What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-08-03 compared with 2021-05-04 · 365 added, 214 removed, 629 unchanged (48% of the section changed)

3 unchanged sentences

(dollars in thousands, except per share and share count data)

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

ASSETS (unaudited)

23 unchanged sentences

Stockholders’ equity:

Common stock and paid in capital, par value $ 0.01 per share, 740,200,000 shares authorized, 373,509,822 and 361,303,445 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively

Common stock and paid in capital, par value $ 0.01 per share, 740,200,000 shares authorized, 380,174,042 and 361,303,445 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively

15,827,231 14,700,050

10 unchanged sentences

(dollars in thousands, except per share data) (unaudited)

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2021 2020 2021 2020

Rental (including reimbursable) $ 460,256 $ 410,201 $ 899,621 $ 822,358

5 unchanged sentences

General and administrative 21,849 19,063 42,645 40,027

Income taxes 6,225 2,763

Provisions for impairment 17,246 13,869 19,966 18,347

Merger-related costs 13,298 — 13,298 —

Total expenses 345,590 305,553 648,665 597,111

2 unchanged sentences

Loss on extinguishment of debt — — ( 46,473 ) ( 9,819 )

Income before income taxes 133,993 110,908 236,454 260,814

Income taxes ( 9,225 ) ( 2,838 ) ( 15,450 ) ( 5,601 )

Net income 124,768 108,070 221,004 255,213

15 unchanged sentences

(dollars in thousands) (unaudited)

Three Months Ended March 31, 2021 and 2020

Three Months Ended June 30, 2021 and 2020

capital Distributions

net income Accumulated

comprehensive

comprehensive loss Total

stockholders’

1 unchanged sentence

interests Total

Balance, December 31, 2019

333,619,106 $ 12,873,849 $ ( 3,082,291 ) $ ( 17,102 ) $ 9,774,456 $ 29,702 $ 9,804,158

Balance, March 31, 2021 373,509,822 $ 15,371,016 $ ( 3,827,660 ) $ ( 8,484 ) $ 11,534,872 $ 32,141 $ 11,567,013

Net income — — 124,479 — 124,479 289 124,768

2 unchanged sentences

Share issuances, net of costs 6,629,021 452,355 — — 452,355 — 452,355

Contributions by noncontrolling interests — — — — — 2,106 2,106

Share-based compensation, net 35,199 3,860 — — 3,860 — 3,860

Balance, June 30, 2021

380,174,042 $ 15,827,231 $ ( 3,968,333 ) $ ( 19,366 ) $ 11,839,532 $ 34,147 $ 11,873,679

Balance, March 31, 2020 343,402,030 $ 13,604,055 $ ( 3,173,468 ) $ ( 42,572 ) $ 10,388,015 $ 29,624 $ 10,417,639

Net Income — — 107,824 — 107,824 246 108,070

Other comprehensive loss — — — ( 10,512 ) ( 10,512 ) — ( 10,512 )

Distributions paid and payable — — ( 240,944 ) — ( 240,944 ) ( 400 ) ( 241,344 )

Share issuances, net of costs 1,555,966 96,996 — — 96,996 — 96,996

Share-based compensation, net

65,425 3,070 — — 3,070 — 3,070

Balance, December 31, 2020

Balance, June 30, 2020

345,023,421 $ 13,704,121 $ ( 3,306,588 ) $ ( 53,084 ) $ 10,344,449 $ 29,470 $ 10,373,919

Six Months Ended June 30, 2021 and 2020

capital Distributions

net income Accumulated

comprehensive

income (loss) Total

stockholders’

equity Noncontrolling

interests Total

Balance, December 31, 2020 361,303,445 $ 14,700,050 $ ( 3,659,933 ) $ ( 54,634 ) $ 10,985,483 $ 32,247 $ 11,017,730

Net Income — — 220,419 — 220,419 585 221,004

2 unchanged sentences

Share issuances, net of costs 18,747,415 1,124,576 — — 1,124,576 — 1,124,576

Contributions by noncontrolling interests — — — — — 2,106 2,106

Share-based compensation, net 123,182 2,605 — — 2,605 — 2,605

Balance, March 31, 2021

Balance, June 30, 2021

380,174,042 $ 15,827,231 $ ( 3,968,333 ) $ ( 19,366 ) $ 11,839,532 $ 34,147 $ 11,873,679

Balance, December 31, 2019 333,619,106 $ 12,873,849 $ ( 3,082,291 ) $ ( 17,102 ) $ 9,774,456 $ 29,702 $ 9,804,158

Net income — — 254,651 — 254,651 562 255,213

Other comprehensive loss — — — ( 35,982 ) ( 35,982 ) — ( 35,982 )

Distributions paid and payable — — ( 478,948 ) — ( 478,948 ) ( 794 ) ( 479,742 )

Share issuances, net of costs 11,280,466 827,772 — — 827,772 — 827,772

Share-based compensation, net 123,849 2,500 — — 2,500 — 2,500

Balance, June 30, 2020

345,023,421 $ 13,704,121 $ ( 3,306,588 ) $ ( 53,084 ) $ 10,344,449 $ 29,470 $ 10,373,919

The accompanying notes to consolidated financial statements are an integral part of these statements.

2 unchanged sentences

(dollars in thousands) (unaudited)

Three months ended March 31,

Six months ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES

15 unchanged sentences

Provisions for impairment on real estate

19,966 18,347

Change in assets and liabilities

12 unchanged sentences

91,616 133,643

Purchase of short-term investment — ( 300,000 )

Insurance and other proceeds received

7 unchanged sentences

Payments on line of credit and commercial paper program ( 4,097,909 ) ( 2,385,859 )

Principal payment on term loan

— ( 250,000 )

Proceeds from notes and bonds payable issued — 593,922

Principal payment on notes payable

7 unchanged sentences

Proceeds from dividend reinvestment and stock purchase plan

Proceeds from At-the-Market (ATM) program, net 449,959 94,076

Distributions to noncontrolling interests

1 unchanged sentence

Net receipts on derivative settlements

Debt issuance costs — ( 5,526 )

Other items, including shares withheld upon vesting

3 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents

( 1,032 ) ( 2,175 )

Net (decrease) increase in cash, cash equivalents and restricted cash ( 583,694 ) 59,313

7 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

June 30, 2021

Basis of Presentation

2 unchanged sentences

Unless otherwise indicated, all dollar amounts are expressed in United States (U.S.) dollars.

At March 31, 2021 we owned 6,662 properties, located in all U.S.

At June 30, 2021 we owned 6,761 properties, located in all 50 U.S.

states, Puerto Rico and the United Kingdom (U.K.), consisting of approximately 118.3 million leasable square feet.

19 unchanged sentences

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 probable.

The majority of concessions granted to our clients during 2020 and the three months ended March 31, 2021 as a result of the COVID-19 pandemic have been rent deferrals with the original lease term unchanged.

The majority of concessions granted to our clients during 2020 and the six months ended June 30, 2021 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 guidance provided by the Financial Accounting Standards Board (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 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 the three months ended March 31, 2021.

Similarly, rent abatements granted, which are also accounted for as lease modifications, impacted our rental revenue by an insignificant amount for the three

months ended March 31, 2021.

As our rent collections were unaffected by the COVID-19 pandemic for the three months ended March 31, 2020, there was no impact for that period.

Similarly, rent abatements granted, which are also accounted

for as lease modifications, impacted our rental revenue by an insignificant amount for the six months ended June 30, 2021.

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):

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2021 2020 2021 2020

Rental revenue reserves $ 7.5 $ 6.4 $ 15.8 $ 7.4

1 unchanged sentence

Total rental revenue reserves $ 8.2 $ 8.5 $ 17.0 $ 10.2

As of March 31, 2021, 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.

As of June 30, 2021, 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.

5 unchanged sentences

We are currently evaluating the impact that the expected market transition from LIBOR to alternative references rates will have on our financial statements as well as the applicability of the aforementioned expedients and exceptions provided in ASU 2020-04.

Reclassification.

For the three months ended June 30, 2021, we began presenting 'Income taxes,' which was previously presented in 'Expenses,' below a newly captioned subtotal for 'Income before income taxes' within our consolidated statements of income and comprehensive income.

