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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC  20549
FORM 10-Q
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 2022, or
Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
Commission File Number 1-13374
REALTY INCOME CORPORATION
(Exact name of registrant as specified in its charter)
Maryland
33-0580106
(State or Other Jurisdiction of
Incorporation or Organization)
(IRS Employer Identification
Number)
11995 El Camino Real, San Diego, California 92130
(Address of Principal Executive Offices)
Registrant’s telephone number, including area code: (858) 284-5000
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol(s)Name of Each Exchange On Which Registered
Common Stock, $0.01 Par ValueONew York Stock Exchange
1.125% Notes due 2027O27ANew York Stock Exchange
1.875% Notes due 2027O27BNew York Stock Exchange
1.625% Notes due 2030O30New York Stock Exchange
1.750% Notes due 2033O33ANew York Stock Exchange
2.500% Notes due 2042O42New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes       No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes      No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," “accelerated filer,” "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  o


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes      No 
There were 627,153,861 shares of common stock outstanding as of October 28, 2022.


REALTY INCOME CORPORATION
Index to Form 10-Q
September 30, 2022
Page
-1-

PART 1. FINANCIAL INFORMATION
Item 1.    Financial Statements
REALTY INCOME CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share and share count data) (unaudited)
September 30, 2022December 31, 2021
ASSETS
Real estate held for investment, at cost:
Land$11,852,057 $10,753,750 
Buildings and improvements26,981,664 25,155,178 
Total real estate held for investment, at cost38,833,721 35,908,928 
Less accumulated depreciation and amortization(4,624,243)(3,949,798)
Real estate held for investment, net34,209,478 31,959,130 
Real estate and lease intangibles held for sale, net18,309 30,470 
Cash and cash equivalents187,745 258,579 
Accounts receivable, net529,248 426,768 
Lease intangible assets, net5,064,322 5,275,304 
Goodwill3,731,478 3,676,705 
Investment in unconsolidated entities 140,967 
Other assets, net2,151,895 1,369,579 
Total assets$45,892,475 $43,137,502 
LIABILITIES AND EQUITY
Distributions payable$156,999 $146,919 
Accounts payable and accrued expenses408,482 351,128 
Lease intangible liabilities, net1,368,525 1,308,221 
Other liabilities752,530 759,197 
Line of credit payable and commercial paper1,920,159 1,551,376 
Term loan, net249,705 249,557 
Mortgages payable, net855,363 1,141,995 
Notes payable, net13,316,455 12,499,709 
Total liabilities19,028,218 18,008,102 
Commitments and contingencies
Stockholders’ equity:
Common stock and paid in capital, par value $0.01 per share, 1,300,000,000 and 740,200,000 shares authorized, 627,145,827 and 591,261,991 shares issued and outstanding as of September 30, 2022, and December 31, 2021, respectively
32,003,069 29,578,212 
Distributions in excess of net income(5,241,012)(4,530,571)
Accumulated other comprehensive income (loss)(24,938)4,933 
Total stockholders’ equity26,737,119 25,052,574 
Noncontrolling interests127,138 76,826 
Total equity26,864,257 25,129,400 
Total liabilities and equity$45,892,475 $43,137,502 
The accompanying notes to consolidated financial statements are an integral part of these statements.
-2-

