Item 9A. Controls and Procedures
Item 9A: Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended) that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
As of and for the quarter ended December 31, 2022, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer.
Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that as of December 31, 2022 our disclosure controls and procedures were effective and were operating at a reasonable assurance level.
Management’s Report on Internal Control Over Financial Reporting
Internal control over financial reporting refers to the process designed by, or under the supervision of, our Chief Executive Officer, Chief Financial Officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that:
(1) Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;
(2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
(3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company.
Management has used the framework set forth in the report entitled “Internal Control--Integrated Framework (2013)” published by the Committee of Sponsoring Organizations of the Treadway Commission to evaluate the effectiveness of the Company’s internal control over financial reporting. Management has concluded that the Company’s internal control over financial reporting was effective as of the end of the most recent fiscal year. KPMG LLP has issued an attestation report on the effectiveness of the Company’s internal control over financial reporting.
Submitted on February 22, 2023 by,
Sumit Roy, President, Chief Executive Officer
Christie B. Kelly, Executive Vice President, Chief Financial Officer, and Treasurer
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Changes in Internal Controls
As a result of our merger with VEREIT in November 2021, we were operating two separate enterprise resource planning (ERP) systems to generate our financial statements. During the three months ended June 30, 2022, we integrated these two ERP platforms into one primary system. We have updated our internal controls over financial reporting, as necessary, to accommodate modifications to our business processes for the integration of these parallel ERP systems into a central platform. Except as described above, there have been no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on the Effectiveness of Controls
Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.
Item 9B: Other Information
None
Item 9C: Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
None
PART III
Item 10: Directors, Executive Officers and Corporate Governance
The information required by this item is set forth under the captions “Board of Directors” and “Executive Officers of the Company” and “Delinquent Section 16(a) Reports” in our definitive Proxy Statement for the 2023 Annual Meeting of Stockholders, to be filed pursuant to Regulation 14A, and is incorporated herein by reference.
Item 11: Executive Compensation
The information required by this item is set forth under the caption “Executive Compensation” in our definitive Proxy Statement for the 2023 Annual Meeting of Stockholders, to be filed pursuant to Regulation 14A, and is incorporated herein by reference.
Item 12: Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this item is set forth under the caption “Security Ownership of Certain Beneficial Owners and Management” in our definitive Proxy Statement for the 2023 Annual Meeting of Stockholders, to be filed pursuant to Regulation 14A, and is incorporated herein by reference.
Item 13: Certain Relationships, Related Transactions and Director Independence
The information required by this item is set forth under the caption “Related Party Transactions” in our definitive Proxy Statement for the 2023 Annual Meeting of Stockholders, to be filed pursuant to Regulation 14A, and is incorporated herein by reference.
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Item 14: Principal Accounting Fees and Services
Our independent registered public accounting firm is KPMG LLP , San Diego, CA , Auditor Firm ID: 185 .
The information required by this item is set forth under the caption “Independent Registered Public Accounting Firm Fees and Services” in our definitive Proxy Statement for the 2023 Annual Meeting of Stockholders, to be filed pursuant to Regulation 14A, and is incorporated herein by reference.
PART IV
Item 15: Exhibits and Financial Statement Schedules
A. The following documents are filed as part of this report.
1. Financial Statements (see Item 8)
a. Reports of Independent Registered Public Accounting Firm
b. Consolidated Balance Sheets,
December 31, 2022 and 2021
c. Consolidated Statements of Income and Comprehensive Income,
Years ended December 31, 2022, 2021 and 2020
d. Consolidated Statements of Equity,
Years ended December 31, 2022, 2021 and 2020
e. Consolidated Statements of Cash Flows,
Years ended December 31, 2022, 2021 and 2020
f. Notes to Consolidated Financial Statements
2. Financial Statement Schedule. Reference is made to page F-1 of this report for Schedule III Real Estate and Accumulated Depreciation (electronically filed with the Securities and Exchange Commission).
Schedules not Filed: All schedules, other than those indicated in the Table of Contents, have been omitted as the required information is either not material, inapplicable or the information is presented in the financial statements or related notes.
3. Exhibits
Exhibit No. Description
Articles of Incorporation and Bylaws
2.1 Agreement and Plan of Merger, dated as of April 29, 2021, by and among Realty Income Corporation, Rams MD Acquisition Sub I, Inc., Rams Acquisition Sub II, LLC, VEREIT, Inc. and VEREIT Operating Partnership, L.P (filed as exhibit 2.1 to the Company's Form 8-K, filed on April 30, 2021 (File No. 001-13374), and incorporated herein by reference).
2.2 First Amendment to Agreement and Plan of Merger, dated as of June 25, 2021, by and among Realty Income Corporation, Rams MD Acquisition Sub I, Inc., Rams Acquisition Sub II, LLC, VEREIT, Inc. and VEREIT Operating Partnership, L.P (filed as exhibit 2.1 to the Company's Form 8-K, filed on June 25, 2021 (File No. 001-13374), and incorporated herein by reference).
3.1 Articles of Incorporation of the Company, as amended by amendment No. 1 dated May 10, 2005 and amendment No. 2 dated May 10, 2005 (filed as exhibit 3.1 to the Company’s Form 10-Q for the quarter ended June 30, 2005, filed on August 3, 2005 (File No. 033-69410) and incorporated herein by reference).
3.2 Articles of Amendment dated July 29, 2011 (filed as exhibit 3.1 to the Company's Form 8-K, filed on August 2, 2011 (File No. 001-13374) and incorporated herein by reference).
3.3 Articles of Amendment dated June 21, 2012 (filed as exhibit 3.1 to the Company's Form 8-K, filed on June 21, 2012 (File No. 001-13374) and incorporated herein by reference).
3.4 Articles of Amendment dated May 14, 2019 (filed as exhibit 3.1 to the Company's Form 8-K, filed on May 16, 2019 (File No. 001-13374) and incorporated herein by reference).
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3.5 Amended and Restated Bylaws of the Company dated February 19, 2020 (filed as exhibit 3.1 to the Company’s Form 8-K, filed on February 20, 2020 (File No. 001-13374) and incorporated herein by reference).
3.6 Articles of Amendment dated May 17, 2022 (filed as exhibit 3.1 to the Company's Form 8-K, filed on May 19, 2022 (File No. 001-13374) and herein by reference.
3.7 Articles Supplementary dated June 30, 1998 establishing the terms of the Company's Class A Junior Participating Preferred Stock (filed as exhibit A to exhibit 1 to the Company's Form 8-A12B, filed on June 26, 1998 (File No. 001-13374) and incorporated herein by reference).
