O filing — read by section

Item 1. Business

Item 1: Business 
 In this Annual Report on Form 10-K, unless the context otherwise requires, references to “Realty Income,” the “Company,” “we,” “our” or “us” refer to Realty Income Corporation and our subsidiaries including, following the consummation of our merger with VEREIT, Inc. on November 1, 2021, VEREIT, Inc. and its subsidiaries. References to “VEREIT” refer to VEREIT, Inc. prior to the consummation of our merger with VEREIT on November 1, 2021. For more information on this merger, see "Recent Developments" in Part I of this Annual Report on Form 10-K below. 
 THE COMPANY 
 Realty Income, The Monthly Dividend Company ® , is an S&P 500 company and member of the S&P 500 Dividend Aristocrats ® index for having increased its dividend every year for over 25 consecutive years. We invest in people and places to deliver dependable monthly dividends that increase over time. We are structured as a real estate investment trust ("REIT"), requiring us to annually distribute at least 90% of our taxable income (excluding net capital gains) in the form of dividends to our stockholders. The monthly dividends are supported by the cash flow generated from real estate owned under long-term net lease agreements with our commercial clients. 
 Realty Income was founded in 1969, and listed on the New York Stock Exchange ("NYSE": O) in 1994. Over the past 53 years, Realty Income has been acquiring and managing freestanding commercial properties that generate rental revenue under long-term net lease agreements with our commercial clients. 
 At December 31, 2021, we owned a diversified portfolio: 
 • Consisting of 11,136 properties; 
 • With an occupancy rate of 98.5%, or 10,972 properties leased and 164 properties available for lease or sale; 
 • With clients doing business in 60 separate industries; 
 • Located in all 50 U.S. states, Puerto Rico, the United Kingdom (U.K.) and Spain; 
 • With approximately 210.1 million square feet of leasable space; 
 • With a weighted average remaining lease term (excluding rights to extend a lease at the option of our client) of approximately 9.0 years; and 
 • With an average leasable space per property of approximately 18,860 square feet, approximately 12,470 square feet per retail property and approximately 248,120 square feet per industrial property. 
 Of the 11,136 properties in the portfolio at December 31, 2021, 11,043, or 99.2%, are single-client properties, of which 10,883 were leased, and the remaining are multi-client properties. 
 Our seven senior officers owned 0.04% of our outstanding common stock with a market value of $15.1 million at February 11, 2022. Our directors and seven senior officers, as a group, owned 0.11% of our outstanding common stock with a market value of $42.2 million at February 11, 2022. 
 Our common stock is listed on the NYSE under the ticker symbol “O” with a CUSIP number of 756109-104. Our central index key number is 726728. Our notes are listed on the NYSE as follows: 
 
 Notes Ticker Symbol CUISP 
 1.125% Notes due July 2027 O27A 756109-BB9 
 
 1.875% Notes due January 2027 O27B 756109-BM5 
 
 1.625% Notes due December 2030 O30 756109-AY0 
 
 1.750% Notes due July 2033 O33A 756109-BC7 
 
 2.500% Notes due January 2042 O42 756109-BN3 
 

 In January 2022, we had 371 employees, inclusive of four part-time employees, as compared to 210 employees, inclusive of two part-time employees, in January 2021. 
 We maintain a corporate website at www.realtyincome.com. On our website we make available, free of charge, copies of our annual report on Form 10-K, quarterly reports on Form 10-Q, Form 3s, Form 4s, Form 5s, current 
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 reports on Form 8-K, and amendments to those reports, as soon as reasonably practicable after we electronically file these reports with the Securities and Exchange Commission, or SEC. None of the information on our website is deemed to be part of this report. 
 
 RECENT DEVELOPMENTS 
 Merger with VEREIT 
 On April 29, 2021, we entered into an Agreement and Plan of Merger, as amended, or the Merger Agreement, with VEREIT, its operating partnership, VEREIT Operating Partnership, L.P., or VEREIT OP, and two newly formed subsidiaries. Pursuant to the terms of the Merger Agreement, (i) one of the newly formed subsidiaries of us agreed to merge with and into VEREIT OP, with VEREIT OP as the surviving entity, and (ii) immediately thereafter, VEREIT agreed to merge with and into the other newly formed subsidiary of us, with our subsidiary as the surviving corporation, which we refer to collectively as the merger. 
 On November 1, 2021, we completed our acquisition of VEREIT, and the merger was consummated. Pursuant to the terms of the Merger Agreement and subject to the terms thereof, upon the consummation of the merger, (i) each outstanding share of VEREIT common stock, and each outstanding common partnership unit of VEREIT OP owned by any of its partners other than VEREIT, Realty Income or their respective affiliates, was automatically converted into 0.705 of newly issued shares of our common stock, or in certain instances, Realty Income L.P. units, and (ii) each VEREIT OP outstanding common unit owned by VEREIT, Realty Income or their respective affiliates remained outstanding as partnership interests in the surviving entity. 
 Orion Divestiture 
 Following of the closing of our merger with VEREIT, we contributed 92 office real estate assets, a consolidated real estate venture holding one office asset, and an unconsolidated real estate venture holding five office assets to a wholly owned subsidiary named Orion Office REIT Inc., or Orion. On November 12, 2021, we distributed the outstanding shares of Orion common stock to our shareholders (including legacy VEREIT stockholders who received shares of our common stock in our merger with VEREIT) on a pro rata basis at a rate of one share of Orion common stock for every ten shares of Realty Income common stock held on November 2, 2021, the applicable record date, which we refer to as the Orion Divestiture. Following the Orion Divestiture, Orion began operating as a separate, independent public company. 
 In conjunction with the Orion Divestiture, we incurred approximately $6.0 million of transaction costs during the year ended December 31, 2021, which were recorded in merger and integration-related costs within our consolidated statements of income and comprehensive income. 
 
 
 As part of the Orion Divestiture, Orion paid us a dividend of $425.0 million and reimbursed $170.2 million to us for the early redemption of mortgage loans underlying the contributed assets prior to the effectuation of the Orion Divestiture. The distribution of Orion resulted in the derecognition of net assets of $1.74 billion, which net of the aforementioned cash payments of $595.2 million, resulted in a reduction to additional paid in capital of $1.14 billion. 
 Merger and Integration-related Costs 
In conjunction with our merger with VEREIT, we incurred approximately $161.4 million of transaction costs during the year ended December 31, 2021, which were included in the $167.4 million of merger and integration-related costs within our consolidated statements of income and comprehensive income. The merger and integration-related costs primarily consist of advisory fees, including success-based fees, attorney fees, accountant fees, SEC filing fees and additional integration costs that include incremental and non-recurring costs necessary to convert data and systems, retain employees and otherwise enable us to operate acquired businesses or assets efficiently. 
 Theater Industry Update 
 As of December 31, 2021, our clients in the theater industry represented 3.4% of our annualized contractual rent. As of December 31, 2021, we were fully reserved for the outstanding receivable balances for 34 theater properties. At December 31, 2021, the receivables outstanding for our 81 theater properties totaled $71.0 million, inclusive of $12.7 million of straight-line rent receivables, and net of $38.1 million of reserves, inclusive of $7.6 million of straight-line rent reserves. 
 For the years ended December 31, 2021 and 2020, we recorded $5.1 million and $22.1 million, respectively, in reserves on contractual base rent for theater properties. Contractual rent reserves exclude reserves on contractually obligated reimbursements by our clients, which was equivalent to $1.4 million and $1.6 million, respectively. 
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 At December 31, 2021, the receivables outstanding across the portfolio totaled $426.8 million, net of $74.0 million of reserves, and includes $231.9 million of straight-line rent receivable, net of $11.8 million of reserves. 
 The following table summarizes reserves to rental revenue for theater properties (in millions): 
 
 Year Ended 
 December 31, 2021 
 Rental revenue reserves $ 6.5 
 Straight-line rent reserves 5.8 
 Total reserves $ 12.3 

 We did not record any provisions for impairment on theater properties during 2021. See "Item 1A—Risk Factors" in Part I of this Annual Report on Form 10-K for more information regarding the actual and potential future impacts of the COVID-19 pandemic and the measures taken to limit its spread on our clients and our business, results of operations, financial condition and liquidity. 
 Increases in Monthly Dividends to Common Stockholders 
 We have continued our 53-year policy of paying monthly dividends. In addition, we increased the dividend five times during 2021 and once during 2022. As of February 2022, we have paid 97 consecutive quarterly dividend increases and increased the dividend 114 times since our listing on the NYSE in 1994. 
 
