| Metric | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|--------|---------|---------|---------|---------|---------|---------|---------|---------|
| **Total Portfolio Annualized Contractual Rent ($ billions)** | $3.41 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | $3.54 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | $3.76 **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | $3.87 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | $4.04 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | $4.79 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | $4.85 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | $4.93 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** |
| **Number of Properties** | 12,237 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | 12,492 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | 13,118 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | 13,282 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | 13,458 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | 15,485 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | 15,450 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | 15,457 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** |
| **Approximate Leasable Square Feet (million sq ft)** | 236.8 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | 246.7 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | 255.5 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | 262.6 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | 272.1 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | 334.2 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | 335.3 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | 336.6 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** |
| **Number of Properties Sold** | 30 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | 26 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | 29 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | 24 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | 42 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | 46 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | 122 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | 92 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** |
| **Net Sales Proceeds ($ millions)** | $20.5 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | $28.6 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | $31.9 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | $32.3 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | $24.6 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | $95.6 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | $106.3 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | $249.5 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** |
| **Gain on Sales of Real Estate ($ millions)** | $9.3 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | $4.3 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | $7.8 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | $7.6 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | $16.6 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | $25.2 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** | $50.6 **[0000726728-24-000127_realtyincomeq32024supple.htm:15]** **[0000726728-24-000127_realtyincomeq32024supple.htm:1]** |

db9b63e356cd4a95cb5c09d990df8105df49505c6a9adddb84aa48ce9c944b25

Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

SG&A [USD, Millions]

R&D [USD, Millions]

D&A [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

EPS - Basic [USD]

EPS - Diluted [USD]

093bc940c4faed606c285df27e118f9aa2745d79eb77478e19e277136c4fdaad

| Metric [Unit: Thousand USD] | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|-----------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Rental Revenue (including reimbursable) | **873,300**  **[0000726728-23-000038_realtyincomeq42022supple.htm:2]**  | **925,300**  **[0000726728-23-000064_realtyincomeq12023supple.htm:2]**  | **995,289**  **[0000726728-23-000103_realtyincomeq22023supple.htm:2]**  | **1,008,862**  **[0000726728-23-000111_realtyincomeq32023supple.htm:2]**  | **1,028,710**  **[0000726728-24-000040_realtyincomeq42023supple.htm:2]**  | **1,208,169**  **[0000726728-24-000072_realtyincomeq12024supple.htm:2]**  | **1,284,728**  **[0000726728-24-000114_realtyincomeq22024supple.htm:2]**  | **1,271,153**  **[0000726728-24-000127_realtyincomeq32024supple.htm:2]**  |
| Other Revenue               | N/A     | **19,100**  **[0000726728-23-000064_realtyincomeq12023supple.htm:2]**  | **23,916**  **[0000726728-23-000103_realtyincomeq22023supple.htm:2]**  | **30,242**  **[0000726728-23-000111_realtyincomeq32023supple.htm:2]**  | **47,575**  **[0000726728-24-000040_realtyincomeq42023supple.htm:2]**  | **52,316**  **[0000726728-24-000072_realtyincomeq12024supple.htm:2]**  | **54,715**  **[0000726728-24-000114_realtyincomeq22024supple.htm:2]**  | **59,762**  **[0000726728-24-000127_realtyincomeq32024supple.htm:2]**  |
| Total Revenue               | N/A     | **944,400**  **[0000726728-23-000064_realtyincomeq12023supple.htm:2]**  | **1,019,205**  **[0000726728-23-000103_realtyincomeq22023supple.htm:2]**  | **1,039,104**  **[0000726728-23-000111_realtyincomeq32023supple.htm:2]**  | **1,076,285**  **[0000726728-24-000040_realtyincomeq42023supple.htm:2]**  | **1,260,485**  **[0000726728-24-000072_realtyincomeq12024supple.htm:2]**  | **1,339,443**  **[0000726728-24-000114_realtyincomeq22024supple.htm:2]**  | **1,330,915**  **[0000726728-24-000127_realtyincomeq32024supple.htm:2]**  |

d8fc4fbd88d5d0887ce680bc4f18f02bdc446a250f6eb2d2c12790fc5a752224

fe51dce93bf9712f6bf0776706d2a21703087e04f617d49a2660c89a0c458f18

ec1eb10529bf327284bf6f15739006c4ec1be325efcb3e35e72912654f1b22c9

Realty Income Corporation, known as "The Monthly Dividend Company®," is a real estate investment trust (REIT) that specializes in owning and leasing commercial properties under long-term net lease agreements **[0000726728-24-000047_o-20231231.htm:2]** **[0000726728-24-000130_o-20240930.htm:47]**. These agreements typically require clients to cover property taxes, insurance, and maintenance costs, providing a predictable income stream for the company **[0000726728-24-000047_o-20231231.htm:2]** **[0000726728-24-000130_o-20240930.htm:47]**. Realty Income's portfolio is highly diversified, with properties leased to clients across 90 different industries, including grocery stores, convenience stores, dollar stores, and drug stores, among others **[0000726728-24-000130_o-20240930.htm:75]** **[0000726728-24-000130_o-20240930.htm:47]**. The company operates across the United States, Puerto Rico, the United Kingdom, and several European countries, focusing on diversification by client, industry, geography, and property type to ensure consistent and predictable income for its stockholders **[0000726728-24-000047_o-20231231.htm:2]** **[0000726728-24-000130_o-20240930.htm:47]**.