3.8 Articles Supplementary dated May 24, 1999 establishing the terms of the Company's 93/8% Class B Cumulative Redeemable Preferred Stock (filed as exhibit 4.1 to the Company's Form 8-K, filed on May 25, 1999 (File No. 001-13374) and incorporated herein by reference).
3.9 Articles Supplementary dated July 28, 1999 establishing the terms of the Company's 91/2% Class C Cumulative Redeemable Preferred Stock (filed as exhibit 4.1 to the Company's Form 8-K, filed on July 30, 1999 (File No. 001-13374) and incorporated herein by reference).
3.10 Articles Supplementary dated May 24, 2004 and the Articles Supplementary dated October 18, 2004 establishing the terms of the Company's 7.375% Monthly Income Class D Cumulative Redeemable Preferred Stock (filed as exhibit 3.8 to the Company's Form 8-A12B, filed on May 25, 2004 (File No. 001-13374) and incorporated herein by reference).
3.11 Articles Supplementary dated November 30, 2006 establishing the terms of the Company's 6.75% Monthly Income Class E Cumulative Redeemable Preferred Stock (filed as exhibit 3.5 to the Company's Form 8-A12B, filed on December 5, 2006 (File No. 001-13374) and incorporated herein by reference).
3.12 Articles Supplementary to the Articles of Incorporation of the Company classifying and designating the 6.625% Monthly Income Class F Cumulative Redeemable Preferred Stock, dated February 3, 2012 (the “First Class F Articles Supplementary”) (filed as exhibit 3.1 to the Company’s Form 8-K, filed on February 3, 2012 (File No. 001-13374) and incorporated herein by reference).
3.13 Certificate of Correction to the First Class F Articles Supplementary, dated April 11, 2012 (filed as exhibit 3.2 to the Company’s Form 8-K, filed on April 17, 2012 (File No. 001-13374) and incorporated herein by reference).
3.14 Articles Supplementary to the Articles of Incorporation of the Company classifying and designating additional shares of the 6.625% Monthly Income Class F Cumulative Redeemable Preferred Stock, dated April 17, 2012 (filed as exhibit 3.3 to the Company’s Form 8-K, filed on April 17, 2012 (File No. 001-13374) and incorporated herein by reference).
Instruments defining the rights of security holders, including indentures
4.1 Indenture dated as of October 28, 1998 between the Company and The Bank of New York (filed as exhibit 4.1 to the Company’s Form 8-K, filed on October 28, 1998 (File No. 001-13374) and incorporated herein by reference).
4.2 Form of 5.875% Senior Notes due 2035 (filed as exhibit 4.2 to the Company’s Form 8-K, filed on March 11, 2005 (File No. 033-69410) and incorporated herein by reference).
4.3 Officer’s Certificate pursuant to sections 201, 301 and 303 of the Indenture dated October 28, 1998 between the Company and The Bank of New York, as Trustee, establishing a series of securities entitled 5.875% Senior Debentures due 2035 (filed as exhibit 4.3 to the Company’s Form 8-K, filed on March 11, 2005 (File No. 033-69410) and incorporated herein by reference).
4.4 Form of Common Stock Certificate (filed as exhibit 4.16 to the Company’s Form 10-Q for the quarter ended September 30, 2011, filed on October 28, 2011 (File No. 001-13374) and incorporated herein by reference).
4.5 Form of 3.875% Note due 2024 (filed as exhibit 4.2 to the Company’s Form 8-K, filed on June 25, 2014 (File No. 001-13374), and incorporated herein by reference).
4.6 Officer’s Certificate pursuant to sections 201, 301 and 303 of the Indenture dated October 28, 1998 between the Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee, establishing a series of securities entitled “3.875% Notes due 2024” (filed as exhibit 4.3 to the Company’s Form 8-K, filed on June 25, 2014 (File No. 001-13374), and incorporated herein by reference).
4.7 Form of 4.125% Note due 2026 (filed as exhibit 4.2 to the Company’s Form 8-K, filed on September 23, 2014 (File No. 001-13374), and incorporated herein by reference).
4.8 Officer’s Certificate pursuant to sections 201, 301 and 303 of the Indenture dated October 28, 1998 between the Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee, establishing a series of securities entitled “4.125% Notes due 2026” (filed as exhibit 4.3 to the Company’s Form 8-K, filed on September 23, 2014 (File No. 001-11374), and incorporated herein by reference).
4.9 Form of 3.000% Note due 2027 (filed as exhibit 4.2 to the Company’s Form 8-K, filed on October 12, 2016 (File No. 001-13374), and incorporated herein by reference).
4.10 Officer’s Certificate pursuant to sections 201, 301 and 303 of the Indenture dated October 28, 1998 between the Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee, establishing a series of securities entitled “3.000% Notes due 2027” (filed as exhibit 4.3 to the Company’s Form 8-K, filed on October 12, 2016 (File No. 001-13374), and incorporated herein by reference).
4.11 Form of 4.650% Note due 2047 (filed as exhibit 4.2 to the Company’s Form 8-K, filed on March 15, 2017 (File No. 001-13374), and incorporated herein by reference).
4.12 Form of 4.125% Note due 2026 (filed as exhibit 4.3 to the Company’s Form 8-K, filed on March 15, 2017 (File No. 001-13374), and incorporated herein by reference).
4.13 Officers’ Certificate pursuant to Sections 201, 301, and 303 of the Indenture dated October 28, 1998 between the Company and The Bank of New York Mellon Trust Company, N.A. as successor trustee, establishing a series of securities entitled “4.650% Notes due 2047” and re-opening a series of securities entitled “4.125% Notes due 2026” (filed as exhibit 4.4 to the Company’s Form 8-K, filed on March 15, 2017 (File No. 001-13374), and incorporated herein by reference).
4.14 Form of 3.650% Note due 2028 (filed as exhibit 4.2 to the Company’s Form 8-K, filed on December 6, 2017 (File No. 001-13374), and incorporated herein by reference).
4.15 Form of 4.650% Note due 2047 (filed as exhibit 4.4 to the Company’s Form 8-K, filed on December 6, 2017 (File No. 001-13374), and incorporated herein by reference).
4.16 Form of 3.875% Note due 2025 (filed as exhibit 4.2 to the Company’s Form 8-K, filed on April 4, 2018 (File No. 001-13374), and incorporated herein by reference).