 Month Month Monthly Dividend Increase 
 2021 Dividend increases 
 Declared Paid per share per share 
 1st increase Dec 2020 Jan 2021 $ 0.2345 $ 0.0005 
 2nd increase Mar 2021 Apr 2021 $ 0.2350 $ 0.0005 
 3rd increase Jun 2021 Jul 2021 $ 0.2355 $ 0.0005 
 4th increase Sept 2021 Oct 2021 $ 0.2360 $ 0.0005 
 5th increase Nov 2021 Dec 2021 $ 0.2460 $ 0.0100 
 
 2022 Dividend Increases 
 
 1st increase Dec 2021 Jan 2022 $ 0.2465 $ 0.0005 

 The dividends paid per share during 2021 totaled $2.833, as compared to $2.794 during 2020, an increase of $0.039, or 1.4%. In November 2021, we also made a $2.060 tax distribution of Orion shares, that occurred in conjunction with the Orion Divestiture on November 12, 2021, after our merger with VEREIT on November 1, 2021. The fair market value of these shares for tax distribution was determined to be $20.6272 per share, which was calculated using the five day volume weighted average share price after issuance. 
 The monthly dividend of $0.2465 per share represents a current annualized dividend of $2.958 per share, and an annualized dividend yield of 4.1% based on the last reported sale price of our common stock on the NYSE of $71.59 on December 31, 2021. Although we expect to continue our policy of paying monthly dividends, we cannot guarantee that we will maintain our current level of dividends, that we will continue our pattern of increasing dividends per share, or what our actual dividend yield will be in any future period. 
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 Acquisitions During 2021 
 Below is a listing of our acquisitions in the U.S. and Europe for the year ended December 31, 2021 (excludes properties assumed on November 1, 2021 in conjunction with our merger with VEREIT): 
 
 Number of Properties Leasable Square Feet Investment
($ in thousands) Weighted Average Lease Term (Years) Initial Weighted Average Cash Lease Yield (1) 
 
 Year ended December 31, 2021 (2) 
 
 Acquisitions - U.S. (in 43 states) 
 714 14,727,335 $ 3,608,573 14.1 5.5 % 
 Acquisitions - Europe (U.K. and Spain) 
 129 9,196,345 2,558,909 11.6 5.5 % 
 Total Acquisitions 843 23,923,680 $ 6,167,482 13.1 5.5 % 
 Properties under Development (3) 
 68 2,681,676 243,278 15.7 6.0 % 
 Total (4) 
 911 26,605,356 $ 6,410,760 13.2 5.5 % 

 (1) The initial weighted average cash lease yield for a property is generally computed as estimated contractual first year cash net operating income, which, in the case of a net leased property, is equal to the aggregate cash base rent for the first full year of each lease, divided by the total cost of the property. Since it is possible that a client could default on the payment of contractual rent, 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 includes approximately $8.5 million received as settlement credits for 41 properties as reimbursement of free rent periods for the year ended December 31, 2021. 
 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 2021 caused any one client to be 10% or more of our total assets at December 31, 2021. 
 (3) Includes £7.0 million of investments in U.K. development properties, converted at the applicable exchange rates on the funding dates. 
 (4) Our clients occupying the new properties are 83.6% retail and 16.4% industrial, based on rental revenue. Approximately 40% of the rental revenue generated from acquisitions during 2021 is from our investment grade rated clients, their subsidiaries or affiliated companies. 
 Portfolio Discussion 
 Leasing Results 
 At December 31, 2021, we had 164 properties available for lease out of 11,136 properties in our portfolio, which represents a 98.5% occupancy rate based on the number of properties in our portfolio. 
 Below is a summary of our portfolio activity for the periods indicated below: 
 
 Three months ended December 31, 2021 
 Properties available for lease at September 30, 2021 
 86 
 Lease expirations (1)(2) 
 354 
 Re-leases to same client (210) 
 Re-leases to new client (13) 
 Vacant dispositions (53) 
 Properties available for lease at December 31, 2021 
 164 

 
 Year ended December 31, 2021 
 Properties available for lease at December 31, 2020 
 140 
 Lease expirations (1)(2) 
 529 
 Re-leases to same client (336) 
 Re-leases to new client (36) 
 Vacant dispositions (133) 
 Properties available for lease at December 31, 2021 
 164 

 (1) Includes 103 net vacancies assumed from the combined effect of our merger with VEREIT and spin-off of office properties to Orion Office REIT Inc. in November 2021. 
 (2) Includes scheduled and unscheduled expirations (including leases rejected in bankruptcy), as well as future expirations resolved in the periods indicated above. 
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 During the three months ended December 31, 2021, the annualized new rent on re-leases was $49.09 million, as compared to the previous annualized rent of $48.22 million on the same units, representing a rent recapture rate of 101.8% on the units re-leased. We re-leased six units to new clients without a period of vacancy, and nine units to new clients after a period of vacancy. 
 During the year ended December 31, 2021, the annual new rent on re-leases was $89.23 million, as compared to the previous annual rent of $86.29 million on the same units, representing a rent recapture rate of 103.4% on the units re-leased. We re-leased 13 units to new clients without a period of vacancy, and 33 units to new clients after a period of vacancy. 
 As part of our re-leasing costs, we pay leasing commissions to unrelated, third party real estate brokers consistent with the commercial real estate industry standard, and sometimes provide rent concessions to our clients. We do not consider the collective impact of the leasing commissions or rent concessions to our clients to be material to our financial position or results of operations. 
 At December 31, 2021, our average annualized contractual rent was approximately $14.03 per square foot on the 10,972 leased properties in our portfolio. At December 31, 2021, we classified 33 properties, with a carrying amount of $30.5 million, as real estate and lease intangibles held for sale, net on our balance sheet. The expected sale of these properties does not represent a strategic shift that will have a major effect on our operations and financial results and is consistent with our existing disposition strategy to further enhance our real estate portfolio and maximize portfolio returns. 
 Investments in Existing Properties 
 During 2021, we capitalized costs of $21.9 million on existing properties in our portfolio, consisting of $6.3 million for re-leasing costs, $978,000 for recurring capital expenditures, and $14.6 million for non-recurring building improvements. 
 The majority of our building improvements relate to roof repairs, HVAC improvements, and parking lot resurfacing and replacements. The amounts of our capital expenditures can vary significantly, depending on the rental market, credit worthiness of our clients, the lease term and the willingness of our clients to pay higher rental revenue over the terms of the leases. 
 We define recurring capital expenditures as mandatory and recurring landlord capital expenditure obligations that have a limited useful life. We define non-recurring capital expenditures as property improvements in which we invest additional capital that extend the useful life of the properties. 
 Note Issuances 
 In January 2022, we issued £250.0 million of 1.875% senior unsecured notes due January 2027 (the "January 2027 Notes") and £250.0 million of 2.500% senior unsecured notes due January 2042 (the "January 2042 Notes"). The public offering price for the January 2027 Notes was 99.487% of the principal amount for an effective semi-annual yield to maturity of 1.974% and the public offering price for the January 2042 Notes was 98.445% of the principal amount for an effective semi-annual yield to maturity of 2.584%. Combined, the new issues of the January 2027 Notes and the January 2042 Notes have a weighted average term of approximately 12.5 years and a weighted average effective semi-annual yield to maturity of approximately 2.28%. 
 In connection with our merger with VEREIT, in November 2021, we completed our debt exchange offer to exchange outstanding notes previously issued by VEREIT OP, totaling $4.65 billion in principal, for new notes issued by Realty Income, pursuant to which approximately 99.2% of the outstanding notes issued by VEREIT OP were exchanged for a like aggregate principal amount of the notes issued by Realty Income. The interest rate, interest payment dates, redemption terms and maturity of each series of Realty Income notes issued by Realty Income in the exchange offers were the same as those of the corresponding series of VEREIT notes exchanged. With respect to the notes originally issued by VEREIT OP that remained outstanding, we amended the indenture governing such notes to, among other things, eliminate substantially all of the restrictive covenants in such indenture. 
 In July 2021, we issued £400.0 million through the issuance of 1.125% senior unsecured notes due July 2027 (the "July 2027 Notes") and £350.0 million through the issuance of 1.750% senior unsecured notes due July 2033 (the "July 2033 Notes"). The public offering price for the July 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 July 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 July 2027 Notes and July 2033 Notes have a weighted average term of 8.8 years and a weighted average effective 
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 semi-annual yield to maturity of 1.48%. The issuances represented our debut green bond offering of Sterling-denominated notes, which were intended to finance or refinance, in whole or in part, new or existing eligible green projects in the categories outlined in our green financing framework, which is designed to align with the International Capital Markets Association (the "ICMA") Green Bond Principles 2021. 
 Early Redemption of Notes 
 In December 2021, we completed the early redemption on all $750.0 million in principal amount of our outstanding 4.650% notes due August 2023, plus accrued and unpaid interest. As a result of the early redemption, we recognized a $46.4 million loss on extinguishment of debt during the three months ended December 31, 2021. 
 In January 2021, we completed the early redemption on all $950.0 million in principal amount of our outstanding 3.250% notes due October 2022, plus accrued and unpaid interest. As a result of the early redemption, we recognized a $46.5 million loss on extinguishment of debt during the three months ended March 31, 2021. 
 Loss on extinguishment of debt is excluded in our calculation of AFFO. 
 New Appointments to our Board of Directors 
 Priscilla Almodovar and Mary Hogan Preusse were appointed to our Board of Directors in November 2021, while Jacqueline Brady was appointed in May 2021. Ms. Almodovar and Ms. Preusse both formerly served on the VEREIT Board of Directors. 
 Capital Raising 
 During 2021, we raised $4.51 billion from the sale of common stock at a weighted average price of $66.51 per share, of which approximately $1.29 billion related to common stock issued through underwritten overnight public offerings and the majority of the remaining proceeds of approximately $3.22 billion related to the sale of common stock through our At-The-Market (ATM) Program. 
 ATM Program 
 In August 2021, following the issuance and sale of 74,911,567 shares under our prior ATM equity distribution plans, or our prior ATM programs, we established a new ATM equity distribution plan, or our new ATM program, pursuant to which up to 69,088,433 additional shares of common stock may be offered and sold (1) by us to, or through, a consortium of banks acting as our sales agents or (2) by a consortium of banks acting as forward sellers on behalf of any forward purchasers contemplated thereunder, in each case by means of ordinary brokers' transactions on the NYSE at prevailing market prices or at negotiated prices. 
 Issuances of Common Stock in Underwritten Public Offerings 
 In July 2021, we raised $594.1 million from the issuance of 9,200,000 shares of common stock, inclusive of 1,200,000 shares purchased by the underwriters upon the exercise of their option to purchase additional shares. 
 In January 2021, we raised $669.6 million from the issuance of 12,075,000 shares of common stock, including 1,575,000 shares purchased by the underwriters upon the exercise of their option to purchase additional shares. 
 Impact of COVID-19 
 We continue to work diligently with our clients most affected by the pandemic to understand their business operations and financial liquidity and their ability to satisfy their contractual obligations to us. As we carefully navigate this difficult economic period with our clients, our focus is on finding resolutions that preserve the long-term relationships we have built with many of our clients. See "Item 1A—Risk Factors" in Part I of this report for more information regarding the actual and potential future impacts of the COVID-19 pandemic and the measures taken to limit its spread on our clients and our business, results of operations, financial condition and liquidity. 
 The majority of lease concessions granted to our clients during 2020 and 2021 as a result of the COVID-19 pandemic have been rent deferrals with the original lease term unchanged. In these cases, we have determined that the collection of deferred rent is probable (within the meaning applicable under generally accepted accounting principles ("GAAP")), although we cannot assure you that this determination will not change in the future. In addition, as we believe to be the case with many retail landlords, we have received many short-term rent relief requests, most often in the form of rent deferral requests, or requests for further discussion from clients. We believe that not all client requests will ultimately result in lease modification agreements, nor have we relinquished our contractual rights under our lease agreements where rent concessions have not yet been granted. Our rent collections for the periods below and rent relief requests to-date may not be indicative of collections, concessions or requests in any future period. 
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 Percentages of Contractual Rent Collected as of December 31, 2021 
 
