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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC  20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTIONAnnual report pursuant to Section 13 ORor 15(d) OF THE SECURITIES EXCHANGE ACT OFof the Securities Exchange Act of 1934
For the fiscal year ended December 31, 2020
2023, or
TRANSITION REPORT PURSUANT TO SECTIONTransition report pursuant to section 13 ORor 15(d) OF THE SECURITIES EXCHANGE ACT OFof the Securities Exchange Act of 1934
For the transition period from _____ to _____
Commission File Number 1-13374
Image2.jpg
REALTY INCOME CORPORATION
(Exact name of registrant as specified in its charter)
Maryland33-0580106
Maryland33-0580106
(State or Other Jurisdiction of Incorporation or Organization)(IRS Employer Identification No.)Number)
11995 El Camino Real, San Diego, California 92130
(Address of Principal Executive Offices)

Registrant’s telephone number, including area code: (858) 284-5000

Securities registered pursuant to Section 12(b) of the Act:
Title of eachEach ClassTrading Symbol
Symbol(s)
Name of each exchange on which registeredEach Exchange On
Which Registered
Common Stock, $0.01 Par ValueONew York Stock Exchange
6.000% Series A Cumulative Redeemable Preferred Stock, $0.01 Par ValueO PRNew York Stock Exchange
1.125% Notes due 2027O27ANew York Stock Exchange
1.875% Notes due 2027O27BNew York Stock Exchange
1.625% Notes due 2030O30New York Stock Exchange
4.875% Notes due 2030O30ANew York Stock Exchange
5.750% Notes due 2031O31ANew York Stock Exchange
1.750% Notes due 2033O33ANew York Stock Exchange
5.125% Notes due 2034O34New York Stock Exchange
6.000% Notes due 2039O39New York Stock Exchange
2.500% Notes due 2042O42New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d)15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes  No 


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Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company.company, or an emerging growth company. See the definitions of “large"large accelerated filer," “accelerated filer,” “smaller"smaller reporting company," and “emerging"emerging growth company”company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

o
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
o
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  No 

At June 30, 2020,2023, the aggregate market value of the Registrant’s shares of common stock, $0.01 par value, held by non-affiliates of the Registrant was $20.5$42.3 billion based upon the last reported sale price of $59.50$59.79 per share on the New York Stock Exchange on June 30, 2020,2023, the last business day of the Registrant’s most recently completed second fiscal quarter. The determination of affiliate status for purposes of this calculation is not necessarily a conclusive determination for other purposes.

There were
At February 15, 2021, the number of 861,123,757shares of common stock outstanding was 373,390,661.

as of February 15, 2024.
DOCUMENTS INCORPORATED BY REFERENCE

Part III, Items 10, 11, 12, 13, and 14 incorporate by reference certain specific portions of the definitive Proxy Statement for Realty Income Corporation’s Annual Meeting expected to be held on May 18, 2021,17, 2024, to be filed pursuant to Regulation 14A. Only those portions of the proxy statement which are specifically incorporated by reference herein shall constitute a part of this annual report.



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REALTY INCOME CORPORATION
Index to Form 10-K
December 31, 2023
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PART I


Item 1:         Business
In this Annual Report on Form 10-K, unless the context otherwise requires, references to“Realty Income,” the “Company,” “we,” “our” or “us” refer to Realty Income Corporation and our subsidiaries.
THE COMPANY
Realty Income, The Monthly Dividend Company®, is an S&P 500 company dedicatedand 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 providing stockholders withdeliver dependable monthly dividends that increase over time. The company isWe are structured as a real estate investment trust or REIT,("REIT"), requiring itus to annually distribute at least 90% of itsour taxable income (excluding net capital gains) in the form of dividends to itsour stockholders. The monthly dividends are supported by the cash flow generated from real estate ownedin which we own or hold interests in under long-term net lease agreements with our commercial clients.
Realty Income was founded in 1969, and listed on the New York Stock Exchange (NYSE:("NYSE": O) in 1994. Over the past 5255 years, Realty Income has been acquiring and managing freestanding commercial properties that generate rental revenue under long-term net lease agreements with our commercial clients. We refer to our tenants as clients, because we strive to build mutually beneficial relationships and we believe their success is our success. The company is a member of the S&P 500 Dividend Aristocrats® index for having increased its dividend every year for more than 25 consecutive years.
At December 31, 2020, we owned a diversified portfolio:
Of 6,592 properties;
With an occupancy rate of 97.9%, or 6,452 properties leased and 140 properties available for lease or sale;
Doing business in 51 separate industries;
Located in 49 U.S. states, Puerto Rico and the United Kingdom (U.K.);
With approximately 110.8 million square feet of leasable space;
With a weighted average remaining lease term (excluding rights to extend a lease at the option of our client) of approximately 9.0 years; and
With an average leasable space per property of approximately 16,810 square feet; approximately 12,340 square feet per retail property and 245,270 square feet per industrial property.
Of the 6,592 properties in the portfolio at December 31, 2020, 6,555, or 99.4%, are single-client properties, of which 6,419 were leased, and the remaining are multi-client properties.
Our eight senior officers owned 0.05% of our outstanding common stock with a market value of $12.5 million at February 15, 2021. Our directors and seven senior officers, as a group, owned 0.15% of our outstanding common stock with a market value of$34.3 million at February 15, 2021.
Our common stock is listed on the NYSE under the ticker symbol “O” with a CUSIP number of 756109-104. Our 1.625% notes due December 2030 are listed on the NYSE under the ticker symbol "O30" with a CUSIP number of 756109-AY0. Our central index key number is 726728.
In January 2021, we had 210 employees, inclusive of two part-time employees, as compared to 196 employees, inclusive of two part-time employees, in January 2020.
We maintain a corporate website at www.realtyincome.com. On our website we make available, free of charge, copies of our annual report on Form 10-K, quarterly reports on Form 10-Q, Form 3s, Form 4s, Form 5s, current reports on Form 8-K, and amendments to those reports, as soon as reasonably practicable after we electronically file these reports with the Securities and Exchange Commission, or SEC. None of the information on our website is deemed to be part of this report.

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RECENT DEVELOPMENTS
Theater Industry Update
As of December 31, 2020, our clients2023, we owned or held interests in 13,458 properties located in the theater industry represented 5.6% ofUnited States ("U.S.") and Europe.
On January 23, 2024, we closed on our annualized contractual rent. Given the ongoing disruption to this industry duepreviously announced merger with Spirit Realty Capital, Inc. ("Spirit", formerly NYSE: SRC), which is further described in note 21, Subsequent Events, to the COVID-19 pandemic, we performed a property-level analysis on the collectabilityconsolidated financial statements. The Spirit portfolio consisted of rent for our theater properties. Our analysis involved the assignment of quartile rankings for each asset’s pre-pandemic EBITDAR relative to each operator’s overall footprint. Other criteria utilized included an analysis of the property’s pre-pandemic annual EBITDA generation before corporate overhead,2,018 U.S. retail, industrial, and real estate fundamentals.

As a result of this analysis at September 30, 2020, we determined that for 31 of our 78 theaterother properties it was no longer probable that we would collect substantially all of contractual rents due. We fully reserved for six additional theater properties for which we do not possess unit level financial information. Consequently, we reserved for 100% of the outstanding receivables for 37 theater properties at September 30, 2020. Beginning October 2020, contractual rent from these 37 properties is accounted for on a cash basis. Additionally, during November 2020, one of these properties was sold. We fully reserved for one additional theater property at December 31, 2020. At December 31, 2020, the receivables outstanding for our 77 theater properties totaled $48.6 million, net of $23.7 million of reserves, and includes $7.8 million of straight-line rent receivables, net of $1.8 million of reserves. The monthly contractual rent associated with the 37 properties accounted for under the cash basis totaled approximately $2.8 million at December 31, 2020. The following table summarizes reserves recorded as a reduction of rental revenue for theater properties (dollars in millions):
Three Months EndedThree Months EndedYear Ended
September 30, 2020December 31, 2020December 31, 2020
Rental revenue reserves$15.6 $8.1 $23.7 
Straight-line rent reserves1.6 $0.2 $1.8 
Total rental revenue reserves$17.2 $8.3 $25.5 

Additionally, during the third quarter, we recorded provisions for impairment on 12 of the 37 theater properties for $79.0 million. During the fourth quarter, we recorded provisions for impairment on one additional theater property for $4.8 million. Impairment charges are not included in Nareit-defined funds from operations (FFO) available to commons stockholders or in our calculation of adjusted funds from operations (AFFO) available to commons stockholders.

See "Item 1A—Risk Factors" in Part I of this Annual Report on Form 10-K for more information regarding the actual and potential future impacts of the COVID-19 pandemic and the measures taken to limit its spread on our clients and our business, results of operations, financial condition and liquidity.

Increases in Monthly Dividends to Common Stockholders
We have continued our 52-year policy of paying monthly dividends. In addition, we increased the dividend five times during 2020 and once during 2021. As of February 2021, we have paid 93 consecutive quarterly dividend increases and increased the dividend 109 times since our listing on the NYSE in 1994.
 MonthMonthMonthly DividendIncrease
2020 Dividend increasesDeclaredPaidper shareper share
1st increaseDec 2019Jan 2020$0.2275 $0.0005 
2nd increaseJan 2020Feb 2020$0.2325 $0.0050 
3rd increaseMar 2020Apr 2020$0.2330 $0.0005 
4th increaseJun 2020Jul 2020$0.2335 $0.0005 
5th increaseSep 2020Oct 2020$0.2340 $0.0005 
2021 Dividend increases    
1st increaseDec 2020Jan 2021$0.2345 $0.0005 
The dividends paid per share during 2020 totaled $2.7940, as compared to $2.7105 during 2019, an increase of $0.0835, or 3.1%.
The monthly dividend of $0.2345 per share represents a current annualized dividend of $2.81 per share, and an annualized dividend yield of approximately 4.5% based on the last reported sale price of our common stock on the
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NYSE of $62.17 on December 31, 2020. Although we expect to continue our policy of paying monthly dividends, we cannot guarantee that we will maintain our current level of dividends, that we will continue our pattern of increasing dividends per share, or what our actual dividend yield will be in any future period.
Acquisitions During 2020
Below is a listing of our acquisitions in the U.S. and U.K. for the year ended December 31, 2020:
Number of PropertiesLeasable Square FeetInvestment
($ in thousands)
Weighted Average Lease Term (Years)
Initial Average Cash Lease Yield (1)
Year ended December 31, 2020 (2)
Acquisitions - U.S. (in 30 states)
202 5,476,009 $1,302,220 14.9 5.8 %
Acquisitions - U.K. (3)
24 2,120,256 920,934 10.8 6.1 %
Total Acquisitions226 7,596,265 $2,223,154 13.2 5.9 %
Properties under Development - U.S.18 1,601,095 84,127 15.3 5.6 %
Total (4)
244 9,197,360 $2,307,281 13.2 5.9 %
(1)The initial 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 our client could default on the payment of contractual rent, we cannot provide assurance that the actual return on the funds invested will remain at the percentages listed above. Contractual net operating income for the fourth quarter of 2020 includes approximately $700,000 received as a settlement credit for a property acquired in the U.S. as reimbursement of a free rent period.
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 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) None of our investments during 2020 caused any one client to be 10% or more of our totalacross 49 states. With assets at December 31, 2020. All of our investments in acquired properties during 2020 are 100% leased at the acquisition date.    
(3) Represents investments of £707.8 million Sterling during the year ended December 31, 2020 converted at the applicable exchange rate on the date of acquisition.
(4) Our clients occupying the new properties operate in 26 industries and are 86.6% retail and 13.4% industrial, based on rental revenue. Approximately 61% of the rental revenue generated from acquisitions during 2020 is from our investment grade rated clients, which we define as clients with a credit rating, and clients that are subsidiaries or affiliates of companies with a credit rating, as of the balance sheet date, of Baa3/BBB- or higher from one of the three major rating agencies (Moody’s/S&P/Fitch).

Portfolio Discussion
Leasing Results
At December 31, 2020, we had 140 properties available for lease out of 6,592 properties in our portfolio, which represents a 97.9% occupancy rate based on the number of properties in our portfolio.

The following tables summarize our leasing results for the periods indicated below:
Three months ended December 31, 2020
Properties available for lease at September 30, 202092 
Lease expirations (1)
159 
Re-leases to same client (2)
(72)
Re-leases to new client (2)(3)
(5)
Vacant dispositions(34)
Properties available for lease at December 31, 2020140 
(1)Includes scheduled and unscheduled expirations (including leases rejected in bankruptcy), as well as future expirations resolved in the current quarter.
(2)The annual new rent on these re-leases was $21.01 million, as compared to the previous annual rent of $20.95 million on the same properties, representing a rent recapture rate of 100.3% on the properties re-leased during the three months ended December 31, 2020.
(3)Re-leased all five properties to new clients after a period of vacancy.

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Year ended December 31, 2020
Properties available for lease at December 31, 201994 
Lease expirations (1)
446 
Re-leases to same client (2)
(296)
Re-leases to new client (2)(3)
(18)
Vacant dispositions(86)
Properties available for lease at December 31, 2020140 
(1)Includes scheduled and unscheduled expirations (including leases rejected in bankruptcy), as well as future expirations resolved in the current year.
(2)The annual new rent on these re-leases was $66.24 million, as compared to the previous annual rent of $66.26 million on the same properties, representing a rent recapture rate of 100.0% on the properties re-leased during the year ended December 31, 2020.
(3)Re-leased five properties to new clients without a period of vacancy, and 13 properties 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 concessionshighly complementary to our clients. We do not considerexisting portfolio, this transaction enhances the collective impact of the leasing commissions or rent concessions to our clients to be material to our financial position or results of operations.
At December 31, 2020, our average annualized contractual rent was approximately $15.38 per square foot on the 6,452 leased properties in our portfolio. At December 31, 2020, we classified 21 properties, with a carrying amount of $19.0 million, as real estatediversification and lease intangibles held for sale, net on our balance sheet. The expected sale of these properties does not represent a strategic shift that will have a major effect on our operations and financial results and is consistent with our existing disposition strategy to further enhancedepth our real estate portfolio and maximize portfolio returns.

Investments in Existing Properties
During 2020, we capitalized costs of $7.0 million onwill allow us to strengthen our longstanding relationships with existing properties in our portfolio, consisting of $1.8 million for re-leasing costs, $198,000 for recurring capital expenditures, and $5.0 million for non-recurring building improvements. In comparison, during 2019, we capitalized costs of $17.9 million on existing properties in our portfolio, consisting of $2.1 million for re-leasing costs, $801,000 for recurring capital expenditures, and $15.0 million for non-recurring building improvements.
The majority of our building improvements relate to roof repairs, HVAC improvements, and parking lot resurfacing and replacements. The amounts of our capital expenditures can vary significantly, depending on the rental market, credit worthiness of our clients, the lease term and the willingness of our clients to pay higher rents over the terms of the leases.
We define recurring capital expenditures as mandatory and recurring landlord capital expenditure obligations that have a limited useful life. We define non-recurring capital expenditures as property improvements in which we invest additional capital that extend the useful life of the properties.
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Chief Legal Officer, General Counsel and Secretary Transition
Effective February 8, 2021, Michelle Bushore joined us as our new Executive Vice President (EVP), Chief Legal Officer, General Counsel and Secretary. Michael Pfeiffer, who served as our EVP, Chief Administrative Officer, General Counsel and Secretary intends to remain with the company through June 30, 2021, serving as EVP, Chief Administrative Officer, to assist with Ms. Bushore's transition.
Chief Financial Officer (CFO) and Treasurer Transition
Effective January 19, 2021, Christie B. Kelly assumed her role as our EVP, Chief Financial Officer (CFO) and Treasurer replacing Paul M. Meurer, our former CFO, who departed the company in March 2020. Concurrently with Ms. Kelly's appointment, she resigned from our Board of Directors, and our Board of Directors was reduced to nine members. As a result of Mr. Meurer's departure, we recognized an executive severance charge of $3.5 million during the first quarter of 2020, consisting of $1.6 million cash, $1.8 million related to share-based compensation expense, and $58,000 of professional fees.

Issuance of Common Stock in an Underwritten Public Offering
In January 2021, we raised $669.6 million from the issuance of 12,075,000 shares of common stock in an underwritten public offering, including 1,575,000 shares purchased by the underwriters upon the exercise of their option to purchase additional shares. The company used the net proceeds from the offering, along with available cash and additional borrowings, to fund property acquisitions and for general corporate purposes and working capital.

Early Redemption of Notes
In January 2021, we completed the early redemption on all $950.0 million in principal amount of our outstanding 3.250% notes due October 2022, plus accrued and unpaid interest. As a result of the early redemption, we will recognize aloss on extinguishment of debt of approximately $46 million, or approximately $0.12 per diluted common share, to net income available to common stockholders and Nareit-defined FFO in the three months ended March 31, 2021. Loss on extinguishment of debt is excluded in our calculation of AFFO.

In January 2020, we completed the early redemption on all $250.0 million in principal amount of our outstanding 5.750% notes due January 2021, plus accrued and unpaid interest. As a result of the early redemption, we recognized a $9.8 million loss on extinguishment of debt during the three months ended March 31, 2020.

Equity Capital Raising
During 2020, we raised $1.85 billion from the sale of common stock at a weighted average price of $67.26 per share. 

Note Issuances
In December 2020, we issued $325.0 million of 0.750% senior unsecured notes due March 2026 (the "2026 Notes") and $400.0 million of 1.800% senior unsecured notes due March 2033 (the "2033" Notes"). The public offering price for the 2026 Notes was 99.192% of the principal amount, for an effective yield to maturity of 0.908% and net proceeds of approximately $320.3 million. The public offering price for the 2033 Notes was 98.470% of the principal amount, for an effective yield to maturity of 1.941% and net proceeds of $391.3 million. The proceeds from this offering were used, along with available cash and additional borrowings, as necessary, to redeem all $950 million aggregate principal amount of the company's outstanding 3.25% notes due 2022 at the applicable redemption price, plus accrued interest, to fund potential investment opportunities and for other general corporate purposes.

In October 2020, we issued £400.0 million of 1.625% senior unsecured notes due December 2030. The public offering price for these notes was 99.191% of the principal amount, for an effective annual yield to maturity of 1.712% and net proceeds of $508.2 million, as converted at the applicable exchange rate on the closing of the offering.The proceedsfrom this offering were used to repay GBP-denominated borrowings outstanding under our $3.0 billion revolving credit facility, to settle an outstanding GBP/USD currency exchange swap arrangement, to fund potential investment opportunities and for other general corporate purposes.
In July 2020, we issued $350.0 million of 3.250% senior unsecured notes due January 2031 (the "2031" Notes), which constituted a further issuance of, and formed a single series with, the $600.0 million of 2031 Notes issued in May 2020. The public offering price was 108.241% of the principal amount, for an effective yield to maturity of 2.341% and net proceeds of $376.6 million.

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In May 2020, we issued $600.0 million of 2031 Notes. The public offering price for the notes was 98.987% of the principal amount, for an effective yield to maturity of 3.364% and net proceeds of approximately $590.0 million.

The proceeds from each of the offerings of 2031 Notes were used to repay borrowings outstanding under our credit facility, to fund potential investment opportunities, and for other general corporate purposes.

Commercial Paper Program
In August 2020, we established a U.S. dollar-denominated unsecured commercial paper program. Under the terms of the program, we may, from time to time, issue unsecured commercial paper notes up to a maximum aggregate amount outstanding of $1.0 billion. Proceeds from commercial paper borrowings are used for general corporate purposes. As of December 31, 2020, we had no outstanding commercial paper borrowings. We use our $3.0 billion revolving credit facility as a liquidity backstop for the repayment of the notes issued under the commercial paper program.
Term Loan Redemption
In June 2020, we repaid the $250.0 million term loan in full upon maturity.
Impact of COVID-19
The COVID-19 pandemic and the measures taken to limit its spread are negatively impacting global, national and regional economies across many industries, including the industries in which some of our clients operate, and have disrupted the businesses and operations of some of our clients, each of which has had and may continue to have an adverse impact on our business, results of operations, financial condition, and liquidity. These impacts may increase in severity as the duration or extent of the pandemic increases. See "Item 1A—Risk Factors" in Part I of this report for more information regarding some of the actual and potential future impacts of the COVID-19 pandemic and the measures taken to limit its spread on our clients and our business, results of operations, financial condition and liquidity.

As a result of this challenging environment, we continue to work diligently with our clients most affected by the pandemic to understand their business operations and financial liquidity and their ability to satisfy their contractual obligations to us. As we carefully navigate this difficult economic period with our clients, our focus is on finding resolutions that preserve the long-term relationships we have built with many of our clients.

The majority of lease concessions granted to our clients during 2020 as a result of the COVID-19 pandemic have been rent deferrals with the original lease term unchanged. In these cases, we have determined that the collection of deferred rent is probable (within the meaning applicable under U.S. generally accepted accounting principles, or GAAP), although we cannot assure you that this determination will not change in the future. In addition, as we believe to be the case with many retail landlords, we have received many short-term rent relief requests, most often in the form of rent deferral requests, or requests for further discussion from our clients. We believe that not all of our client requests will ultimately result in lease modification agreements, nor have we relinquished our contractual rights under our lease agreements where rent concessions have not yet been granted. Our rent collections for the periods below and rent relief requests to-date may not be indicative of collections, concessions or requests in any future period.

Percentages of Contractual Rent Collected as of January 31, 2021
Month Ended
October 31, 2020
Month Ended
November 30, 2020
Month Ended
December 31, 2020
Quarter Ended
December 31, 2020
Contractual rent collected(1) across total portfolio
93.5%93.7%93.6%93.6%
Contractual rent collected(1) from our top 20 clients(2)
89.8%90.2%89.7%89.9%
Contractual rent collected(1) from our investment grade clients(3)
100.0%100.0%100.0%100.0%
(1) Collection rates are calculated as the aggregate contractual rent collected for the applicable period from the beginning of that applicable period through January 31, 2021, divided by the contractual rent charged for the applicable period. Rent collection percentages are calculated based on contractual rents (excluding percentage rents and contractually obligated reimbursements by our clients). Charged amounts have not been adjusted for any COVID-19 related rent relief granted and include contractual rents from any clients in bankruptcy. Due to differences in applicable foreign currency conversion rates and rent conventions, the percentages above may differ from percentages calculated utilizing total our portfolio annualized contractual rent.
(2) We define our top 20 clients as our 20 largest clients based on percentage of total portfolio annualized contractual rent as of December 31, 2020 for all periods.
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(3) We define our investment grade clients as clients with a credit rating, and clients that are subsidiaries or affiliates of companies with a credit rating, as of the balance sheet date, of Baa3/BBB- or higher from one of the three major rating agencies (Moody’s/S&P/Fitch).

The following table provides information relating to percentage of total contractual rent due and collected for the indicated periods:
Percentage of Total Contractual Rent Due By Month(1)
Percentage of Total Contractual Rent Collected By Month(1)
December
2020
November
2020
October
2020
December
2020
November
2020
October
2020
U.S.
Aerospace0.6%0.6%0.6%0.6%0.6%0.6%
Apparel stores1.31.31.31.31.31.3
Automotive collision services1.11.11.11.11.11.1
Automotive parts1.61.61.61.61.61.6
Automotive service2.72.52.52.72.52.5
Automotive tire services2.02.02.02.02.02.0
Beverages2.02.02.02.02.02.0
Child care2.12.12.12.12.12.1
Consumer electronics0.20.30.30.20.30.3
Consumer goods0.50.60.60.50.60.6
Convenience stores12.012.112.112.012.012.0
Crafts and novelties0.90.90.90.90.90.9
Diversified industrial0.80.80.60.80.80.6
Dollar stores7.77.77.77.67.77.7
Drug stores8.28.38.48.28.38.4
Education0.20.20.20.20.20.2
Electric utilities0.10.10.10.10.10.1
Entertainment0.30.30.30.30.30.3
Equipment services0.30.30.30.30.30.3
Financial services1.91.91.91.91.91.9
Food processing0.70.70.70.70.70.7
General merchandise3.23.03.03.23.03.0
Government services0.60.60.70.60.60.7
Grocery stores4.94.95.04.94.94.9
Health and beauty0.20.20.20.20.20.2
Health and fitness6.86.97.05.66.06.1
Health care1.51.61.61.51.51.6
Home furnishings0.70.70.70.70.70.7
Home improvement3.13.03.03.13.03.0
Machinery0.10.10.10.10.10.1
Motor vehicle dealerships1.61.61.61.61.61.6
Office supplies0.20.20.20.10.10.1
Other manufacturing0.40.60.60.40.60.6
Packaging0.90.90.90.90.90.9
Paper0.10.10.10.10.10.1
Pet supplies and services0.70.70.70.70.70.7
Restaurants - casual dining2.92.92.92.72.82.8
Restaurants - quick service5.35.55.65.35.55.6
Shoe stores0.20.20.20.20.20.2
Sporting goods0.70.70.70.70.70.7
Telecommunications0.50.50.50.50.50.5
Theaters5.65.75.70.80.70.5
Transportation services4.04.14.14.04.14.1
Wholesale clubs2.52.52.52.52.52.5
Other0.1*0.20.1*0.2
Total U.S.94.0%94.6%95.1%87.6%88.3%88.6%
U.K.
Grocery stores4.84.33.94.84.33.9
Health care0.10.10.10.10.10.1
Home improvement1.11.00.91.11.00.9
Theaters***
Total U.K.6.0%5.4%4.9%6.0%5.4%4.9%
Totals100.0%100.0%100.0%93.6%93.7%93.5%
* Less than 0.1%
(1) Collection rates are calculated as the aggregate contractual rent collected for the applicable period from the beginning of that applicable period through January 31, 2021, divided by the contractual rent charged for the applicable period. Rent collection percentages are calculated based on contractual rents (excluding percentage rents and contractually obligated reimbursements by our clients). Charged amounts have not been adjusted for any COVID-19 related rent relief granted and include contractual rents from any clients in bankruptcy. Due to differences in applicable foreign currency conversion rates and rent conventions, the industry percentages above may differ from industry percentages calculated utilizing our total portfolio annualized contractual rent.
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As the adverse impacts of the COVID-19 pandemic and the measures taken to limit its spread continue to evolve, the ability of our clients to continue to pay rent to us may further diminish, and therefore we cannot assure you that our historical rental collections are indicative of our rental collections in the future. As a result of the impacts of the COVID-19 pandemic and the measures taken to limit its spread, our revenues in the foreseeable future may decline relative to 2020, and that decline may continue or increase in subsequent periods as long as such impacts continue to exist.
Summarized Financial Results
The following summarizes our select financial results (dollars in millions, except per share data):
Year Ended December 31,
20202019% Increase/ (decrease)
Total revenue$1,651.6$1,491.610.7 %
Net income available to common stockholders (1)
$395.5$436.5(9.4)%
Net income per share (2)
$1.14$1.38(17.4)%
FFO available to common stockholders$1,142.1$1,039.69.9 %
FFO per share (2)
$3.31$3.290.6 %
AFFO available to common stockholders$1,172.6$1,050.011.7 %
AFFO per share (2)
$3.39$3.322.1 %
(1) The calculation to determine net income available to common stockholders includes provisions for impairment, gain from the sales of real estate, and foreign currency gains and losses. These items can vary from year to year and can significantly impact net income available to common stockholders and period to period comparisons.
(2) All per share amounts are presented on a diluted per common share basis.
Our financial results for 2020 were impacted by the following transactions: (i) $147.2 million of provisions for impairment, (ii) $52.5 million in reserves recorded as a reduction of rental revenue, (iii) a $9.8 million loss on extinguishment of debt due to the early redemption of the 5.750% notes due 2021, and (iv) a $3.5 million executive severance charge for our former CFO. For 2019, the only comparable charges were $40.2 million in provisions for impairment and $2.9 million in reserves recorded as a reduction of rental revenue.

See our discussion of FFO and AFFO (which are not financial measures under GAAP), later in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in this annual report, which includes a reconciliation of net income available to common stockholders to FFO and AFFO.
DIVIDEND POLICY
Distributions are paid monthly to holders of shares of our common stock.
Distributions are paid monthly to the limited partners holding common units of Realty Income, L.P., each on a per unit basis that is generally equal to the amount paid per share to our common stockholders.

In order to maintain our status as a REIT for federal income tax purposes, we generally are required to distribute dividends to our stockholders aggregating annually at least 90% of our taxable income (excluding net capital gains), and we are subject to income tax to the extent we distribute less than 100% of our taxable income (including net capital gains). In 2020, our cash distributions to common stockholders totaled $964.2 million, or approximately 119.8% of our estimated taxable income of $804.9 million. Our estimated taxable income reflects non-cash deductions for depreciation and amortization. Our estimated taxable income is presented to show our compliance with REIT dividend requirements and is not a measure of our liquidity or operating performance. We intend to continue to make distributions to our stockholders that are sufficient to meet this dividend requirement and that will reduce or eliminate our exposure to income taxes. Furthermore, we believe our funds from operations are sufficient to support our current level of cash distributions to our stockholders. Our cash distributions to common stockholders in 2020 totaled $964.2 million, representing82.2% of our adjusted funds from operations available to common stockholders of $1.173 billion. In comparison, our 2019 cash distributions to common stockholders totaled $852.1 million, representing 81.2% of our adjusted funds from operations available to common stockholders of $1.05 billion.
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Future distributions will be at the discretion of our Board of Directors and will depend on, among other things, our results of operations, FFO, AFFO, cash flow from operations, financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Internal Revenue Code of 1986, as amended, or the Code, our debt service requirements, and any other factors the Board of Directors may deem relevant. In addition, our credit facility contains financial covenants that could limit the amount of distributions payable by us in the event of a default, and which prohibit the payment of distributions on the common or preferred stock in the event that we fail to pay when due (subject to any applicable grace period) any principal or interest on borrowings under our credit facility.
Distributions of our current and accumulated earnings and profits for federal income tax purposes generally will be taxable to stockholders as ordinary income, except to the extent that we recognize capital gains and declare a capital gains dividend, or that such amounts constitute “qualified dividend income” subject to a reduced rate of tax. The maximum tax rate of non-corporate taxpayers for “qualified dividend income” is generally 20%. In general, dividends payable by REITs are not eligible for the reduced tax rate on qualified dividend income, except to the extent that certain holding requirements have been met with respect to the REIT’s stock and the REIT’s dividends are attributable to dividends received from certain taxable corporations (such as our taxable REIT subsidiaries) or to income that was subject to tax at the corporate or REIT level (for example, if we distribute taxable income that we retained and paid tax on in the prior taxable year). However, non-corporate stockholders, including individuals, generally may deduct up to 20% of dividends from a REIT, other than capital gain dividends and dividends treated as qualified dividend income, for taxable years beginning after December 31, 2017 and before January 1, 2026.
Distributions in excess of earnings and profits generally will first be treated as a non-taxable reduction in the stockholders’ basis in their stock, but not below zero. Distributions in excess of that basis generally will be taxable as a capital gain to stockholders who hold their shares as a capital asset. Approximately17.6% of the distributions to our common stockholders, made or deemed to have been made in 2020, were classified as a return of capital for federal income tax purposes.

curate new ones.
BUSINESS PHILOSOPHY AND STRATEGY
We believe that owning an actively managed,managing a diversified portfolio of commercial properties under long-term, net lease agreements produces consistent and predictable income. A net lease typically requires the client to be responsible for monthly rent and certain property operating expenses including property taxes, insurance, and maintenance. In addition, clients of our properties typically pay rent increases based on: (1) fixed increases, (2) increases in the consumer price indextied to inflation (typically subject to ceilings), or (3) additional rent calculated as a percentage of the clients’ gross sales above a specified level. We believe that a portfolio of properties under long-term net lease agreements with our commercial clients generally produces a more predictable income stream than many other types of real estate portfolios, while continuing to offer the potential for growth in rental income.
Diversification is also a key component of our investment philosophy. We believe that diversification of the portfolio by client, industry, geography, and property type leads to more consistent and predictable income for our stockholders by reducing vulnerability that can come with any single concentration. Our investment activities have led to a diversified property portfolio that,and as of December 31, 2020, consisted of 6,5922023, we owned or held interests in 13,458 properties doing business in 51 industries, and located in 49all 50 U.S. states, Puerto Rico, the United Kingdom ("U.K."), France, Germany, Ireland, Italy, Portugal, and the U.K. None of the 51 industries representedSpainand doing business in our property portfolio accounted for more than 11.9% of our annualized contractual rent as of December 31, 2020.86 industries.
As we look to continue to expand geographically across Europe, we focus upon building relationships with new multinational clients that seek a real estate partner with an expanding geographic footprint.
Investment Strategy
When identifying new properties for investment, we generally focus on acquiringWe seek to acquire, invest in and develop high-quality real estate that our clients consider important to the successful operation of their business.businesses. We generally seek to acquireown or hold interests in commercial real estate that has some or all of the following characteristics:
Properties that are freestanding, commercially-zoned with a single client;in markets or locations important to our clients;
Properties that are in significant marketswith strong demographic attributes or strategic locations critical to generating revenue for our clients (i.e. they need the property in which they operate in order to conduct their business);
Properties that we deem to be profitable for our clients and/or can generally be characterized as important to the successful operations of the company’s business;
Properties that are located within attractive demographic areas relative to the business of our clients;
Properties with real estate valuations that approximate replacement costs;
Properties with rental or lease payments that approximate market rents for similar properties; and
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Properties that can be purchased with the simultaneous execution oror assumption of long-term net lease agreements, offering both current income and the potential for future rent increases.increases;
Properties that leverage relationships with clients, sellers, investors, or developers as part of a long-term strategy; and
Properties that leverage our proprietary insights, including those in locations and geographic markets we expect to remain strong or strengthen in the future.

We typically seek to invest in properties or portfolios of properties owned or leased by clients that are already or could become leaders in their respective businesses supported by mechanisms including (but not limited to) occupancy of prime real estate locations, pricing, merchandise assortment, service, quality, economies of scale, consumer branding, e-commerce, and advertising. In addition, we frequently acquire large portfolios of single-client properties net leased to different clients operating in a variety of industries. We have an internal team dedicated to sourcing such opportunities, often using our relationships with various clients, owners/developers, brokers, and advisers to uncover and secure transactions. We also undertake thorough research and analysis to identify what we consider to be appropriate property locations, clients, and industries for investment. This research expertise is instrumental to uncovering net leaseinvestment opportunities in markets where we believe we can add value.
In selecting potential investments, we generally look for clients with one or more of the following attributes:
Reliable and sustainable cash flow;flow, including demonstrated economic resiliency;
Revenue and cash flow from multiple sources;
Are willing to sign a long-term lease (10 or more years); and
Are large owners and/orand users of real estate.

From a retail perspective, our investment strategy is to target clients that have a service, non-discretionary, and/or low-price-point component to their business. We believe these characteristics better positiontarget investments with clients who have demonstrated resiliency to operatee-commerce or have a strong omnichannel retail strategy, uniting brick-and-mortar and mobile browsing, both of which reflect the continued importance of last mile retail, the movement of goods to their final destination, real estate as part of a customer experience and supply chain strategy. Our overall investments (including last mile retail) are driven by an optimal portfolio strategy that, among other considerations, targets allocation ranges by asset class and industry. We review our strategy periodically and stress test our portfolio in a variety of positive and negative economic conditionsscenarios to ensure we deliver consistent earnings growth and to compete more effectively with internet retailers.value creation across economic cycles. As a result of the execution of this strategy, approximately95% 91% of our annualized retail contractual rent at onDecember 31, 20202023, is derived from our clients with a service, non-discretionary, and/or low price point component to their business. From a non-retail perspective, we target industrial properties generally leased to industry leaders that are primarily investment grade rated companies. We believe these characteristics enhance the stability of the rental revenue generated from these properties.

After applying this investment strategy, we pursue those transactions that meet our strategic objectives which include achievingwhere we believe we can achieve an attractive aggregate investment spread over our cost of capital and favorable risk-adjusted returns. We will continue to evaluate all investments consistentfor consistency with our objective of owning net lease assets.
Underwriting Strategy
In order toTo be considered for acquisition, propertiesinvestments must meet stringent underwriting requirements. We have established a four-part analysis to examine each potential investmentanalyze investments based on:
on one or more of the following criteria:
The aforementioned overall real estate characteristics, including demographics, replacement cost and comparative rental rates;
Industry, client (including credit profile)credit), and market conditions;
Expected financial returns under various scenarios (including default);
The value of real estate (based on replacement cost, comparative rental rates and alternative uses), or other collateral backing the client’s contractual obligations; and
Store profitability for retail locations if profitability data is available; and
Theavailable or the importance of the real estate location to the operations of ourthe clients’ business.

We believe the principal financial obligations for most of our clients typically include their bank and other debt, payment obligationsWith regard to employees, suppliers, and real estate lease obligations. Becauseinvestments, we typically own the land and building in which a client conducts its business or which are critical to the client’s ability to generate revenue, we believe the risk of default on a client’s lease obligation is less than the client’s unsecured general obligations.revenue. It has been our experience that clients must retain their profitable and critical locations in order to survive. Therefore, in the event of reorganization, we believe they are less likely to reject a lease of a profitable or critical location because this would terminate their right to use the property.
Thus, as the property owner, we believe that we willshould fare better than unsecured creditors of the same client in the event of reorganization. If a property is rejected by our client during reorganization, we own the property and can either lease it to a new client or sell the property. In addition, we believe that the risk of default on real estate leases
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can be further mitigated by monitoring the performance of our clients’ individual locations and considering whether to proactively sell locations that meet our criteria for disposition.
We conduct comprehensive reviews of the business segments and industries in which our clients’clients operate. PriorIn addition, prior to entering into any transaction, our credit research departmentteam conducts a review of a client’s credit quality. The information
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reviewed may include reports and filings, including any public credit ratings, financial statements, debt and equity analyst reports, and reviews of corporate credit spreads, stock prices, market capitalization, and other financial metrics. We conduct additional due diligence, including financial reviews of the client, and continue to monitor our clients’ credit quality on an ongoing basis, by reviewing the available information previously discussed, and providingprovide summaries of these findings to management.

At December 31, 2020, approximately 51%2023, 39.6% of our total portfolio annualized contractual rent (as defined in "Property Portfolio Information"below) comes from properties leased to our investment grade clients, their subsidiaries or affiliated companies. At December 31, 2020,2023, our top 20 clients (based on percentage of total portfolio annualized contractual rent) represented approximately 52%40.2% of our annualized rent and 1210 of these clients have investment grade credit ratings or are subsidiaries or affiliates of investment grade companies.
Asset Management Strategy
In addition to pursuing new properties for investment, we seek to increase earnings and dividends through active asset management.
Generally, our asset management efforts seek to achieve:
Rent increases during and at the expiration of existing leases, when market conditions permit;
Optimum exposure to certain clients, industries, and markets through re-leasing vacant properties and selectively selling properties;
Maximum asset-level returns on properties that are renewed, re-leased or sold; and
Additional value creation opportunities from the existing portfolio by enhancingleveraging internal capabilities to enhance individual properties, pursuingpursue alternative uses, and derivingderive ancillary revenue; andrevenue.
Investment opportunities in new asset classes for the portfolio.
WeAs part of our ongoing credit and predictive analytics research, we continually monitor our portfolio for any changes that could affect the performance of our clients, our clients’ industries, and the real estate locations in which we have invested. We also regularly analyze our portfolio with a view towards optimizing its returns and enhancing its overall credit quality. Our active asset management strategy pursues asset sales when we believe the reinvestment of the sale proceeds will:
Generate higher returns;
Enhance the credit quality of our real estate portfolio;
Extend our average remaining lease term; and/or
Strategically decrease client, industry, or geographic concentration.
The active management of the portfolio is an essential component of our long-term strategy of maintaining high occupancy.

Capital Philosophy
Our goal is to deliver dependable monthly dividends to our stockholders that increase over time. Historically, we have met our principal short-term and long-term capital needs, including the funding of high-quality real estate acquisitions, property development, and capital expenditures, by issuing common stock, preferred stock, and long-term unsecured notes and bonds.term loan borrowings. Over the long term, we believe that common stock should be the majority of our capital structure; however, we may issue preferred stock or debt securities.structure. We may issue common stock when we believe that our share price is at a level that allows for the proceeds of anyan offering to be accretively invested into additional properties. In addition, we may issue common stockproperties or to permanently finance properties that were initially financed by our revolving credit facility, commercial paper program,programs, or shorter-term debt securities. However, there can be no assuranceswe cannot assure you that we will have access to the capital markets at all times and at terms that are acceptable to us.
Our primary cash obligations, for the current year and subsequent years, are included in the “Table of Obligations,” 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 on our credit facility and under our commercial paper program, and through public securities offerings.

We may choose to mitigate our financial exposure to exchange rate risk for properties acquired outside the U.S. through the issuance of debt securities denominated in the same local currency and through currency derivatives. We may leave a portion of our foreign cash flow unhedged to reinvest in additional properties in the same local currency.

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For 2021, we intend to continue our active disposition efforts to further enhance our real estate portfolio. We plan to invest these proceeds into new property acquisitions if there are attractive opportunities available. However, we cannot guarantee that we will sell properties during 2021 or be able to invest the property sale proceeds in new properties.

Conservative Capital Structure
We believe that our stockholders are best served by a conservative capital structure. Therefore, we seek to maintain a conservative debt level on our balance sheet and solid interest and fixed charge coverage ratios. At December 31, 2020, our total outstanding borrowings of senior unsecured notes and bonds, term loan and mortgages payable were $8.85 billion, or approximately 28.2% of our total market capitalization of $31.34 billion.
We define our total market capitalization at December 31, 2020 as the sum of:
Shares of our common stock outstanding of 361,303,445, plus total common units outstanding of 463,119, multiplied by the last reported sales price of our common stock on the NYSE of $62.17 per share on December 31, 2020, or $22.49 billion;
Outstanding mortgages payable of $299.6 million, excluding net mortgage premiums of $1.7 million and deferred financing costs of $973,000;
Outstanding borrowings of $250.0 million on our term loan, excluding deferred financing costs of $642,000;
Outstanding senior unsecured notes and bonds of $8.30 billion, including Sterling-denominated notes totaling £715.0 million, and excluding unamortized net original issuance premiums of $14.6 million and deferred financing costs of $49.2 million; and
No borrowings outstanding on our revolving credit facility.

Impact of Real Estate and Credit Markets
In the commercial real estate market, property prices generally continue to fluctuate. Likewise, during certain periods, including the current market, the global credit 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 credit markets carefully and, if required, will make decisions to adjust our business strategy accordingly.
Universal Shelf Registration
In November 2018, we filed a shelf registration statement with the SEC, which is effective for a term of three years and will expire in November 2021. In accordance with SEC rules, the amount of securities to be issued pursuant to this shelf registration statement was not specified when it was filed and there is no specific dollar limit. The securities covered by this registration statement include (1) common stock, (2) preferred stock, (3) debt securities, (4) depositary shares representing fractional interests in shares of preferred stock, (5) warrants to purchase debt securities, common stock, preferred stock, or depositary shares, and (6) any combination of these securities. We may periodically offer one or more of these securities in amounts, prices and on terms to be announced when and if these securities are offered. The specifics of any future offerings, along with the use of proceeds of any securities offered, will be described in detail in a prospectus supplement, or other offering materials, at the time of any offering.

Revolving Credit Facility and Commercial Paper Program
We have a $3.0 billion unsecured revolving credit facility with an initial term that expires in March 2023 and includes, at our option, two six-month extensions. The multicurrency revolving facility allows us to borrow in up to 14 currencies, including U.S. dollars. Our revolving credit facility has a $1.0 billion expansion option, which is subject to obtaining lender commitments. Under our credit facility, our investment grade credit ratings as of December 31, 2020 provide for financing at the London Interbank Offered Rate, commonly referred to as LIBOR, plus 0.775% with a facility commitment fee of 0.125%, for all-in pricing of 0.90% over LIBOR.

The borrowing rate under our revolving credit facility is subject to an interest rate floor and may change if our investment grade credit ratings change. We also have other interest rate options available to us under our credit facility. Our revolving credit facility is unsecured and, accordingly, we have not pledged any assets as collateral for this obligation.
At December 31, 2020, we had a borrowing capacity of $3.0 billion available on our revolving credit facility and nooutstanding balance. The weighted average interest rate on borrowings outstanding under our revolving credit facility during 2020 was 1.5% per annum. We must comply with various financial and other covenants in our credit facility. At December 31, 2020, we were in compliance with these covenants. We continually evaluate our business
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operations through the COVID-19 pandemic and, as of December 31, 2020, expect to remain in compliance with the financial covenants for our credit facility over the next 12 months. We expect to use our credit facility to acquire additional properties and for other general corporate purposes. Any additional borrowings will increase our exposure to interest rate risk.

In August 2020, we established a U.S. dollar-denominated unsecured commercial paper program. Under the terms of the program, we may, from time to time, issue unsecured commercial paper notes up to a maximum aggregate amount outstanding of $1.0 billion. Borrowings under this program generally mature in one year or less. At December 31, 2020, we had no outstanding commercial paper borrowings. The weighted average interest rate on borrowings under our commercial paper program was 0.3% from inception of the plan through December 31, 2020. We use our $3.0 billion revolving credit facility as a liquidity backstop for the repayment of the notes issued under the commercial paper program.
We generally use our credit facility and commercial paper borrowings for the short-term financing of new property acquisitions. Thereafter, we generally seek to refinance those borrowings with the net proceeds of long-term or permanent financing, which may include the issuance of common stock, preferred stock or debt securities. We cannot assure you, however, that we will be able to obtain any such refinancing, or that market conditions prevailing at the time of the refinancing will enable us to issue equity or debt securities at acceptable terms. We regularly review our credit facility and commercial paper program and may seek to extend, renew or replace one or both, to the extent we deem appropriate.
Cash Reserves
We are organized to operate as an equity REIT that acquires and leases properties and distributes to stockholders, in the form of monthly cash distributions, a substantial portion of our net cash flow generated from leases on our properties. We intend to retain an appropriate amount of cash as working capital. At December 31, 2020, we had cash and cash equivalents totaling $824.5 million, inclusive of £32.3 million Sterling.
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 program.
Credit Agency Ratings
The borrowing interest rates under our revolving credit facility are based upon our ratings assigned by credit rating agencies. As of December 31, 2020, we were assigned the following investment grade corporate credit ratings on our senior unsecured notes and bonds: Moody’s Investors Service has assigned a rating of A3 with a “stable” outlook and Standard & Poor’s Ratings Group has assigned a rating of A- with a “stable” outlook. In addition, we were assigned the following ratings on our commercial paper at December 31, 2020: Moody's Investors Service has assigned a rating of P-2 and Standard & Poor's Ratings Group has assigned a rating of A-2.
Based on our ratings as of December 31, 2020, the facility interest rate was LIBOR, plus 0.775% with a facility commitment fee of 0.125%, for all-in pricing of 0.90% over LIBOR. Our credit facility provides that the interest rate can range between: (i) LIBOR, plus 1.45% if our credit rating is lower than BBB-/Baa3 or unrated and (ii) LIBOR, plus 0.75% if our credit rating is A/A2 or higher. In addition, our credit facility provides for a facility commitment fee based on our credit ratings, which range from: (i) 0.30% for a rating lower than BBB-/Baa3 or unrated, and (ii) 0.10% for a credit rating of A/A2 or higher.
We also issue senior debt securities from time to time and our credit ratings can impact the interest rates charged in those transactions. If our credit ratings or ratings outlook change, our cost to obtain debt financing could increase or decrease. The credit ratings assigned to us could change based upon, among other things, our results of operations and financial condition. These ratings are subject to ongoing evaluation by credit rating agencies and we cannot assure you that our ratings will not be changed or withdrawn by a rating agency in the future if, in its judgment, circumstances warrant. Moreover, a rating is not a recommendation to buy, sell or hold our debt securities, preferred stock or common stock.

Term Loans
In October 2018, in conjunction with our credit facility, we entered into a $250.0 million senior unsecured term loan, which matures in March 2024, and is governed by the credit agreement that governs our revolving credit facility. Borrowing under this term loan bears interest at the current one-month LIBOR, plus 0.85%. In conjunction with this
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term loan, we also entered into an interest rate swap which effectively fixes our per annum interest on this term loan at 3.89%.

In June 2015, in conjunction with entering into our previous credit facility, we entered into a $250.0 million senior unsecured term loan which matured in June 2020. Borrowing under this term loan bore interest at the current one-month LIBOR, plus 0.90%. In conjunction with this term loan, we also entered into an interest rate swap which effectively fixed our per annum interest rate on this term loan at 2.62%. In June 2020, we repaid the term loan in full upon maturity.

Mortgage Debt
As of December 31, 2020, we had $299.6 million of mortgages payable, all of which were assumed in connection with our property acquisitions. Additionally, at December 31, 2020, we had net premiums totaling $1.7 million on these mortgages and deferred financing costs of $973,000. We expect to pay off the mortgages payable as soon as prepayment penalties have declined to a level that would make it economically feasible to do so. During 2020, we made $108.8 million of principal payments, including the repayment of nine mortgages in full for $103.4 million.
Notes Outstanding
As of December 31, 2020, we had $8.30 billion of senior unsecured note and bond obligations, excluding unamortized net original issuance premiums of $14.6 million and deferred financing costs of $49.2 million. All of our outstanding notes and bonds have fixed interest rates. With the exception of interest on our 1.625% senior unsecured notes due in December 2030, which is paid annually, interest on all of our other senior note and bond obligations is paid semiannually.
No Unconsolidated Investments
We have no unconsolidated investments, nor do we engage in trading activities involving energy or commodity contracts.
Environmental, Social and Governance (ESG)
In recent years, our environmental, social, and governance efforts have quickly evolved from commitments to action. We continue to focus on how best to institutionalize efforts for a lasting and positive impact. We strive to be a leader in the net lease industry in ESG initiatives.

We are committed to conducting our business according to the highest ethical standards. We are dedicated to providing an engaging, diverse, and safe work environment for our employees, operating our business in an environmentally conscious manner, and upholding our corporate responsibilities as a public company for the benefit of our stakeholders - our investors, clients, team and community.

As The Monthly Dividend Company®, our mission is to conduct business with integrity, transparency, respect and humility to create long-term value across economic cycles for all stakeholders. We are dedicated to providing dependable monthly dividends that increase over time.

We believe that our commitment to corporate responsibility, which encompasses ESG principles, is critical to our performance and long-term success and that we all have a shared responsibility to our community and the planet. The Nominating/Corporate Governance Committee of our Board of Directors has direct oversight of ESG matters.

Environmental - Sustainability
In 2020, we took the next step on our sustainability agenda by continuing to increase our ESG reporting and disclosure, expanding our "green lease" coverage, and committing to offsetting 100% of our electricity usage at our corporate headquarters through renewable energy combined with an energy storage system. As our sustainability strategy matures, we plan on executing more environmental impact initiatives in the coming years, by utilizing opportunities to collaborate with both internal and external stakeholders.

We hold the protection of our assets, communities, and the environment in high regard. Based on our business model, the properties in our portfolio are primarily net leased to our clients, and each client is generally responsible for maintaining the buildings, including utilities management and the implementation of environmentally sustainable practices at each location. In that light, we intend to expand our client engagement efforts to achieve shared sustainability objectives on an ongoing basis. As a member of the National Association of Real Estate Investment Trusts (Nareit) Real Estate Sustainability Council, we are focused on leveraging best practices and advancing our efforts in this area.
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Social - Company Culture and Employees

Human Capital
We put great effort into cultivating an inclusive company culture. We are one team, and together we are committedseek to providing an engaging work environment centered on our values of integrity, transparency, respect, and humility. We hire talented employees with diverse backgrounds and perspectives and worklook to providefoster an environment withthat allows for regular, open communication where capable team members have fulfilling careers and are encouraged to engage with and make a positive impact on our Company, its operations, its business partners, and the communities in which we operate.