1. **Commercial Property Leasing** - Owns and leases commercial properties under long-term net lease agreements, requiring clients to cover property taxes, insurance, and maintenance costs.
2. **Geographic Diversification** - Operates properties in the United States, Puerto Rico, the United Kingdom, and several European countries, focusing on reducing geographic concentration risks.
3. **Industry Diversification** - Leases properties to clients across 90 different industries, including grocery stores, convenience stores, dollar stores, and drug stores, to minimize industry-specific risks.

b204075da6fa3cc3fae62a9e67209f50bdbe4d8ad8d585c3a6e70d0d456d82d2

1. Given that private arms are becoming bigger players in transactions  **[O_3405811_16]** , how do you plan to maintain your competitive edge in both the U.S. and international markets amidst increasing competition?  **[O_3405811_16]** 

2. With the creation of your private capital investment platform  **[O_3405811_4]** , how will you address potential conflicts of interest when allocating investment opportunities between the public REIT and the private fund to maximize returns for shareholders?  **[O_3405811_4]** **[O_3405811_7]** 

3. You mentioned cap rate compression in your recent acquisitions, with a 4% cap rate in the third quarter  **[O_3405811_6]** ; can you elaborate on how you reconcile lower initial yields with your long-term cost of capital to ensure investments are accretive?  **[O_3405811_6]** 

4. Considering that you have forward-funded approximately $1.3 billion in fourth quarter investments  **[O_3405811_6]** , and given recent cost of capital volatility  **[O_3405811_6]** , how confident are you in achieving your investment targets without relying on public equity markets?  **[O_3405811_6]** 

5. Regarding your development pipeline, particularly the non-retail properties that are currently not leased  **[O_3405811_26]** , what is your strategy for leasing these up, and how might this impact your yields and risk profile?  **[O_3405811_26]** 

e554d1e5b5373aa7eb625e711f5f5edcad298b753d543ed69d18e97516a41b71

**Number of Properties**

**Approximate Leasable Square Feet (million sq ft)**

**Number of Properties Sold**

**Net Sales Proceeds ($ millions)**

**Gain on Sales of Real Estate ($ millions)**

7278d98c40e5fea460378c62ce7f4b99361bae0e2014c7be9c54950cf6bf4fc9

ff2af198111ec4907b62bec605d7fb931b8b9f6814b6c25629d625715e7a380e

U.S.

- Retail

- Industrial

- Other

- Rental

U.K.

Other

Total Revenue

293decb8d888eb98e8045f7ead83d2ba83e64c354713184e9bdd910ff721bf2b

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Investment Volume Guidance**: Approximately **$3.5 billion**  **[O_3405811_0]** .
  2. **AFFO Per Share Guidance**: Range of **$4.17 to $4.21**  **[O_3405811_0]** .
  3. **Asset Sales Proceeds**: Between **$550 million to $600 million**  **[O_3405811_1]** .
  4. **Fourth Quarter Investment Outlook**: Approximately **$1.3 billion**  **[O_3405811_1]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Investment Guidance**: **$3 billion**  **[O_3396887_6]** .
  2. **AFFO per Share Guidance**: Range of **$4.15 to $4.21**, with a **4.5% annual per share growth** at the midpoint  **[O_3396887_6]** .
  3. **Same-Store Rental Revenue Growth**: Expected to recover to close to **1%**  **[O_3396887_6]** .
  4. **Dispositions**: Between **$400 million and $500 million**  **[O_3396887_3]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **AFFO per Share Growth**: Approximately **4%**  **[O_3387145_5]** .
  2. **Dividend Yield**: Approximately **6%**  **[O_3387145_5]** .
  3. **Operational Return Profile**: Approximately **10%**  **[O_3387145_1]** .
  4. **Investment Guidance**: **$2 billion**  **[O_3387145_4]** .
  5. **Free Cash Flow**: Approximately **$825 million**  **[O_3387145_4]** .
  6. **Debt Maturity**: Approximately **$469 million**  **[O_3387145_4]** .
  7. **Liquidity**: Approximately **$4 billion**  **[O_3387145_4]** .
  8. **Investment Spread**: Over **340 basis points**  **[O_3387145_2]** .
  9. **Same-Store Rent Growth**: **0.8%**, excluding certain impacts, **1.4%**  **[O_3387145_2]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: FY 2024
- **Guidance**:
  1. **AFFO per Share Guidance**: Range of **$4.13 to $4.21**, with a **4.3% annual growth rate** at the midpoint  **[O_3374513_1]** .
  2. **Acquisitions Guidance**: Approximately **$2 billion**  **[O_3374513_1]** .
  3. **Free Cash Flow**: Over **$800 million**  **[O_3374513_4]** .
  4. **Occupancy**: Expected to remain above **98%**  **[O_3374513_12]** .
  5. **Investment Volume**: Half of the $2 billion in development financing  **[O_3374513_2]** .
  6. **Credit Loss and Integration of Spirit Portfolio**: Accommodates any level of credit loss  **[O_3374513_16]** .

