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Merger with Spirit Realty Capital, Inc. | 9 Months Ended
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Sep. 30, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract] |
Merger with Spirit Realty Capital, Inc. | Merger with Spirit Realty Capital, Inc. On January 23, 2024, we completed our previously announced merger (the "Merger") with Spirit. For further details, please see note 2, Merger with Spirit Realty Capital, Inc., to our consolidated financial statements in our annual report on Form 10-K for the year ended December 31, 2024. The Merger has been accounted for using the acquisition method of accounting in accordance with ASC 805, Business Combinations, with Realty Income as the accounting acquirer, which requires, among other things, that the assets acquired, and liabilities assumed be recognized at their acquisition date fair value. The fair value of the consideration transferred on the date of the acquisition is as follows (in thousands, except share and per share data):
Shares of Spirit common stock exchanged (1) |  | 142,136,567 |
Exchange Ratio |  | 0.762
Shares of Realty Income common stock issued |  | 108,308,064
Opening price of Realty Income common stock on January 23, 2024 |  | $ | 55.80 |
Fair value of Realty Income common stock issued to the former holders of Spirit common stock |  | $ | 6,043,590 |
Shares of Realty Income Series A Preferred Stock issued in exchange for Spirit Series A Preferred Stock (2) |  | 6,900,000 |
Opening price of Realty Income Series A Preferred Stock on January 23, 2024 |  | $ | 24.26 |
Fair value of Realty Income Series A Preferred Stock issued to the former holders of Spirit Series A Preferred Stock |  | $ | 167,394 |
Cash paid for fractional shares |  | $ | 51 |
Less: Fair value of Spirit restricted stock and performance awards attributable to post-combination costs (3) |  | $ | (24,751) |
Consideration transferred |  | $ | 6,186,284 |
(1) Includes 142.1 million shares of Spirit common stock outstanding as of January 23, 2024, which were converted into Realty Income common stock at the effective time of the Merger (the “Effective Time”) at an Exchange Ratio of 0.762 per share of Spirit common stock. The portion of the converted unvested Spirit restricted stock awards related to post-combination expense is removed in footnote (3) below. (2) In September 2024, we redeemed all 6.9 million shares of Realty Income Series A Preferred Stock outstanding. (3) Represents the fair value of fully vested Spirit restricted stock and performance share awards that were accelerated and converted into Realty Income common stock at the Effective Time, reflecting the value attributable to post-combination services. Spirit restricted stock and performance share awards are included in Spirit's outstanding common stock as of the date of the Merger. The fair value attributable to pre-combination services was $41.7 million and is included in the consideration transferred above. A. Merger-related Transaction Costs In conjunction with the Merger, during the three and nine months ended September 30, 2024 we incurred $2.9 million and $99.8 million, respectively, of merger-related transaction costs primarily consisting of employee severance, post-combination share-based compensation, transfer taxes, and various professional fees directly attributable to the Merger. We incurred $0.9 million and $1.7 million of merger-related transaction costs during the three and nine months ended September 30, 2025, respectively, primarily related to the resolution of certain contingencies which existed at the date of the Merger. Merger-related transaction costs are presented in 'Merger, transaction, and other costs, net' in our consolidated statements of income and comprehensive income. B. Unaudited Pro Forma Financial Information The following unaudited pro forma information presents a summary of our combined results of operations for the nine months ended September 30, 2024, as if the Merger had occurred on January 1, 2023 (in millions, except per share data). The pro forma financial information is not necessarily indicative of the results of operations had the acquisition been effected on the assumed date, nor is it necessarily an indication of trends in future results for a number of reasons, including, but not limited to, differences between the assumptions used to prepare the pro forma information, basic shares outstanding and dilutive equivalents, cost savings from operating efficiencies, potential synergies, and the impact of incremental costs incurred in integrating the businesses.
|  |  | Nine months ended |  |  |  |
|  |  | September 30, 2024 |  |  |  |
Total revenues |  |  | $ | 3,978.8 |  |  |  |  |
Net income |  |  | $ | 759.4 |  |  |  |  |
Basic and diluted earnings per share |  |  | $ | 0.88 |  |  |  |  |
Our consolidated results of operations for the three and nine months ended September 30, 2024 include $202.8 million and $563.8 million of revenues, respectively, and $40.2 million and $96.0 million of net income, respectively, associated with the results of operations of Spirit from the closing of the Merger on January 23, 2024 to September 30, 2024.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-20/tableOfContent Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent + Details
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