The COVID-19 pandemic presented challenges to our employees. In response, during 2020, we took the following actions to seek to assist our employees:
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Employees operate as "One Team" and, together, we are committed to providing an engaging work environment centered on our values of:
Transitioned all employees to working remotely through secure systems supported by our IT department;Do the Right Thing,
Utilized Microsoft Teams to support regular communication, collaboration, and continued training;Take Ownership,
Increased dialogue with our team leaders, including our CEO, who scheduled regular check-in calls with departments and employees;Empower Each Other,
Provided resources to employees who were directly impacted by the COVID-19 pandemic;
Implemented a business continuity plan that includes emergency planning, disaster recovery, alternative communication outlets, and real-time testing simulations;
Engaged with employees through a survey to gather their perspectives on how and when to return to an office work environment based on their individual situations;Celebrate Differences, and
Established virtual engagement activities bringing colleagues together through the Team Building Committee and Green Team.

Give More than We Take.
Recruitment, Development and Retention
We believeAt the heart of our corporate culture lie our dedicated employees, who form the foundation of our corporate culture and are one oforganization, representing our most valuable assets. As of January 2021, we employed 210 professionals (including two part-time employees), with theDecember 31, 2023, our workforce comprises 418 professionals. The majority of talentour talented team members are recruited and hired from the communities in which we operate, embodying our commitment to local community. In order to broadenengagement. To extend the scope of our reach for talent acquisition efforts, we offerhave implemented various initiatives, including college and high school internship programs. Our comprehensive approach encompasses a college internship program and attract candidates utilizing diverse resourceswide range of strategies, such as engaging with affinity associations, utilizing targeted job advertisements, employing sourcing software that emphasizes diversity criteria, and fostering employee referrals. Additionally, as partThese measures ensure that we continually attract and embrace a diverse pool of candidates. Furthermore, we recognize that internal mobility within our ongoing effortsorganization unlocks yet another great source of talent. By encouraging our current employees to strengthenexpand their skills and take on new challenges, we tap into a rich reservoir of potential that enhances our internalworkforce's capabilities and reinforces our corporate culture.

We offer leadership development capabilities, we operate an annual mentorship programprograms and train on critical topics such as ethics, insider trading, anti-discrimination and harassment, cybersecurity, Diversity, Equalitydiversity, equality and Inclusion (DE&I) awareness,inclusion, safety, and important company policies that are required for every employee.other Company policies. We also offer competency-based training that includesprovide professional development mentorship opportunities executivefor One Team members and officer-level coaching, and leadership development.

Assistanceprovide assistance and support are provided to employees who are working towards obtainingpursuing job-related licenses, and relevant certifications, as welland continuing education. Opportunities to enroll in professional and technical education is also extended to all employees who are looking for ways to continue learning and growing with the company.

Employee retention is vital to maintainingessential for supporting a robustpositive culture and cohesiveproductive workforce. To that end, we provide compensation thatAccordingly, we believe iswe offer competitive with our peerscompensation and competitors, including a generous benefits package.packages. Benefits include medical, dental, and vision healthcare benefitscoverage for all employees and their families; participation in afamilies, 401(k) planor equivalent plans with aCompany matching contribution from us;opportunity; paid time-off;time-off or equivalent vacation; disability and life insurance; and, in years that the company'sCompany's performance meets certain goals, the ability to earn equity in the company that vests over four years. Our employees have an average tenureCompany subject to applicable vesting periods.
Additional information regarding our human capital programs and initiatives is available in our annual Proxy Statement and Sustainability Report, both of over five years andwhich can be found on our leadership,website. Information on our website, including Vice President and above, tenureour Sustainability Report, is over 11 years.

not incorporated by reference into this Annual Report.
Diversity, Equality and Inclusion (DE&I)
We believe that much of our success is rooted in the diversity of our teamsOne Team and our commitmentdedication to inclusion. This commitment starts at the top withinclusion are foundational to our highly skilledsuccess. We continue DE&I training and diverse Board, comprised of individuals with a variety of backgrounds and experience. We strivelearning sessions to emulate this diversity throughout the company as part of our ongoing commitment to diversity, equality and inclusion, our DE&I Policy. In 2020 we focused on building our employeesbuild employee awareness and understanding ofaction while also encouraging open discussion amongst colleagues. Our DE&I with both required and voluntary learning opportunities (65% participation).

These learning opportunities aiminitiatives are designed to continue buildingenhance knowledge, anddeepen understanding, facilitate open and safe conversations regardingon critical DE&I topics, such as confronting bias in the workplace, drivingencourage inclusive conversations with others,interactions, and promoting belonging in our remote environment.

We performcultivate a sense of belonging. In addition, we conduct pay equity analysis each yearanalyses to help ensure that regardless of gender, race, or national origin,equitable pay for employees who perform similar work under similar circumstances, are paid similar wages.

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Tableregardless of Contents
Workforce Demographics
The following data is as of February 8, 2021 and was gathered voluntarily from employees and directors, and reflects the information provided by the participating respondents. We define Manager Level as employees that either supervise at least one team membergender, race, or hold a title of Associate Director or above. We define Senior Officer Level as employees with a title of Senior Vice President or above.
o-20201231_g2.jpgo-20201231_g3.jpgo-20201231_g4.jpg
*6 of 17 senior officers identify as women

Age% of our Workforce
Under 30 years old21 %
Between 30 and 50 years old57 %
Over 50 years old22 %
Ethnicity
Asian13 %
Black or African American%
Hispanic or Latino11 %
Caucasian68 %
Two or more races%
In addition, 22% of our Board of Directors identify as women and 44% identify as ethnically diverse.

Employee Engagement
We believe our focus on culture, employee engagement and inclusion has helped us mitigate the risk of losing key team members. To assess, analyze, and respond to employee sentiment and to ensure that we are doing all we can to foster engagement from a strategic perspective, we launched our first employee engagement survey in 2019. Eighteen months later, we conducted our second employee engagement survey, both with an overwhelming 99% of employees participating and increasing positive results. We continuously engage in our culture and the work environment experiences for opportunities to improve. We intend to continue to conduct employee engagement surveys every eighteen months.

We sponsor an active Team Building Committee comprised of volunteer-employees across numerous departments and seniority levels that organizes employee-driven, team-building events and activities to promote employee involvement, communication, and organizational continuity to foster strong interconnected relationships. We complement the Team Building Committee in support of our Environmental, Social, and Governance efforts with another volunteer-based, employee-driven Green Team that works on sustainability related matters at our office and in the community.

ethnicity.
Employee Health, Safety and Wellbeing
We believeprioritize the health, safety, and wellbeing of our team members are cornerstones for our successful operations.members. Our “O”verall Wellbeing Program provides opportunities for our peoplewellbeing program is designed to participate in variousempower employees through a range of activities and educational programsinitiatives that contribute to enhanceboth their personal and professional lives. To supportdevelopment. In fostering a healthy work environment, we promote work-life balance we offerby offering flexible work schedules and providing discounted fitness programs, on-site dry-cleaning pickup, car wash services, paid family leave, generous maternityparental leave, onsite lactation rooms, an infant-at-work program, employee health fairs, and an infant at work program for new parents. Employees also have access to a robust employee assistance program. Our Injuryprogram, among other programs and Illness Prevention Program (IIPP) helps us meetservices.
Government Regulation
General
Compliance with various governmental regulations has an impact on our goalbusiness, including our capital expenditures, earnings and competitive position, which can be material. We incur costs to monitor and take actions to comply with governmental regulations that are applicable to our business, which include, among others, federal securities laws and regulations, applicable stock exchange requirements, REIT and other tax laws and regulations, environmental and health and safety laws and regulations, local zoning, usage and other regulations relating to real property and the Americans with Disabilities Act of maintaining a safe1990, or ADA. We believe that our properties generally have the necessary permits and healthy working environment for our employees.

approvals needed and are in compliance with applicable laws and regulations.
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Additionally, we have been training employees on best practice health habits in advance of a future return to our offices. Every employee will be required to attend an information session prior to regularly returning to the office to work. We have invested in MERV 13 filters, continuous HVAC air filtration, sanitizing stations, social distancing guidelines, training for healthy hand washing habits, escalated cleaning protocols, and preventative health screening questionnaires to create a safe and clean environment for our employees.

Our people are Realty Income.

Governance - Fiduciary Duties and Ethics
We believe that nothing is more important than a company’s reputation for integrity and serving as a responsible fiduciary for its stockholders. We are committed to managing the company for the benefit of our stockholders and are focused on maintaining good corporate governance. Our practices that illustrate this commitment include, but are not limited to:

Our Board of Directors is currently comprised of nine directors, eight of whom are independent, non- employee directors;
Our Board of Directors is elected on an annual basis with a majority vote standard;
Our directors conduct annual self-evaluations and participate in orientation and continuing education programs;
An enterprise risk management evaluation is conducted annually to identify and assess company risk;
Each committee within our Board of Directors is comprised entirely of independent directors; and
We adhere to all other corporate governance principles outlined in our Corporate Governance Guidelines. These guidelines, as well as our bylaws, committee charters and other governance documents may be found on our website.

We are committed to conducting our business according to the highest ethical standards and upholding our corporate responsibilities as a public company operating for the benefit of our stockholders. Our Board of Directors has adopted a Code of Business Ethics that applies to our directors, officers, and other employees. The Code of Business Ethics includes our commitment to dealing fairly with all of our customers, service providers, suppliers, and competitors. We conduct an annual training with our employees regarding ethical behavior and require all employees to acknowledge the terms of, and abide by, our Code of Business Ethics, which is also available on our website. Our employees have access to members of our Board of Directors to report anonymously, if desired, any suspicion of misconduct by any member of our senior management or executive team. Anonymous reporting is always available through the company’s whistleblower hotline and reported to our Audit Committee quarterly.




Environmental Matters
Investments in real property can create a potential for environmental liability. Federal, state and local environmental laws and regulations regulate releases of hazardous or toxic substances into the environment. While our tenants are generally primarily responsible for compliance with environmental laws and regulations, we as 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. We have no knowledge of any hazardous substances existing on our properties in violation of any applicable laws; however, no assurance can be given that such substances are not currently located on any of our properties.
Some of our properties contain, have contained, or are adjacent to or near properties that contain or have contained storage tanks for petroleum products or that involve or involved the use of hazardous or toxic substances. Under certain laws and regulations, a current or previous owner, operator or tenant may be required to investigate and clean-up hazardous or toxic substances or petroleum product releases or threats of releases, and may be held liable to a government entity or third parties for property damage and for investigation, clean-up and monitoring costs incurred by those parties in connection with actual or threatened contamination. These laws typically impose clean-up responsibility and liability without regard to fault, or whether or not the owner, operator or tenant knew of or caused the contamination. The liability may be joint and several for the full amount of the investigation, clean-up and monitoring costs incurred or to be incurred or actions to be undertaken, although a party held jointly and severally liable may seek contributions from other identified, solvent, responsible parties for their fair share toward these costs. In addition, strict environmental laws regulate a variety of activities that can occur on a property, including the storage of petroleum products or other hazardous or toxic substances, air emissions and water discharges. Such laws may impose fines or penalties for violations.


Environmental laws also govern asbestos-containing materials (“ACM”). Federal regulations require building owners and those exercising control over a building’s management to identify and warn, through signs and labels, of potential hazards posed by workplace exposure to ACM in their building. The regulations also have employee training, record keeping and due diligence requirements pertaining to ACM. Significant fines can be assessed for violation of these regulations, and we could be subject to lawsuits if personal injury from exposure to ACM occurs. Federal, state and local laws and regulations also govern the removal, encapsulation, disturbance, handling and/or disposal of ACM when those materials are in poor condition or in the event of construction, remodeling, renovation or demolition of a building. These laws may impose liability for improper handling or a release into the environment of ACM and may provide for fines to, and for third parties to seek recovery from, owners or operators of real properties for personal injury or improper work exposure associated with ACM. In addition, our properties may contain or develop harmful mold or other airborne contaminants. The presence of significant mold or other airborne contaminants at any of our properties could require us to undertake a costly remediation to contain or remove the mold or other airborne contaminants from the affected property or increase indoor ventilation. Further, the presence of significant mold or other airborne contaminants could expose us to liability from our tenants, employees of our tenants or others if property damage or personal injury occurs.

Americans with Disabilities Act of 1990

Our properties are generally required to comply with ADA. The ADA has separate compliance requirements for “public accommodations” and “commercial facilities,” but generally requires that buildings be made accessible to people with disabilities. Compliance with the ADA, as well as a number of additional federal, state and local laws and regulations, may require modifications to properties we currently own and any properties we purchase, or may restrict renovations of those properties. Noncompliance with these laws or regulations could result in fines or an award of damages to private litigants, as well as the incurrence of costs to make modifications to attain compliance. Although our tenants are generally responsible for compliance with the ADA and other similar laws or regulations, we could be held liable as the owner of the property for a failure of one of our tenants to comply with such laws or regulations. As of December 31, 2023, we have not received notice from any governmental authority, nor are we otherwise aware, of any non-compliance with the ADA that we believe would have a material adverse effect on our business, financial position or results of operations.

Available Information
















We maintain a corporate website at www.realtyincome.com. On our website we make available, free of charge, copies of our annual report on Form 10-K, quarterly reports on Form 10-Q, Form 3s, Form 4s, Form 5s, current reports on Form 8-K, and amendments to those reports, as soon as reasonably practicable after we electronically file these reports with the Securities and Exchange Commission (the "SEC"). None of the information on our website is deemed to be part of this report.
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PROPERTY PORTFOLIO INFORMATION
At December 31, 2020,2023, out of the 13,458 properties that we owned a diversified portfolio:
Of 6,592 properties;
With an occupancy rate of 97.9%, or 6,452 properties leased and 140 properties available for lease or sale;
Doing businessheld interests in, 51 separate industries;
Located in 49 U.S. states, Puerto Rico and the U.K.;
With approximately 110.8 million square feet of leasable space;
With a weighted average remaining lease term (excluding rights to extend a lease at the option of the client) of approximately 9.0 years; and
With an average leasable space per property of approximately 16,810 square feet; approximately 12,340 square feet per retail property and 245,270 square feet per industrial property.
At December 31, 2020, 6,45213,265 properties were vastly leased under net lease agreements. A net lease typically requires the client to be responsible for monthly rent and certain property operating expenses including property taxes, insurance, and maintenance. In addition, clients of our clients areproperties typically subject to futurepay rent increases based onon: (1) fixed increases, in the consumer price index(2) increases tied to inflation (typically subject to ceilings), or (3) additional rent calculated as a percentage of the client'sclients' gross sales above a specified level, or fixed increases.

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

Top 10 Industry Concentrations
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TableWe are engaged in a single business activity, which is the leasing of Contents
Industry Diversification
The following table sets forthproperty to clients, generally on a net basis. That business activity spans various geographic boundaries and includes property types and clients engaged in various industries. Even though we have a single segment, we believe our investors continue to view diversification as a key component of our investment philosophy and so we believe it remains important to present certain information regarding our property portfolio classified according to the business of the respective clients, expressed as a percentage of our total portfolio annualized contractual rent:
Percentage of Total Portfolio Annualized Contractual Rent by Industry
As of
Dec 31, 2020Dec 31, 2019Dec 31, 2018Dec 31, 2017Dec 31, 2016
U.S.
Aerospace0.6 %0.8 %0.9 %1.0 %1.1 %
Apparel stores1.3 1.1 1.2 1.4 1.7 
Automotive collision services1.1 1.0 0.9 1.0 1.0 
Automotive parts1.6 1.6 1.7 1.5 1.3 
Automotive service2.7 2.6 2.3 2.5 2.0 
Automotive tire services2.0 2.1 2.3 2.5 2.6 
Beverages2.1 2.0 2.4 2.6 2.8 
Child care2.1 2.1 2.2 1.7 1.7 
Consumer electronics0.3 0.3 0.3 0.3 0.3 
Consumer goods0.6 0.6 0.7 0.7 0.9 
Convenience stores11.9 12.3 12.6 9.3 10.0 
Crafts and novelties0.9 0.6 0.6 0.6 0.5 
Diversified industrial0.8 0.7 0.8 0.8 0.9 
Dollar stores7.6 7.9 7.3 7.5 8.0 
Drug stores8.2 8.8 9.4 10.2 10.8 
Education0.2 0.2 0.3 0.3 0.3 
Electric utilities0.1 0.1 0.1 0.1 0.1 
Entertainment0.3 0.3 0.3 0.4 0.4 
Equipment services0.3 0.4 0.4 0.4 0.5 
Financial services1.8 2.0 2.4 2.3 2.6 
Food processing0.7 0.7 0.5 0.6 1.0 
General merchandise3.4 2.5 2.1 2.3 1.9 
Government services0.6 0.7 0.9 0.9 1.0 
Grocery stores4.9 5.2 5.0 5.3 3.5 
Health and beauty0.2 0.2 0.2 **
Health and fitness6.7 7.0 7.1 7.7 7.6 
Health care1.5 1.6 1.6 1.4 1.5 
Home furnishings0.7 0.8 0.8 0.9 0.9 
Home improvement3.1 2.9 2.8 2.9 2.5 
Machinery0.1 0.1 0.1 0.1 0.1 
Motor vehicle dealerships1.6 1.6 1.8 2.0 2.0 
Office supplies0.1 0.2 0.2 0.2 0.3 
Other manufacturing0.4 0.6 0.7 0.8 0.8 
Packaging0.9 0.8 1.0 1.1 0.9 
Paper0.1 0.1 0.1 0.1 0.1 
Pet supplies and services0.7 0.7 0.5 0.6 0.6 
Restaurants - casual dining2.8 3.2 3.3 3.6 3.7 
Restaurants - quick service5.3 5.8 6.3 5.2 4.8 
Shoe stores0.2 0.2 0.5 0.6 0.6 
Sporting goods0.7 0.8 0.9 1.0 1.5 
Telecommunications0.5 0.5 0.6 0.6 0.7 
Theaters5.6 6.1 5.3 5.7 4.6 
Transportation services3.9 4.3 5.0 5.4 5.7 
Wholesale clubs2.4 2.5 2.9 3.1 3.4 
Other0.2 0.7 0.7 0.8 0.8 
Total U.S.93.8 %

97.3 %100.0 %100.0 %

100.0 %
U.K.
Grocery stores4.9 2.7 — — — 
Health care0.1 — — — — 
Home improvement1.2 — — — — 
Theaters**— — — 
Total U.K.6.2 %2.7 %— %— %— %
Totals100.0 %

100.0 %100.0 %100.0 %

100.0 %
Percentage of Total Portfolio Annualized Contractual Rent by Industry (1)
As of
Dec 31,
2023
Dec 31,
2022
Dec 31,
2021
Dec 31,
2020
Dec 31,
2019
Grocery11.4%10.0%10.2%9.8%7.9%
Convenience Stores10.28.69.111.912.3
Dollar Stores7.17.47.57.67.9
Home Improvement5.95.65.14.32.9
Drug Stores5.55.76.68.28.8
Restaurants-Quick Service5.26.06.65.35.8
Restaurants-Casual4.45.15.92.83.2
Automotive Service4.34.03.22.72.6
Health and Fitness3.94.44.76.77.0
Gaming3.92.9
*(1) Less than 0.1%
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TableThe presentation of ContentsTop 10 Industry Concentrations combines total portfolio contractual rent from the U.S. and Europe. Europe consists of properties in the U.K., starting in May 2019, in Spain, starting in September 2021, in Italy, starting in October 2022, in Ireland, starting in June 2023, and in France, Germany, and Portugal, starting in December 2023.
Property Type Composition
The following table sets forth certain property type information regarding our property portfolio as of December 31, 20202023 (dollars in thousands):
Property TypeProperty TypeNumber of
Properties
Approximate Leasable
Square Feet (1)
Total Portfolio Annualized Contractual Rent as of
December 31, 2020
Percentage of Total Portfolio Annualized Contractual RentProperty TypeNumber of
Properties
Approximate
Leasable
Square Feet (1)
Total Portfolio Annualized Contractual RentPercentage of Total Portfolio Annualized Contractual Rent
RetailRetail6,419 79,227,800 $1,409,959 84.4 %Retail13,053179,880,600$3,304,177 81.8 81.8 %
IndustrialIndustrial115 28,206,300 182,004 10.9 
Office43 3,175,700 51,308 3.1 
Agriculture15 184,500 27,113 1.6 
Gaming (2)
Other (3)
TotalsTotals6,592 110,794,300 $1,670,384 100.0 %Totals13,458272,083,100$4,041,871 100.0 100.0 %
(1)Includes leasable building square footage. Excludes 3,3002,962 acres of leased land categorized as agriculture at December 31, 2020.2023.

(2)
Includes our pro rata share of leasable square feet of properties owned by unconsolidated joint ventures.
(3)"Other" includes 27 properties classified as agriculture, consisting of approximately 0.3 million leasable square feet and $38.0 million in annualized contractual rent and 10 properties classified as office, consisting of approximately 2.1 million leasable square feet and $27.4 million in annualized contractual rent, as well as one land parcel under development.
Client Diversification
The following table sets forth ourthe 20 largest clients in our property portfolio, expressed as a percentage of total portfolio annualized contractual rent, which does not give effect to deferred rent, at December 31, 2020:2023: 
ClientClientNumber of
Leases
Percentage of Total Portfolio Annualized Contractual RentClientNumber of
Leases
Percentage of Total Portfolio Annualized Contractual Rent (1)
Dollar GeneralDollar General1,659 3.8 %
WalgreensWalgreens248 5.7 %
Dollar Tree / Family Dollar
7-Eleven7-Eleven432 4.8 %
Dollar General787 4.3 %
EG Group Limited
Wynn Resorts
FedExFedEx41 3.7 %
Dollar Tree / Family Dollar550 3.3 %
B&Q (Kingfisher)
Asda
Sainsbury's
LA FitnessLA Fitness56 3.1 %
Sainsbury's18 3.0 %
Wal-Mart / Sam's Club58 2.9 %
Regal Cinemas (Cineworld)41 2.7 %
BJ's Wholesale Clubs
Lifetime Fitness
MGM (Bellagio)
CVS Pharmacy
Walmart / Sam's Club
Tractor Supply
Tesco
AMC TheatersAMC Theaters32 2.7 %
Lifetime Fitness16 2.4 %
Circle K (Couche-Tard)277 1.8 %
BJ's Wholesale Clubs15 1.7 %
Treasury Wine Estates17 1.6 %
CVS Pharmacy88 1.5 %
Speedway (Marathon)161 1.5 %
Kroger22 1.5 %
Tesco10 1.4 %
Home Depot22 1.3 %
GPM Investments / Fas Mart202 1.3 %
Totals3,093 52.2 %
Red Lobster
TotalTotal5,33240.2 %

(1)

Amounts for each client are calculated independently; therefore, the individual percentages may not sum to the total. Excludes non-rental contractual income on loans and preferred equity investments.







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Lease Expirations
The following table sets forth certain information regarding the timing of the lease term expirations in our portfolio (excluding rights to extend a lease at the option of the client) and their contribution to total portfolio annualized contractual rent as of December 31, 20202023 (dollars in thousands):
Total Portfolio(1)
Total Portfolio(1)
Total Portfolio (1)
Expiring
Leases
Approximate
Leasable
Total Portfolio Annualized Contractual Rent as of
December 31, 2020
Percentage of Total Portfolio Annualized Contractual Rent
Expiring
Leases
Expiring
Leases
Approximate
Leasable
Square Feet
Total Portfolio Annualized Contractual RentPercentage of Total Portfolio Annualized Contractual Rent
YearYearRetailNon-RetailSquare FeetTotal Portfolio Annualized Contractual Rent as of
December 31, 2020
Percentage of Total Portfolio Annualized Contractual RentYearRetailNon-Retail
2021178 10 1,491,300 
2022372 21 8,339,600 78,637 4.7 
2023545 24 9,751,500 121,418 7.3 
20242024418 17 7,768,600 98,186 5.9 2024474146,370,500$79,995 2.0 2.0 %
20252025507 21 7,913,500 122,585 7.3 
20262026374 10 6,731,800 89,150 5.3 
20272027432 6,507,400 88,054 5.3��
20282028590 14 11,789,800 136,826 8.2 
20292029541 9,277,800 131,580 7.9 
20302030227 12 6,856,200 78,966 4.7 
20312031253 15 6,799,500 114,831 6.9 
20322032304 12 4,898,100 101,673 6.1 
20332033288 3,894,200 71,124 4.3 
20342034304 5,239,200 125,685 7.5 
20352035258 — 2,181,600 62,335 3.7 
2036-2046765 9,158,200 220,502 13.2 
2036
2037
2038
2039-2143
TotalsTotals6,356 180 108,598,300 $1,670,384 100.0 %Totals13,835427269,031,000$4,041,871 100.0 100.0 %
(1)The table sets forth the timing of remaining lease terms expirations in our portfolio and their contributions to contractual rent as of December 31, 2020. Leases on our multi-client properties are counted separately in the table above. TheThis table excludes 163270 vacant units.

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Geographic Diversification
The following table sets forth certain state-by-stategeographic information regarding our property portfolio as of December 31, 20202023 (dollars in thousands):
LocationLocationNumber of
Properties
Percent
Leased
Approximate Leasable
Square Feet
Total Portfolio Annualized Contractual Rent as of December 31, 2020Percentage of Total Portfolio Annualized Contractual RentLocation
Number of
Properties
Percent LeasedApproximate Leasable Square FeetPercentage of Total Portfolio Annualized Contractual Rent
Alabama
Alabama
AlabamaAlabama225 95 %2,127,700 $30,754 1.8 %40898 %4,438,6001.7 %
AlaskaAlaska100 274,600 2,148 0.1 
ArizonaArizona152 99 2,082,200 31,380 1.9 
ArkansasArkansas100 97 1,178,800 14,419 0.9 
CaliforniaCalifornia238 98 7,398,100 147,067 8.8 
ColoradoColorado98 94 1,575,200 23,500 1.4 
ConnecticutConnecticut18 89 1,274,100 12,907 0.8 
DelawareDelaware19 100 101,400 3,132 0.2 
FloridaFlorida430 98 4,981,400 87,988 5.3 
GeorgiaGeorgia296 99 4,546,100 59,553 3.6 
Hawaii
IdahoIdaho14 93 103,200 1,748 0.1 
IllinoisIllinois299 95 7,703,900 96,369 5.8 
IndianaIndiana200 100 2,556,000 40,333 2.4 
IowaIowa46 91 2,527,800 18,182 1.1 
KansasKansas118 98 2,206,600 24,807 1.5 
KentuckyKentucky94 99 1,826,100 22,184 1.3 
LouisianaLouisiana136 97 1,953,200 25,595 1.5 
MaineMaine27 100 277,800 5,721 0.3 
MarylandMaryland38 100 1,494,000 25,743 1.5 
MassachusettsMassachusetts58 95 881,400 17,082 1.0 
MichiganMichigan243 100 2,752,200 42,837 2.6 
MinnesotaMinnesota176 99 2,357,400 44,713 2.7 
MississippiMississippi188 95 2,029,800 22,826 1.4 
MissouriMissouri186 94 2,962,100 39,114 2.3 
MontanaMontana12 100 89,100 2,238 0.1 
NebraskaNebraska61 98 862,300 8,846 0.5 
NevadaNevada26 96 1,239,300 9,204 0.6 
New HampshireNew Hampshire14 100 321,500 6,058 0.4 
New JerseyNew Jersey80 99 1,271,000 29,992 1.8 
New MexicoNew Mexico58 100 495,500 8,577 0.5 
New YorkNew York139 98 3,164,400 69,359 4.2 
North CarolinaNorth Carolina207 99 3,493,800 51,160 3.1 
North DakotaNorth Dakota75 126,900 1,321 0.1 
OhioOhio341 98 6,765,000 69,258 4.0 
OklahomaOklahoma190 99 2,368,500 32,147 1.9 
OregonOregon31 100 665,100 11,965 0.7 
PennsylvaniaPennsylvania211 99 2,217,000 44,495 2.7 
Rhode IslandRhode Island100 158,000 2,582 0.2 
South CarolinaSouth Carolina179 98 1,816,700 35,507 2.1 
South DakotaSouth Dakota21 81 254,700 2,584 0.2 
TennesseeTennessee261 98 3,854,700 49,839 3.0 
TexasTexas831 99 11,691,500 176,716 10.5 
UtahUtah23 100 949,700 9,980 0.6 
VermontVermont100 65,500 1,212 0.1 
VirginiaVirginia219 99 3,418,300 45,136 2.7 
WashingtonWashington51 98 956,700 15,915 1.0 
West VirginiaWest Virginia37 97 537,500 7,120 0.4 
WisconsinWisconsin131 98 3,044,400 32,972 2.0 
WyomingWyoming100 63,900 1,520 0.1 
Puerto RicoPuerto Rico100 28,300 859 *
U.K.42 100 3,703,900 103,720 6.2 
Totals\Average6,592 98 %110,794,300 $1,670,384 100.0 %
France
Germany
Ireland
Italy
Portugal
Spain
United Kingdom
Totals/averageTotals/average13,458100 %272,083,100100.0 %
*Less than 0.1%
* Less than 0.1%
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FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K, including the documents incorporated by reference, containscontain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended. When used in this annual report, the words “estimated”, “anticipated”, “expect”, “believe”, “intend”“estimated,” “anticipated,” “expect,” “believe,” “intend,” “continue,” “should,” “may,” “likely,” “plans,” and similar expressions are intended to identify forward-looking statements. Forward-looking statements include discussions of our business and portfolio; growth strategies and intentions to acquire or dispose of properties (including timing, partners, clients and terms); re-leases, re-development and speculative development of properties and expenditures related thereto; future operations and results; the announcement of operating results, strategy, plans, orand the intentions of management.management; and trends in our business, including trends in the market for long-term leases of freestanding, single-client properties. Forward-looking statements are subject to risks, uncertainties, and assumptions about Realty Income Corporation including, among other things:
Our accesswhich may cause our actual future results to capital and other sources of funding;
Our anticipated growth strategies;
Our intention to acquire additional properties and the timing of these acquisitions;
Our intention to sell properties and the timing of these property sales;
Our intention to re-lease vacant properties;
Anticipated trends in our business, including trends in the market for long-term net leases of freestanding, single-client properties;
Future expenditures for development projects; and
The impact of the COVID-19 pandemic, or future pandemics, on us, our business, our clients, or the economy generally.
Future events and actual results, financial and otherwise, may differ materially from the results discussed in or implied by the forward-looking statements. In particular, forward-looking statements regarding estimated or future results of operations are based upon numerous assumptions and estimates and are inherently subject to substantial uncertainties and actual results of operations may differ materially from those expressed or implied in the forward-looking statements, particularly if actual events differ from those reflected in the estimates and assumptions upon which such forward-looking statements are based.expected results. Some of the factors that could cause actual results to differ materially are:
Ourare, among others, our continued qualification as a real estate investment trust;
General general domestic and foreign business, and economic, or financial conditions;
Competition;
Fluctuating competition; fluctuating interest and currency rates;
Access inflation and its impact on our clients and us; access to debt and equity capital markets;
Continuedmarkets and other sources of funding (including the terms and partners of such funding); continued volatility and uncertainty in the credit markets and broader financial markets;
Other other risks inherent in the real estate business including our clients' solvency, client defaults under leases, increased client bankruptcies, potential liability relating to environmental matters, illiquidity of real estate investments, and potential damages from natural disasters;
Impairments impairments in the value of our real estate assets;
Changes changes in domestic and foreign income tax laws and rates;
The continued evolution property ownership through joint ventures, partnerships and other arrangements which may limit control of the COVID-19 pandemic and theunderlying investments; epidemics or pandemics including measures taken to limit itstheir spread, and itsthe impacts on us, our business, our clients, orand the economy generally;
The timing and pace the loss of reopening efforts atkey personnel; the local, state and national level in response to the COVID-19 pandemic and any developments, such as the recent surge in COVID-19 cases, that cause a delay in or postponement of reopenings;
The outcome of any legal proceedings to which we are a party or which may occur in the future; and
Actsacts of terrorism and war.
war; and the anticipated benefits from mergers and acquisitions including from the merger with Spirit (the "Merger").
Additional factors that may cause future events and actual results, financial or otherwise, to differ, potentially materially, from those discussed in or implied by the forward-looking statements include the risks and uncertainties include those discussed in the sections entitled “Business”,“Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report.
annual report on Form 10-K, for the year ended December 31, 2023.
Readers are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements whichare not guarantees of future plans and performance and speak only as of the date that this annual report was filed with the SecuritiesSEC. Actual plans and Exchange Commission,operating results may differ materially from what is expressed or SEC. Whileforecasted in this annual report and forecasts made in the forward-looking statements reflect our good faith beliefs, they arediscussed in this annual report might not guarantees of future performance.materialize. We do not undertake noany obligation to publicly release the results of any revisions to theseupdate forward-looking statements that may be made to reflect events or circumstances after the date of this annual report or to reflect the occurrence of unanticipated events. In light of these risks and uncertainties, the forward-looking events discussed in this annual report might not occur.statements were made.
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Item 1A:      Risk Factors
This “Risk Factors” section contains references to our “capital stock” and to our “stockholders.” Unless expressly stated otherwise, the references to our “capital stock” represent our common stock and any class or series ofpreferred stock which may be outstanding preferred stock,from time to time, while the references to our “stockholders” represent holders of our common stock and any class or series of preferred stock which may be outstanding preferred stock.

from time to time.
Risks Related to Our Business and Industry

The COVID-19 pandemic has disrupted our operations and is expected to continue to have an adverse effect on our business, results of operations, financial condition and liquidity.

In late 2019, COVID-19 was first reported in Wuhan, China, and on March 11, 2020, the World Health Organization declared COVID-19 a pandemic. The outbreak has spread globally and has led governments and other authorities around the world, including federal, state and local authorities in the United States and elsewhere, to impose measures intended to control its spread, including restrictions on freedom of movement and business operations such as travel bans, border closings, business closures, quarantines and shelter-in-place orders.

The COVID-19 pandemic has had, and other pandemics in the future could have, repercussions across global economies and financial markets. The COVID-19 pandemic and the measures taken to limit its spread have adversely impacted regional, national and global economic activity and have contributed to significant volatility and negative pressure in financial markets. The impact of the COVID-19 pandemic has been rapidly evolving and, as cases of COVID-19 have continued to increase and be identified, many countries, including the United States and United Kingdom, have reacted by, among other things, instituting quarantines and restricting travel. Many national, state and local governments, including in areas where we own properties, have also reacted by instituting quarantines, restrictions on travel, shelter-in-place orders, restrictions on types of business that may continue to operate, school closures, limitations on attendance at events or other gatherings, and social distancing requirements, and additional national, state and local governments may implement similar restrictions. In that regard, surges in COVID-19 cases have led many state and local governments to increase the scope and severity of some of these restrictions and to institute new restrictions.

As a result, the COVID-19 pandemic and the measures taken to limit its spread are negatively impacting the global, national and regional economies generally and many industries, directly or indirectly, and those impacts are likely to continue and may increase in severity, including potentially triggering a prolonged period of negative or limited economic growth. Factors that have contributed or may contribute to the adverse impact of the COVID-19 pandemic and the measures taken to limit its spread on the business, results of operations, financial condition and liquidity of us and our clients include, without limitation, the following:

A complete or partial closure of, or other operational limitations or issues at, properties operated by our clients resulting from government action (including travel bans, border closings, business closures, quarantine, shelter-in-place or similar orders requiring that people remain in their homes) or client action;
Reduced economic activity, the deterioration in our or our clients’ ability to operate in affected areas and any delays in the supply of products or services to our clients may impact certain of our clients’ businesses, results of operations, financial condition and liquidity and may cause certain of our clients to be unable to meet their obligations to us in full, or at all, and to seek, whether through negotiation, restructuring or bankruptcy, reductions or deferrals in their rent payments and other obligations to us or early termination of their leases;
We may experience difficulties, some of which may be related to unexpected supply chain disruptions, in leasing, selling or redeveloping vacant properties or renewing expiring or terminated leases on terms we consider acceptable, or at all;
We may experience difficulty accessing the bank lending, capital markets and other financial markets on attractive terms, or at all, and a severe disruption or instability in the national or global financial markets or deterioration in credit and financing conditions may adversely affect our cost of capital, our access to capital to acquire additional properties necessary to grow our business and to fund our business operations, our ability to pay dividends on our common stock, our ability to pay the principal of and interest on our indebtedness, and our other liabilities on a timely basis, and our clients’ ability to fund their business operations and meet their obligations to us and others;
The financial impact of the COVID-19 pandemic could negatively impact our credit ratings, the interest rates on our borrowings, and, if the COVID-19 pandemic continues for an extended period of time, our future compliance with financial covenants under our credit facility and other debt instruments, which could result in a default and
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potentially an acceleration of indebtedness, any of which could negatively impact our ability to make additional borrowings under our revolving credit facility, to sell commercial paper notes under our commercial paper program or incur other indebtedness, and pay dividends on our common stock and to pay the principal of and interest on our indebtedness, and our other obligations when due;
The impact of the COVID-19 pandemic on the market value of our properties has led to impairment charges and may require that we incur further impairment charges, asset write-downs or similar charges;
The impact on the ability of our employees, including members of our management team or board of directors, to fulfill their duties to us as a result of the COVID-19 pandemic, either as a result of measures taken to limit its spread or as a result of infection; and
A general decline in business activity and demand for real estate transactions could adversely affect our ability to grow our portfolio of properties.

The extent to which the COVID-19 pandemic continues to impact our operations and those of our clients will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or limit its impact, and the direct and indirect economic effects of the pandemic and containment measures. To date, the COVID-19 pandemic and the measures taken to limit its spread have adversely impacted and may continue to adversely impact, among other things, the ability of a number of our clients’ to generate adequate, or in certain cases, any revenue from their businesses, the ability or willingness of many of our clients to pay rent in full, or at all, or on a timely basis, and our ability to collect rent from our clients. It may also adversely impact our ability to enforce remedies for the failure to pay rent, our occupancy levels, our ability to acquire properties or complete construction projects, and may otherwise negatively affect our business.

Certain industries in which our clients operate appear to have been disproportionately adversely impacted by the COVID-19 pandemic and the measures taken to mitigate its spread. These adverse impacts have reduced the amount of rent we have been able to collect from our clients in those industries and may further decrease the likelihood of us collecting such rent in the future. For example, in October 2020, two major theater operators that are clients of ours publicly announced financial difficulties from the COVID-19 pandemic, including sustained operating losses, the depletion of liquidity resources and the closure of locations. In response to this information, we have recorded reserves as a reduction of rental revenue on certain theater leases related to those clients on an accrual basis and have recorded provisions for impairment on certain of our assets with respect to properties of which those theater operators are clients to reduce the carrying value of those assets to fair value. Our ability to collect rent from these clients, from other clients in the theater industry, or from other clients who face similar hardships may be further adversely impacted as the COVID-19 pandemic and its adverse impacts on those clients continue. In addition, if any of these or other clients declare bankruptcy or enter into similar corporate restructuring arrangements, they may seek to reject or renegotiate our existing leases, which could adversely affect our ability to collect rent that is owed or to collect future rent on those properties at anticipated rates, or at all, or to re-lease those properties on favorable terms. As of December 31, 2020, our exposure to the theater industry was 5.6% of total portfolio annualized contractual rent.

In addition, most of our clients operate retail businesses that depend on customer traffic. As a result, conditions that lead to a decline in customer traffic (including quarantine, shelter-in-place or similar orders requiring that people remain in their homes or orders requiring business closures or restricting business operations) have had and so long as those conditions continue to exist will continue to have an adverse effect on the business, results of operations, financial condition and liquidity of a number of our clients, and their willingness or ability to pay rent, to renew expiring leases or to enter into new leases on terms favorable to us, or at all.

In addition to the near-term effects of the COVID-19 pandemic on our clients and their businesses, we are unable to predict at this time the broader long-term impacts on consumer behavior in regard to brick-and-mortar retail and service-based businesses. To the extent certain adverse factors, including but not limited to, continued patterns of consumer savings and unemployment, persist, certain discretionary businesses could have prolonged negative consequences as a result of shifts in long-term consumer behavior.

As a result of the foregoing, we cannot predict the number of our clients that will not pay rent in the future, nor can we predict whether our clients who have paid rent in the past will continue to do so or whether our clients who have deferred rent will pay such rent in the future. As the COVID-19 pandemic continues, our clients may cease to pay their rent obligations to us in full or at all, and our clients may elect not to renew their leases, seek to terminate their leases, seek relief from their leases (including through negotiation, restructuring or bankruptcy), or decline to renew expiring leases or enter into new leases, all of which may adversely impact our rental revenue and occupancy rates,
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generate additional expenses, result in impairment charges or other write-downs of assets, and adversely impact our results of operations, financial condition and liquidity. In addition, as we believe to be the case with many retail landlords, we have received many short-term rent relief requests, most often in the form of rent deferral requests, or requests for further discussion from our clients. Collections and rent relief requests to-date may not be indicative of collections or requests in any future period.

Likewise, the deterioration of global economic conditions as a result of the pandemic may ultimately lead to a further decrease in occupancy levels and rental rates across our portfolio as our clients reduce or defer their spending, institute restructuring plans or file for bankruptcy. Some of our major clients have experienced temporary closures of some or all of their properties or have substantially reduced their operations in response to the COVID-19 pandemic, and additional clients may do so in the future. In addition, the measures taken to prevent the spread of COVID-19 (including quarantine, shelter-in-place or similar orders requiring that people remain in their homes) have led and may lead to further closures, or other operational issues at our properties, or delays in acquisition activities, construction projects, and other corporate actions, all of which may materially adversely impact our operations.

In addition, in light of the uncertain and rapidly evolving situation relating to the COVID-19 pandemic, we have taken certain precautionary measures within our organization intended to help reduce the risk of the virus to our employees, our clients, and the communities in which we operate, including instituting a work-from-home policy for our employees and suspending non-essential travel and in-person attendance at industry events.

While we anticipate that these measures are temporary, we cannot predict the specific duration for which these precautionary measures will stay in effect, and we may elect to take additional measures as the information available to us continues to develop. These actions, and any future actions we may take in response to the COVID-19 pandemic, could further negatively impact our business, financial condition, results of operations and liquidity.

For the foregoing reasons, we expect that the impact of the COVID-19 pandemic and related containment measures, including the impact on regional, national and global economies, will likely adversely affect our business, results of operations, financial condition and liquidity, and, given unpredictability of the scope, severity and duration of the pandemic, such impacts may be material.

To the extent the COVID-19 pandemic and related containment measures continue to adversely affect regional, national and global economic conditions and financial markets, as well as the business, results of operations, financial conditions and liquidity of us and our clients, it may also have the effect of heightening many of the risks described elsewhere in this “Risk Factors” section, including the risks resulting from our significant indebtedness; our need to generate sufficient cash flows to service our indebtedness, to pay dividends on our common stock, to pay the principal of and interest on our indebtedness, and provide for our other cash needs; our ongoing need for external financing; our ability to access borrowings under our credit facility and to sell notes under our commercial paper program; our ability to comply with the covenants contained in the agreements that govern our indebtedness; our dependency on key personnel; and the impact of negative market conditions or adverse events on our clients. In addition, in light of the COVID-19 pandemic and the measures taken to limit its spread, our historical information regarding our business, properties, results of operations, financial condition or liquidity may not be representative of the future results of operations, financial condition, liquidity or other financial or operating results of us, our properties or our business.

In order to grow we need to continue to acquire investment properties. The acquisition of investment properties may be subject to competitive pressures.
We face competition in the acquisition and operation of our properties. We expect competition from:
Businesses;
Individuals;
Fiduciaryfrom businesses, individuals, fiduciary accounts and plans;plans, and
Other other entities engaged in real estate investment and financing.
Some of these competitors are larger than we are and have greater financial resources. This competition may result in a higher cost for properties we wish to purchase.
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Negative market conditions or adverse events affecting our existing or potential clients, or the industries in which they operate, could have an adverse impact on our ability to attract new clients, re-lease space, collect rent or renew leases, which could adversely affect our cash flow from operations and inhibit growth.
Cash flow from operations depends in part on our ability to lease space to our clients on economically favorable terms and to collect rent from our clients on a timely basis. We could be adversely affected by various facts and events over which we have limited or no control, such as:
Lack of demand in areas where our properties are located;
Inability to retain existing clients and attract new clients;
Oversupply of space and changes in market rental rates;
Declines in our clients’ creditworthiness and ability to pay rent, which may be affected by their operations (including as a result from changes in consumer behaviors or preferences impacting our clients operations), economic downturns and competition within their industries from other operators;
Defaults by and bankruptcies of clients, failure of clients to pay rent on a timely basis, or failure of our clients to comply with their contractual obligations;
The current COVID-19 pandemic (see “Risk Factors — The COVID-19 pandemic has disruptedChanges in laws, rules or regulations that negatively impact clients or our operations and is expected to continue to have an adverse effect on our business, results of operations, financial condition and liquidity” above) or otherproperties;
Epidemics, pandemics or outbreaks of illness, disease or virus that affect countries or regions in which our clients and their parent companies operate or in which our properties or corporate headquarters are located;
Changes in consumer behaviors (e.g., decrease in discretionary consumer spending), preferences or demographics impacting our clients' operations;
Supply chain disruptions;
Economic or physical decline of the areas where the properties are located; and
Deterioration of physical condition of our properties.
At any time, any of our clients may experience a downturn in its business that may weaken its operating results or overall financial condition. As a result, a client may delay lease commencement, fail to make rental payments when due, decline to extend a lease upon its expiration, become insolvent or declare bankruptcy. Any client bankruptcy or insolvency, leasing delay or failure to make rental payments when due could result in the termination of the our client’s lease and material losses to us.

If our clients do not renew their leases as they expire, we may not be able to rent or sell the properties. Furthermore, leasesLeases that are renewed, and some new leases for properties that are re-leased, may have terms that are less economically favorable than expiring lease terms, or may require us to incur significant costs, such as renovations, improvements on behalf of the client or lease transaction costs. Negative market conditions may cause us to sell vacant properties for less than their carrying value, which could result in impairments. Any of these events could adversely affect our cash flow from operations and our ability to make distributions to our stockholders and service our indebtedness. A significant portion of the costs of owning property, such as real estate taxes, insurance and maintenance, are not necessarily reduced when circumstances cause a decrease in rental revenue from the properties. In a weakened financial condition, our clients may not be able to pay these costs of ownership and we may be unable to recover these operating expenses from them.

At any time, any of our clients may experience a downturn in its business that may weaken its operating results or overall financial condition. As a result, a client may delay lease commencement, fail to make rental payments when due, decline to extend a lease upon its expiration, become insolvent or declare bankruptcy. Any client bankruptcy or insolvency, leasing delay or failure to make rental payments when due could result in the termination of our client’s lease and material losses to us. Further, the occurrence of a client bankruptcy or insolvency could diminish or eliminate the income we receive from our client’s lease or leases. In addition, aA bankruptcy court might authorize oura client to terminate one or more of its leases with us. If that happens, our claim against the bankrupt client for unpaid future
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rent would be subject to statutory limitations that most likely would result in rent payments that would be substantially less than the remaining rent we are owed under the leases (although it(it is also possible that we may not receive any unpaid future rent under terminated leases) or we may elect not to pursue claims against a client for terminated leases. In addition, any claimClaims we have for unpaid past rent, if any, may not be paid in full, or at all. Client bankruptcies within a given property may also adversely impact our ability to re-release that property at favorable terms, or at all. Moreover, in the case of a client’s leases that are not terminated as the result of its bankruptcy, we may be required or elect to reduce the rent payable under those leases or provide other concessions, reducing amounts we receive under those leases. As a result, client bankruptcies may have a material adverse effect on our results of operations and financial condition. Any of these events could adversely affect our cash flow from operations and our ability to make distributions to stockholders and service our indebtedness.

As of December 31, 2020, 140Downturns in any of our properties were availableindustries could adversely affect our clients (including, for lease or sale. As of December 31, 2020, no single client or group ofexample, the recent challenges faced by our clients in the same industry, accounted for more than 10% of our total portfolio annualized contractual rent, except as described in the next paragraph.
As of December 31, 2020, our clients in the “convenience store - U.S.” industry accounted for approximately11.9% of our annualized contractual rent. A downturn in this industry could have a material adverse effect on our financial
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position, results of operations, our ability to pay the principal of and interest on our debt securities and other indebtedness and to make distributions on our common stock and any outstanding preferred stock.
Individually,each of the other industries in our property portfolio accounted for less than 10% of our total portfolio annualized contractual rent for 2020. Nevertheless, downturns in these industries could also adversely affect our clients,theater industry), which in turn could also have a material adverse effect on our financial position, results of operations and our ability to pay the principal of and interest on our debt securities and other indebtedness and to make distributions on our common stock and any outstanding preferred stock.
In addition, some of our properties are leased to clients that may have limited financial and other resources and, therefore, they are more likely to be adversely affected by a downturn in their respective businesses, including any downturns that have resulted or may result from the COVID-19 pandemic or other epidemics or pandemics, or in the regional, national or international economy. Furthermore, we have made and may continue to make selected acquisitions of properties that fall outside our historical focus on freestanding, single-client, net-lease retail locations in the U.S. As a result, we may be exposed to a variety of new risks by expanding into new property types and/or new jurisdictions outside the U.S. and properties leased to clients engaged in non-retail businesses. These risks may include limited experience in managing certain types of new properties, new types of real estate locations and lease structures, and the laws and culture of non-U.S. jurisdictions.

As a property owner, we may be subject to unknown environmental liabilities.
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:
Ourof our knowledge of the contamination;
The the timing of the contamination;
The the cause of the contamination; or
The the party responsible for the contamination of the property.

There may be environmental conditions associated with our properties of which we are unaware. In that regard, aA number of our properties are leased to operators of convenience stores that sell petroleum-based fuels, as well as 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 undergroundstorage 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 partythird-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 property,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.

In addition, severalSome 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.
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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 havemaintain environmental insurance policies, that provide for a total limit of $15 million per occurrence and $70 million in the aggregate, 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. For properties that have underground storage tanks, in addition to providing an indemnity in our favor,
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the clients generally are required to meet applicable state financial assurance obligations, including maintaining certain minimum net worth requirements, obtaining environmental insurance, or relying upon the state trust funds where available in the states where these properties are located to reimburse responsible parties for costs of environmental remediation. 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.

If we fail to qualify as a REIT, it could adversely impact us, and the amount of dividends we are able to pay would decrease, which could adversely affect the market price of our capital stock and could adversely affect the value of our debt securities.
We believe that, commencing with our taxable year ended December 31, 1994, we have been organized and have operated, and we intend to continue to operate, so as to qualify as a REIT under Sections 856 through 860 of the Code. However, we cannot make any assurances that we have been organized or have operated in a manner that has satisfied the requirements for qualification as a REIT, or that we will continue to be organized or operate in a manner that will allow us to continue to qualify as a REIT.
Qualification as a REIT involves the satisfaction of numerous requirements under highly technical and complex Code provisions, for which there are only limited judicial and administrative interpretations, as well as the determination of various factual matters and circumstances not entirely within our control.
As we have recently expanded into new geographies and transactional structures, and may continue to do so in the future, the analyses of our REIT qualification, and our ability to ensure such qualification, have become, and may become in the future, more complex. For example, in order to qualify as a REIT, at least 95% of our gross income in each year must be derived from qualifying sources, and we must pay distributions to stockholders aggregating annually at least 90% of our taxable income (excluding net capital gains).

If we fail to satisfy any of the requirements for qualification as a REIT, we may be subject to certain penalty taxes or, in some circumstances, we may fail to qualify as a REIT. If we were to fail to qualify as a REIT in any taxable year:
We would be required to pay regular United States, or U.S., federal corporate income tax on our taxable income;
We would not be allowed a deduction for amounts distributed to our stockholders in computing our taxable income;
We could be disqualified from treatment as a REIT for the four taxable years following the year during which qualification is lost;
We would no longer be required to make distributions to stockholders; and
This treatment would substantially reduce amounts available for investment or distribution to stockholders because of the additional tax liability for the years involved, which could have a material adverse effect on the market price of our capital stock and the value of our debt securities.

Even if we qualify for and maintain our REIT status, we may be subject to certain federal, state, local and foreign taxes on our income and property. For example, if we have net income from a prohibited transaction, that income will be subject to a 100% tax. In addition, our taxable REIT subsidiaries including Crest, are subject to federal,state and, in some cases, foreign taxes at the applicable tax rates on their income and property. Any failure to comply with legal and regulatory tax obligations could adversely affect our ability to conduct business and could adversely affect the market price of our capital stock and the value of our debt securities.