 Month Ended 
 October 31, 2021 
 Month Ended 
 November 30, 2021 
 Month Ended 
 December 31, 2021 
 Quarter Ended 
 December 31, 2021 
 
 
 Contractual rent collected (1) across total portfolio 
 99.7% 99.5% 99.4% 99.5% 
 Contractual rent collected (1) from our top 20 clients (2) 
 99.9% 99.8% 99.8% 99.8% 
 Contractual rent collected (1) from our investment grade clients (3) 
 99.9% 99.8% 99.8% 99.8% 
 Contractual rent collected from our theater clients 100.0% 100.0% 100.0% 100.0% 
 Contractual rent collected from our health and fitness clients 96.7% 96.7% 96.7% 96.7% 

 (1) Collection rates are calculated as the aggregate contractual rent collected for the applicable period from the beginning of that applicable period through December 31, 2021, divided by the contractual rent charged for the applicable period. Rent collection percentages are calculated based on contractual rent (excluding percentage rents and contractually obligated reimbursements by our clients). Charged amounts have not been adjusted for any COVID-19 related rent relief granted and include contractual rent from any clients in bankruptcy. Due to differences in applicable foreign currency conversion rates and rent conventions, the percentages above may differ from percentages calculated utilizing our total portfolio annualized contractual rent. 
 (2) We define our top 20 clients as our 20 largest clients based on percentage of total portfolio annualized contractual rent as of December 31, 2021 for all periods. 
 (3) We define investment grade clients as clients with a credit rating, and our clients that are subsidiaries or affiliates of companies with a credit rating, as of the balance sheet date, of Baa3/BBB- or higher from one of the three major rating agencies (Moody’s/S&P/Fitch). 
 As the adverse impacts of the COVID-19 pandemic and the measures taken to limit its spread continue to evolve, the ability of our clients to continue to pay rent to us may further diminish, and therefore we cannot assure you that our historical rental collections are indicative of our rental collections in the future. As a result of the impacts of the COVID-19 pandemic and the measures taken to limit its spread, our revenues in the foreseeable future may decline, and that decline may continue or increase in subsequent periods as long as such impacts continue to exist. 
 Select Financial Results 
 The following summarizes our select financial results (dollars in millions, except per share data): 
 
 Year Ended December 31, 
 2021 2020 % Increase / (Decrease) 
 Total revenue $ 2,080.5 $ 1,647.1 26.3 % 
 Net income available to common stockholders (1) 
 $ 359.5 $ 395.5 (9.1) % 
 Net income per share (2) 
 $ 0.87 $ 1.14 (23.7) % 
 Funds from operations available to common stockholders ("FFO") $ 1,240.6 $ 1,142.1 8.6 % 
 FFO per share (2) 
 $ 2.99 $ 3.31 (9.7) % 
 Normalized funds from operations available to common stockholders ("Normalized FFO") $ 1,408.0 $ 1,142.1 23.3 % 
 Normalized FFO per share (2) 
 $ 3.39 $ 3.31 2.4 % 
 Adjusted funds from operations available to common stockholders ("AFFO") $ 1,488.8 $ 1,172.6 27.0 % 
 AFFO per share (2) 
 $ 3.59 $ 3.39 5.9 % 

 (1) The calculation to determine net income available to common stockholders includes provisions for impairment, gains from the sale of real estate, and foreign currency gains and losses. These items can vary from year to year and can significantly impact net income available to common stockholders and period to period comparisons. 
 (2) All per share amounts are presented on a diluted per common share basis. 
 Our financial results during 2021 were primarily impacted by the following transactions: (i) a $97.2 million loss on extinguishment of debt, which primarily includes $46.5 million related to the January 2021 early redemption of the 3.250% notes due October 2022 recorded in the three months ended March 31, 2021 and $46.4 million related to the December 2021 early redemption of the 4.650% notes due August 2023 recorded in the three months ended December 31, 2021, (ii) $167.4 million of merger and integration-related costs related to our merger with VEREIT and spin-off of office properties to Orion, (iii) $39.0 million of provisions for impairment, and (iv) $14.7 million in net reserves, recorded as a reduction of rental revenue. Our financial results during 2020 were primarily impacted by the following transactions: (i) $147.2 million of provisions for impairment, (ii) $52.5 million in net reserves recorded as a reduction of rental revenue, (iii) a $9.8 million loss on extinguishment of debt due to the January 2020 early 
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 redemption of the 5.750% notes due January 2021, and (iv) a $3.5 million executive severance charge for our former Chief Financial Officer ("CFO"). 
 See our discussion of FFO, Normalized FFO, and AFFO (which are not financial measures under GAAP), later in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in this annual report, which includes a reconciliation of net income available to common stockholders to FFO and Normalized FFO, and AFFO. 
 