Prior year amounts have been reclassified to conform to the current year presentation.

Agreement and Plan of Merger

On April 29, 2021, we entered into an Agreement and Plan of Merger, as amended, or the Merger Agreement, with VEREIT, Inc., or VEREIT, its operating partnership, VEREIT Operating Partnership, L.P., or VEREIT OP, and two newly formed wholly-owned subsidiaries of us.

Pursuant to the terms of the Merger Agreement, (i) one of the newly formed subsidiaries of us will merge with and into VEREIT OP, with VEREIT OP as the surviving entity, which we refer to as the Partnership Merger, and (ii) immediately thereafter, VEREIT will merge with and into the other newly formed subsidiary of us, with our subsidiary as the surviving corporation, which we refer to as the Merger and, together with the Partnership Merger, the Mergers.

Pursuant to the terms of the Merger Agreement and subject to the terms thereof, upon the consummation of the Mergers, (i) each outstanding share of VEREIT common stock, and each outstanding common partnership unit of VEREIT OP owned by any of its partners other than VEREIT, Realty Income or their respective affiliates, will automatically be converted into 0.705 of a newly issued share of our common stock, subject to possible adjustment as provided in the Merger Agreement, (ii) each outstanding Series F preferred partnership unit of VEREIT OP owned by a partner other than VEREIT shall be converted into the right to receive $ 25.00 , plus the accumulated and unpaid distributions described in the Merger Agreement, and (iii) each outstanding Series F preferred partnership unit of VEREIT OP owned by VEREIT will remain outstanding as a preferred partnership unit and each outstanding common partnership unit of VEREIT OP owned by VEREIT, Realty Income or their respective affiliates will remain outstanding as a common partnership unit in the surviving entity of VEREIT OP.

Immediately prior to the Mergers, VEREIT will issue a redemption notice to redeem each share of issued and outstanding VEREIT Series F preferred stock at its redemption price in accordance with its terms.

In connection with the Mergers, we and VEREIT intend to contribute some or all of our office real estate properties to a newly formed, wholly owned subsidiary, which we refer to as OfficeCo, and, following the Mergers, for us to

distribute the outstanding voting shares of common stock of OfficeCo to our stockholders (including former VEREIT stockholders who receive shares of our common stock in the Mergers) on a pro rata basis, which we refer to as the Spin-Off.

Following the consummation of the Spin-Off, we and VEREIT intend for OfficeCo to operate as a separate, publicly-traded REIT.

Subject to the terms and conditions of the Merger Agreement, we and VEREIT may also or alternatively seek to sell some or all of the office real estate properties in connection with the closing of the Mergers or choose to retain some or all of the OfficeCo properties.

The Merger Agreement contains customary covenants, representations, and warranties, as well as certain termination rights for VEREIT and us, in each case, as more fully described in the Merger Agreement.

The consummation of the Mergers is also subject to certain customary closing conditions, including receipt of the approval by our stockholders and the stockholders of VEREIT.

In addition, we will not be obligated to consummate the Mergers before January 29, 2022 unless the Spin-Off is ready, in all respects, to be consummated contemporaneously with the closing of the Mergers.

If this condition is not satisfied or waived by us by January 29, 2022, and all other conditions to closing have been satisfied, the parties will be obligated to close the Mergers, regardless of whether the Spin-Off is ready to be consummated.

Likewise, the Spin-Off is subject to various conditions and uncertainties and we and VEREIT may elect to sell some or all of the applicable office properties before the Spin-Off and we may elect not to proceed with the Spin-Off at all.

In connection with the Merger, we have filed a registration statement on Form S-4 (File No.

333-256772), declared effective by the SEC on June 29, 2021, that includes a joint proxy statement of Realty Income and VEREIT.

Realty Income and VEREIT have each scheduled special meetings of their respective stockholders to be held on August 12, 2021 in connection with the Mergers and related transactions.

Realty Income stockholders will be asked to consider and vote on a proposal to approve the issuance of Realty Income common stock in the Mergers pursuant to the Merger Agreement.

VEREIT stockholders will be asked to consider and vote on a proposal to approve the Merger, on the terms and subject to the conditions of the Merger Agreement and a proposal to approve, by advisory (non-binding) vote, the compensation that may be paid or become payable to the named executive officers of VEREIT in connection with the Merger.

Merger-related Costs

In conjunction with our proposed acquisition of VEREIT, we incurred approximately $ 13.3 million of merger-related transaction costs during the three and six months ended June 30, 2021.

The merger-related costs incurred to date primarily consist of advisory fees, attorney fees, accountant fees and SEC filing fees.

In addition, we have engaged service providers, including investment banks and advisors, to help us negotiate the terms of the Merger and to advise us on other merger-related matters.

In connection with these services, we expect to be required to pay success-based fees to the extent that certain conditions, including the closing of the Merger and consummation of the Spin-Off and/or sale of OfficeCo business, are met.

As of June 30, 2021, we expect to incur approximately $ 18.0 million of such success fees.

As closing of the Merger has not occurred, no such amounts have been paid or accrued through June 30, 2021.

If closing of the Merger does not occur, we would not expect to be required to pay these fees.

Litigation Relating to the Mergers

To date, purported stockholders of VEREIT filed 12 lawsuits challenging disclosures related to the Merger ( Stein v.

VEREIT, Inc., et.

1:21-cv-01409 (D.

Md., June 7, 2021) (the “Stein Complaint”);

VEREIT, Inc., et.

1:21-cv-00845 (D.

Del., June 10, 2021) (the “Bowles Complaint”);

VEREIT, Inc., et.

1:21-cv-05270 (D.

S.D.N.Y., June 14, 2021) (the “Leach Complaint”);

VEREIT, Inc., et.

1:21-cv-05286 (D.

S.D.N.Y., June 15, 2021) (the “Jenkins Complaint”);

VEREIT, Inc., et.

1:21-cv-05357 (D.

S.D.N.Y., June 17, 2021) (the “Tacka Complaint”);

Congregation Zichron Moishe v.

VEREIT, Inc., et.

1:21-cv-01729 (D.

Colo., June 24, 2021) (the “Congregation Zichron Moishe Complaint”);

VEREIT, Inc., et al.

1:21-cv-01758 (D.

June 28, 2021) (the “Mishra Complaint”) ;

VEREIT, Inc., et.

1:21-cv-01791 (D.

July 1, 2021) (the “Walker Complaint”);

Ciccotelli v.

VEREIT, Inc., et.

2:21-cv-02983 (D.

July 2, 2021) (the “Ciccotelli Complaint”);

VEREIT, Inc., et.

1:21-cv-06129 (D.

S.D.N.Y July 16, 2021) (the “Upton Complaint”);

VEREIT, Inc., et al.

1:21-cv-06212 (S.D.N.Y.

July 21, 2021) (the “Matten Complaint”);

and Halberstam v.

VEREIT, Inc., et al.

1:21-cv-02000 (D.

July 23, 2021 (the “Halberstam Complaint”)).

Purported stockholders of Realty Income filed one lawsuit challenging the disclosures related to the Merger ( Boyko v.

Realty Income Corp., et.

1:21-cv-01653 (D.

Colo., June 16, 2021) (the “Boyko Complaint,” and collectively, the “Complaints”)).

A stockholder of Realty Income also sent the Company a demand disclosure letter on June 30, 2021 (the “Demand Letter”).

The Stein, Leach, Tacka, Matten and Halberstam Complaints name VEREIT and the members of the VEREIT board of directors as defendants.

The Congregation Zichron Moishe, Mishra, Walker and Upton Complaints name VEREIT, VEREIT OP, and the members of the VEREIT board of directors as defendants.

The Bowles and Ciccotelli Complaints name VEREIT, the members of the VEREIT board of directors, VEREIT OP, Realty Income, Merger Sub 1 and Merger Sub 2 as defendants.

The Jenkins Complaint names VEREIT, the members of the VEREIT board of directors, Realty Income, Merger Sub 1 and Merger Sub 2 as defendants.

The Boyko Complaint names Realty Income and the members of the Realty Income board of directors as defendants.

The Demand Letter is addressed to Realty Income and the members of the Realty Income board of directors.