REALTY INCOME CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(dollars in thousands, except per share and share count data) (unaudited)
Three months ended September 30,Nine months ended September 30,
 2022202120222021
REVENUE  
Rental (including reimbursable)$825,946 $486,337 $2,426,311 $1,385,958 
Other11,323 3,554 28,720 9,485 
Total revenue837,269 489,891 2,455,031 1,395,443 
EXPENSES
Depreciation and amortization419,016 198,832 1,232,215 564,606 
Interest117,409 76,156 333,933 222,905 
Property (including reimbursable)52,719 29,662 157,241 89,895 
General and administrative34,096 23,813 100,934 66,458 
Provisions for impairment1,650 11,011 16,379 30,977 
Merger and integration-related costs3,746 16,783 12,994 30,081 
Total expenses628,636 356,257 1,853,696 1,004,922 
Gain on sales of real estate42,883 12,094 93,611 35,396 
Foreign currency and derivative loss, net(22,893)(2,374)(16,003)(1,170)
Gain (loss) on extinguishment of debt240 (3,983)367 (50,456)
Equity in income and impairment of investment in unconsolidated entities(662) (6,335) 
Other income, net2,249 1,984 6,907 3,518 
Income before income taxes230,450 141,355 679,882 377,809 
Income taxes(10,163)(6,079)(35,802)(21,529)
Net income220,287 135,276 644,080 356,280 
Net income attributable to noncontrolling interests(720)(280)(1,937)(865)
Net income available to common stockholders$219,567 $134,996 $642,143 $355,415 
Amounts available to common stockholders per common share:
Net Income, basic and diluted$0.36 $0.34 $1.06 $0.94 
Weighted average common shares outstanding:
Basic617,511,609 391,913,478 604,463,977 379,291,782 
Diluted617,957,039 392,050,401 604,835,836 379,409,427 
Other comprehensive income:
Net income available to common stockholders$219,567 $134,996 $642,143 $355,415 
Foreign currency translation adjustment(89,231)1,438 (148,929)1,130 
Unrealized gain on derivatives, net41,914 16,852 119,058 52,428 
Comprehensive income available to common stockholders$172,250 $153,286 $612,272 $408,973 
The accompanying notes to consolidated financial statements are an integral part of these statements.