 DIVIDEND POLICY 
 Distributions are paid monthly to holders of shares of our common stock. 
 Distributions are paid monthly to the limited partners holding common units of Realty Income, L.P., each on a per unit basis that is generally equal to the amount paid per share to our common stockholders. 
 In order to maintain our status as a REIT for federal income tax purposes, we generally are required to distribute dividends to our stockholders aggregating annually at least 90% of our taxable income (excluding net capital gains), and we are subject to income tax to the extent we distribute less than 100% of our taxable income (including net capital gains). In 2021, our cash distributions to common stockholders totaled $1.17 billion, or approximately 149.1% of our estimated taxable income of $784.7 million. Our estimated taxable income reflects non-cash deductions for depreciation and amortization. Our estimated taxable income is presented to show our compliance with REIT dividend requirements and is not a measure of our liquidity or operating performance. We intend to continue to make distributions to our stockholders that are sufficient to meet this dividend requirement and that will reduce or eliminate our exposure to income taxes. Furthermore, we believe our cash on hand and funds from operations are sufficient to support our current level of cash distributions to our stockholders. Our cash distributions to common stockholders in 2021 totaled $1.17 billion, representing 78.5% of our adjusted funds from operations available to common stockholders of $1.49 billion. In comparison, our 2020 cash distributions to common stockholders totaled $964.2 million, representing 82.2% of our adjusted funds from operations available to common stockholders of $1.17 billion. 
 Future distributions will be at the discretion of our Board of Directors and will depend on, among other things, our results of operations, FFO, Normalized FFO, AFFO, cash flow from operations, financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Internal Revenue Code of 1986, as amended, or the Code, our debt service requirements, and any other factors the Board of Directors may deem relevant. In addition, our credit facility contains financial covenants that could limit the amount of distributions payable by us in the event of a default, and which prohibit the payment of distributions on our common stock in the event that we fail to pay when due (subject to any applicable grace period) any principal or interest on borrowings under our credit facility. 
 Distributions of our current and accumulated earnings and profits for federal income tax purposes generally will be taxable to stockholders as ordinary income, except to the extent that we recognize capital gains and declare a capital gains dividend, or that such amounts constitute “qualified dividend income” subject to a reduced rate of tax. The maximum tax rate of non-corporate taxpayers for “qualified dividend income” is generally 20%. In general, dividends payable by REITs are not eligible for the reduced tax rate on qualified dividend income, except to the extent that certain holding requirements have been met with respect to the REIT’s stock and the REIT’s dividends are attributable to dividends received from certain taxable corporations (such as our taxable REIT subsidiaries) or to income that was subject to tax at the corporate or REIT level (for example, if we distribute taxable income that we retained and paid tax on in the prior taxable year). However, non-corporate stockholders, including individuals, generally may deduct up to 20% of dividends from a REIT, other than capital gain dividends and dividends treated as qualified dividend income, for taxable years beginning after December 31, 2017 and before January 1, 2026. 
 Distributions in excess of earnings and profits generally will first be treated as a non-taxable reduction in the stockholders’ basis in their stock, but not below zero. Distributions in excess of that basis generally will be taxable as a capital gain to stockholders who hold their shares as a capital asset. Approximately 67.3% of the distributions to our common stockholders, made or deemed to have been made in 2021, were classified as a return of capital for federal income tax purposes. 
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 BUSINESS PHILOSOPHY AND STRATEGY 
 We believe that owning an actively managed, diversified portfolio of commercial properties under long-term, net lease agreements produces consistent and predictable income. A net lease typically requires the client to be responsible for monthly rent and certain property operating expenses including property taxes, insurance, and maintenance. In addition, clients of our properties typically pay rent increases based on: (1) fixed increases, (2) increases tied to inflation (typically subject to ceilings), or (3) additional rent calculated as a percentage of the clients’ gross sales above a specified level. We believe that a portfolio of properties under long-term net lease agreements with our commercial clients generally produces a more predictable income stream than many other types of real estate portfolios, while continuing to offer the potential for growth in rental income. 
 Diversification is also a key component of our investment philosophy. We believe that diversification of the portfolio by client, industry, geography, and property type leads to more consistent and predictable income for our stockholders by reducing vulnerability that can come with any single concentration. Our investment activities have led to a diversified property portfolio that, as of December 31, 2021, consisted of 11,136 properties located in all 50 U.S. states, Puerto Rico, the U.K. and Spain, and doing business in 60 industries. None of the 60 industries represented in our property portfolio accounted for more than 9.1% of our annualized contractual rent as of December 31, 2021. 
 With expanded scale from our merger with VEREIT, we hope to serve our existing clients better and to partner with new clients that require the larger and more diversified balance sheet we now provide. Equally, as we look to continue to expand geographically across Europe, we hope to partner with new multinational clients that seek a real estate partner with an expanding geographic footprint. 
 Investment Strategy 
 We seek to invest in high-quality real estate that our clients consider important to the successful operation of their businesses. We generally seek to acquire commercial real estate that has some or all of the following characteristics: 
 • Properties in markets or locations important to our clients; 
 • Properties that we deem to be profitable for our clients (e.g., retail stores or revenue generating sites); 
 • Properties with strong demographic attributes relative to the specific business drivers of our clients; 
 • Properties with real estate valuations that approximate replacement costs; 
 • Properties with rental or lease payments that approximate market rents for similar properties; 
 • Properties that can be purchased with the simultaneous execution or assumption of long-term net lease agreements, offering both current income and the potential for future rent increases; 
 • Properties that leverage relationships with clients, sellers, investors, or developers as part of a long-term strategy; and 
 • Properties that leverage our proprietary insights, including predictive analytics (e.g., through the selection of locations and geographic markets we expect to remain strong or strengthen in the future). 
 We typically seek to invest in properties owned or leased by clients that are already or could become leaders in their respective businesses supported by mechanisms including (but not limited to) occupancy of prime real estate locations, pricing, merchandise assortment, service, quality, economies of scale, consumer branding, e-commerce, and advertising. In addition, we frequently acquire large portfolios of properties net leased to different clients operating in a variety of industries. We have an internal team dedicated to sourcing such opportunities, often using our relationships with various clients, owners/developers, brokers, and advisers to uncover and secure transactions. We also undertake thorough research and analysis to identify what we consider to be appropriate property locations, clients, and industries for investment. This research expertise is instrumental to uncovering net lease opportunities in markets where we believe we can add value. 
 In selecting potential investments, we generally look for clients with the following attributes: 
 • Reliable and sustainable cash flow, including demonstrated economic resiliency; 
 • Revenue and cash flow from multiple sources; 
 • Are willing to sign a long-term lease (10 or more years); and 
 • Are large owners and users of real estate. 
 From a retail perspective, our investment strategy is to target clients that have a service, non-discretionary, and/or low-price-point component to their business. Our investments are usually with clients who have demonstrated 
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 resiliency to e-commerce or have a strong omni channel retail strategy, uniting brick-and-mortar and mobile browsing, both of which reflect the continued importance of last mile retail, the movement of goods to its final destination, real estate as part of a customer experience and supply chain strategy. Our overall investments (including last mile retail) are driven by an optimal portfolio strategy that, among other considerations, targets allocation ranges by asset class and industry. We review our strategy periodically and stress test our portfolio in a variety of positive and negative economic scenarios to ensure we deliver consistent earnings growth and value creation across economic cycles. As a result of the execution of this strategy, approximately 92% of our annualized retail contractual rent on December 31, 2021 is derived from our clients with a service, non-discretionary, and/or low price point component to their business. From a non-retail perspective, we target industrial properties leased to industry leaders, the majority of which are investment grade rated companies. We believe these characteristics enhance the stability of the rental revenue generated from these properties. 
 After applying this investment strategy, we pursue those transactions where we believe we can achieve an attractive investment spread over our cost of capital and favorable risk-adjusted returns. We will continue to evaluate all investments for consistency with our objective of owning net lease assets. 
 Underwriting Strategy 
 In order to be considered for acquisition, properties must meet stringent underwriting requirements. We have established a four-part analysis that examines each potential investment based on: 
 • The aforementioned overall real estate characteristics, including demographics, replacement cost, and comparative rental rates; 
 • Industry, client (including credit profile), and market conditions; 
 • Store profitability for retail locations if profitability data is available; and 
 • The importance of the real estate location to the operations of the clients’ business. 
 We believe the principal financial obligations for most of our clients typically include their bank and other debt, payment obligations to employees, suppliers, and real estate lease obligations. Because we typically own the land and building in which a client conducts its business or which are critical to the client’s ability to generate revenue, we believe the risk of default on a client’s lease obligation is less than the client’s unsecured general obligations. It has been our experience that clients must retain their profitable and critical locations in order to survive. Therefore, in the event of reorganization, we believe they are less likely to reject a lease of a profitable or critical location because this would terminate their right to use the property. 
 Thus, as the property owner, we believe that we will fare better than unsecured creditors of the same client in the event of reorganization. If a property is rejected by our client during reorganization, we own the property and can either lease it to a new client or sell the property. In addition, we believe that the risk of default on real estate leases can be further mitigated by monitoring the performance of our clients’ individual locations and considering whether to proactively sell locations that meet our criteria for disposition. 
 We conduct comprehensive reviews of the business segments and industries in which our clients’ operate. Prior to entering into any transaction, our research department conducts a review of a client’s credit quality. The information reviewed may include reports and filings, including any public credit ratings, financial statements, debt and equity analyst reports, and reviews of corporate credit spreads, stock prices, market capitalization, and other financial metrics. We conduct additional due diligence, including additional financial reviews of the client, and continue to monitor our clients’ credit quality on an ongoing basis by reviewing the available information previously discussed, and providing summaries of these findings to management. 
 