bc7a4aa135d1c5d336ef620ad7265c74a10643a3e63c554401e53b09ce518113

| Name             | Position                                                                 | Start Date       | Short Bio                                                                                                                                                                                                                                                                                                                                 |
|------------------|--------------------------------------------------------------------------|------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Sumit Roy        | President and Chief Executive Officer                                    | October 2018     | Sumit Roy has been the President and CEO since October 2018. He joined Realty Income in September 2011 and has held various roles, including Executive Vice President, COO, and CIO. Prior to Realty Income, he worked at UBS Investment Bank, Merrill Lynch, and Cap Gemini Ernst & Young LLP  **[0000726728-24-000063_o-20240415.htm:47]** **[0000726728-24-000063_o-20240415.htm:28]** **[0000726728-23-000059_o-20230331.htm:29]** .                                      |
| Jonathan Pong    | Executive Vice President, Chief Financial Officer, and Treasurer         | January 1, 2024  | Jonathan Pong became the EVP, CFO, and Treasurer effective January 1, 2024. He joined Realty Income in 2014 and previously led capital markets, investor relations, financial planning, and derivatives functions. Before Realty Income, he was a Vice President in Equity Research at Robert W. Baird  **[0000726728-24-000063_o-20240415.htm:47]** **[0000726728-24-000063_o-20240415.htm:48]** .                                |
| Neil M. Abraham  | Executive Vice President, Chief Strategy Officer, and President, Realty Income International | January 2022     | Neil M. Abraham has been EVP, Chief Strategy Officer, and President of Realty Income International since January 2022. He joined Realty Income as EVP, CIO from November 2015 to May 2018. Previously, he was a Portfolio Manager at AllianceBernstein and held positions at McKinsey & Company and Salomon Brothers  **[0000726728-24-000063_o-20240415.htm:47]** **[0000726728-23-000059_o-20230331.htm:44]** .                  |
| Michelle Bushore | Executive Vice President, Chief Legal Officer, General Counsel, and Secretary | February 2021    | Michelle Bushore has been EVP, Chief Legal Officer, General Counsel, and Secretary since February 2021. Before Realty Income, she was EVP, General Counsel, Chief Legal & Risk Officer at Caesars Entertainment and held roles at Monsanto and The Climate Corporation. She was also in private practice with Latham & Watkins LLP  **[0000726728-24-000063_o-20240415.htm:47]** **[0000726728-23-000059_o-20230331.htm:44]** . |
| Mark E. Hagan    | Executive Vice President, Chief Investment Officer                        | May 2018         | Mark E. Hagan has been EVP, Chief Investment Officer since May 2018. Before joining Realty Income, he was Managing Director in Real Estate Investment Banking at RBC Capital Markets and held positions at Deutsche Bank Securities and Merrill Lynch & Co., Inc.  **[0000726728-24-000063_o-20240415.htm:47]** **[0000726728-23-000059_o-20230331.htm:44]** .                                                                    |
| Shannon Kehle    | Executive Vice President, Chief People Officer                            | January 2022     | Shannon Kehle is the EVP, Chief People Officer since January 2022. She previously served as SVP, Human Resources and VP, Human Resources. Before Realty Income, she worked in senior HR roles across various industries, including clean technology and online gaming  **[0000726728-24-000063_o-20240415.htm:47]** .                                                                  |
| Gregory J. Whyte | Executive Vice President, Chief Operating Officer                         | January 2023     | Gregory J. Whyte joined as EVP, COO in January 2023. Before Realty Income, he was a Senior Advisor at UBS Securities and Managing Director, Global Head of Real Estate Equity Research at Morgan Stanley. He is also a director at Orion Office REIT Inc. and was an independent director of TIER REIT, Inc.  **[0000726728-24-000063_o-20240415.htm:47]** **[0000726728-23-000059_o-20230331.htm:44]** **[0000726728-23-000044_o-20221231.htm:5]** .                      |

6181e6815dcfa369ac9f2e69f1e025b61709029dd1407604b944b1e671c1942e

Adjustments for Non-Cash Items [USD, Thousands]

Stock-Based Compensation [USD, Thousands]

Changes in Working Capital [USD, Thousands]

Capital Expenditures (CapEx) [USD, Thousands]

Proceeds from / Repayments of Debt [USD, Thousands]

Share Repurchases [USD, Thousands]

Dividend Payments [USD, Thousands]

Net Change in Cash [USD, Thousands]

1961b595c9de97de8d3fc3179c5399c00694d67ae841ff0a9f8e461d258c0665

**Quarterly guidance for Q4 2024:**
- **Fourth Quarter Investment Outlook**: $1.3 billion  **[O_3405811_1]**  (no prior guidance)

**Annual guidance for FY 2024:**
- **Investment Volume Guidance**: $3.5 billion  **[O_3405811_0]**  (raised from $3.0 billion  **[O_3396887_6]** )  
- **AFFO Per Share Guidance**: $4.17–$4.21  **[O_3405811_0]**  (raised from $4.15–$4.21  **[O_3396887_6]** )  
- **Asset Sales Proceeds**: $550 million–$600 million  **[O_3405811_1]**  (raised from $400 million–$500 million  **[O_3396887_3]** )  

446874a4756aef480e9280de448b6a230f31d233ad45137bf26aff23322bf3eb

| Name       | Start Date | End Date | Reason for Change |
|------------|------------|----------|-------------------|
| KPMG LLP   | 1993  **[0000726728-24-000047_o-20231231.htm:77]**    | Present  | Current auditor   |

7ef8e93e8beabc20a44e0d422ac31e9e54bdd1a3006c586b06bf0fc36ffc50e2

- Total Revenue: $1,330.9 million (+28% YoY)  **[0000726728-24-000130_o-20240930.htm:4]** **[0000726728-23-000115_o-20230930.htm:4]**   
- Rental Revenue: $1,196.8 million (+19% YoY)  **[0000726728-24-000130_o-20240930.htm:59]** **[0000726728-23-000115_o-20230930.htm:4]**   
- Other Revenue: **$59.8 million (+98% YoY)**  **[0000726728-24-000130_o-20240930.htm:59]** **[0000726728-23-000115_o-20230930.htm:4]**   
- Net Income: $271.12 million (+16% YoY)  **[0000726728-24-000130_o-20240930.htm:4]** **[0000726728-23-000115_o-20230930.htm:4]**   
- EPS (Diluted): $0.30 (-9% YoY)  **[0000726728-24-000130_o-20240930.htm:4]** **[0000726728-23-000115_o-20230930.htm:4]**   
- Interest Expense: **$261.26 million (+42% YoY)**  **[0000726728-24-000130_o-20240930.htm:4]** **[0000726728-23-000115_o-20230930.htm:4]**   
- D&A: $602.34 million (+21% YoY)  **[0000726728-24-000130_o-20240930.htm:4]** **[0000726728-23-000115_o-20230930.htm:4]**   