The Complaints each allege generally that the entities and individual defendants named in such Complaint violated Section 14(a) and Rule 14a-9 promulgated thereunder and that the individual defendants violated Section 20(a) of the Exchange Act by preparing and disseminating a registration statement that misstates or omits certain allegedly material information.

The Demand Letter includes similar allegations.

Furthermore, the Jenkins Complaint also alleges that:

(1) members of the VEREIT board of directors breached their fiduciary duties by entering into the transactions contemplated by the Merger Agreement through a flawed and unfair process and by failing to disclose all material information to VEREIT’s stockholders;

and (2) VEREIT, Realty Income, Merger Sub 1 and Merger Sub 2 each aided and abetted such breach of fiduciary duty by the VEREIT board of directors.

Each Complaint seeks, among other things, injunctive relief enjoining the consummation of the Merger, if the Merger is consummated, rescission or rescissory damages and an award of the plaintiff’s costs, including attorneys’ and experts’ fees.

The defendants believe that all of the claims asserted in the Complaints are without merit and intend to defend against them vigorously.

On July 30, 2021, VEREIT filed a Form 8-K containing supplemental disclosures regarding the Mergers and related transactions in response to allegations set forth in the Complaints and the Demand letter.

We have determined that there is a reasonable possibility that we and/or VEREIT will incur losses associated with the Complaints and Demand letter, though the amount of the reasonably possible loss or range of losses is not expected to be material.

Accordingly, no accrual for merger-related litigation matters has been recorded as of June 30, 2021.

However, litigation is inherently uncertain and there can be no assurance regarding the likelihood that the defendants’ defense of the actions will be successful.

The outcome of these lawsuits can’t be predicted and could have a significant impact on the timing or our ability to close the Merger.

Additional lawsuits arising out of the Mergers may also be filed in the future.

Supplemental Detail for Certain Components of Consolidated Balance Sheets (dollars in thousands):

Accounts Receivable, net, consist of the following at:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Straight-line rent receivables, net $ 195,860 $ 174,074

2 unchanged sentences

Lease intangible assets, net, consist of the following at:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

In-place leases

8 unchanged sentences

Other assets, net, consist of the following at:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Financing receivables $ 165,604 $ 131,291

Right of use asset - financing leases 117,063 118,585

Right of use asset - operating leases, net 108,112 112,049

Right of use asset - financing leases 103,474 118,585

Derivative assets and receivables - at fair value 43,068 10

Prepaid expenses 18,100 11,795

Restricted escrow deposits 34,636 21,220

Goodwill 14,017 14,180

Prepaid expenses 13,225 11,795

Non-refundable escrow deposits 12,153 1,000

Corporate assets, net 8,344 8,598

Restricted escrow deposits 7,776 21,220

Credit facility origination costs, net 5,993 7,705

Non-refundable escrow deposits 2,623 1,000

Impounds related to mortgages payable 1,185 4,983

Value-added tax receivable 220 1,130

Other items 6,399 2,881

1 unchanged sentence

Accounts payable and accrued expenses consist of the following at:

March 31, 2021 December 31, 2020

Derivative liabilities and payables - at fair value $ 67,131 $ 73,356

June 30, 2021 December 31, 2020

Notes payable - interest payable $ 83,966 $ 83,219

Derivative liabilities and payables - at fair value 64,207 73,356

Property taxes payable 23,897 23,413

1 unchanged sentence

Accrued income taxes 11,064 5,182

Merger-related costs 8,944 —

Value-added tax payable 6,450 8,077

3 unchanged sentences

Lease intangible liabilities, net, consist of the following at:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Below-market leases

4 unchanged sentences

Other liabilities consist of the following at:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Rent received in advance and other deferred revenue $ 153,020 $ 130,231

5 unchanged sentences

We acquire land, buildings and improvements necessary for the successful operations of commercial clients.

Acquisitions During the Three Months ended March 31, 2021 and 2020

Below is a summary of our acquisitions for the three months ended March 31, 2021:

Acquisitions During the Six Months Ended June 30, 2021 and 2020

Below is a summary of our acquisitions for the six months ended June 30, 2021:

Properties Leasable

1 unchanged sentence

($ in thousands) Weighted

(Years) Initial

Three months ended March 31, 2021 (1)

(Years) Initial Average Cash Lease Yield (1)

Six months ended June 30, 2021 (2)

Acquisitions - U.S.

7 unchanged sentences

254 9,634,167 $ 2,161,914 12.0 5.5 %

(1) None of our investments during the three months ended March 31, 2021 caused any one client to be 10% or more of our total assets at March 31, 2021.

All of our investments in acquired properties during the three months ended March 31, 2021 are 100 % leased at the acquisition date.

(2) Represents investments of £ 290.2 million Sterling during the three months ended March 31, 2021, converted at the applicable exchange rate on the date of acquisition.

(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 a 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 used in the calculation of initial average cash yield for the six months ended June 30, 2021 includes approximately $ 850,000 received as settlement credits for four properties acquired as reimbursement of free rent periods.

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 the six months ended June 30, 2021 caused any one client to be 10% or more of our total assets at June 30, 2021.

All of our investments in acquired properties during the six months ended June 30, 2021 are 100 % leased at the acquisition date.

(3) Represents investments of £ 715.1 million Sterling during the six months ended June 30, 2021, converted at the applicable exchange rate on the date of acquisition.

(4) Our clients occupying the new properties operate in 28 industries, and are 75.8 % retail and 24.2 % industrial, based on rental revenue.

Approximately 39 % of the rental revenue generated from acquisitions during the three months ended March 31, 2021 is from investment grade rated clients, their subsidiaries or affiliated companies.

The acquisitions during the three months ended March 31, 2021, which had no associated contingent consideration, were allocated as follows (amounts in millions):

Approximately 47 % of the rental revenue generated from acquisitions during the six months ended June 30, 2021 is from investment grade rated clients, their subsidiaries or affiliated companies.

The acquisitions during the six months ended June 30, 2021, which had no associated contingent consideration, were allocated as follows (amounts in millions):

Acquisitions - U.S.

Acquisitions - U.K.

Three months ended March 31, 2021

Six months ended June 30, 2021

(USD) (£ Sterling)

7 unchanged sentences

( 21.5 ) ( 0.3 )

land includes £ 570,000 of right of use assets under long-term ground leases.

$ 1,098.3 £ 715.1

land includes £ 1.3 million of right of use assets under long-term ground leases.

(2) The weighted average amortization period for acquired lease intangible assets is 12.6 years.

other assets consists entirely of financing receivables with above-market terms.

other assets consists entirely of right of use assets under ground leases.

other assets consists of financing receivables with above-market terms and a right-of-use asset accounted for as a finance lease.

(4) The weighted average amortization period for acquired lease intangible liabilities is 14.0 years.

other liabilities consists entirely of deferred rent on certain below-market leases.

The properties acquired during the three months ended March 31, 2021 generated total revenues of $ 5.1 million and net income of $ 2.0 million during the three months ended March 31, 2021.

Below is a summary of our acquisitions for the three months ended March 31, 2020:

other liabilities consists entirely of a GBP mortgage premium.

The properties acquired during the six months ended June 30, 2021 generated total revenues of $ 24.9 million and net income of $ 6.1 million during the six months ended June 30, 2021.

Below is a summary of our acquisitions for the six months ended June 30, 2020:

Properties Leasable Square Feet Investment

($ in thousands) Weighted

(Years) Initial

Three months ended March 31, 2020 (1)

(Years) Initial Average Cash Lease Yield

Six months ended June 30, 2020 (1)

Acquisitions - U.S.

7 unchanged sentences

94 2,519,318 $ 640,204 13.6 6.1 %

(1) None of our investments during the three months ended March 31, 2020 caused any one client to be 10% or more of our total assets at March 31, 2020.

All of our investments in acquired properties during the three months ended March 31, 2020 were 100 % leased at the acquisition date.

(2) Represents investments of £ 133.3 million Sterling during the three months ended March 31, 2020, converted at the applicable exchange rate on the date of the acquisition.

(1) None of our investments during the six months ended June 30, 2020 caused any one client to be 10% or more of our total assets at June 30, 2020.

All of our investments in acquired properties during the six months ended June 30, 2020 were 100 % leased at the acquisition date.