 
 At December 31, 2021, approximately 44% of our annualized contractual rent comes from properties leased to our investment grade clients, their subsidiaries or affiliated companies. At December 31, 2021, our top 20 clients (based on percentage of total portfolio annualized contractual rent) represented approximately 43% of our annualized rent and 12 of these clients have investment grade credit ratings or are subsidiaries or affiliates of investment grade companies. 
 Asset Management Strategy 
 In addition to pursuing new properties for investment, we seek to increase earnings and dividends through active asset management. 
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 Generally, our asset management efforts seek to achieve: 
 • Rent increases at the expiration of existing leases, when market conditions permit; 
 • Optimum exposure to certain clients, industries, and markets through re-leasing vacant properties and selectively selling properties; 
 • Maximum asset-level returns on properties that are re-leased or sold; 
 • Additional value creation from the existing portfolio by enhancing individual properties, pursuing alternative uses, and deriving ancillary revenue; and 
 • Investment opportunities in new asset classes for the portfolio. 
 We continually monitor our portfolio for any changes that could affect the performance of our clients, our clients’ industries, and the real estate locations in which we have invested. We also regularly analyze our portfolio with a view towards optimizing its returns and enhancing its overall credit quality. Our active asset management strategy pursues asset sales when we believe the reinvestment of the sale proceeds will: 
 • Generate higher returns; 
 • Enhance the credit quality of our real estate portfolio; 
 • Extend our average remaining lease term; and/or 
 • Strategically decrease client, industry, or geographic concentration. 
 The active management of the portfolio is an essential component of our long-term strategy of maintaining high occupancy. 
 Capital Philosophy 
 Historically, we have met our long-term capital needs by issuing common stock, long-term unsecured notes and bonds, term loans under our revolving credit facility and preferred stock. Over the long term, we believe that common stock should be the majority of our capital structure; however, we may also raise funds from debt or other equity securities. We may issue common stock when we believe that our share price is at a level that allows for the proceeds of any offering to be accretively invested into additional properties. In addition, we may issue common stock to permanently finance properties that were initially financed by our revolving credit facility, commercial paper program, or debt securities. However, we cannot assure you that we will have access to the capital markets at all times and at terms that are acceptable to us. 
 Our primary cash obligations, for the current year and subsequent years, are included in the “Table of Obligations,” which is presented later in this section. We expect to fund our operating expenses and other short-term liquidity requirements, including property acquisitions and development costs, payment of principal and interest on our outstanding indebtedness, property improvements, re-leasing costs and cash distributions to common stockholders, primarily through cash provided by operating activities, borrowings on our credit facility and under our commercial paper program and through public securities offerings. 
 We may choose to mitigate our financial exposure to exchange rate risk for properties acquired outside the U.S. through the issuance of debt securities denominated in the same local currency and through currency derivatives. We may leave a portion of our foreign cash flow unhedged to reinvest in additional properties in the same local currency. 
 For 2022, we intend to continue our active disposition efforts to further enhance our real estate portfolio. We plan to invest these proceeds into new property acquisitions if there are attractive opportunities available. However, we cannot guarantee that we will sell properties during 2022 or be able to invest the property sale proceeds in new properties. 
 Conservative Capital Structure 
 We believe that our stockholders are best served by a conservative capital structure. Therefore, we seek to maintain a conservative debt level on our balance sheet and solid interest and fixed charge coverage ratios. At December 31, 2021, our total outstanding borrowings of senior unsecured notes and bonds, term loan, mortgages payable, credit facility borrowings, commercial paper, and our proportionate share of outstanding borrowings by unconsolidated entities were $15.26 billion, or approximately 26.5% of our total market capitalization of $57.66 billion. 
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 We define our total market capitalization at December 31, 2021 as the sum of: 
 • Shares of our common stock outstanding of 591,261,991, plus total common units outstanding of 1,060,709, multiplied by the last reported sales price of our common stock on the NYSE of $71.59 per share on December 31, 2021, or $42.4 billion; 
 • Outstanding borrowings of $650.0 million on our revolving credit facility; 
 • Outstanding borrowings of $901.4 million on our commercial paper program; 
 • Outstanding mortgages payable of $1.11 billion, excluding net mortgage premiums of $28.7 million and deferred financing costs of $790,000; 
 • Outstanding borrowings of $250.0 million on our term loan, excluding deferred financing costs of $443,000; 
 • Outstanding senior unsecured notes and bonds of $12.26 billion, including Sterling-denominated notes totaling £1.47 billion, and excluding unamortized net premiums of $295.5 million and deferred financing costs of $53.1 million; and 
 • Our proportionate share of outstanding debt from unconsolidated entities of $86.0 million, excluding deferred financing costs of $1.8 million. 
 Impact of Real Estate and Credit Markets 
 In the commercial real estate market, property prices generally continue to fluctuate. Likewise, during certain periods, including the current market, the global credit markets have experienced significant price volatility, dislocations, and liquidity disruptions, which may impact our access to and cost of capital. We continually monitor the commercial real estate and global credit markets carefully and, if required, will make decisions to adjust our business strategy accordingly. 
 Universal Shelf Registration 
 In June 2021, we filed a shelf registration statement with the SEC, which is effective for a term of three years and will expire in June 2024. In accordance with SEC rules, the amount of securities to be issued pursuant to this shelf registration statement was not specified when it was filed and there is no specific dollar limit. The securities covered by this registration statement include (1) common stock, (2) preferred stock, (3) debt securities, (4) depositary shares representing fractional interests in shares of preferred stock, (5) warrants to purchase debt securities, common stock, preferred stock, or depositary shares, and (6) any combination of these securities. We may periodically offer one or more of these securities in amounts, prices and on terms to be announced when and if these securities are offered. The specifics of any future offerings, along with the use of proceeds of any securities offered, will be described in detail in a prospectus supplement, or other offering materials, at the time of any offering. 
 Revolving Credit Facility and Commercial Paper Program 
 We have a $3.0 billion unsecured revolving credit facility with an initial term that expires in March 2023 and includes, at our option, two six-month extensions. The multicurrency revolving facility allows us to borrow in up to 14 currencies, including U.S. dollars. Our revolving credit facility has a $1.0 billion expansion option, which is subject to obtaining lender commitments. Under our revolving credit facility, our investment grade credit ratings as of December 31, 2021 provide for financing at the London Interbank Offered Rate ("LIBOR"), plus 0.775% with a facility commitment fee of 0.125%, for all-in pricing of 0.90% over LIBOR. Our revolving credit facility was amended in December 2021 to include provisions for establishing alternative reference rates when LIBOR is no longer available. 
 The borrowing rate is subject to an interest rate floor and may change if our investment grade credit ratings change. We also have other interest rate options available to us under our credit facility. Our credit facility is unsecured and, accordingly, we have not pledged any assets as collateral for this obligation. 
 At December 31, 2021, we had a borrowing capacity of $2.35 billion available on our revolving credit facility and an outstanding balance of $650.0 million. The weighted average interest rate on borrowings outstanding under our revolving credit facility during 2021 was 0.9% per annum. We must comply with various financial and other covenants in our credit facility. At December 31, 2021, we were in compliance with these covenants. We expect to use our credit facility to acquire additional properties and for other general corporate purposes. Any additional borrowings will increase our exposure to interest rate risk. 
 Additionally, we have a U.S. dollar-denominated unsecured commercial paper program. Under the terms of the program, we may issue from time to time unsecured commercial paper notes up to a maximum aggregate amount outstanding of $1.0 billion. Borrowings under this program generally mature in one year or less. At December 31, 2021, we had an outstanding balance of $901.4 million. The weighted average interest rate on borrowings under our 
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 commercial paper program was 0.2% for 2021. We use our $3.0 billion revolving credit facility as a liquidity backstop for the repayment of the notes issued under the commercial paper program. 
 We generally use our credit facility and commercial paper borrowings for the short-term financing of new property acquisitions. Thereafter, we generally seek to refinance those borrowings with the net proceeds of long-term or more permanent financing, including the issuance of equity or debt securities. We cannot assure you, however, that we will be able to obtain any such refinancing, or that market conditions prevailing at the time of the refinancing will enable us to issue equity or debt securities at acceptable terms. We regularly review our credit facility and commercial paper program and may seek to extend, renew or replace our credit facility and commercial paper program, to the extent we deem appropriate. 
 Cash Reserves 
 We are organized to operate as an equity REIT that acquires and leases properties and distributes to stockholders, in the form of monthly cash distributions, a substantial portion of our net cash flow generated from leases on our properties. We intend to retain an appropriate amount of cash as working capital. At December 31, 2021, we had cash and cash equivalents totaling $258.6 million, inclusive of £105.1 million Sterling and €7.2 million Euro. 
 We believe that our cash and cash equivalents on hand, cash provided from operating activities, and borrowing capacity is sufficient to meet our liquidity needs for the next twelve months. We intend, however, to use permanent or long-term capital to fund property acquisitions and to repay future borrowings under our credit facility and commercial paper program. 
 Credit Agency Ratings 
 The borrowing interest rates under our revolving credit facility are based upon our ratings assigned by credit rating agencies. As of December 31, 2021, we were assigned the following investment grade corporate credit ratings on our senior unsecured notes and bonds: Moody’s Investors Service has assigned a rating of A3 with a “stable” outlook and Standard & Poor’s Ratings Group has assigned a rating of A- with a “stable” outlook. In addition, we were assigned the following ratings on our commercial paper at December 31, 2021: Moody's Investors Service has assigned a rating of P-2 and Standard & Poor's Ratings Group has assigned a rating of A-2. 
 Based on our ratings as of December 31, 2021, the facility interest rate was LIBOR, plus 0.775% with a facility commitment fee of 0.125%, for all-in drawn pricing of 0.90% over LIBOR. Our credit facility provides that the interest rate can range between: (i) LIBOR, plus 1.45% if our credit rating is lower than BBB-/Baa3 or our senior unsecured debt is unrated and (ii) LIBOR, plus 0.75% if our credit rating is A/A2 or higher. In addition, our credit facility provides for a facility commitment fee based on our credit ratings, which range from: (i) 0.30% for a rating lower than BBB-/Baa3 or unrated, and (ii) 0.10% for a credit rating of A/A2 or higher. Our revolving credit facility and term loan facility were amended in December 2021 to include provisions for establishing alternative reference rates when LIBOR is no longer available. 
 We also issue senior debt securities from time to time and our credit ratings can impact the interest rates charged in those transactions. If our credit ratings or ratings outlook change, our cost to obtain debt financing could increase or decrease. The credit ratings assigned to us could change based upon, among other things, our results of operations and financial condition. These ratings are subject to ongoing evaluation by credit rating agencies and we cannot assure you that our ratings will not be changed or withdrawn by a rating agency in the future if, in its judgment, circumstances warrant. Moreover, a rating is not a recommendation to buy, sell or hold our debt securities, preferred stock or common stock. 
 Term Loans 
 In October 2018, in conjunction with entering into our revolving credit facility, we entered into a $250.0 million senior unsecured term loan, which matures in March 2024, and is governed by the credit agreement that governs our revolving credit facility. Borrowing under this term loan bears interest at the current one-month LIBOR, plus 0.85%. In conjunction with this term loan, we also entered into an interest rate swap which effectively fixes our per annum interest on this term loan at 3.89%. Our term loan facility was amended in December 2021 to include provisions for establishing alternative reference rates when LIBOR is no longer available. 
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 Mortgage Debt 
 As of December 31, 2021, we had $1.11 billion of mortgages payable, the majority of which were assumed in connection with our property acquisitions, including ten mortgages from our merger with VEREIT in 2021 totaling $839.1 million and a Sterling-denominated mortgage payable of £31.0 million. Additionally, at December 31, 2021, we had net premiums totaling $28.7 million on these mortgages and deferred financing costs of $790,000. We expect to pay off the mortgages payable as soon as prepayment penalties have declined to a level that would make it economically feasible to do so. During 2021, we made $66.6 million of principal payments, including the repayment of seven mortgages in full for $63.0 million. 
 Notes Outstanding 
 As of December 31, 2021, we had $12.26 billion of senior unsecured note and bond obligations, excluding unamortized net premiums of $295.5 million and deferred financing costs of $53.1 million. All of our outstanding notes and bonds have fixed interest rates and contain various covenants, with which we remained in compliance as of December 31, 2021. Additionally, with the exception of our £400.0 million of 1.625% senior unsecured notes issued in October 2020, our January 2027 Notes, our July 2027 Notes, our July 2033 Notes, and our January 2042 Notes, in each case where interest is paid annually, interest on our remaining senior unsecured note and bond obligations is paid semiannually. 
 