c9513fecd40edccc17e60846f64f49f90b17edf312c139334a4a7e018b234962

9f52252fd44891f78af33d0ee626fd93640d643b3e080d4fe462882a630467bd

cff0c93a3c6e7c27e8790084fd407193509b6c8dcb0a09ab5c4fec31c81883d8

| Year | Amount Due (in millions) | Debt Type                  | Interest Rate | % of Total Debt                                                                 |
|----------|------------------------------|---------------------------------|-------------------|------------------------------------------------------------------------------------|
| 2024     | 114.2 **[0000726728-24-000130_o-20240930.htm:81]**                | Mortgages Payable              | 4.600%, 3.875% **[0000726728-24-000130_o-20240930.htm:27]** | 0.4% = (114.2 / 26,437.0) * 100 **[0000726728-24-000130_o-20240930.htm:69]** **[0000726728-24-000130_o-20240930.htm:81]**                                  |
| 2025     | 1,896.0 **[0000726728-24-000130_o-20240930.htm:81]**              | Senior Unsecured Notes, Loans  | 3.875%, 4.625% **[0000726728-24-000130_o-20240930.htm:27]** | 7.2% = (1,896.0 / 26,437.0) * 100 **[0000726728-24-000130_o-20240930.htm:69]** **[0000726728-24-000130_o-20240930.htm:81]**                                |
| 2026     | 2,375.0 **[0000726728-24-000130_o-20240930.htm:29]**              | Senior Unsecured Notes         | 5.050%, 0.750%, 4.875%, 4.450%, 4.125% **[0000726728-24-000130_o-20240930.htm:27]** | 9.0% = (2,375.0 / 26,437.0) * 100 **[0000726728-24-000130_o-20240930.htm:69]** **[0000726728-24-000130_o-20240930.htm:29]**                                |
| 2027     | 2,371.1 **[0000726728-24-000130_o-20240930.htm:29]**              | Senior Unsecured Notes         | 1.875%, 3.000%, 3.200%, 1.125%, 3.950% **[0000726728-24-000130_o-20240930.htm:27]** | 9.0% = (2,371.1 / 26,437.0) * 100 **[0000726728-24-000130_o-20240930.htm:69]** **[0000726728-24-000130_o-20240930.htm:29]**                                |
| 2028     | 2,499.8 **[0000726728-24-000130_o-20240930.htm:29]**              | Senior Unsecured Notes         | 3.400%, 2.100%, 2.200%, 4.700%, 3.650% **[0000726728-24-000130_o-20240930.htm:69]** **[0000726728-24-000130_o-20240930.htm:27]** | 9.5% = (2,499.8 / 26,437.0) * 100 **[0000726728-24-000130_o-20240930.htm:69]** **[0000726728-24-000130_o-20240930.htm:29]**                                |
| Thereafter | 15,085.8 **[0000726728-24-000130_o-20240930.htm:29]**           | Senior Unsecured Notes         | Various (e.g., 5.375%, 6.000%, 4.650%) **[0000726728-24-000130_o-20240930.htm:28]** | 57.1% = (15,085.8 / 26,437.0) * 100 **[0000726728-24-000130_o-20240930.htm:69]** **[0000726728-24-000130_o-20240930.htm:29]**                              |

668b72b9bae90aefe99022d5b299e466274063e902cc9be40289babd52f569b2

- **Income taxes are expected to increase by approximately 35% year-over-year in 2024**, driven by the growth of international business, particularly in the U.K., which could impact net earnings.  **[O_3374513_23]**
- **Challenges in deploying capital due to a disconnect between sellers' price expectations and the company's required investment returns**, leading to lower transaction volumes and potentially hindering growth.  **[O_3374513_11]** **[O_3374513_13]**
- **Occupancy rates are expected to decrease from historically high levels of around 99% to approximately 98%**, due to expected vacancies and lease expirations, which may reduce rental income.  **[O_3374513_12]**

203a29ddc756c104c9d5d20e0f6a0a5c5ad3ce6e85c82c48c330d275d3bc68e4

- **Realty Income plans to dispose of $400 million to $500 million of assets this year, with approximately 50% being occupied assets**, which may indicate concerns about the quality or performance of these properties. The assets being sold include automotive services, drug stores, Cineworld theaters, and some discount stores.  **[O_3387145_9]**
- **The company has significant exposure to tenants on their credit watch list, such as Red Lobster, which represents 1.07% of annualized rent**. Operational issues and management changes at Red Lobster could lead to rent defaults, impacting Realty Income's cash flow.  **[O_3387145_7]**
- **Uncertainty in the U.S. market has led Realty Income to shift investments towards Europe**, focusing on retail parks with shorter lease durations of 5 to 10 years. This may expose the company to higher geopolitical and currency risks, and shorter lease terms could increase renewal risk.  **[O_3387145_16]** **[O_3387145_6]**

03e8e7de54e428979d4c19b31b856d06b5af0a56142e56caa3e11ddf31384a7d

- *- The company's creation of a private capital fund allows it to access greater investment opportunities, investing in high-quality assets that meet long-term return hurdles, even if initial yields are lower. This strategy can enhance returns for public shareholders through co-investment and recurring asset management fees.**  **[O_3405811_23]** **[O_3405811_7]**
- *- The company is optimistic about growth opportunities in the data center sector, engaging with multiple operators, and potentially securing long-term leases with high-quality clients, contributing to future earnings growth.**  **[O_3405811_21]** **[O_3405811_22]**
- *- The company plans to leverage its existing scale and resources to minimize incremental costs in establishing the private fund, maximizing efficiency and enhancing shareholder value without significant increases in overhead or changes to their investment process.**  **[O_3405811_15]**