(2) Represents investments of £ 180.1 million Sterling during the six months ended June 30, 2020 converted at the applicable exchange rate on the date of the acquisition.

(3) Our clients occupying the new properties operated in 17 industries, and are 96.5 % retail and 3.5 % industrial, based on rental revenue.

Approximately 36 % of the rental revenue generated from acquisitions during the three months ended March 31, 2020 was from investment grade rated clients, their subsidiaries or affiliated companies.

The acquisitions during the three months ended March 31, 2020, which had no associated contingent consideration, were allocated as follows (amounts in millions):

Approximately 37 % of the rental revenue generated from acquisitions during the six months ended June 30, 2020 was from investment grade rated clients, their subsidiaries or affiliated companies.

The acquisitions during the six months ended June 30, 2020, which had no associated contingent consideration, were allocated as follows (amounts in millions):

Acquisitions - U.S.

Acquisitions - U.K.

Three months ended March 31, 2020

Six months ended June 30, 2020

(USD) (£ Sterling)

12 unchanged sentences

other liabilities consists entirely of lease liabilities under ground leases.

The properties acquired during the three months ended March 31, 2020 generated total revenues of $ 3.9 million and net income of $ 1.2 million during the three months ended March 31, 2020.

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.

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:

The properties acquired during the six months ended June 30, 2020 generated total revenues of $ 13.6 million and net income of $ 4.6 million during the six months ended June 30, 2020.

Investments in Existing Properties

During the three months ended March 31, 2021, we capitalized costs of $ 1.5 million on existing properties in our portfolio, consisting of $ 706,000 for re-leasing costs, $ 23,000 for recurring capital expenditures, and $ 769,000 for non-recurring building improvements.

In comparison, during the three months ended March 31, 2020, we capitalized costs of $ 2.1 million on existing properties in our portfolio, consisting of $ 138,000 for re-leasing costs, and $ 2.0 million for non-recurring building improvements.

During the six months ended June 30, 2021, we capitalized costs of $ 4.3 million on existing properties in our portfolio, consisting of $ 827,000 for re-leasing costs, $ 51,000 for recurring capital expenditures, and $ 3.4 million for non-recurring building improvements.

In comparison, during the six months ended June 30, 2020, we capitalized costs of $ 4.4 million on existing properties in our portfolio, consisting of $ 1.1 million for re-leasing costs, $ 23,000 for recurring capital expenditures, and $ 3.3 million for non-recurring building improvements.

Properties with Existing Leases

Of the $ 1.0 billion we invested during the three months ended March 31, 2021, approximately $ 856.8 million was used to acquire 68 properties with existing leases.

In comparison, of the $ 486.0 million we invested during the three months ended March 31, 2020, approximately $ 363.0 million was used to acquire 39 properties with existing leases.

Of the $ 2.16 billion we invested during the six months ended June 30, 2021, approximately $ 1.81 billion was used to acquire 143 properties with existing leases.

In comparison, of the $ 640.2 million we invested during the six months ended June 30, 2020, approximately $ 500.3 million was used to acquire 57 properties with existing leases.

The value of the in-place and above-market leases is recorded to lease intangible assets, net on our consolidated balance sheets, and the value of the below-market leases is recorded to lease intangible liabilities, net on our consolidated balance sheets.

The values of the in-place leases are amortized as depreciation and amortization expense.

The amounts amortized to expense for all of our in-place leases, for the three months ended March 31, 2021 and 2020 were $ 35.8 million and $ 32.6 million, respectively.

The amounts amortized to expense for all of our in-place leases, for the six months ended June 30, 2021 and 2020 were $ 77.5 million and $ 66.3 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 on our consolidated statements of income and comprehensive income.

The amounts amortized as a net decrease to rental revenue for capitalized above-market and below-market leases for the three months ended March 31, 2021 and 2020 were $ 12.4 million and $ 8.2 million, respectively.

The amounts amortized as a net decrease to rental revenue for capitalized above-market and below-market leases for the six months ended June 30, 2021 and 2020 were $ 19.7 million and $ 16.1 million, respectively.

If a lease was to be terminated prior to its stated expiration, all unamortized amounts relating to that lease would be recorded to revenue or expense, as appropriate.

The following table presents the estimated impact during the next five years and thereafter related to the amortization of the above-market and below-market lease intangibles and the amortization of the in-place lease intangibles at March 31, 2021 (dollars in thousands):

rental revenue

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dollars, and 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 March 31, 2021 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 drawn pricing of 0.90 % over LIBOR.

Under our credit facility, our investment grade credit ratings as of June 30, 2021 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 drawn 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.

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Our revolving credit facility is unsecured and, accordingly, we have not pledged any assets as collateral for this obligation.

At March 31, 2021, credit facility origination costs of $ 6.8 million are included in other assets, net, as compared to $ 7.7 million at December 31, 2020, on our consolidated balance sheet.

At June 30, 2021, credit facility origination costs of $ 6.0 million are included in other assets, net, as compared to $ 7.7 million at December 31, 2020, on our consolidated balance sheet.

These costs are being amortized over the remaining term of our revolving credit facility.

At March 31, 2021 and December 31, 2020, we had a borrowing capacity of $ 3.0 billion available on our revolving credit facility (subject to customary conditions to borrowing) and no outstanding balance.

The weighted average interest rate on outstanding borrowings under our revolving credit facility was 0.8 % during the three months ended March 31, 2021 and 2.1 % during the three months ended March 31, 2020.

Our revolving credit facility is subject to various leverage and interest coverage ratio limitations, and at March 31, 2021, we were in compliance with the covenants on our revolving credit facility.

At June 30, 2021, we had a borrowing capacity of $ 2.4 billion available on our revolving credit facility (subject to customary conditions to borrowing) and an outstanding balance of $ 635.3 million, consisting entirely of Sterling-denominated borrowings of £ 460.0 million, as compared to no outstanding balance on December 31, 2020.

The weighted average interest rate on outstanding borrowings under our revolving credit facility was 0.9 % during the six months ended June 30, 2021 and 1.6 % during the six months ended June 30, 2020.

Our revolving credit facility is subject to various leverage and interest coverage ratio limitations, and at June 30, 2021, we were in compliance with the covenants on our revolving credit facility.

Commercial Paper Program

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Proceeds from commercial paper borrowings will be used for general corporate purposes.

As of March 31, 2021, the balance of borrowings outstanding under our commercial paper program was $ 675.0 million, as compared to no outstanding commercial paper borrowings at December 31, 2020.

The weighted average interest rate on outstanding borrowings under our commercial paper program for the three months ended March 31, 2021 was 0.3 %.

As of March 31, 2021, the weighted average interest rate on borrowings outstanding under our commercial paper program was 0.2 %.

As of June 30, 2021, the balance of borrowings outstanding under our commercial paper program was $ 650.0 million, which matured on July 8, 2021, as compared to no

outstanding commercial paper borrowings at December 31, 2020.

The weighted average interest rate on outstanding borrowings under our commercial paper program for the six months ended June 30, 2021 was 0.3 %.

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.

The commercial paper borrowings outstanding at March 31, 2021 totaled $ 675.0 million

and mature as follows;

$ 50.0 million on April 9, 2021 , $ 240.0 million on April 23, 2021 and $ 385.0 million on May 12, 2021 .

In October 2018, in conjunction with entering into our current revolving credit facility, we entered into a $ 250.0 million senior unsecured term loan, which matures in March 2024.

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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 %.

At March 31, 2021, deferred financing costs of $ 593,000 are included net of the term loan principal balance, as compared to $ 642,000 at December 31, 2020, on our consolidated balance sheet.

At June 30, 2021, deferred financing costs of $ 543,000 are included net of the term loan principal balance, as compared to $ 642,000 at December 31, 2020, on our consolidated balance sheet.

These costs are being amortized over the remaining term of the term loan .

Mortgages Payable

During the three months ended March 31, 2021, we made $ 18.1 million in principal payments, including the repayment of three mortgages in full for $ 17.2 million.

During the three months ended March 31, 2020, we made $ 1.7 million in principal payments.

No mortgages were assumed during the three months ended March 31, 2021 or 2020.

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, failure to pay taxes, insurance premiums, liens on the property, violations of the single purpose entity requirements, and uninsured losses.