-3-

REALTY INCOME CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY 
(dollars in thousands) (unaudited)
Three months ended September 30, 2022, and 2021
Shares of
common
stock
Common
stock and
paid in
capital
Distributions
in excess of
net income
Accumulated
other
comprehensive income (loss)
Total
stockholders’
equity
Noncontrolling
interests
Total
equity
Balance, June 30, 2022
617,564,272 $31,303,383 $(4,999,150)$22,379 $26,326,612 $76,267 $26,402,879 
Net income— — 219,567 — 219,567 720 220,287 
Other comprehensive loss— — — (47,317)(47,317)— (47,317)
Distributions paid and payable— — (461,429)— (461,429)(1,070)(462,499)
Issuance of common partnership units — — — — — 51,221 51,221 
Share issuances, net of costs9,582,012 694,708 — — 694,708 — 694,708 
Share-based compensation, net
(457)4,978 — — 4,978 — 4,978 
Balance, September 30, 2022
627,145,827 $32,003,069 $(5,241,012)$(24,938)$26,737,119 $127,138 $26,864,257 
Balance, June 30, 2021
380,174,042 $15,827,231 $(3,968,333)$(19,366)$11,839,532 $34,147 $11,873,679 
Net income— — 134,996 — 134,996 280 135,276 
Other comprehensive income— — — 18,290 18,290 — 18,290 
Distributions paid and payable— — (279,616)— (279,616)(407)(280,023)
Share issuances, net of costs24,030,435 1,618,463 — — 1,618,463 — 1,618,463 
Share-based compensation, net1,599 3,428 — — 3,428 — 3,428 
Balance, September 30, 2021
404,206,076 $17,449,122 $(4,112,953)$(1,076)$13,335,093 $34,020 $13,369,113 
Nine months ended September 30, 2022 and 2021
Shares of
common
stock
Common
stock and
paid in
capital
Distributions
in excess of
net income
Accumulated
other
comprehensive
income (loss)
Total
stockholders’
equity
Noncontrolling
interests
Total
equity
Balance, December 31, 2021591,261,991 $29,578,212 $(4,530,571)$4,933 $25,052,574 $76,826 $25,129,400 
Net income— — 642,143 — 642,143 1,937 644,080 
Other comprehensive income— — — (29,871)(29,871)— (29,871)
Distributions paid and payable— — (1,352,584)— (1,352,584)(2,846)(1,355,430)
Issuance of common partnership units— — — — — 51,221 51,221 
Share issuances, net of costs35,715,042 2,415,281 — — 2,415,281 — 2,415,281 
Share-based compensation, net168,794 9,576 — — 9,576 — 9,576 
Balance, September 30, 2022
627,145,827 $32,003,069 $(5,241,012)$(24,938)$26,737,119 $127,138 $26,864,257 
Balance December 31, 2020361,303,445 $14,700,050 $(3,659,933)$(54,634)$10,985,483 $32,247 $11,017,730 
Net income— — 355,415 — 355,415 865 356,280 
Other comprehensive income— — — 53,558 53,558 — 53,558 
Distributions paid and payable— — (808,435)— (808,435)(1,198)(809,633)
Share issuances, net of costs42,777,850 2,743,039 — — 2,743,039 — 2,743,039 
Contributions by noncontrolling interests— — — — — 2,106 2,106 
Share-based compensation, net124,781 6,033 — — 6,033 — 6,033 
Balance, September 30, 2021
404,206,076 $17,449,122 $(4,112,953)$(1,076)$13,335,093 $34,020 $13,369,113 
The accompanying notes to consolidated financial statements are an integral part of these statements.
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REALTY INCOME CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands) (unaudited)
Nine months ended September 30,
20222021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income$644,080 $356,280 
Adjustments to net income:
Depreciation and amortization1,232,215 564,606 
Amortization of share-based compensation16,742 12,484 
Non-cash revenue adjustments(37,538)(12,722)
(Gain) loss on extinguishment of debt(367)50,456 
Amortization of net premiums on mortgages payable(10,418)(1,158)
Amortization of net premiums on notes payable(47,185)(37)
Amortization of deferred financing costs11,116 8,649 
Loss on interest rate swaps2,181 2,179 
Foreign currency and derivative loss, net16,003 1,170 
Gain on sales of real estate(93,611)(35,396)
Equity in income and impairment of investment in unconsolidated entities 6,335  
Distributions from unconsolidated entities 1,605  
Provisions for impairment on real estate16,379 30,977 
Change in assets and liabilities
Accounts receivable and other assets207,838 (46,670)
Accounts payable, accrued expenses and other liabilities(32,009)39,248 
Net cash provided by operating activities1,933,366 970,066 
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in real estate(4,980,159)(3,709,894)
Improvements to real estate, including leasing costs(66,047)(11,159)
Proceeds from sales of real estate414,688 123,533 
Return of investment from unconsolidated entities 1,401  
Net proceeds from sale of unconsolidated entities107,621  
Proceeds from note receivable5,867  
Insurance proceeds received16,046  
Non-refundable escrow deposits(28,556)(5,432)
Net cash used in investing activities(4,529,139)(3,602,952)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash distributions to common stockholders(1,342,695)(797,847)
Borrowings on line of credit and commercial paper programs19,644,724 6,277,918 
Payments on line of credit and commercial paper programs(19,147,386)(5,853,423)
Proceeds from notes and bonds payable issued1,405,570 1,033,387 
Principal payment on notes payable (950,000)
Principal payments on mortgages payable(311,083)(55,983)
Payments upon extinguishment of debt (51,218)
Proceeds from common stock offerings, net 2,404,092 2,734,830 
Proceeds from dividend reinvestment and stock purchase plan8,708 8,208 
Distributions to noncontrolling interests(2,658)(1,198)
Net receipts on derivative settlements7,474 2,463 
Debt issuance costs(27,732)(8,670)
Other items, including shares withheld upon vesting(4,685)(6,451)
Net cash provided by financing activities2,634,329 2,332,016 
Effect of exchange rate changes on cash and cash equivalents(82,012)(3,711)
Net decrease in cash, cash equivalents and restricted cash(43,456)(304,581)
Cash, cash equivalents and restricted cash, beginning of period332,369 850,679 
Cash, cash equivalents and restricted cash, end of period$288,913 $546,098 
For supplemental disclosures, see note 16.
The accompanying notes to consolidated financial statements are an integral part of these statements.
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REALTY INCOME CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2022
(unaudited)
1.Basis of Presentation
The consolidated financial statements of Realty Income Corporation (“Realty Income,” the “Company,” “we,” “our” or “us”) were prepared from our books and records without audit and include all adjustments (consisting of only normal recurring accruals) necessary to present a fair statement of results for the interim periods presented. Readers of this quarterly report should refer to our audited consolidated financial statements for the year ended December 31, 2021, which are included in our 2021 Annual Report on Form 10-K, as certain disclosures that would substantially duplicate those contained in the audited financial statements have not been included in this report. The U.S. Dollar (“USD”) is our reporting currency. Unless otherwise indicated, all dollar amounts are expressed in United States USD. Our financial results for the three and nine months ended September 30, 2021 do not reflect our merger with VEREIT, Inc. (VEREIT), which was completed on November 1, 2021.
For our consolidated subsidiaries whose functional currency is not the U.S. dollar, we translate their financial statements into U.S. dollars at the time we consolidate those subsidiaries’ financial statements. Generally, assets and liabilities are translated at the exchange rate in effect at the balance sheet date. The resulting translation adjustments are included in 'Accumulated other comprehensive income (loss)', or AOCI, in the consolidated balance sheets. Certain balance sheet items, primarily equity and capital-related accounts, are reflected at the historical exchange rate. Income statement accounts are translated using the average exchange rate for the period.
We and certain of our consolidated subsidiaries have intercompany and third-party debt that is not denominated in our functional currency. When the debt is remeasured to the functional currency of the entity, a gain or loss can result. The resulting adjustment is reflected in 'Foreign currency and derivative loss, net' in the consolidated statements of income and comprehensive income.
At September 30, 2022, we owned 11,733 properties, located in all 50 U.S. states, Puerto Rico, the United Kingdom (U.K.), and Spain, consisting of approximately 225.7 million leasable square feet.
2.Summary of Significant Accounting Policies and Procedures and New Accounting Standards
Principles of Consolidation. These consolidated financial statements include the accounts of Realty Income and all other entities in which we have a controlling financial interest. We evaluate whether we have a controlling financial interest in an entity in accordance with Accounting Standards Codification (“ASC”) 810, Consolidation.