541884f6d4abfe9edc4812bec604c1a219af5812d8086d5fadff70ebaa31c4d5

- **The formation of a private capital fund may create conflicts of interest**, potentially diverting high-quality assets from Realty Income to the fund, impacting returns for public shareholders.  **[O_3405811_23]** **[O_3405811_7]**
- **Investing in assets outside traditional triple net leases**, such as data centers or non-triple-net properties, may expose the company to higher risks due to lack of expertise in these areas.  **[O_3405811_22]** **[O_3405811_21]**
- **Engaging in speculative development projects**, particularly in non-retail assets, increases exposure to lease-up and construction risks, potentially affecting financial performance.  **[O_3405811_26]**

ebc977c8a802273586ab0cfa5afb96313a05cb1f4a88e0366bf8a3330dc06834

- **Strategic Investments Driving Internal Growth:** The company's expansion into **data centers, gaming, and international markets** is successfully increasing its internal growth rate from approximately **1% to 1.5%**, and they plan to continue focusing on these high-growth areas.  **[O_3396887_11]**
- **Strong Pipeline and Market Outlook:** The company anticipates improvement in the transaction market, with potential **larger portfolio deals** in the second half, indicating confidence in future growth opportunities.  **[O_3396887_16]**
- **Resilient Performance in New Verticals:** The company's investments in **gaming assets have been performing well**, with leases structured favorably, and they are **excited about opportunities in the data center space**, viewing it as a **massive market** for growth.  **[O_3396887_27]**

517916627078b168b8adf4b5379770b60fb43e0f4f9a702fca1eb27c80be467c

1. **Asda Loan Strategy**  
   **Q:** Will you do more loans like the Asda investment?  
   **A:** We don't anticipate doing any more credit investments in the second half. The Asda loan was an opportunistic transaction yielding **8.1% over six years** and helps offset higher interest rates on our balance sheet. We remain open to such investments when they make strategic sense.  **[O_3396887_8]** **[O_3396887_10]** **[O_3396887_14]** 

2. **Market Outlook**  
   **Q:** How are U.S. and European investment opportunities looking?  
   **A:** We're seeing increased transaction volume in the U.S. as sellers adjust to higher cap rates. We expect more opportunities in the second half, especially in the U.S., while European markets remain stable.  **[O_3396887_9]** **[O_3396887_15]** 

3. **Dispositions Guidance**  
   **Q:** Why provide guidance on dispositions now?  
   **A:** We're being more proactive in disposing of non-strategic assets, expecting **$400–$500 million** in dispositions. This helps generate capital and reflects a slight shift in strategy due to recent large M&A deals.  **[O_3396887_20]** 

4. **Expansion into New Verticals**  
   **Q:** Are you pursuing other high-growth verticals?  
   **A:** We'll focus on data centers, gaming, and international markets to drive higher internal growth. Industrial assets also offer higher growth. We're not targeting new verticals beyond those already defined.  **[O_3396887_11]** **[O_3396887_27]** 

5. **Investment Grade Tenant Percentage**  
   **Q:** The share of investment grade tenants was low; are you moving down the risk curve?  
   **A:** We don't target investment grade ratings specifically. We aim for appropriate risk-adjusted returns, and many of our non-rated tenants are effectively investment grade.  **[O_3396887_12]** 

6. **Bad Debt Outlook**  
   **Q:** What's your current bad debt level and outlook?  
   **A:** Year-to-date bad debt expense is around **$9 million**, about **70 basis points of revenue**. We expect similar levels in the second half but don't anticipate earlier reserve impacts to continue.  **[O_3396887_13]** 

7. **Acquisition Strategy**  
   **Q:** How are improved capital costs affecting investment spreads?  
   **A:** We aim to maintain our investment spreads despite potentially lower cap rates due to competition. We'll remain disciplined and selective in our acquisitions.  **[O_3396887_19]** 

8. **Interest Costs and Debt Issuance**  
   **Q:** How much did higher interest costs impact guidance, and what's your debt strategy?  
   **A:** Interest costs had minimal drag this year. For **2025**, we have **$1.8 billion** maturing. Current indicative rates are **around 5.1–5.2%** for U.S. dollar debt and **low 4%** in euros, which could mitigate impact.  **[O_3396887_26]** 

9. **Same-Store Revenue Growth**  
   **Q:** What does same-store revenue growth look like for next year?  
   **A:** We expect contractual rent growth to continue at approximately **1.5%**, aligning with our stabilized internal growth rate.  **[O_3396887_22]** 

b62db074ac7e655cb5e1a64e695e3f9df9ce5fb57f9235aef02d41c34849e075

1. **Dispositions Program Impact**  
   **Q:** What are details of your asset dispositions program?  
   **A:** We aim to sell **$400–$500 million** worth of assets this year, split roughly **50% occupied and 50% vacant** properties.  **[O_3387145_8]**  This is part of our strategy to optimize our portfolio for 2025 and beyond.  **[O_3387145_9]**  We're proactively disposing of assets that aren't core to our long-term strategy, which sometimes includes assets acquired through recent M&A deals.  **[O_3387145_9]**  Some assets are being sold at a **7% cap rate** and reinvested at **7.7%**, making this an accretive disposition strategy.  **[O_3387145_9]** 