Legislative or other actions affecting REITs could have a negative effect on us or our investors.
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
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entities more attractive relative to an investment in a REIT.
The 2017 Tax Cuts 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 Jobs Act, or TCJA, has significantly changed the U.S. federal income taxation of U.S. businesseslessees and their owners, including REITs and their stockholders. We are continuing to assess the potentialnegatively impact of TCJA on us as related regulations are proposed and finalized.
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our operations.

Although a number of regulations related to TCJA became final after 2017, there are still a number of proposed regulations open for comment, and further changes may be made in light of recent changes in the U.S. government. The legislation is still unclear in some respects and could be subject to further potential amendments and technical corrections, as well as interpretations and implementing regulations by the Treasury and IRS, any of which could lessen or increase the impact of the legislation. In addition, state and local tax jurisdictions, which often use federal taxable income as a starting point for computing state and local tax liabilities, are continuing to evaluate the legislation to determine their respective levels of conformity to the new law. While some of the changes made by the tax legislation may adversely affect us in one or more reporting periods and prospectively, other changes may be beneficial on a going forward basis. We continue to work with our tax advisors and auditors to determine the full impact that the recent tax legislation as a whole will have on us.
Distribution requirements imposed by law limit our flexibility.
To maintain our status as a REIT for federal income tax purposes, we generally are required to distribute to our stockholders at least 90% of our taxable income, excluding net capital gains, each year. We also are subject to tax at regular corporate rates to the extent that we distribute less than 100% of our taxable income (including net capital gains) each year.
In addition, we are subject to a 4% nondeductible excise tax to the extent that we fail to distribute during any calendar year at least the sum of 85% of our ordinary income for that calendar year, 95% of our capital gain net income for the calendar year, and any amount of that income that was not distributed in prior years.
We intend to continue to make distributions to our stockholders to comply with the distribution requirements of the Code as well as to reduce our exposure to federal income taxes and the nondeductible excise tax. Differences in timing between the receipt of income and the payment of expenses to arrive at taxable income, along with the effect of required debt amortization payments, could require us to borrow funds to meet the distribution requirements that are necessary to achieve the tax benefits associated with qualifying as a REIT.

Future issuances of equity securities could dilute the interest of holders of our common stock.
Our future growth will depend, in large part, upon our ability to raise additional capital. If we were to raiseRaising additional capital through the issuance of equity securities we couldcan dilute the interests of holders of our common stock. The interests of our common stockholders could also be diluted by the issuance of shares of common stock pursuant to stock incentive plans. Likewise, ourOur Board of Directors is authorized to cause us to issue preferred stock of any class or series (withwith dividend, voting and other rights as determined by our Board of Directors). Accordingly, our Board of Directors may authorize(such as the issuanceshares of preferred stock that were issued in connection with voting, dividend and other similar rights thatthe closing of the Merger with Spirit) which could dilute, or otherwise adversely affect, the interest of holders of our common stock.

We may acquire properties or portfolios of properties through tax deferred contribution transactions, which could result in stockholder dilution and limit our ability to sell or refinance such assets.
We have in the past and may in the future acquire properties or portfolios of properties through tax deferred contribution transactions in exchange for partnership units in an operating partnership, which could result in stockholder dilution through the issuance of operating partnership units that, under certain circumstances, may be exchanged for shares of our common stock. This acquisition structure may have the effect of, among other things, reducing the amount of tax depreciation we could deduct over the tax life of the acquired properties, and may require that we agree to restrictions on our ability to dispose of, or refinance the debt on, the acquired properties in order to protect the contributors’ ability to defer recognition of taxable gain. Similarly, we may be required to incur or maintain debt we would otherwise not incur so we can allocate the debt to the contributors to maintain their tax bases. In the event we take any action that incurs taxable gain allocated to these contributors, we may be required to make them whole under tax protection agreements. These restrictions could limit our ability to manage, control, sell or refinance an asset at a time, or on terms, that would be favorable absent such restrictions.
We are subject to risks associated with debt and preferred stock financing.
We intend to incur additional indebtedness in the future, including borrowings under our $3.0$4.25 billion unsecured revolving credit facility and our $1.0$3.0 billion commercial paper program. The credit agreement governing our revolving credit facility also governs our $250.0 million unsecured term loan facility due March 2024. At December 31, 2020, we had no outstanding borrowings under our revolving credit facility or our commercial paper program, a total of $8.30 billion of outstanding unsecured senior debt securities (excluding unamortized original issuance premiums of $14.6 million and deferred financing costs of $49.2 million), including £715 million of Sterling-denominated unsecured senior debt securities, $250.0 million of borrowings outstanding under our term loan facility (excluding deferred financing costs of $642,000) and approximately $299.6 million of outstanding mortgage debtprograms.
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(excluding net unamortized premiums totaling $1.7 million and deferred financing costs of $973,000). Our revolving credit facility grants us the option, subject to obtaining lender commitments and other customary conditions, to expand the borrowing limits thereunder to up to $4.0$5.25 billion. The credit agreement governing our revolving credit facility also governs our $250.0 million unsecured term loan facility due March 2024 and, on January 6, 2023, we entered into the term loan agreement (the “2023 term loan agreement”) governing our 2023 term loans, pursuant to which we borrowed an aggregate of approximately $1.0 billion in multicurrency borrowings. The 2023 term loan agreement also permits us to incur additional term loans, up to an aggregate of $1.5 billion in total borrowings, pursuant to an accordion expansion feature, which is subject to obtaining lender commitments and other customary conditions. The term loans pursuant to our 2023 term loan agreement mature in January 2025 with one remaining 12-month maturity extension available at our option. At December 31, 2023, we also had a total of $18.6 billion of outstanding unsecured senior debt securities (excluding unamortized net original issuance premiums, deferred financing costs and basis adjustments on interest rate swaps designated as fair value hedges), including approximately $4.2 billion denominated in Sterling (of which $1.2 billion is related to our privately placed Sterling notes), $1.2 billion denominated in Euro thereunder, and approximately $822.4 million of outstanding mortgage debt (excluding unamortized net discounts and deferred financing costs).
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In connection with the consummation of the closing of the Merger on January 23, 2024, we effectively assumed Spirit’s existing term loans with various lenders. Specifically, on January 22, 2024, we entered into an amended and restated term loan agreement, pursuant to which we borrowed $800 million in aggregate total borrowings, $300 million of which matures on August 22, 2025 and $500 million of which matures on August 20, 2027 (the “$800 million term loan agreement”), and an amended and restated term loan agreement pursuant to which we borrowed $500 million in aggregate total borrowings which matures on June 16, 2025. The $800 million term loan agreement and the $500 million term loan agreement became effective upon the closing of the Merger on January 23, 2024. Our A3/A- credit ratings provide for a borrowing rate of 80 basis points over the applicable benchmark rate, which includes adjusted Secured Overnight Financing Rate ("SOFR") for US Dollar-denominated loans, adjusted Sterling Overnight Indexed Average (“SONIA”) for Sterling-denominated loans, and Euro Interbank Offered Rate (“EURIBOR”) for Euro-denominated loans. 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. In addition, in August 2020, we establishedas a result of the Merger, all outstanding secured indebtedness, liabilities, and other indebtedness of Spirit and its subsidiaries, including $2.75 billion of additional senior unsecured notes that were originally issued by Spirit Realty Capital, L.P., substantially all of which were exchanged for senior unsecured notes issued by us, became indebtedness and liabilities of ours or our subsidiaries, as the case may be, which substantially increased the total secured indebtedness and the total liabilities and other indebtedness of us and our subsidiaries.

Pursuant to our unsecured commercial paper note program under whichprograms we may offer and sell up to $1.0$3.0 billion of commercial paper at any time. We use our $3.0 billion revolving credit facility as a liquidity backstop for the repayment of notes issued under the commercial paper program.programs. Specifically, we maintain unused borrowing capacity under our revolving credit facility equal to the aggregate principal amount of borrowings outstanding under our commercial paper programprograms from time to time. We also may in the future enter into amendments and restatements of our current revolving credit facility and term loan facility,facilities, or enter into new revolving credit facilities or term loan facilities, and any such amended, restated or replacement revolving credit facilities or term loan facilities may increase the amounts we are entitled to borrow, subject to customary conditions, compared to our current revolving credit facility and term loan facility,facilities, or we may incur other indebtedness. We may also in the future increase the size of our commercial paper program. programs or establish new commercial paper programs. We expect that we will continue to use our current and any new revolving credit facilities we may enter into (in each case as the same may be expanded, amended or restated, if applicable, from time to time), as a liquidity backstop for the repayment of notes issued under our current or any new commercial paper programs that we may maintain from time to time.

To the extent that new indebtedness is added to our current debt levels, the related risks that we now face would increase. As a result, we are and will be subject to risks associated with debt financing, including the risk that our cash flow could be insufficient to make required payments on our debt or to pay dividends on our common stock. We also face variable interest rate risk as the interest rates on our revolving credit facility, term loan facilities, and commercial paper programs are variable (subject to our interest rate swaps on our term loan facilities, in effect from time to time), and the interest rates on any credit facilities and term loan arefacilities we may enter into in the future may be variable, and could therefore increase over time. In addition, commercial paper borrowings are short-term obligations and the interest rate on newly issued commercial paper varies according to market conditions at the time of issuance. Similarly, some of the indebtedness to which we have become subject to subsequent to the Merger may also bear interest at variable rates. In addition, while we may enter into hedging and other derivatives instruments to mitigate our exposure to fluctuations in borrowing and currency rates, we may not realize the anticipated benefits from these arrangements or they may be insufficient to mitigate our exposure. We also face the risk that we may be unable to refinance or repay our debt as it comes due. Given past disruptions in the financial markets and ongoing global financial uncertainties, including the impact of COVID-19 and of the United Kingdom’s withdrawal from the European Union (referred to as Brexit), we also face the risk that one or more of the participants in our revolving credit facility may not be ableunwilling or unable to lend us money.

We have incurred and may continue to incur indebtedness that is denominated in local currencies to fund our international investments and operations. However, it is possible that such indebtedness may be insufficient or may be on unacceptable terms requiring us to use non-local currency indebtedness. In addition,such event, we may be subject to foreign exchange rate volatility. While we may enter into hedging and other derivatives instruments to mitigate our exposure to fluctuations in foreign exchange rates, we may not realize the anticipated benefits from these arrangements or these arrangements may be insufficient to mitigate our exposure.

Our revolving credit facility, our term loan facilityfacilities, and our mortgage loan documents contain provisions that could limit or, in certain cases, prohibit the payment of dividends and other distributions to holders of our common stock
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and any outstanding preferred stock. In particular,The credit agreements governing our revolving credit facility and our $250.0 million term loan facility, all of which are governed by the same credit agreement,facilities provide that, if an event of default (as defined in the credit agreement)agreements, as applicable) exists, we may not pay any dividends or make other distributions on (except distributions payable in shares of a given class of our stock to the stockholders of that class), or repurchase or redeem, among other things, any shares of our common stock or any outstanding preferred stock, during any period of four consecutive fiscal quarters in an aggregate amount in excess of the greater of:
Theof (i) the sum of (a) 95% of our adjusted funds from operations (as defined in the credit agreement)agreements, as applicable) for that period plus (b) the aggregate amount of cash distributions made to holders of our outstanding preferred stock if any, for that period, and
The (ii) the minimum amount of cash distributions required to be made to our stockholders in order to maintain our status as a REIT for federal income tax purposes and to avoid the payment of any income or excise taxes that would otherwise be imposed under specified sections of the Internal Revenue Code of 1986, as amended, or the Code on income we do not distribute to our stockholders,
except that we may repurchase or redeem shares of our outstanding preferred stock, if any, with net proceeds from the issuance of shares of our common stock or preferred stock.

The credit agreement further providesagreements each provide that, in the event of a failure to pay principal, interest, or any other amount payable thereunder when due or upon the occurrence of certain events of bankruptcy, insolvency or reorganization with respect to us or with respect to one or more of our subsidiaries that in the aggregate meet a significance test set forth in the credit agreement,agreements, we and our subsidiaries (other than our wholly-owned subsidiaries) may not pay any dividends or make other distributions on (except for (a) distributions payable in shares of a given class of our stock to the stockholders of that class and (b) dividends and distributions described in the second bullet point(ii) above), or repurchase or redeem, among other things, any shares of our common stock or preferred stock. If any such event of default under the applicable credit agreements (or under any other credit agreement or debt instrument with similar terms that we may in the future enter into or be subject to) were to occur, it would likely have a material adverse effect on the market price of our outstanding common stock and any outstanding preferred stock and on the market value of our debt securities which could limit the amount of dividends or other distributions payable to holders of our common stock and any outstanding preferred stock or the amount of interest and principal we are able to pay on our indebtedness, or prevent us from paying those dividends, other distributions, interest or principal altogether, and may adversely affect our ability to qualify, or prevent us from qualifying, as a REIT.

Our indebtedness could also have other important consequences to holders of our common stock, any outstanding preferred stock, and our debt securities, including:
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Increasing increasing our vulnerability to general adverse economic and industry conditions;
Limiting limiting our ability to obtain additional financing to fund future working capital, acquisitions, capital expenditures and other general corporate requirements;
Requiring requiring the use of a substantial portion of our cash flow from operations for the payment of principal and interest on our indebtedness, thereby reducing our ability to use our cash flow to fund working capital, acquisitions, capital expenditures, and general corporate requirements;
Limiting limiting our flexibility in planning for, or reacting to, changes in our business and our industry; and
Putting putting us at a disadvantage compared to our competitors with less indebtedness.

If we default under a credit facility, loan agreement, or other debt instrument, the lenders will generally have the right to demand immediate repayment of the principal and interest on all of their loans and, in the case of secured indebtedness, to exercise their rights to seize and sell the collateral. Moreover, a default under a single loan or debt instrument may trigger cross-default or cross- accelerationcross-acceleration provisions in other indebtedness and debt instruments, giving the holders of such other indebtedness and debt instruments similar rights to demand immediate repayment and to seize and sell any collateral.

Real estate ownership is subject to particular conditions that may have a negative impact on our revenue.
We are subject to all of the inherent risks associated with the ownership of real estate. In particular, we face the risk that rental revenue from our properties may be insufficient to cover all corporate operating expenses, debt service payments on indebtedness we incur, and distributions on our capital stock. Additional real estate ownership risks include:
Adverse changes in general or local economic conditions;
Changes in supply of, or demand for, similar or competing properties;
Changes in interest rates and operating expenses;expenses (including energy costs, shortages and rationing);
Competition within an industry and for our clients;
Changes in market rental rates;rents;
Inability to lease properties upon termination of existing leases;
Renewal of leases at lower rental rates;
Inability to collect rentsrental revenue from our clients due to financial hardship, including bankruptcy;
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Changes in tax, real estate, zoning and environmental laws that may have an adverse impact upon the value of real estate;
Uninsured property liability;
Property damage or casualty losses;
Unexpected expenditures for capital improvements, including requirements to bring properties into compliance with applicable federal, state and local laws;
The need to periodically renovate and repair our properties;
Risks assumed as manager for pre-leased development or redevelopment projects;
Physical or weather-related damage to properties;
The potential risk of functional obsolescence of properties over time;
Acts of terrorism and war;
Changes in consumer behaviors, preferences or demographics;
The impacts of climate change; and
Acts of God and other factors beyond the control of our management.

Real estate property investments are illiquid. We may not be able to acquire or dispose of properties when desired or on favorable terms.
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.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.

Our acquisition of additional properties may have a significant effect on our business, liquidity, financial position and/or results of operations.
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 the benefits that we anticipate from such acquisitions.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,
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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.

Furthermore, weWe have made and may continue to make selected 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 United States.U.S. We may be exposed to a variety of new risks by expanding into new property types and/or new jurisdictions outside the United States(e.g., non-retail businesses), geographies, lease and properties leased to ouracquisition structures, and clients engagedwho engage in non-retail businesses. These risks may includebe enhanced by our limited experience in managing certainnew property types, of new properties, new types of real estate locationsgeographies, lease and leaseacquisition structures, clients. and the laws andand/or culture of non-United States jurisdictions.non-U.S. geographies.

We are subject to additional risks from our international investments.investments and debt.
We have acquired and may continue to acquireinvest in properties outside of the United States. U.S.These investments may expose us to a variety of risks that are different from and in addition to those commonly found in the United States.U.S. Our international investments are subject to additional risks, including:

The laws, rules and regulations applicable in such jurisdictions outside of the United States,U.S., including those related to property ownership and control by foreign entities;
Complying with a wide variety of foreign laws;laws, including corruption, employment, data protection, energy usage, health and safety and environmental regulations which may require capital expenditures to maintain or bring our
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foreign properties into compliance with applicable regulations and/or may require disclosure of various environmental, social and governance matters;
Fluctuations in exchange rates between foreign currencies and the U.S. dollar (including risks related to their impact on our results of operations, hedging and other derivative arrangements used to mitigate our exposure to fluctuations in foreign currency rates, translational reporting risks, and exchange controls;controls);
LimitedAs we may not have or have only a limited number of properties within a jurisdiction, our experience in that market and with local business may be limited, and our operating costs may be disproportionately higher until the number of properties within a jurisdiction grows;
We may face challenges with expanding into current or new jurisdictions, such as identifying and securing investment opportunities, hiring and retaining employees, extended time periods for acquiring or disposing of investments, which may increase the cost of funding an investment, and potentially experiencing different cultural factors that differ from our usual standards and practices;business practices related to employees, rent adjustments, ground leases, and property ownership requirements and limitations;
Challenges in establishing effective controls and procedures to manage and regulate operations in different regions and to monitor and ensure compliance with applicable regulations, such as applicable laws related to corrupt practices, employment, licensing, construction, energy usage, climate change or environmental compliance;
Unexpected or other changes in regulatory requirements (including disclosure requirements), tax, tariffs, trade barriers and other laws within jurisdictions outside the United StatesU.S. or between the United StatesU.S. and such jurisdictions;
Potentially adverse tax consequences with respect to our properties;properties and/or investment vehicles;
Initial limited investments within certain regions or countries may result in industry or client concentration risks;
The impact of regional or country-specific business cycles, inflation and economic instability, including deteriorationsdeterioration in political relations with the United States,U.S., instability in, or further withdrawals from, the European Union or other international trade alliances or agreements; and
Political instability, uncertainty over property rights, civil unrest, acts of war, drug trafficking, political activism or the continuation or escalation of terrorist or gang activities.

We also engage external property managers and other third parties, who assist with managing our international properties. If a property manager or third party fails to meet its obligations or terminates its services, we may need to find a replacement; however, these services may be on less favorable terms and conditions, or we may not be able to find a suitable replacement in a timely manner or at all.

We have incurred and may continue to incur indebtedness that is denominated in local currencies to fund our international investments and operations. However, it is possible that such indebtedness may be insufficient or may be on unacceptable terms requiring us to use non-local currency indebtedness. In such event, we may be subject to foreign exchange rate volatility which may be impacted by various factors, including those described above. While we may enter into hedging and other derivatives instruments to mitigate our exposure to fluctuations in foreign exchange rates, we may not realize the anticipated benefits from these arrangements or these arrangements may be insufficient to mitigate our exposure. For more information, see “—We are subject to risks associated with debt and preferred stock financing.”

If we are unable to adequately address these risks, they could have a significant adverse effect on our operations.

We may engage in development, speculative development, or expansion projects or invest in new assets,asset classes, which would subject us to additional risks that could negatively impact our operations.
We may engage in development, speculative development, or other expansion projects, which wouldcould require us to raise additional capital and overseeobtain additional state and local permitting.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.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.
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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.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.

Property taxes may increase without notice.
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We may face extensive regulations from gaming and other regulatory authorities regarding current and future gaming properties.
As a landlord of Contentsa gaming facility or future gaming facilities, we may be impacted by the risks associated with the gaming industry. The ownership, operation, and management of gaming facilities are subject to pervasive regulation. Gaming authorities also retain great discretion such that gaming regulations can impact our gaming clients, individuals associated with the operation of gaming properties, and us as the owner of the real estate and landlord related to such facilities. Gaming laws and regulations can impact all facets of a gaming property, including but not limited to alcoholic beverages, environmental matters, employees, health care, currency transactions, zoning and building codes, and marketing and advertising. Such laws and regulations could change or could be interpreted differently in the future, or new laws and regulations could be enacted, which could adversely affect our operating results, and may also result in additional taxes or licensing fees imposed on us and our gaming clients. In addition, subject to certain administrative due process requirements, gaming regulators generally have broad authority to conduct investigations into the conduct or associations of our officers or certain investors to ensure compliance with applicable standards and suitability to hold a gaming license, and to deny any application or limit, condition, restrict, revoke, or suspend any gaming license, registration, or finding of suitability or approval, or fine any person licensed, registered, or found suitable or qualified as a licensee. As a result, our ability to obtain or maintain our required licenses and approvals, or avoid penalties related thereto, may be subject to risks, including risks outside of our control, and cannot be predicted.

Were a tenant unable to continue to perform under a lease, because of the highly regulated nature of the industry, it may be difficult to re-lease gaming properties. This difficulty may be exacerbated to the extent the gaming property is located in a geography that does not have an expansive gaming footprint, such as one of the properties, in which we are invested. A transfer of interest, including a new lease, will likely require approval of regulators and the licensing of a new gaming operator tenant.

An uninsured loss or a loss that exceeds the policy limits on our properties could subject us to lost capital or revenue on those properties.
Under the terms and conditions of theOur leases currently in force ongenerally require our properties, clients generally are required to indemnify and hold us harmless from liabilities resulting from injury to persons, air, water, land or property, due to activities conducted on the properties, except for claims arising from the negligence or intentional misconduct of us or our agents. Additionally, clients are generally required, at the client’s expense, to obtain and keep in full force during the term of the lease, liability and property damage insurance policies. The insurance policies our clients are required to maintain for property damage are generally in amounts not less than the full replacement cost of the improvements less slab, foundations, supports and other customarily excluded improvements. Our clients are generally required to maintain general liability coverage depending on the client and the industry in which the client operates.

In addition to the indemnities and required insurance policies identified above, manyMany of our properties are also covered by flood and earthquake insurance policies (subject to substantial deductibles) obtained and paid for by theour clients as part of their risk management programs. Additionally, we have obtained blanket liability, flood and earthquake (subject to substantial deductibles) and property damage insurance policies to protect us and our properties against loss should the indemnities and insurance policies provided by the
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clients fail to restore the properties to their condition prior to a loss. We do not carry insurance for certain losses and certain types of losses may be either uninsurable or not economically insurable. However, should a loss occur that is uninsured or in an amount exceeding the combined aggregate limits for the policies noted above, or in the event of a loss that is subject to a substantial deductible under an insurance policy, we could lose all or part of our capital invested in, and anticipated revenue from, one or more of the properties, which could have a material adverse effect on our
results of operations or financial condition and on our ability to pay the principal of and interest on our debt securities and other indebtedness and to make distributions to our stockholders. We also face the risk that our insurance carriers may not be able to provide payment under any potential claims that might arise under the terms of our insurance policies, and we may not have the ability to purchase insurance policies we desire.

In addition, although we obtain title insurance policies ofon our properties to help protect us and our properties against unknown title defects (such as adverse claims of ownership, liens or other encumbrances), there may be certain title defects that our title insurance will not cover. If a material title defect related to any of our properties is not adequately covered by a title insurance policy, we could lose some or all of our capital invested in and our anticipated profits from such property, cause a financial misstatement or damage our reputation.

Compliance with the Americans with Disabilities Act of 1990 and fire, safety, and other regulations may require us to make unintendedunanticipated expenditures that could adversely impact our results of operations.
Our properties are generally required to comply with the Americans with Disabilities Act of 1990, or the ADA. The ADA has separate compliance requirements for “public accommodations” and “commercial facilities,” but generally requires that buildings be made accessible to people with disabilities. Compliance with the ADA requirements could require removal of access barriers and non-compliance could result in imposition of fines by the U.S. government or an award of damages to private litigants. The retailersclients to whom we lease properties are obligated by law to comply with the ADA provisions and, we believe that these retailers may bein many cases, the clients are generally obligated to cover costs associated with compliance.compliance pursuant to the terms of their applicable leases. If required changes involve greater expenditures than anticipated, or if the changes must be made on a more accelerated basis than anticipated, the ability of these retailersclients to cover costs could be adversely affected and we could be required to expend our own funds to comply with the provisions of the ADA, which could materially adversely affect our results of operations or financial condition and our ability to pay the principal of and interest on our debt securities and other indebtedness and to make distributions to our stockholders. In addition, we are required to operate our properties must be in compliance with fire and safety regulations, building codes and other land use regulations, as they may be adopted by governmental agencies and bodies and become applicable to our properties. We may be required to make substantial capital expenditures to comply with those requirements and these expenditures could have a material adverse effect on our results of operations or financial condition and our ability to pay the principal of and interest on our debt securities and other indebtedness and to make distributions to our stockholders.
Property taxes may increase without notice.
The real property taxes on our properties and any other properties that we develop or acquire in the future 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.

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Our business is subject to risks associated with climate change and our sustainability strategies.
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 triggeradversely affect our business through both chronic and acute perils including, but not limited to, extreme weather, and changes in precipitation and temperature, and air quality,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. Shouldconditions, 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 customers. Thisclients. 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.

In addition, weWe 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
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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.

WeIn 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 risks relatedthe 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 recent proposals for reform regarding LIBOR.
Certain ofsuccessfully 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 existing debt instruments and other financial arrangements, includingrelationship with our $3.0 billion revolving credit facilityinvestors, our stock price, and our $250.0 million term loan facility, provide for borrowingsaccess to be made at variable interest rates that use the London Interbank Offered Rate, or LIBOR (or metrics derived from or related to LIBOR), as a benchmark for establishing the interest rate applicable to outstanding borrowings thereunder, and we may incur additional indebtedness or enter into new financial arrangements that use LIBOR as a benchmark for establishing the interest rate for borrowing thereunder.

The UK Financial Conduct Authority, which is the LIBOR administrator’s regulator, previously stated that it would no longer encourage or require banks to submit rates for LIBOR after 2021. However, for U.S. dollar LIBOR, it now appears that the relevant datecapital may be deferred to June 30, 2023 for certain tenors, including overnight and one, three, six and 12 months), at which time the LIBOR administrator has indicated that it intends to cease publication of U.S. dollar LIBOR. Despite this potential deferral, the LIBOR administrator has advised that no new contracts using U.S. dollar LIBOR should be entered into after December 31, 2021. These actions are expected to cause LIBOR to cease to exist and the adoption of alternative reference rates. Likewise, notwithstanding a possible deferral, the LIBOR administrator’s advice that no new contracts using U.S. dollar LIBOR be entered into after December 31, 2021 may mean that LIBOR borrowings (including LIBOR borrowings under our credit facilities) may cease to be available after that date. While our revolving credit facility and our term loan facility include provisions for establishing alternative reference rates in the event LIBOR shall no longer be available, the consequences of the adoption of any such alternative reference rates cannot be predicted and could have an adverse impact on the market value for or value of LIBOR-linked securities, loans and other financial obligations or extensions of credit held by or due to us and could also affect interest rates and other financing costs under our debt instruments and other financial arrangements, any of which could adversely affect our results of operations and financial condition.negatively impacted.

Our charter contains restrictions upon ownership of our common stock.
Our charter contains restrictions on ownership and transfer of our common stock intended to, among other purposes, assist us in maintaining our status as a REIT for United StatesU.S. federal and/or state income tax purposes. For example, our charter restricts any person from acquiring beneficial or constructive ownership of more than 9.8% (by value or by number of shares, whichever is more restrictive) of our outstanding shares of common stock. These restrictions could have anti-takeover effects and could reduce the possibility that a third party will attempt to acquire control of us, which could adversely affect the market price of our common stock.

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The value of certain of our investment in real property may be reduced as the result of the expiration or loss of local tax abatements, tax credit programs, or other governmental incentives.
Certain of our investments have the benefit of governmental tax incentives aimed at inducing retailproperty users to relocate to incentivize development in areas and neighborhoods which have not historically seen robust commercial development. The TCJA provided for such communities to be designated as Qualified Opportunity Zones, which are eligible for such tax benefits. These incentives typically have specific sunset provisions and may be subject to governmental discretion in the eligibility or award of the applicable incentives. The expiration of these incentive programs or the inability of potential clients or users to be eligible for or to obtain governmental approval of the incentives, or the inability to remain compliant with such programs, may have an adverse effect on the value of our investment, cash flow and net income, and may result in impairment charges.
Risks Related to the Spirit Merger and Transactions Contemplated by the Merger Agreement
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.
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
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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.

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.
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.

Our common stockholders will be diluted by the Merger.
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.
General Risk Factors

The market value of our capital stock and debt securities could be substantially affected by various factors.
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; and
Actual or anticipated variations in quarterly operating results of us and our competitors.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 United States,U.S., trading markets have been experiencingexperienced 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.
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Litigation risks could affect our business.
From time to time, we are involved in legal proceedings, lawsuits, and other claims.claims including those that may arise out of mergers and acquisitions, acquisitions, development opportunities, dispositions, joint ventures, and other strategic transactions. An unfavorable resolution of litigation may have a material adverse effect on our business, results of operations and financial condition. Regardless of its outcome, litigation may result in substantial costs and expenses and significantly divert the attention of management.

We depend on key personnel.
We depend on the efforts of our executive officers and key employees. The loss of the services of our executive officers and key employees could have a material adverse effect on our results of operations or financial condition and on our ability to pay the principal and interest on our debt securities and other indebtedness and to make distributions to our stockholders. It is possible that we will not be able to recruit additional personnel with equivalent experience in the net lease industry.industry or retain employees to the same extent as in the past.

Natural disasters, terrorist attacks, cyber attacks, other acts of violence or war, or other unexpected events may affect the value of our debt and equity securities, the markets in which we operate and our results of operations.
Natural disasters, terrorist attacks, cyber attacks, other acts of violence or war, or other unexpected events (e.g., pandemics or epidemics) may negatively affect our operations, the market price of our capital stock and the value of our debt securities. There can be no assurance that events like these will not occur or have a direct impact on our clients, our business or the United StatesU.S. or world generally.

If events like these were to occur, they could materially interrupt our business operations, cause consumer confidence and spending to decrease or result in increased volatility in the U.S. and worldwide financial markets and economy. They also could result in or prolong an economic recession in the U.S. or abroad. Any of these
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occurrences could have a significant adverse impact on our operating results and revenues and on the market price of our capital stock and on the value of our debt securities. It could also have an adverse effect on our ability to pay principal and interest on our debt securities or other indebtedness and to make distributions to our stockholders.

We rely on information technology in our operations, and any material failure, inadequacy, interruption or security failure of that technology could harm our business.
We, rely onlike all businesses, are subject to cyber-attacks and security incidents, which threaten the confidentiality, integrity, and availability of our systems and information resources. Cyber-attacks are malicious cyber activity and a security incident is a successful cyber-attack that has the potential to expose sensitive data, internal systems, or otherwise disrupt business operations. Those attacks and incidents may be due to intentional or unintentional acts by employees, contractors or third-parties, who seek to gain unauthorized access to our or our service providers’ systems to disrupt operations, corrupt data, or steal confidential information through malware, computer viruses, ransomware, social engineering (e.g., phishing attachments to e-mails) or other vectors.

The risk of a cybersecurity breach or operational disruption, particularly through a cyber incident, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased, particularly as remote working has become more common. Our information technology (“IT”) networks and related systems includingare essential to the Internet,operation of our business and our ability to perform day-to-day operations and, in some cases, may be critical to the operations of certain of our clients. Although we make efforts to maintain the security and integrity of these types of IT networks and related systems, and we have implemented various measures to manage the risk of a security breach or disruption (such as the implementation of systems and/or vendors that provide constant monitoring of our IT networks and related systems for cyber-attacks and incidents); however, there can be no assurance that our security efforts and measures will be effective or that attempted security breaches or disruptions would not be successful or damaging.

While we maintain some of our own critical IT networks and related systems, we depend on third-parties to provide important software, technologies, tools and a broad array of services and functions, such as payroll, human resources, electronic communications, data storage, and certain finance and treasury functions, among others. In the ordinary course of our business, we collect, process, transmit and store electronicsensitive data, within our own systems and utilize those of third-party providers, including intellectual property, our proprietary business information and to manage or support a varietythat of our clients, suppliers and business processes, including financial transactions and maintenancepartners, as well as personally identifiable information.
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Our measures to prevent, detect and mitigate these threats may not be successful in preventing a security incident or data breach or limiting the effects of such a breach. This is particularly so because attack methodologies change frequently or are not recognized until launched, and we also may be unable to investigate or remediate incidents because attackers are increasingly using techniques and tools designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence. Our clients, joint venture partners, or other third parties with whom we do business may themselves become subject to cyberattacks or security incidents, over which we may have no control, and which could be negatively affected as a result of actions of activist stockholders and shareholder advisory firms.
Campaigns by stockholders to effect changes at publicly traded companies are sometimes led by investors seeking to increase short-term stockholder value through actions such as financial restructuring, increased debt, special dividends, stock repurchaseshave an indirect adverse impact on them, us or sales of assets or the entire company. If we become engaged in a process or proxy contest with an activist stockholder in the future, our business relationship.

The primary risks that could be adversely affected, as such activities could be costly and time-consuming, disrupt our operations and divertdirectly result from the attention of management and our employees from executing our business plan. Additionally, perceived uncertainties as to our future direction as a result of stockholder activism or actual or potential changes to the composition of our Board of Directors or management team may lead to the perceptionoccurrence of a change in the direction of our business, instabilitycyberattack or lack of continuity, which may be exploited by our competitors, cause concern to current or potential sellers of properties, clients and financing sources, and make it more difficult to attract and retain qualified personnel. If potential or existing sellers of properties, clients or financing sources choose to delay, defer or reduce transactions with us or transact with our competitors instead of us because of any such issues, then our results of operations could be adversely affected. Similarly, we may suffersecurity incident include operational interruption, damage to our reputation (for example, regardingrelationship with our corporate governance or stockholder relations) or brand by way of actions taken or statements made by outside constituents, including activist investorsclients, reputational damage, and shareholder advisory firms, whichprivate data exposure. We could adversely affect the market price of our common stock and preferred stock and the value of our debt securities, resulting inbe required to expend significant loss of value, which could impact our ability to access capital, increase our cost of capital and decreaseother resources to address an attack or incident, which may not be covered or fully covered by our abilityinsurance and which may involve payments for investigations, forensic analyses, legal advice, public relations advice, system repair or replacement, or other services, in addition to acquire properties on attractive terms.any remedies or relief that may result from legal proceedings. Our financial results may be negatively impacted by any such attacks and incidents or any resulting negative media attention. Further, while we carry cyber liability insurance, such insurance may not be adequate to cover all losses related to such events.

Current volatilityVolatility in market and economic conditions may impact the accuracy of the various estimates used in the preparation of our financial statements and footnotes to the financial statements.
Various estimates are used in the preparation of our financial statements, including estimates related to asset and liability valuations (or potential impairments), and various receivables. Often these estimates require the use of market data values that are currently difficult to assess, as well asand involve estimates of future performance or receivables collectability thatall of which can also be difficult to accurately predict. Although management believes it has been prudent and used reasonable judgment in making these estimates, it is possible that actual results may differ from these estimates.

Inherent limitations of internal controls over financial statements, disclosure controls and safeguarding of assets may adversely impact our financial condition and results of operations.
Our internal controls over financial reporting, disclosure controls and procedures and our operating internal controls may not prevent or detect financial misstatements or loss of assets because of inherent limitations, including the possibility of human error, the circumvention or overriding of controls, or fraud. Effective internal controls can provide only reasonable assurance with respect to financial statement and disclosure accuracy and safeguarding of assets. Any failure of theseFailures in our internal controls could result in decreased investor confidenceadverse consequences in the accuracy and completeness of our financial reportsreporting and disclosures, our REIT qualification being jeopardized,operations, including delays, additional costs, impairment in our ability to access capital, adverse impacts to capital, civil litigationinvestor confidence, regulatory review, or investigations by the NYSE, the SEC or other regulatory authorities, which may adversely impact our financial conditionand results of operations.litigation.

Our business operations may not generate the cash needed to make distributions on our capital stock or to service our indebtedness.
Our ability to make distributions on our common stock and any outstanding preferred stock and payments on our indebtedness, and to fund planned acquisitions and capital expenditures will depend on our ability to generate cash
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in the future. We cannot make any assurances that our business will generate sufficient cash flow from operations or that future borrowings will be available to us in an amount sufficient to enable us to make distributions on our common stock and any outstanding preferred stock, to pay our indebtedness, or to fund our other liquidity needs.

Disruptions in the financial markets could affect our ability to obtain financing on reasonable terms and have other adverse effects on us, and the market price of our common stock.stock, and may make it more difficult or costly for us to raise capital.
Historically, there have been periods where the global equity and credit markets have experienced significant price volatility, dislocations and liquidity disruptions, which have caused market prices of equity and debt securities to fluctuate substantially and the spreads on prospective debt financings to widen considerably. These circumstances have materially impacted liquidity in the financial markets, making terms for certain financings less attractive, and in certain cases have resulted in the unavailability of certain types of financing. Uncertainty in the equity and credit markets may negatively impact our ability to access additional financing at reasonable terms, which may adversely affect our ability to make acquisitions. A prolonged downturn in the equity or credit markets may cause us to refinance at higher rates, seek alternative sources of potentially less attractive financing, and may require us to adjust our business plan accordingly. In addition, these factors may make it more difficult for us to buy or sell properties, or may adversely affect the price we purchase or receive for properties, thatas we do sell, asand prospective buyers may
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experience increased costs of financing or difficulties in obtaining financing. These events in the equity and credit markets may make it more difficult or costly for us to raise capital through the issuance of common stock, preferred stock or debt securities. These disruptions in the financial markets also may have a material adverse effect on the market value of our common stock and debt securities, the income we receive from our properties and the lease rates we can charge for our properties, as well as other unknown adverse effects on us or the economy in general.

Inflation (including prolonged inflationary periods) may adversely affect our results of operations, financial condition and results of operations.liquidity.
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. Likewise, eveninflation 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. In addition, theThe U.K. government's plangovernment plans to reformmigrate away from the Retail Price Index (RPI)("RPI"), to align withalternatives such as the Consumer Price Index (CPIH)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 commentsComments
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.”
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Cybersecurity Governance
The Board of Directors considers cybersecurity risk as part of its risk oversight function, and the Audit Committee of our Board oversees Realty Income's cybersecurity and other information technology risk exposures and the steps taken by management to monitor and control such exposures. Our cybersecurity risk profile and cybersecurity program status are reported to the Audit Committee on a quarterly basis. In addition, management updates the Audit Committee, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential. The Audit Committee reports to the full Board regarding its activities, including those related to cybersecurity, and the full Board also receives briefings from management on our cybersecurity risk management program, as appropriate.

Our management team, including the Cybersecurity Risk Committee chaired by our Head of IT and comprised of functional leaders across the Company, is responsible for assessing and managing our material risks from cybersecurity threats. The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants. Our management team has extensive experience implementing and operating cybersecurity technologies, policies, and procedures throughout various industries and includes a Certified Information Systems Security Professional with ISC2.
Our management team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the IT environment.
Item 2:                                 Properties
Information pertaining to our properties can be found under Item 1.

Item 3:                                 Legal Proceedings
We are subject Information regarding legal proceedings is included in note 20, Commitments and Contingencies, to certain claims and lawsuits in the ordinary course of business, the outcome of which cannot be determined at this time. In the opinion of management, any liability we might incur upon the resolution of these claims and lawsuits will not, in the aggregate, have a material adverse effect on our consolidated financial position or results of operations.

statements.
Item 4:                                 Mine Safety Disclosures
None.

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PART II

Item 5:Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
A. Our common stock is traded on the NYSE under the ticker symbol “O.” The following table shows the high and low sales prices per share for our common stock as reported by the NYSE, and distributions declared per share of common stock for the periods indicated. 
Price Per Share
of Common Stock
Distributions
 HighLow
Declared (1)
2020   
First Quarter$84.92 $38.00 $0.6980 
Second Quarter65.56 43.41 0.6995 
Third Quarter66.80 56.33 0.7010 
Fourth Quarter65.09 57.09 0.7025 
Total  $2.8010 
2019   
First Quarter$74.14 $61.60 $0.6770 
Second Quarter73.94 66.21 0.6785 
Third Quarter77.50 67.70 0.6800 
Fourth Quarter82.17 71.45 0.6815 
Total  $2.7170 
Holders
(1) Common stock cash distributions are declared monthly by us based on financial results for the prior months. At December 31, 2020, a distribution of $0.2345 per common share had been declared and was paid in January 2021.
B.  There were approximately 9,500 13,800registered holders of record of our common stock as of DecemberJanuary 31, 2020. We estimate that our total number2024. This figure does not reflect the beneficial ownership of stockholders is approximately 735,000 when we include both registered and beneficial holdersshares of our common stock.
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C. 

Repurchases of Equity Securities
During the fourth quarter of 2020,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 2012Realty Income 2021 Incentive Award Plan, of Realty Income Corporation:(the "2021 Plan"):
102 shares of stock, at a weighted average price of $61.73, in October 2020;
6,018 shares of stock, at a weighted average price of $64.39, in November 2020; and
83 shares of stock, at a weighted average price of $60.40, in December 2020.

PeriodTotal Number of Shares PurchasedAverage Price Paid per Share
October 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 
Total15,260 $55.58 
Item 6:                                 Selected Financial DataReserved
(not covered by Report of Independent Registered Public Accounting Firm)
(dollars in thousands, except for per share data)
The following table sets forth our selected historical consolidated financial information for each of the five years in the period ended December 31, 2020. The statements of income and comprehensive income data, the statements of equity data, the statements of cash flows data and the other data for the years ended December 31, 2020, 2019 and 2018 and the balance sheet data as of December 31, 2020 and 2019 were derived from our audited consolidated financial statements included elsewhere in this Form 10-K. The statements of income and comprehensive income data, the statements of equity data, the statements of cash flows data and the other data for the years ended December 31, 2017 and 2016, and the balance sheet data as of December 31, 2018, 2017 and 2016 were derived from our audited consolidated financial statements that are not included in this Form 10-K.
The selected financial data presented below is not necessarily indicative of results of future operations and should be read in conjunction with our consolidated financial statements and the information included under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Form 10-K.



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As of or for the Years Ended December 31,20202019201820172016
Total assets (book value)$20,740,285 $18,554,796 $15,260,483 $14,058,166 $13,152,871 
Cash and cash equivalents824,476 54,011 10,387 6,898 9,420 
Total debt8,817,467 7,901,547 6,499,976 6,111,471 5,839,605 
Total liabilities9,722,555 8,750,638 7,139,505 6,667,458 6,365,818 
Total equity11,017,730 9,804,158 8,120,978 7,390,708 6,787,053 
Net cash provided by operating activities1,115,543 1,068,937 940,742 875,850 799,863 
Net change in cash, cash equivalents and restricted cash779,674 49,934 8,929 (3,539)(34,652)
Total revenue1,651,625 1,491,591 1,327,838 1,215,768 1,103,172 
Net income396,506 437,478 364,598 319,318 316,477 
Preferred stock dividends— — — (3,911)(27,080)
Excess of redemption value over carrying value of preferred shares redeemed— — — (13,373)— 
Net income available to common stockholders395,486 436,482 363,614 301,514 288,491 
Cash distributions paid to common stockholders964,167 852,134 761,582 689,294 610,516 
Net income per common share:
Basic1.15 1.38 1.26 1.10 1.13 
Diluted1.14 1.38 1.26 1.10 1.13 
Cash distributions paid per common share2.794000 2.710500 2.630500 2.527000 2.391500 
Cash distributions declared per common share2.801000 2.717000 2.639000 2.537000 2.403000 
Basic weighted average number of common shares outstanding345,280,126 315,837,012 289,427,430 273,465,680 255,066,500 
Diluted weighted average number of common shares outstanding345,415,258 316,159,277 289,923,984 273,936,752 255,624,250 
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Item 7:                             Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis reflect our financial condition and results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022. For a discussion of the year ended December 31, 2022 compared to the year ended December 31, 2021, 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, 2022.
GENERAL
Realty Income, The Monthly Dividend Company®, is an S&P 500 company dedicatedand 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 providing stockholders withdeliver dependable monthly dividends that increase over time. The company isWe are structured as a real estate investment trust, or REIT requiring itus annually to distribute at least 90% of itsour taxable income (excluding net capital gains) in the form of dividends to itsour 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.

Realty Income was founded in 1969, and listed on the New York Stock Exchange (NYSE: O) in 1994. Over the past52years, Realty Income has been acquiring and managing freestanding commercial properties that generate rental revenue under long-term net lease agreements with our commercial clients. We refer to our tenants as clients because we strive to build mutually beneficial relationships and we believe their success is our success. The company is a memberAs of the S&P 500 Dividend Aristocrats® index for having increased its dividend every year for over 25 consecutive years.
At December 31, 2020,2023, we owned or held interests in a diversified portfolio:
Of 6,592 properties;
With an occupancy rateportfolio of 97.9%, or 6,45213,458 properties leased and 140 properties available for lease or sale;
Doing businesslocated in 51 separate industries;
Located in 49all 50 U.S. states, Puerto Rico, the U.K., France, Germany, Ireland, Italy, Portugal, and the United Kingdom (U.K.);
WithSpain, with approximately 110.8272.1 million square feet of leasable space;
Withspace 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 9.0 years; and
With an average leasable space per property of approximately 16,810 square feet; approximately 12,340 square feet per retail property and 245,270 square feet per industrial property.
Of the 6,592 properties in the portfolio at December 31, 2020, 6,555, or 99.4%, are single-client properties, of which 6,419 were leased, and the remaining are multi-client properties.

9.8 years.
Unless otherwise specified, references to rental revenue in the Management's DiscussDiscussion and Analysis of Financial Condition and Results of Operations are exclusive of reimbursements from clients for recoverable real estate taxes and operating expenses totaling $79.4$274.2 million, $69.1$184.7 million and $47.0$104.9 million for 2020, 2019the years ended December 31, 2023, 2022 and 2018,2021, respectively.
RECENT DEVELOPMENTS
Closing of Spirit Realty Capital Merger
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.
Increases in Monthly Dividends to Common Stockholders
We have continued our 55-year history of paying monthly dividends. In addition, referenceswe increased the dividend five times during 2023 and onceduring 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 share
1st 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 increase
1st increaseDec 2023Jan 2024$0.2565 $0.0005 
The dividends paid per share during 2023 totaled $3.051, as compared to reserves recorded$2.967 during 2022, an increase of $0.084, or 2.8%.
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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.
Investments During 2023
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.
Equity Capital Raising
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 billionof 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 included91.7 millionshares 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.
Note Issuances
In January 2024, we issued $450.0 million of 4.750%senior unsecured notes due February 2029 and $800.0 million of5.125%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.
Appointment of New Chief Financial Officer and Treasurer ("CFO")
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.
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Portfolio Discussion
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, 2023
Properties 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 
Year ended December 31, 2023
Properties 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 
(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.
Pan European Sale and Leaseback with Decathlon SE ("Decathlon")
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.
Investments in Unconsolidated Joint Ventures
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%.
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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.
Impact of Inflation
Leases generally provide for limited increases in rent as a reductionresult of rental revenue include amounts reservedfixed increases, increases in the consumer price index, or retail price index in the case of certain leases in the U.K. (typically subject to ceilings), or increases in the clients’ sales volumes. We expect that inflation will cause these lease provisions to result in rent increases over time. During times when inflation is greater than increases in rent, as provided for in the current period, as well as unrecognized contractual rentalleases, rent increases may not keep up with the rate of inflation and other costs.
Moreover, our strategic focus on the use of net lease agreements reduces our exposure to rising property expenses due to inflation because the client is responsible for property expenses. Even though the utilization of net leases reduces our exposure to rising property expenses due to inflation, substantial inflationary pressures and increased costs may have an adverse impact on our clients if increases in their operating expenses exceed increases in revenue, which may adversely affect our clients' ability to pay rent. Additionally, inflationary periods may cause us to experience increased costs of financing, make it difficult to refinance debt at attractive rates or at all, and unrecognized straight-line rental revenue for leases accounted for on a cash basis.may adversely affect the properties we can acquire if the cost of financing an acquisition is in excess of our anticipated earnings from such property, thereby limiting the properties that can be acquired.
Impact of Real Estate and Credit Markets
In the commercial real estate market, property prices generally continue to fluctuate. Likewise, during certain periods, the global capital markets have experienced significant price volatility, dislocations, and liquidity disruptions, which may impact our access to and cost of capital. We continually monitor the commercial real estate and global capital markets carefully and, if required, will make decisions to adjust our business strategy accordingly.
LIQUIDITY AND CAPITAL RESOURCES
Capital Philosophy
Historically,As of December 31, 2023, we have methad $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 long-term capital needs by issuing common stock, preferred stock and long-term$4.25 billion unsecured notes and bonds. Over the long term, we believe that common stock should be the majority ofrevolving credit facility, after deducting $764.4 million in borrowings under our capital structure; however, we may issue preferred stock or debt securities.commercial paper programs. We may issue common stock when we believe thatuse our share price is atunsecured revolving credit facility as a level that allowsliquidity backstop for the proceedsrepayment of any offering to be accretively invested into additional properties. In addition, we may issue common stock to permanently finance properties that were initially financed by our credit facility, commercial paper program, or debt securities. However, we cannot assure you that we will have access to the capital markets at all times and at terms that are acceptable to us.

notes issued under these programs.
Our primary cash obligations, for the current year and subsequent years, are included in the “Table of Obligations,”“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 onunder our revolving credit facility, short-term term loans, and under our commercial paper programprograms, 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.
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Conservative Capital Structure
WeLong-Term Liquidity Requirements
Our goal is to deliver dependable monthly dividends to our stockholders that increase over time. Historically, we have met our principal short-term and long-term capital needs, including the funding of high-quality real estate acquisitions, investments in loans, property development, and capital expenditures by issuing common stock, preferred stock, long-term unsecured notes, and term loan borrowings. Over the long term, we believe that common stock should be the majority of our stockholders are best served by a conservative capital structure. Therefore,We may issue common stock when we seekbelieve our share price is at a level that allows for the proceeds of an offering to maintain a conservativebe accretively invested into additional properties or to permanently finance properties that were initially financed by our revolving credit facility, commercial paper programs, or shorter-term debt level on our balance sheetsecurities. However, we cannot assure you that we will have access to the capital markets at all times and solid interest and fixed charge coverage ratios. Atat terms that are acceptable to us.
Capitalization
As of December 31, 2020,2023, 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, term loan and mortgages payable were $8.85 billion, or approximately 28.2%our proportionate share of ourunconsolidated entities' debt (excluding unamortized deferred financing costs, discounts, and premiums). Our total debt to market capitalization of $31.34 billion.

We define our total market capitalizationwas 33.8% at December 31, 2020 as the sum of:
Shares of our common stock outstanding of 361,303,445, plus total common units outstanding of 463,119, multiplied by the last reported sales price of our common stock on the NYSE of $62.17 per share on December 31, 2020, or $22.49 billion;
Outstanding mortgages payable of $299.6 million, excluding net mortgage premiums of $1.7 million and deferred financing costs of $973,000;
Outstanding borrowings of $250.0 million on our term loan, excluding deferred financing costs of $642,000;
Outstanding senior unsecured notes and bonds of $8.30 billion, including Sterling-denominated notes of £715.0 million, and excluding unamortized net original issuance premiums of $14.6 million and deferred financing costs of $49.2 million; and
No borrowings outstanding on our revolving credit facility.

2023.
Universal Shelf Registration
In November 2018,On February 16, 2024, we filed a new shelf registration statement with the SEC, which is effective for a term of three years and will expire in November 2021.February 2027. In accordance with SEC rules, the amount of securities to be issued pursuant to this shelf registration statement was not specified when it was filed and there is no specific dollar limit. The securities covered by this registration statement include (1) common stock, (2) preferred stock, (3) debt securities, (4) depositary shares representing fractional interests in shares of preferred stock, (5) warrants to purchase debt securities, common stock, preferred stock, or depositary shares, and (6) any combination of these securities. We may periodically offer one or more of these securities in amounts, prices and on terms to be announced when and if these securities are offered. The specifics of any future offerings, along with the use of proceeds of any securities offered, will be described in detail in a prospectus supplement, or other offering materials, at the time of any offering.