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4.17 Officers’ Certificate pursuant to Sections 201, 301, and 303 of the Indenture dated October 28, 1998 between the Company and The Bank of New York Mellon Trust Company, N.A. as successor trustee, establishing a series of securities entitled “3.875% Notes due 2025” and re-opening a series of securities entitled “4.125% Notes due 2026” (filed as exhibit 4.3 to the Company’s Form 8-K, filed on April 4, 2018 (File No. 001-13374), and incorporated herein by reference).
4.18 Form of 3.250% Note due 2029 (filed as exhibit 4.2 to the Company's Form 8-K, filed on June 16, 2019 (File No. 001-13374), and incorporated herein by reference).
4.19 Officers’ Certificate pursuant to Sections 201, 301 and 303 of the Indenture dated October 28, 1998 between the Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee, establishing a series of securities entitled “3.250% Notes due 2029." (filed as exhibit 4.3 to the Company's Form 8-K, filed on June 16, 2019 (File No. 001-13374), and incorporated herein by reference).
4.20 Form of 3.250% Note due 2031 (filed as exhibit 4.2 to the Company’s Form 8-K, filed on May 8, 2020 (File No. 001-13374), and incorporated herein by reference).
4.21 Form of 3.250% Note due 2031 (filed as exhibit 4.2 to the Company's Form 8-K, filed on July 16, 2020 (File No. 001-13374), and incorporated herein by reference).
4.22 Officers' Certificate, dated May 8, 2020, pursuant to Sections 201, 301 and 303 of the Indenture dated October 28, 1998 between the Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee, establishing a series of securities entitled "3.250% Notes due 2031." (filed as exhibit 4.3 to the Company's Form 8-K, filed on May 8, 2020, (File No. 001-13374), and incorporated herein by reference).
4.23 Officers' Certificate, dated July 16, 2020, pursuant to Sections 201, 301 and 303 of the Indenture dated October 28, 1998 between the Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee, re-opening a series of securities entitled "3.250% Notes due 2031." (filed as exhibit 4.3 to the Company's Form 8-K, filed on July 16, 2020, (File No. 001-13374), and incorporated herein by reference).
4.24 Form of 1.625% Note due 2030 (filed as exhibit 4.2 to the Company’s Form 8-K, filed on October 1, 2020 (File No. 001-13374), and incorporated herein by reference).
4.25 Officers’ Certificate dated October 1, 2020 pursuant to Sections 201, 301 and 303 of the Indenture dated as of October 28, 1998 between the Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee, establishing a series of securities entitled “1.625% Notes due 2030” (filed as an Exhibit 4.3 to the Company’s Form 8-K, filed on October 1, 2020 (File No. 001-13374), and incorporated herein by reference).
4.26 Form of 0.750% Note due 2026 (filed as exhibit 4.2 to the Company’s Form 8-K, filed on December 14, 2020 (File No. 001-13374), and incorporated herein by reference).
4.27 Form of 1.800% Note due 2033 (filed as exhibit 4.3 to the Company’s Form 8-K, filed on December 14, 2020 (File No. 001-13374), and incorporated herein by reference).
4.28 Officers’ Certificate dated December 14, 2020 pursuant to Sections 201, 301 and 303 of the Indenture dated as of October 28, 1998 between the Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee, establishing a series of debt securities entitled “0.750% Notes due 2026” and a series of debt securities entitled “1.800% Notes due 2033” (filed as an Exhibit 4.4 to the Company's Form 8-K, filed on December 14, 2020 (File No. 001-13374), and incorporated herein by reference).
4.29 Officers’ Certificate dated July 13, 2021 pursuant to Sections 201, 301 and 303 of the Indenture establishing the terms of a new series of debt securities entitled “1.125% Notes due 2027” and a new series of debt securities entitled “1.750% Notes due 2033.” (filed as Exhibit 4.4 to the Company's Form 8-K, filed on July 13, 2021 (File No. 001-13374), and incorporated herein by reference).
4.30 Form of 1.125% Notes due 2027 (filed as exhibit 4.2 to the Company's Form 8-K, filed on July 13, 2021 (File No. 001-13374), and incorporated herein by reference)
4.31 Form of 1.750% Notes due 2033 (filed as exhibit 4.3 to the Company's Form 8-K, filed on July 13, 2021 (File No. 001-13374), and incorporated herein by reference)
4.32 Form of 1.875% Notes due 2027 (filed as exhibit 4.2 to the Company's Form 8-K, filed on January 14, 2022 (File No. 001-13374), and incorporated herein by reference).
4.33 Form of 2.500% Notes due 2042 (filed as exhibit 4.3 to the Company's Form 8-K, filed on January 14, 2022 (File No. 001-13374), and incorporated herein by reference).
4.34 Officers’ Certificate dated January 14, 2022, pursuant to Sections 201, 301 and 303 of the Indenture establishing the terms of a new series of debt securities entitled “1.875% Notes due 2027” and a new series of debt securities entitled “2.500% Notes due 2042” (filed as exhibit 4.4 to the Company’s Form 8-K, filed on January 14, 2022 (File No. 001-13374), and incorporated herein by reference).
4.35 Indenture, dated as of February 6, 2014, among ARC Properties Operating Partnership, L.P., Clark Acquisition, LLC, the guarantors named therein and U.S. Bank National Association, as trustee (filed as exhibit 4.1 to VEREIT, Inc.'s Form 8-K, filed on February 7, 2014 (File No. 001-35263), and incorporated herein by reference).
4.36 Officers’ Certificate, dated as of February 6, 2014 (filed as exhibit 4.2 to VEREIT, Inc.'s Form 8-K, filed on February 7, 2014 (File No. 001-35263), and incorporated herein by reference).
4.37 First Supplemental Indenture, dated as of February 9, 2015, by and among ARC Properties Operating Partnership, L.P., American Realty Capital Properties, Inc. and U.S. Bank National Association (filed as exhibit 4.1 to VEREIT, Inc.'s Form 8-K, filed on February 13, 2015 (File No. 001-35263), and incorporated herein by reference).
4.38 Officers’ Certificate, dated as of June 2, 2016 (filed as exhibit 4.2 to VEREIT, Inc.'s Form 8-K, filed on June 3, 2016 (File No. 001-35263), and incorporated herein by reference).
4.39 Officers’ Certificate, dated as of August 11, 2017 (filed as exhibit 4.2 to VEREIT, Inc.'s Form 8-K, filed on August 11, 2017 (File No. 001-35263), and incorporated herein by reference).
4.40 Officers’ Certificate, dated as of October 16, 2018 (filed as exhibit 4.2 to VEREIT, Inc.'s Form 8-K, filed on October 16, 2018 (File No. 001-35263), and incorporated herein by reference).