2. **Tenant Credit Watchlist**  
   **Q:** Which tenants are on your credit watchlist?  
   **A:** We're monitoring tenants like **Rite Aid** (31 basis points of rent) undergoing bankruptcy, and **Joanne** (4 basis points), from whom we expect full lease assumption.  **[O_3387145_7]**  **Red Lobster** is also on our watchlist, representing **1.07%** of rent across **216 leases** with **2x cash flow coverage**.  **[O_3387145_7]**  We've collected **100%** of rents due as of May, and we're keeping a close eye on their operational improvements.  **[O_3387145_7]** 

3. **European Acquisitions Strategy**  
   **Q:** Why are you focusing on acquisitions in Europe?  
   **A:** We're seeing better risk-adjusted returns in Europe, with **54%** of our acquisition volume occurring there.  **[O_3387145_6]**  Sellers in Europe are more willing to transact due to consistent economic data and their need for capital amid redemption pressures.  **[O_3387145_12]**  Our established reputation as a reliable buyer gives us a competitive advantage in securing attractive deals with higher cap rates.  **[O_3387145_12]** 

4. **Impact of European Cap Rates**  
   **Q:** How are European cap rates affecting your development projects?  
   **A:** As older developments roll off, new projects are reflecting the current higher cost of capital, leading to higher yields.  **[O_3387145_11]**  We expect **cash cap rates** on developments to trend higher over the next few quarters, aligning with market conditions.  **[O_3387145_15]** 

5. **Family Dollar Closures**  
   **Q:** How will Family Dollar closures impact you?  
   **A:** Our exposure to Dollar Tree/Family Dollar is about **3%** of rent, with around **60%** being Family Dollar stores.  **[O_3387145_13]**  Lease expirations over the next 2.5 years represent only **9 basis points** of rent, so the impact is minimal.  **[O_3387145_13]**  Our asset management team is proactive in finding resolutions, and we have received interest from alternative retailers due to the urban locations of these stores.  **[O_3387145_13]** 

6. **AMC Credit Exposure**  
   **Q:** What are your thoughts on AMC's financial position?  
   **A:** AMC accounts for about **1%** of our rent across **39 assets**.  **[O_3387145_17]**  While the 2024 box office may be flat or down, we expect improvement in 2025.  **[O_3387145_17]**  Even if AMC undergoes bankruptcy, our experience with Cineworld gives us confidence in achieving acceptable outcomes, as our assets are among their better-performing locations.  **[O_3387145_17]**  Historically, we've had a recapture rate of over **80%** in similar situations.  **[O_3387145_17]** 

7. **Acquisition Outlook for H2 2024**  
   **Q:** Will you increase investments if opportunities arise later this year?  
   **A:** We're not targeting a specific acquisition volume but allowing the market to dictate opportunities.  **[O_3387145_18]**  We believe the second half of the year will present more opportunities, especially in the U.S., as interest rates stabilize.  **[O_3387145_18]**  We expect both U.S. and European acquisition momentum to continue and are optimistic about growth in the latter half of the year.  **[O_3387145_18]** 

8. **Use of Free Cash Flow**  
   **Q:** How does free cash flow factor into your investment strategy?  
   **A:** Our **$825 million** in free cash flow is a significant advantage, allowing us to invest in growth without dilution.  **[O_3387145_14]**  We evaluate the best use of this capital, whether investing accretively, buying back debt, or repurchasing stock.  **[O_3387145_14]**  All investments must meet or exceed our hurdle rate based on our long-term weighted average cost of capital.  **[O_3387145_14]** 

9. **Data Center and Gaming Investments**  
   **Q:** What's the status of your data center and gaming investments?  
   **A:** About **6%** of our first-quarter investments went into a digital JV developing a data center in Northern Virginia, operational by early next year.  **[O_3387145_20]**  We're also investing in a data center project in Spain.  **[O_3387145_20]**  In gaming, we've made two investments representing over **3%** of rents and are exploring additional opportunities, including potential developments in major cities.  **[O_3387145_20]** 

10. **Credit Investment Platform**  
    **Q:** Can you update us on your credit investment platform?  
    **A:** We continue to pursue credit investments to support our clients and facilitate sale-leasebacks.  **[O_3387145_21]**  This strategy serves as a natural hedge against refinancing headwinds from higher interest rates.  **[O_3387145_21]**  By lending to clients at current rates, we're mitigating the impact of higher refinancing costs and strengthening relationships with key operators.  **[O_3387145_21]** 

11. **Predictive Analytics in Dispositions**  
    **Q:** How do you use predictive analytics in asset dispositions?  
    **A:** Our proprietary analytics tool assesses variables across industries to predict renewal outcomes and leasing risks.  **[O_3387145_23]**  It's instrumental in identifying assets to dispose of, ensuring we optimize our portfolio.  **[O_3387145_23]**  This data-driven approach, combined with asset management insights, allows us to make informed decisions across our **15,400** locations.  **[O_3387145_23]** 

12. **Core Portfolio Characteristics**  
    **Q:** What defines your core portfolio strategy?  
    **A:** We aim for an optimal portfolio balance, maintaining desired exposure levels in sectors like grocery (targeting **13–14%**, currently at **10%**) and limiting exposure to less preferred sectors like apparel.  **[O_3387145_24]**  Over **90%** of our retail portfolio comprises service-oriented, low price point, or non-discretionary businesses.  **[O_3387145_24]**  Geographical diversification is also key, as it provides advantages in finding superior return profiles across markets.  **[O_3387145_24]** 