During the six months ended June 30, 2021, we made $ 42.6 million in principal payments, including the repayment of five mortgages in full for $ 40.9 million.

During the six months ended June 30, 2020, we made $ 14.7 million in principal payments, including the repayment of one mortgage in full for $ 11.4 million.

During the six months ended June 30, 2021, we assumed a Sterling-denominated mortgage on one property totaling £ 31.0 million.

No mortgages were assumed during the six months ended June 30, 2020.

Assumed mortgages are secured by the properties on which the debt was placed and are considered non-recourse debt with limited customary exceptions which vary from loan to loan.

Our mortgages contain customary covenants, such as limiting our ability to further mortgage each applicable property or to discontinue insurance coverage without the prior consent of the lender.

At March 31, 2021, we were in compliance with these covenants.

The balance of our deferred financing costs, which are classified as part of mortgages payable, net, on our consolidated balance sheets, was $ 907,000 at March 31, 2021 and $ 973,000 at December 31, 2020.

At June 30, 2021, we were in compliance with these covenants.

The balance of our deferred financing costs, which are classified as part of mortgages payable, net, on our consolidated balance sheets, was $ 942,000 at June 30, 2021 and $ 973,000 at December 31, 2020.

These costs are being amortized over the remaining term of each mortgage.

The following table summarizes our mortgages payable as of March 31, 2021 and December 31, 2020, respectively (dollars in thousands):

The following table summarizes our mortgages payable as of June 30, 2021 and December 31, 2020, respectively (dollars in thousands):

Properties (1)

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12/31/2020 68 4.9 % 4.6 % 2.9 $ 299,631 $ 729 $ 300,360

(1) At March 31, 2021, there were 15 mortgages on 64 properties.

(1) At June 30, 2021, there were 14 mortgages on 62 properties.

At December 31, 2020, there were 18 mortgages on 68 properties.

The mortgages require monthly payments with principal payments due at maturity.

At March 31, 2021 and December 31, 2020, all mortgages were at fixed interest rates.

(2) Stated interest rates ranged from 3.8 % to 6.9 % at each of March 31, 2021 and December 31, 2020.

(3) Effective interest rates ranged from 4.0 % to 5.5 % at each of March 31, 2021 and December 31, 2020.

The following table summarizes the maturity of mortgages payable, excluding net premiums of $ 1.4 million and deferred financing costs of $ 907,000 , as of March 31, 2021 (dollars in millions):

At June 30, 2021 and December 31, 2020, all mortgages were at fixed interest rates.

(2) Stated interest rates ranged from 3.0 % to 6.9 % and 3.8 % to 6.9 % at each of June 30, 2021 and December 31, 2020, respectively.

(3) Effective interest rates ranged from 2.8 % to 5.1 % and 4.0 % to 5.5 % at each of June 30, 2021 and December 31, 2020, respectively.

The following table summarizes the maturity of mortgages payable, excluding net premiums of $ 1.6 million and deferred financing costs of $ 942,000 , as of June 30, 2021 (dollars in millions):

Year of Maturity

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Our senior unsecured notes and bonds consist of the following, sorted by maturity date (dollars in millions):

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

3.250 % notes, $ 450 issued in October 2012 and $ 500 issued in December 2017, both due in October 2022 (1)

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(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 rates on March 31, 2021, and December 31, 2020, respectively.

The following table summarizes the maturity of our notes and bonds payable as of March 31, 2021, excluding net unamortized original issuance premiums of $ 11.8 million and deferred financing costs of $ 45.7 million (dollars in millions):

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 rates on June 30, 2021, and December 31, 2020, respectively.

In July 2021, we issued £ 400 million of 1.125 % senior unsecured notes due 2027 and £ 350 million of 1.750 % senior unsecured notes due 2033.

See note 22, Subsequent Events.

The following table summarizes the maturity of our notes and bonds payable as of June 30, 2021, excluding net unamortized original issuance premiums of $ 11.7 million and deferred financing costs of $ 44.1 million (dollars in millions):

Year of Maturity

Thereafter 5,762

As of March 31, 2021, the weighted average interest rate on our notes and bonds payable was 3.4 % and the weighted average remaining years until maturity was 8.7 years.

All of our outstanding notes and bonds payable have fixed interest rates and contain various covenants, with which we remained in compliance as of March 31, 2021.

Additionally, with the exception of our £ 400 million of 1.625 % senior unsecured notes issued in October 2020 where interest is paid annually, interest on our remaining senior unsecured note and bond obligations is paid semiannually.

As of June 30, 2021, the weighted average interest rate on our notes and bonds payable was 3.4 % and the weighted average remaining years until maturity was 8.5 years.

All of our outstanding notes and bonds payable have fixed interest rates and contain various covenants, with which we remained in compliance as of June 30, 2021.

Additionally, with the exception of our £ 400 million of 1.625 % senior unsecured notes issued in October 2020, our £ 400 million of 1.125 % senior unsecured notes issued in July 2021, and £ 350 million of 1.750 % senior unsecured notes also issued in July 2021, in each case where interest is paid annually, interest on our remaining senior unsecured note and bond obligations is paid semiannually.

Note Repayment

In January 2021, we redeemed 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 recognized a $ 46.5 million loss on extinguishment of debt on our consolidated statement of income for the three months ended March 31, 2021.

As a result of the early redemption, we recognized a $ 46.5 million loss on extinguishment of debt on our consolidated statement of income and comprehensive income during the six months ended June 30, 2021.

In January 2020, we redeemed 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 on our consolidated statement of income for the three months ended March 31, 2020.

As a result of the early redemption, we recognized a $ 9.8 million loss on extinguishment of debt on our consolidated statement of income and comprehensive income during the six months ended June 30, 2020.

Issuances of Common Stock

Issuance of Common Stock in an Underwritten Public Offering

Issuances of Common Stock in Underwritten Public Offerings

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.

After deducting underwriting discounts of $ 19.3 million, the net proceeds of $ 669.6 million were used to fund property acquisitions and for general corporate purposes, and working capital.

In July 2021, we issued 9,200,000 shares of common stock in an underwritten public offering, including 1,200,000 shares purchased by the underwriters upon the exercise of their option to purchase additional shares.

After deducting underwriting discounts of $ 2.9 million, the net proceeds of $ 594.1 million were primarily used to repay borrowings under our $ 1.0 billion commercial paper program, to fund potential investment opportunities and/or for other general corporate purposes.

For further information, see note 22, Subsequent Events .

In March 2020, we issued 9,690,500 shares of common stock in an underwritten public offering, including 690,500 shares purchased by the underwriters upon the exercise of their option to purchase additional shares.

After deducting underwriting discounts of $ 21.2 million, 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.

After deducting underwriting discounts and other offering costs of $ 21.5 million, the net proceeds of $ 728.5 million were used to repay borrowings under our credit facility, to fund investment opportunities, and for other general corporate purposes.

At-the-Market (ATM) Program

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O") at prevailing market prices or at negotiated prices.

At March 31, 2021, we had 15,678,031 shares remaining for future issuance under our ATM program.

At June 30, 2021, we had 9,088,433 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.

We did no t issue any shares under the ATM program during the three months ended March 31, 2021 or 2020.

The following table outlines common stock issuances pursuant to our ATM program (dollars in millions):

Three months ended June 30, Six months ended June 30,

2021 2020 2021 2020

Shares of common stock issued under the ATM program 6,589,598 1,511,149 6,589,598 1,511,149

Gross proceeds $ 454.8 $ 95.7 $ 454.8 $ 95.7

Dividend Reinvestment and Stock Purchase Plan

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Our DRSPP authorizes up to 26,000,000 common shares to be issued.

At March 31, 2021, we had 11,459,985 shares remaining for future issuance under our DRSPP program.

At June 30, 2021, we had 11,420,562 shares remaining for future issuance under our DRSPP program.

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

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2021 2020 2021 2020

Shares of common stock issued under the DRSPP program 39,423 44,817 82,817 78,817

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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 the three months ended March 31, 2021 or 2020.

We did not issue shares under the waiver approval process during the six months ended June 30, 2021 or 2020.

Noncontrolling Interests

There are three entities with noncontrolling interests that we consolidate including an operating partnership, Realty Income, L.P., a joint venture acquired in 2019 and a development joint venture acquired in 2020.