Voting interest entities are entities considered to have sufficient equity at risk and which the equity holders have the obligation to absorb losses, the right to receive residual returns and the right to make decisions about the entity’s activities. We consolidate voting interest entities in which we have a controlling financial interest, which we typically have through holding of a majority of the entity’s voting equity interests.

Variable interest entities (“VIEs”) are entities that lack sufficient equity at risk or where the equity holders either do not have the obligation to absorb losses, do not have the right to receive residual returns, do not have the right to make decisions about the entity’s activities, or some combination of the above. A controlling financial interest in a VIE is present when an entity has a variable interest, or a combination of variable interests, that provides the entity with (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. An entity that meets both conditions above is deemed the primary beneficiary and consolidates the VIE. We reassess our initial evaluation of whether an entity is a VIE when certain reconsideration events occur. We reassess our determination of whether we are the primary beneficiary of a VIE on an ongoing basis based on current facts and circumstances.

The portion of a consolidated entity not owned by us is recorded as a noncontrolling interest. Noncontrolling interests are reflected on our consolidated balance sheets as a component of equity. Noncontrolling interest that was created or assumed as part of a business combination or asset acquisition was recognized at fair value as of the date of the transaction (see note 11, Noncontrolling Interests).

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Income Taxes. We have elected to be taxed as a real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended. We believe we have qualified and continue to qualify as a REIT. Under the REIT operating structure, we are permitted to deduct dividends paid to our stockholders in determining our taxable income. Assuming our dividends equal or exceed our taxable net income in the US, we generally will not be required to pay U.S. income taxes on such income. However, we are liable for taxes in the United Kingdom and Spain. Accordingly, a provision has been made for U.K. and Spain income taxes, as well as U.S. income taxes on our taxable REIT subsidiaries, but no provision was made for U.S. income taxes for our U.S. REIT parent.
Lease Revenue Recognition and Accounts Receivable. The COVID-19 pandemic and the measures taken to limit its spread have negatively impacted the economy across many industries, including the industries in which some of our clients operate. We continue to assess the probability of collecting substantially all of the lease payments to which we are entitled under the original lease contract as required under Topic 842, Leases. We assess the collectability of our future lease payments based on an analysis of creditworthiness, economic trends (including trends arising from the COVID-19 pandemic) and other facts and circumstances related to the applicable clients. If we conclude the collection of substantially all lease payments under a lease is less than probable, rental revenue recognized for that lease is limited to cash received going forward, existing operating lease receivables, including those related to straight-line rental revenue, must be written off as an adjustment to rental revenue, and no further operating lease receivables are recorded for that lease until such future determination is made that substantially all lease payments under that lease are now considered probable. If we subsequently conclude that the collection of substantially all lease payments under a lease is probable, a reversal of lease receivables previously written off is recognized.