At-the-Market (ATM)ATM Program
Under our "at-the-market" equity distribution plan, orAs of December 31, 2023, there were approximately 6.2 million shares of unsettled common stock subject to forward sale confirmations through our ATM program, up to 33,402,405representing 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, may be offeredsubject 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 (1) by uspursuant to orforward sale agreements 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. During 2020, we issued 17,724,374 shares and raisedATM program for approximately $1.09$5.4 billion of gross proceeds under the ATM program. Atnet proceeds. As of December 31, 2020,2023, we had 15,678,031 81.3 millionshares remaining for future issuance under our current ATM program. We anticipate maintaining the availability of our ATM program in the future, including the replenishment of authorized shares issuable thereunder.

IssuancesDebt and Financing Activities
At December 31, 2023, our total outstanding borrowings of Common Stock
In March 2020, we issued 9,690,500 shares of common stock in an overnight underwritten public offering, including 690,500 shares purchased by the underwriters upon exercise of their option to purchase additional shares. After deducting underwriting discounts and other offering costs of $21.2 million, the net proceeds of $728.9 million were primarily used to repay borrowings under our revolving credit facility.

In January 2021, we issued 12,075,000 sharesfacility, commercial paper, term loans, mortgages payable, and senior unsecured notes and bonds were $21.5 billion, with a weighted average maturity of common stock in an overnight underwritten public offering, including 1,575,000 shares purchased by5.9 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 underwriters upon exercise of their option to purchaseconsolidated financial statements for additional shares. The company used the net proceeds from the offering,information about our outstanding debt, along with available cash and additional borrowings, to fund property acquisitions and for general corporate purposes and working capital.

Dividend Reinvestment and Stock Purchase Plan
Our Dividend Reinvestment and Stock Purchase Plan, or 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 26,000,000 common shares to be issued. Our DRSPP includes a waiver approval process, allowing larger investors or institutions, per a formal approval process, to purchase shares at a small discount, if approved by us. We did not issue shares underdebt financing activities during the waiver approval process during 2020. During 2020, we issued 149,289 shares and raised approximately $9.1year ended December 31, 2023 below.
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million under our DRSPP. At December 31, 2020, we had 11,503,379 shares remaining for future issuance under our DRSPP program.

Revolving Credit Facility and Commercial Paper Program
We have a $3.0 billion unsecured revolving credit facility with an initial term that expires in March 2023 and includes, at our option, two six-month extensions. The multicurrency revolving facility allows us to borrow in up to 14 currencies, including U.S. dollars. Our revolving credit facility has a $1.0 billion expansion option, which is subject to obtaining lender commitments. Under our revolving credit facility, our investment grade credit ratings as of December 31, 2020 provide for financing at the London Interbank Offered Rate, commonly referred to as LIBOR, plus 0.775% with a facility commitment fee of 0.125%, for all-in pricing of 0.90% over LIBOR.

The borrowing rate is subject to an interest rate floor and may change if our investment grade credit ratings change. We also have other interest rate options available to us under our credit facility. Our credit facility is unsecured and, accordingly, we have not pledged any assets as collateral for this obligation.
At December 31, 2020, we had no outstanding borrowings on our revolving credit facility and available borrowing capacity of $3.0 billion. The weighted average interest rate on borrowings under our revolving credit facility during 2020 was 1.5% per annum. We must comply with various financial and other covenants in our credit facility. At December 31, 2020, we were in compliance with these covenants. We expect to use our credit facility to acquire additional properties and for other general corporate purposes. Any additional borrowings will increase our exposure to interest rate risk.

In August 2020, we established a U.S. dollar-denominated unsecured commercial paper program. Under the terms of the program we may, from time to time, issue unsecured commercial paper notes up to a maximum aggregate amount outstanding of $1.0 billion. Borrowings under this program generally mature in one year or less. At December 31, 2020, we had no outstanding commercial paper borrowings. The weighted average interest rate on borrowings under our commercial paper program was 0.3% from inception of the plan through December 31, 2020. We use our $3.0 billion revolving credit facility as a liquidity backstop for the repayment of the notes issued under the commercial paper program.

We generally use our credit facility and commercial paper borrowings for the short-term financing of new property acquisitions. Thereafter, we generally seek to refinance those borrowings with the net proceeds of long-term or permanent financing, which may include the issuance of common stock, preferred stock or debt securities. We cannot assure you, however, that we will be able to obtain any such refinancing, or that market conditions prevailing at the time of the refinancing will enable us to issue equity or debt securities at acceptable terms. We regularly review our credit facility and commercial paper program and may seek to extend, renew or replace our credit facility, to the extent we deem appropriate.
Term Loans
In October 2018, in conjunction with entering into our revolving credit facility, we entered into a $250.0 million senior unsecured term loan, which matures in March 2024, and is governed by the credit agreement that governs our revolving credit facility. Borrowing under this term loan bears interest at the current one-month LIBOR plus 0.85%. In conjunction with this term loan, we also entered into an interest rate swap which effectively fixes our per annum interest on this term loan at 3.89%.

In June 2015, in conjunction with entering into our previous revolving credit facility, we entered into a $250.0 million senior unsecured term loan which matured in June 2020. Borrowing under this term loan bore interest at the current one-month LIBOR, plus 0.90%. In conjunction with this term loan, we also entered into an interest rate swap which effectively fixed our per annum interest rate on this term loan at 2.62%. In June 2020, we repaid the term loan in full upon maturity.

Mortgage Debt
As of December 31, 2020, we had $299.6 million of mortgages payable, all of which were assumed in connection with our property acquisitions. Additionally, at December 31, 2020, we had net premiums totaling $1.7 million on these mortgages and deferred financing costs of $973,000. We expect to pay off the mortgages payable as soon as prepayment penalties have declined to a level that would make it economically feasible to do so. During 2020, we made $108.8 million of principal payments, including the repayment of nine mortgages in full for $103.4 million.

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Notes Outstanding
Our senior unsecured note and bond obligations consist of the following as of December 31, 2020, sorted by maturity date (dollars in millions):
3.250% notes, $450 issued in October 2012 and $500 issued in December 2017, both due in October 2022 (1)
$950 
4.650% notes, issued in July 2013 and due in August 2023750 
3.875% notes, issued in June 2014 and due in July 2024350 
3.875% notes, issued in April 2018 and due in April 2025500 
0.750% notes, issues December 2020 and due in March 2026325 
4.125% notes, $250 issued in September 2014 and $400 issued in March 2017, both due in October 2026650 
3.000% notes, issued in October 2016 and due in January 2027600 
3.650% notes, issued in December 2017 and due in January 2028550 
3.250% notes, issued in June 2019 and due in June 2029500 
1.625% notes, issued in October 2020 and due December 2030 (2)
547 
3.250% notes, $600 issued in May 2020 and $350 issued in July 2020, both due in January 2031950 
1.800% notes, issued in December 2020 and due in March 2033400 
2.730% notes, issued in May 2019 and due in May 2034 (2)
431 
5.875% bonds, $100 issued in March 2005 and $150 issued in June 2011, both due in March 2035250 
4.650% notes, $300 issued in March 2017 and $250 issued in December 2017, both due in March 2047550 
Total principal amount8,303 
Unamortized net original issuance premiums and deferred financing costs(35)
$8,268 
(1) In January 2021, we completed the early redemption on all $950.0 million in principal amount of our outstanding 3.250% notes due October 2022, plus accrued and unpaid interest.
(2) Represents the principal balance (in U.S. dollars) of the October 2020 Sterling-denominated note offering and May 2019 Sterling-denominated private placement of £400.0 million and £315.0 million, respectively, converted at the applicable exchange rate on December 31, 2020.

Note Issuances
During the year ended December 31, 20202023, we issued the following notes and bonds (in millions):

2020 IssuancesDate of
Issuance
Maturity datePrincipal
amount
issued
Price of par valueEffective yield to
maturity
3.250% notesMay 2020January 2031$60098.99 %3.36%
3.250% notesJuly 2020January 2031$350108.24 %2.34%
1.625% notesOctober 2020December 2030£40099.19 %1.71%
0.750% notesDecember 2020March 2026$32599.19 %0.91%
1.800% notesDecember 2020March 2033$40098.47 %1.94%
Note IssuanceDate of IssuanceMaturity DatePrincipal amountPrice of par valueEffective yield to maturity
5.050% 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 2030550.0 99.421 %4.975 %
5.125% NotesJuly 2023July 2034550.0 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 %

The net proceedsIn January 2024, we issued $450.0 million of $391.3 million from the December 2020 offering of 1.800% notes due 2033 and the net proceeds of $320.3 million from the December 2020 offering of 0.750% notes due 2026 were used, along with available cash and additional borrowings, as necessary to redeem in January 2021 all $950 million aggregate principal amount of our outstanding 3.25% notes due 2022 at the applicable redemption price, plus accrued interest and, to the extent not used for those purposes, to fund investment opportunities and for other general corporate purposes.
4.750%
The net proceeds from the October 2020 Sterling-denominated offering of £400.0 million approximated $508.2 million, as converted at the applicable exchange rate on the closing of the offering, and were used to repay GBP-denominated borrowings outstanding under our $3.0 billion revolving credit facility, to settle an outstanding GBP/USD currency exchange swap arrangement and, to the extent not used for those purposes, to fund investment opportunities and for other general corporate purposes.

The net proceeds of $376.6 million from the July 2020 note offering and the net proceeds of $590.0 million from the May 2020 note offering were used to repay borrowings under our credit facility, to fund potential investment opportunities and for other general corporate purposes.
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All of our outstanding notes and bonds have fixed interest rates and contain various covenants, with which we remained in compliance as of December 31, 2020. Additionally, with the exception of interest on our 1.625% senior unsecured notes due February 2029 and $800.0 million of5.125%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 2030,31, 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 is paid annually,fix our per annum interest on allrate. As of our other senior note and bond obligations is paid semiannually.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, measurements, are presented to investors to show our ability to incur additional debt under the terms of our senior notes and bonds as well as to disclose our current compliance with such covenants and are not measures of our liquidity or performance. The actual amounts as of December 31, 20202023, are:
Note CovenantsRequiredActual
Note CovenantsRequiredActual
Limitation on incurrence of total debt
< 60% of adjusted assets
39.639.7 %
Limitation on incurrence of secured debt
< 40% of adjusted assets
1.41.6 %
Debt service coverage (trailing 12 months)(1)
> 1.5 x1.5x
5.14.7x
Maintenance of total unencumbered assets
> 150% of unsecured debt
256.7257.9 %
(1) Our debt service coverage ratio is calculated on a pro forma basis for the preceding four-quarter period on the assumptions that: (i) the incurrence of any debt (as defined in the covenants) incurred by us since the first day of such four-quarter period and the application of the proceeds therefrom (including to refinance other Debtdebt since the first day of such four-quarter period), (ii) the repayment or retirement of any of our debt since the first day of such four-quarter period, and (iii) any acquisition or disposition by us of any asset or group since the first day of such four quarters had in each case occurred on January 1, 2020,2023 and subject to certain additional adjustments. Such pro forma ratio has been prepared on the basis required by that debt service covenant, reflects various estimates and assumptions and is subject to other uncertainties, and therefore does not purport to reflect what our actual debt service coverage ratio would have been had transactions referred to in clauses (i), (ii) and (iii) of the preceding sentence occurred as of January 1, 2020,2023, nor does it purport to reflect our debt service coverage ratio for any future period. The following is our calculation of debt service and fixed charge coverage at December 31, 20202023 (in thousands, for trailing twelve months):
Net income available to common stockholders
Net income available to common stockholders$872,309
Plus: interest expense, excluding the amortization of deferred financing costs703,883
Plus: provision for taxes52,021
Plus: depreciation and amortization1,895,177
Plus: provisions for impairment82,208
Plus: pro forma adjustments360,009
Less: gain on sales of real estate(25,667)
Income available for debt service, as defined$3,939,940
Total pro forma debt service charge$837,945
Debt service and fixed charge coverage ratio4.7x
30

$395,486 
Plus: interest expense, excluding the amortization of deferred financing costs299,015 
Plus: loss on extinguishment of debt9,819 
Plus: provision for taxes14,693 
Plus: depreciation and amortization677,038 
Plus: provisions for impairment147,232 
Plus: pro forma adjustments71,574 
Less: gain on sales of real estate(76,232)
Income available for debt service, as defined$1,538,625 
Total pro forma debt service charge$304,552 
Debt service and fixed charge coverage ratio5.1 

Cash Reserves
We are organized to operate as an equity REIT that acquires and leases properties and distributes to stockholders, in the form of monthly cash distributions, a substantial portion of our net cash flow generated from leases on our properties. We intend to retain an appropriate amount of cash as working capital. At December 31, 2020, we had cash and cash equivalents totaling $824.5 million, inclusive of £32.3 million Sterling.
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 program.
Credit Agency Ratings
The borrowing interest rates under our revolving credit facility are based upon our ratings assigned by credit rating agencies. As of December 31, 2020,2023, we were assigned the following investment grade corporate credit ratings on our senior unsecured notes and bonds: Moody’s Investors Service has assigned a rating of A3 with a “stable” outlook and Standard & Poor’s Ratings Group has assigned a rating of A- with a “stable” outlook. In addition, we were assigned the following ratings on our commercial paper at December 31, 2020:2023: Moody's Investors Service has assigned a rating of P-2 and Standard & Poor's Ratings Group has assigned a rating of A-2.
Based on our credit agency ratings as of December 31, 2020,2023, interest rates under our credit facility for U.S. borrowings would have been at the facility interest rate was LIBOR,SOFR, plus 0.775%0.725% with a SOFR adjustment charge of 0.10% and a revolving credit facility commitment fee of 0.125%, for all-in drawn pricing of 0.90%0.95% over LIBOR. OurSOFR, for British Pound Sterling borrowings, at the SONIA, plus 0.725% with a SONIA adjustment charge of 0.0326% and a revolving credit facility fee of 0.125%, for all-in drawn pricing of 0.8826% over SONIA, and for Euro Borrowings at one-month EURIBOR, plus 0.725%, and a revolving credit facility fee of 0.125%, for all-in drawn pricing of 0.85% over one-month EURIBOR. In addition, our credit facility provides that the interest raterates can range between: (i) LIBOR,SOFR/SONIA/EURIBOR, plus 1.45%1.40% if our credit rating is lower than BBB-/Baa3 or our senior unsecured debt is unrated and (ii) LIBOR,
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SOFR/SONIA/EURIBOR, plus 0.75%0.70% if our credit rating is A/A2 or higher. In addition, our credit facility provides for a facility commitment fee based on our credit ratings, which rangeranges from: (i) 0.30% for a rating lower than BBB-/Baa3 or unrated, and (ii) 0.10% for a credit rating of A/A2 or higher.
We also issue senior debt securities from time to time and our credit ratings can impact the interest rates charged in those transactions. If our credit ratings or ratings outlook change, our cost to obtain debt financing could increase or decrease. The credit ratings assigned to us could change based upon, among other things, our results of operations and financial condition. These ratings are subject to ongoing evaluation by credit rating agencies, and we cannot assure you that our ratings will not be changed or withdrawn by a rating agency in the future if, in its judgment, circumstances warrant. Moreover, a rating is not a recommendation to buy, sell or hold our debt securities, preferred stock or common stock.

Table of ObligationsMaterial Cash Requirements
The following table summarizes the maturity of each of our obligations as of December 31, 20202023 (dollars in millions):
Year of
Maturity
Credit
Facility and Commercial Paper Program(1)
Notes
and Bonds(2)
Term
Loan(3)
Mortgages
Payable (4)
Interest (5)
Ground Leases
Paid by Realty
Income(6)
Ground Leases
Paid by Our
Clients
(7)
Other(8)
Totals
2021$— $— $— $44.2 $302.3 $1.6 $13.7 $106.8 $468.6 
2022— 950.0 — 111.8 301.6 1.6 13.6 — 1,378.6 
2023— 750.0 — 20.6 266.6 1.6 13.7 — 1,052.5 
Credit Facility and Commercial Paper (1)
Credit Facility and Commercial Paper (1)
Unsecured Term
Loans (2)
Mortgages Payable
Senior Unsecured Notes and Bonds (3)
Interest (4)
Ground
Leases Paid by the Company (5)
Ground
Leases Paid by
Our Clients (6)
Other (7)
Totals
20242024— 350.0 250.0 112.2 223.2 1.6 13.8 — 950.8 
20252025— 500.0 — 0.7 192.9 1.4 13.5 — 708.5 
2026
2027
2028
ThereafterThereafter— 5,752.4 — 10.1 1,222.4 18.8 55.9 — 7,059.6 
TotalsTotals$— $8,302.4 $250.0 $299.6 $2,509.0 $26.6 $124.2 $106.8 $11,618.6 
(1) The initial term of the credit facility expires in March 2023June 2026 and includes, at our option, two six-month extensions. At December 31, 2020,2023, there were no outstanding borrowings under our revolving credit facility, orand commercial paper program.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 both non–cash originalour January 2024 issuance discounts and premiums recorded on notes payable of $14.6$450.0 million and deferred financing costs of $49.2 million. Excludes the impact of the January 2021 early redemption of all $950.0 million in principal of the 3.250%4.750% senior unsecured notes due October 2022.
(3)  Excludes deferred financing costsFebruary 2029 and $800.0 million of $642,000.5.125% senior unsecured notes due February 2034.
(4) Excludes both non–cash net premiums recorded on the mortgages payable of $1.7 million and deferred financing costs of $973,000.
(5) Interest on the commercial paper programs, term loans, notes, bonds, mortgages payable, credit facility and commercial paper programsenior unsecured notes and bonds has been calculated based on outstanding balances at period end through their respective maturity dates. Excludes the impact ofinterest on the January 2021 early redemption2024 issuances of all $950.0$450.0 million in principal of the 3.250%unsecured senior notes due October 2022.February 2029 and $800.0 million of unsecured senior notes due February 2034.
(6)  (5)Realty Income We currently payspay the ground lessors directly for the rent under the ground leases.
(7)(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.
(8)(7) “Other” consists of $100.0$740.0 million of commitments under construction contracts, and $6.8$32.7 million for re-leasing costs, recurring capital expenditures, and non-recurring building improvements.
Investments in Unconsolidated Entities
Our credit facility, commercial paper program, term loan, and notes payable obligations are unsecured. Accordingly, we have not pledged any assets as collateral for these obligations.As of December 31, 2023, our pro-rata share of secured debt of unconsolidated entities was approximately $659.2 million.
31
No Unconsolidated Investments

We have no unconsolidated investments, nor do we engage in trading activities involving energy or commodity contracts.
ImpactTable of Real Estate and Credit Markets
In the commercial real estate market, property prices generally continue to fluctuate. Likewise, during certain periods, including the current market, the global credit 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 credit markets carefully and, if required, will make decisions to adjust our business strategy accordingly.Contents


DIVIDEND POLICY
Distributions are paid monthly to holders of shares of our common stock.
Distributions are paid monthly to the limited partners holding common units of Realty Income, L.P., each on a per unit basis that is equal to the amount paid per share to our common stockholders.
In order to maintain our status as a REIT for federal income tax purposes, we generally are required to distribute dividends to our stockholders aggregating annually at least 90% of our taxable income (excluding net capital gains), and we are subject to income tax to the extent we distribute less than 100% of our taxable income (including net capital gains). In 2023, our cash distributions to common stockholders totaled $2.11 billion, or approximately 115.9% of estimated taxable income of $1.82 billion. Certain measures are available to us to reduce or eliminate our tax exposure as a REIT, and accordingly, no provision for federal income taxes, other than our taxable REIT subsidiaries (each, a "TRS"), has been made. Our estimated taxable income reflects non-cash deductions for depreciation and amortization. Our estimated taxable income is presented to show our compliance with REIT dividend requirements and is not a measure of our liquidity or operating performance. We intend to continue to make distributions to our stockholders that are sufficient to meet this dividend requirement and that will reduce or eliminate our exposure to income taxes. Furthermore, we believe our cash on hand and funds from operations are sufficient to support our current level of cash distributions to our stockholders. We distributed $3.051 per share to stockholders during 2023, representing 76.3% of our diluted Adjusted Funds from Operations Available to Common Stockholders ("AFFO") per share of $4.00.
Future distributions will be at the discretion of our Board of Directors and will depend on, among other things, our results of operations, Funds from Operations Available to Common Stockholders ("FFO"), Normalized Funds from Operations Available to Common Stockholders ("Normalized FFO"), AFFO, cash flow from operations, financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Internal Revenue Code of 1986, as amended, our debt service requirements, and any other factors the Board of Directors may deem relevant. In addition, our credit facility contains financial covenants that could limit the amount of distributions payable by us in the event of a default, and which prohibit the payment of distributions on our common stock in the event that we fail to pay when due (subject to any applicable grace period) any principal or interest on borrowings under our credit facility.
Distributions of our current and accumulated earnings and profits for federal income tax purposes generally will be taxable to stockholders as ordinary income, except to the extent that we recognize capital gains and declare a capital gains dividend, or that such amounts constitute “qualified dividend income” subject to a reduced rate of tax. The maximum tax rate of non-corporate taxpayers for “qualified dividend income” is generally 20%. In general, dividends payable by REITs are not eligible for the reduced tax rate on qualified dividend income, except to the extent that certain holding requirements have been met with respect to the REIT’s stock and the REIT’s dividends are attributable to dividends received from certain taxable corporations (such as our TRSs) or to income that was subject to tax at the corporate or REIT level (for example, if we distribute taxable income that we retained and paid tax on in the prior taxable year). However, non-corporate stockholders, including individuals, generally may deduct up to 20% of dividends from a REIT, other than capital gain dividends and dividends treated as qualified dividend income, for taxable years beginning after December 31, 2017, and before January 1, 2026.
Distributions in excess of earnings and profits generally will first be treated as a non-taxable reduction in the stockholders’ basis in their stock, but not below zero. Distributions in excess of that basis generally will be taxable as a capital gain to stockholders who hold their shares as a capital asset. Approximately 6.8% of the distributions to our common stockholders, made or deemed to have been made in 2023, were classified as a return of capital for federal income tax purposes.
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RESULTS OF OPERATIONS
The following is a comparison of our results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Total Revenue
The following summarizes our total revenue (dollars in thousands):
Years ended December 31,
20232022Change
Rental (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 Revenue (excluding reimbursable)
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,
20232022Change
Properties 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 
(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 $14.9 million for the years ended December 31, 2023 and 2022, respectively, which represents less than 1% of rental revenue.
At December 31, 2023, our portfolio of 13,458 properties was 98.6% leased with 193 properties available for lease, as compared to 99.0% leased with 126 properties available for lease at December 31, 2022. It has been our experience that approximately 1% to 4% of our property portfolio will be available for lease at any given time; however, it is possible that the number of properties available for lease or sale could increase in the future, given the nature of economic cycles and other unforeseen global events.
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Acquisitions During 2020
Below is a listingRental Revenue (reimbursable)
A number of our acquisitionsleases provide for contractually obligated reimbursements from clients for recoverable real estate taxes and operating expenses. The increase in the U.S. and U.K.contractually obligated reimbursements by our clients for the year ended December 31, 2020:2023 as compared with the same period in 2022 is primarily due to higher recoverable real estate tax taxes from overall portfolio growth.
Number of PropertiesLeasable Square FeetInvestment
($ in thousands)
Weighted Average Lease Term (Years)
Initial Average Cash Lease Yield (1)
Year ended December 31, 2020 (2)
Acquisitions - U.S. (in 30 states)
202 5,476,009 $1,302,220 14.9 5.8 %
Acquisitions - U.K. (3)
24 2,120,256 920,934 10.8 6.1 %
Total Acquisitions226 7,596,265 $2,223,154 13.2 5.9 %
Properties under Development - U.S.18 1,601,095 84,127 15.3 5.6 %
Total (4)
244 9,197,360 $2,307,281 13.2 5.9 %
Other Revenue
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.
Total Expenses
The following summarizes our total expenses (in thousands):
Years ended December 31,
20232022Change
Depreciation and amortization$1,895,177$1,670,389$224,788
Interest730,423465,223265,200
Property (excluding reimbursable)42,76341,6451,118
Property (reimbursable)274,201184,68589,516
General and administrative144,536138,4596,077
Provisions for impairment87,08225,86061,222
Merger and integration-related costs14,46413,897567
Total expenses$3,188,646$2,540,158$648,488
Total revenue (1)
$3,804,792$3,158,996

General 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 %

(1) Excludes rental revenue (reimbursable).

Depreciation and Amortization
The initialincrease 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.
Interest Expense
The following is a summary of the components of our interest expense (in thousands):
Years ended December 31,
20232022
Interest on our credit facility, commercial paper, term loans, mortgages, senior unsecured notes and bonds, and interest rate swaps$788,344$523,384
Credit facility commitment fees5,3574,908
Amortization of debt origination and deferred financing costs26,67014,149
(Gain) loss on interest rate swaps(7,189)718
Amortization of net mortgage premiums(12,803)(13,622)
Amortization of net note premiums(60,657)(62,989)
Capital lease obligation1,5091,464
Interest capitalized(10,808)(2,789)
Interest expense$730,423$465,223
Credit facility, commercial paper, term loans, mortgages and senior unsecured notes and bonds
Average outstanding balances$20,537,222$16,460,928
Weighted average interest rates3.83 %3.15 %
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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 cashdebt and weighted average interest. See notes to the accompanying consolidated financial statements for additional information regarding our indebtedness.
Property Expenses (excluding reimbursable)
Property expenses (excluding reimbursable) consist of costs associated with properties available for lease, yieldnon-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 athe year ended December 31, 2023 as compared with the same period in 2022 is primarily impacted by property tax and property management expenses.
Property Expenses (reimbursable)
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 generally computedproportional to overall portfolio growth.
General and Administrative Expenses
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 estimated contractual firstcompared with the same period in 2022 is primarily due to higher payroll-related compensation costs associated with the growth of the company.
Provisions for Impairment
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 cash net operating income, which,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 casefollowing table (dollars in millions):
Years ended December 31,
20232022
Carrying 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 
(1) Excludes provision for current expected credit loss 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 our client could default on the payment of contractual rent, we cannot provide assurance that the actual return on the funds invested will remain at the percentages listed above. Contractual net operating income for the fourth quarter of 2020 includes approximately $700,000 received as a settlement credit for a property acquired in the U.S. as reimbursement of a free rent period.
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 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)None of our investments during 2020 caused any one client to be 10% or more of our total assets$4.9 million at December 31, 2020. All2023.
Merger and Integration-Related Costs
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.
Gain on Sales of Real Estate
The following summarizes our property dispositions (dollars in millions):
Years ended December 31,
20232022
Number of properties sold121 170 
Net sales proceeds$117.4 $436.1 
Gain on sales of real estate$25.7 $103.0 
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Foreign Currency and Derivative (Loss) Gain, Net
We borrow in the functional currencies of the countries in which we invest. Net foreign currency gain and loss are primarily related to the remeasurement of intercompany debt from foreign subsidiaries.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 investments in acquired properties during 2020 are 100% leased atSterling-denominated intercompany loan receivable from our consolidated foreign subsidiaries, we terminated the acquisition date.    
(3)four cross-currency swaps used to hedge the foreign currency exposure of the intercompany loan.Represents investments of £707.8As the hedge relationship was terminated and the future principal and interest associated with the prepaid intercompany loan will not occur, $20.0 million Sterlinggain was reclassified from AOCI to 'Foreign currency and derivative (loss) gain, net' during the year ended December 31, 2020 converted at2022. The reclassification from AOCI was offset by $7.9 million in losses from the applicable exchange rateintercompany loan remeasurement on the datefinal exchange.
Equity in Income and Impairment of acquisition.Investment in Unconsolidated Entities
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.
Other Income, Net
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.
(4)Income Taxes
Our clients occupyingIncome 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 new properties operateyear ended December 31, 2023 as compared with the same period in 26 industries, and are 86.6% retail and 13.4% industrial, based on rental revenue. Approximately 61% of2022 is primarily attributable to higher taxable income in the rental revenue generated from acquisitions during 2020 is from our investment grade rated clients, their subsidiaries or affiliated companies.UK; partially offset by lower UK tax rates.

Portfolio Discussion
36

Leasing Results
At December 31, 2020, we had 140 properties available for lease outTable of 6,592 properties in our portfolio, which represents a 97.9% occupancy rate based on the number of properties in our portfolio.

The following tables summarize our leasing results for the periods indicated below:
Three months ended December 31, 2020
Properties available for lease at September 30, 202092 
Lease expirations (1)
159 
Re-leases to same client (2)
(72)
Re-leases to new client (2)(3)
(5)
Vacant dispositions(34)
Properties available for lease at December 31, 2020140 
(1)Includes scheduled and unscheduled expirations (including leases rejected in bankruptcy), as well as future expirations resolved in the current quarter.
(2)The annual new rent on these re-leases was $21.01 million, as compared to the previous annual rent of $20.95 million on the same properties, representing a rent recapture rate of 100.3% on the properties re-leased during the three months ended December 31, 2020.
(3)Re-leased all five properties to new clients after a period of vacancy.Contents



CRITICAL ACCOUNTING POLICIES







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Year ended December 31, 2020
Properties available for lease at December 31, 201994 
Lease expirations (1)
446 
Re-leases to same client (2)
(296)
Re-leases to new client (2)(3)
(18)
Vacant dispositions(86)
Properties available for lease at December 31, 2020140 
(1)Includes scheduled and unscheduled expirations (including leases rejected in bankruptcy), as well as future expirations resolved in the current year.
(2)The annual new rent on these re-leases was $66.24 million, as compared to the previous annual rent of $66.26 million on the same properties, representing a rent recapture rate of 100.0% on the properties re-leased during the year ended December 31, 2020.
(3)Re-leased five properties to new clients without a period of vacancy, and 13 properties 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.
At December 31, 2020, our average annualized contractual rent was approximately $15.38 per square foot on the 6,452 leased properties in our portfolio. At December 31, 2020, we classified 21 properties with a carrying amount of $19.0 million, as real estate and lease intangibles held for sale, net on our balance sheet. The expected sale of these properties does not represent a strategic shift that will have a major effect on our operations and financial results and is consistent with our existing disposition strategy to further enhance our real estate portfolio and maximize portfolio returns.
Investments in Existing Properties
During 2020, we capitalized costs of $7.0 million on existing properties in our portfolio, consisting of $1.8 million for re-leasing costs, $198,000 for recurring capital expenditures, and $5.0 million for non-recurring building improvements. In comparison, during 2019, we capitalized costs of $17.9 million on existing properties in our portfolio, consisting of $2.1 million for re-leasing costs, $801,000 for recurring capital expenditures, and $15.0 million for non-recurring building improvements.
The majority of our building improvements relate to roof repairs, HVAC improvements, and parking lot resurfacing and replacements. The amounts of our capital expenditures can vary significantly, depending on the rental market, credit worthiness of our clients, the lease term and the willingness of our clients to pay higher rents over the terms of the leases.
We define recurring capital expenditures as mandatory and recurring landlord capital expenditure obligations that have a limited useful life. We define non-recurring capital expenditures as property improvements in which we invest additional capital that extend the useful life of the properties.
Increases in Monthly Dividends to Common Stockholders
We have continued our 52-year policy of paying monthly dividends. In addition, we increased the dividend five times during 2020 and once in 2021. As of February 2021, we have paid 93 consecutive quarterly dividend increases and increased the dividend 109 times since our listing on the NYSE in 1994.
 MonthMonthDividendIncrease
2020 Dividend increasesDeclaredPaidper shareper share
1st increaseDec 2019Jan 2020$0.2275 $0.0005 
2nd increaseJan 2020Feb 2020$0.2325 $0.0050 
3rd increaseMar 2020Apr 2020$0.2330 $0.0005 
4th increaseJun 2020Jul 2020$0.2335 $0.0005 
5th increaseSep 2020Oct 2020$0.2340 $0.0005 
2021 Dividend increases    
1st increaseDec 2020Jan 2021$0.2345 $0.0005 
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The dividends paid per share during 2020 totaled $2.7940, as compared to $2.7105 during 2019, an increase of $0.0835, or 3.1%.
The monthly dividend of $0.2345 per share represents a current annualized dividend of $2.81 per share, and an annualized dividend yield of approximately 4.5% based on the last reported sale price of our common stock on the NYSE of $62.17 on December 31, 2020. 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.

RESULTS OF OPERATIONS
Critical Accounting Policies
Our consolidated financial statements have been prepared in accordance with U.S. GAAP and are the basis for our discussion and analysis of financial condition and results of operations. Preparing our consolidated financial statements requires us to make a number of estimates and assumptions that affect the reported amounts and disclosures in the consolidated financial statements. We believe that we have made these estimates and assumptions in an appropriate manner and in a way that accurately reflects our financial condition. We continually test and evaluate these estimates and assumptions using our historical knowledge of the business, as well as other factors, to ensure that they are reasonable for reporting purposes. However, actual results may differ from these estimates and assumptions. This summary should be read in conjunction with the more complete discussion of our accounting policies and procedures included in note 21, Summary of Significant Accounting Policies, to our consolidated financial statements.
statements in this annual report on Form 10-K for the year ended December 31, 2023. In order to prepare our consolidated financial statements according to the rules and guidelines set forth by U.S. GAAP, many subjective judgments must be made with regard to critical accounting policies.
Allocation of the Purchase Price of Real Estate Acquisitions
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–marketabove-market rents on certain leases under which we are a lessor are accounted for as financing receivables amortizing over the lease term, while below–marketbelow-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.

Provisions for Impairment - Real Estate Assets
Another significant judgment must be made as to if, and when, impairment losses should be taken on our properties when events or a change in circumstances indicate that the carrying amount of the asset may not be recoverable. If estimated future operating cash flows (undiscounted and without interest charges) plus estimated disposition proceeds (undiscounted) are less than the current book value of the property, a fair value analysis is performed and, to the extent the estimated fair value is less than the current book value, a provision for impairment is recorded to reduce the book value to estimated fair value. Key inputs that we utilize in this analysis include projected rental rates, estimated holding periods, capital expenditures, and property sales capitalization rates. If a property is held for sale, it is carried at the lower of carrying cost or estimated fair value, less estimated cost to sell. The carrying value of our real estate is the largest component of our consolidated balance sheets. Our strategy of primarily holding properties, long-term, directly decreases the likelihood of their carrying values not being recoverable, thus requiring the recognition of an impairment. However, if our strategy, or one or more of the above assumptions were to change in the future, an impairment may need to be recognized. If events should occur that require us to reduce the carrying value of our real estate by recording provisions for impairment, they could have a material impact on our results of operations.

When assessing the collectability of future lease payments, one of the key factors we have considered during 2020 has been the COVID-19 pandemic. We generally assess collectability based on an analysis of creditworthiness,
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economic trends, and other facts and circumstances related to our applicable clients. If the collection of substantially all of the future lease payments is less than probable, we will write-off the receivable balances associated with the lease and cease to recognize lease income, including straight-line rent, unless cash is received when due. Unless otherwise specified, references to reserves recorded as a reduction of rental revenue include amounts reserved for in the current period, as well as unrecognized contractual rental revenue and unrecognized straight-line rental revenue for leases accounted for on a cash basis. As of December 31, 2020, other than the information related to the reserves we have recorded to such date, we do not have any further client specific information that would change our assessment that collection of substantially all of the future lease payments under our existing leases is probable. However, there may be impacts in future periods that could change this assessment as the situation continues to evolve and as more information becomes available.

The COVID-19 pandemic and the measures taken to limit its spread are negatively impacting the economy across many industries, including the industries in which some of our clients operate. These impacts may continue and increase in severity as the duration or extent of the pandemic increases, which may, in turn, adversely impact the fair value estimates of our real estate and require the recording of impairments on our properties. As a result, we evaluated certain key assumptions involving fair value estimates of our real estate, recording of impairments on our properties and collectability of our accounts receivable. We continue to evaluate the potential impacts of the COVID-19 pandemic and the measures taken to limit its spread on our business and industry segments, as the situation continues to evolve and more information becomes available.

The following is a comparison of our results of operations for the years ended December 31, 2020, 2019 and 2018.
Total Revenue
The following summarizes our total revenue (dollars in thousands):
    Increase
 2020201920182020
versus
2019
2019
versus
2018
REVENUE     
Rental (excluding reimbursable)$1,560,171 $1,415,733 $1,274,596 $144,438 $141,137 
Rental (reimbursable)79,362 69,085 46,950 10,277 22,135 
Other12,092 6,773 6,292 5,319 481 
Total revenue$1,651,625 $1,491,591 $1,327,838 $160,034 $163,753 
Rental Revenue (excluding reimbursable)
The table below summarizes the increase in rental revenue (excluding reimbursable) in 2020 compared to 2019 (dollars in thousands):
Year Ended December 31,Increase/(Decrease)
Number of PropertiesSquare Footage20202019$ Change% Change
Properties acquired during 2020 & 20191,014 22,388,061 $282,038 $85,039 $196,999 231.7 %
Same store rental revenue5,403 84,641,826 1,237,358 1,259,303 (21,945)(1.7)%
Properties sold during 2020 & 2019221 4,234,228 6,567 22,389 (15,822)(70.7)%
Straight-line rent and other non-cash adjustmentsN/AN/A7,384 15,177 (7,793)(51.3)%
Vacant rents, development and other (1)
180 3,916,555 26,824 33,825 (7,001)(20.7)%
Totals$1,560,171 $1,415,733 $144,438 10.2 %
(1) Relates to the aggregate of (i) rental revenue from properties (174 properties comprising 2,973,551 square feet) that were available for lease during part of 2020 or 2019, (ii) rental revenue for properties (6 properties comprising 943,004 square feet) under development, and (iii) lease termination settlements.
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The table below summarizes the increase in rental revenue (excluding reimbursable) in 2019 compared to 2018 (dollars in thousands):
Year Ended December 31,Increase/(Decrease)
Number of PropertiesSquare Footage20192018$ Change% Change
Properties acquired during 2019 & 20181,532 18,219,735 $197,784 $54,028 $143,756 266.1 %
Same store rental revenue4,811 83,399,809 1,175,576 1,157,577 17,999 1.6 %
Properties sold during 2019 & 2018221 1,933,496 3,615 19,306 (15,691)(81.3)%
Straight-line rent and other non-cash adjustmentsN/AN/A13,821 16,993 (3,172)(18.7)%
Vacant rents, development and other (1)
140 4,653,664 24,937 26,692 (1,755)(6.6)%
Totals$1,415,733 $1,274,596 $141,137 11.1 %
(1) Relates to the aggregate of (i) rental revenue from properties (130 properties comprising 3,249,304 square feet) that were available for lease during part of 2019 or 2018, (ii) rental revenue for properties (10 properties comprising 1,404,360 square feet) under development, and (iii) 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.

Our calculation of same store rental revenue includes rent deferred for future payment as a result of lease concessions we granted in response to the COVID-19 pandemic and recognized under the practical expedient provided by the Financial Accounting Standards Board (FASB). Same store rental revenue in 2020 was negatively impacted by reserves recorded as reductions of rental revenue of $39.9 million, compared to $1.4 million in 2019. There was no same store rental income impact by reserves recorded as a reduction of rental revenue in 2018. Our calculation of same store rental revenue also includes uncollected rent for which we have not granted a lease concession. If these applicable amounts of rent deferrals and uncollected rent were excluded from our calculation of same store rental revenue, the decrease for 2020 relative to 2019 would have been (5.1)%.

Rental revenue was negatively impacted by rent reserves during 2020, primarily due to the COVID-19 pandemic, particularly with respect to the ongoing disruption to the theater industry. The following table summarizes reserves recorded as a reduction of rental revenue (dollars in millions):

Year ended December 31,
202020192018
Rental revenue reserves$44.1 $1.4 $1.1 
Straight-line rent reserves8.4 1.5 0.2 
Total rental revenue reserves$52.5 $2.9 $1.3 

Of the 6,592 properties in the portfolio at December 31, 2020, 6,555, or 99.4%, are single-client properties and the remaining are multi-client properties. Of the 6,555 single-client properties, 6,419, or 97.9%, were net leased at December 31, 2020. Of our 6,419 leased single-client properties, 5,486 or 85.5% were under leases that provide for increases in rents through:
Base rent increases tied to a consumer price index (typically subject to ceilings);
Percentage rent based on a percentage of our client's gross sales;
Fixed increases; or
A combination of two or more of the above rent provisions.
Percentage rent, which is included in rental revenue, was $5.1 million in 2020, $8.0 million in 2019, and $5.9 million in 2018. Percentage rent in 2020 was less than 1% of rental revenue and we anticipate percentage rent to be less than 1% of rental revenue in 2021.
At December 31, 2020, our portfolio of 6,592 properties was 97.9% leased with 140 properties available for lease, as compared to 98.6% leased, with 94 properties available for lease at December 31, 2019. It has been our
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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, such as the ongoing COVID-19 pandemic and the measures taken to limit its spread.
Rental Revenue (reimbursable)
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 in the years presented is primarily due to the growth of our portfolio due to acquisitions.

Other Revenue
The increase in other revenue for 2020 was primarily related to interest income recognized on financing receivables for certain leases with above-market terms as compared to 2019. In addition, interest income from our money market accounts was higher for 2020 as compared to 2019, which is primarily due to higher average investment balances.

Total Expenses
The following summarizes our total expenses (dollars in thousands):
    Increase (Decrease)
 2020201920182020
versus
2019
2019
versus
2018
EXPENSES     
Depreciation and amortization$677,038 $593,961 $539,780 $83,077 $54,181 
Interest309,336 290,991 266,020 18,345 $24,971 
Property (excluding reimbursable)25,241 19,500 19,376 5,741 $124 
Property (reimbursable)79,362 69,085 46,950 10,277 $22,135 
General and administrative (1)
73,215 66,483 84,148 6,732 $(17,665)
Income taxes14,693 6,158 5,340 8,535 $818 
Provisions for impairment147,232 40,186 26,269 107,046 $13,917 
Total expenses$1,326,117 $1,086,364 $987,883 $239,753 $98,481 
Total revenue (2)
$1,572,263 $1,422,506 $1,280,888 
General and administrative expenses as a percentage of total revenue (1)(2)
4.4 %4.7 %5.1 %
Property expenses (excluding reimbursable) as a percentage of total revenue (2)
1.6 %1.4 %1.5 %
(1) General and administrative expenses for 2020 included an executive severance charge related to the departure of our former CFO in March 2020. The total value of cash, stock compensation and professional fees incurred as a result of this severance was $3,463 and was recorded to general and administrative expense. In order to present a normalized calculation of our general and administrative expenses as a percentage of total revenue for 2020, we have excluded this executive severance charge to arrive at a normalized general and administrative amount of $69,752, which was used for our calculation. General and administrative expenses for 2018 included a one–time severance payment made to our former CEO in October 2018. The total value of cash, stock compensation and professional fees incurred as a result of this severance was $28,293; however, the net amount, after incorporating accruals for CEO compensation previous to this severance, was $18,651 and was recorded to general and administrative expense. In order to present a normalized calculation of our general and administrative expenses as a percentage of total revenue for 2018, we have excluded this one–time executive severance charge to arrive at a normalized general and administrative amount of $65,497, which was used for our calculation. Executive severance charges are excluded from Adjusted Funds from Operations Available to Common Stockholders, or AFFO, which is not a financial measure under generally accepted accounting principles. See our discussion of AFFO, which includes a reconciliation of this amount.
(2)  Excludes rental revenue (reimbursable).

Depreciation and Amortization
The increase in depreciation and amortization in 2020 and 2019 was primarily due to the acquisition of properties in 2020 and 2019, which was partially offset by property sales in those same periods. As discussed in the sections entitled “Funds from Operations Available to Common Stockholders (FFO)” and “Adjusted Funds from Operations Available to Common Stockholders (AFFO),” depreciation and amortization is a non-cash item that is added back to net income available to common stockholders for our calculation of FFO and AFFO.
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Interest Expense
The following is a summary of the components of our interest expense (dollars in thousands):
 202020192018
Interest on our credit facility, commercial paper, term loans, notes, mortgages and interest rate swaps$293,879 $277,802 $260,103 
Credit facility commitment fees3,812 3,803 2,774 
Amortization of debt origination and deferred financing costs10,694 9,485 8,711 
Loss (gain) on interest rate swaps4,132 2,752 (2,733)
Amortization of net mortgage premiums(1,258)(1,415)(1,520)
Amortization of net note premiums(1,754)(995)(1,256)
Other items(169)(441)(59)
Interest expense$309,336 $290,991 $266,020 
Credit facility, commercial paper, term loans, mortgages and notes 
Average outstanding balances (dollars in thousands)$8,240,829 $7,100,032 $6,662,952 
Average interest rates3.48 %3.89 %3.90 %
The increase in interest expense from 2019 to 2020 is primarily due to the October 2020 issuance of our 1.625% notes due 2030, May and July 2020 issuances of our 2031 Notes, the May 2019 issuance of our 2.730% notes due 2034, the June 2019 issuance of our 3.250% notes due 2029, and higher interest related to mortgages assumed during December 2019, partially offset by the January 2020 repayment of our 5.750% notes due 2021, the June 2020 repayment of one of our $250.0 million term loans, and lower average interest rates.

The increase in interest expense from 2018 to 2019 is primarily due to the October 2018 issuance of our $250.0 million senior unsecured term loan, the May 2019 issuance of our 2.730% notes due 2034, the June 2019 issuance of our 3.250% notes due 2029, and a loss on our interest rate swaps in 2019.

At December 31, 2020, the weighted average interest rate on our:
Term loan outstanding of $250.0 million (excluding deferred financing costs of $642,000 and considering that one of our $250.0 million term loans was paid off in June 2020) was swapped to fixed at 3.9%;
Mortgages payable of $299.6 million (excluding net premiums totaling $1.7 million and deferred financing costs of $973,000 on these mortgages) was 4.9%;
Notes and bonds payable of $8.30 billion (excluding unamortized net original issuance premiums of $14.6 million and deferred financing costs of $49.2 million) was 3.4%; and
Combined outstanding notes, bonds, mortgages and term loan of $8.85 billion (excluding all net premiums and deferred financing costs) was 3.5%.
Property Expenses (excluding reimbursable)
Property expenses (excluding reimbursable) consist of costs associated with properties available for lease, non-net-leased properties and general portfolio expenses. Expenses related to properties available for lease and non-net-leased properties include, but are not limited to, property taxes, maintenance, insurance, utilities, property inspections and legal fees. General portfolio costs include, but are not limited to, insurance, legal, property inspections, and title search fees. At December 31, 2020, 140 properties were available for lease, as compared to 94 at December 31, 2019 and 80 at December 31, 2018.

The increase in property expenses (excluding reimbursable) in 2020 is primarily due to reserves for contractually obligated reimbursements by our clients, an increase in repairs and maintenance expense, and an increase in portfolio size and the number of vacant properties at year-end.

Property Expenses (reimbursable)
The increase in property expenses (reimbursable) in both 2020 and 2019 was primarily attributable to the increased portfolio size, which contributed to higher contractually obligated reimbursements from our clients for recoverable real estate taxes and operating expenses primarily due to our acquisitions in each year.

General and Administrative Expenses
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.

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General and administrative expenses increased in 2020 primarily due to a severance charge of $3.5 million for our former CFO, who departed the company in March 2020, higher payroll-related costs, and higher corporate–level professional fees, partially offset by lower costs for terminated acquisitions and travel. The decrease in general and administrative costs in 2019 is primarily due to the severance charge of $18.7 million incurred in 2018 that related to our former CEO, who departed the company in October 2018.

Income Taxes
Income taxes are for city and state income and franchise taxes, and for U.K. income taxes paid by us and our subsidiaries. The increase in income taxes in 2020 was primarily attributable to our U.K. investments, which contributed to higher U.K. income taxes as compared to 2019.
Provisions for Impairment
The following table summarizes provisions for impairment during the periods indicated below (dollars in millions):
Year Ended December 31,
202020192018
Total provisions for impairment$147.2 $40.2 $26.3 
Number of properties:
Classified as held for sale— 
Classified as held for investment42 
Sold51 45 41 

During 2020, we identified the impact of the COVID-19 pandemic as an impairment triggering event for properties occupied by certain of our clients experiencing difficulties meeting their lease obligations to us. After considering the impacts of the COVID-19 pandemic on the key assumptions, we determined that the carrying values of 38 properties classified as held for investment for the year ended December 31, 2020 were not recoverable. As a result, we recorded provisions for impairment of $105.0 million for the year ended December 31, 2020 on the applicable properties impacted by the COVID-19 pandemic. Of the provisions for impairment recorded during 2020 for properties impacted by the COVID-19 pandemic, a total of 13 assets occupied by certain of our clients in the theater industry were impaired for $83.8 million,which reduced the carrying value of the properties from $123.4 million to their estimated fair value of $39.6 million. Impairments recorded on other properties during the year ended December 31, 2020 totaled $42.2 million.
Gain on Sales of Real Estate
The following table summarizes our properties sold during the periods indicated below (dollars in millions):
Year Ended December 31,
202020192018
Number of properties sold126 93 128 
Net sales proceeds$262.5 $108.9 $142.3 
Gain on sales of real estate$76.2 $30.0 $24.6 

Foreign Currency and Derivative Gains, Net
We borrow in the functional currencies of the countries in which we invest. Foreign currency gains and losses are primarily a result of intercompany debt and certain remeasurement transactions.

Loss on Extinguishment of Debt
In January 2020, we completed the early redemption on all $250.0 million in principal amount of outstanding 5.75% notes due January 2021, plus accrued and unpaid interest. As a result of the early redemption, we recognized a $9.8 million loss on extinguishment of debt during 2020.





NON-GAAP FINANCIAL MEASURES


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Net Income Available to Common Stockholders
The following summarizes our net income available to common stockholders (dollars in millions, except per share data):
Year Ended December 31,% Increase/(decrease)
2020201920182020 versus 20192019 versus 2018
Net income available to common stockholders$395.5$436.5$363.6(9.4)%20.0 %
Net income per share (1)
$1.14$1.38$1.26(17.4)%9.5 %
(1) All per share amounts are presented on a diluted per common share basis.

The calculation to determine net income available to common stockholders includes provisions for impairment, gains from the sale of properties, and foreign currency gains and losses, which can vary from period to period based on timing and significantly impact net income attributable to the Company and available to common stockholders.

Net income available to common stockholders in 2020 was impacted by the following transactions: (i)$147.2 million of provisions for impairment, (ii) $52.5 million in reserves recorded as a reduction of rental revenue, (iii) a $9.8 million loss on extinguishment of debt due to the January 2020 early redemption of the 5.750% notes due 2021, and (iv) a $3.5 million executive severance charge for our former CFO. For 2019, the only comparable charges were $40.2 million in provisions for impairment and $2.9 million in reserves recorded as a reduction of rental revenue.

Net income available to common stockholders in 2018 was impacted by a severance payment made to our former CEO in October 2018. The total value of cash, stock compensation and professional fees incurred as a result of this severance was $28.3 million; however, the net amount, after incorporating accruals for CEO compensation previous to this severance, was $18.7 million.