4.41 Officers’ Certificate, dated as of December 4, 2019 (filed as exhibit 4.2 to VEREIT, Inc.'s Form 8-K, filed on December 4, 2019 (File No. 001-35263), and incorporated herein by reference).
4.42 Officers’ Certificate, dated as of June 29, 2020 (filed as exhibit 4.2 to VEREIT, Inc.'s Form 8-K, filed on June 29, 2020 (File No. 001-35263), and incorporated herein by reference).
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4.43 Officers’ Certificate, dated as of November 17, 2020 (filed as exhibit 4.2 to VEREIT, Inc.'s Form 8-K, filed on November 17, 2020 (File No. 001-35263), and incorporated herein by reference) .
4.44 Second Supplemental Indenture, dated as of November 1, 2021, by an among Rams MD Subsidiary I, Inc., VEREIT Operating Partnership, L.P., VEREIT, Inc. and U.S. Bank National Association, as trustee (filed as exhibit 4.10 to the Company's Form 8-K, filed on November 1, 2021 (File No. 001-13374), and incorporated herein by reference) .
4.45 Third Supplemental Indenture, dated as of November 9, 2021, by and among VEREIT Operating Partnership, L.P., Rams MD Subsidiary I, Inc. (f/k/a VEREIT, Inc.) and U.S. Bank National Association, as trustee (filed as exhibit 4.1 to the Company's Form 8-K, filed on November 15, 2021 (File No. 001-13374), and incorporated herein by reference).
4.46 Form of 4.600% Notes due February 6, 2024. (filed as exhibit 4.2 to the Company's Form 8-K, filed on November 15, 2021 (File No. 001-13374), and incorporated herein by reference).
4.47 Form of 4.625% Notes due November 1, 2025. (filed as exhibit 4.3 to the Company's Form 8-K, filed on November 15, 2021 (File No. 001-13374), and incorporated herein by reference).
4.48 Form of 4.875% Notes due June 1, 2026. (filed as exhibit 4.4 to the Company's Form 8-K, filed on November 15, 2021 (File No. 001-13374), and incorporated herein by reference).
4.49 Form of 3.950% Notes due August 15, 2027. (filed as exhibit 4.5 to the Company's Form 8-K, filed on November 15, 2021 (File No. 001-13374), and incorporated herein by reference).
4.50 Form of 3.400% Notes due January 15, 2028. (filed as exhibit 4.6 to the Company's Form 8-K, filed on November 15, 2021 (File No. 001-13374), and incorporated herein by reference).
4.51 Form of 2.200% Notes due June 15, 2028. (filed as exhibit 4.7 to the Company's Form 8-K, filed on November 15, 2021 (File No. 001-13374), and incorporated herein by reference).
4.52 Form of 3.100% Notes due December 15, 2029. (filed as exhibit 4.8 to the Company's Form 8-K, filed on November 15, 2021 (File No. 001-13374), and incorporated herein by reference).
4.53 Form of 2.850% Notes due December 15, 2032. (filed as exhibit 4.9 to the Company's Form 8-K, filed on November 15, 2021 (File No. 001-13374), and incorporated herein by reference).
4.54 Form of 5.625% Notes due October 13, 2032. (filed as exhibit 4.2 to the Company's Form 8-K, filed on October 13, 2022 (File No. 001-13374), and incorporated herein by reference).
4.55 Officers’ Certificate dated October 13, 2022 pursuant to Sections 201, 301 and 303 of the Indenture dated as of October 28, 1998 between the Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee, establishing the terms of a new series of debt securities entitled “5.625% Notes due 2032” and including the form of debt securities of such series (filed as exhibit 4.3 to the Company’s Form 8-K, filed on October 13, 2022 (File No. 001-13374), and incorporated herein by reference)
4.56 Form of 5.050% Note due 2026 issued on January 13, 2023 (filed as exhibit 4.2 to the Company’s Form 8-K, filed on January 13, 2023 (File No. 001-13374) and incorporated herein by reference) .
4.57 Form of 4.850% Note due 2030 issued on January 13, 2023 (filed as exhibit 4.3 to the Company’s Form 8-K, filed on January 13, 2023 (File No. 001-13374) and incorporated herein by reference) .
4.58 Officers’ Certificate dated January 13, 2023 pursuant to Sections 201, 301 and 303 of the Indenture dated as of October 28, 1998 between the Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee, establishing the terms of a new series of debt securities entitled “5.050% Notes due 2026” and a new series of debt securities entitled “4.850% Notes due 2030” and including the forms of debt securities of each such series (filed as exhibit 4.4 to the Company’s Form 8-K, filed on January 13, 2023 (File No. 001-13374) and incorporated herein by reference).
4.59* Description of Securities.
Material Contracts
10.1+ Realty Income Corporation 2012 Incentive Award Plan (filed as Appendix B to the Company’s Proxy Statement on Schedule 14A filed on March 30, 2012 (File No. 001-13374) and incorporated herein by reference).
10.2+ Form of Restricted Stock Agreement for Employees under the Realty Income Corporation 2012 Incentive Award Plan (filed as exhibit 10.1 to the Company’s Form 8-K, filed on January 8, 2013 (File No. 001-13374) and incorporated herein by reference).
10.3+ Form of Restricted Stock Agreement for Non-Employee Directors under the Realty Income Corporation 2012 Incentive Award Plan (filed as exhibit 10.2 to the Company’s Form 8-K, filed on January 8, 2013 (File No. 001-13374) and incorporated herein by reference).
10.4+ Form of Addendum to Restricted Stock Agreement (filed as exhibit 10.2 to the Company’s Form 8-K, filed on June 19, 2013 (File No. 001-13374) and incorporated herein by reference).
10.5+ Amended and Restated Form Indemnification Agreement, between the Company and each executive officer and each director of the Board of Directors of the Company (filed as exhibit 10.1 to the Company’s Form 8-K, filed on October 30, 2014 (File No. 001-13374) and incorporated herein by reference).
10.6+ Form of Performance Share Award Agreement (filed as exhibit 10.1 to the Company’s Form 10-Q, filed on April 30, 2015 (File No. 001-13374) and incorporated herein by reference).
10.7+ Dividend Reinvestment and Stock Purchase Plan (filed pursuant to Rule 424(b)(5) under the Securities Act of 1933, as amended, on February 23, 2015, as a prospectus supplement to the Company’s prospectus dated February 22, 2013 (File No. 333-186788) and incorporated herein by reference).