The following table represents the change in the carrying value of all noncontrolling interests through March 31, 2021 (dollars in thousands):

There are four entities with noncontrolling interests that we consolidate including an operating partnership, Realty Income, L.P., a joint venture acquired in 2019, and two development joint ventures, one acquired in 2020 and one acquired in May 2021.

The following table represents the change in the carrying value of all noncontrolling interests through June 30, 2021 (dollars in thousands):

Realty Income, L.P.

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$ 24,100 $ 8,147 $ 32,247

Contributions — 2,106 2,106

Distributions

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Allocation of net income

Carrying value at March 31, 2021

Carrying value at June 30, 2021

$ 23,945 $ 10,202 $ 34,147

(1) 242,007 units were issued 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 remained outstanding at each of March 31, 2021 and December 31, 2020 .

At March 31, 2021 and December 31, 2020, Realty Income, L.P., the joint venture acquired during 2019 and the development joint venture acquired in 2020 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 March 31, 2021 and December 31, 2020 (in thousands):

March 31, 2021 December 31, 2020

463,119 remained outstanding at each of June 30, 2021 and December 31, 2020 .

In May 2021, 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 June 30, 2021, we and our subsidiaries held an 68.0 % interest, and consolidated this entity in our consolidated financial statements.

At June 30, 2021, Realty Income, L.P., the joint venture acquired during 2019, and two development joint ventures, one acquired in 2020 and one acquired in May 2021, 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 June 30, 2021 and December 31, 2020 (in thousands):

June 30, 2021 December 31, 2020

Net real estate

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We believe that the carrying values reflected in our consolidated balance sheets reasonably approximate the fair values for cash and cash equivalents, accounts receivable, escrow deposits, loans receivable, line of credit payable and commercial paper borrowings, term loan and all other liabilities, due to their short-term nature or interest rates and terms that are consistent with market, except for our mortgages payable assumed in connection with acquisitions and our senior notes and bonds payable, which are disclosed as follows (dollars in millions):

March 31, 2021 Carrying value

June 30, 2021 Carrying value

Estimated fair value

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(1) Excludes non-cash net premiums recorded on the mortgages payable.

The unamortized balance of these net premiums was $ 1.4 million at March 31, 2021, and $ 1.7 million at December 31, 2020.

Also excludes deferred financing costs of $ 907,000 at March 31, 2021 and $ 973,000 at December 31, 2020.

The unamortized balance of these net premiums was $ 1.6 million at June 30, 2021, and $ 1.7 million at December 31, 2020.

Also excludes deferred financing costs of $ 942,000 at June 30, 2021 and $ 973,000 at December 31, 2020.

(2) Excludes non-cash original issuance premiums and discounts recorded on notes payable.

The unamortized balance of the net original issuance premiums was approximately $ 11.8 million at March 31, 2021, and $ 14.6 million at December 31, 2020.

Also excludes deferred financing costs of $ 45.7 million at March 31, 2021 and $ 49.2 million at December 31, 2020.

The unamortized balance of the net original issuance premiums was approximately $ 11.7 million at June 30, 2021, and $ 14.6 million at December 31, 2020.

Also excludes deferred financing costs of $ 44.1 million at June 30, 2021 and $ 49.2 million at December 31, 2020.

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.

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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 two on the three-level valuation hierarchy.

During March 2021, we entered into a currency exchange swap to exchange £ 810.0 million for $ 1.11 billion, which matured in April 2021.

The currency exchange swap was entered into to hedge our exposure to foreign currency risk associated with Sterling-denominated liabilities.

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 two on the three-level valuation hierarchy.

Derivatives Designated as Hedging Instruments

During June 2021, to hedge the foreign currency risk associated with interest payments on intercompany loans denominated in British Pound Sterling, or GBP, we entered into a series of foreign currency forward contracts to sell GBP and buy U.S.

Dollars, or USD, with a total notional amount of approximately £ 136.9 million, which mature between September 2021 and August 2024.

These foreign currency forwards are designated as cash flow hedges.

Forward points on the forward contracts are included in the assessment of hedge effectiveness.

Derivatives Not Designated as Hedging Instruments

In June 2021, we entered into a currency exchange swap to exchange £ 672.5 million for $ 950.0 million, which matured in July 2021.

The currency exchange swap was entered into to hedge our exposure to foreign currency risk associated with Sterling-denominated assets.

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' in the consolidated statements of income and comprehensive income.

The net loss from derivatives not designated in hedging relationships for the three months ended March 31, 2021 totaled $ 5.7 million.

We did not enter into or settle any currency exchange swaps during the three months ended March 31, 2020.

The following table summarizes the terms and fair values of our derivative financial instruments at March 31, 2021 and December 31, 2020 (dollars in millions):

The net loss from derivatives not designated in hedging relationships for the three and six months ended June 30, 2021 totaled $ 16.0 million and $ 21.7 million, respectively.

The following table summarizes the terms and fair values of our derivative financial instruments at June 30, 2021 and December 31, 2020 (dollars in millions):

Derivative Type (1)

Number of Instruments (2)

Accounting Classification Hedge Designation

Notional Amount

Effective Date

Weighted Average Strike Rate (3)

Maturity Date (4)

Fair Value - asset (liability)

March 31, December 31, March 31, December 31,

June 30, December 31, June 30, December 31,

2021 2020 2021 2020

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$ 250.0 $ 250.0 3.04 % 03/2024 $ ( 17.8 ) $ ( 22.6 )

Cross-currency swap (2)

Derivative Cash flow

41.6 41.6 (3) 05/20/2019 05/22/2034 ( 6.0 ) ( 5.2 )

Cross-currency swap (2)

Derivative Cash flow

41.6 41.6 (4) 05/20/2019 05/22/2034 ( 6.1 ) ( 5.1 )

Cross-currency swap (2)

Derivative Cash flow

41.6 41.6 (5) 05/20/2019 05/22/2034 ( 6.3 ) ( 5.4 )

Cross-currency swap (2)

Cross-currency swaps (5)

4 Derivative Cash flow

166.4 166.4 (6) 05/2034 ( 20.5 ) ( 21.4 )

Currency exchange swap (2)

Derivative N/A

— 625.0 (7) 12/23/2020 01/29/2021 — ( 8.2 )

Currency exchange swap (2)

Currency exchange swaps (5)

1 Derivative N/A

950.0 625.0 (7) 07/2021 21.1 ( 8.2 )

Forward-starting swap Derivative Cash flow

75.0 75.0 2.02 % (9) 06/30/2033 2.0 ( 5.0 )

Forward-starting swap Derivative Cash flow

75.0 75.0 1.94 % (9) 11/30/2032 1.7 ( 5.2 )

Forward-starting swap Derivative Cash flow

25.0 25.0 1.67 % (9) 11/30/2032 1.2 ( 1.1 )

Forward-starting swap Derivative Cash flow

Forward-starting swaps (8)

4 Derivative Cash flow

300.0 300.0 1.86 % 11/2032 - 06/2033 ( 2.8 ) ( 16.5 )

Forward-starting swap Hybrid debt Cash flow

Forward-starting swaps (8)

2 Hybrid debt Cash flow

200.0 200.0 1.93 % 11/2032 - 06/2033 ( 5.0 ) ( 12.8 )

Forward-starting swap Hybrid debt Cash flow

Foreign currency forwards 36 Derivative Cash flow

193.3 — (9) 09/2021 - 08/2024 3.9 —

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(1) There have been no changes to hedging arrangements in-place at December 31, 2020.

All hedges remained effective through March 31, 2021.

All hedges remained effective through June 30, 2021.

For full discussion of the hedging arrangements, please refer to note 2 to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2020.

(2) This column represents the number of instruments outstanding as of June 30, 2021.

(3) Weighted average strike rate is calculated using the current notional value as of June 30, 2021.

(4) This column represents maturity dates for instruments outstanding as of June 30, 2021.

(5) Represents British Pound Sterling, or GBP, United States Dollar, or USD, currency instrument.

(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) Forward GBP-USD exchange rate of 1.35 .

(6) GBP fixed rates initially at 4.82 % and escalating to 10.96 %, and USD weighted average fixed rate at 9.78 %.