44253455586dc9ff1f105cca3db1e347f59919da0f9c75aed0cdc8ad37b998e9

- **Geographical diversification** is providing better investment opportunities for Realty Income, especially in Europe where they're seeing **higher risk-adjusted returns** due to consistent market data and less seller reluctance. This has allowed them to invest **54% of their volume** in Europe in Q1, taking advantage of attractive yields in retail parks.  **[O_3387145_6]** **[O_3387145_16]**
- Realty Income's **active portfolio management** and **accretive disposition strategy** involve selling non-core assets at attractive cap rates and reinvesting the proceeds at higher yields. They plan to dispose of **$400-$500 million** in assets, approximately **50%** of which are occupied assets, strengthening their portfolio and positioning for future growth.  **[O_3387145_9]** **[O_3387145_8]**
- The company expects an **acceleration of investment opportunities** in the second half of the year, especially in the U.S., as the interest rate environment stabilizes. They have a **strong track record** of securing more than their share of desired assets, which positions them well for future growth.  **[O_3387145_18]** **[O_3387145_22]**

d8460b0b6bb16daea40811a314cb4ece65ec81c198035348664478d7b4541215

1. **Private Fund Launch**  
   **Q:** Why launch a private fund now?  
   **A:** Sumit explained that the private fund allows Realty Income to pursue high-quality assets with lower initial yields but similar long-term returns, which the public entity can't target due to its focus on near-term spreads. The fund expands their investment universe and monetizes their platform's scale, benefiting public shareholders over time.  **[O_3405811_7]** **[O_3405811_18]** **[O_3405811_13]** 

2. **Acquisition Strategy and Q4 Guidance**  
   **Q:** What's driving acquisition volumes and guidance for Q4?  
   **A:** Sumit noted they completed **$740 million** in acquisitions in Q3 at a **4% cap rate**, 50 basis points lower than Q2's **7.9%**, but their cost of capital improved by **65 basis points**, making these deals more accretive. They anticipate closing **$1.3 billion** in Q4, have forward-funded it, and have zero reliance on public markets for financing.  **[O_3405811_6]** **[O_3405811_14]** 

3. **$63 Million Noncash Charge**  
   **Q:** What about the $63 million charge related to a C-store client?  
   **A:** Jonathan explained it's a **noncash** charge due to a client not paying rent while operating the assets. They expect to recapture a significant portion upon re-leasing, as they've historically achieved recapture rates over **80%**. The assets are primarily in Texas and have generated strong interest.  **[O_3405811_10]** **[O_3405811_20]** 

4. **Expanding into Europe**  
   **Q:** How are European opportunities shaping up?  
   **A:** Sumit stated that **56%** of year-to-date acquisitions have been in Europe, which they view as an advantage. They expect momentum to continue, with potential expansion into new countries, though Q4 will revert to more historical norms between U.S. and international investments.  **[O_3405811_12]** 

5. **Credit and Lease Renewals**  
   **Q:** Can you update on credit issues and lease renewals?  
   **A:** Sumit highlighted successful resolutions with tenants like Red Lobster, Rite Aid, and Regal, achieving recapture rates of **91%**, **88%**, and **85%** respectively. All **13** Walgreens leases up for renewal this year were renewed, and they've seen over **100%** rent recapture on **55** Walgreens renewals historically. Similar strong renewals were noted with CVS and dollar stores, emphasizing that headlines don't reflect their portfolio's performance.  **[O_3405811_10]** 

6. **Competitive Landscape**  
   **Q:** How is competition affecting your acquisitions?  
   **A:** Sumit acknowledged increased competition from private capital in the U.S., making it a crowded field, though they don't often compete with public net lease companies. In international markets, competition is less intense, which is advantageous for them.  **[O_3405811_16]** 

7. **Data Center Investments**  
   **Q:** What's the status of data center initiatives?  
   **A:** Sumit mentioned they're seeing strong demand in the data center space and are in discussions with multiple operators. They're crafting compelling value propositions and are optimistic about future opportunities to allocate capital exposed to top-tier clients on long-term leases.  **[O_3405811_22]** 

8. **Effect of Interest Rates**  
   **Q:** How are interest rate changes affecting transactions?  
   **A:** Sumit said that volatility in long-term interest rates impacts their cost of capital, affecting acquisitions. They monitor policy-driven inflation expectations but believe uncertainty will pass, allowing them to execute business as usual once rates stabilize.  **[O_3405811_17]** 

9. **Fund Investment Focus**  
   **Q:** Will the fund invest in non-triple net assets?  
   **A:** Sumit clarified that fund investments will have rental income similar to their balance sheet assets, focusing on high-flow-through properties like hyperscale, single-tenant data centers with 20-year leases. They won't pursue businesses with lower NOI margins.  **[O_3405811_23]** 

10. **Development Pipeline**  
    **Q:** Update on leasing non-retail developments?  
    **A:** Sumit said the non-retail portion of their development pipeline is small, around **15%**, and they wait for lease clarity before significant spending. They're confident in leasing up these assets, partnering with top developers like Panattoni.  **[O_3405811_26]** 

e1efcdd62a81dc80d6f62366bc290dbb568756c0f225e26e874e989224732260

- **Strong track record of executing large transactions and building robust pipeline:** The company has completed over five transactions above $500 million in size, including two over $1 billion, demonstrating its ability to deliver big solutions to clients and indicating potential for future growth once market conditions align.  **[O_3374513_11]**
- **Successful integration of Spirit Realty Capital with potential upside:** The integration of the Spirit portfolio is progressing smoothly, with positive surprises and potential upside beyond conservative underwriting expectations, positioning the company for enhanced performance.  **[O_3374513_16]**
- **Expanding offerings through credit lending platform to enhance client relationships and economics:** By offering additional products such as credit investments, including in sectors like gaming with Blackstone and grocery in the UK, the company is able to enhance transaction economics and strengthen client relationships.  **[O_3374513_21]**