10.8+ Dividend Reinvestment and Stock Purchase Plan (filed pursuant to Rule 424(b)(5) under the Securities Act of 1933, as amended, on July 30, 2015, as a prospectus supplement to the Company’s prospectus dated February 22, 2013 (File No. 333-186788) and incorporated herein by reference).
10.9+ Form of Restricted Stock Agreement (filed as exhibit 10.30 to the Company’s Form 10-K for the year ended December 31, 2015 , filed on February 11, 2016 (File No. 001-13374) and incorporated herein by reference).
10.10+ Form of Restricted Stock Unit Award Agreement (filed as exhibit 10.31 to the Company’s Form 10-K for the year ended December 31, 2015 , filed on February 11, 2 016 (file No. 001-13374) and incorporated herein by reference).
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10.11+ First Amendment to Realty Income Corporation 2012 Incentive Award Plan. (filed as exhibit 10.33 to the Company’s Form 10-K, filed on February 23, 2017 (File No. 001-13374) and incorporated herein by reference).
10.12+ Second Amendment to Realty Income Corporation 2012 Incentive Award Plan (filed as exhibit 10.1 to the Company’s Form 8-K, filed on February 17, 2017 (File No. 001-13374) and incorporated herein by reference).
10.13+ Form of Performance Share Award Agreement (filed as exhibit 10.3 to the Company’s Form 10-Q for the quarter ended March 31, 2017 , filed on April 30, 2017 ( File No. 001-13374) and incorporated herein by reference).
10.14+ Realty Income Executive Severance Plan dated January 15, 2019 (filed as exhibit 10.1 to the Company's Form 8-K, filed on January 18, 2019 ( File No. 001 -13374) and incorporated herein by reference).
10.15+ Form of Participation Agreement to Realty Income Executive Severance Plan dated January 15, 2019 (filed as exhibit 10.2 to the Company's Form 8-K, filed on January 18, 2019 (File No. 001-13374) and incorporated herein by reference).
10.16+ Severance Agreement and General Release dated January 29, 2020 (filed as exhibit 10.1 to the Company's Form 8-K, filed on January 30, 2020 (File No. 001-13374) and incorporated herein by reference).
10.17+ Participation Agreement to Realty Income Executive Severance Plan, dated as of October 12, 2020, by and between Realty Income Corporation and Christie B. Kelly. (filed as exhibit 10.1 to the Company’s Form 8-K, filed on October 13, 2020 (File No. 001-1 3374) and incorporated herein by reference) .
10.18+ Realty Income Corporation 2021 Incentive Award Plan (filed as Appendix B to the Company's Proxy Statement on Schedule 14A filed on April 01, 2021 (File No. 001-13374) and incorporated herein by reference).
10.19+ First Amendment to the Realty Income Corporation 2021 Incentive Award Plan (filed as e xhibit 10.1 to the Company's Form 8-K, filed on November 1, 2021 (File No. 001-13374) and incorporated herein by reference).
10.20+ Form of Restricted Stock Agreement for Non-Employee Directors under the Realty Income Corporation 2021 Incentive Award Plan (filed as Exhibit 10.2 to the Company's Registration Statement on Form S-8 filed on May 18, 2021 (File No. 333-256254) and incorporated herein by reference).
10.21+ Form of Restricted Stock Agreement for Executives under the Realty Income Corporation 2021 Incentive Award Plan (filed as exhibit 10.21 to the Company’s Form 10-K for the year ended December 31, 2021, filed on February 23, 2022 (File No. 001-13374) and incorporated herein by reference).
10.22+ Form of Restricted Stock Unit Agreement for Senior Vice Presidents and Executives under the Realty Income Corporation 2021 Incentive Award Plan (filed as exhibit 10.22 to the Company’s Form 10-K for the year ended December 31, 2022, filed on February 23, 2022 (File No. 001-13374) and incorporated herein by reference) .
10.23+ Form of November 15, 2021 Performance Share Award Agreement under the Realty Income Corporation 2021 Incentive Award Plan (filed as exhibit 10.23 to the Company’s Form 10-K for the year ended December 31, 2022, filed on February 23, 2022 (File No. 001-13374) and incorporated herein by reference).
10.24+ Form of Performance Share Award Agreement under the Realty Income Corporation 2021 Incentive Award Plan (filed as exhibit 10.24 to the Company’s Form 10-K for the year ended December 31, 2022, filed on February 23, 2022 (File No. 001-13374) and incorporated herein by reference).
10.25+* Form of Restricted Stock Agreement for Executive Officers under the Realty Income Corporation 2021 Incentive Award Plan.
10.26+* Form of Restricted Stock Agreement for Executive Officers (Christie Kelly) under the Realty Income Corporation 2021 Incentive Award Plan.
10.27+* Form of Performance Share Award Agreement for Executive Officers under the Realty Income Corporation 2021 Incentive Award Plan.
10.28+* Form of Performance Share Award Agreement for Executive Officers (Christie Kelly) under the Realty Income Corporation 2021 Incentive Award Plan.
10.29+* Realty Income Corporation Retirement Policy, effective as of November 7, 2022.
10.30 Consent Letter, dated July 20, 2021, among the Company, as Borrower, the lenders party thereto, Wells Fargo Bank, National Association, as Administrative Agent, and the other parties named therein (filed as E xhibit 10.1 to the Company's Form 8-K filed on July 22, 2021 ( File No. 001 -13374) and incorporated herein by reference).
10.31 Second Amended and Restated Credit Agreement dated August 7, 2019 (filed as exhibit 10.1 to the Company's Form 8-K, filed on August 12, 2019 (File No. 001-13374) and incorporated herein by reference).
10.32 First Amendment to the Second Amended and Restated Credit Agreement dated December 22, 2021 (filed as exhibit 10.1 to the Company's Form 8-K, filed on December 2 8 , 2021 (File No. 001-13374) and incorporated herein by reference).
10.33 Third Amended and Restated Credit Agreement among the Company, as Borrower, the lenders party thereto, Wells Fargo Bank, National Association, as Administrative Agent, and the other parties named therein (filed as exhibit 10.1 to the Company’s Form 8-K filed on April 28, 2022 (File No. 001-13374) and incorporated herein by reference).
10.34 Term Loan Agreement, dated January 6, 2023, by and among Realty Income Corporation, as borrower, the lender parties thereto, as lenders, and Toronto Dominion (Texas) LLC, as administrative agent (filed as exhibit 10.1 to the Company’s Form 8-K, filed on January 6, 2023 (File NO. 001-13374) and incorporated herein by reference).