(7) Forward GBP-USD exchange rate of 1.38 .

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For full discussion of the hedging arrangements for these six forward starting swaps, please refer to Note 2 to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2020.

(9) Weighted average forward GBP-USD exchange rate of 1.41 .

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 agreements to manage interest rate risk and cross-currency swaps to manage foreign currency risk.

We utilize interest rate swaps 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.

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.

To comply with the provisions of ASC 820, Fair Value Measurement , we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements.

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Although we have determined that the majority of the inputs used to value our derivatives fall within level two on the three-level valuation 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 March 31, 2021 and December 31, 2020, 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.

However, at June 30, 2021 and December 31, 2020, we assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives.

As a result, we determined that our derivative valuations in their entirety are classified as level two on the three-level valuation hierarchy.

Unrealized gains and losses in accumulated other comprehensive income, or AOCI, are reclassified to interest expense in the case of interest rate swaps and to foreign currency gains and losses, net in the case of cross-currency swaps, when the related hedged items are recognized.

During the three months ended March 31, 2021, we reclassified $ 2.5 million from AOCI as an increase to interest expense and a $ 1.2 million loss for cross-currency swaps into foreign exchange gains.

During the three months ended March 31, 2020, we reclassified $ 1.6 million from AOCI as an increase to interest expense for our interest rate swaps and $ 11.4 million in cross-currency swap losses into foreign currency and derivative gains, net.

We expect to reclassify $ 10.2 million from AOCI as an increase to interest expense relating to interest rate swaps and $ 908,000 from AOCI to foreign currency gain relating to cross-currency swaps within the next twelve months.

During the three and six months ended June 30, 2021, we reclassified $ 2.6 million and $ 5.1 million, respectively, from AOCI as an increase to interest expense and $ 200,000 and $ 1.4 million losses for cross-currency swaps into foreign exchange gains.

During the three and six months ended June 30, 2020, we reclassified $ 3.7 million and $ 5.3 million, respectively, from AOCI as an increase to interest expense and $ 800,000 and $ 12.2 million gains for cross-currency swaps into foreign exchange gains.

We expect to reclassify $ 10.3 million from AOCI as an increase to interest expense and $ 1.8 million from AOCI to foreign currency gain related to cash flow hedges within the next twelve months.

Operating Leases

At March 31, 2021, we owned 6,662 properties in all U.S.

At June 30, 2021, we owned 6,761 properties in all 50 U.S.

states, Puerto Rico, and the U.K.

Of the 6,761 properties, 6,715 , or 99.3 %, are single-client properties, and the remaining are multi-client properties.

At March 31, 2021, 131 properties were available for lease or sale.

At June 30, 2021, 103 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, for the three months ended March 31, 2021 and 2020 was $ 1.0 million and $ 1.2 million, respectively.

Major Clients - No individual client’s rental revenue, including percentage rents, represented more than 10% of our total revenue for each of the three months ended March 31, 2021 and 2020.

Rent based on a percentage of our client's gross sales, or percentage rents, for the three months ended June 30, 2021 and 2020 was $ 596,000 and $ 547,000 , respectively.

Percentage rents for the six months ended June 30, 2021 and 2020 were $ 1.6 million and $ 1.8 million, respectively.

Major Clients - No individual client’s rental revenue, including percentage rents, represented more than 10% of our total revenue for each of the six months ended June 30, 2021 and 2020.

Gain on Sales of Real Estate

The following table summarizes our properties sold during the periods indicated below (dollars in millions):

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2021 2020 2021 2020

Number of properties 42 12 69 29

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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.

Key assumptions that

we utilize in this analysis include projected rental rates, estimated holding periods, capital expenditures and property sales capitalization rates.

If a property is classified as held for sale, it is carried at the lower of carrying cost or estimated fair value, less estimated cost to sell, and depreciation of the property ceases.

There were 29 properties classified as held for sale at March 31, 2021.

There were 33 properties classified as held for sale at June 30, 2021.

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.

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The following table summarizes our provisions for impairment during the periods indicated below (dollars in millions):

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2021 2020 2021 2020

Total provisions for impairment $ 17.2 $ 13.9 $ 20.0 $ 18.3

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Classified as held for investment 5 7 9 7

Sold 18 17 28 28

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 three months ended March 31, 2021 and 2020:

The following is a summary of monthly distributions paid per common share for the six months ended June 30, 2021 and 2020:

January $ 0.2345 $ 0.2275

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March 0.2345 0.2325

April 0.2350 0.2330

May 0.2350 0.2330

June 0.2350 0.2330

$ 1.4085 $ 1.3915

At March 31, 2021, a distribution of $ 0.235 per common share was payable and was paid in April 2021.

At June 30, 2021, a distribution of $ 0.2355 per common share was payable and was paid in July 2021.

Net Income per Common Share

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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:

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2021 2020 2021 2020

Weighted average shares used for the basic net income per share computation

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Supplemental Disclosures of Cash Flow Information

Cash paid for interest was $ 94.8 million in the three months ended March 31, 2021 and $ 84.1 million in the three months ended March 31, 2020.

Cash paid for income taxes was $ 3.4 million in the three months ended March 31, 2021 and $ 2.5 million in the three months ended March 31, 2020.

Cash paid for interest was $ 139.4 million in the six months ended June 30, 2021 and $ 149.4 million in the six months ended June 30, 2020.

Cash paid for income taxes was $ 9.7 million in the six months ended June 30, 2021 and $ 5.3 million in the six months ended June 30, 2020.

Cash paid for merger-related costs was $ 4.4 million in the six months ended June 30, 2021.

There were no merger-related costs in the six months ended June 30, 2020.

The following non-cash activities are included in the accompanying consolidated financial statements:

During the three months ended March 31, 2021 and 2020, the fair value of net derivative liabilities decreased by $ 48.3 million and $ 16.4 million, respectively.

Non-refundable deposits from 2019 of $ 13.8 million were applied to acquisitions during the three months ended March 31, 2020.

During the six months ended June 30, 2021 and 2020, the fair value of net derivative liabilities decreased by $ 60.4 million and $ 28.6 million, respectively.

During the six months ended June 30, 2021, we assumed a Sterling-denominated mortgage on one property totaling £ 31.0 million.

Non-refundable deposits from 2019 of $ 13.8 million were applied to acquisitions during the six months ended June 30, 2020.

Per the requirements of ASU 2016-18 (Topic 230, Statement of Cash Flows ), the following table provides a reconciliation of cash and cash equivalents reported within the consolidated balance sheets to the total of the cash, cash equivalents and restricted cash reported within the consolidated statements of cash flows (dollars in thousands):

March 31, 2021 March 31, 2020

June 30, 2021 June 30, 2020

Cash and cash equivalents shown in the consolidated balance sheets

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Restricted escrow deposits (1)

34,636 81,683

Impounds related to mortgages payable (1)

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Assets, as of:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Segment net real estate:

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666,622 608,222

Home improvement - U.K.

464,102 187,289

Restaurants-casual dining

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100,259 97,228

Home improvement - U.K.

118,272 57,369

Restaurants-casual dining 18,654 20,553

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$ 21,984,941 $ 20,740,285

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

Revenue 2021 2020 2021 2020

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13,544 11,382 26,582 22,692

Home improvement - U.K.

6,670 — 11,149 —

Restaurants-casual dining 12,019 11,431 23,725 23,969

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Wholesale club 10,148 9,588 20,090 19,176

Other non-reportable segments and contractually obligated reimbursements

by our clients

Other non-reportable segments and contractually obligated reimbursements by our clients

113,708 100,510 217,157 198,551

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Common Stock Incentive Plan

In 2012, our Board of Directors adopted and stockholders approved the Realty Income Corporation 2012 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 2012 Plan offers our directors and employees an opportunity to own our stock or rights that will reflect our growth, development and financial success.

Under the terms of the 2012 plan, the aggregate number of shares of our common stock subject to options, restricted stock, stock appreciation rights, restricted stock units, performance shares and other awards, will be no more than 3,985,734 shares.

The 2012 Plan has a term of ten years from the date it was adopted by our Board of Directors.

In March 2021, our Board of Directors adopted the Realty Income 2021 Incentive Award Plan, or 2021 Plan.