Adjusted Earnings before Interest, Taxes, Depreciation and Amortization for Real Estate (Adjusted("Adjusted EBITDAre")
The National Association of Real Estate Investment Trusts (Nareit) came to the conclusion that a Nareit-definedNareit established an EBITDA metric for real estate companies (i.e., EBITDA for real estate, or EBITDAre) it believed would provide investors with a consistent measure to help make investment decisions among REITs. Our definition of “Adjusted EBITDAre” is generally consistent with the Nareit definition, other than our adjustments to remove foreign currency and derivative gainsgain and lossesloss, excluding gain and executive severance chargesloss from the settlement of foreign currency forwards not designated as hedges (which is consistent with our previous calculations of "Adjusted EBITDA"). We define Adjusted EBITDAre,EBITDAre, a non–GAAPnon-GAAP financial measure, for the most recent quarter as earnings (net income) before (i) interest expense, including non-cash loss (gain) on swaps, (ii) income and franchise taxes, (iii) gain on extinguishment of debt, (iv) real estate depreciation and amortization, (iv)(v) provisions for impairment, (v)(vi) merger and integration-related costs, (vii) gain on sales of real estate, (vi)(viii) foreign currency and derivative gainsgain and losses,loss, net, (ix) gain on settlement of foreign currency forwards, and (vii) executive severance charges (as described in the Adjusted Funds(x) our proportionate share of adjustments from Operations section).unconsolidated entities. Our Adjusted EBITDAreEBITDAre may not be comparable to Adjusted EBITDAreEBITDAre reported by other companies or as defined by Nareit, and other companies may interpret or define Adjusted EBITDAre differently than we do. Management believes Adjusted EBITDAre to be a meaningful measure of a REIT’s performance because it provides a view of our operating performance, analyzes our ability to meet interest payment obligations before the effects of income tax, depreciation and amortization expense, provisions for impairment, gain on sales of real estate and other items, as defined above, that affect comparability, including the removal of non-recurring and non-cash items that industry observers believe are less relevant to evaluating the operating performance of a company. In addition, EBITDAreis widely followed by industry analysts, lenders, investors, rating agencies, and investors.others as a means of evaluating the operational cash generating capacity of a company prior to servicing debt obligations. Management also believes the use of an annualized quarterly Adjusted EBITDAre metric, which we refer to as Annualized Adjusted EBITDAre, is meaningful because it represents the Company’sour current earnings run rate for the period presented. The ratio of our total debt to our annualized quarterlyAnnualized Adjusted EBITDAre isand Annualized Pro Forma Adjusted EBITDAre, as defined below, are also used to determine the vesting of performance share awards granted to our executive officers. Annualized Adjusted EBITDAreshould be considered along with, but not as an alternative to net income as a measure of our operating performance. We define Annualized Pro Forma Adjusted EBITDAre as Annualized Adjusted EBITDAre, subject to certain adjustments to incorporate operating incomeAdjusted EBITDAre from properties we acquired or stabilized during the applicable quarter and to remove operating incomeAdjusted EBITDAre from properties we disposed of during the applicable quarter, and include transaction accounting adjustments in accordance with U.S. GAAP, giving pro forma effect to all transactions as if they occurred at the beginning of the applicable period. Our calculation includes all adjustments consistent with the requirements to present Adjusted EBITDAre on a pro forma basis in accordance with Article 11 of Regulation S-X. The Annualized Pro Forma Adjustments are consistent with the debt service coverage ratio calculated under financial covenants for our senior unsecured notes. We believe Annualized Pro Forma Adjusted EBITDAre is a useful non-GAAP supplemental measure, as it excludes properties that were no longer owned at the balance sheet date and includes the annualized rent from properties acquired during the quarter. OurManagement also uses our ratios of net debt-to-Adjusteddebt-to-Annualized Adjusted EBITDAre and net debt-to-Prodebt-to Annualized Pro Forma Adjusted EBITDAre, which are used by management as a measuremeasures of leverage arein assessing our financial performance, which is calculated as net debt (which we define as total debt per the consolidated balance sheet,sheets, excluding deferred financing costs and net premiums and discounts, but including our proportionate share of debt from unconsolidated entities, less cash and cash equivalents), divided by annualized quarterly Adjusted EBITDAreand annualized Pro Forma Adjusted EBITDAre, respectively.
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The following table summarizes ouris a reconciliation of net income (which we believe is the most comparable U.S. GAAP measure) to Adjusted EBITDAreand calculationAnnualized Pro Forma EBITDAre calculations for the periods indicated below:below (dollars in thousands):
For the Quarter Ended December 31,
Dollars in thousands202020192018
Net income (1)
$118,150 $129,553 $85,303 
Three months ended December 31,Three months ended December 31,
202320232022
Net income
InterestInterest78,764 75,073 70,635 
Loss on extinguishment of debt
Income taxesIncome taxes4,500 1,736 1,607 
Depreciation and amortizationDepreciation and amortization175,041 156,594 137,711 
Executive severance charge (2)
— — 18,651 
Provisions for impairmentProvisions for impairment23,790 8,950 1,235 
Merger and integration-related costs
Gain on sales of real estateGain on sales of real estate(22,667)(14,168)(5,825)
Foreign currency and derivative gains, net(3,311)(1,792)— 
Foreign currency and derivative loss (gain), net
Gain on settlement of foreign currency forwards
Proportionate share of adjustments from unconsolidated entities
Quarterly Adjusted EBITDAre
Quarterly Adjusted EBITDAre
$374,267 $355,946 $309,317 
Annualized Adjusted EBITDAre (3)
$1,497,068 $1,423,784 $1,237,268 
Annualized Adjusted EBITDAre (1)
Annualized Pro Forma AdjustmentsAnnualized Pro Forma Adjustments25,910 77,793 11,306 
Annualized Pro Forma Adjusted EBITDAre
Annualized Pro Forma Adjusted EBITDAre
$1,522,978 $1,501,577 $1,248,574 
Total debt per the consolidated balance sheets, excluding deferred financing costs and net premiums and discounts
Proportionate share of unconsolidated entities debt, excluding deferred financing costs
Less: Cash and cash equivalents
Net Debt (2)
Net Debt (4)
$7,992,991 $7,847,536 $6,489,589 
Net Debt/Adjusted EBITDAre
5.3 5.5 5.2 
Net Debt/Pro forma Adjusted EBITDAre
5.2 5.2 5.2 
Net Debt/Annualized Adjusted EBITDAre
Net Debt/Annualized Adjusted EBITDAre
Net Debt/Annualized Adjusted EBITDAre
5.6 x5.5 x
Net Debt/Annualized Pro Forma Adjusted EBITDAre
Net Debt/Annualized Pro Forma Adjusted EBITDAre
5.5 x5.3 x
(1)Net income for 2020 was negatively impacted by $18.1 million of rent reserves recorded as reductions of rental revenue, of which $3.3 million relates to straight-line rent.
(2) The executive severance charge in 2018 reflects an $18.7 million severance charge for our former CEO upon his departure in October 2018.
(3) We calculate Annualized Adjusted EBITDAreEBITDAre by multiplying the Quarterly Adjusted EBITDAreEBITDAre by four.
(4) (2)Net Debt is total debt per theour consolidated balance sheet,sheets, excluding deferred financing costs and net premiums and discounts, but including our proportionate share of debt from unconsolidated entities, less of cash and cash equivalents.

TheAs described above, the Annualized Pro Forma Adjustments, which include transaction accounting adjustments in accordance with U.S. GAAP, consist of adjustments to incorporate operating incomethe Adjusted EBITDAre from properties we acquired or stabilized during the applicable quarter and to remove operating incomeAdjusted EBITDAre from properties we disposed of during the applicable quarter, giving pro forma effect to all transactions as if they occurred at the beginning of the applicable period. The Annualized Pro Forma Adjustments areperiod, consistent with the debt service coverage ratio calculated under financial covenants for our senior unsecured notes and bonds.requirements of Article 11 of Regulation S-X. The following table summarizes our Annualized Pro formaForma Adjusted EBITDAreEBITDAre calculation for the periodsperiod indicated below:below (dollars in thousands):
Three months ended December 31,
20232022
Annualized pro forma adjustments from properties acquired or stabilized$77,012 $120,408 
Annualized pro forma adjustments from properties disposed(2,093)(532)
Annualized Pro forma Adjustments$74,919 $119,876 

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Dollars in thousands202020192018
Annualized pro forma adjustments from properties acquired or stabilized$27,431 $77,431 $14,633 
Annualized pro forma adjustments from properties disposed(1,521)362 (3,327)
Annualized Pro forma Adjustments$25,910 $77,793 $11,306 

FUNDS FROM OPERATIONS AVAILABLE TO COMMON STOCKHOLDERS (FFO)

The following summarizes our FFO (dollars in millions, except per share data):
% Increase
2020201920182020 versus 20192019 versus 2018
FFO available to common stockholders$1,142.1$1,039.6$903.39.9 %15.1 %
FFO per share (1)
$3.31$3.293.120.6 %5.4 %
(1) All per share amounts are presented on a diluted per common share basis.

FFO in 2020 was impacted by reserves recorded as a reduction of rental revenue related to the COVID-19 pandemic, a loss on extinguishment of debt due to the early redemption of the 5.750% notes due 2021 in January 2020 and an executive severance charge for our former CFO in March 2020.

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FFO in 2018 was impacted by a severance payment made to our former CEO in October 2018. The total value of cash, stock compensation and professional fees incurred as a result of this severance was $28.3 million; however, the net amount, after incorporating accruals for CEO compensation previous to this severance, was $18.7 million.
The following is a reconciliation of net income available to common stockholders (which we believe is the most comparable GAAP measure) to FFO. Also presented is information regarding distributions paid to common stockholders and the weighted average number of common shares used for the basic and diluted computation per share (dollars in thousands, except per share amounts):
 202020192018
Net income available to common stockholders$395,486 $436,482 $363,614 
Depreciation and amortization677,038 593,961 539,780 
Depreciation of furniture, fixtures and equipment(588)(565)(650)
Provisions for impairment147,232 40,186 26,269 
Gain on sales of real estate(76,232)(29,996)(24,643)
FFO adjustments allocable to noncontrolling interests(817)(477)(1,113)
FFO available to common stockholders$1,142,119 $1,039,591 $903,257 
FFO allocable to dilutive noncontrolling interests1,418 1,403 867 
Diluted FFO$1,143,537 $1,040,994 $904,124 
FFO per common share, basic and diluted3.313.293.12
Distributions paid to common stockholders$964,167 $852,134 $761,582 
FFO available to common stockholders in excess of distributions paid to common stockholders$177,952 $187,457 $141,675 
Weighted average number of common shares used for computation per share:   
Basic345,280,126 315,837,012 289,427,430 
Diluted345,878,377 316,601,350 289,923,984 
("FFO") AND NORMALIZED FUNDS FROM OPERATIONS AVAILABLE TO COMMON STOCKHOLDERS ("Normalized FFO")
We define FFO, a non-GAAP financial measure, consistent with the National Association of Real Estate Investment Trusts' definition, as net income available to common stockholders, plus depreciation and amortization of real estate assets, plus provisions for impairments of depreciable real estate assets, and reduced by gainsgain on property sales. We define Normalized FFO, a non-GAAP financial measure, as FFO excluding merger and integration-related costs related to our merger with VEREIT. We define diluted FFO and diluted normalized FFO as FFO and normalized FFO adjusted for dilutive noncontrolling interests.
The following summarizes our FFO and Normalized FFO (dollars in millions, except per share data):
Years ended December 31,
20232022% Change
FFO available to common stockholders$2,822.1$2,471.914.2 %
FFO per common share (1)
$4.07$4.040.7 %
Normalized FFO available to common stockholders$2,836.6$2,485.814.1 %
Normalized FFO per common share (1)
$4.09$4.060.7 %
(1) All per share amounts are presented on a diluted per common share basis.

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The following is a reconciliation of net income available to common stockholders (which we believe is the most comparable U.S. GAAP measure) to FFO and Normalized FFO. Also presented is information regarding distributions paid to common stockholders and the weighted average number of common shares used for the basic and diluted computation per share (dollars in thousands, except per share amounts):
Years ended December 31,
20232022
Net income available to common stockholders$872,309 $869,408 
Depreciation and amortization1,895,177 1,670,389 
Depreciation of furniture, fixtures and equipment(2,239)(2,014)
Provisions for impairment of real estate82,208 25,860 
Gain on sales of real estate(25,667)(102,957)
Proportionate share of adjustments for unconsolidated entities (1)
4,205 12,812 
FFO adjustments allocable to noncontrolling interests(3,855)(1,605)
FFO available to common stockholders$2,822,138 $2,471,893 
FFO allocable to dilutive noncontrolling interests5,552 3,979 
Diluted FFO$2,827,690 $2,475,872 
FFO available to common stockholders$2,822,138 $2,471,893 
Merger and integration-related costs14,464 13,897 
Normalized FFO available to common stockholders$2,836,602 $2,485,790 
Normalized FFO allocable to dilutive noncontrolling interests5,552 3,979 
Diluted Normalized FFO$2,842,154 $2,489,769 
FFO per common share:
Basic$4.08 $4.04 
Diluted$4.07 $4.04 
Normalized FFO per common share:
Basic$4.10 $4.06 
Diluted$4.09 $4.06 
Distributions paid to common stockholders$2,111,793 $1,813,432 
FFO available to common stockholders in excess of distributions paid to common stockholders$710,345 $658,461 
Normalized FFO available to common stockholders in excess of distributions paid to common stockholders$724,809 $672,358 
Weighted average number of common shares used for FFO and Normalized FFO:
Basic692,298 611,766 
Diluted694,819 613,473 
(1)Includes an other than temporary impairment of $8.5 million recognized during the year ended December 31, 2022 on our investment in unconsolidated entities, all of which were sold as of December 31, 2022.
We consider FFO and Normalized FFO to be an appropriate supplemental measuremeasures of a REIT’s operating performance as it isthey are based on a net income analysis of property portfolio performance that adds back items such as depreciation and impairments for FFO, and adds back merger and integration-related costs, for Normalized FFO. The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, which implies that the value of real estate assets diminishes predictably over time. Since real estate values historically rise and fall with market conditions, presentations of operating results for a REIT, using historical accounting for depreciation, could be less informative. The use
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Table of FFO is recommended by the REIT industry as a supplemental performance measure.Contents


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

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):
% Increase
2020201920182020 versus 20192019 versus 2018
Years ended December 31,
Years ended December 31,
Years ended December 31,
202320232022% Change
AFFO available to common stockholdersAFFO available to common stockholders$1,172.6$1,050.0$924.611.7 %13.6 %AFFO available to common stockholders$2,774.9$2,401.415.6 %
AFFO per share (1)
$3.39$3.323.192.1 %4.1 %
AFFO per common share (1)
AFFO per common share (1)
$4.00$3.922.0 %
(1) All per share amounts are presented on a diluted per common share basis.

AFFO for 2020 was impacted by reserves recorded as a reduction of rental revenue related to the COVID-19 pandemic.

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We consider AFFO to be an appropriate supplemental measure of our performance. OtherMost 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.
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The following is a reconciliation of net income available to common stockholders (which we believe is the most comparable U.S. GAAP measure) to Normalized FFO and AFFO. Also presented is information regarding distributions paid to common stockholders and the weighted average number of common shares used for the basic and diluted computation per share (dollars in thousands, except per share amounts):
202020192018
Years ended December 31,
Years ended December 31,
Years ended December 31,
202320232022
Net income available to common stockholders (1)
Net income available to common stockholders (1)
$395,486 $436,482 $363,614 
Cumulative adjustments to calculate FFO (2)
746,633 603,109 539,643 
FFO available to common stockholders1,142,119 1,039,591 903,257 
Executive severance charge (3)
3,463 — 18,651 
Loss on extinguishment of debt9,819 — — 
Cumulative adjustments to calculate Normalized FFO (1)
Normalized FFO available to common stockholders
Gain on extinguishment of debt
Amortization of share-based compensationAmortization of share-based compensation14,727 13,662 15,470 
Amortization of deferred financing costs (4)
4,968 4,754 3,991 
Amortization of net mortgage premiums(1,258)(1,415)(1,520)
Loss (gain) on interest rate swaps4,353 2,752 (2,733)
Straight-line payments from cross-currency swaps (5)
2,573 4,316 — 
Amortization of net debt premiums and deferred financing costs (2)
Non-cash (gain) loss on interest rate swaps
Non-cash change in allowance for credit losses
Straight-line impact of cash settlement on interest rate swaps (3)
Leasing costs and commissionsLeasing costs and commissions(1,859)(2,102)(3,907)
Recurring capital expendituresRecurring capital expenditures(198)(801)(1,084)
Straight-line rent(26,502)(28,674)(24,687)
Amortization of above and below-market leases22,940 19,336 16,852 
Straight-line rent and expenses, net
Amortization of above and below-market leases, net
Proportionate share of adjustments for unconsolidated entities
Other adjustments (6)(4)
Other adjustments (6)(4)
(2,519)(1,404)268 
Total AFFO available to common stockholders$1,172,626 $1,050,015 $924,558 
AFFO available to common stockholders
AFFO allocable to dilutive noncontrolling interestsAFFO allocable to dilutive noncontrolling interests1,438 1,442 901 
Diluted AFFODiluted AFFO$1,174,064 $1,051,457 $925,459 
AFFO per common share:AFFO per common share:   
AFFO per common share:
AFFO per common share:
Basic
Basic
BasicBasic$3.40 $3.32 $3.19 
DilutedDiluted$3.39 $3.32 $3.19 
Distributions paid to common stockholdersDistributions paid to common stockholders$964,167 $852,134 $761,582 
Distributions paid to common stockholders
Distributions paid to common stockholders
AFFO available to common stockholders in excess of distributions paid to common stockholdersAFFO available to common stockholders in excess of distributions paid to common stockholders$208,459 $197,881 $162,976 
Weighted average number of common shares used for computation per share:Weighted average number of common shares used for computation per share:   
BasicBasic345,280,126 315,837,012 289,427,430 
Basic
Basic
DilutedDiluted345,878,377 316,601,350 289,923,984 
(1) As of December 31, 2020, there was $24.5 million of uncollected rent deferred as a result of lease concessions we granted in response to the COVID-19 pandemic and recognized under the practical expedient provided by the FASB and $51.9 million of uncollected rent for which we have not granted a lease concession. Deferrals accounted for as modifications totaling $236,000 for 2020 have not been added back to AFFO.
(2)See reconciling items for Normalized FFO presented under “Funds from Operations Available to Common Stockholders (FFO)("FFO") and Normalized Funds from Operations Available to Common Stockholders ("Normalized FFO")".
(3) (2)The executive severance charge in 2020 represents the incremental costs incurred upon our former CFO's departure in March 2020, consisting of $1.6 million of cash, $1.8 million of share-based compensation expense and $58,000 of professional fees. The executive severance charge in 2018 represents the incremental costs incurred upon our former CEO's departure in October 2018, consisting of $9.8 million of cash, $17.9 million of share-based compensation expense and $574,000 of professional fees, reduced by $9.6 million accrued for CEO compensation prior to separation.
(4)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 upon issuance of our current and previous term loans. The deferred financing costsloans, which are also being amortized over the lives of the respective mortgages and term loans.applicable debt. No costs associated with our credit facility agreements or annual fees paid to credit rating agencies have been included.
(5) (3)Straight-lineRepresents 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, represent quarterly payments in U.S. dollars received by us from counterparties in exchange for associated foreign currency payments. These USD payments are fixed and determinable for the duration of the associated hedging transaction.
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(6) Includes adjustments allocable to noncontrolling interests, obligations related to financing lease liabilities, and foreign currency gains and losses as a result of intercompany debt and remeasurement transactions.

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.
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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.

IMPACT OF INFLATION
Leases generally provide for limited increases in rent as a result of fixed increases, increases in the consumer price index (typically subject to ceilings), or increases in the clients’ sales volumes. We expect that inflation will cause these lease provisions to result in rent increases over time. During times when inflation is greater than increases in rent, as provided for in the leases, rent increases may not keep up with the rate of inflation.
Moreover, our use of net lease agreements tends to reduce our exposure to rising property expenses due to inflation because the client is responsible for property expenses. Inflation and increased costs may have an adverse impact on our clients if increases in their operating expenses exceed increases in revenue.

IMPACT OF NEWLY ADOPTED ACCOUNTING STANDARDS
For information on the impact of newly adopted accounting standards on our business, see note 2 of the Notes to the Consolidated Financial Statements.

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.
Interest Rates
We are exposed to interest rate changes primarily as a result of our credit facility and commercial paper program,programs, term loan,loans, mortgages payable, and long-term notes and bonds used to maintain liquidity and expand our real estate investment portfolio and operations. Our interest rate risk management objective is to limit the impact of interest rate changes on earnings and cash flow and to lower our overall borrowing costs. To achieve these objectives, we issue long-term notes and bonds, primarily at fixed rates.
In order to mitigate and manage the effects of interest rate risks on our operations, we may utilize a variety of financial instruments, including interest rate swaps, interest rate swaptions, interest rate locks and caps. The use of these types of instruments to hedge our exposure to changes in interest rates carries additional risks, including counterparty credit risk, the enforceability of hedging contracts and the risk that unanticipated and significant changes in interest rates will cause a significant loss of basis in the contract. To limit counterparty credit risk, we will seek to enter into such agreements with major financial institutions with favorable credit ratings. There can be no assurance that we will be able to adequately protect against the foregoing risks or realize an economic benefit that exceeds the related amounts incurred in connection with engaging in such hedging activities. We do not enter into any derivative transactions for speculative or trading purposes.
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The following table presents, by year of expected maturity, the principal amounts, average interest rates and estimated fair values of our fixed and variable rate debt as of December 31, 2020. There was no variable rate debt or debt that was not swapped to fixed at December 31, 2020.2023. This information is presented to evaluate the expected cash flows and sensitivity to interest rate changes (dollars in millions):

Expected Maturity Data
Year of maturityFixed rate debtWeighted average rate on fixed rate debt
2021$44.2 5.55 %
20221,061.8 3.43 
2023770.6 4.64 
2024712.2 3.97 
2025500.7 3.88 
Thereafter5,762.5 3.18 
Totals (1)
$8,852.0 3.45 %
Fair Value (2)
$9,883.4  
The following table summarizes the maturity of our debt as of December 31, 2023 (dollars in millions):
Year of Principal Due
Fixed rate
debt
Weighted average rate
on fixed rate debt
Variable rate
debt
Weighted average rate
on variable rate debt
2024$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 
(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 original issuance premiums recorded on notes payable, and deferred financing costs on term loans, mortgages payable, notes payable, and our term loan.  At December 31, 2020, the unamortized balance of net premiumsbasis adjustment on mortgages payable is $1.7 million, the unamortized balance of net original issuance premiumsinterest rate swaps designated as fair value hedges on notes payable is $14.6 million, and the balancepayable.
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Table of deferred financing costs on mortgages payable is $973,000, on notes payable is $49.2 million, and on our term loan is $642,000.Contents
(2)  

(5)We base the estimated fair value of our fixed rate mortgages and private senior notes payable at December 31, 2023, on the publicly-tradedrelevant 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, 20202023, on the indicative market prices and recent trading activity of our senior notes and bonds payable. We base the estimated fair value of our fixed rate mortgages at December 31, 2020 on the relevant forward interest rate curve, plus an applicable credit-adjusted spread. We believe that the carrying valuevalues of the line of credit, commercial paper borrowings, and term loan balancebalances reasonably approximates itsapproximate their estimated fair valuevalues at December 31, 2020.2023.
The table above incorporates only those exposures that exist as of December 31, 2020.2023. 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, 2020,2023, our outstanding notes, bonds and mortgages payable, notes, and bonds had fixed interest rates. Interest on our revolving credit facility and commercial paper borrowings and term loan balanceloans is variable. However, the variable interest rate feature on our term loan hasloans have been mitigated by an interest rate swap agreement.agreements. At December 31, 2020, our credit facility balance was zero; however, we intend to borrow funds on our credit facility in the future. Based on a hypothetical credit facility borrowing of $50 million,2023, a 1% change in interest raterates on our variable-rate debt would change our interest costs by $500,000 annually.$12.6 million.

Foreign Currency Exchange Rates
During 2019, we commencedWe 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 and acquired real propertyor 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 U.K.currencies in which we invest thereby providing a natural hedge. We continuously evaluate and have continuedmanage 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 acquire U.K. properties in 2020. As a result, we are subject to currency fluctuations that may, from time to time, affect our financial condition and results of operations. Increases or decreases in the value of Sterling relative to the U.S. dollar impact the amount of net income we earnredeploy rent receipts from our investments in the U.K. We mitigate theseinternational operations on a timely basis subjects us to foreign currency exposures with non-U.S. denominated borrowings and cross-currency swaps. If we increase our international presence through investments in properties outside the U.S., we may also decide to transact additional business or borrow funds in currencies other than U.S. dollars.exchange risk.
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Item 8:         Financial Statements and Supplementary Data

Table of Contents
A.
B.
C.
D.
E.
F.
G.
H.
 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.

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Report of Independent Registered Public Accounting Firm
 
To the Stockholders and Board of Directors
Realty Income Corporation:
Opinion on the ConsolidatedFinancial Statements
We have audited the accompanying consolidated balance sheets of Realty incomeIncome Corporation and subsidiaries (the Company) as of December 31, 20202023 and 2019,2022, the related consolidated statements of income and comprehensive income, equity, and cash flows for each of the years in the three‑yearthree-year period ended December 31, 2020,2023, and the related notes and financial statement schedule III (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 20202023 and 2019,2022, and the results of its operations and its cash flows for each of the years in the three‑yearthree-year period ended December 31, 2020,2023, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2020,2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 23, 202121, 2024 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
Change in Accounting Principle
As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for leases as of January 1, 2019 due to the adoption of Accounting Standards Codification Topic 842,Leases.reporting.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit MattersMatter
The critical audit mattersmatter communicated below are mattersis a matter arising from the current period audit of the consolidated financial statements that werewas communicated or required to be communicated to the audit committee and that: (1) relaterelates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit mattersmatter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit mattersmatter below, providing a separate opinionsopinion on the critical audit mattersmatter or on the accounts or disclosures to which they relate.it relates.
Evaluation of the fair values usedFair Value of Land in the allocation of the purchase price of real estate acquisitionsReal Estate Acquisitions
As discussed in Note 4 to the consolidated financial statements, during 2020,2023 the Company acquired $2.3$8.2 billion of real estate properties. As discussed in Note 2,1, the purchase price of a real estate acquisition is typically allocated to land, buildingamong the individual components of both tangible and improvements, and identified lease related intangible assets and liabilities acquired based on their estimated relative fair values.

We identified the evaluation of the fair values usedvalue of land in the purchase price allocated to land, building and improvements, and identified lease related intangible assets and liabilitiesreal estate acquisitions as a critical audit matter. Specifically, the measurement of the fair values of land building and improvements, and identified lease
related intangible assets and liabilities is dependent upon significant assumptions that are subject to potential management bias andof market land values for which relevant external market data is not always readily available. Such assumptions include market land and building values, market rental rates, and discount rates. There was a high degree of subjectiveSubjective and complex auditor judgment was required in evaluating the fair value measurements given the sensitivity of the fair value measurements to changes in these assumptions.

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The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s process to allocate the purchase price of real estate acquisitions. This included controls over the selection and reviewmeasurement of the significant assumptions used to estimate fair value.value of land. For a selection of real estate acquisitions, we involved valuation professionals with specialized skills and knowledge who assisted in evaluating the significant assumptions used to estimate the fair value measurements to allocate the purchase price, and the qualifications of third-party valuation professionals. The evaluation included comparisona selection of the Company’s assumptions noted aboveacquired land values by comparing them to independently developed ranges using market data from industry transaction databases and published industry reports. For a selection of real estate acquisitions, we compared the amounts allocated to land, building and improvements, and lease related intangible assets and liabilities as a percentage of the total acquisition value to the Company’s historical allocation percentages for similar types of properties. We assessed potential management bias by evaluating the results of the procedures performed.
Evaluation of the provision for impairment of long-lived real estate assets
As discussed in Note 2 to the consolidated financial statements, during 2020, the Company recorded provisions for impairment of long-lived real estate assets of $147.2 million. A provision for impairment is recorded if estimated future operating cash flows (undiscounted and without interest charges) including estimated disposition proceeds to be received are less than the current book value of the real estate asset. The impairment recorded is measured as the amount by which the book value of the real estate asset exceeds its fair value.
We identified the evaluation of the provision for impairment of long-lived real estate assets as a critical audit matter. The Company’s property level operating cash flow projections are used to both identify if an impairment has occurred and in determining a real estate asset’s fair value. These projections are dependent upon assumptions that are subject to potential management bias and for which relevant external market data is not always readily available. These assumptions include the expected property holding period, projected rental rates, and current and terminal property capitalization rates. Given the sensitivity of the operating cash flow projections to changes in these assumptions, there was a high degree of subjective and complex auditor judgment required in evaluating the assumptions.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s process to identify and measure impairments including selection and review of the assumptions used to determine the property level operating cash flow projections. For a selection of properties, we evaluated the projected rental rates and property holding period assumptions in the Company’s property level operating cash flow projections by comparing to lease agreements, the Company’s historical holding period data, market data from industry transaction databases, and published industry reports. We also involved valuation professionals with specialized skills and knowledge who assisted in evaluating the projected market rent and current and terminal capitalization rates utilized by the Company. This evaluation included comparison to independently developed ranges using publicly available market data. We also performed a sensitivity analysis over the assumptions noted above, used to determine the Company’s property level operating cash flow projections for a selection of properties. We assessed potential management bias by evaluating the results of the procedures performed.
Evaluation of lease revenue
As discussed in Note 2 to the consolidated financial statements, rental revenue for leases that have fixed and determinable rent increases are recognized on a straight-line basis over the lease term. When the Company concludes collection of substantially all future lease payments for a lease is less than probable, the Company writes off the receivable balances associated with the lease as a reduction to rental revenue for the period and it ceases to recognize rental revenue on a straight-line basis for that lease. Rental revenue recognition is limited to the lesser of cash received or the amount that would have been recognized on a straight-line basis for that lease. Rental revenue was $1.6 billion for the year ended December 31, 2020, and accounts receivable was $285.7 million as of December 31, 2020.
We identified the evaluation of the probability of collection of lease payments as a critical audit matter. The significant assumption used in the evaluation is the creditworthiness of the client and any guarantors. Evaluating the Company’s probability assessment of collection of substantially all the lease payments for the individual leases required significant auditor judgment, because of the subjective nature of management’s judgment and the potential impact of the current economic environment on the significant assumption.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s collectability probability assessment process, including the assessment of the creditworthiness of the client and any guarantors. For a selection of the Company’s leases, we evaluated the Company’s determination of the collectability of substantially all of the contractual lease payments by performing the following: (i) read the lease agreement, (ii) obtained and read third-party credit reports, (iii) searched for and read publicly available information, including the client’s financial statements, analyst reports, recent public filings and news articles to evaluate the Company’s collection probability assessment, (iv) considered the rental payment history of the lessee and (v) inquired of Company employees to obtain evidence regarding creditworthiness of the clients.
(signed)/s/ KPMG LLP
 
We have served as the Company’s auditor since 1993.
 
San Diego, California
February 23, 202121, 2024


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Report of Independent Registered Public Accounting Firm
 
To the Stockholders and Board of Directors
Realty Income Corporation:
Opinion on Internal Control Over Financial Reporting
We have audited Realty Income Corporation and subsidiaries’subsidiaries' (the Company) internal control over financial reporting as of December 31, 2020,2023, based on criteria established inInternal Control – Integrated Framework (2013)issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020,2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 20202023 and 2019,2022, the related consolidated statements of income and comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, 2020,2023, and the related notes and financial statement schedule III (collectively, the consolidated financial statements), and our report dated February 23, 202121, 2024 expressed an unqualified opinion on those consolidated financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’sManagement's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

(signed)/s/ KPMG LLP
San Diego, California
February 23, 202121, 2024
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REALTY INCOME CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 2020 and 2019
(dollars in thousands, except per share data)amounts)
20202019
December 31, 2023December 31, 2023December 31, 2022
ASSETSASSETS  
Real estate held for investment, at cost:Real estate held for investment, at cost:  
Real estate held for investment, at cost:
Real estate held for investment, at cost:
Land
Land
LandLand$6,318,926 $5,684,034 
Buildings and improvementsBuildings and improvements14,696,712 13,833,882 
Total real estate held for investment, at costTotal real estate held for investment, at cost21,015,638 19,517,916 
Less accumulated depreciation and amortizationLess accumulated depreciation and amortization(3,549,486)(3,117,919)
Real estate held for investment, netReal estate held for investment, net17,466,152 16,399,997 
Real estate and lease intangibles held for sale, netReal estate and lease intangibles held for sale, net19,004 96,775 
Cash and cash equivalentsCash and cash equivalents824,476 54,011 
Accounts receivable, netAccounts receivable, net285,701 181,969 
Lease intangible assets, netLease intangible assets, net1,710,655 1,493,383 
Goodwill
Investment in unconsolidated entities
Other assets, netOther assets, net434,297 328,661 
Total assetsTotal assets$20,740,285 $18,554,796 
LIABILITIES AND EQUITYLIABILITIES AND EQUITY
LIABILITIES AND EQUITY
LIABILITIES AND EQUITY
Distributions payable
Distributions payable
Distributions payableDistributions payable$85,691 $76,728 
Accounts payable and accrued expensesAccounts payable and accrued expenses241,336 177,039 
Lease intangible liabilities, netLease intangible liabilities, net321,198 333,103 
Other liabilitiesOther liabilities256,863 262,221 
Line of credit payable and commercial paperLine of credit payable and commercial paper704,335 
Term loans, net249,358 499,044 
Term loan, net
Mortgages payable, netMortgages payable, net300,360 410,119 
Notes payable, netNotes payable, net8,267,749 6,288,049 
Total liabilitiesTotal liabilities9,722,555 8,750,638 
Commitments and contingencies00
Commitments and contingencies (Note 20)Commitments and contingencies (Note 20)
Stockholders’ equity:Stockholders’ equity:
Common stock and paid in capital, par value $0.01 per share, 740,200,000 shares authorized, 361,303,445 and 333,619,106 shares issued and outstanding as of December 31, 2020 and December 31, 2019, respectively14,700,050 12,873,849 
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
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
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
Distributions in excess of net incomeDistributions in excess of net income(3,659,933)(3,082,291)
Accumulated other comprehensive loss(54,634)(17,102)
Accumulated other comprehensive income
Total stockholders’ equityTotal stockholders’ equity10,985,483 9,774,456 
Noncontrolling interestsNoncontrolling interests32,247 29,702 
Total equityTotal equity11,017,730 9,804,158 
Total liabilities and equityTotal liabilities and equity$20,740,285 $18,554,796 
The accompanying notes to consolidated financial statements are an integral part of these statements.
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REALTY INCOME CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
Years Ended December 31, 2020, 2019 and 2018
(dollars in thousands, except per share data)
 202020192018
REVENUE   
Rental (including reimbursable)$1,639,533 $1,484,818 $1,321,546 
Other12,092 6,773 6,292 
Total revenue1,651,625 1,491,591 1,327,838 
EXPENSES
Depreciation and amortization677,038 593,961 539,780 
Interest309,336 290,991 266,020 
Property (including reimbursable)104,603 88,585 66,326 
General and administrative73,215 66,483 84,148 
Income taxes14,693 6,158 5,340 
Provisions for impairment147,232 40,186 26,269 
Total expenses1,326,117 1,086,364 987,883 
Gain on sales of real estate76,232 29,996 24,643 
Foreign currency and derivative gains, net4,585 2,255 
Loss on extinguishment of debt(9,819)
Net income396,506 437,478 364,598 
Net income attributable to noncontrolling interests(1,020)(996)(984)
Net income available to common stockholders$395,486 $436,482 $363,614 
Amounts available to common stockholders per common share:
Net income
Basic1.151.381.26
Diluted1.141.381.26
Weighted average common shares outstanding:
Basic345,280,126 315,837,012 289,427,430 
Diluted345,415,258 316,159,277 289,923,984 
Other comprehensive income:
Net income available to common stockholders$395,486 436,482 363,614 
Foreign currency translation adjustment(2,606)186 
Unrealized loss on derivatives, net(34,926)(9,190)(8,098)
Comprehensive income available to common stockholders$357,954 $427,478 $355,516 
The accompanying notes to consolidated financial statements are an integral part of these statements.
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REALTY INCOME CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITYINCOME AND COMPREHENSIVE INCOME
Years Ended December 31, 2020, 2019 and 2018(in thousands, except per share amounts)
(dollars in thousands)
Shares of
common
stock
Common
stock and
paid in
capital
Distributions
in excess of
net income
Accumulated other comprehensive lossTotal
stockholders’
equity
Noncontrolling
interests
Total
equity
Balance, December 31, 2017284,213,685 $9,624,264 $(2,252,763)$$7,371,501 $19,207 $7,390,708 
Net income— — 363,614 — 363,614 984 364,598 
Other comprehensive loss— — — (8,098)(8,098)— (8,098)
Distributions paid and payable— — (768,506)— (768,506)(1,996)(770,502)
Share issuances, net of costs19,304,878 1,119,297 — — 1,119,297 — 1,119,297 
Contributions by noncontrolling interests— — — — — 18,848 18,848 
Redemption of common units88,182 2,829 — — 2,829 (5,581)(2,752)
Reallocation of equity— (774)— — (774)774 
Share-based compensation, net135,345 8,879 — — 8,879 — 8,879 
Balance, December 31, 2018303,742,090 $10,754,495 $(2,657,655)$(8,098)$8,088,742 $32,236 $8,120,978 
Net income— — 436,482 — 436,482 996 437,478 
Other comprehensive loss— — — (9,004)(9,004)— (9,004)
Distributions paid and payable— — (861,118)— (861,118)(1,296)(862,414)
Share issuances, net of costs29,818,978 2,117,983 — — 2,117,983 — 2,117,983 
Contributions by noncontrolling interests— — — — — 11,370 11,370 
Redemption of common units(6,866)— — (6,866)(14,257)(21,123)
Reallocation of equity— (653)— — (653)653 
Share-based compensation, net58,038 8,890 — — 8,890 — 8,890 
Balance, December 31, 2019333,619,106 $12,873,849 $(3,082,291)$(17,102)$9,774,456 $29,702 $9,804,158 
Net income— — 395,486 — 395,486 1,020 396,506 
Other comprehensive loss— — — (37,532)(37,532)— (37,532)
Distributions paid and payable— — (973,128)— (973,128)(1,596)(974,724)
Share issuances, net of costs27,564,163 1,817,978 — — 1,817,978 — 1,817,978 
Contributions by noncontrolling interests— — — — — 3,168 3,168 
Reallocation of equity— 47 — — 47 (47)
Share-based compensation, net120,176 8,176 — — 8,176 — 8,176 
Balance, December 31, 2020361,303,445 $14,700,050 $(3,659,933)$(54,634)$10,985,483 $32,247 $11,017,730 
Years ended December 31,
 202320222021
REVENUE
Rental (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 
EXPENSES
Depreciation 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 gain
Foreign 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 
The accompanying notes to consolidated financial statements are an integral part of these statements.

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REALTY INCOME CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
(in thousands)
Years ended December 31, 2023, 2022 and 2021
Shares of
common
stock
Common
stock and
paid in
capital
Distributions
in excess of
net income
Accumulated other comprehensive income (loss)Total
stockholders’
equity
Noncontrolling
interests
Total
equity
Balance, 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 
The accompanying notes to consolidated financial statements are an integral part of these statements.
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REALTY INCOME CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 2020, 2019 and 2018
(dollars in thousands)
202020192018
Years ended December 31,Years ended December 31,
2023202320222021
CASH FLOWS FROM OPERATING ACTIVITIESCASH FLOWS FROM OPERATING ACTIVITIES   
Net income
Net income
Net incomeNet income$396,506 $437,478 $364,598 
Adjustments to net income:Adjustments to net income:
Depreciation and amortizationDepreciation and amortization677,038 593,961 539,780 
Loss on extinguishment of debt9,819 
Depreciation and amortization
Depreciation and amortization
Amortization of share-based compensationAmortization of share-based compensation16,503 13,662 27,267 
Non-cash revenue adjustmentsNon-cash revenue adjustments(3,562)(9,338)(7,835)
(Gain) loss on extinguishment of debt
Amortization of net premiums on mortgages payableAmortization of net premiums on mortgages payable(1,258)(1,415)(1,520)
Amortization of net premiums on notes payableAmortization of net premiums on notes payable(1,754)(995)(1,256)
Amortization of deferred financing costsAmortization of deferred financing costs11,003 9,795 9,021 
Loss (gain) on interest rate swaps4,353 2,752 (2,733)
Foreign currency and derivative gains, net(4,585)(2,255)
(Gain) loss on interest rate swaps
Foreign currency and unrealized derivative loss, net
Gain on sales of real estateGain on sales of real estate(76,232)(29,996)(24,643)
Provisions for impairment on real estate147,232 40,186 26,269 
Equity in income and impairment of investment in unconsolidated entities
Distributions from unconsolidated entities
Provisions for impairment
Change in assets and liabilitiesChange in assets and liabilities
Accounts receivable and other assets
Accounts receivable and other assets
Accounts receivable and other assetsAccounts receivable and other assets(79,240)(8,954)(6,901)
Accounts payable, accrued expenses and other liabilitiesAccounts payable, accrued expenses and other liabilities19,720 24,056 18,695 
Net cash provided by operating activitiesNet cash provided by operating activities1,115,543 1,068,937 940,742 
CASH FLOWS FROM INVESTING ACTIVITIESCASH FLOWS FROM INVESTING ACTIVITIES
Investment in real estateInvestment in real estate(2,283,130)(3,572,581)(1,769,335)
Investment in real estate
Investment in real estate
Improvements to real estate, including leasing costsImprovements to real estate, including leasing costs(8,708)(23,536)(25,350)
Investment in unconsolidated entities
Investment in loans
Proceeds from sales of real estateProceeds from sales of real estate259,459 108,911 142,286 
Insurance and other proceeds received7,648 
Collection of loans receivable5,267 
Return of investment from unconsolidated entities
Net proceeds from sale of unconsolidated entities
Proceeds from note receivable
Insurance proceeds received
Non-refundable escrow depositsNon-refundable escrow deposits(14,603)(200)
Net cash paid in merger
Net cash used in investing activitiesNet cash used in investing activities(2,032,379)(3,501,809)(1,639,684)
CASH FLOWS FROM FINANCING ACTIVITIESCASH FLOWS FROM FINANCING ACTIVITIES
Cash distributions to common stockholdersCash distributions to common stockholders(964,167)(852,134)(761,582)
Borrowings on line of credit and commercial paper program3,528,042 2,816,632 1,774,000 
Payments on line of credit and commercial paper program(4,246,755)(2,365,368)(1,632,000)
Principal payment on term loan(250,000)(70,000)(125,866)
Proceeds from notes and bonds payable issued2,200,488 897,664 497,500 
Cash distributions to common stockholders
Cash distributions to common stockholders
Borrowings on line of credit and commercial paper programs
Payments on line of credit and commercial paper programs
Proceeds from term loan
Proceeds from notes payable issued
Proceeds from notes payable issued
Proceeds from notes payable issued
Principal payment on notes payablePrincipal payment on notes payable(250,000)(350,000)
Proceeds from term loan250,000 
Principal payments on mortgages payable
Payments upon extinguishment of debtPayments upon extinguishment of debt(9,445)
Principal payments on mortgages payable(108,789)(20,723)(21,905)
Proceeds from common stock offerings, netProceeds from common stock offerings, net728,883 845,061 
Proceeds from dividend reinvestment and stock purchase planProceeds from dividend reinvestment and stock purchase plan9,109 8,437 9,114 
Proceeds from At-the-Market (ATM) program1,094,938 1,264,518 1,125,364 
Redemption of common units(21,123)(2,752)
Distributions to noncontrolling interestsDistributions to noncontrolling interests(1,596)(1,342)(1,930)
Net receipts on derivative settlementsNet receipts on derivative settlements4,106 4,881 
Debt issuance costsDebt issuance costs(19,456)(9,129)(18,685)
Net cash received from Orion Divestiture
Other items, including shares withheld upon vestingOther items, including shares withheld upon vesting(23,279)(4,772)(33,387)
Net cash provided by financing activitiesNet cash provided by financing activities1,692,079 2,492,602 707,871 
Effect of exchange rate changes on cash and cash equivalentsEffect of exchange rate changes on cash and cash equivalents4,431 (9,796)
Net increase in cash, cash equivalents and restricted cash779,674 49,934 8,929 
Cash, cash equivalents and restricted cash, beginning of year71,005 21,071 12,142 
Cash, cash equivalents and restricted cash, end of year$850,679 $71,005 $21,071 
Net increase (decrease) in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash, beginning of period
Cash, cash equivalents and restricted cash, end of period
For supplemental disclosures, see note 15.18, Supplemental Disclosures of Cash Flow Information.

The accompanying notes to consolidated financial statements are an integral part of these statements.
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REALTY INCOME CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020, 2019, and 2018
2023
1.Organization and Operation
    Summary of Significant Accounting Policies
Realty Income Corporation (“Realty Income,” the “Company,” “we,” “our” or “us”) was founded in 1969 and is organized as a Maryland corporation. We invest in commercial real estate and have elected to be taxed as a real estate investment trust or REIT.("REIT"). We are listed on the New York Stock Exchange ("NYSE") under the symbol “O”.
AtAs of December 31, 2020,2023, we owned 6,592or held interests in a diversified portfolio of 13,458 properties located in 49 U.Sall 50 states of the United States ("U.S."), Puerto Rico, and the United Kingdom (U.K.("U.K."), containingFrance, Germany, Ireland, Italy, Portugal, and Spain, with approximately 110.8272.1 millionsquare feet of leasable square feet.
space.
Information with respect to number of properties, leasable square feet, average initial lease term and initial weighted average cash lease yield is unaudited.
2.SummaryBasis of Significant Accounting Policies and Procedures and Newly Adopted Accounting Standards
Federal Income TaxesPresentation. We have elected to be taxed as a real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended. We believe we have qualified and continue to qualify as a REIT. Under the REIT operating structure, we are permitted to deduct dividends paid to our stockholders in determining our taxable income. Assuming our dividends equal or exceed our taxable net income, we generally will not be required to pay federal corporate income taxes on such income. Accordingly, no provision has been made for federal income taxes in the accompanyingThese consolidated financial statements excepthave been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). Intercompany accounts and transactions are eliminated in consolidation. The U.S. Dollar ("USD") is our reporting currency. Unless otherwise indicated, all dollar amounts are expressed in USD.
For our consolidated subsidiaries whose functional currency is not the USD, we translate their financial statements into USD at the time we consolidate those subsidiaries’ financial statements. Generally, assets and liabilities are translated at the exchange rate in effect at the balance sheet date. The resulting translation adjustments are included in 'Accumulated other comprehensive income', ("AOCI"), on our consolidated balance sheets. Certain balance sheet items, primarily equity and capital-related accounts, are reflected at the historical exchange rate. Income statement accounts are translated using the average exchange rate for federal income taxesthe period.
We and certain of our taxable REIT subsidiaries.consolidated subsidiaries have intercompany and third-party debt that is not denominated in our functional currency. When the debt is remeasured to the functional currency of the entity, a gain or loss can result. The income taxes recorded onresulting adjustment is reflected in 'Foreign currency and derivative (loss) gain, net' in our consolidated statements of income and comprehensive income represent amounts accruedincome. In the statement of cash flows, cash flows denominated in foreign currencies are translated using the exchange rates in effect at the time of the respective cash flows or paid byat average exchange rates for the period, depending on the nature of the cash flow items.
Principles of Consolidation. These consolidated financial statements include the accounts of Realty Income and its subsidiaries for cityall other entities in which we have a controlling financial interest. We evaluate whether we have a controlling financial interest in an entity in accordance with Accounting Standards Codification ("ASC") 810, Consolidation.
Voting interest entities ("VOEs") are entities considered to have sufficient equity at risk and state incomewhich the equity holders have the obligation to absorb losses, the right to receive residual returns and franchise taxesthe right to make decisions about the entity’s activities. We consolidate voting interest entities in which we have a controlling financial interest, which we typically have through holding of a majority of the entity’s voting equity interests.
Variable interest entities ("VIEs") are entities that lack sufficient equity at risk or where the equity holders either do not have the obligation to absorb losses, do not have the right to receive residual returns, do not have the right to make decisions about the entity’s activities, or some combination of the above. A controlling financial interest in a VIE is present when an entity has a variable interest, or a combination of variable interests, that provides the entity with (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and for U.K. income taxes.(ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. An entity that meets both conditions above is deemed the primary beneficiary and consolidates the VIE. We reassess our initial evaluation of whether an entity is a VIE when certain reconsideration events occur. We reassess our determination of whether we are the primary beneficiary of a VIE on an ongoing basis based on current facts and circumstances.
At December 31, 2023, we are considered the primary beneficiary of Realty Income, L.P. and certain investments, including investments in joint ventures. Below is a summary of selected financial data of such consolidated VIEs, included on our consolidated balance sheets at December 31, 2023 and 2022 (in thousands):
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Earnings
December 31, 2023December 31, 2022
Net real estate$2,866,272$920,032 
Total assets$3,588,720$1,082,346 
Total liabilities$134,366$60,127 
The portion of a consolidated entity not owned by us is recorded as a noncontrolling interest. Noncontrolling interests are reflected on our consolidated balance sheets as a component of equity. Noncontrolling interests that were created or assumed as part of a business combination or asset acquisition were recognized at fair value as of the date of the transaction (see note 12, Noncontrolling Interests).
Reclassification. Certain prior period amounts have been reclassified to conform to the current year presentation.
Value-added tax receivable is included in 'Other assets, net', on our consolidated balance sheets. Previously, this was categorized as 'Accounts receivable, net' on our consolidated balance sheets.
Use of Estimates. The consolidated financial statements were prepared in conformity with U.S. GAAP, which requires management to make estimates and profitsassumptions that determineaffect the taxabilityreported amounts of distributions to stockholdersassets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from net income reported for financial reporting purposes due to differences in the estimated useful lives and methods used to compute depreciation and the carrying value (basis) of the investments in properties for tax purposes, among other things.
We regularly analyze our various federal and state filing positions and only recognize the income tax effect in our financial statements when certain criteria regarding uncertain income tax positions have been met. We believe that our income tax positions would more likely than not be sustained upon examination by all relevant taxing authorities. Therefore, no provisions for uncertain income tax positions have been recorded in our financial statements.
those estimates.
Net Income per Common Share. Basic net income per common share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during each period. Diluted net income per common share is computed by dividing net income available to common stockholders, plus income attributable to dilutive shares and convertible common units for the period, by the weighted average number of common shares that would have been outstanding assuming the issuance of common shares for all potentially dilutive common shares outstanding during the reporting period. For more detail, see note
The following is a reconciliation of the denominator of the basic net income 17, Net Income per common share computation to the denominator of the diluted net income per common share computation.
 202020192018
Weighted average shares used for the basic net income per share computation345,280,126 315,837,012 289,427,430 
Incremental shares from share-based compensation135,132 322,265 179,532 
Weighted average partnership common units convertible to common shares that were dilutive317,022 
Weighted average shares used for diluted net income per share computation345,415,258 316,159,277 289,923,984 
Unvested shares from share-based compensation that were anti-dilutive70,581 8,113 13,148 
Weighted average partnership common units convertible to common shares that were anti-dilutive463,119 442,073 297,576 

Common Share.
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Lease Revenue Recognition and Accounts Receivable. The majority of our leases are accounted for as operating leases. Under this method, leases that have fixed and determinable rent increases are recognized on a straight-line basis over the lease term. Any rental revenue contingent upon our client’s sales is recognized only after our client exceeds their sales breakpoint. Rental increases based upon changes in the consumer price indexes are recognized only after the changes in the indexes have occurred and are then applied according to the lease agreements. Contractually obligated rental revenue from our clients for recoverable real estate taxes and operating expenses are included in contractually obligated reimbursements by our clients, a component of rental revenue, in the period when such costs are incurred. Taxes and operating expenses paid directly by our clients are recorded on a net basis.

Other revenue, includes property-related revenue not included in rental revenue and interest income recognized on financing receivables for certain leases with above-market terms.

We assess collectability of our future lease payments based on an analysis of creditworthiness, economic trends (including trends arising from the COVID-19 pandemic) and other facts and circumstances related to the applicable clients. If the collection of substantially all of the future lease payments is less than probable, we record a reserve of the receivable balances associated with the lease and cease to recognize lease income, including straight-line rent, unless cash is received when due.

The COVID-19 pandemic and the measures taken to limit its spread are negatively impacting the economy across many industries, including the industries in which some of our clients operate. These impacts may continue and increase in severity as the duration or extent of the pandemic increases. As a result, we have closely monitored the collectability of our accounts receivable and continue to evaluate the potential impacts of the COVID-19 pandemic and the measures taken to limit its spread on our business and industry segments as the situation continues to evolve and more information becomes available.