Subsidiaries of the Registrant
21.1* Subsidiaries of the Company.
Consents of Experts and Counsel
23.1* Consent of Independent Registered Public Accounting Firm.
Certifications
31.1* Rule 13a-14(a) Certifications as filed by the Chief Executive Officer pursuant to SEC release No. 33-8212 and 34-47551.
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Tabl e of Contents
31.2* Rule 13a-14(a) Certifications as filed by the Chief Financial Officer pursuant to SEC release No. 33-8212 and 34-47551.
32* Section 1350 Certifications as furnished by the Chief Executive Officer and the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Interactive Data Files
101* The following materials from Realty Income Corporation’s Annual Report on Form 10-K for the period ended December 31, 2022 formatted in Inline Extensible Business Reporting Language: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income and Comprehensive Income, (iii) Consolidated Statements of Stockholders' Equity, (iv) Consolidated Statements of Cash Flows, (v) Notes to Consolidated Financial Statements, and (vi) Schedule III Real Estate And Accumulated Depreciation .
104* The cover page from the Company's Annual Report on Form 10-K for the period ended December 31, 2022, formatted in Inline Extensible Business Reporting Language.
* Filed herewith.
+ Indicates a management contract or compensatory plan or arrangement.
Item 16: Form 10-K Summary
None.
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Tabl e of Contents
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
REALTY INCOME CORPORATION
By: /s/SUMIT ROY Date: February 22, 2023
Sumit Roy
President, Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: /s/MICHAEL D. MCKEE Date: February 22, 2023
Michael D. McKee
Non-Executive Chairman of the Board of Directors
By: /s/PRISCILLA ALMODOVAR Date: February 22, 2023
Priscilla Almodovar
Director
By: /s/JACQUELINE BRADY Date: February 22, 2023
Jacqueline Brady
Director
By: /s/A. LARRY CHAPMAN Date: February 22, 2023
A. Larry Chapman
Director
By: /s/REGINALD H. GILYARD Date: February 22, 2023
Reginald H. Gilyard
Director
By: /s/MARY HOGAN PREUSSE Date: February 22, 2023
Mary Hogan Preusse
Director
By: /s/PRIYA CHERIAN HUSKINS Date: February 22, 2023
Priya Cherian Huskins
Director
By: /s/GERARDO I. LOPEZ Date: February 22, 2023
Gerardo I. Lopez
Director
By: /s/GREGORY T. MCLAUGHLIN Date: February 22, 2023
Gregory T. McLaughlin
Director
By: /s/RONALD L. MERRIMAN Date: February 22, 2023
Ronald L. Merriman
Director
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Tabl e of Contents
By: /s/SUMIT ROY Date: February 22, 2023
Sumit Roy
Director, President, Chief Executive Officer
(Principal Executive Officer)
By: /s/CHRISTIE B. KELLY Date: February 22, 2023
Christie B. Kelly
Executive Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)
By: /s/SEAN P. NUGENT Date: February 22, 2023
Sean P. Nugent
Senior Vice President, Controller, Principal Accounting Officer
(Principal Accounting Officer)
115
Table of Contents
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
As of December 31, 2022
(dollars in thousands)
Initial Cost to Company Cost Capitalized Subsequent to Acquisition Gross Amount at Which Carried at Close of Period (Notes 3, 4 and 6)
Description Number of Properties (Note 1) Encumbrances (Note 2) Land Buildings, Improvements and Acquisition Fees Improvements Carrying Costs Land Buildings, Improvements and Acquisition Fees Total Accumulated Depreciation (Note 5) Date of Construction Date Acquired
U.S.
Advertising 5 $ — $ 18,687 $ 70,757 $ ( 81 ) $ — $ 18,687 $ 70,676 $ 89,363 $ 3,516 1990 - 2009 3/26/2021 - 11/1/2021
Aerospace 6 24,133 9,280 104,596 3,092 — 9,280 107,688 116,968 38,709 1951 - 2013 6/20/2011 - 11/1/2021
Apparel 64 53,577 144,586 407,383 4,256 199 144,586 411,838 556,424 66,728 1962 - 2022 10/30/1987 - 9/29/2022
Automotive Collision Service 187 — 130,102 281,957 6,907 10 130,102 288,874 418,976 51,722 1920 - 2021 8/30/2002 - 12/28/2022
Automotive Parts 408 — 161,438 387,335 5,568 827 161,438 393,730 555,168 99,794 1969 - 2020 8/6/1987 - 11/10/2022
Automotive Service 696 — 500,964 975,615 9,268 145 500,964 985,028 1,485,992 108,958 1920 - 2022 10/2/1985 - 12/15/2022
Automotive Tire Services 249 — 202,115 429,838 22,636 83 202,115 452,557 654,672 145,128 1947 - 2022 11/27/1985 - 10/3/2022
Beverage 18 — 183,323 185,539 — — 183,323 185,539 368,862 54,313 1950 - 2020 6/25/2010 - 6/28/2022
Child Care 321 — 147,817 344,390 4,903 769 147,817 350,062 497,879 118,998 1957 - 2022 12/22/1981 - 11/10/2022
Consumer Electronics 27 — 51,172 155,347 6,652 52 51,172 162,051 213,223 20,115 1991 - 2021 6/9/1997 - 11/1/2021
Consumer Goods 9 17,990 24,077 259,494 894 — 24,077 260,388 284,465 37,761 1987 - 2013 1/22/2013 - 11/1/2021
Convenience Stores 1,622 — 1,505,613 2,008,689 320 145 1,505,613 2,009,154 3,514,767 500,986 1922 - 2022 3/3/1995 - 12/22/2022
Crafts and Novelties 50 — 99,292 290,977 1,235 440 99,292 292,652 391,944 34,909 1974 - 2022 11/26/1996 - 11/1/2021
Diversified Industrial 18 49,838 52,524 302,351 38,018 — 52,524 340,369 392,893 28,257 1987 - 2022 9/19/2012 - 7/1/2022
Dollar Stores 2,617 1,983 871,107 2,224,486 5,358 9 871,107 2,229,853 3,100,960 439,227 1925 - 2022 2/3/1998 - 12/22/2022