This 2021 Plan will replace the 2012 Plan, pending approval by stockholders at our May 2021 Annual Meeting.

The amount of share-based compensation costs recognized in general and administrative expense on our consolidated statements of income and comprehensive income was $ 3.7 million during the three months ended March 31, 2021 and $ 5.5 million during the three months ended March 31, 2020 (including $ 1.8 million of accelerated share-based compensation costs for our former Chief Financial Officer ("CFO").

Upon the departure of our former CFO in the first quarter of 2020, we incurred a severance charge of $ 3.5 million, consisting of $ 1.6 million of cash, $ 1.8 million related to share-based compensation expense and $ 58,000 of professional fees.

In March 2021, our Board of Directors adopted, and in May 2021, stockholders approved, the Realty Income 2021 Incentive Award Plan, or 2021 Plan, to enable us to motivate, attract and retain the services of directors, employees and consultants, considered essential to our long-term success.

The 2021 Plan offers our directors, employees and consultants an opportunity to own our stock and/or rights that will reflect our growth, development and financial success.

Under the terms of the 2021 Plan, the aggregate number of shares of our common stock subject to options, stock purchase rights, or SPR, stock appreciation rights, or SAR, and other awards, will be no more 8,924,231 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 3,200,000 , 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, or the 2012 Plan, which was set to expire in March 2022.

No further awards will be granted under the 2012 Plan.

The disclosures below incorporate activity for both the 2012 Plan and the 2021 Plan.

The amount of share-based compensation costs recognized in general and administrative expense on our consolidated statements of income and comprehensive income was $ 4.5 million during the three months ended June 30, 2021, $ 4.9 million during the three months ended June 30, 2020, $ 8.2 million during the six months ended June 30, 2021, and $ 10.4 million during the six months ended June 30, 2020 (including $ 1.8 million of accelerated share-based compensation costs for our former Chief Financial Officer ("CFO")).

Upon the departure of our former CFO in March 2020, we incurred a severance charge of $ 3.5 million, consisting of $ 1.6 million of cash, $ 1.8 million related to share-based compensation expense and $ 58,000 of professional fees.

Restricted Stock

During the three months ended March 31, 2021, we granted 74,183 shares of common stock under the 2012 Plan.

These restricted stock awards vest over a four-year service period.

As of March 31, 2021, the remaining unamortized share-based compensation expense related to restricted stock totaled $ 11.9 million, which is being amortized on a straight-line basis over the service period of each applicable award.

During the six months ended June 30, 2021, we granted 112,498 shares of common stock under the 2012 and 2021 Plans.

This included 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 2021, 24,000 shares of which vested immediately and 12,000 shares of which vest in equal parts over a three-year service period.

Our restricted stock awards granted to employees vest in equal parts over a four-year service period.

As of June 30, 2021, the remaining unamortized share-based compensation expense related to restricted stock totaled $ 11.0 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.

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Performance Shares and Restricted Stock Units

During the three months ended March 31, 2021, we granted 157,341 performance shares, as well as dividend equivalent rights, to our executive officers.

During the six months ended June 30, 2021, we granted 157,341 performance shares, as well as dividend equivalent rights, to our executive officers, of which 9,621 shares were subsequently forfeited, leaving 147,720 of the 2021 grants outstanding at June 30, 2021.

The performance shares are earned based on our Total Shareholder Return (TSR) performance relative to select industry indices and peer groups as well as achievement of certain operating metrics, and vest 50 % on the first and second January 1 after the end of the three-year performance period, subject to continued service.

During the three months ended March 31, 2021, we also granted 13,837 restricted stock units, all of which vest over a four-year service period.

During the six months ended June 30, 2021, we also granted 17,285 restricted stock units, all of which vest over a four-year service period.

These restricted stock units have the same economic rights as shares of restricted stock.

As of March 31, 2021, the remaining share-based compensation expense related to the performance shares and restricted stock units totaled $ 18.6 million.

As of June 30, 2021, the remaining share-based compensation expense related to the performance shares and restricted stock units totaled $ 15.5 million.

The fair value of the performance shares were estimated on the date of grant using a Monte Carlo Simulation model.

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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 March 31, 2021, we had commitments of $ 6.9 million for re-leasing costs, recurring capital expenditures, and non-recurring building improvements.

In addition, as of March 31, 2021, we had committed $ 90.1 million under construction contracts related to development projects, which is expected to be paid in the next twelve months.

In connection with the Mergers, we expect to incur merger-related costs and, if the transaction is consummated, certain success-based fees and additional merger-related costs.

In addition, we have been subject to lawsuits associated with the Merger Agreement.

For further details, please refer to Note 3, Agreement and Plan of Merger .

At June 30, 2021, we had commitments of $ 9.4 million for re-leasing costs, recurring capital expenditures, and non-recurring building improvements.

In addition, as of June 30, 2021, we had committed $ 218.6 million under construction contracts related to development projects, which is expected to be paid in the next twelve months.

Subsequent Events

In April 2021, we declared a dividend of $ 0.235 per share to our common stockholders, which will be paid in May 2021.

Agreement and Plan of Merger

On April 29, 2021, we entered into an Agreement and Plan of Merger, or the Merger Agreement, with VEREIT, Inc., or VEREIT, its operating partnership, VEREIT Operating Partnership, L.P., or VEREIT OP, and two newly formed wholly owned subsidiaries of us.

Pursuant to the terms of the Merger Agreement, (i) one of the newly formed subsidiaries of us will merge with and into VEREIT OP, with VEREIT OP as the surviving entity, and (ii) immediately thereafter, VEREIT will merge with and into the other newly formed subsidiary of us, with our subsidiary as the surviving corporation.

We refer to these transactions, collectively, as the Mergers.

Pursuant to the terms of the Merger Agreement, upon the consummation of the Mergers, (i) each outstanding share of VEREIT common stock, and each outstanding common unit of VEREIT OP owned by a partner other than VEREIT, will automatically be converted into 0.705 of a newly issued share of our common stock, (ii) each outstanding Series F preferred unit of VEREIT OP owned by a partner other than VEREIT shall be converted into the right to receive $ 25.00 , plus the accumulated and unpaid distributions described in Merger Agreement, in each case, subject to certain adjustments, and (iii) each outstanding partnership unit of VEREIT OP owned by VEREIT will remain outstanding as a partnership unit in the surviving entity of VEREIT OP.

In connection with the Mergers, we and VEREIT intend to contribute some or all of our office real properties to a newly formed, wholly owned subsidiary, which we refer to as OfficeCo, and, following the Mergers, distribute the outstanding voting shares of common stock in OfficeCo to our combined shareholders on a pro rata basis, which we refer to as the Spin-Off.

Following the consummation of the Spin-Off, we and VEREIT intend for OfficeCo to operate as a separate, publicly-traded REIT.

Subject to the terms and conditions of the Merger Agreement, we and VEREIT may also seek to sell some or all of the OfficeCo business in connection with the closing of the Mergers.

The consummation of the Mergers is also subject to certain customary closing conditions, including receipt of the approval by our stockholders and the stockholders of VEREIT.

Dividend Increases

In July 2021, we declared a dividend of $ 0.2355 per share to our common stockholders, which will be paid in August 2021.

Capital Raising

In July 2021, we raised $ 594.1 million from the issuance of 9,200,000 shares of common stock in an underwritten public offering, inclusive of 1,200,000 shares purchased by the underwriters upon the exercise of their option to purchase additional shares.

The company intends to use the net proceeds from this offering to repay borrowings under our commercial paper program, to fund potential investment opportunities and/or for other general corporate purposes.

In July 2021, we issued £ 400 million through the issuance of 1.125 % senior unsecured notes due 2027 (the "2027 Notes") and £ 350 million through the issuance of 1.750 % senior unsecured notes due 2033 (the "2033 Notes").

The public offering price for the 2027 Notes was 99.305 % of the principal amount for an effective semi-annual yield to maturity of 1.242 % and the public offering price for the 2033 Notes was 99.842 % of the principal amount for an effective semi-annual yield to maturity of 1.757 %.

Combined, the new issues of the 2027 Notes and 2033 Notes have a weighted average term of 8.8 years and a weighted average effective semi-annual yield to maturity of 1.48 %.

The issuances represented our debut green bond offering.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements