Redeemable Preferred Stock

3 Months Ended

Mar. 31, 2024

Equity [Abstract]

Redeemable Preferred Stock

Stockholders' Equity

A.Common Stock

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:

	Three months ended March 31,
Month	2024		2023
January	$	0.2565	$	0.2485
February	0.2565		0.2485
March	0.2565		0.2545
Total	$	0.7695	$	0.7515

At March 31, 2024, a distribution of $0.2570 per common share was payable and was paid in April 2024.

B.    At-the-Market ("ATM") Program

Under our current ATM program, which we entered into in August 2023, we may offer and sell up to 120.0 million shares of common stock (1) by us to, or through, a consortium of banks acting as our sales agents or (2) by a consortium of banks acting as forward sellers on behalf of any forward purchasers contemplated thereunder, in each case by means of ordinary brokers' transactions on the NYSE under the ticker symbol "O" at prevailing market prices or at negotiated prices. Upon settlement, subject to certain exceptions, we may elect, in our sole discretion, to cash settle or net share settle all or any portion of our obligations under any forward sale agreement, in which cases we may not receive any proceeds (in the case of cash settlement) or will not receive any proceeds (in the case of net share settlement), and we may owe cash (in the case of cash settlement) or shares of our common stock (in the case of net share settlement) to the relevant forward purchaser. As of March 31, 2024, we had 76.7 million shares remaining for future issuance under our ATM program. We anticipate maintaining the availability of our ATM program in the future, including the replenishment of authorized shares issuable thereunder.

The following table outlines common stock issuances pursuant to our ATM programs (dollars in millions, shares in thousands):

	Three months ended March 31,
	2024		2023
Shares of common stock issued under the ATM program (1)	9,604		12,664
Gross proceeds	$	547.0	$	801.7
Sales agents' commissions and other offering expenses	(3.5)		(5.5)
Net proceeds	$	543.5	$	796.2

(1) During the three months ended March 31, 2024, 4.6 million shares were sold, and 9.6 million shares were settled pursuant to forward sale confirmations. In addition, as of March 31, 2024, 1.2 million shares of common stock subject to forward sale confirmations have been executed, but not settled, at a weighted average initial gross price of $54.00 per share. We currently expect to fully settle forward sale agreements outstanding by June 30, 2024, representing $62.9 million in net proceeds, for which the weighted average forward price at March 31, 2024 was $53.70 per share.

C.    Dividend Reinvestment and Stock Purchase Plan ("DRSPP")

Our DRSPP provides our common stockholders, as well as new investors, with a convenient and economical method of purchasing our common stock and reinvesting their distributions. It also allows our current stockholders to buy additional shares of common stock by reinvesting all or a portion of their distributions. Our DRSPP authorizes up to 26.0 million common shares to be issued. At March 31, 2024, we had 10.9 million shares remaining for future issuance under our DRSPP program.

The following table outlines common stock issuances pursuant to our DRSPP program (dollars in millions, shares in thousands):

	Three months ended March 31,
	2024		2023
Shares of common stock issued under the DRSPP program	58		42
Gross proceeds	$	3.1	$	2.7

Redeemable Preferred Stock

As part of the Merger Agreement with Spirit, 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, resulting in 6.9 million shares of Realty Income Series A Preferred Stock issued. We are authorized to issue up to 69.9 million shares of our preferred stock. As of March 31, 2024, we had 6.9 million shares of our preferred stock outstanding. The 6.000% Series A Cumulative Redeemable Preferred Stock trades on the NYSE under the ticker symbol "O PR".

The 6.000% Series A Cumulative Redeemable Preferred Stock is classified as mezzanine equity on our consolidated balance sheets as it is contingently redeemable for cash or the value of the property, rights or securities to be paid or distributed upon the occurrence of a change of control event, which is not solely within our control.

Our preferred stock pays cumulative cash dividends at the rate of 6.000% per annum on their liquidation preference of $25.00 per share (equivalent to $1.50 per share on an annual basis). We may, at our option, redeem the 6.000% Series A Cumulative Redeemable Preferred Stock, in whole or in part, at any time for cash at a redemption price of $25.00 per share, plus any accrued and unpaid dividends up to, but excluding, the redemption date. Dividends are payable quarterly in arrears on or about the last day of March, June, September and December of each year. During the three months ended March 31, 2024, we paid one quarterly dividend to holders of our preferred stock totaling $0.375 per share, or $2.6 million.