On April 8, 2020, the Financial Accounting Standards Board, or FASB, staff and FASB board members responded to questions about the accounting for COVID-19 related rent concessions under Topic 842, Leases. The accounting for these rent concessions under Topic 842 depends on the enforceable rights and obligations of the parties under the original lease contract (including those arising from the laws of the jurisdiction governing the lease contract) and the nature of any changes to the terms and conditions of the contract. If a rent concession under these circumstances is required by the original lease contract (e.g. by a force majeure clause), the concession will generally be accounted for as a variable lease payment. In contrast, if the lessor is under no obligation to grant a rent concession, the lessor’s agreement to grant one should be accounted for as a lease modification.

The FASB staff has provided clarifying guidance for leases for which the total lease cash flows will remain substantially the same or less than those after the COVID-19 related effects, though companies may choose to forgo the evaluation of the enforceable rights and obligations of the original lease contract as a practical expedient.

Instead, the company would account for rent concessions, whatever their form (e.g. rent deferral, abatement or other), either (1) as if they are part of the enforceable rights and obligations of the parties under the existing lease contract; or (2) as a lease modification. If accounting for a concession as a lease modification, the full lease modification requirements under Topic 842 apply. Under either policy election, we must continue to assess the probability of collecting substantially all of the lease payments to which we are entitled under the original lease contract as required under Topic 842. If a company concludes collection of substantially all lease payments under a lease is less than probable, rental revenue recognized for that lease is limited to cash received going forward, existing operating lease receivables must be written off as an adjustment to rental revenue, and no further operating lease receivables are recorded for that lease until such future determination is made that substantially all lease payments under that lease are now considered more than probable.

The majority of concessions granted to our clients during 2020 as a result of the COVID-19 pandemic have been rent deferrals with the original lease term unchanged. We currently anticipate future concessions to be similar. In accordance with the April 8, 2020 guidance provided by the FASB staff, we have elected to account for these leases as if the right of deferral existed in the lease contract and therefore continue to recognize lease revenue in accordance with the lease contract in effect. In limited circumstances, the undiscounted cash flows resulting from deferrals granted during 2020 increased significantly from original lease terms, which required us to account for these as lease modifications, and resulted in an insignificant impact to rental revenue for 2020. Similarly, rent abatements granted during 2020, which were also accounted for as lease modifications, impacted our rental revenue by an insignificant amount for 2020.
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Unless otherwise specified, references to reserves recorded as a reduction of rental revenue include amounts reserved for in the current period, as well as unrecognized contractual rental revenue and unrecognized straight-line rental revenue for leases accounted for on a cash basis. The following table summarizes reserves recorded as a reduction of rental revenue (dollars in millions):
Year ended December 31,
202020192018
Rental revenue reserves$44.1 $1.4 $1.1 
Straight-line rent reserves8.4 1.5 0.2 
Total rental revenue reserves$52.5 $2.9 $1.3 

As of December 31, 2020, other than the information related to the reserves recorded to date, we do not have any further client specific information that would change our assessment that collection of substantially all of the future lease payments under our existing leases is probable. However, since the conversations regarding rent collections for our clients affected by the COVID-19 pandemic are ongoing and we do not currently know the types of future concessions, if any, that will ultimately be granted, there may be impacts in future periods that could change this assessment as the situation continues to evolve and as more information becomes available. We also evaluated certain properties impacted by the COVID-19 pandemic for impairment (see Provisions for Impairment section below).

Principles of Consolidation. The accompanying consolidated financial statements include the accounts of Realty Income and other subsidiaries for which we make operating and financial decisions (i.e. control), after elimination of all material intercompany balances and transactions. We consolidate entities that we control and record a noncontrolling interest for the portion that we do not own. Noncontrolling interest that was created or assumed as part of a business combination or asset acquisition was recognized at fair value as of the date of the transaction (see note 10). We have no unconsolidated investments.
Cash Equivalents and Restricted Cash. We consider all short-term, highly liquid investments that are readily convertible to cash and have an original maturity of three months or less at the time of purchase to be cash equivalents. Restricted cash includes cash proceeds from the sale of assets held by qualified intermediaries in anticipation of the acquisition of replacement properties in tax-free exchanges under Section 1031 of the U.S. Internal Revenue Code, impounds related to mortgages payable and cash that is not immediately available to Realty Income (i.e. escrow deposits for future acquisitions).
Cash accounts maintained on behalf of Realty Income in demand deposits at commercial banks and money market funds may exceed federally insured levels or may be held in accounts without any federal insurance or any other insurance or guarantee. However, Realty Income has not experienced any losses in such accounts.
Income Taxes. We have elected to be taxed as a REIT, under the Internal Revenue Code of 1986, as amended. We believe we have qualified and continue to qualify as a REIT. Under the REIT operating structure, we are permitted to deduct dividends paid to our stockholders in determining our taxable income. Assuming our dividends equal or exceed our taxable net income in the U.S., we generally will not be required to pay U.S. income taxes on such income. Accordingly, no provision has been made for federal income taxes in the accompanying consolidated financial statements, except for federal income taxes of our taxable REIT subsidiaries ("TRS"). A TRS is a subsidiary of a REIT that is subject to federal, state and local income taxes, as applicable. Our use of TRS entities enables us to engage in certain business activities while complying with the REIT qualification requirements and to retain any income generated by these businesses for reinvestment without the requirement to distribute those earnings. For our international territories, we are liable for taxes in the United Kingdom and Spain. Accordingly, provisions have been made for U.K. and Spain income taxes. Therefore, the income taxes recorded on our consolidated statements of income and comprehensive income represent amounts accrued or paid by Realty Income and its subsidiaries for U.S. income taxes on our TRS entities, city and state income and franchise taxes, and income taxes for the U.K. and Spain.
Earnings and profits that determine the taxability of distributions to stockholders differ from net income reported for financial reporting purposes primarily due to differences in the estimated useful lives and methods used to compute depreciation and the carrying value (basis) of the investments in properties for tax purposes, among other things.
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We regularly analyze our various international, federal and state filing positions and only recognize the income tax effect in our financial statements when certain criteria regarding uncertain income tax positions have been met. We believe that our income tax positions would more likely than not be sustained upon examination by all relevant taxing authorities. Therefore, no provisions for uncertain tax positions have been recorded on our consolidated financial statements.
Lease Revenue Recognition and Accounts Receivable. The majority of our leases are accounted for as operating leases. Under this method, leases that have fixed and determinable rent increases are recognized on a straight-line basis over the lease term. Any rental revenue contingent upon our client’s sales, or percentage rent, is recognized only after our client exceeds their sales breakpoint. Rental increases based upon changes in the consumer price indices are recognized only after the changes in the indexes have occurred and are then applied according to the lease agreements. Contractually obligated rental revenue from our clients for recoverable real estate taxes and operating expenses are included in contractually obligated reimbursements by our clients, a component of rental revenue, in the period when such costs are incurred. Taxes and operating expenses paid directly by our clients are recorded on a net basis.
Other revenue includes certain property-related revenue not included in rental revenue and interest income recognized on financing receivables for certain leases with above-market terms.
We assess the probability of collecting substantially all of the lease payments to which we are entitled under the original lease contract as required under ASC 842, Leases. We assess the collectability of our future lease payments based on an analysis of creditworthiness, economic trends and other facts and circumstances related to the applicable clients. If we conclude the collection of substantially all of lease payments under a lease is less than probable, rental revenue recognized for that lease is limited to cash received going forward, existing operating lease receivables, including those related to straight-line rental revenue, must be written off as an adjustment to rental revenue, and no further operating lease receivables are recorded for that lease until such future determination is made that substantially all lease payments under that lease are now considered probable. If we subsequently conclude that the collection of substantially all lease payments under a lease is probable, a reversal of lease receivables previously written off is recognized.
Loans Receivable. The loans we acquired during 2023 are classified as held for investment andare carried at their amortized cost basis. We recognize interest income on loans receivable using the effective-interest method. Direct costs associated with originating loans, along with any premium or discount, are deferred and amortized as an adjustment to interest income over the term of the loan using the effective interest method. When management identifies the full recovery of the contractually specified payments of principal and interest of a loan is less than probable, we evaluate the expected loss amount and place it on non-accrual status. We made the accounting policy election to record accrued interest on our loan portfolio separate from our loan receivable and other lending investments. These loans and the related interest receivable are presented in 'Other assets, net' on our consolidated balance sheets.
Allowance for Credit Losses. The allowance for credit losses, which is recorded as a reduction to loans receivable and financing receivable within 'Other assets, net' on our consolidated balance sheets, is measured using a probability of default method based on our client's respective credit ratings and the expected value of the underlying collateral upon its repossession. Included in our model are factors that incorporate forward-looking information. Allowance for credit losses is presented in 'Provisions for impairment' in our consolidated statements of income and comprehensive income.
During the year ended December 31, 2023, we recognized a provision for credit losses of $4.9 million, which includes $2.5 million of allowances on loans receivable and $2.4 million of allowances on financing receivables.
Gain on Sales of PropertiesReal Estate. When real estate is sold, the related net book valuecarrying amount of the applicable assets is removed andderecognized with a corresponding gain from the sale is recognized in our consolidated statements of income and comprehensive income. We record a gain on sale of real estate pursuant to provisions under ASC 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets. We determine whether we would have a controlling financial interest in the property after the sale. We record a gain from the sale of real estate provided that various criteria, relating to the terms of the sale and any subsequent involvement by us with the real estate, have been met.
Allocation of the Purchase Price of Real Estate Acquisitions. We evaluate whether or not substantially all of the 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
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acquisitions qualify as asset acquisitions, and the transaction costs associated with those acquisitions are capitalized. When acquiringOn the other hand, we expense the transaction costs and categorize them as merger and integration-related costs on our consolidated statements of income and comprehensive income for transactions that qualify as a property for investment purposes,business combination. For business combinations, we typicallyrecognize 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 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. Intangible assets and liabilities consist of above-market or below-market lease value of in-place leases 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 values of the land, building and improvements, and identified intangible assets and liabilities, utilizing market-based evidence and is often based upon various characteristics of the market where the property is located.commonly applied valuation approaches. In addition, any assumed notes payable or 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
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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.

Our estimated fair value determinations are based on management’s judgment, utilizing various factors, including: market land and building values, market rental rates, discount rates and capitalization rates. Our methodology for measuring and allocating the fair value of real estate acquisitions includes both observable market data (categorized as level 2 on the three-level valuation hierarchy of Accounting Standards Codification (ASC) TopicASC 820, Fair Value Measurement)Measurement), and unobservable inputs that reflect our own internal assumptions (categorized as level 3 under ASC Topic 820). Given the significance of the unobservable inputs we believe the allocations of fair value of real estate acquisitions should be categorized as level 3 under ASC Topic 820. For certainFrom time to time, we have used, and may continue to use, the assistance of independent third parties specializing in real estate valuations to prepare our purchase price allocations we have used the assistance of an independent third party real estate valuation firm.
allocations.
The allocation of tangible assets (which includes land and buildings/improvements) of an acquired property with an in-place lease is based upon relative fair value. Land is typically valued utilizing the sales comparison (or market) approach. Buildings and improvements are typically valued under the replacement cost approach. In allocating the fair value to identified intangibles for above-market or below-market leases, an amount is recorded based on the present value of the difference between (i) the contractual amount to be paid pursuant to the in-place lease and (ii) our estimate of fair market lease rate for the corresponding in-place lease, measured over the remaining assumed contract term of the lease. The value of in-place leases is determined by our estimated costs related to acquiring a tenantclient and the carrying costs that would be incurred over the vacancy period to locate a tenantclient if the property were vacant, considering market conditions and costs to execute similar leases at the time of acquisition.
The values of the above-market and below-market leases are amortized over the term of the respective leases, including any bargain renewal options, as an adjustment to rental revenue on our consolidated statements of income and comprehensive income. The value of in-place leases, exclusive of the value of above-market and below-market in-place leases, is amortized to depreciation and amortization expense over the remaining periods of the respective leases. If a lease is terminated prior to its stated expiration, all unamortized amounts relating to that lease are recorded to revenue or expense as appropriate.
Real Estate and Lease Intangibles Held for Sale. We generally reclassify assets to held for sale when the disposition has been approved, there are no known contingencies relating to the sale and the consummation of the disposition is considered probable within one year. Upon classifying a real estate investment as held for sale, we will no longer recognize depreciation expense related to the depreciable assets of the property. Assets held for sale are recorded at the lower of carrying value or estimated fair value, less the estimated cost to dispose of the assets. Twenty-nine properties were classified as held for sale at December 31, 2023.
If circumstances arise that we previously considered unlikely and, as a result, we decide not to sell a property previously classified as held for sale, we will reclassify the property as held for investment. We measure and record
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a property that is reclassified as held for investment at the lower of (i) its carrying value before the property was classified as held for sale, adjusted for any depreciation expense that would have been recognized had the property been continuously classified as held for investment or (ii) the estimated fair value at the date of the subsequent decision not to sell.
Investment in Unconsolidated Entities.Investments in unconsolidated entities of which we are not considered the primary beneficiary, include VIEs and are accounted for using the equity method as we have the ability to exercise significant influence over operating and financing policies of these investments. We initially recognize the fair value of our contribution as an equity method investment. We subsequently adjust these balances for our proportionate share of net earnings/losses of the entities, distributions received and contributions made. Transaction costs related to the formation of equity method investments are also capitalized, resulting in a basis difference. This basis difference is amortized over the estimated useful life of the respective underlying assets and/or liabilities. The carrying value of our investment is included in 'Investment in unconsolidated entities' on our consolidated balance sheets. We record our proportionate share of net income from the unconsolidated entities in 'Equity in income and impairment of investment in unconsolidated entities' in our consolidated statements of income and comprehensive income. With regard to distributions from unconsolidated entities, we have elected the nature of distribution approach as the information is available to us to determine the nature of the underlying activity that generated the distributions. In accordance with such approach, cash flows generated from the operations of an unconsolidated entity are classified as a return on investment (cash inflow from operating activities) and cash flows that are generated from other activities, such as property sales, debt refinancing or sale and redemptions of our investments of our investments are classified as a return of investment (cash inflow from investing activities). Our contribution to the unconsolidated entities or any distributions from them as returns of investment are classified as investing activities.
Our investment in unconsolidated entities includes preferred interests. Upon acquisition, we assess whether such investment should be considered debt or equity securities based on investment terms. As of December 31, 2023, our investment balance includes preferred interests classified as equity securities without a readily determinable fair value, for which we elect to apply the measurement alternative and record the value of the investment at cost, less any applicable impairment.
Goodwill. Upon the closing of a business combination, after identifying all tangible and intangible assets and liabilities, the excess consideration paid over the fair value of the assets and liabilities acquired and assumed, respectively, represents goodwill.
Deferred Financing Costs. Deferred financing costs represent commitment fees, legal fees and other costs associated with obtaining or originating financing. Deferred financing costs, other than those associated with the line of credit, are presented on our consolidated balance sheets as a direct deduction from the carrying amount of the related debt liability. Deferred financing costs related to the line of credit are included in 'other assets, net' in the accompanying consolidated balance sheets. These costs are amortized to interest expense over the terms of the respective financing agreements that approximates the effective interest method.
Depreciation and Amortization. Land, buildings and improvements are recorded and stated at cost. Major replacements and betterments, which improve or extend the life of the asset, are capitalized and depreciated over their estimated useful lives, while ordinary repairs and maintenance are expensed as incurred. Buildings and improvements that are under redevelopment, or are being developed, are carried at cost and no depreciation is recorded on these assets. Additionally, amounts essential to the development of the property, such as pre-construction, development, construction, interest and other costs incurred during the period of development are capitalized. We cease capitalization when the property is available for occupancy upon substantial completion of property improvements to accommodate the client's use, but in any event no later than one year from the completion of major construction activity.
Properties are depreciated using the straight-line method over the estimated useful lives of the assets. The estimated useful lives are as follows:
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Buildings25 years orto 35 years
Building improvements4 to 35 years
Equipment5 to 25 years
Lease commissions and property improvements to accommodate the client's useThe shorter of the term of the related lease or useful life
Acquired in-place leasesRemaining terms of the respective leases

Provisions for Impairment.Impairment - Real Estate Assets. We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If estimated future operating cash flows (undiscounted and without interest charges) plus estimated disposition proceeds (undiscounted) are less than the current book value of the property, a fair value analysis is performed and, to the extent the estimated fair value is less than the current book value, a provision for impairment is recorded to reduce the book value to estimated fair value. Key assumptions that we utilize in this analysis include projected rental rates, estimated holding periods, capital expenditures and property sales capitalization rates. IfFor further details, see note 13, Fair Value Measurements.
Provisions for Impairment - Goodwill. Goodwill is not amortized, but is subject to impairment reviews annually, or more frequently if necessary. Goodwill is qualitatively assessed to determine whether a propertyquantitative impairment assessment is classified as held for
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sale, itnecessary. Impairment is carried at the lower of carrying cost or estimated fair value, less estimated cost to sell, and depreciation ofcondition that exists when the property ceases.
If a property was previously reclassified as held for sale but the applicable criteria for this classification are no longer met, the property is reclassified to real estate held for investment. A property that is reclassified to held for investment is measured and recorded at the lower of (i) its carrying amount before the property was classified as held for sale, adjusted for any depreciation expense that would have been recognized had the property been continuously classified as held for investment, or (ii) theof goodwill exceeds its implied fair value at the date of the subsequent decision not to sell.

NaN properties were classified as held for sale at December 31, 2020.

During 2020, we identified the impact of the COVID-19 pandemic as an impairment triggering event for properties occupied by certain clients experiencing difficulties meeting their lease obligations to us. After considering the impacts of the COVID-19 pandemic on the key assumptions noted above, we determined that the carrying values of 38 properties classified as held for investment for the year ended December 31, 2020 were not recoverable. As a result, we recorded provisions for impairment of $105.0 million for the year ended December 31, 2020 on the applicable properties impacted by the COVID-19 pandemic. Of the provisions for impairment recorded during 2020 for properties impacted by the COVID-19 pandemic, a total of 13 assets occupied by certain of our clients in the theater industry were impaired for $83.8 million,which reducedvalue. If the carrying value of the properties from $123.4 million to theirasset exceeds its estimated fair value, an impairment loss is recognized, and the asset is written down to its estimated fair value. We perform our annual goodwill impairment assessment as of $39.6 million. Impairments recorded on other properties duringJune 30. During the yearyears ended December 31, 2020 totaled $42.2 million.2023, 2022 and 2021, there were no impairments of goodwill.

Provisions for Impairment - Investment in Unconsolidated Entities.
During our ownership of properties that are accounted for under the equity method and considered unconsolidated entities, and when circumstances indicate that a decrease in the value of an equity method investment has occurred that is other than temporary, we recognize an impairment loss, which requires significant judgment. To determine whether the impairment loss is other-than-temporary, we consider whether it has the ability and intent to hold the investment until the carrying value is fully recovered. We evaluate the impairment of our investment in unconsolidated entities in accordance with accounting standards for equity investments by first reviewing each investment for indicators of impairment. If indicators are present, we estimate the fair value of the investments. If the carrying value of the investment is greater than the estimated fair value, we make an assessment of whether the impairment is temporary or other-than-temporary. In making this assessment, we consider the length of time and the extent to which fair value has been less than cost, the financial condition and near-term prospects of the entity, and our intent and ability to retain the interest long enough for a recovery in market value. The following table summarizes our provisions forinvestment is then reduced to its estimated fair value if conclusions indicate the impairment during the periods indicated below (dollars in millions):
Year Ended December 31,
202020192018
Total provisions for impairment$147.2 $40.2 $26.3 
Number of properties:
Classified as held for sale
Classified as held for investment42 
Sold51 45 41 

is other than temporary.
Equity Offering Costs. Underwriting commissions and offering costs have been reflected as a reduction of additional paid-in-capital on our consolidated balance sheets.
Noncontrolling Interests. Noncontrolling interests are reflected on our consolidated balance sheets as a component of equity. 
Derivative and Hedging Activities. Activities. Derivatives are financial arrangements among two or more parties with returns linked to or “derived” from an underlying equity, debt, commodity, other asset, liability, interest rate, foreign exchange rate or another index, or the occurrence or nonoccurrence of a specified event. The settlement of a derivative is determined by its underlying notional amount specified in the contract. Derivative contracts may be entered into outright or embedded within a non-derivative host contract, and may be listed, traded on exchanges or privately negotiated directly between two parties.
We actively manage interest rate and foreign currency exposures arising from our liquidity and funding activities using derivative instruments. We record all derivatives on the balance sheet at fair value. The accounting formajority of inputs used to value our derivatives fall within level 2 of the fair value hierarchy. The recognition of changes in the fair value of derivatives depends on the intended use ofis recorded in net income unless the derivative whether we have elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. We may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or we elect not to apply hedge accounting.

As of December 31, 2020 we had 1 interest rate swap in place on our $250.0 million unsecured term loan. Our objective in using derivatives is to add stability to interest expense and to manage our exposure to interest rate movements. We designated these interest rate swaps as hedges in accordance with Topic 815, Derivatives and Hedging. We record interest rate swaps on the consolidated balances sheet at fair value. Changes to fair value are recorded to accumulated other comprehensive income, or AOCI, and are amortized through interest expense over the term of the associated debt.

During December 2020, we entered into a currency exchange swap to exchange £463.1 million for $625.0 million, which matured in January 2021. The currency exchange swap was entered into to hedge our exposure to foreign currency risk associated with Sterling-denominated liabilities. As the currency exchange swap is not accounted for as a hedging instrument,cash flow or net investment hedge, in which case the change in fair value is recorded in earnings through the caption entitled 'Foreign currency and derivative gains, net' in the consolidated statements ofother comprehensive income and comprehensive income. The net
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loss from derivatives notsubsequently reclassified to a designated accountin hedging relationships for 2020 totaled $14.5 million. We did not hold any derivatives that were not designated in hedging relationships during 2019.

In February 2020, we entered into 5 forward starting treasury rate locks with notional amounts totaling $500.0 million. The treasury rate locks were entered into to hedge our exposure to the changes in the 10-year US treasury rates in anticipation of potential future debt offerings during the first half of 2020. The treasury rate locks were designated as cash flow hedges, with any changes in fair value recorded in AOCI. Upon the initial issuance of the 2031 Notes in May 2020, we amortized the AOCI balance over the term of the 2031 Notes. In June 2020, all 5 treasury rate locks were terminated and we entered into 6 forward starting interest rate swaps with notional amounts totaling $500.0 million in a cashless settlement of the terminated treasury rate locks. The forward starting swaps were entered into to hedge our exposure to the changes in the 3-month USD-LIBOR swap rate in anticipation of potential future debt offerings through a current estimated range ending in 2023. The forward starting swaps are designated as cash flow hedges, with any changes in fair value recorded in AOCI. Upon issuance of the 2031 Notes during July 2020, the AOCI balance associated with 4 of the forward starting swaps with a notional amount of $350.0 million we amortized over the term of the notes. However, we elected not to terminate the 4 forward starting interest rate swaps, and redesignated the swaps in a new hedging relationship for a future debt issuance to hedge our exposure to the changes in the 10-year US treasury rates in anticipation of potential future debt offerings between May 2020 and December 2023. Upon issuance during December 2020 of $325.0 million of 0.750% notes due March 2026 and $400.0 million of 1.800% notes due March 2033, the AOCI balance associated with 4 of the forward starting swaps with a notional amount of $350.0 million, representing the change in fair value for the swaps from the July issuance of the 2031 notes through the December note issuances, and the AOCI balance associated with the 2 remaining forward starting swaps with a notional amount of $150.0 million, representing the change in fair value from their inception during June 2020 through the December note issuances, are being amortized over the term, by first applying the notional to the $400.0 million of 1.800% notes due March 2033 and $100.0 million of notional to the remaining $325.0 million of 0.750% notes due March 2026. However, we elected not to terminate any of the 6 forward starting interest rate swaps, and redesignated the swaps in a new hedging relationship to hedge our exposure to the changes in the 10-year US treasury rates in anticipation of potential future debt offerings between December 2020 and December 2023.

Due to the size of the initial net investment resulting from the termination value of the treasury rate locks being rolled into them, 2 of the 6 forward starting swaps were determined to be hybrid debt instruments containing embedded at-market swap derivative instruments. As a result, we have bifurcated the derivative instrument and the debt instrument for those 2 forward starting interest rate swaps for accounting purposes. The remaining 4 forward starting interest rates swaps are accounted for as derivative instruments.

In May 2019, we entered into 4 cross-currency swaps to exchange £130 million Sterling for $166 million maturing in May 2034, in order to hedge the foreign currency risk associated with our Sterling-denominated intercompany loan receivable from our consolidated foreign subsidiaries. These cross-currency swaps were designated as cash flow hedges on their trade date. Gains and losses representing hedge components excluded from the assessment of effectiveness are recognized in earnings over the life of the hedges on a systematic and rational basis, as documented at hedge inception in accordance with our accounting policy election. The earnings recognition of excluded components is presented in foreign currency and derivative gains, net on our consolidated statements of income and comprehensive income in the periods during which is the same caption item as the hedged transactions.

transaction affects earnings.
Use of EstimatesSegment Reporting. . The consolidated financial statements were prepared in conformity with U.S. generally accepted accounting principles, or GAAP, which requires management to make estimatesOur business is characterized as owning and assumptions that affect the reported amounts of assetsleasing commercial properties under long-term, mostly triple net lease agreements (whereby clients are responsible for property taxes, insurance and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications. During 2020, we reclassified 'Real estate held for sale, net', which was previously presented in 'Net real estate', into a new caption entitled 'Real estate and lease intangibles held for sale, net'. The reclassification out of 'Net real estate' incorporates intangibles held for sale into a more appropriate presentation of the held for sale caption. Intangibles held for investment are included in the captions entitled 'Lease intangible assets, net' and 'Lease intangible liabilities, net' in the consolidated balance sheets. The December 31, 2019 balance sheet has been reclassified to match the current period classification.

Newly Issued Accounting Standards. In March 2020, the FASB issued ASU 2020-04 establishing Topic 848, Reference Rate Reform. ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance is optional and is effective between March 12,maintenance
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2020
costs), and these economic characteristics are similar across various property types, geographic locations, and industries in which our clients operate. Information reviewed by our chief operating decision maker in evaluating performance and allocating resources are primarily operating results and cash flow analysis for the overall company. Therefore, we operate and manage the business in one operating and reportable segment.
ASC 280, Segment Reporting, requires certain entity-wide annual disclosures for entities with a single reportable segment. The following table disaggregates domestic and international revenue by major asset types and geographic regions (in millions):
Years ended December 31,
2023
U.S.U.K.
Other (1)
Total
Retail$2,754.2 $374.0 $65.4 $3,193.6 
Industrial515.4 43.7 — 559.1 
Other (2)
205.5 — — 205.5 
Rental (including reimbursable)$3,475.1 $417.7 $65.4 $3,958.2 
Other revenue120.8 
Total revenue$4,079.0 
2022
U.S.U.K.
Other (1)
Total
Retail$2,455.9 $243.3 $30.9 $2,730.1 
Industrial465.2 30.2 — 495.4 
Other (2)
74.2 — — 74.2 
Rental (including reimbursable)$2,995.3 $273.5 $30.9 $3,299.7 
Other revenue44.0 
Total revenue$3,343.7 
2021
U.S.U.K.
Other (1)
Total
Retail$1,566.7 $138.9 $4.2 $1,709.8 
Industrial261.5 9.6 — 271.1 
Other (2)
84.1 — — 84.1 
Rental (including reimbursable)$1,912.3 $148.5 $— $2,065.0 
Other revenue15.5 
Total revenue$2,080.5 
(1) Other includes properties in Spain, starting in September 2021, in Italy, starting in October 2022,in Ireland, starting in June 2023, and in France, Germany, and Portugal starting in December 2023.
(2) Other includes the following asset types: office, agriculture and gaming.
Long-lived assets include items such as property, plant, equipment and right-of-use assets subject to operating and finance leases. As of December 31, 2022.2023, no individual country or asset-type represented more than 10% of total revenue, other than as presented in the tables above. In addition, as of December 31, 2023, no individual country or asset-type represented more than 10% of the total assets, other than as presented in the tables below. The following table disaggregates domestic and international total long-lived assets (in millions):
As of December 31,
20232022
U.S.U.K.
Other (1)
TotalU.S.U.K.
Other (1)
Total
Long-lived assets$36,577.1 $6,787.1 $1,496.1 $44,860.3 $33,685.6 $4,596.1 $582.7 $38,864.4 
Remaining assets12,919.1 10,808.7 
Total assets$57,779.4 $49,673.1 
(1) Other includes properties in Spain, starting in September 2021, in Italy, starting in October 2022,in Ireland, starting in June 2023, and in France, Germany, and Portugal, starting in December 2023.
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Recent Accounting Standards Not Yet Adopted.
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 may be elected over time as reference rate reform activities occur.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 that the expected market transition from LIBOR to alternative references rates will have on our financial statementsstatement 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 well asa 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 applicabilityamendments should be applied retrospectively to all periods presented in the financial statements. We are currently evaluating the impact on our financial statement disclosures.
2.    Merger with VEREIT, Inc. and Orion Office REIT Inc. Divestiture
Merger with VEREIT
On November 1, 2021, we completed our acquisition of VEREIT, Inc. ("VEREIT"), and the merger was consummated. Pursuant to the terms of the aforementioned expedientsMerger Agreement and exceptions providedsubject 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 ASU 2020-04.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 Costs
In 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.
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Recently Adopted Accounting Standards.
Orion Divestiture
In February 2016,Following of the FASB issued ASU 2016-02 (Topic 842, Leases), which replaced Topic 840, Leases. Under this amended topic, the accounting applied by a lessor is largely unchanged from that applied under Topic 840, Leases. The large majorityclosing of our leases remain classified as operating leases,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 continuedistributed the outstanding shares of Orion common stock to recognize lease incomeour shareholders on a generally straight-linepro rata basis overat a rate of one share of Orion common stock for every ten shares of Realty Income common stock held on November 12, 2021, the lease term. Although primarily a lessor, we are also a lessee under several ground lease arrangements. We adopted Topic 842, Leases, effective asapplicable record date. The fair market value of January 1, 2019these shares for tax distribution was determined to be $20.6272 per share, which was calculated using the effective date method,five-day volume weighted average share price after issuance. For more detail, see note 16, Distributions Paid and electedPayable.
In conjunction with the practical expedients available for implementation underOrion Divestiture, we incurred approximately $1.9 million and $6.0 million of transaction costs during the standard for all classes of underlying assets. As a result, we recognize lease obligations for ground leases designated as operatingyear ended December 31, 2022 and financing leases with corresponding right of use assets and liabilities (see note 3). Additionally, above-market rents on certain of our leases under2021, which we are a lessor are accounted for as financing receivables amortizing over the lease term, and below-market rents on certain of our leases under which we are a lessor are accounted for as prepaid rent (see note 3). Also, as a result of the adoption of this standard, contractually obligated reimbursements by our clients and property expenses are now presented on a gross basis as both contractually obligated reimbursements by our clientswere included in rental revenue,'Merger and as a reimbursable expense included in property expenses, respectively, onintegration-related costs' within our consolidated statements of income and comprehensive income. Property taxes
As part of the Orion Divestiture, Orion paid us a dividend of $425.0 million and insurancereimbursed $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 directly by the lessee to a third party will continue to be presented on a net basis. These presentation changes had no impact on our resultsin capital of operations. As a result, there was no restatement of prior issued financial statements and, similarly, no cumulative effect adjustment to opening equity; however, we have elected to aggregate prior period tenant reimbursement revenue within rental revenue to be consistent with the current period presentation within the statements of income and comprehensive income.

$1.14 billion.
3.Supplemental Detail for Certain Components of Consolidated Balance Sheets (dollars in thousands):
A.Accounts Receivable, net, consist of the following at:December 31, 2020December 31, 2019
Straight-line rent receivables, net$174,074 $147,047 
Client receivables, net111,627 34,922 
$285,701 $181,969 
A.Accounts receivable, net, consist of the following at:December 31, 2023December 31, 2022
Straight-line rent receivables, net$516,692 $363,993 
Client receivables, net193,844 179,244 
$710,536 $543,237 
B.Lease intangible assets, net, consist of the following at:December 31, 2020December 31, 2019
In-place leases$1,840,704 $1,612,153 
Accumulated amortization of in-place leases(744,375)(627,676)
Above-market leases866,567 710,275 
Accumulated amortization of above-market leases(252,241)(201,369)
 $1,710,655 $1,493,383 
C.Other assets, net, consist of the following at:December 31, 2020December 31, 2019
Financing receivables$131,291 $81,892 
Right of use asset - financing leases118,585 36,901 
Right of use asset - operating leases, net112,049 120,533 
Restricted escrow deposits21,220 4,529 
Goodwill14,180 14,430 
Prepaid expenses11,795 11,839 
Corporate assets, net8,598 5,251 
Credit facility origination costs, net7,705 11,453 
Impounds related to mortgages payable4,983 12,465 
Value-added tax receivable1,130 9,682 
Non-refundable escrow deposits1,000 14,803 
Derivative assets and receivables - at fair value10 12 
Other items1,751 4,871 
 $434,297 $328,661 
D.Accounts payable and accrued expenses consist of the following at:December 31, 2020December 31, 2019
Notes payable - interest payable$83,219 $75,114 
Derivative liabilities and payables - at fair value73,356 26,359 
Property taxes payable23,413 18,626 
Accrued costs on properties under development12,685 5,870 
Value-added tax payable8,077 13,434 
B.Lease intangible assets, net, consist of the following at:December 31, 2023December 31, 2022
In-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, 2022
Financing 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 
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Accrued income taxes5,182 4,450 
Mortgages, term loans, and credit line - interest payable and interest rate swaps1,044 1,729 
Other items34,360 31,457 
 $241,336 $177,039 
E.Lease intangible liabilities, net, consist of the following at:December 31, 2020December 31, 2019
Below-market leases$460,895 $447,522 
Accumulated amortization of below-market leases(139,697)(114,419)
 $321,198 $333,103 
F.Other liabilities consist of the following at:December 31, 2020December 31, 2019
Rent received in advance and other deferred revenue$130,231 $127,687 
Lease liability - operating leases, net114,559 122,285 
Lease liability - financing leases6,256 5,946 
Security deposits5,817 6,303 
 $256,863 $262,221 


D.Accounts payable and accrued expenses consist of the following at:December 31, 2023December 31, 2022
Notes 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 
E.Lease intangible liabilities, net, consist of the following at:December 31, 2023December 31, 2022
Below-market leases$1,728,027 $1,617,870 
Accumulated amortization of below-market leases(321,174)(238,434)
$1,406,853 $1,379,436 
F.Other liabilities consist of the following at:December 31, 2023December 31, 2022
Lease liability - operating leases, net$425,213 $440,096 
Rent received in advance and other deferred revenue312,195 269,645 
Lease liability - financing leases44,345 49,469 
Security deposits28,250 15,577 
Other acquisition liabilities1,647 — 
$811,650 $774,787 
4.Investments in Real Estate
We acquire land, buildings and improvements necessary for the successful operationsA.    Acquisitions of our commercial clients.
A.Acquisitions during 2020 and 2019Real Estate
Below is a summary of our acquisitions for the year ended December 31, 2020:
Number of PropertiesLeasable Square FeetInvestment
($ in thousands)
Weighted Average Lease Term (Years)Initial Average Cash Lease Yield
Year Ended December 31, 2020 (1)
Acquisitions - U.S. (in 30 states)
202 5,476,009 $1,302,220 14.95.8 %
Acquisitions - U.K. (2)
24 2,120,256 920,934 10.86.1 %
Total Acquisitions226 7,596,265 $2,223,154 13.25.9 %
Properties under Development - U.S.18 1,601,095 84,127 15.35.6 %
Total (3)
244 9,197,360 $2,307,281 13.25.9 %
(1)NaN of our investments during 2020 caused any one client to be 10% or more of our total assets at December 31, 2020. All of our investments in acquired properties during 2020 are 100% leased at the acquisition date.    
(2)Represents investments of £707.8 million Sterling during the year ended December 31, 2020 converted at the applicable exchange rate on the date of acquisition.
(3)Our clients occupying the new properties operate in 26 industries and are 86.6% retail and 13.4% industrial, based on rental revenue. Approximately 61% of the rental revenue generated from acquisitions during 2020 is from our investment grade rated clients, their subsidiaries or affiliated companies.
The acquisitions during the year ended December 31, 2020, which had 0 associated contingent consideration, were allocated as follows (dollars in millions)2023 (unaudited):
Acquisitions - U.S.Acquisitions - U.K.
Year Ended December 31, 2020(USD)(£ Sterling)
Land (1)
$337.5 £247.1 
Buildings and improvements768.4 258.7 
Lease intangible assets (2)
203.1 139.8 
Other assets (3)
52.4 62.9 
Lease intangible liabilities (2)
(12.9)(0.7)
Other liabilities (4)
(0.9)
$1,347.6 £707.8 
(1) U.K. land includes £88.6 million of right of use assets under long-term ground leases.
(2) The weighted average amortization period for acquired lease intangible assets and liabilities is 15.9 years.
(3) U.S. other assets consists of $51.7 million of financing receivables with above-market terms and $689,000 of right of use assets under ground leases. U.K. other assets consists entirely of right of use assets under ground leases.
(4) U.S. other liabilities consists entirely of lease liabilities under ground leases.
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The properties acquired during 2020 generated total revenues of $54.6 million and net income of $19.4 million during the year ended December 31, 2020.

Below is a summary of our acquisitions for the year ended December 31, 2019:
Number of PropertiesLeasable Square FeetInvestment
($ in thousands)
Weighted Average Lease Term (Years)Initial Average Cash Lease Yield
Year Ended December 31, 2019 (1)
Acquisitions - U.S. (in 45 states)
753 11,630,423 $2,860,806 13.06.8 %
Acquisitions - U.K. (2)
18 1,583,676 797,846 15.65.2 %
Total Acquisitions771 13,214,099 3,658,652 13.46.4 %
Properties under Development - U.S.18 522,173 56,585 15.17.3 %
Total (3)
789 13,736,272 3,715,237 13.56.4 %
Number of
Properties
Leasable
Square Feet
(in thousands, unaudited)
Investment
($ in millions)
Weighted
Average
Lease Term
(Years)
Initial
Weighted
Average Cash
Lease 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 %
(1)NaN of our investments during 2019 caused any one client to be 10% or more of our total assets at December 31, 2019. All of our 2019 investments in acquired properties were 100% leased at the acquisition date.
(2)Represents investments of £625.8 million Sterling during the year ended December 31, 2019 converted at the applicable exchange rate on the date of acquisition.
(2) Our clients occupying the new properties operated in 31 industries, and are 94.6% retail and 5.4% industrial, based on rental revenue. Approximately 36% of the rental revenue generated from acquisitions during 2019 was from our investment grade rated clients, their subsidiaries or affiliated companies.
The acquisitions during the year ended December 31, 2019, which had 0 associated contingent consideration, were allocated as follows (dollars in millions):
Acquisitions - U.S.Acquisitions - U.K.
Year Ended December 31, 2019(USD)(£ Sterling)
Land (1)
$780.0 £251.0 
Buildings and improvements1,776.1 249.3 
Lease intangible assets (2)
290.1 129.9 
Other assets (3)
82.0 
Lease intangible liabilities (4)
(41.9)(4.4)
Other liabilities (5)
(8.4)
$2,877.9 £625.8 
(1) U.K. land includes £24.9 million of right of use assets under long-term ground leases.
(2) The weighted average amortization period for acquired lease intangible assets is 13.3 years.
(3) U.S other assets consists entirely of financing receivables with above-market terms.
(4) The weighted average amortization period for acquired lease intangible liabilities is 18.1 years.
(5) U.S. other liabilities consists entirely of deferred rent on certain below-market leases.
The properties acquired during 2019 generated total revenues of $92.0 million and net income of $36.9 millionduring the year ended December 31, 2019.
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.
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B.
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 - Euro
Land (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 
(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 consistentirely 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.
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 2020,the year ended December 31, 2023, we capitalized costs of $7.0$59.8 million on existing properties in our portfolio, consisting of $1.8$49.6 million for non-recurring building improvements, $9.9 million for re-leasing costs, $198,000and $0.3 million for recurring capital expenditures and $5.0 million for non-recurring building improvements.expenditures. In comparison, during 2019,the year ended December 31, 2022, we capitalized costs of $17.9$96.7 million on existing properties in our portfolio, consisting of $2.1$88.3 million for non-recurring building improvements, $5.2 million for re-leasing costs, $801,000and $3.2 million for recurring capital expenditures and $15.0 million for non-recurring building improvements.expenditures.
C.Properties with Existing Leases
Of the $2.3 billion we invested during 2020, approximately $1.86 billion was used to acquire 127 properties with existing leases. In comparison, of the $3.7 billion we invested during 2019, approximately $2.72 billion was used to acquire 575 properties with existing leases. The value of the in-place and above-market leases is recorded to lease'Lease intangible assets, netnet' on our consolidated balance sheets, and the value of the below-market leases is recorded to lease'Lease intangible liabilities, netnet' 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 2020, 2019,the years ended December 31, 2023, 2022 and 20182021 were $134.6$651.1 million, $112.0$634.9 million, and $106.6$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 onin 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 2020, 2019,the years ended December 31, 2023, 2022 and 20182021 were $30.9$61.5 million, $22.1$55.6 million, and $16.9$35.4 million, respectively. If a lease was to be terminated prior to its stated expiration, all unamortized amounts relating to that lease would be recorded to revenue or expense, as appropriate.
The following table presents the estimated impact during the next five years and thereafter related to the amortization of the above-market and below-market lease intangibles and theamortization of the in-place lease intangibles at December 31, 20202023 (dollars in thousands):
Net increase
(decrease) to
rental revenue
Increase to
amortization
expense
2024$(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 
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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,
202320222021
Number 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 

5.    Investments in Unconsolidated Entities
The following is a summary of our investments in unconsolidated entities as of December 31, 2023 and 2022 (in thousands):
Ownership %Number of Properties
Carrying Amount(1) of Investment as of
InvestmentAs of December 31, 202312/31/202312/31/2022
Bellagio 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 $— 
(1) The total carrying amount of the investments was greater than the underlying equity in net assets (i.e., basis difference) by $2.2 million as of December 31, 2023.
Net
decrease to
rental revenue
Increase to
amortization
expense
2021$(31,717)$138,254 
2022(30,283)126,762 
2023(28,745)114,571 
2024(27,164)105,775 
2025(26,609)96,398 
Thereafter(148,610)514,569 
Totals$(293,128)$1,096,329 

Equity in income and impairment of investment in unconsolidated entities consists of the following (in thousands):
Years ended December 31,
Investment202320222021
Bellagio 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 
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.
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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.
6.     Investments in Loans
The following table presents information about our loans as of December 31, 2023 (dollars in thousands):
Amortized CostAllowance
Carrying Amount (1)
Senior Secured Note Receivable$174,337 $(2,498)$171,839 
Mortgage Loan33,500 — 33,500 
Total$207,837 $(2,498)$205,339 
5.(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.
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.
7.    RevolvingCredit Facility and Commercial Paper Program

Programs
A.    Credit Facility
We have a $3.0$4.25 billion unsecured revolving multicurrency credit facility with an initial term that expiresmatures in March 2023 andJune 2026, includes two six-month extensions that can be exercised at our option, 2 six-month extensions. The revolving credit facilityand allows us to borrow in up to 14 currencies, including U.S. dollars, andUSD. Our revolving credit facility also has a $1.0 billion expansion option, which is subject to obtaining lender commitments. Under our revolving credit facility, our current investment grade credit ratings as of December 31, 2020 provide for financingUSD borrowings at the London Interbank OfferedSecured Overnight Financing Rate commonly referred to as LIBOR,("SOFR"), plus 0.775%0.725% with a SOFR adjustment charge of 0.10% and a revolving credit facility commitment fee of 0.125%, for all-in pricing of 0.90%0.95% over LIBOR. The borrowing rate is subject to an interest rate floor and may change if our investment grade credit ratings change. We also have other interest rate options available to us under our revolving credit facility. Our revolving credit facility is unsecured and, accordingly, we have not pledged any assets as collateral for this obligation.

At December 31, 2020, credit facility origination costs of $7.7 million are included in other assets, net, as compared to $11.5 millionSOFR, British Pound Sterling at December 31, 2019, on our consolidated balance sheet. These costs are being amortized over the remaining term of our revolving credit facility.
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At
the SONIA, plus 0.725% with a SONIA adjustment charge of 0.0326% and a revolving credit facility fee of 0.125%, for all-in pricing of 0.8826% over SONIA, and Euro Borrowings at one-month Euro Interbank Offered Rate (“EURIBOR”), plus 0.725%, and a revolving credit facility fee of 0.125%, for all-in pricing of 0.85% over one-month EURIBOR.
As of December 31, 2020,2023, we had a borrowing capacity of $3.0$4.25 billion available on our revolving credit facility (subject to customary conditions to borrowing) and 0no outstanding balance as compared to an outstanding balance of $704.3 million, including £169.2 million Sterling, at December 31, 2019.
2022 of $2.0 billion, comprised of€1.8 billion Euro and £70.0 million Sterling borrowings.
The weighted average interest rate on outstanding borrowings under our revolving credit facility was 1.5%4.8% during 2020 and 3.1% during 2019. Atthe year ended December 31, 2019,2023, and 1.8% during the weighted average interest rate on borrowings outstanding under our revolving credit facility was 2.2%.year ended December 31, 2022. Our revolving credit facility is subject to various leverage and interest coverage ratio limitations, and at December 31, 2020, 2023,we were in compliance with the covenants onunder our revolving credit facility.facility.

As of December 31, 2023, credit facility origination costs of
$12.3 millionare included in 'Other assets, net', as compared to $17.2 million at December 31, 2022, on our consolidated balance sheets. These costs are being amortized over the remaining term of our revolving credit facility.
B.    Commercial Paper ProgramPrograms
In August 2020, we establishedWe have a U.S. dollar-denominatedUSD-denominated unsecured commercial paper program. Under the terms of the program, under which we may from time to time, issue unsecured commercial paper notes up to a maximum aggregate amount outstanding of $1.0 billion. $1.5 billion, as well as a Euro-denominated unsecured commercial paper program, which permits us to issue additional unsecured commercial notes up to a maximum aggregate amount of $1.5 billion (or foreign currency equivalent). Our Euro-denominated unsecured commercial paper program may be issued in USD or various foreign currencies, including but not limited to, Euros, Sterling, Swiss Francs, Yen, Canadian Dollars, and Australian Dollars, in each case, pursuant to customary terms in the European commercial paper market.
The commercial paper will rankranks on a parity in right of payment with all of our other unsecured senior indebtedness outstanding from time to time, including borrowings under our revolving credit facility, our term loan facilityloans and our outstanding senior unsecured notes. Proceeds from commercial paper borrowings are used for general corporate purposes. At
As of December 31, 2020, we had 02023, the balance of borrowings outstanding under our commercial paper programs was $764.4 million, including €583.0 million of Euro-denominated borrowings, as compared to $701.8 millionoutstanding commercial paper borrowings.borrowings, including €361.0 million of EUR borrowings, at December 31, 2022. The weighted average interest rate on outstanding borrowings under our commercial paper programprograms was 0.3% from inception of4.8% for the plan throughyear ended December 31, 2020.2023, and 1.6% for the year ended December 31, 2022. As of December 31, 2023, our weighted average interest rate on outstanding borrowings under our commercial paper programs was 4.4%. We use our $3.0$4.25 billion revolving credit facility as a liquidity backstop for the repayment of the notes issued under the commercial paper program.programs. The commercial paper borrowings generally carry a term of less than a year.

We regularly review our credit facility and commercial paper programs and may seek to extend, renew or replace our credit facility and commercial paper programs, to the extent we deem appropriate.
6.8.    Term Loans
In October 2018,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 revolving credit facility,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. Borrowing under this term loan bears interest at the current one-month LIBOR, plus 0.85%. In conjunction with this term loan, we also entered into an interest rate swap which effectively fixes our per annum interest on this term loan at 3.89%.
In June 2015, in conjunction with entering into our previous credit facility, we entered into a $250.0 million senior unsecured term loan which matured in June 2020. Borrowing under this term loan bore interest atand as of December 31, 2023, the current one-month LIBOR, plus 0.90%. In conjunction with this term loan, we also entered into an interest rate swap which effectively fixed our per annumeffective interest rate on this term loan, at 2.62%. In June 2020, we repaidafter giving effect to the term loan in full upon maturity.interest rate swap, was 3.8%.
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Deferred
At December 31, 2023, deferred financing costs of $1.2$0.1 million incurred in conjunction withare included net of the term loans principal balance, as compared to $0.2 million related to our $250.0 million term loan which matured June 2020, and $1.1 million incurred in conjunction with the $250.0 million term loan maturing March 2024at December 31, 2022, on our consolidated balance sheets. These costs are being amortized over the remaining termsterm of each respectivethe term loan. The net balanceloans. As of deferred financing costs at December 31, 2020 of $642,000 relates to2023, we were in compliance with the $250.0 millioncovenants contained in the term maturing March 2024. The net balance of deferred financing costs atloans.
9.    Mortgages Payable
During the year ended December 31, 2019 of $956,000 related to the $250.0 million term loan that matured in June 2020 and the $250.0 million term loan maturing March 2024.

7.Mortgages Payable
During 2020,2023, we made $108.8$22.0 million in principal payments, including the full repayment of 9two mortgages in full for $103.4$17.4 million. During 2019,the year ended December 31, 2022, we made $20.7$312.2 million in principal payments, including the full repayment of 1 mortgage in full12 mortgages for $15.8$308.0 million. NaNNo mortgages were assumed during 2020. During 2019, wethe year ended December 31, 2023. We assumed 2eight mortgages on 17 properties totaling $130.8$45.1 million on 33 properties.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 for items such as solvency, bankruptcy, misrepresentation, fraud, misapplication of payments, environmental liabilities, failurewhich vary from loan to pay taxes, insurance premiums, liens on the property, violations of the single purpose entity requirements, and uninsured losses.
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, 2020,2023, we were in compliance with these covenants.
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The balance of our deferred financing costs, which are classified as part of mortgages'Mortgages payable, net,net', on our consolidated balance sheets, was $0.4 million and $0.8 million at December 31, 20202023 and 2019 was $973,000 and $1.3 million,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, 20202023 and 2019, respectively2022 (dollars in thousands)millions):
As Of
Number of
Properties(1)
Weighted Average
Stated
Interest Rate(2)
Weighted Average
Effective Interest
Rate(3)
Weighted
Average
Remaining
Years Until
Maturity
Remaining
Principal
Balance
Unamortized
Premium
and Deferred
Finance Costs
Balance, net
Mortgage
Payable
Balance
12/31/202068 4.9 %4.6 %2.9$299,631 $729 $300,360 
12/31/201992 4.9 %4.6 %3.1$408,419 $1,700 $410,119 

As Of
Number of
Properties (1)
Weighted
Average
Stated
Interest
Rate (2)
Weighted
Average
Effective
Interest
Rate (3)
Weighted
Average
Remaining
Years Until
Maturity
Remaining
Principal
Balance
Unamortized
Premium (Discount)
and Deferred
Financing Costs
Balance, net
Mortgage
Payable
Balance
December 31, 20231314.8 %3.3 %0.4$822.4 $(0.8)$821.6 
December 31, 20221364.8 %3.3 %1.4$842.3 $11.6 $853.9 
(1)At December 31, 2020,2023, there were 16 mortgages on 131 properties and at December 31, 2022, there were 18 mortgages on 68136 properties. At December 31, 2019, there were 27 mortgages on 92 properties. TheWith 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, 2020,2023 and December 31, 2022, all mortgages were at fixed interest rates. At December 31, 2019, we had one variable rate mortgage with a principal balance of $7.1 million that was swapped to a fixed interest rate.
(2)Stated interest rates ranged from 3.8%3.0% to 6.9% at each of December 31, 20202023 and 2019,December 31, 2022, respectively.
(3)Effective interest rates ranged from 4.0%0.5% to 5.5%6.6% and 2.7% to 6.6% at December 31, 2020, while effective interest rates ranged from 3.8% to 7.6% at2023 and December 31, 2019.2022, respectively.




The following table summarizes the maturity of mortgages payable as of December 31, 2023, excluding $0.8 million related to unamortized net premiums of $1.7 milliondiscounts and deferred financing costs of$973,000, as of December 31, 2020 (dollars in millions):
Year of MaturityPrincipal
2021$44.2 
2022111.8 
202320.6 
2024112.2 
20250.7 
Thereafter10.1 
Totals$299.6 

Year of MaturityPrincipal
2024$740.5
202544.0
202612.0
202722.3
20281.3
Thereafter2.3
Totals$822.4
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8.
10.    Notes Payable
A.    General
OurAt December 31, 2023, our senior unsecured notes and bonds consist of the following, sorted by maturity date (dollars in millions):
December 31, 2020December 31, 2019
5.750% notes, issued in June 2010 and due in January 2021$$250 
3.250% notes, $450 issued in October 2012 and $500 issued in December 2017, both due in October 2022 (1)
950 950 
4.650% notes, issued in July 2013 and due in August 2023750 750 
3.875% notes, issued in June 2014 and due in July 2024350 350 
3.875% notes, issued in April 2018 and due in April 2025500 500 
0.750% notes, issued December 2020 and due in March 2026325 
4.125% notes, $250 issued in September 2014 and $400 issued in March 2017, both due in October 2026650 650 
3.000% notes, issued in October 2016 and due in January 2027600 600 
3.650% notes, issued in December 2017 and due in January 2028550 550 
3.250% notes, issued in June 2019 and due in June 2029500 500 
1.625% notes, issued in October 2020 and due December 2030 (2)
547 
3.250% notes, $600 issued in May 2020 and $350 issued in July 2020, both due in January 2031950 
1.800% notes, issued in December 2020 and due in March 2033400 
2.730% notes, issued in May 2019 and due in May 2034 (2)
431 418 
5.875% bonds, $100 issued in March 2005 and $150 issued in June 2011, both due in March 2035250 250 
4.650% notes, $300 issued in March 2017 and $250 issued in December 2017, both due in March 2047550 550 
Total principal amount8,303 6,318 
Unamortized net original issuance premiums and deferred financing costs(35)(30)
 $8,268 $6,288 
(1) In January 2021, we completed the early redemption of all $950.0 million in principal. See note 19, Subsequent Events.
(2) Represents the principal balance (in U.S. dollars) of the October 2020are USD-denominated, Sterling-denominated, note offering and May 2019 Sterling-denominated private placement of £400.0 million and £315.0 million, respectively,Euro-denominated. Foreign-denominated notes are converted at the applicable exchange rate on December 31, 2020.the balance sheet date. The following are sorted by maturity date (in thousands):
Carrying Value (USD) as of
Maturity DatesPrincipal (Currency Denomination)December 31, 2023December 31, 2022
4.600% Notes due 2024February 6, 2024$499,999 $499,999 $499,999 
3.875% Notes due 2024July 15, 2024$350,000 350,000 350,000 
3.875% Notes due 2025April 15, 2025$500,000 500,000 500,000 
4.625% Notes due 2025November 1, 2025$549,997 549,997 549,997 
5.050% Notes due 2026January 13, 2026$500,000 500,000 — 
0.750% Notes due 2026March 15, 2026$325,000 325,000 325,000 
4.875% Notes due 2026June 1, 2026$599,997 599,997 599,997 
4.125% Notes due 2026October 15, 2026$650,000 650,000 650,000 
1.875% Notes due 2027 (1)
January 14, 2027£250,000 318,450 301,225 
3.000% Notes due 2027January 15, 2027$600,000 600,000 600,000 
1.125% Notes due 2027 (1)
July 13, 2027£400,000 509,520 481,960 
3.950% Notes due 2027August 15, 2027$599,873 599,873 599,873 
3.650% Notes due 2028January 15, 2028$550,000 550,000 550,000 
3.400% Notes due 2028January 15, 2028$599,816 599,816 599,816 
2.200% Notes due 2028June 15, 2028$499,959 499,959 499,959 
4.700% Notes due 2028December 15, 2028$400,000 400,000 — 
3.250% Notes due 2029June 15, 2029$500,000 500,000 500,000 
3.100% Notes due 2029December 15, 2029$599,291 599,291 599,291 
4.850% Notes due 2030March 15, 2030$600,000 600,000 — 
3.160% Notes due 2030June 30, 2030£140,000 178,332 168,686 
4.875% Notes due 2030 (1)
July 6, 2030550,000 607,915 — 
1.625% Notes due 2030 (1)
December 15, 2030£400,000 509,520 481,960 
3.250% Notes due 2031January 15, 2031$950,000 950,000 950,000 
5.750% Notes due 2031 (1)
December 5, 2031£300,000 382,140 — 
3.180% Notes due 2032June 30, 2032£345,000 439,461 415,691 
5.625% Notes due 2032October 13, 2032$750,000 750,000 750,000 
2.850% Notes due 2032December 15, 2032$699,655 699,655 699,655 
1.800% Notes due 2033March 15, 2033$400,000 400,000 400,000 
1.750% Notes due 2033 (1)
July 13, 2033£350,000 445,830 421,715 
4.900% Notes due 2033July 15, 2033$600,000 600,000 — 
2.730% Notes due 2034May 20, 2034£315,000 401,247 379,544 
5.125% Notes due 2034 (1)
July 6, 2034550,000 607,915 — 
5.875% Bonds due 2035March 15, 2035$250,000 250,000 250,000 
3.390% Notes due 2037June 30, 2037£115,000 146,487 138,563 
6.000% Notes due 2039 (1)
December 5, 2039£450,000 573,210 — 
2.500% Notes due 2042 (1)
January 14, 2042£250,000 318,450 301,225 
4.650% Notes due 2047March 15, 2047$550,000 550,000 550,000 
Total principal amount$18,562,064 $14,114,156 
Unamortized net premiums, deferred financing costs, and cumulative basis adjustment on fair value hedge (2)
40,255 163,857 
 $18,602,319 $14,278,013 
(1) Interest paid annually. Interest on the remaining senior unsecured notes and bond obligations included in the table is paid semi-annually.
(2) In January 2023, in conjunction with the pricing of these senior unsecured notes due January 2026, we entered into three-year, fixed-to-variable interest rate swaps, which are accounted for as fair value hedges. See note 14, Derivative Instruments for further details.
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The following table summarizes the maturity of our notes and bonds payable as of December 31, 2020,2023, excluding $40.3 million related to unamortized net original issuance premiums, of $14.6 million and deferred financing costs, of $49.2 millionand basis adjustment on interest rate swaps designated as fair value hedges (dollars in millions):
Year of MaturityPrincipal
2022 (1)
$950 
2023750 
2024350 
2025500 
Thereafter5,753 
Totals$8,303 
(1) In January 2021, we completed the early redemption of all $950.0 million in principal. See note 19, Subsequent Events.

Year of MaturityPrincipal
2024$850.0 
20251,050.0 
20262,075.0 
20272,027.8 
20282,049.8 
Thereafter10,509.5 
Totals$18,562.1 
As of December 31, 2020,2023, the weighted average interest rate on our notes and bonds payable was 3.4%3.8%, and the weighted average remaining years until maturity was 8.26.7 years.
Interest incurred on all of the notes and bonds was $252.0$598.6 million, $431.3 million, and $286.4 million for 2020, $233.5 million for 2019the years ended December 31, 2023, 2022 and $213.8 million for 2018. The interest rate on each of these notes and bonds is fixed.
2021, respectively.
Our outstanding notes and bonds are unsecured; accordingly, we have not pledged any assets as collateral for these or any other obligations. Additionally, with the exception of our £400.0 million of 1.625% senior unsecured
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notes issued in October 2020, for which interest is paid annually, interest on our remaining senior unsecured note and bond obligations is paid semiannually.
All of these notes and bonds contain various covenants, including: (i) a limitation on incurrence of any debt which would cause our debt to total adjusted assets ratio to exceed 60%; (ii) a limitation on incurrence of any secured debt which would cause our secured debt to total adjusted assets ratio to exceed 40%; (iii) a limitation on incurrence of any debt which would cause our debt service coverage ratio to be less than 1.5 times; and (iv) the maintenance at all times of total unencumbered assets not less than 150% of our outstanding unsecured debt. At December 31, 2020,2023, we were in compliance with these covenants.

B. Note Repayments
In January 2020, we repaid our $250.0 million of outstanding 5.75% notes, plus accrued and unpaid interest upon maturity. As a result of the early redemption, we recognized a $9.8 million loss on extinguishment of debt during the first quarter of 2020.

In January 2021, we completed the early redemption on all $950.0 million in principal amount of our outstanding 3.250% notes due October 2022. For further information, see note 19, Subsequent Events.

C.    Note Issuances
During the three year periodyears ended December 31, 20202023 and 2022 we issued the following notes and bonds (in millions):
2020 IssuancesDate of
Issuance
Maturity datePrincipal
amount
issued
Price of par valueEffective yield to
maturity
3.250% notes (1)
May 2020January 2031$60098.99 %3.36%
3.250% notes (1)
July 2020January 2031$350108.24 %2.34%
1.625% notesOctober 2020December 2030£40099.19 %1.71%
0.750% notesDecember 2020March 2026$32599.19 %0.91%
1.800% notesDecember 2020March 2033$40098.47 %1.94%
2023 IssuancesDate of IssuanceMaturity DatePrincipal amountPrice of par valueEffective yield to maturity
5.050% NotesJanuary 2023January 2026$500.0 (1)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 2030550.0 99.421 %4.975 %
5.125% NotesJuly 2023July 2034550.0 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 %
2019 Issuances
2.730% notesMay 2019May 2034£315100.00 %2.73%
3.250% notesJune 2019June 2029$50099.36 %3.33%
2018 Issuance
3.875% notesApril 2018April 2025$50099.50 %3.96%
2022 IssuancesDate of IssuanceMaturity DatePrincipal amountPrice of par valueEffective yield to maturity
1.875% NotesJanuary 2022January 2027£250.0 99.487 %1.974 %
2.500% NotesJanuary 2022January 2042£250.0 98.445 %2.584 %
3.160% NotesJune 2022June 2030£140.0 100.000 %3.160 %
3.180% NotesJune 2022June 2032£345.0 100.000 %3.180 %
3.390% NotesJune 2022June 2037£115.0 100.000 %3.390 %
5.625% NotesOctober 2022October 2032$750.0 99.879 %5.641 %
(1)    In July 2020,January 2023, we issued $350.0$500 million of 3.250%5.05% senior unsecured notes due January 2031 (the "2031 Notes"),13, 2026, which constituted a further issuance of, and formed a single series with, the $600.0 million of 2031 Notes issued in May 2020.were callable at par beginning on January 13, 2024.

The net proceedsIn January 2024, we issued $450.0 million of $391.3 million from the December 2020 offering of 1.800%4.750%senior unsecured notes due 2033February 2029 and the net proceeds$800.0 million of $320.3 million from the December 2020 offering of 0.750%5.125%senior unsecured notes due 2026 were used, along with available cash and additional borrowings, as necessary to redeem in January 2021 all $950 million in aggregate principal amount of our outstanding 3.25% notes due 2022 at the applicable redemption price, plus accrued interest and, to the extent not usedFebruary 2034.See note 21, Subsequent Events, for those purposes, to fund investment opportunities and for other general corporate purposes.further details.
The net proceeds from the October 2020 Sterling-denominated offering of £400.0 million approximated $508.2 million, as converted at the applicable exchange rate on the closing of the offering, and were used to repay GBP-denominated borrowings outstanding under our $3.0 billion revolving credit facility, to settle an outstanding GBP/USD currency exchange swap arrangement and, to the extent not used for those purposes, to fund investment opportunities and for other general corporate purposes.
The net proceeds of $376.6 million from the July 2020 note offering and the net proceeds of $590.0 million from the May 2020 note offering were used to repay borrowings under our credit facility, to fund potential investment opportunities and for other general corporate purposes.
The gross proceeds from the May 2019 Sterling-denominated private placement of £315.0 million approximated $400.9 million, as converted at the applicable exchange rate on the closing of the offering, and were used to fund our initial investment in U.K. properties.
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The net proceeds of$493.5 million from the June 2019 note offering and the net proceeds of approximately $494.4 million from the April 2018 note offering were used to repay borrowings outstanding under our credit facility, to fund investment opportunities, and for other general corporate purposes.

9.Issuances of Common Stock
A.   Issuance of Common Stock in an Overnight Offering
In March 2020, we issued 9,690,500 shares of common stock in an overnight underwritten public offering, including 690,500 shares purchased by the underwriters upon the exercise of their option to purchase to purchase additional shares. The net proceeds of $728.9 million were used to repay borrowings under our credit facility, to fund investment opportunities, and for other general corporate purposes.

In May 2019, we issued 12,650,000 shares of common stock in an overnight underwritten public offering. The net proceeds of $845.4 million were used to repay borrowings under our credit facility, to fund investment opportunities, and for other general corporate purposes.

We did 0t issue any shares in an underwritten offering in 2018.
In January 2021, we issued 12,075,000 shares of common stock in an underwritten public offering, including 1,575,000 shares purchased by the underwriters upon the exercise of their option to purchase additional shares. The company used the net proceeds from the offering, along with available cash and additional borrowings, to fund property acquisitions and for general corporate purposes and working capital. For further information, see note 19, Subsequent Events.

B.
C.    Note Repayments
We redeemed the following principal amounts (in millions) of certain outstanding notes, prior to their maturity. As a result of these early redemptions, we recognized the following losses on extinguishment of debt (in millions) in our consolidated statements of income and comprehensive income. There were no comparable repayments for the years ended December 31, 2023 or 2022.
Loss on Extinguishment of Debt
2021 Repayments
Principal Amount (1)
Amount of LossPeriod Recognized
4.650% notes due August 2023 redeemed in December 2021$750.0 $46.4 December 31, 2021
3.25% notes due October 2022 redeemed in January 2021$950.0 $46.5 March 31, 2021
(1) The redeemed principal amounts presented exclude the amounts we paid in accrued and unpaid interest.
11.    Issuances of Common Stock
A.    At-the-Market ("ATM") At-the-Market (ATM) Program
UnderIn August 2023, we replaced our "at-the-market" equity distribution plan, or ourprior ATM program with a new ATM program, pursuant to which we may offer and sell up to 33,402,405120.0 million shares of common stock may be offered and sold (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 New York Stock Exchange ("NYSE: O")NYSE under the ticker symbol "O" at prevailing market prices or at negotiated prices. AtUpon 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, 2020,2023, we had 15,678,031 81.3 millionshares 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 programprograms (dollars in millions)millions, shares in thousands):
Year Ended December 31,
202020192018
Shares of common stock issued under the ATM program17,724,37417,051,45619,138,610 
Years ended December 31,
Years ended December 31,
Years ended December 31,
2023202320222021
Shares of common stock issued under the ATM program(1)
Shares of common stock issued under the ATM program(1)
91,69968,60846,291
Gross proceedsGross proceeds$1,094.9 $1,274.5 $1,125.4 
Sales agents' commissions and other offering expenses
Net proceeds
C.(1) Dividend ReinvestmentDuring the year ended December 31, 2023, 91.1 million shares were sold and Stock Purchase Plan91.7 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.
Our
B.    Dividend Reinvestment and Stock Purchase Plan or our("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 26,000,00026.0 million common shares to be issued. At December 31, 2020,2023, we had 11,503,37911.0 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)millions, shares in thousands):
Year Ended December 31,
202020192018
Shares of common stock issued under the DRSPP program149,289117,522116,268 
Gross proceeds$9.1 $8.4 $9.1 
Our DRSPP includes a waiver approval process, allowing larger investors or institutions, per a formal approval process, to purchase shares at a small discount, if approved by us. We did not issue shares under the waiver approval process during 2020, 2019 or 2018.
Years ended December 31,
202320222021
Shares of common stock issued under the DRSPP program198176 168 
Gross proceeds$11.5 $11.7 $11.2 
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10.Noncontrolling Interests
In January 2013,C.    Issuance of Common Stock in Connection with VEREIT Acquisition
On November 1, 2021, we completed our acquisition of AmericanVEREIT. As a result of the merger, former VEREIT common stockholders, VEREIT OP common unitholders and awardees of vested share awards separated from Realty Capital Trust, Inc. (ARCT). EquityIncome 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 as considerationan 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 this transaction included commongeneral corporate purposes and preferredworking capital.
There were no comparative offerings during the years ended December 31, 2023 or 2022.
12.    Noncontrolling Interests
As of December 31, 2023, we have seven entities with noncontrolling interests that we consolidate, including an operating partnership, units issuedRealty Income, L.P., and interests in consolidated property partnerships not wholly-owned by Tau Operating Partnership, L.P., or Tau Operating Partnership, the consolidated subsidiary which owns properties acquired through the ARCT acquisition. us.
At December 31, 2018, Tau Operating Partnership and Realty Income, L.P. were considered variable interest entities, or VIEs, in which we were deemed the primary beneficiary based on our controlling financial interests. In January 2019, we redeemed all 317,022 remaining Tau Operating Partnership common units held by nonaffiliates for $20.2 million and recorded the excess over carrying value of $6.9 million as a reduction to common stock and paid in capital. In conjunction with this redemption, we also paid off the2023, outstanding balance and interest on the $70.0 million senior unsecured term loan entered in January 2013 in conjunction with our acquisition of ARCT. Following the redemption, our taxable REIT subsidiary, Crest Net Lease, obtained a 0.11% interest in Tau Operating Partnership, and we hold 100% of the ownership interests of Tau Operating Partnership, L.P. While we continue to consolidate the entity, it is no longer considered a VIE.
In 2019 and 2018, we completed the acquisitions of portfolios of properties, both by paying cash and by issuing additional common partnership units in Realty Income, L.P. as consideration for the acquisitions. At December 31, 2020, the remaining units from this issuance represent a 1.9%represented 6.9% ownership interest in Realty Income L.P. We hold the remaining 98.1% interests in this entity93.1% 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 11.02934 due to one,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.

In December 2020, we completed the acquisition of a development property by acquiring a controlling interest in a joint venture. We are the managing member of this joint venture, and possess the ability to control the business and manage the affairs of this entity. At December 31, 2020, we and our subsidiaries held an 75.8% interest, and consolidated this entity in our consolidated financial statements.

In December 2019, we completed the acquisition of 9 properties by acquiring a controlling interest in a joint venture. We are the managing member of this joint venture, and possess the ability to control the business and manage the affairs of this entity. At December 31, 2020, we and our subsidiaries held an 89.9% interest, and consolidated this entity in our consolidated financial statements.

In 2016, we completed the acquisition of 2 properties by acquiring a controlling interest in 2 entities. In December 2018, we acquired all of the outstanding minority ownership interests associated with 1 of these entities. In July 2019, we acquired all of the outstanding minority interest associated with the remaining entity.
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The following table represents the change in the carrying value of all noncontrolling interests through December 31, 2020 (dollars in2023 (in thousands):
Realty Income, L.P. units (1)
Realty Income, L.P. units (1)
Realty Income, L.P. units (1)
Carrying value at December 31, 2021
Carrying value at December 31, 2021
Carrying value at December 31, 2021
Contributions (2)
Contributions (2)
Contributions (2)
Tau Operating
Partnership units(1)
Realty Income, L.P.
units(2)
Other
Noncontrolling
Interests
Total
Carrying value at December 31, 2018$13,356 $17,912 $968 $32,236 
Reallocation of equityReallocation of equity653 653 
Redemptions(13,356)(901)(14,257)
Additions to noncontrolling interest6,286 5,084 11,370 
Reallocation of equity
Reallocation of equity
Distributions
Distributions
DistributionsDistributions(1,219)(77)(1,296)
Allocation of net incomeAllocation of net income964 32 996 
Carrying value at December 31, 2019$$24,596 $5,106 $29,702 
Reallocation of equity(47)(47)
Additions to noncontrolling interest3,168 3,168 
Distributions(1,297)(299)(1,596)
Allocation of net incomeAllocation of net income848 172 1,020 
Carrying value at December 31, 2020$$24,100 $8,147 $32,247 
Allocation of net income
Carrying value at December 31, 2022
Carrying value at December 31, 2022
Carrying value at December 31, 2022
Contributions (3)
Contributions (3)
Contributions (3)
Distributions (4)
Distributions (4)
Distributions (4)
Allocation of net income
Allocation of net income
Allocation of net income
Carrying value at December 31, 2023
Carrying value at December 31, 2023
Carrying value at December 31, 2023
(1) 317,022 Tau Operating Partnership1,795,167 units were issued on January 22, 2013. NaNoutstanding as of both December 31, 2023 andDecember 31, 2022. 1,060,709 units remainedwere outstanding as of December 31, 2020 and 2019.2021.
(2) 242,007In September 2022, we issued 734,458 common partnership units were issuedin 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 March 30, 2018, 131,790 units were issued on April 30, 2018 and 89,322 units were issued on March 28, 2019. 463,119 units remained outstanding asproperty 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, 2020 and 2019.2023.
At December 31, 2020 and 2019, respectively,2023, we are considered the primary beneficiary of Realty Income, L.P. and the joint ventures acquired during 2020 and 2019 were considered variable interest entities, or VIEs, in which we were deemed the primary beneficiary based on our controlling financial interests. Below is a summary of selected financial data of consolidated VIEs included in the consolidated balance sheets at December 31, 2020 and 2019 (in thousands):
 December 31, 2020December 31, 2019
Net real estate$635,963 $654,305 
Total assets723,668 744,394 
Total liabilities47,962 52,087 

11.other VIEs. For further information, Distributions Paid and Payablesee note

We pay monthly distributions to our common stockholders. The following is a summary 1, Summary of monthly distributions paid per common share for 2020, 2019 and 2018:
Month202020192018
January$0.2275 $0.2210 $0.2125 
February0.2325 0.2255 0.2190 
March0.2325 0.2255 0.2190 
April0.2330 0.2260 0.2195 
May0.2330 0.2260 0.2195 
June0.2330 0.2260 0.2195 
July0.2335 0.2265 0.2200 
August0.2335 0.2265 0.2200 
September0.2335 0.2265 0.2200 
October0.2340 0.2270 0.2205 
November0.2340 0.2270 0.2205 
December0.2340 0.2270 0.2205 
Total$2.7940 $2.7105 $2.6305 
Significant Accounting Policies.
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The following presents the federal income tax characterization of distributions paid or deemed to be paid per common share for the years:
 202020192018
Ordinary income$2.2798764 $2.1206964 $2.0269173 
Nontaxable distributions0.4902835 0.5898036 0.6035827 
Total capital gain distribution0.0238401 
Totals$2.7940000 $2.7105000 $2.6305000 
At December 31, 2020, a distribution of $0.2345 per common share was payable and was paid in January 2021. At December 31, 2019, a distribution of $0.2275 per common share was payable and was paid in January 2020.
12.Operating Leases
A.      At December 31, 2020, we owned 6,592 properties in 49 U.S. states, Puerto Rico and the U.K. Of the 6,592 properties, 6,555, or 99.4%, are single-client properties, and the remaining are multi-client properties. At December 31, 2020, 140 properties were available for lease or sale.
Substantially all of our leases are net leases where our client pays or reimburses us for property taxes and assessments, maintains the interior and exterior of the building and leased premises, 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 rents, was $5.1 million for 2020, $8.0 million for 2019 and $5.9 million for 2018.

At December 31, 2020, minimum future annual rents to be received on the operating leases for the next five years and thereafter are as follows (dollars in thousands):
2021$1,684,817 
20221,629,281 
20231,543,909 
20241,428,212 
20251,343,730 
Thereafter8,371,347 
Totals$16,001,296 
B.      Major Clients - 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, 2020, 2019 or 2018.

13.Gain on Sales of Real Estate
The following table summarizes our properties sold during the periods indicated below (dollars in millions):
Year Ended December 31,
202020192018
Number of properties126 93 128 
Net sales proceeds$262.5 $108.9 $142.3 
Gain on sales of real estate$76.2 $30.0 $24.6 
These property sales do not represent a strategic shift that will have a major effect on our operations and financial results, and therefore do not require presentation as discontinued operations.

14. Financial Instruments and    Fair Value Measurements
Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The disclosure for assetsdate (the exit price).
ASC 820, Fair Value Measurements and liabilities measured atDisclosures, sets forth a fair value requires allocation to a three-level valuation hierarchy. This valuation hierarchy is based upon the transparency ofthat categorizes inputs to valuation techniques used to measure fair value. The hierarchy gives the valuation of an assethighest priority to unadjusted quoted prices in active markets for identical assets or liability as of the measurement date.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, 2023
Hierarchy Level
Carrying ValueLevel 1Level 2Level 3
Assets:
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 
(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, 2022
Hierarchy Level
Carrying ValueLevel 1Level 2Level 3
Assets:
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 
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We believe that the carrying values reflected inA.    Financial Instruments Not Measured at Fair Value on our consolidated balance sheets reasonably approximate theConsolidated Balance Sheets
The fair values forvalue of short-term financial instruments such as cash and cash equivalents, accounts receivable, escrow deposits, loans receivable,accounts payable, distributions payable, line of credit payable and commercial paper borrowings, term loans and all other liabilities approximate their carrying value in the accompanying consolidated balance sheets, due to their short-term nature ornature. The aggregate fair value of our term loans approximates carrying value due to the frequent repricing of the variable interest ratesrate charged on the borrowing.
The following table reflects the carrying amounts and terms that are consistent with market, except forestimated fair values of our mortgages payable assumed in connection with acquisitions andfinancial instruments not measured at fair value on our senior notes and bonds payable, which are disclosed as follows (dollars inconsolidated balance sheets (in millions):

At December 31, 2020Carrying valueEstimated fair value
Mortgages payable assumed in connection with acquisitions (1)
$299.6 $309.4 
Notes and bonds payable (2)
8,302.4 9,324.0 
At December 31, 2019Carrying valueEstimated fair value
Mortgages payable assumed in connection with acquisitions (1)
$408.4 $417.7 
Notes and bonds payable (2)
6,317.6 6,826.1 
December 31, 2023December 31, 2022
Carrying valueFair valueCarrying valueFair value
Mortgages 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 
((1)1)Excludes non-cash net premiums or discounts recorded on the mortgages payable. The unamortized balance of these net premiums is $1.7discounts was $0.4 million at December 31, 2020,2023, and $3.0$12.4 million of net premiums at December 31, 2019.2022. Also excludes deferred financing costs of $973,000 at December 31, 2020, and $1.3$0.4 million at December 31, 2019.2023, and $0.8 million at December 31, 2022.
(2)Excludes non-cash original issuancenet premiums and discounts recorded on notes payable. The unamortized balance of the net original issuance premiums was $14.6$125.3 million at December 31, 2020,2023, and $6.3$224.6 million at December 31, 2019.2022. Also excludes deferred financing costs of $49.2$83.8 million and a favorable basis adjustment on interest rate swaps designated as fair value hedges of $1.3 million at December 31, 20202023, and $35.9$60.7 million of deferred financing costs at December 31, 2019.

2022.
The estimated fair values of our mortgages payable assumed in connection with acquisitions 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 three on3 of the three-level valuationfair 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 two2 of the fair value hierarchy.
B.    Financial Instruments Measured at Fair Value on the three-level valuation hierarchy.
The following table summarizes the terms and fair values of our derivative financial instruments at December 31, 2020 and 2019 (dollars in millions):
Derivative TypeAccounting ClassificationHedge DesignationNotional AmountStrikeEffective DateMaturity DateFair Value - asset (liability)
December 31,December 31,December 31,December 31,
2020201920202019
Interest rate swap (1)
DerivativeCash flow$$7.06.03%09/25/201209/03/2021$$(0.2)
Interest rate swapDerivativeCash flow250.01.72%06/30/201506/30/2020(0.1)
Interest rate swapDerivativeCash flow250.0 250.03.04%10/24/201803/24/2024(22.6)(14.7)
Cross-currency swap (2)
DerivativeCash flow41.6 41.6(3)05/20/201905/22/2034(5.2)(2.6)
Cross-currency swap (2)
DerivativeCash flow41.6 41.6(4)05/20/201905/22/2034(5.1)(2.6)
Cross-currency swap (2)
DerivativeCash flow41.6 41.6(5)05/20/201905/22/2034(5.4)(2.9)
Cross-currency swap (2)
DerivativeCash flow41.6 41.6(6)05/20/201905/22/2034(5.7)(3.2)
Currency exchange swap (2)
DerivativeN/A625.0 0(7)12/23/202001/29/2021(8.2)0
Forward-starting swapDerivativeCash flow75.0 02.02%(8)06/30/2033(5.0)0
Forward-starting swapDerivativeCash flow75.0 01.94%(8)11/30/2032(5.2)0
Forward-starting swapDerivativeCash flow25.0 01.67%(8)11/30/2032(1.1)0
Forward-starting swapDerivativeCash flow125.0 01.75%(8)06/30/2033(5.2)0
Forward-starting swapHybrid debtCash flow125.0 01.88%(8)11/30/2032(7.9)0
Forward-starting swapHybrid debtCash flow75.0 02.00%(8)06/30/2033(4.9)0
$1,541.4 $673.4$(81.5)$(26.3)
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a Recurring Basis
(1)In connection with the early prepayment of a mortgage loan during the fourth quarter of 2020, the swap was terminated with a payment of $0.2 millionFor derivative assets and liabilities, we recognized an associated loss on derivative of $0.2 million.
(2)Represents British Pound Sterling, or GBP, United States Dollar, or USD, cross-currency swap.
(3)GBP fixed rates initially at 4.82% and escalating to 10.96%, and USD fixed rate at 9.800%.
(4)GBP fixed rates initially at 4.82% and escalating to 10.96%, and USD fixed rate at 9.803%.
(5)GBP fixed rates initially at 4.82% and escalating to 10.96%, and USD fixed rate at 9.745%.
(6)GBP fixed rates initially at 4.82% and escalating to 10.96%, and USD fixed rate at 9.755%.
(7) The forward GBP-USD exchange rate is 1.35.
(8) The 5 treasury rate locks which were entered into during February 2020 were terminated in June 2020 and converted into 6 forward startingmay utilize interest rate swaps, through a cashless settlement of the terminated treasury rate locks.
We measure our derivatives at fair value and include the balances within other assets 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.
We utilize interest rate swap agreementsswaptions, 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. volatility.
To comply with the provisions of ASC 820, Fair Value Measurement, we incorporateDerivative 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 two2 on the three-level valuationfair 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, 20202023, and 2019,2022, 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 twotwo. 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.
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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,
202320222021
Carrying 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 
(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.
14.    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 three-level valuation hierarchy.
Unrealized gains and lossesforward contracts are included in AOCI are reclassifiedthe 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 casefixed 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 gainsrisk 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 losses, netcross-currency basis spread from the assessment of hedge effectiveness (the "excluded component"). Changes in the casefair value of the cross-currency swaps when the related hedged itemsattributable to these excluded components are recognized. During 2020, we reclassified $11.4 million from AOCI as an increaserecorded to interest expense for our interest rate swapsother comprehensive income and $3.6 million for 2020subsequently recognized in cross-currency swap losses into foreign'Foreign currency and derivative gains, net. (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 2019,the fourth quarter of 2023, we reclassified $3.4 million from AOCIdesignated the three existing cross-currency swaps that had not been designated as an increasehedging instruments through the third quarter of 2023 as net investment hedges to interest expensemitigate 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
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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 our interest rate swaps and $5.5 million for 2019 in cross-currency swap losseswhether 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 foreigncurrency 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 gains, net. During 2018, there were no(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 Type
Number of Instruments (1)
Notional Amount as of
Weighted Average Strike Rate (2)
Maturity Date (3)
Fair Value - asset (liability) as of
Derivatives Designated as Hedging InstrumentsDecember 31, 2023December 31, 2022December 31, 2023December 31, 2022
Interest 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 Instruments
Currency 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 
(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 $280 million of three cross-currency swaps as net investment hedges in December 2023.
(6)USD fixed rate of 5.625% and EUR weighted average fixed rate of 4.681%.
(7)USD fixed rate of 5.625% and EUR weighted average fixed rate of 4.716%.
(8)Weighted average forward GBP-USD exchange rate of 1.30.
(9)Weighted average exchange rates of 1.27 for GBP-USD and 0.86 for EUR-GBP.
We measure our derivatives designated as hedgesat fair value and accounted for through AOCI. As a result, there were no amountsinclude the balances within 'Other assets, net' and 'Accounts payable and accrued expenses' on our consolidated balance sheets.
We have agreements with each of our derivative counterparties containing provisions under which we could be declared in default on our derivative obligations if repayment of our indebtedness is accelerated by the lender due to reclassifyour default.
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The following table summarizes the amount of unrealized gain (loss) on derivatives and foreign currency translation adjustments in other comprehensive income (in thousands):
Years ended December 31,
Derivatives in Cash Flow Hedging Relationships202320222021
Cross-currency swaps$— $(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 $50,448 
Derivatives in Fair Value Hedging Relationships
Cross-currency swaps - Fair Value$(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 $50,448 
Derivatives in Net Investment Hedging Relationships
Cross-currency swaps - Net Investment$(4,272)$— $— 
Total unrealized loss recorded in foreign currency translation adjustment$(4,272)$— $— 
The following table summarizes the amount of gain (loss) on derivatives reclassified from AOCI during 2018.(in thousands):

Years ended December 31,
Derivatives in Cash Flow Hedging RelationshipsLocation of Gain (Loss) Recognized in Income202320222021
Cross-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 Relationships
Cross-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 Relationships
Cross-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)
We expect to reclassify $10.3$8.0 million from AOCI as an increasea decrease to interest expense relating to interest rate swaps and $1.0interest rate swaptions and $3.6 million from AOCI to foreign currency gain relating to cross-currency swapsforeign currency forwards within the next twelve months.

15.Supplemental Disclosures of Cash Flow Information
Cash paid for interest was $285.6 million in 2020, $275.3 million in 2019, and $251.5 million in 2018.
Cash paid for income taxes was $13.1 million in 2020, $4.2 million in 2019, and $4.7 million in 2018.
The following non-cash activities are included in the accompanying consolidated financial statements:

A. During 2020, the fair value of derivatives decreased by $55.2 million.

B. Non-refundable deposits from 2019 of $13.8 million were applied to acquisitions during 2020.
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C. As
The following table details our foreign currency and derivative gains (losses), net included in income (in thousands):
Years ended December 31,
202320222021
Realized 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 
15.    LessorOperating Leases
At December 31, 2023, we owned or held interests in 13,458properties. Of the 13,458 properties, 13,197, or98.1%, 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 resultpercentage 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 Payments
Future 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 
(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 adoptionlease payments. Amounts reflected are the cash rent on these respective properties.Twoproperties are subject to sales-type leases and, therefore, revenue is recognized as sales-type lease income on the discounted cash flows of Accounting Standards Codifications Topic 842, Leases,the lease payments. Amounts reflected are the cash rent on January 1, 2019, we recorded $132.0 millionthese respective properties.
No individual client’s rental revenue, including percentage rents, represented more than 10% of lease liabilitiesour total revenue for each of the years ended December 31, 2023, 2022, and related right2021.
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D. During 2019, we issued 89,322
16.    Distributions Paid and Payable
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:
202320222021
January$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 
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:
 202320222021
Ordinary 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 
(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.
17.    Net Income per Common Share
Basic net income per common share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during each period. Diluted net income per common share is computed by dividing net income available to common stockholders, plus income attributable to dilutive shares and convertible common units for the period, by the weighted average number of common shares that would have been outstanding assuming the issuance of common shares for all potentially dilutive common shares outstanding during the reporting period.
The following is a reconciliation of the denominator of the basic net income per common share computation to the denominator of the diluted net income per common share computation (shares in thousands):
Years ended December 31,
202320222021
Weighted average shares used for the basic net income per share computation692,298 611,766 414,535 
Incremental shares from share-based compensation349 395 235 
Dilutive effect of forward ATM offerings377 20 — 
Weighted average shares used for diluted net income per share computation693,024 612,181 414,770 
Unvested shares from share-based compensation that were anti-dilutive117 32 45 
Weighted average partnership common units convertible to common shares that were anti-dilutive1,795 1,292 500 
Weighted average forward ATM offerings that were anti-dilutive759 644 — 
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18.    Supplemental Disclosures of Cash Flow Information
The following table summarizes our supplemental cash flow information during the periods indicated below (in thousands):
Years ended December 31,
202320222021
Supplemental disclosures:
Cash paid for interest$692,004 $501,716 $355,483 
Cash paid for income taxes$12,283 $45,031 $19,676 
Cash paid for merger and integration-related costs$11,329 $22,783 $157,115 
Non-cash activities:
Net (decrease) increase in fair value of derivatives$(116,145)$58,753 $40,489 
Increase in noncontrolling interests from property acquisitions$39,156 $— $— 
Mortgages assumed at fair value (1)
$— $45,079 $911,525 
Notes payable assumed at fair value$— $— $4,946,965 
Issuance of common partnership units of Realty Income, L.P. (2)
$— $51,221 $38,783 
Non-cash assets and liabilities assumed in merger$— $— $11,559,875 
Non-cash assets and liabilities distributed in Orion Divestiture$— $— $1,142,121 
(1) For the year ended December 31, 2021, includes £31.0 million Sterling, converted at the applicable exchange rate on the date of transaction, for one mortgage and $869.1 million, estimated at fair value, for ten mortgages from our merger with VEREIT.
(2) For the year ended December 31, 2022, includes 734,458 common partnership units of Realty Income L.P. totaling $6.3 million, as partial consideration for an acquisition of properties.

E. During 2019, we recorded $5.1 million to noncontrolling intereststhat were issued in connection with the acquisition of nine properties. For the year ended December 31, 2021, includes $1.8 million for the issuance of 56,400 units on November 1, 2021 that were a controlling interest inresult of our merger with VEREIT, $20.4 million for the issuance of 300,604 units on November 30, 2021 that were a consolidated joint venture.

F. During 2019, we assumed mortgages payable to the third-party lenders of $130.8 million.

G.  During 2018, we issued 373,797 common partnership units of Realty Income, L.P. as partial consideration for an acquisition of properties, totaling $18.8 million.and $16.6 million for the issuance of 240,586 units on December 30, 2021 that were issued to a new partner in connection with an industrial property contribution.

H. During 2018, we completed the acquisition of a property using $7.5 million in funds that were held in a non-refundable escrow account.

Per the requirements of ASU 2016-18 (Topic 230, Statement of Cash Flows)theThe following table provides a reconciliation of cash and cash equivalents reported within theon our consolidated balance sheets to the total of the cash, cash equivalents, and restricted cash reported within theour consolidated statements of cash flows (dollars in(in thousands):
December 31, 2023December 31, 2023December 31, 2022
Cash and cash equivalents shown in the consolidated balance sheets
Cash and cash equivalents shown in the consolidated balance sheets
December 31, 2020December 31, 2019
Cash and cash equivalents shown in the consolidated balance sheetsCash and cash equivalents shown in the consolidated balance sheets$824,476 $54,011 
Restricted escrow deposits (1)
Restricted escrow deposits (1)
21,220 4,529 
Impounds related to mortgages payable (1)
Impounds related to mortgages payable (1)
4,983 12,465 
Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flowsTotal cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows$850,679 $71,005 
(1) Included within other'other assets, netnet' on theour consolidated balance sheets (see note 3)3, Supplemental Detail for Certain Components of Consolidated Balance Sheets). These amounts consist of cash that we are legally entitled to, but that is not immediately available to us. As a result, these amounts were considered restricted as of the dates presented.
16.19.    Common Stock Incentive Plan
In 2012,March 2021, our Board of Directors adopted, and in May 2021, stockholders approved, the Realty Income Corporation 20122021 Incentive Award Plan or the 2012 Plan, to enable us to motivate, attract and retain the services of directors and employees considered essential to our long-term success.(the "2021 Plan"). The 20122021 Plan offers our directors, employees, and employeesconsultants an opportunity to own our stock and/or rights that will reflect our growth, development and financial success. Under the terms of the 2012 plan,Except as noted below, the aggregate number of shares of our common stock subject to options, restricted stock purchase rights ("SPR"), stock appreciation rights restricted stock units, performance shares("SAR"), and other awards, will be no more than 3,985,7348.9 million shares. The maximum number of shares that may be subject to options, SPR, SAR and other awards granted under the plan to any individual in any calendar year may not exceed 3.2 million, and the maximum aggregate amount of cash that may be paid in cash during any calendar year with respect to one or more shares payable in cash shall be $10.0 million. The 2021 Plan replaced the Realty Income Corporation 2012 Incentive Award Plan (the"2012 Plan"), which was set to expire in March 2022 and from which no further awards have been granted. The disclosures below incorporate activity for both the 2012 Plan has a termand the 2021 Plan.
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In connection with our merger with VEREIT, shares which remained available for issuance under the VEREIT, Inc. 2021 Equity Incentive Plan immediately prior to the closing of the merger (as adjusted by the Exchange Ratio) may be used for awards under the 2021 Plan and will not reduce the shares authorized for grant under the 2021 Plan, to the extent that awards using such shares (i) are permitted without stockholder approval under applicable stock exchange rules, (ii) are made only to VEREIT service providers or individuals who become Realty Income service providers following the date of the consummation of the merger, and (iii) are only granted under the 2021 Plan during the period commencing on the date of the consummation of the merger and ending on June 2, 2031. As a result, 6.2 million additional shares were available for issuance under the 2021 Plan.
The amount of share-based compensation costs recognized in general'General and administrative expense onadministrative' in our consolidated statements of income and comprehensive income was $16.5$26.2 million, $21.6 million, and $16.2 million during 2020, $13.7the years ended December 31, 2023, 2022, and 2021, respectively.
Also, in connection with the merger, each outstanding VEREIT, Inc. 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 shares of the Company's common stock, using the equity award exchange ratio in accordance with the merger agreement. The converted awards issued by Realty Income have identical terms to the original VEREIT, Inc. award grant. On November 1, 2021, we issued 0.4 million during 2019shares of Realty Income common stock in settlement of equity awards that vested upon the separation of certain former-VEREIT employees and $27.3 million during 2018.

Upondirectors in connection with the departuremerger. This issuance is excluded from the Restricted Stock Units and Stock Options sections below, as the awards were not granted under the 2021 Plan. The aggregate fair value of our former CFO in March 2020, we incurred a severance charge of $3.5 million, consisting of $1.6the converted awards was $71.6 million, of cash, $1.8which i.) $44.0 million related to pre-combination services and is included in the consideration transferred in the merger ii.) $25.6 million of share-basedexpense was recognized during November in merger and integration-related costs related to the acceleration of vesting upon the separation of certain employees in connection with the merger, and iii.) $2.0 million will be amortized through general and administrative expenses over the remaining vesting term for former VEREIT, Inc. employees who were retained by Realty Income. The following disclosures are inclusive of converted awards for former VEREIT employees continuing as employees of Realty Income, which are reflected as grants, as the replacement awards represent newly issued awards settled in Realty Income common shares.
In connection with the Orion Divestiture, each stock option, restricted stock unit and performance award outstanding at November 12, 2021 was entitled to an equitable adjustment equal to the ratio of the five-day volume weighted average per-share price of Realty Income common stock prior to the Orion Divestiture divided by the five-day volume weighted average per-share of Realty Income common stock following the Orion Divestiture, resulting in an adjustment factor of approximately 1.002342. The equitable adjustment was considered a modification in accordance with the provisions of ASC 718, Compensation-Stock Compensation. As a result, we compared the fair value of each award immediately prior to the equitable adjustment to the fair value immediately after the equitable adjustment to measure incremental compensation cost, if any. The equitable adjustment did not result in any incremental fair value. Therefore, no stock-based compensation expense and $58,000was recorded as of professional fees.

Upon the departure of our former CEO in October 2018, we incurred a severance charge of $28.3 million, consisting of $9.8 million of cash, $17.9 million of share-based compensation expense and $574,000 of professional fees. The incremental severance of $18.7 million consistsresult of the $28.3 million total severance charge reduced by $9.6 millionmodification. The following disclosures are inclusive of compensation accrued prior to separation. The net amount of accelerated equity awards expensed in 2018 related to his departure was $11.8 million.

these adjustments, which has been labeled 'Equitable adjustment - Orion Divestiture' throughout.





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A.    Restricted Stock
The following table summarizes our common stock grant activity under our 2012 Plan.activity:
202020192018 202320222021
Number of shares
Weighted average price(1)
Number of shares
Weighted average price(1)
Number of shares
Weighted average price(1)
Number of sharesNumber of shares
Weighted average price (1)
Number of shares
Weighted average price (1)
Number of shares
Weighted average price (1)
Outstanding nonvested shares, beginning of yearOutstanding nonvested shares, beginning of year259,698 $58.39 307,821 $53.44 475,768 $52.32 
Shares granted103,473 $67.84 87,327 $69.83 183,952 $52.21 
Shares granted (2)
Shares vestedShares vested(141,486)$56.94 (126,363)$54.45 (310,706)$51.05 
Shares forfeitedShares forfeited(2,203)$66.48 (9,087)$55.71 (41,193)$53.06 
Outstanding nonvested shares, end of each periodOutstanding nonvested shares, end of each period219,482 $63.69 259,698 $58.39 307,821 $53.44 
(1) Grant date fair value.
(2) Our restricted stock awards granted to employees vest over a service periods not exceeding four-years. Additionally effective November 1, 2022, and applied retroactively for all outstanding awards, we have a retirement provision whereby the vesting date for eligible participants is accelerated based on certain criteria.
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The vesting schedule for shares granted to non-employee directors is as follows:

For directors with less than six years of service at the date of grant, shares vest in 33.33% annual increments upon re-election to the Board at each of the three Annual Meetings of Stockholders following the grant date;
For directors with six years of service at the date of grant, shares vest in 50% annual increments upon re-election to the Board at each of the two Annual Meetings of Stockholders following the grant date;
For directors with seven years of service at the date of grant, shares are 100% vested upon re-election to the Board in the following year; and
For directors with eight or more years of service at the date of grant, there is immediate vesting as of the date the shares of stock are granted.

During May 2020,For the years ended December 31, 2023, 2022, and 2021, respectively, we granted 40,000, 40,000, and 36,000 total shares of restricted stock granted to the independent members of our Board of Directors in connection with our annual awards in May 2023, 2022 and 2021, respectively. In addition, in November 2021, we granted 8,000 shares of restricted stock to the new members of our Board of Directors, which vest in equal parts over a three-year service period. In connection with our annual awards, 20,000, 20,000, and 24,000 shares vested immediately and 20,000, 20,000, and 12,000 shares vest in equal parts over a three-year service period.period for the years ended December 31, 2023, 2022, and 2021, respectively.
Our restricted stock awards granted to employees typically vest annually in equal parts over a four-year service period. During 2020, 67,473 shares were granted to our employees, and vest over a four-year service period, with the exception of 4,541 shares granted to our former CFO, which vested upon his departure from the Company.
As of December 31, 2020,2023, the remaining unamortized share-based compensation expense related to restricted stock totaled $8.6$14.9 million, which is being amortized on a straight-line basis over the service period of each applicable award.The amount of share-based compensation is based on the fair value of the stock at the grant date. We define the grant date as the date the recipient and Realty Income have a mutual understanding of the key terms and conditions of the award, and the recipient of the grant begins to benefit from, or be adversely affected by, subsequent changes in the price of the shares.
B.    Restricted Stock Units
During 2023, 2022 and 2021, and in connection with our merger with VEREIT Inc., we also granted restricted stock units that primarily vest over service periods of three or four-years and have the same economic rights as shares of restricted stock:

B.    Performance Shares
 202320222021
Number of restricted stock units
Weighted average price (1)
Number of restricted stock units
Weighted average price (1)
Number of restricted stock units
Weighted average price (1)
Outstanding nonvested shares, beginning of year58,513 $67.91 67,367 $69.69 18,670 $70.38 
Equitable adjustment - Orion Divestiture (2)
— — 109 
Shares granted15,065 $66.41 24,820 $66.82 71,956 $68.96 
Shares vested(29,492)$70.30 (26,917)$70.55 (23,368)$66.96 
Shares forfeited(1,474)$71.02 (6,757)$71.14 — 
Outstanding nonvested shares, end of each period42,612 $65.62 58,513 $67.91 67,367 $69.69 
(1) Grant date fair value.
(2) Effective with the Orion Divestiture on November 12, 2021, outstanding equity awards were adjusted by a conversion ratio of 1.002342 per one Realty Income share then held.
As of December 31, 2023, the remaining share-based compensation expense related to the restricted stock units totaled $1.1 millionand is being recognized on a straight-line basis over the service period. The amount of share-based compensation for the restricted stock units is based on the fair value of our common stock at the grant date. The expense amortization period for restricted stock units is the lesser of the four-year service period or the period over which the awardee reaches the qualifying retirement age. For employees who have already met the qualifying retirement age, restricted stock units are fully expensed at the grant date.
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C.    Performance Shares
During 2020, 20192023, 2022 and 2018,2021, we granted annual performance share awards, as well as dividend equivalent rights, to our executive officers. The number of performance shares that vest for each of the three years is based on the achievement of the following performance goals:
Weighting for year granted
Performance Awards Metrics20202019 2018
Total shareholder return (“TSR”) ranking relative to MSCI US REIT Index70 %45 % 45 %
TSR ranking relative to J.P. Morgan Net Lease Peer GroupN/A26 % 26 %
Dividend per share Growth Rate15 %16 % 16 %
Debt-to-Adjusted EBITDAre Ratio
N/A13 %13 %
Net Debt-to-Adjusted EBITDAre Ratio
15 %N/A N/A
Weighting for year granted
Annual Performance Awards Metrics202320222021
Total shareholder return (“TSR”) ranking relative to MSCI US REIT Index55 %55 %70 %
Dividend per share growth rate20 %20 %15 %
Net Debt-to-Pro Forma Adjusted EBITDAre Ratio
25 %25 %N/A
Net Debt-to-Adjusted EBITDAre Ratio
N/AN/A15 %
The annual performance shares are earned based on our performance related to our metrics above, and vest 50% on the first and second January 1 after the end of the three-year performance period, subject to continued service. The performance period for the 20182021 performance awards began on January 1, 20182021 and ended on December 31, 2020.
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2023. The performance period for the 20192022 performance awards began on January 1, 20192022 and will end on December 31, 2021.2024. The performance period for the 20202023 performance awards began on January 1, 20202023 and will end on December 31, 2022.2025.

On November 15, 2021, the Compensation Committee approved a one-time grant of performance share awards and a one-time cash bonus to certain of our named executives in connection with the completion of our merger with VEREIT and the transactions contemplated thereby, including the Orion Divestiture (the "VEREIT Transaction"). The awards were made to reward the executives for the successful consummation of the VEREIT Transaction and were intended to retain and motivate the executives to achieve optimal synergies and incentivize further growth from the merger. The performance shares were earned based on our performance related to Adjusted Funds from Operations Available to Common Stockholders ("AFFO") accretion (50% weighting) and general and administrative expense synergies (50% weighting), and vested 50% upon the completion of the performance period.
The remaining 50% vested on the one-year anniversary of the completion of the applicable performance period. All vesting is subject to continued service. The performance period was one year for the AFFO accretion targets from January 1, 2022 to December 31, 2022, and was two years for the general and administrative expense synergies from January 1, 2022 to December 31, 2023.
The fair value of the performance shares was estimated on the date of grant using a Monte Carlo Simulation model. The following table summarizes our performance share grant activity:
 202020192018
Number of performance shares
Weighted average price(1)
Number of performance shares
Weighted average price(1)
Number of performance shares
Weighted average price(1)
Outstanding nonvested shares, beginning of year304,663 $62.25 223,392 $58.78 245,309 $62.49 
Shares granted136,729 $79.98 128,581 $65.34 269,868 $51.98 
Shares vested(139,012)$63.66 (47,310)$54.27 (291,785)$54.88 
Shares forfeited(10,621)$66.64 $$
Outstanding nonvested shares, end of each period291,759 $69.73 304,663 $62.25 223,392 $58.78 
(1) Grant date fair value.

Asvalue of December 31, 2020, the remaining share-based compensation expense related to theone-time performance shares totaled $8.9 million and is being recognized on a tranche-by-tranche basis over the service period.
C.    Restricted Stock Units
During 2020, 2019 and 2018 we also granted restricted stock units that primarily vest over a four-year service period and have the same economic rights as shares of restricted stock:
 202020192018
Number of restricted stock units
Weighted average price(1)
Number of restricted stock units
Weighted average price(1)
Number of restricted stock units
Weighted average price(1)
Outstanding nonvested shares, beginning of year15,511 $59.82 14,968 $54.62 24,869 $55.97 
Shares granted9,966 $78.79 5,482 $69.58 8,383 $49.96 
Shares vested(6,807)$58.63 (4,939)$54.90 (10,118)$55.01 
Shares forfeited$$(8,166)$53.45 
Outstanding nonvested shares, end of each period18,670 $70.38 15,511 $59.82 14,968 $54.62 
(1) Grant date fair value.

The amount of share-based compensation for the restricted stock units iswas based on the fair value of our common stock at the grant date.date and is dependent on the probability of satisfying the performance conditions stipulated in the award grant. The expense amortization period isfollowing table summarizes our performance share grant activity, inclusive of annual performance shares and the lesserone-time performance shares related to the merger with VEREIT:
202320222021
Number of performance shares
Weighted average price (1)
Number of performance shares
Weighted average price (1)
Number of performance shares
Weighted average price (1)
Outstanding nonvested shares, beginning of year470,880 $73.37 388,139 $68.09 291,759 $69.73 
Equitable adjustment - Orion Divestiture (2)
— — 752 
Shares granted215,040 $73.32 174,940 $77.73 257,149 $64.18 
Shares vested(124,151)$76.59 (74,247)$59.62 (109,113)$62.52 
Shares forfeited— $— (17,952)$58.59 (52,408)$65.83 
Outstanding nonvested shares, end of each period561,769 $72.64 470,880 $73.37 388,139 $68.09 
(1) Grant date fair value.
(2) Effective with the Orion Divestiture on November 12, 2021, outstanding equity awards were adjusted by a conversion ratio of the four-year service period or the period over which the awardee reaches the qualifying retirement age. For employees who have already met the qualifying retirement age, restricted stock units are fully expensed at the grant date. 1.002342 per one Realty Income share then held.
As of December 31, 2020,2023, the remaining share-based compensation expense related to the restricted stock unitsperformance shares totaled $399,000 $17.4 millionand is being recognized on a tranche-by-tranche basis over the service period.
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D.    Stock Options
In connection with our merger with VEREIT in 2021, 709,426 stock options were converted with a weighted average exercise price of $53.80 per option. There were no outstanding stock options prior to the VEREIT merger, and no additional stock options have since been granted.
The fair value of the stock options as of their grant date is determined using the Black-Scholes option pricing model, which requires the input of assumptions including expected terms, expected volatility, dividend yield and risk-free rate.
As of December 31, 2023, we had 28,343 outstanding nonvested stock options with a weighted average exercise price of $54.50 per option. Their weighted average remaining contractual term is 4.8 years.
Compensation expense for stock options is recognized on a straight-line basis over the service period.

period described above. During the years ended December 31, 2023, we recorded no expense related to stock options. During each of the years ended December 31, 2022 and 2021, we recorded less than $0.1 million of expense related to stock options. As of December 31, 2023, there was no unamortized expense relating to our outstanding stock options.
17.Segment Information
We evaluate performance and make resource allocation decisions on an industry by industry basis. For financial reporting purposes, we have grouped our clients into 51 activity segments. All of the properties are incorporated into one of the applicable segments. Unless otherwise specified, all segments listed below are located within the U.S. Because substantially all of our leases require our clients to pay or reimburse us for operating expenses, rental revenue is the only component of segment profit and loss we measure. Our investments in industries outside of the U.S. are managed as separate operating segments.






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The following tables set forth certain information regarding the properties owned by us, classified according to the business of our respective clients (dollars in thousands):

Assets, as of December 31:20202019
Segment net real estate:  
Automotive service$328,340 $288,453 
Beverages347,366 279,373 
Child care216,718 208,326 
Convenience stores2,101,005 2,057,157 
Dollar stores1,420,210 1,427,950 
Drug stores1,555,106 1,618,854 
Financial services374,508 389,634 
General merchandise730,806 475,418 
Grocery stores - U.S.907,634 922,349 
Grocery stores - U.K.1,131,760 663,210 
Health and fitness1,050,791 1,019,796 
Home improvement - U.S.608,222 495,305 
Restaurants-casual dining515,226 576,526 
Restaurants-quick service1,062,918 1,059,155 
Theaters - U.S.767,117 878,103 
Transportation services729,640 769,614 
Wholesale club407,584 396,690 
Other non-reportable segments3,230,205 2,970,859 
Total segment net real estate17,485,156 16,496,772 
Intangible assets:
Automotive service55,018 58,854 
Beverages9,401 1,509 
Child care19,848 21,997 
Convenience stores121,151 131,808 
Dollar stores77,176 82,701 
Drug stores167,975 183,319 
Financial services14,611 17,130 
General merchandise108,646 66,135 
Grocery stores - U.S.181,764 180,197 
Grocery stores - U.K.282,211 153,407 
Health and fitness67,537 74,428 
Home improvement - U.S.97,228 72,979 
Restaurants-casual dining20,553 23,289 
Restaurants-quick service47,517 52,353 
Theaters - U.S.28,292 36,089 
Transportation services53,902 66,055 
Wholesale club36,165 23,372 
Other non-reportable segments321,660 247,761 
Other corporate assets1,544,474 564,641 
Total assets$20,740,285 $18,554,796 










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Revenue for the years ended December 31,202020192018
Segment rental revenue:   
Automotive service$35,090 $32,365 $28,303 
Beverages32,771 31,807 31,488 
Child care35,643 31,749 21,865 
Convenience stores189,658 166,755 142,194 
Dollar stores126,719 102,695 94,782 
Drug stores140,993 127,853 129,565 
Financial services30,531 30,189 29,429 
General merchandise49,352 35,366 29,249 
Grocery stores - U.S.78,106 69,691 63,594 
Grocery stores - U.K.51,459 17,819 
Health and fitness104,744 105,896 94,638 
Home improvement - U.S.46,392 42,351 37,939 
Restaurants-casual dining46,265 45,238 46,171 
Restaurants-quick service88,163 92,018 72,465 
Theaters - U.S.78,653 87,698 70,560 
Transportation services64,131 66,500 63,565 
Wholesale club38,713 38,117 37,571 
Other non-reportable segments and contractually obligated reimbursements by our clients402,150 360,711 328,168 
Rental (including reimbursable)1,639,533 1,484,818 1,321,546 
Other12,092 6,773 6,292 
Total revenue$1,651,625 $1,491,591 $1,327,838 

18.20.    Commitments and Contingencies
In the ordinary course of business, we are party to various legal actions which we believe are routine in nature and incidental to the operation of our business. We believe that the outcome of the proceedings will not have a material adverse effect upon our consolidated financial position or results of operations.
At December 31, 2020,2023, we had commitments of $6.8$32.7 million, forwhich primarily relate to re-leasing costs, recurring capital expenditures, and non-recurring building improvements. In addition, as of December 31, 2020,2023, we had committed $100.0$740.0 million under construction contracts related to development projects, which is expected to be paid in the next twelve months.

have estimated rental revenue commencement dates between January 2024 and January 2025.
We have certain properties that are subject to ground leases, which are accounted for as operating leases.

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At December 31, 2020,2023, minimum future rental payments for the next five years and thereafter are as follows (dollars in(in millions):
Ground Leases
Paid by
Realty Income (1)
Ground Leases
Paid by
Our Clients (2)
Total
2021$1.6 $13.7 $15.3 
20221.6 13.6 15.2 
20231.6 13.7 15.3 
20241.6 13.8 15.4 
20251.4 13.5 14.9 
Thereafter18.8 55.9 74.7 
Total$26.6 $124.2 $150.8 
Present value adjustment for remaining lease payments (3)
(36.2)
Lease liability - operating leases, net$114.6 
(1)Realty Income currently pays the ground lessors directly for the rent under the ground leases.
(2)Our clients, who are generally sub-tenants under the ground leases, are responsible for paying the rent under these ground leases.  In the event a client fails to pay the ground lease rent, we are primarily responsible.
Operating LeasesFinance
 Leases
Total
2024$39.4 $5.3 $44.7 
202538.8 3.6 42.4 
202638.0 9.2 47.2 
202735.5 1.5 37.0 
202831.9 1.5 33.4 
Thereafter497.5 48.9 546.4 
Total$681.1 $70.0 $751.1 
Present value adjustment for remaining lease payments (1)
(255.9)(25.7)
Total lease liability$425.2 $44.3 
(31The range of discount rates used to calculate the present value of the lease payments is 2.42% to 5.50%. At December 31, 2020, the weighted average discount rate is 4.29% and the weighted average remaining lease term is 11.5 years. The discount rates are derived using a hypothetical corporate credit curve for the ground leases based on our outstanding senior notes and relevant market data. The discount rates are specific for individual leases primarily based on the lease term.

The range of discount rates used to calculate the present value of the operating lease payments is 0.94% to 6.42% and for finance lease payments is 1.14% to 6.21%. The weighted average discount rate was derived from estimated incremental borrowing rates based on our credit quality, as we did not have any borrowings at the balance sheet date with comparable terms to our lease agreements. At December 31, 2023, the weighted average discount rate for operating leases is 3.66% and the weighted average remaining lease term is 23.1 years. At December 31, 2023, the weighted average discount rate for finance leases is 3.47% and the weighted average remaining lease term is 22.6 years.
19.21.    Subsequent Events
A.     Dividends
In January and February 2021,2024, we declared a dividend of $0.2345,$0.2565 per share to our common stockholders, which was paid in February 2024. In addition, in February 2024, we declared a dividend of $0.2565, which will be paid in February 2021 and March 2021, respectively.
In January 2021, we completed the early redemption of our outstanding 3.250% notes due October 2022, for a redemption price of approximately $1.004 billion, consisting of the principal of $950.0 million, call premium of $47.2 million and accrued and unpaid interest of $7.1 million.
In January 2021, we raised $669.6 million from the issuance of 12,075,000 shares of common stock in an underwritten public offering, which included the underwriters' options to purchase 1,575,000 additional shares.

2024.
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REALTY INCOME CORPORATION AND SUBSIDIARIES
CONSOLIDATED QUARTERLY FINANCIAL DATA
(dollars in thousands, except per share data) (unaudited)
(not covered by Report of Independent Registered Public Accounting Firm)
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
Year
2020     
Total revenue(1)
$414,341 $414,636 $404,572 $418,076 $1,651,625 
Depreciation and amortization expense164,585 168,328 169,084 175,041 677,038 
Interest expense75,925 77,841 76,806 78,764 309,336 
Other expenses(2)
53,811 62,222 151,611 72,099 339,743 
Net income147,143 108,070 23,143 118,150 396,506 
Net income available to common stockholders146,827 107,824 22,904 117,931 395,486 
Net income per common share     
Basic0.44 0.31 0.07 0.33 1.15 
Diluted0.44 0.31 0.07 0.33 1.14 
Dividends paid per common share0.6925 0.6990 0.7005 0.7020 2.7940 
2019     
Total revenue$354,365 $365,450 $374,247 $397,529 $1,491,591 
Depreciation and amortization expense137,517 150,426 149,424 156,594 593,961 
Interest expense70,020 72,488 73,410 75,073 290,991 
Other expenses(2)
42,861 54,143 52,139 52,269 201,412 
Net income111,230 95,420 101,275 129,553 437,478 
Net income available to common stockholders110,942 95,194 101,049 129,297 436,482 
Net income per common share
Basic and diluted0.37 0.31 0.32 0.39 1.38 
Dividends paid per common share0.6720 0.6780 0.6795 0.6810 2.7105 
(1) Total revenue for the second half of 2020 was negatively impacted by rent reserves recorded as reductions of rental revenue.
(2) Other expenses can vary among quarters, primarily due to provisions for impairment, gains on sales of real estate, and foreign currency gains and losses.


B.     Agreement and Plan of Merger
On January 23, 2024, we completed our acquisition of Spirit in an all-stock transaction. Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, the transaction was subject to the approval of Spirit’s stockholders and satisfaction of other customary closing conditions.
Pursuant to the terms and subject to the conditions of the Merger Agreement, at the effective time of the Merger, (i) each outstanding share of Spirit common stock, par value $0.05 per share (other than the Excluded Common Shares (as defined in the Merger Agreement)) automatically converted into 0.762 of a newly issued share of our common stock, subject to adjustment 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,converted into the right to receive one share of newly issued Realty Income 6.000% Series A Cumulative Redeemable Preferred Stock, having substantially the same terms as the Spirit Series A Preferred Stock.
In connection with our merger with Spirit, we completed the $2.7 billion exchange in principal of outstanding notes issued by Spirit Realty, L.P. (“Spirit OP”), a wholly owned subsidiary of the Company following the Merger, for new notes issued by Realty Income and entered into $800.0 million and $500.0 million term loan agreements, which provide for the assumption of Spirit OP's existing term loan agreements.
Due to the close proximity of the acquisition date and the Company's filing of its annual report on Form 10-K for the year ended December 31, 2023, the initial accounting for the business combination is incomplete, and therefore we are unable to disclose the information required by ASC 805, Business Combinations. Such information will be included in the Company's subsequent Form 10-Q.
C.    Notes Issuance
In January 2024, we issued $450.0 million of 4.750% senior unsecured notes due February 2029 (the “2029 Notes”), and $800.0 million of 5.125% senior unsecured notes due February 2034 (the “2034 Notes”). The public offering price for the 2029 Notes was 99.225% of the principal amount for an effective annual yield to maturity of 4.923%, and the public offering price for the 2034 Notes was 98.910% of the principal amount for an effective annual yield to maturity of 5.265%. Interest on the 2029 Notes and the 2034 Notes is paid semi-annually.
D.    ATM Forward Offerings
As of February 20, 2024, ATM forward agreements for a total of 10.8 million shares remain unsettled with total expected net proceeds of approximately $605 million of which 4.6 million shares were executed in January 2024.
85


Item 9:AChanges In and Disagreements With Accountants on Accounting and Financial Disclosure
We have had no disagreements with our independent registered public accounting firm on accounting matters or financial disclosure, nor have we changed accountants in the two most recent fiscal years.
None.
Item 9A:Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended) that are designed to ensure thatinformation required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
As of and for the yearquarter ended December 31, 2020,2023, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer.
Based on the foregoing, our Chief Executive Officer and ChiefChief Financial Officer concluded that as of December 31, 2023 our disclosure controls and procedures were effective and were operating at a reasonable assurance level.
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Table of Contents
Management’s Report on Internal Control Over Financial Reporting
Internal control over financial reporting refers to the process designed by, or under the supervision of, our Chief Executive Officer, PrincipalChief Financial Officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that:

(1) Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;
(2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
(3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company.
Management has used the framework set forth in the report entitled “Internal Control--Integrated Framework (2013)” published by the Committee of Sponsoring Organizations of the Treadway Commission to evaluate the effectiveness of the Company’s internal control over financial reporting. Management has concluded that the Company’s internal control over financial reporting was effective as of the end of the most recent fiscal year. KPMG LLP has issued an attestation report on the effectiveness of the Company’s internal control over financial reporting.
Submitted on February 23, 202121, 2024 by,
Sumit Roy, President, Chief Executive Officer
Christie B. Kelly,Jonathan Pong, Executive Vice President, Chief Financial Officer, and Treasurer

Changes in Internal Controls
There have been no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 20202023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
86


Limitations on the Effectiveness of Controls
Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.
Item 9B:Other Information
Director and Officer Trading Arrangements
None.
During the three months ended December 31, 2023, none of our officers or directors adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”

Item 9C:    
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
None
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PART III
Item 10:Directors, Executive Officers and Corporate Governance
The information required by this item is set forth under the captions “Board of Directors” and “Executive Officers of the Company” and “Delinquent Section 16(a) Reports” in our definitive Proxy Statement for the 20212024 Annual Meeting of Stockholders, to be filed pursuant to Regulation 14A, and is incorporated herein by reference. The Annual Meeting of Stockholders is presently scheduled to be held on May 18, 2021.

Item 11:Executive Compensation
The information required by this item is set forth under the caption “Executive Compensation” in our definitive Proxy Statement for the 20212024 Annual Meeting of Stockholders, to be filed pursuant to Regulation 14A, and is incorporated herein by reference.

Item 12:    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this item is set forth under the caption “Security Ownership of Certain Beneficial Owners and Management” in our definitive Proxy Statement for the 20212024 Annual Meeting of Stockholders, to be filed pursuant to Regulation 14A, and is incorporated herein by reference.

Item 13:Certain Relationships, Related Transactions and Director Independence
The information required by this item is set forth under the caption “Related Party Transactions” in our definitive Proxy Statement for the 20212024 Annual Meeting of Stockholders, to be filed pursuant to Regulation 14A, and is incorporated herein by reference.

Item 14:Principal Accounting Fees and Services
Our independent registered public accounting firm is KPMG LLP, San Diego, CA, Auditor Firm ID: 185.
The information required by this item is set forth under the caption “Independent Registered Public Accounting Firm Fees and Services” in our definitive Proxy Statement for the 20212024 Annual Meeting of Stockholders, to be filed pursuant to Regulation 14A, and is incorporated herein by reference.
87


PART IV

Item 15:Exhibits and Financial Statement Schedules
A.                        The following documents are filed as part of this report.
1.            Financial Statements (see Item 8)
a.                         Reports of Independent Registered Public Accounting Firm
b.                        Consolidated Balance Sheets,
December 31, 20202023 and 2019
2022
c.                         Consolidated Statements of Income and Comprehensive Income,
Years ended December 31, 2020, 20192023, 2022 and 2018
2021
d.                        Consolidated Statements of Equity,
Years ended December 31, 2020, 20192023, 2022 and 2018
2021
e.                         Consolidated Statements of Cash Flows,
Years ended December 31, 2020, 20192023, 2022 and 2018
2021
f.                           Notes to Consolidated Financial Statements
g.Consolidated Quarterly Financial Data (unaudited), for 2020 and 2019
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2.           Financial Statement Schedule.Schedules. Reference is made to page F-1 of this report for Schedule III Real Estate and Accumulated Depreciation (electronically filed with the Securities and Exchange Commission).
a. Schedule III Real Estate and Accumulated Depreciation
Schedules not Filed:  All schedules, other than those 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.
3.            Exhibits
Articles of Incorporation and By-Laws
Exhibit No.Description
Plans of acquisition, reorganization, arrangement, liquidation or succession
2.1
2.2
2.3
Bylaws
3.1
3.2
3.23.3
3.33.4
3.43.5
3.53.6
3.63.7
3.8
88


3.73.9
3.83.10
3.93.11
3.103.12
3.113.13
3.123.14
3.133.15
3.16
Instruments defining the rights of security holders, including indentures
4.1
4.2
4.3
4.4
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4.5
4.6
4.7
4.84.6
4.94.7
4.104.8
4.114.9
4.124.10
4.134.11
4.144.12
4.154.13
4.164.14
4.174.15
4.184.16
4.194.17
89


4.204.18
4.214.19
4.22*4.20
4.23
4.244.21
4.254.22
4.264.23
4.274.24
4.284.25
4.294.26
4.304.27
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4.314.28
Material Contracts
10.1+4.29
4.30
4.31
4.32
4.33
4.34
4.35
4.36
4.37
4.38
4.39
4.40
4.41
4.42
4.43
90


4.44
4.45
4.46
4.47
4.48
4.49
4.50
4.51
4.52
4.53
4.54
4.55
4.56
4.57
10.2+4.58
10.3+4.59
10.4+4.60
10.5+
10.6+
10.7+4.61
10.8+4.62
4.63
4.64
4.65
4.66
4.67
4.68
91


4.69
4.70
4.71
4.72
4.73
4.74
4.75
4.76
4.77
4.78
4.79
4.80
4.81
4.82
4.83
4.84
4.85
4.86
Officers’ Certificate, dated as of January 23, 2024, pursuant to Sections 201, 301 and 303 of the Indenture, dated as of October 28, 1998, between Realty Income Corporation and The Bank of New York Mellon Trust Company, N.A., as successor trustee, establishing the terms of a new series of debt securities entitled “4.450% Notes due 2026,” a new series of debt securities entitled “3.200% Notes due 2027,” a new series of debt securities entitled “2.100% Notes due 2028,” a new series of debt securities entitled “4.000% Notes due 2029,” a new series of debt securities entitled “3.400% Notes due 2030,” a new series of debt securities entitled “3.200% Notes due 2031” and a new series of debt securities entitled “2.700% Notes due 2032” and including the forms of debt securities of each such series (filed as exhibit 4.18 to the Company’s Form 8-K, filed on January 24, 2024 (File No. 001-13374) and incorporated herein by reference).
4.87
4.88*
Material Contracts
10.1+
10.9+10.2+
92


10.10+10.3+
10.11+10.4+
10.12+
10.13+10.5+
10.14+10.6+
10.15+10.7+
10.16+10.8+
10.17+10.9+
10.18+10.10+
10.19+10.11+
10.20+
10.21+10.12+
10.22+10.13+
10.23+10.14+
10.24+10.15+
10.2510.16+
10.26+
10.27+10.17+
10.18+
10.19+
10.20+
10.21+
10.22+
10.23+
10.24+
10.25+
10.26+
10.27+
10.28+
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Table of Contents
10.29+
10.30
10.31
10.32
10.33
10.34
10.35
10.36
10.37
10.38
Policy Relating to Recovery of Erroneously Awarded Compensation
97.1*+
Subsidiaries of the Registrant
21.1*
Consents of Experts and Counsel
23.1*
Certifications
31.1*
31.2*
32**
Interactive Data Files
101*101.INS*Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
The following materials from Realty Income Corporation’s Annual Report on Form 10-K for the year ended December 31, 2020, formatted in Extensible Business Reporting Language: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income and Comprehensive Income, (iii) Consolidated Statements of Stockholders’ Equity, (iv) Consolidated Statements of Cash Flows, (v) Notes to Consolidated Financial Statements, and (vi) Schedule III Real Estate and Accumulated Depreciation.101.SCH*Inline XBRL Taxonomy Extension Schema Document.
101.CAL*Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB*Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*Inline XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF*Inline XBRL Taxonomy Extension Definition Linkbase Document.
104*Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)The cover page from the Company's Annual Report on Form 10-K for the year ended December 31, 2020, formatted in Inline Extensible Business Reporting Language.
* Filed herewith.
**Furnished herewith.
+ Indicates a management contract or compensatory plan or arrangement.arrangement
Item 16:Form 10-K Summary
None.
-101-
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Table of Contents


SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
REALTY INCOME CORPORATION
 
By:/s/SUMIT ROYDate: February 23, 202121, 2024
 Sumit Roy  
 President, Chief Executive Officer  
 
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
 
By:/s/MICHAEL D. MCKEEDate: February 23, 202121, 2024
 Michael D. McKee 
 Non-Executive Chairman of the Board of Directors
    
By:/s/KATHLEEN R. ALLEN, Ph.D.PRISCILLA ALMODOVARDate: February 23, 202121, 2024
Priscilla AlmodovarKathleen R. Allen, Ph.D.
Director
By:/s/JACQUELINE BRADYDate: February 21, 2024
Jacqueline Brady
Director
By:/s/A. LARRY CHAPMAN Date: February 23, 202121, 2024
 A. Larry Chapman  
 Director  
    
By:/s/REGINALD H. GILYARD Date: February 23, 202121, 2024
 Reginald H. Gilyard  
 Director  
By:/s/MARY HOGAN PREUSSEDate: February 21, 2024
Mary Hogan Preusse
Director
By:/s/PRIYA CHERIAN HUSKINS Date: February 23, 202121, 2024
 Priya Cherian Huskins  
 Director  
By:/s/GERARDO I. LOPEZ Date: February 23, 202121, 2024
 Gerardo I. Lopez  
 Director  
    
By:/s/GREGORY T. MCLAUGHLIN Date: February 23, 202121, 2024
 Gregory T. McLaughlin  
 Director  
    
95


By:/s/RONALD L. MERRIMAN Date: February 23, 202121, 2024
 Ronald L. Merriman  
 Director  
By:/s/SUMIT ROY Date: February 23, 202121, 2024
 Sumit Roy  
 Director, President, Chief Executive Officer
 (Principal Executive Officer)  
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Table of Contents
By:/s/CHRISTIE B. KELLYJONATHAN PONGDate: February 23, 202121, 2024
Christie B. KellyJonathan Pong
Executive Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)
By:/s/SEAN P. NUGENT Date: February 23, 202121, 2024
 Sean P. Nugent  
 Senior Vice President, Controller, Principal Accounting Officer
 (Principal Accounting Officer)  
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Table of Contents
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBERAs of December 31, 20202023
(dollars in thousands)

Initial Cost to CompanyCost Capitalized Subsequent to AcquisitionGross Amount at Which Carried at Close of Period (Notes 3, 4 and 6)
DescriptionNumber of Properties (Note 1)Encumbrances (Note 2)LandBuildings, Improvements and Acquisition FeesImprovementsCarrying CostsLandBuildings, Improvements and Acquisition FeesTotalAccumulated Depreciation (Note 5)Date of ConstructionDate AcquiredLife on which depreciation in latest Income Statement is Computed (in Years)
U.S.
Aerospace512,811,485 6,890,774 110,783,380 222,669 6,890,774 111,006,049 117,896,823 32,439,224 1994-20136/20/2011-6/27/201325-35
Apparel stores3713,925,000 73,267,619 183,914,767 3,472,987 199,362 73,267,619 187,587,116 260,854,735 48,433,166 1970-201210/30/1987-10/6/20204-25
Automotive collision services8359,995,209 140,125,701 1,800,680 10,000 59,995,209 141,936,381 201,931,590 33,434,601 1928-20208/30/2002-7/7/202019-25
Automotive parts25198,784,470 252,803,413 4,702,685 826,885 98,784,470 258,332,983 357,117,453 73,960,839 1969-20208/6/1987-10/28/202015-25
Automotive service319156,569,614 244,468,843 513,914 147,524 156,569,614 245,130,281 401,699,895 73,360,221 1920-201910/2/1985-12/23/202014-25
Automotive tire services202126,835,381 234,004,107 727,127 97,335 126,835,381 234,828,569 361,663,950 123,637,853 1947-201711/27/1985-12/14/202010-25
Beverages20217,138,252 174,982,150 147 217,138,252 174,982,297 392,120,549 44,754,449 1992-20206/25/2010-11/9/202025-35
Book Stores1998,250 3,696,707 129,751 79 998,250 3,826,537 4,824,787 3,590,046 19963/11/199725
Child care27898,644,904 221,368,767 5,240,741 901,323 98,644,904 227,510,831 326,155,735 109,437,582 1958-201812/22/1981-10/30/20204-25
Consumer electronics1222,731,086 28,326,134 939,944 51,616 22,731,086 29,317,694 52,048,780 12,093,963 1992-20036/9/1997-12/7/202023-25
Consumer goods47,663,458 124,173,738 894,295 7,663,458 125,068,033 132,731,491 26,065,011 1987-20111/22/2013-9/22/201534-35
Convenience stores1,2551,067,078,213 1,402,601,795 (598,228)145,384 1,067,078,213 1,402,148,951 2,469,227,164 368,222,563 1949-20203/3/1995-10/30/20205-25
Crafts and novelties2953,819,025 124,854,660 995,404 440,482 53,819,025 126,290,546 180,109,571 18,551,249 1974-202011/26/1996-9/29/202022-34
Diversified industrial89,790,000 12,501,884 140,181,089 139,970 12,501,884 140,321,059 152,822,943 21,274,393 1987-20159/19/2012-10/30/202025-35
Dollar stores1,33711,127,000 436,860,261 1,283,734,718 1,749,982 8,879 436,860,261 1,285,493,579 1,722,353,840 302,143,582 1935-20202/3/1998-11/6/202021-25
Drug stores384123,224,723 575,380,313 1,331,712,483 3,288,007 100,379 575,380,313 1,335,100,869 1,910,481,182 355,374,686 1965-20159/30/1998-12/16/20199-35
Education135,689,836 19,699,816 389,722 130,135 5,689,836 20,219,673 25,909,509 16,215,093 1980-200012/19/1984-6/28/200612-25
Electric utilities11,450,000 9,209,989 1,450,000 9,209,989 10,659,989 1,941,726 19838/30/201335
Entertainment1028,373,479 10,617,464 515,457 28,373,479 11,132,921 39,506,400 6,634,393 1989-19993/26/1998-9/11/201424-25
Equipment services63,889,283 38,989,570 650,489 140 3,889,283 39,640,199 43,529,482 11,916,443 2000-20147/3/2003-12/2/201925-35
Financial services238115,289,112 351,027,648 (4,403,463)101,099 115,289,112 346,725,284 462,014,396 87,506,735 1807-20153/10/1987-6/29/201815-35
Food processing628,533,002 13,025,055 151,759,842 210,468 13,025,055 151,970,310 164,995,365 25,524,794 1988-20194/1/2011-9/27/201925-35
General merchandise122199,207,356 619,215,984 (6,200,698)557,868 199,207,356 613,573,154 812,780,510 81,974,326 1954-20208/6/1987-12/23/202015-35
Government services168,093,555 121,520,749 3,517,744 8,093,555 125,038,493 133,132,048 29,653,734 1983-20119/17/2009-1/22/201325-35
Grocery stores13238,621,000 276,250,552 783,434,945 1,821,243 325,183 276,250,552 785,581,371 1,061,831,923 154,197,849 1948-20205/26/1988-12/22/202020-35
Health and beauty22,475,474 43,935,914 2,475,474 43,935,914 46,411,388 3,256,609 2005-201711/1/2006-4/13/201825-35
Health and fitness103251,062,948 1,054,810,217 7,735,262 172,145 251,062,948 1,062,717,624 1,313,780,572 262,990,060 1940-20195/31/1995-3/19/202023-25
Health care6651,510,133 298,522,788 4,046,245 1,285,766 51,510,133 303,854,799 355,364,932 66,121,271 1930-20189/9/1991-12/2/201916-35
Home furnishings649,700,000 31,810,693 109,453,697 2,365,455 127,944 31,810,693 111,947,096 143,757,789 34,126,430 1968-20151/24/1984-1/13/202015-35
Home improvement836,095,360 224,674,137 465,949,401 2,472,665 75,210 224,674,137 468,497,276 693,171,413 84,948,975 1950-201512/22/1986-11/23/202023-35
Insurance1634,343 6,331,030 634,343 6,331,030 6,965,373 2,120,895 20128/28/201225
Jewelry48,268,989 8,268,989 8,268,989 2,632,294 2006-20081/22/201325
Machinery11,630,917 12,938,430 1,630,917 12,938,430 14,569,347 4,377,502 20107/31/201225
Motor vehicle dealerships28115,897,045 143,335,317 231 115,897,045 143,335,548 259,232,593 56,030,088 1975-20175/13/2004-3/29/201925
Office supplies78,281,041 13,776,478 875,115 349,599 8,281,041 15,001,192 23,282,233 12,683,737 1995-20141/29/1997-12/2/201923-25
Other manufacturing723,664,607 8,893,136 78,526,394 1,676,794 239,723 8,893,136 80,442,911 89,336,047 14,216,221 1989-20161/22/2013-12/21/201634-35
Packaging101,809,877 20,323,553 163,114,123 2,480,121 20,323,553 165,594,244 185,917,797 33,290,751 1965-20166/3/2011-12/20/201725-35
Initial Cost to CompanyCost Capitalized Subsequent to AcquisitionGross Amount at Which Carried at Close of Period (Notes 3, 4 and 6)
DescriptionNumber of Properties (Note 1)Encumbrances (Note 2)LandBuildings, Improvements and Acquisition FeesImprovementsCarrying CostsLandBuildings, Improvements and Acquisition FeesTotalAccumulated Depreciation (Note 5)Date of ConstructionDate Acquired
U.S.
Advertising4$—$18,677$70,647$—$—$18,677$70,647$89,324$5,5411990-20093/26/2021-11/1/2021
Aerospace624,133 9,280 104,596 3,297 — 9,280 107,893 117,173 48,022 1951-20136/20/2011-11/1/2021
Apparel7953,577 162,647 450,233 7,454 199 162,647 457,886 620,533 84,459 1962-202210/30/1987-3/22/2023
Automotive Collision Service221— 165,204 397,470 22,135 10 165,204 419,615 584,819 65,871 1920-20238/30/2002-12/21/2023
Automotive Parts407— 160,113 387,057 6,358 827 160,113 394,242 554,355 113,720 1969-20208/6/1987-3/22/2023
Automotive Service808— 629,606 1,221,922 84,848 144 629,606 1,306,914 1,936,520 152,030 1920-202310/2/1985-12/21/2023
Automotive Tire Services270— 221,879 476,681 27,802 81 221,879 504,564 726,443 157,639 1947-202311/27/1985-10/18/2023
Beverage18— 183,323 185,539 — — 183,323 185,539 368,862 61,713 1950-20206/25/2010-6/28/2022
Child Care320— 149,289 348,591 5,658 728 149,289 354,977 504,266 128,677 1957-202312/22/1981-12/7/2023
Consumer Electronics27— 57,535 158,334 2,145 51 57,535 160,530 218,065 24,810 1991-20206/9/1997-8/22/2023
Consumer Goods917,990 24,077 259,494 925 — 24,077 260,419 284,496 45,221 1987-20131/22/2013-11/1/2021
Convenience Stores2,076— 1,884,822 2,846,162 23,970 145 1,884,822 2,870,277 4,755,099 599,684 1922-20233/3/1995-12/21/2023
Crafts and Novelties53— 104,873 312,117 2,174 440 104,873 314,731 419,604 47,880 1974-202211/26/1996-3/22/2023
Diversified Industrial2249,838 57,865 360,336 17,976 — 57,865 378,312 436,177 38,147 1954-20219/19/2012-3/22/2023
Dollar Stores2,8991,983 919,277 2,588,243 6,854 919,277 2,595,106 3,514,383 533,523 1925-20232/3/1998-12/21/2023
Drug Stores594254,729 775,846 2,159,983 4,143 100 775,846 2,164,226 2,940,072 529,688 1958-20159/30/1998-8/24/2023
Education19— 28,362 58,918 4,514 103 28,362 63,535 91,897 17,061 1957-200912/19/1984-11/22/2022
Energy32— 23,442 74,471 297 — 23,442 74,768 98,210 4,644 1963-201411/1/2021-11/1/2021
Entertainment28— 97,433 219,535 26,632 — 97,433 246,167 343,600 17,115 1960-20213/31/1999-6/30/2023
Equipment Services30— 31,703 102,090 1,424 — 31,703 103,514 135,217 18,730 1965-20227/3/2003-12/15/2023
Financial Services357135,382 177,065 455,777 (6,538)101 177,065 449,340 626,405 109,972 1807-20153/10/1987-3/22/2023
Food Processing13— 24,968 184,897 25,804 — 24,968 210,701 235,669 21,523 1991-202312/20/2012-9/15/2023
General Merchandise2737,592 432,290 1,228,772 (1,155)535 432,290 1,228,152 1,660,442 185,927 1954-20238/6/1987-12/6/2023
Gaming1— 419,464 1,277,403 — — 419,464 1,277,403 1,696,867 39,539 2019-201912/1/2022-12/1/2022
Grocery24469,243 580,352 1,500,504 8,557 325 580,352 1,509,386 2,089,738 287,504 1947-20219/30/2003-6/1/2023
Health and Beauty8— 6,696 49,339 2,542 — 6,696 51,881 58,577 8,221 1999-20172/23/1999-3/22/2023
Health and Fitness141— 351,092 1,562,037 12,618 172 351,092 1,574,827 1,925,919 404,359 1943-20235/31/1995-8/23/2023
Health Care49368,360 341,653 1,151,285 24,848 225 341,653 1,176,358 1,518,011 122,778 1922-202312/18/1984-12/18/2023
Home Furnishings18041,472 206,189 561,998 10,253 128 206,189 572,379 778,568 72,276 1960-20211/24/1984-5/10/2023
Home Improvement17215,916 526,157 935,456 5,976 63 526,157 941,495 1,467,652 171,569 1863-202212/22/1986-6/13/2023
Insurance310,998 2,204 6,838 — — 2,204 6,838 9,042 422 2000-201211/1/2021-10/17/2022
Jewelry5— 5,367 58,688 — — 5,367 58,688 64,055 7,596 1997-20081/22/2013-11/1/2021
Machinery4— 6,577 69,225 — — 6,577 69,225 75,802 8,837 1969-20217/31/2012-3/22/2023
Motor Vehicle Dealerships64— 229,924 421,181 1,700 — 229,924 422,881 652,805 93,690 1962-202311/29/2003-11/30/2023
Office Supplies6— 12,603 38,026 1,147 339 12,603 39,512 52,115 8,419 1978-20145/30/1997-11/1/2021
Other Manufacturing16— 28,025 202,510 3,248 240 28,025 205,998 234,023 24,822 1979-20181/22/2013-12/15/2022

F-1

Table of Contents
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION (continued)
AS OF DECEMBERAs of December 31, 20202023

(dollars in thousands)
Initial Cost to CompanyCost Capitalized Subsequent to AcquisitionGross Amount at Which Carried at Close of Period (Notes 3, 4 and 6)
DescriptionNumber of Properties (Note 1)Encumbrances (Note 2)LandBuildings, Improvements and Acquisition FeesImprovementsCarrying CostsLandBuildings, Improvements and Acquisition FeesTotalAccumulated Depreciation (Note 5)Date of ConstructionDate AcquiredLife on which depreciation in latest Income Statement is Computed (in Years)
Paper22,462,414 11,934,685 44,760 2,462,414 11,979,445 14,441,859 3,834,776 2002-20065/2/2011-12/21/201225-35
Pet supplies and services432,509,000 26,418,753 114,773,425 5,541,147 243,582 26,418,753 120,558,154 146,976,907 25,506,704 1950-201912/22/1981-11/24/202011-35
Restaurants - casual dining263225,489,972 416,077,090 (1,386,447)1,936,522 225,489,972 416,627,165 642,117,137 126,891,240 1965-20185/16/1984-12/2/201910-40
Restaurants - quick service907434,309,094 806,191,905 865,353 212,582 434,309,094 807,269,840 1,241,578,934 178,660,444 1968-201912/9/1976-10/12/202011-26
Shoe stores36,251,472 35,793,479 214,466 214,706 6,251,472 36,222,651 42,474,123 10,836,836 1996-20083/26/1998-1/22/201323-35
Sporting goods2034,594,645 101,810,538 997,950 178,206 34,594,645 102,986,694 137,581,339 29,388,411 1950-201610/17/2001-12/2/201919-25
Telecommunications79,269,789 68,360,132 1,484,421 21,884 9,269,789 69,866,437 79,136,226 20,270,489 1990-20166/26/1998-12/10/201522-35
Theaters78227,724,561 742,442,923 8,987,908 270 227,724,561 751,431,101 979,155,662 212,038,075 1930-20147/27/2000-8/13/201921-25
Transportation services44102,948,288 800,700,134 3,051,181 401,593 102,948,288 804,152,908 907,101,196 177,461,019 1967-20164/1/2003-9/6/201625-35
Wholesale clubs3317,820,000 191,190,334 328,001,563 (3,889,900)191,190,334 324,111,663 515,301,997 107,718,055 1985-20159/30/2011-9/25/202025
Other67,254,447 24,355,185 887,023 18,796 7,254,447 25,261,004 32,515,451 6,351,227 1982-19975/29/1984-9/13/201323-35
U.K.
Grocery stores31568,612,041 586,831,469 568,612,041 586,831,469 1,155,443,510 23,683,408 1975-20205/23/2019-12/24/202025-167
Health care28,902,803 17,341,109 8,902,803 17,341,109 26,243,912 447,303 20003/23/202063-71
Home improvement8101,275,951 86,969,771 101,275,951 86,969,771 188,245,722 956,356 1986-20067/31/2020-12/2/202025
Theaters11,561,502 1,561,502 1,561,502 201112/18/2019N/A
6,593299,631,054 6,331,886,427 14,647,754,645 59,170,409 9,522,579 6,331,886,427 14,716,447,633 21,048,334,060 3,563,177,697 
Initial Cost to CompanyCost Capitalized Subsequent to AcquisitionGross Amount at Which Carried at Close of Period (Notes 3, 4 and 6)
DescriptionNumber of Properties (Note 1)Encumbrances (Note 2)LandBuildings, Improvements and Acquisition FeesImprovementsCarrying CostsLandBuildings, Improvements and Acquisition FeesTotalAccumulated Depreciation (Note 5)Date of ConstructionDate Acquired
Packaging18$626$45,730$237,725$2,480$—$45,730$240,205$285,935$52,6651956-20166/3/2011-1/5/2023
Paper2— 2,462 11,935 45 — 2,462 11,980 14,442 5,122 2002-20065/2/2011-12/21/2012
Pet Supplies and Services140— 130,787 376,248 26,557 239 130,787 403,044 533,831 54,428 1945-202312/22/1981-12/15/2023
Restaurants-Casual83612,823 654,015 1,473,143 722 1,531 654,015 1,475,396 2,129,411 256,294 1965-20195/16/1984-4/10/2023
Restaurants-Quick Service1,814— 939,921 1,960,658 3,593 174 939,921 1,964,425 2,904,346 336,068 1926-202312/9/1976-10/25/2023
Shoe Stores6— 6,992 41,985 341 215 6,992 42,541 49,533 14,544 1990-20083/26/1998-12/22/2021
Sporting Goods4712,255 107,608 366,711 5,185 178 107,608 372,074 479,682 58,030 1950-202010/17/2001-3/22/2023
Telecommunications7— 9,303 14,392 683 11 9,303 15,086 24,389 3,681 1964-20166/26/1998-10/17/2022
Theaters76— 221,786 739,058 10,719 — 221,786 749,777 971,563 298,810 1930-20147/27/2000-11/1/2021
Transportation Services87— 177,691 1,059,854 11,424 402 177,691 1,071,680 1,249,371 256,618 1967-20164/1/2003-4/5/2022
Warehousing and Storage2— 1,442 15,178 — — 1,442 15,178 16,620 3,390 1979-20071/22/2013-11/1/2021
Wholesale Club546,787 306,006 713,020 — — 306,006 713,020 1,019,026 178,110 1985-20199/30/2011-8/11/2022
Other16— 31,434 54,994 3,916 — 31,434 58,910 90,344 9,830 1986-20218/18/1986-4/10/2023
Europe
Apparel3— 20,751 79,223 — — 20,751 79,223 99,974 4,649 1990-20054/19/2021-3/30/2023
Automotive Parts2— 3,918 7,737 — — 3,918 7,737 11,655 204 1980-19966/17/2022-9/28/2023
Automotive Tire Services3— 1,707 5,206 — — 1,707 5,206 6,913 581 1974-19943/9/2021-3/9/2021
Consumer Electronics2— 8,988 24,686 602 — 8,988 25,288 34,276 717 1997-20063/4/2022-9/29/2023
Convenience Stores2— 5,284 3,301 — — 5,284 3,301 8,585 213 1982-202012/21/2021-9/20/2023
Diversified Industrial5— 29,505 57,817 922 — 29,505 58,739 88,244 2,055 1980-20207/22/2021-3/30/2023
Drug Stores1— — — — — — — — — 1990-19901/31/2023-1/31/2023
Energy1— 9,562 10,678 — — 9,562 10,678 20,240 600 2020-20201/13/2022-1/13/2022
Entertainment1— 22,768 35,888 — — 22,768 35,888 58,656 2,823 1993-19931/13/2022-1/13/2022
Food Processing7— 33,485 90,850 1,911 — 33,485 92,761 126,246 4,795 1950-202111/30/2021-2/23/2023
General Merchandise23— 191,349 232,095 19,656 — 191,349 251,751 443,100 9,191 1980-20238/25/2021-10/17/2023
Grocery17638,732 1,541,454 2,312,185 2,361 — 1,541,454 2,314,546 3,856,000 185,616 1800-20225/23/2019-12/1/2023
Health and Fitness2— 29,102 28,456 — — 29,102 28,456 57,558 1,659 2004-20203/24/2022-1/31/2023
Health Care6— 27,163 52,355 — — 27,163 52,355 79,518 3,801 1969-20063/23/2020-9/7/2022
Home Furnishings12— 89,533 113,961 — — 89,533 113,961 203,494 7,629 1980-20194/9/2021-4/4/2023
Home Improvement92— 729,656 938,924 1,478 — 729,656 940,402 1,670,058 61,997 1890-20167/31/2020-12/6/2023
Motor Vehicle Dealerships3— 16,376 28,146 — — 16,376 28,146 44,522 1,879 1990-20052/11/2022-9/27/2022
Other Manufacturing2— 40,179 13,169 — — 40,179 13,169 53,348 614 1912-19684/6/2022-6/22/2022
Restaurants-Quick Service1— 713 1,899 — — 713 1,899 2,612 230 2007-20073/17/2021-3/17/2021
Sporting Goods92— 264,736 478,111 892 — 264,736 479,003 743,739 8,693 1950-20188/5/2022-12/28/2023
Theaters1— 1,455 — — — 1,455 — 1,455 — 2011-201112/18/2019-12/18/2019
Transportation Services3— 13,166 28,600 1,142 — 13,166 29,742 42,908 1,110 1970-19701/6/2022-12/22/2022
Warehousing and Storage1— 52,725 48,919 — — 52,725 48,919 101,644 3,902 2002-20023/11/2021-3/11/2021
Wholesale Club7— 54,550 96,993 — — 54,550 96,993 151,543 4,559 1973-200210/28/2022-10/28/2022
Other3— 75,775 — 7,125 — 75,775 7,125 82,900 — 2023-20234/27/2023-9/29/2023
13,458$822,436$14,954,956$34,240,455$439,360$7,715$14,954,956$34,687,530$49,642,486$6,096,736

F-2

Table of Contents
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION (continued)
Note 1.Realty Income Corporation owns 6,503 single-client properties in the United States and Puerto Rico, our corporate headquarters property in San Diego, California and 39 single-client properties in the United Kingdom. Crest Net Lease, Inc. owns 13 single-client properties in the United States.
Realty Income Corporation also owns 34 multi-client properties located in the United States and owns 3 multi-client properties located in the United Kingdom.
Note 2.Includes mortgages payable secured by 68 properties, but excludes unamortized net debt premiums of $1.7 million.
Note 3.The aggregate cost for federal income tax purposes for Realty Income Corporation is $22,741,595,516 and for Crest Net Lease, Inc. is $92,643,698.
Note 4.The following is a reconciliation of total real estate carrying value for the years ended December 31:202020192018
Balance at Beginning of Period19,637,626,852 16,566,601,986 15,027,043,415 
Additions During Period:
Acquisitions2,163,707,260 3,644,884,106 1,802,745,841 
Less amounts allocated to acquired lease intangible assets and liabilities on our Consolidated Balance Sheets(382,849,836)(401,318,627)(89,474,897)
Improvements, Etc.6,194,424 17,447,145 23,043,158 
Other (Leasing Costs and Building Adjustments as a result of net debt premiums) (1)
22,489,716 2,740,797 2,839,574 
Total Additions1,809,541,564 3,263,753,421 1,739,153,676 
Deductions During Period:
Cost of Real Estate sold253,505,789 129,736,613 165,023,825 
Cost of Equipment sold24,799 11,200 15,650 
Releasing costs258,513 673,647 232,089 
Other (including Provisions for Impairment) (2)
195,003,525 87,951,488 34,323,541 
Total Deductions448,792,626 218,372,948 199,595,105 
Foreign Currency Translation49,958,270 25,644,393 
Balance at Close of Period21,048,334,060 19,637,626,852 16,566,601,986 
(1) Includes reclassification of $22.5 million right of use assets under finance leases in 2020.
(2) Includes provision for impairment and, for the year ended 2019, a reclassification of $36.9 million of right of use assets under finance leases in accordance with the adoption of ASC 842, Leases, on January 1, 2019.
As of December 31, 2023
(dollars in thousands)

Note 1.
Realty Income Corporation owns or holds interests in 12,851 single-client properties in the United States and Puerto Rico, our corporate headquarters property in San Diego, California, 191 single-client properties in the United Kingdom, and 148 single-client properties elsewhere in Europe. Crest Net Lease, Inc. owns seven single-client properties in the United States.

Realty Income Corporation also owns or holds interests in 149 multi-client properties in the United States, 100 multi-client properties in the United Kingdom, and 12 multi-client properties elsewhere in Europe.
Note 2.Includes mortgages payable secured by 131 properties and excludes unamortized discount and deferred financing costs of $0.8 million.
Note 3.The aggregate cost for federal income tax purposes for Realty Income Corporation is $55.2 billion and for Crest Net Lease, Inc. is $26.1 million.
Note 4.The following is a reconciliation of total real estate carrying value for the years ended December 31 (in thousands):202320222021
Balance at Beginning of Period$42,689,699 $35,952,659 $21,048,334 
Additions During Period:
Acquisitions and development7,239,885 8,021,159 5,851,945 
Merger Additions (1)
— — 11,722,801 
Less amounts allocated to acquired lease intangible assets and liabilities on our Consolidated Balance Sheets(484,096)(625,730)(826,064)
Improvements, Etc.54,904 99,484 56,567 
Other (Leasing Costs and Building Adjustments) (2)
49,504 97,482 64,807 
Total Additions6,860,197 7,592,395 16,870,056 
Deductions During Period:
Cost of Real Estate sold125,166 402,386 1,206,837 
Cost of Equipment sold11 — 
Orion Divestiture (1)
— — 634,254 
Releasing costs— 53 40 
Other (3)
111,851 39,463 91,176 
Total Deductions237,028 441,902 1,932,315 
Foreign Currency Translation329,618 (413,453)(33,416)
Balance at Close of Period$49,642,486 $42,689,699 $35,952,659 

F-3

Table of Contents
REALTY INCOME CORPORATION AND SUBSIDIARIES
Note 5.The following is a reconciliation of accumulated depreciation for the years ended:
Balance at Beginning of Period3,140,854,604 2,723,085,290 2,350,544,126 
Additions During Period - Provision for Depreciation531,908,615 481,498,979 432,482,396 
Deductions During Period:
Accumulated depreciation of real estate and equipment sold or disposed of110,914,744 64,053,838 59,941,232 
Foreign Currency Translation1,329,222 324,174 
Balance at Close of Period3,563,177,697 3,140,854,604 2,723,085,290 
Note 6.In 2020, provisions for impairment were recorded on NaN Realty Income properties.
In 2019, provisions for impairment were recorded on NaN Realty Income properties.
In 2018, provisions for impairment were recorded on NaN Realty Income properties.
See report of independent registered public accounting firm.
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION (continued)
As of December 31, 2023
(dollars in thousands)
(1) Represents derecognition of assets from the Orion Divestiture. For further information, see note 2, Merger with VEREIT, Inc. and Orion Office REIT Inc. Divestiture, to our consolidated financial statements.
(2) The year ended December 31, 2023 includes contributions to joint ventures of $38.4 million and reclassification of $11.3 million right of use assets under finance leases. 2022 includes reclassification of $3.3 million right of use assets under finance leases, $43.0 million mortgage assumption, and $51.2 million RI Ops LP Units. 2021 includes $20.1 million right of use assets under finance leases and $43.7 million mortgage assumption.
(3) The year ended December 31, 2023 includes $14.0 million for building razed and $97.5 million of impairment, excluding impairment of depreciation, in-place and above- market leases. The year ended 2022 includes $13.6 million for building razed and $25.9 million of impairment. The year ended 2021 includes $43.0 million for building razed and $39.0 million of impairment.
Note 5.The following is a reconciliation of accumulated depreciation for the years ended (in thousands):202320222021
Balance at Beginning of Period$4,908,658 $3,963,753 $3,563,178 
Additions During Period - Provision for Depreciation1,233,709 1,028,182 628,246 
Deductions During Period:
Accumulated depreciation of real estate and equipment sold or disposed of57,609 73,913 226,897 
Foreign Currency Translation11,978 (9,364)(774)
Balance at Close of Period$6,096,736 $4,908,658 $3,963,753 
Please see note 1, Summary of Significant Accounting Policies, to our consolidated financial statements for information regarding lives used for depreciation and amortization.
Note 6.In 2023, provisions for impairment were recorded on 112 Realty Income properties.
In 2022, provisions for impairment were recorded on 94 Realty Income properties.
In 2021, provisions for impairment were recorded on 103 Realty Income properties.
See report of independent registered public accounting firm.

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