 
 In connection with our merger with VEREIT, in November 2021, we completed our debt exchange offer to exchange outstanding notes previously issued by VEREIT OP, totaling $4.65 billion in principal, for new notes issued by Realty Income, pursuant to which approximately 99.2% of the outstanding notes issued by VEREIT OP were exchanged for a like aggregate principal amount of the notes issued by Realty Income. The interest rate, interest payment dates, redemption terms and maturity of each series of Realty Income notes issued by Realty Income in the exchange offers were the same as those of the corresponding series of VEREIT notes exchanged. With respect to the notes originally issued by VEREIT OP that remained outstanding, we amended the indenture governing such notes to, among other things, eliminate substantially all of the restrictive covenants in such indenture. 
 Environmental, Social and Governance (ESG) 
 In recent years, our environmental, social, and governance efforts have quickly evolved from commitments to action. We continue to focus on how best to institutionalize efforts for a lasting and positive impact. As a result, we strive to be a sustainability leader in the net lease REIT sector. 
 As The Monthly Dividend Company ® , our mission is to conduct business with integrity, transparency, respect and humility to create long-term value across economic cycles for all stakeholders. We are committed to conducting our business according to the highest moral and ethical standards. Our dedication to providing dependable monthly dividends that increase over time is only enhanced by our elevated purpose, mission, vision and values. 
 We believe that our commitment to corporate responsibility, which encompasses ESG principles, is critical to our performance and long-term success and that we all have a shared responsibility to our people, communities that we operate in and the planet. In support of this commitment, we are dedicated to providing an engaging, inclusive, and safe work environment for our employees, operating our business in an environmentally conscious manner, and upholding our corporate responsibilities as a public company for the benefit of our stakeholders - our investors, clients, team and community. The Nominating/Corporate Governance Committee of our Board of Directors has direct oversight of ESG matters. 
 Environmental - Sustainability 
 We hold the protection of our assets, communities, and the environment in high regard. Based on our business model, the properties in our portfolio are primarily net leased to our clients, and each client is generally responsible for maintaining the buildings, including utilities management and the implementation of environmentally sustainable practices at each location. Therefore, we generally cannot control the implementation of environmentally sustainable practices without the assistance of our clients whose environmental initiatives may or may not be aligned with ours. However, we hope that with continued engagement, we can encourage clients to adopt environmentally sustainable practices. In that light, we have expanded and intend to continue to expand our client engagement efforts to achieve shared sustainability objectives on an ongoing basis. As a member of the National Association of Real Estate Investment Trusts ("Nareit") Real Estate Sustainability Council, we are focused on leveraging best practices and advancing our efforts in this area. 
 
 
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 Response to Climate Change 
 We seek to promote effective energy efficiency and other sustainability strategies and compliance with federal, state and international laws and regulations related to climate change, both internally and with our clients. We remain committed to sustainable business practices in our day-to-day activities by encouraging a culture of environmental responsibility at our offices and within our communities. We work with our clients to promote environmental responsibility at the properties we own, however, as noted above, as our properties are primarily net leased to our clients we generally cannot control the implementation of environmentally sustainable practices without the assistance of our clients. As we grow our sustainability efforts, we intend to leverage our size and expand our client engagement efforts to achieve shared sustainability objectives. We are: 
 • Operating from green certified buildings: our San Diego headquarters earned Energy Star Certification and through our merger with VEREIT, we have added LEED Platinum and LEED Silver office spaces; 
 • Continuing to upgrade our headquarters by completing a complete, building-wide LED retrofit, installing electric vehicle charging stations, and working to install rooftop and canopy photovoltaic panel system. This is in addition to our automatic lighting control system with light-harvesting technology, building management system that monitors and controls energy use, and energy efficient PVC roofing and heating and cooling systems; 
 • Following our 2021 Green Financing Framework to allocate proceeds from our inaugural Green Bond offering to green certified building acquisitions and other eligible green projects; 
 • Expanding and incorporating a greater volume of “Green Lease Clauses” in our leases for access to utility and performance data through lease rollovers, sale-leaseback transactions, and initiatives which allow us to benchmark our properties and work with clients to identify and implement energy efficiency projects; 
 • Increasing our client engagement initiative to learn about client sustainability goals, initiatives, and collaboration opportunities focused on utility data sharing, renewable energy options, electric vehicle charging infrastructure, as well as LED lighting and HVAC retrofits and other energy efficiency projects; 
 • Working with strategic real estate partners to survey existing site-level environmental characteristics to help develop a more comprehensive inventory of the portfolio’s low-footprint carbon initiatives; 
 • Providing our asset management and real estate operations teams with additional resources to identify and evaluate client partnership opportunities; 
 • Surveying asset-level property characteristics via client survey requests to increase environmental data coverage; 
 • Continuing to strengthen our governance structure and legal instruments to expedite opportunities across our portfolio; and 
 • Considering climate-related risks within our strategic enterprise-level risk assessment process while following Task Force on Climate-Related Financial Disclosure (TCFD) recommendations to better understand how climate change may impact future business decisions. 
 Social - Company Culture and Employees 
 Human Capital 
 We put great effort into cultivating an inclusive company culture. We are one team, and together we are committed to providing an engaging work environment centered on our One Team values of Do the right thing, Take ownership, Empower each other, Celebrate differences, and Give more than we take. As such, we hire talented employees with diverse backgrounds and perspectives and work to provide an environment with regular, open communication where capable team members have fulfilling careers and are encouraged to engage with and make a positive impact on business partners and the communities in which we operate. 
 The COVID-19 pandemic presented challenges to our employees. In response, during 2020 and continuing into 2021, we took the following actions to seek to assist our employees: 
 • For the continued safety of all employees, maintained a remote work environment; 
 • Implemented an improved internal communication and document management platform that provides employees enhanced video conferencing, document management, and virtual collaboration workspace which enhanced employee communications and collaboration during our remote work environment; 
 • Increased dialogue with our team leaders, including our CEO, who conducts regular check-in meetings with all departments and employees across the Company; 
 • Provided resources to employees who were directly impacted by the COVID-19 pandemic; 
 • Updated our business continuity plan that includes emergency planning, disaster recovery, alternative communication outlets, and real-time testing simulations; 
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 • Engaged with employees through a survey to gather their perspectives on how and when to return to an office work environment based on their individual situations; 
 • Established virtual engagement activities bringing colleagues together through the Team Building Committee and Green Team; and 
 • Hosted virtual “O”verall Wellbeing Program classes and events addressing mental health, stress reduction, financial wellbeing, and other wellness topics. 
 Recruitment, Development and Retention 
 We believe our employees form the foundation of our corporate culture and are one of our most valuable assets. As of January 2022, we employed 371 professionals (including four part-time employees), with the majority of talent recruited and hired from the local communities in which we operate. In order to broaden our reach for talent, we offer a college internship program and attract candidates utilizing diverse resources such as affinity associations, targeted job advertisements, and employee referrals. Additionally, as part of our ongoing efforts to strengthen our internal leadership development capabilities, we operate an annual mentorship program and train on topics such as anti-discrimination and harassment, cybersecurity, Diversity, Equality and Inclusion (DE&I) awareness, safety, and important company policies that are required for every employee. We a lso offer competency-based training that includes professional development, mentorship opportunities, executive and officer-level coaching, and leadership development. 
 Assistance and support are provided to employees who are working towards obtaining job-related licenses and relevant certifications as well as continuing education. Opportunities to enroll in professional and technical education is also extended to all employees who are looking for ways to continue learning and growing with the Company. 
 Employee retention is vital to maintaining a robust and cohesive workforce. To that end, we provide compensation that we believe is competitive with our peers and competitors, including a generous benefits package. Benefits include medical, dental, and vision healthcare benefits for all employees and their families; participation in a 401(k) plan with a matching contribution from us; paid time-off; disability and life insurance; and, in years that the Company's performance meets certain goals, the ability to earn equity in the Company that vests over four years. Our employees (excluding continuing employees from our merger with VEREIT in November 2021) have an average tenure of approximately 4.5 years and our leadership, including Senior Vice President and above, have an average tenure of approximately 9.5 years. 
 Diversity, Equality and Inclusion 
 We believe that much of our success is rooted in the diversity of our teams and our commitment to inclusion. This commitment starts at the top with our highly skilled and diverse Board, comprised of individuals with a variety of backgrounds and experience. We strive to emulate this diversity throughout the Company as part of our ongoing commitment to diversity, equality and inclusion with our DE&I Policy. We continue to expand our DE&I efforts around building employee awareness and understanding through various training requirements and learning opportunities. In 2021, we accomplished a 100% participation in our required DE&I training and hosted a variety of voluntary learning sessions around an array of DE&I topics (e.g., Cultural Diversity, and Humility, LGBTQ+ Pride, Black History), which supported employee self-reflection, engagement, and action throughout the year. In addition, we introduced the option for employees to select a floating holiday that recognizes DE&I that is personally meaningful to them. 
 These learning opportunities aim to continue building knowledge and facilitate open and safe conversations regarding critical DE&I topics, such as confronting bias in the workplace, driving inclusive conversations with others, and promoting belonging in our remote environment. 
 We perform a pay equity analysis each year to ensure that regardless of gender, race, or national origin, employees who perform similar work under similar circumstances are paid similar wages. 
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 Workforce Demographics 
 The following data is as o f December 31, 2021 and w as gathered voluntarily from employees and reflects the information provided by the participating respondents. No employees have identified as non-binary. We define Manager Level as employees that either supervise at least one team member or hold a title of Associate Director or above. We define Senior Officer Level as employees with a title of Senior Vice President or above. In addition to maintaining a diverse workforce, 42% of our Board of Directors self-identify as wom en and 50% self-ide ntify as racially or ethnically diverse. 
 
 * 7 of 19 senior officers identify as women 
 Employee Engagement 
 We believe our focus on culture, employee engagement and inclusion has helped us mitigate the risk of losing key team members. To assess, analyze, and respond to employee sentiment and to ensure that we are doing all we can to foster engagement from a strategic perspective, we launched our first employee engagement survey in 2019. Eighteen months later, we conducted our second employee engagement survey, both with an overwhelming 99% of employees participating and increasing positive results. We continuously strive in our culture and work environment to create opportunities for engagement and improvement. We intend to continue conducting employee engagement surveys every eighteen months. 
 We sponsor an active Team Building Committee comprised of volunteer-employees across numerous departments and seniority levels that organizes employee-driven, team-building events and activities to promote employee involvement, communication, and organizational continuity to foster strong interconnected relationships. We complement the Team Building Committee in support of our Environmental, Social, and Governance efforts with another volunteer-based, employee-driven Green Team that works on sustainability related matters at our office and in the community. 
 Employee Health, Safety and Wellbeing 
 We believe the health and wellbeing of our team members are cornerstones for our successful operations. Our “O”verall Wellbeing Program provides opportunities for our people to participate in various activities and educational programs to enhance their personal and professional lives. To support a healthy work-life balance, we offer flexible work schedules, access to discounted fitness programs, on-site dry-cleaning pickup, car wash services, paid family leave, generous maternity leave, lactation rooms and an infant at work program for new parents. Employees also have access to a robust employee assistance program. Our Injury and Illness Prevention Program (IIPP) helps us meet our goal of maintaining a safe and healthy working environment for our employees. 
 Additionally, we have continued to train employees on best practices for healthy hygiene in the workplace as we evaluate a return to office plan. Every employee was required to attend an information session on healthy office protocols and COVID-19 safety and prevention prior to regularly returning to the office to work. For our corporate offices, we have invested in MERV 13 filters, provide continuous HVAC air filtration, installed sanitizing stations, implemented social distancing guidelines, and trained employees on healthy hand washing habits. We also escalated cleaning protocols and preventative health screening questionnaires to create a safe and clean environment for our employees. 
 Governance - Fiduciary Duties and Ethics 
 We believe in the importance of a company’s reputation for integrity and are committed to managing the Company for the benefit of our stockholders. We are focused on maintaining good corporate governance and have implemented the below practices that illustrate this commitment including, but are not limited to: 
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 • Our Board of Directors is currently comprised of 12 directors, 11 of whom are independent, non-employee directors; 
 • Our Board of Directors is elected on an annual basis with a majority vote standard; 
 • Our directors conduct annual self-evaluations and participate in director orientation and continuing education programs; 
 • An enterprise risk management evaluation is conducted annually to identify and assess Company risk; 
 • Each standing committee of our Board of Directors is comprised entirely of independent directors; and 
 • We adhere to all other corporate governance principles outlined in our Corporate Governance Guidelines. These guidelines, as well as our bylaws, committee charters and other governance documents may be found on our website. 
 We are committed to conducting our business according to the highest ethical standards and upholding our corporate responsibilities as a public company operating for the benefit of our stockholders. Our Board of Directors has adopted a Code of Business Ethics that applies to our directors, officers, and other employees. The Code of Business Ethics includes our commitment to dealing fairly with all of our customers, service providers, suppliers, and competitors. We conduct an annual training with our employees regarding ethical behavior and require all employees to acknowledge the terms of, and abide by, our Code of Business Ethics, which is also available on our website. Our employees have access to members of our Board of Directors to report anonymously, if desired, any suspicion of misconduct by any member of our senior management or executive team. Anonymous reporting is always available through our whistleblower hotline and reported to our Audit Committee quarterly. 
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 PROPERTY PORTFOLIO INFORMATION 
 At December 31, 2021, we owned a diversified portfolio: 
 • Consisting of 11,136 properties; 
 • With an occupancy rate of 98.5%, or 10,972 properties leased and 164 properties available for lease or sale; 
 • With clients doing business in 60 separate industries; 
 • Located in all 50 U.S. states, Puerto Rico, the U.K. and Spain; 
 • With approximately 210.1 million square feet of leasable space; 
 • With a weighted average remaining lease term (excluding rights to extend a lease at the option of the client) of approximately 9.0 years; and 
 • With an average leasable space per property of approximately 18,860 square feet, approximately 12,470 square feet per retail property and approximately 248,120 square feet per industrial property. 
 At December 31, 2021, 10,972 properties were leased under net lease agreements. A net lease typically requires the client to be responsible for monthly rent and certain property operating expenses including property taxes, insurance, and maintenance. In addition, clients of our properties typically pay rent increases based on: (1) fixed increases, (2) increases tied to inflation (typically subject to ceilings), or (3) additional rent calculated as a percentage of the clients’ gross sales above a specified level. 
 We define total portfolio annualized contractual rent as the monthly aggregate cash amount charged to clients, inclusive of monthly base rent receivables, but excluding percentage rent and reimbursements from clients, as of the balance sheet date, multiplied by 12, excluding percentage rent. We believe total portfolio annualized contractual revenue is a useful supplemental operating measure, as it excludes properties that were no longer owned at the balance sheet date and includes the annualized rent from properties acquired during the quarter. Total portfolio annualized contractual rent has not been reduced to reflect reserves recorded as reductions to GAAP rental revenue in the periods presented and excludes unconsolidated entities. 
 
 
 
 
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 Industry Diversification 
 The following table sets forth certain information regarding our property portfolio classified according to the business of the respective clients, expressed as a percentage of our total portfolio annualized contractual rent: 
 
 Percentage of Total Portfolio Annualized Contractual Rent by Industry as of 
 Dec 31, 2021 
 Dec 31, 2020 
 Dec 31, 2019 
 Dec 31, 2018 
 Dec 31, 2017 
 
 United States 
 
 Aerospace 0.4 % 0.6 % 0.8 % 0.9 % 1.0 % 
 Apparel stores 1.5 1.3 1.1 1.2 1.4 
 Automotive collision services 1.0 1.1 1.0 0.9 1.0 
 Automotive parts 1.5 1.6 1.6 1.7 1.5 
 Automotive service 3.2 2.7 2.6 2.3 2.5 
 Automotive tire services 1.8 2.0 2.1 2.3 2.5 
 Beverages 1.3 2.1 2.0 2.4 2.6 
 Child care 1.5 2.1 2.1 2.2 1.7 
 Consumer electronics 0.6 0.3 0.3 0.3 0.3 
 Consumer goods 0.7 0.6 0.6 0.7 0.7 
 Convenience stores 9.1 11.9 12.3 12.6 9.3 
 Crafts and novelties 1.0 0.9 0.6 0.6 0.6 
 Diversified industrial 1.0 0.8 0.7 0.8 0.8 
 Dollar stores 7.5 7.6 7.9 7.3 7.5 
 Drug stores 6.6 8.2 8.8 9.4 10.2 
 Education 0.1 0.2 0.2 0.3 0.3 
 Energy 0.4 — — — — 
 Entertainment 0.8 0.3 0.3 0.3 0.4 
 Equipment services 0.3 0.3 0.4 0.4 0.4 
 Financial services 2.0 1.8 2.0 2.4 2.3 
 Food processing 0.7 0.7 0.7 0.5 0.6 
 General merchandise 3.5 3.4 2.5 2.1 2.3 
 Government services * 0.6 0.7 0.9 0.9 
 Grocery stores 4.9 4.9 5.2 5.0 5.3 
 Health and beauty 0.2 0.2 0.2 0.2 * 
 Health and fitness 4.7 6.7 7.0 7.1 7.7 
 Health care 1.9 1.5 1.6 1.6 1.4 
 Home furnishings 2.2 0.7 0.8 0.8 0.9 
 Home improvement 3.1 3.1 2.9 2.8 2.9 
 
 
 Machinery 0.1 0.1 0.1 0.1 0.1 
 Motor vehicle dealerships 1.3 1.6 1.6 1.8 2.0 
 Office supplies 0.2 0.1 0.2 0.2 0.2 
 Other manufacturing 0.5 0.4 0.6 0.7 0.8 
 Packaging 0.6 0.9 0.8 1.0 1.1 
 Paper * 0.1 0.1 0.1 0.1 
 Pet supplies and services 0.9 0.7 0.7 0.5 0.6 
 Restaurants - casual dining 5.9 2.8 3.2 3.3 3.6 
 Restaurants - quick service 6.5 5.3 5.8 6.3 5.2 
 Shoe stores 0.2 0.2 0.2 0.5 0.6 
 Sporting goods 1.5 0.7 0.8 0.9 1.0 
 Telecommunications 0.1 0.5 0.5 0.6 0.6 
 Theaters 3.4 5.6 6.1 5.3 5.7 
 Transportation services 3.4 3.9 4.3 5.0 5.4 
 
 Wholesale clubs 2.5 2.4 2.5 2.9 3.1 
 Other 0.9 0.3 0.8 0.8 0.9 
 Total United States 91.5 % 93.8 % 97.3 % 100.0 % 100.0 % 
 Europe (1) 
 
 Grocery stores 5.3 4.9 2.7 — — 
 Health care 0.1 0.1 — — — 
 Home improvement 2.0 1.2 — — — 
 Warehousing and storage 0.2 — — — — 
 Other 0.9 * * — — 
 Total Europe 8.5 % 6.2 % 2.7 % — % — % 
 Totals 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 
 * Less than 0.1% 
 (1) Europe consists of properties in the U.K., starting in May 2019, and in Spain, starting in September 2021. 
 

 
 
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 Property Type Composition 
 The following table sets forth certain property type information regarding our property portfolio as of December 31, 2021 (dollars in thousands): 
 
 Property Type Number of 
Properties Approximate Leasable 
 Square Feet (1) 
 Total Portfolio Annualized Contractual Rent Percentage of Total Portfolio Annualized Contractual Rent 
 Retail 10,819 134,919,200 $ 2,430,223 83.4 % 
 Industrial 294 72,947,300 424,217 14.6 
 Other (2) 
 23 2,201,000 57,757 2.0 
 Totals 11,136 210,067,500 $ 2,912,197 100.0 % 

 (1) Includes leasable building square footage. Excludes 3,600 acres of leased land categorized as agriculture at December 31, 2021. 
 (2) "Other" includes seven properties classified as office, consisting of 2,009,800 approximate leasable square feet and $29.2 million in annualized contractual rent, and 16 properties classified as agriculture, consisting of 191,200 approximate leasable square feet and $28.6 million in annualized contractual rent. In November 2021, we completed the spin-off of substantially all of our office assets into Orion Office REIT Inc. 
 Client Diversification 
 The following table sets forth the 20 largest clients in our property portfolio, expressed as a percentage of total portfolio annualized contractual rent, which does not give effect to deferred rent, at December 31, 2021: 
 
 Client Number of
Leases Percentage of Total Portfolio Annualized Contractual Rent (1) 
 
 Walgreens 333 4.1 % 
 Dollar General 1,272 4.0 
 7-Eleven 627 4.0 
 Dollar Tree / Family Dollar 1,016 3.6 
 FedEx 80 3.0 
 LA Fitness 79 2.5 
 Sainsbury's 26 2.3 
 BJ's Wholesale Club 32 2.0 
 CVS Pharmacy 183 1.8 
 Wal-Mart / Sam's Club 64 1.8 
 B&Q (Kingfisher) 23 1.7 
 AMC Theaters 35 1.7 
 Regal Cinemas (Cineworld) 41 1.6 
 Red Lobster 201 1.6 
 Tractor Supply 153 1.4 
 Tesco 15 1.4 
 Lifetime Fitness 16 1.4 
 Home Depot 29 1.2 
 Amazon 16 1.1 
 Fas Mart (GPM Investments) 262 1.0 
 Totals 4,503 43.1 % 

 (1) Amounts for each client are calculated independently; therefore, the individual percentages may not sum to the total. 
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 Lease Expirations 
 The following table sets forth certain information regarding the timing of the lease term expirations in our portfolio (excluding rights to extend a lease at the option of the client) and their contribution to total portfolio annualized contractual rent as of December 31, 2021 (dollars in thousands): 
 
 
 Total Portfolio (1) 
 
 Expiring 
 Leases 
 Approximate 
 Leasable 
 Square Feet 
 Total Portfolio Annualized Contractual Rent Percentage of Total Portfolio Annualized Contractual Rent 
 Year 
 Retail 
 Non-Retail 
 
 2022 363 28 9,970,100 $ 78,627 2.7 % 
 2023 774 27 11,461,700 147,579 5.1 
 2024 660 30 13,290,800 150,833 5.2 
 2025 800 32 13,432,100 191,366 6.6 
 2026 745 32 15,313,000 174,810 6.0 
 2027 1,143 22 16,729,100 216,666 7.4 
 2028 942 33 18,442,100 220,058 7.6 
 2029 811 14 17,085,400 209,853 7.2 
 2030 497 16 13,504,900 154,216 5.3 
 2031 424 36 19,914,400 228,369 7.8 
 2032 577 12 8,872,600 167,609 5.8 
 2033 508 13 11,776,300 149,801 5.1 
 2034 493 5 9,027,300 189,096 6.5 
 2035 373 2 4,054,000 95,522 3.3 
 2036 370 6 6,385,700 120,659 4.1 
 2037-2059 1,420 28 18,261,000 417,133 14.3 
 Totals 10,900 336 207,520,500 $ 2,912,197 100.0 % 

 (1) Leases on our multi-client properties are counted separately in the table above. This table excludes 208 vacant units. 
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 Geographic Diversification 
 The following table sets forth certain state-by-state information regarding our property portfolio as of December 31, 2021: 
 
 Location 
 Number of 
 Properties 
 Percent Leased 
 Approximate 
 Leasable 
 Square Feet 
 Percentage of Total Portfolio Annualized Contractual Rent 
 
 Alabama 
 380 98 % 4,074,500 2.1 % 
 Alaska 
 6 100 299,700 0.1 
 Arizona 
 223 99 3,344,600 1.9 
 Arkansas 
 226 98 2,454,300 1.1 
 California 
 315 99 10,962,400 6.3 
 Colorado 
 156 98 2,550,000 1.5 
 Connecticut 
 30 90 1,350,800 0.5 
 Delaware 
 26 100 192,000 0.2 
 Florida 
 700 99 9,492,600 5.3 
 Georgia 
 487 99 8,364,900 3.6 
 Hawaii 22 100 47,800 0.2 
 Idaho 
 27 100 189,100 0.1 
 Illinois 
 455 98 11,743,900 5.0 
 Indiana 
 386 99 7,370,100 2.9 
 Iowa 
 88 98 3,466,600 1.0 
 Kansas 
 172 100 4,452,400 1.3 
 Kentucky 
 172 97 3,413,800 1.3 
 Louisiana 
 296 99 4,861,900 2.2 
 Maine 
 55 98 1,008,300 0.5 
 Maryland 
 72 96 2,740,100 1.3 
 Massachusetts 
 88 99 3,045,800 1.4 
 Michigan 
 447 98 5,276,700 2.9 
 Minnesota 
 230 100 3,511,200 2.1 
 Mississippi 
 277 99 4,148,400 1.4 
 Missouri 
 341 98 4,636,100 2.1 
 Montana 
 21 100 204,500 0.1 
 Nebraska 
 75 99 1,013,000 0.4 
 Nevada 
 72 100 2,638,300 1.0 
 New Hampshire 
 30 100 567,900 0.4 
 New Jersey 
 136 98 2,199,900 1.8 
 New Mexico 
 101 99 1,280,200 0.7 
 New York 
 239 99 4,277,800 3.3 
 North Carolina 
 372 99 7,611,600 3.3 
 North Dakota 
 22 86 352,300 0.2 
 Ohio 
 656 99 14,915,200 4.7 
 Oklahoma 
 279 98 3,876,100 1.8 
 Oregon 
 41 98 656,400 0.5 
 Pennsylvania 
 327 98 5,852,700 2.8 
 Rhode Island 
 7 86 109,800 0.1 
 South Carolina 
 287 99 3,917,800 2.0 
 South Dakota 
 30 97 430,200 0.2 
 Tennessee 
 369 98 6,372,600 2.6 
 Texas 
 1,422 98 23,608,600 10.6 
 Utah 
 36 100 1,529,500 0.6 
 Vermont 
 7 100 134,900 0.1 
 Virginia 
 339 97 5,792,000 2.5 
 Washington 
 76 99 1,674,300 1.0 
 West Virginia 
 74 100 726,000 0.4 
 Wisconsin 
 239 100 4,200,600 1.9 
 Wyoming 
 23 100 157,700 0.1 
 Puerto Rico 
 6 100 59,400 0.1 
 Spain 43 100 2,492,000 0.7 
 U.K. 
 130 100 10,418,200 7.8 
 Totals/average 
 11,136 99 % 210,067,500 100.0 % 

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 FORWARD-LOOKING STATEMENTS 
 This Annual Report on Form 10-K, including the documents incorporated by reference, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended. When used in this annual report, the words “estimated”, “anticipated”, “expect”, “believe”, “intend” and similar expressions are intended to identify forward-looking statements. Forward-looking statements include discussions of strategy, plans, or intentions of management. Forward-looking statements are subject to risks, uncertainties, and assumptions about Realty Income Corporation, including, among other things: 
 • Our access to capital and other sources of funding; 
 • Our anticipated growth strategies; 
 • Our intention to acquire additional properties and the timing of these acquisitions; 
 • Our intention to sell properties and the timing of these property sales; 
 • Our intention to re-lease vacant properties; 
 • Anticipated trends in our business, including trends in the market for long-term net leases of freestanding, single-client properties; 
 • Future expenditures for development projects; 
 • The impact of the COVID-19 pandemic, or future pandemics, on us, our business, our clients, or the economy generally; and 
 • The uncertainties regarding whether the anticipated benefits or results of our merger with VEREIT will be achieved. 
 Future events and actual results, financial and otherwise, may differ materially from the results discussed or implied by the forward-looking statements. In particular, forward-looking statements regarding estimated or future results of operations or financial condition, estimated or future acquisitions of properties, or the estimated or potential impact of our merger with VEREIT are based upon numerous assumptions and estimates and are inherently subject to substantial uncertainties and actual results of operations, financial condition, property acquisitions and the impacts of our merger with VEREIT may differ materially from those expressed or implied in the forward-looking statements, particularly if actual events differ from those reflected in the estimates and assumptions upon which such forward-looking statements are based. Some of the factors that could cause actual results to differ materially are: 
 • Our continued qualification as a real estate investment trust; 
 • General domestic and foreign business and economic conditions; 
 • Competition; 
 • Fluctuating interest and currency rates; 
 • Access to debt and equity capital markets; 
 • Continued volatility and uncertainty in the credit markets and broader financial markets; 
 • Other risks inherent in the real estate business including our clients' defaults under leases, potential liability relating to environmental matters, illiquidity of real estate investments, and potential damages from natural disasters; 
 • Impairments in the value of our real estate assets; 
 • Changes in income tax laws and rates; 
 • The continued evolution of the COVID-19 pandemic and the measures taken to limit its spread, and its impacts on us, our business, our clients, or the economy generally; 
 • The timing and pace of reopening efforts at the local, state and national level in response to the COVID-19 pandemic and developments, such as the unexpected surges in COVID-19 cases, that cause a delay in or postponement of reopenings; 
 • The outcome of any legal proceedings to which we are a party or which may occur in the future; 
 • Acts of terrorism and war; and 
 • Any effects of uncertainties regarding whether the anticipated benefits or results of our merger with VEREIT will be achieved. 
 Additional factors that may cause risks and uncertainties include those discussed in the sections entitled “Business”, “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report on Form 10-K, for the fiscal year ended December 31, 2021. 
 Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date that this annual report was filed with the SEC. While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. We undertake no obligation to publicly release the results of any 
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 revisions to these forward-looking statements that may be made to reflect events or circumstances after the date of this annual report or to reflect the occurrence of unanticipated events. In light of these risks and uncertainties, the forward-looking events discussed in this annual report might not occur.
REALTY INCOME CORP 10-K

Item 1. Business