Drug Stores 568 262,868 725,794 1,805,788 5,181 100 725,794 1,811,069 2,536,863 457,567 1958 - 2015 9/30/1998 - 12/22/2021
Education 19 — 28,362 53,373 2,150 103 28,362 55,626 83,988 15,116 1957 - 2009 12/19/1984 - 11/22/2022
Energy 33 — 23,699 76,052 75 — 23,699 76,127 99,826 2,542 1963 - 2014 11/1/2021
Entertainment 22 — 80,537 165,639 1,311 — 80,537 166,950 247,487 8,956 1960 - 2021 3/31/1999 - 3/31/2022
Equipment Services 25 — 23,386 83,409 912 — 23,386 84,321 107,707 15,822 1965 - 2021 7/3/2003 - 11/9/2022
Financial Services 364 135,382 178,826 466,321 69 101 178,826 466,491 645,317 95,909 1807 - 2015 3/10/1987 - 10/17/2022
Food Processing 8 — 21,190 176,837 871 — 21,190 177,708 198,898 16,257 1991 - 2022 12/20/2012 - 10/12/2022
General Merchandise 250 7,592 401,176 1,089,731 44,930 535 401,176 1,135,196 1,536,372 141,268 1954 - 2022 8/6/1987 - 12/20/2022
Gaming 1 — 419,464 1,277,403 — — 419,464 1,277,403 1,696,867 4,258 2019 12/1/2022
Grocery 234 72,426 570,474 1,453,526 2,783 325 570,474 1,456,634 2,027,108 240,001 1947 - 2021 9/30/2003 - 12/7/2022
Health and Beauty 6 — 4,930 47,836 157 — 4,930 47,993 52,923 6,710 1999 - 2017 2/23/1999 - 11/1/2021
Health and Fitness 134 — 339,302 1,445,569 10,178 172 339,302 1,455,919 1,795,221 352,249 1943 - 2021 5/31/1995 - 9/9/2022
Health Care 466 69,083 329,471 1,029,584 18,488 225 329,471 1,048,297 1,377,768 78,509 1922 - 2022 12/18/1984 - 12/16/2022
Home Furnishings 177 41,472 202,472 545,144 9,564 128 202,472 554,836 757,308 53,068 1960 - 2021 1/24/1984 - 9/14/2022
Home Improvement 163 22,629 503,817 832,727 5,259 63 503,817 838,049 1,341,866 131,329 1863 - 2022 12/22/1986 - 11/18/2022
Insurance 3 10,998 1,587 4,500 — — 1,587 4,500 6,087 157 2000 - 2012 11/1/2021 - 10/17/2022
Jewelry 5 — 5,367 58,688 — — 5,367 58,688 64,055 5,314 1997 - 2008 1/22/2013 - 11/1/2021
Machinery 3 — 5,925 60,300 — — 5,925 60,300 66,225 6,768 1969 - 2021 7/31/2012 - 5/25/2022
Motor Vehicle Dealerships 48 — 189,195 314,252 — — 189,195 314,252 503,447 72,955 1962 - 2020 5/13/2004 - 9/8/2022
Office Supplies 7 — 12,844 39,856 707 339 12,844 40,902 53,746 9,361 1978 - 2014 5/30/1997 - 11/1/2021
Other Manufacturing 15 — 27,768 200,933 1,663 240 27,768 202,836 230,604 18,816 1979 - 2018 1/22/2013 - 12/15/2022
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Table of Contents
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION (continued)
As of December 31, 2022
(dollars in thousands)
Initial Cost to Company Cost Capitalized Subsequent to Acquisition Gross Amount at Which Carried at Close of Period (Notes 3, 4 and 6)
Description Number of Properties (Note 1) Encumbrances (Note 2) Land Buildings, Improvements and Acquisition Fees Improvements Carrying Costs Land Buildings, Improvements and Acquisition Fees Total Accumulated Depreciation (Note 5) Date of Construction Date Acquired
Packaging 12 $ 1,059 $ 35,530 $ 190,280 $ 2,480 $ — $ 35,530 $ 192,760 $ 228,290 $ 45,011 1965 - 2016 6/3/2011 - 8/29/2022
Paper 2 — 2,462 11,935 45 — 2,462 11,980 14,442 4,693 2002 - 2006 5/2/2011 - 12/21/2012
Pet Supplies and Services 128 2,509 121,395 327,677 6,331 239 121,395 334,247 455,642 40,529 1945 - 2022 12/22/1981 - 12/14/2022
Restaurants-Casual 840 12,823 653,289 1,453,831 ( 1,881 ) 1,577 653,289 1,453,527 2,106,816 199,179 1965 - 2018 5/16/1984 - 12/22/2021
Restaurants-Quick Service 1,832 — 939,782 1,964,726 1,598 174 939,782 1,966,498 2,906,280 263,921 1926 - 2022 12/9/1976 - 11/10/2022
Shoe Stores 6 — 6,992 41,985 316 215 6,992 42,516 49,508 13,285 1990 - 2008 3/26/1998 - 12/22/2021
Sporting Goods 56 12,255 112,684 365,437 5,157 178 112,684 370,772 483,456 48,817 1950 - 2020 10/17/2001 - 8/9/2022
Telecommunications 5 — 4,234 12,114 364 11 4,234 12,489 16,723 2,538 1990 - 2016 6/26/1998 - 10/17/2022
Theaters 79 — 229,925 745,852 10,272 — 229,925 756,124 986,049 269,763 1930 - 2014 7/27/2000 - 11/1/2021
Transportation Services 87 — 177,691 1,059,840 7,906 402 177,691 1,068,148 1,245,839 220,342 1967 - 2016 4/1/2003 - 4/5/2022
Warehousing and Storage 3 — 2,157 21,319 — — 2,157 21,319 23,476 3,161 1967 - 2016 4/1/2003 - 4/5/2022
Wholesale Club 54 6,787 306,006 713,020 — — 306,006 713,020 1,019,026 149,815 1985 - 2019 9/30/2011 - 8/11/2022
Other 15 — 23,403 50,498 1,396 — 23,403 51,894 75,297 9,297 1986 - 2021 8/18/1986 - 11/1/2021
Europe
Apparel 2 — 13,704 47,956 — — 13,704 47,956 61,660 2,001 2004 - 2005 4/19/2021 - 3/25/2022
Automotive Parts 1 — 1,705 2,296 — — 1,705 2,296 4,001 49 1996 6/17/2022
Automotive Tire Services 3 — 1,615 4,925 — — 1,615 4,925 6,540 353 1974 - 1994 3/9/2021
Consumer Electronics 1 — 4,845 6,964 — — 4,845 6,964 11,809 230 2006 3/4/2022
Convenience Stores 1 — 2,933 2,369 — — 2,933 2,369 5,302 99 2020 12/21/2021
Diversified Industrial 2 — 21,152 12,460 — — 21,152 12,460 33,612 771 2016 - 2020 7/22/2021 - 5/6/2022
Energy 1 — 9,045 10,100 — — 9,045 10,100 19,145 391 2016 - 2020 7/22/2021 - 5/6/2022
Entertainment 1 — 21,536 33,947 — — 21,536 33,947 55,483 1,313 1993 1/13/2022
Food Processing 5 — 29,549 69,108 — — 29,549 69,108 98,657 2,481 1950 - 2000 11/30/2021 - 2/10/2022
General Merchandise 12 — 79,154 61,966 — — 79,154 61,966 141,120 2,129 1980 - 2021 8/25/2021 - 6/22/2022
Grocery 125 36,939 1,053,299 1,506,227 8,950 — 1,053,299 1,515,177 2,568,476 104,530 1910 - 2022 5/23/2019 - 12/23/2022
Health and Fitness 1 — 21,214 17,053 — — 21,214 17,053 38,267 525 2020 3/24/2022
Health Care 6 — 25,694 49,523 — — 25,694 49,523 75,217 2,193 1970 - 2006 3/23/2020 - 9/7/2022
Home Furnishings 11 — 78,435 104,208 — — 78,435 104,208 182,643 2,941 1980 - 2019 4/9/2021 - 9/30/2022
Home Improvement 70 — 562,014 607,373 319 — 562,014 607,692 1,169,706 30,222 1890 - 2016 7/31/2020 - 12/21/2022
Motor Vehicle Dealerships 3 — 15,490 26,624 — — 15,490 26,624 42,114 712 1990 - 2005 2/11/2022 - 9/27/2022
Other Manufacturing 2 — 38,006 12,457 — — 38,006 12,457 50,463 315 1912 - 1968 4/6/2022 - 6/22/2022
Restaurants-Quick Service 1 — 675 1,797 — — 675 1,797 2,472 140 2007 3/17/2021
Sporting Goods 11 — 48,036 106,656 13,800 — 48,036 120,456 168,492 1,595 1950 - 2023 4/12/2022 - 12/8/2022
Theaters 1 — 1,376 — — — 1,376 — 1,376 — 2011 12/18/2019
Transportation Services 3 — 12,617 18,972 5,614 — 12,617 24,586 37,203 327 1970 1/6/2022 - 12/22/2022
Warehousing and Storage 1 — 49,873 46,273 — — 49,873 46,273 96,146 2,369 2002 3/11/2021
Wholesale Club 7 — 55,554 81,158 — — 55,554 81,158 136,712 568 1973 - 2002 10/28/2022
12,238 $ 842,343 $ 12,960,754 $ 29,445,148 $ 275,991 $ 7,806 $ 12,960,754 $ 29,728,945 $ 42,689,699 $ 4,908,658
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Table of Contents
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION (continued)
As of December 31, 2022
(dollars in thousands)
Note 1. Realty Income Corporation owns or holds interests in 11,813 single-client properties in the United States and Puerto Rico, our corporate headquarters property in San Diego, California, 141 single-client properties in the United Kingdom, 51 single-client properties in Spain and seven properties in Italy. Crest Net Lease, Inc. owns six single-client properties in the United States.
Realty Income Corporation also owns or holds interests in 147 multi-client properties located in the United States, 71 multi-client properties located in the United Kingdom and one multi-client property located in Spain.
Note 2. Includes mortgages payable secured by 136 properties and excludes unamortized premium and deferred financing costs of $ 11.6 million.
Note 3. The aggregate cost for federal income tax purposes for Realty Income Corporation is $ 47.6 billion and for Crest Net Lease, Inc. is $ 23.0 million.
Note 4. The following is a reconciliation of total real estate carrying value for the years ended December 31 (in thousands): 2022 2021 2020
Balance at Beginning of Period $ 35,952,659 $ 21,048,334 $ 19,637,627
Additions During Period:
Acquisitions and development 8,021,159 5,851,945 2,163,707
Merger Additions (1)
— 11,722,801 —
Less amounts allocated to acquired lease intangible assets and liabilities on our Consolidated Balance Sheets ( 625,730 ) ( 826,064 ) ( 382,850 )
Improvements, Etc. 99,484 56,567 6,194
Other (Leasing Costs and Building Adjustments) (2)
97,482 64,807 22,491
Total Additions 7,592,395 16,870,056 1,809,542
Deductions During Period:
Cost of Real Estate sold 402,386 1,206,837 253,506
Cost of Equipment sold — 8 25
Orion Divestiture (1)
— 634,254 —
Releasing costs 53 40 259
Other (3)
39,463 91,176 195,003
Total Deductions 441,902 1,932,315 448,793
Foreign Currency Translation ( 413,453 ) ( 33,416 ) 49,958
Balance at Close of Period $ 42,689,699 $ 35,952,659 $ 21,048,334
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Table of Contents
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION (continued)
As of December 31, 2022
(dollars in thousands)
(1) Represents derecognition of assets from the Orion Divestiture. For further information, see Note 3 to the Consolidated Financial Statements, Merger with VEREIT, Inc. and Orion Office REIT Inc. Divestiture.
(2) 2022 includes reclassification of $ 3.3 million right of use assets under finance leases, $ 43.0 million mortgage assumption, and $ 51.2 million RI Ops LP Units. 2021 includes $ 20.1 million right of use assets under finance leases and $ 43.7 million mortgage assumption.
(3) The year ended 2022 includes $ 13.6 million for building razed and $ 25.9 million of impairment. The year ended 2021 includes $ 43.0 million for building razed and $ 39.0 million of impairment. The year ended 2020 includes $ 147.2 million of impairment.
Note 5. The following is a reconciliation of accumulated depreciation for the years ended (in thousands): 2022 2021 2020
Balance at Beginning of Period $ 3,963,753 $ 3,563,178 $ 3,140,855
Additions During Period - Provision for Depreciation 1,028,182 628,246 531,909
Deductions During Period:
Accumulated depreciation of real estate and equipment sold or disposed of 73,913 226,897 110,915
Foreign Currency Translation ( 9,364 ) ( 774 ) 1,329
Balance at Close of Period $ 4,908,658 $ 3,963,753 $ 3,563,178
Please see note 2, Summary of Significant Accounting Policies and Procedures and New Accounting Standards , to our consolidated financial statements for information regarding lives used for depreciation and amortization.
Note 6. In 2022, provisions for impairment were recorded on 94 Realty Income properties.
In 2021, provisions for impairment were recorded on 103 Realty Income properties.
In 2020, provisions for impairment were recorded on 99 Realty Income properties.
See report of independent registered public accounting firm.
F-4