3a502d2d70dd9903790fc896276021f729c12e3d4ba03ea0e013da3d35cc5b17

1. **Acquisition Guidance and Market Outlook**  
   **Q:** What can increase your $2B acquisition guidance this year?  
   **A:** We can exceed our $2 billion acquisition guidance if cap rates adjust or if our cost of capital improves. Currently, cap rates haven't moved in line with the increased cost of capital, so we're being conservative. If the environment changes, we'll act quickly to capitalize on opportunities. We aim to deliver over **10% total return** without relying on market conditions.  **[O_3374513_7]** 

2. **Navigating Prolonged Murky Markets**  
   **Q:** How will you navigate a multi-year slow transaction market?  
   **A:** If high cost of capital persists and becomes the norm, cap rates will eventually adjust, and transaction activity will resume. Currently, market volatility causes sellers to delay deals. When stability returns, we'll be ready to act on attractive opportunities.  **[O_3374513_8]** 

3. **Integration of Spirit Portfolio and Credit Losses**  
   **Q:** What's embedded in guidance regarding Spirit's credit loss?  
   **A:** Integration of the Spirit portfolio is going well with no negative surprises. We've been conservative in our underwriting, and our guidance range accommodates any potential credit losses from the Spirit assets. There's potential upside if outcomes are better than expected.  **[O_3374513_16]** 

4. **Investment Spreads and Cost of Capital**  
   **Q:** Is the 200bps spread over cost of capital still required?  
   **A:** The 200 basis point spread isn't a hard minimum. Historically, our average spread is **150bps**, but in volatile markets, it can vary. We employ a barbell strategy, balancing investments with different spreads to achieve attractive risk-adjusted returns. We can still deliver over **10%** returns without heavy reliance on acquisitions.  **[O_3374513_15]** 

5. **AFFO Guidance Assumptions**  
   **Q:** What drives the high and low ends of AFFO guidance?  
   **A:** The low end assumes higher short-term rates, minimal acquisitions, and conservative bad debt expenses. The high end assumes improved macro conditions, increased investment volume, better spreads (above **150bps**), and lower bad debt expenses aligned with historical levels.   

6. **Development Yields and Strategy**  
   **Q:** Will you lean more into development for better yields?  
   **A:** Development is another tool for growth, offering potentially higher yields than market acquisitions. Most of our pipeline consists of takeouts, where we fund upon project completion. While development isn't the main focus, it helps us support clients and achieve superior yields.  **[O_3374513_10]** 

7. **Opportunities in Europe Versus U.S.**  
   **Q:** Is Europe more attractive given better debt costs?  
   **A:** Transaction volumes are low globally due to the buyer-seller disconnect. However, Europe, especially the U.K., offers pockets of opportunity, and our cost of debt there is lower by **110-120bps**, making deals more attractive when available.  **[O_3374513_13]** 

8. **Internal Growth Drivers**  
   **Q:** Does client credit quality affect lease escalators?  
   **A:** Higher credit clients often resist higher escalators. We've increased internal growth by **50bps** to **1.5%** by diversifying into new asset types like industrial, data centers, gaming, and expanding internationally where we achieve better growth even with investment-grade clients.  **[O_3374513_19]** 

9. **Capital Recycling Plans**  
   **Q:** Do you have a target date to dispose of non-core assets?  
   **A:** We're actively identifying and marketing non-core assets from the Spirit portfolio, prioritizing those that don't fit our long-term strategy. There's no specific target date, but we expect higher capital recycling than the **$160 million** achieved in 2023.  **[O_3374513_18]** **[O_3374513_20]** 

10. **G&A Expenses and Spirit Synergies**  
    **Q:** Why aren't G&A expenses declining more with Spirit deal?  
    **A:** While we expect synergies of **$30 million**, we're reinvesting in the business, including technology and personnel, to create a scalable platform. The full impact of synergies will take time, and we're maintaining some conservatism in our guidance.  **[O_3374513_14]** 

11. **Use of Free Cash Flow**  
    **Q:** Does the $800M free cash flow include money market income?  
    **A:** Yes, the expected free cash flow over **$800 million** includes all income, such as that from holding cash in money markets. This flows through to AFFO, and after dividends, results in our free cash flow.  **[O_3374513_22]** 

12. **Pipeline Composition**  
    **Q:** What's the domestic vs. international pipeline split?  
    **A:** Historically, our investments are **60-70% U.S.** and **30-40% international**. Given current discussions, the international portion may increase, but it's too early to provide specific numbers.   

13. **Income Taxes Increase**  
    **Q:** What drives the large increase in income taxes?  
    **A:** The increase is due to growth in our international business, primarily in the U.K., where we are subject to taxes. As our U.K. portfolio, now over **$9 billion**, grows, so does the tax expense. This is factored into our underwriting and investment decisions.   

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- **Exposure to Tenant Bankruptcies and Store Closures:** Realty Income has exposure to clients currently navigating bankruptcies or store closures, including **Rite Aid (0.3% of annualized rent)** and **Red Lobster (1% of annualized rent)**. While they expect to recapture approximately **84%** of rent through restructurings, there is still potential loss of income and uncertainty related to these tenants.  **[O_3396887_4]**
- **Potential Impact from Interest Rate Increases on Debt Refinancing:** Realty Income has **$1.8 billion to $1.9 billion** of debt maturing in **2025** at a **4.2%** interest rate. Refinancing this debt could result in up to **100 basis points** higher interest rates, leading to a potential **50 basis point impact on earnings** due to increased interest expenses.  **[O_3396887_26]**
- **Competitive Pressures Could Compress Investment Spreads:** As cost of capital improves and more competitors enter the market, **cap rates are expected to compress**, potentially lowering Realty Income's investment spreads. This, coupled with economic and geopolitical uncertainties, may impact their ability to maintain previous returns on investments.  **[O_3396887_19]**

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Realty Income Corp (O)

Financials