The majority of concessions granted to our clients as a result of the COVID-19 pandemic have been rent deferrals with the original lease term unchanged. In accordance with the guidance provided by the Financial Accounting Standards Board (FASB) staff, we have elected to account for these leases as if the right of deferral existed in the lease contract and therefore continue to recognize lease revenue in accordance with the lease contract in effect. In limited circumstances, the undiscounted cash flows resulting from deferrals granted increased significantly from original lease terms, which required us to account for these as lease modifications and resulted in an insignificant impact to consolidated rental revenue. Similarly, rent abatements granted, which are also accounted for as lease modifications, have impacted our rental revenue by an insignificant amount.

As of September 30, 2022, other than the information related to the reserves recorded to date, we do not have any further client specific information that would change our assessment that collection of substantially all of the future lease payments under our existing leases is probable. However, since the conversations regarding rent collections for our clients affected by the COVID-19 pandemic are ongoing and we do not currently know the types of future concessions, if any, that will ultimately be granted, there may be impacts in future periods that could change this assessment as the situation continues to evolve and as more information becomes available.
Investment in Unconsolidated Entities. During the three months ended September 30, 2022, all seven properties owned by our industrial partnerships and accounted for under the equity method were sold. For further details, see note 5. Investments in Real Estate.
We accounted for our investment in unconsolidated entity arrangements using the equity method of accounting as we had the ability to exercise significant influence, but not control, over operating and financing policies of these investments. We had determined that none of the unconsolidated entities would be considered VIEs under the applicable accounting guidance. Our equity method investments were acquired in our merger with VEREIT. As a result, the investments were recorded at fair value and subsequently would be adjusted for our share of equity in the entities' earnings and distributions received. The step-up in fair value was allocated to the individual investment assets and liabilities and is being amortized over the estimated useful life of the respective underlying tangible real estate assets, the lease term of the intangible real estate assets, and the remaining term of the assumed debt. The carrying value of our investment was included in 'Investment in unconsolidated entities' in the accompanying consolidated balance sheets. We recorded our proportionate share of net income from the unconsolidated entities in 'Equity in income and impairment of investment in unconsolidated entities' in the consolidated statements of income and comprehensive income.
Segment Reporting. During the second quarter of 2022, a re-evaluation of our business and management structure led to a change in identification of operating and reportable segments. As we have grown in size and scale over recent years, including through the acquisition of VEREIT in November 2021, management has shifted its focus from managing primarily through identification of concentrations of risk from exposure to client industries or
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geographies, to now focused on seeking investments with attractive yields and risk adjusted returns regardless of client industry or geography. As a result, we reorganized our business activities into one operating and reportable segment. ASC Topic 280, Segment Reporting, establishes standards for the manner in which enterprises report information about operating segments. We are engaged in a single business activity, which is the leasing of property to clients, generally on a net basis (whereby clients are responsible for property taxes, insurance and maintenance costs). That business activity spans various geographic boundaries and includes property types and clients engaged in various industries, but ultimately all business activity involves similar economic characteristics of owning and leasing commercial properties under long-term, net lease agreements. Therefore, we aggregate these business activities for reporting purposes and operate in one operating and reportable segment. This segmental presentation is consistent with the information provided to our chief operating decision maker to make decisions about allocating resources and assessing our performance.
Newly Issued Accounting Standards In March 2020, the FASB issued ASU 2020-04 establishing Topic 848, Reference Rate Reform. ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance is optional and is effective between March 12, 2020, and December 31, 2022. The guidance may be elected over time as reference rate reform activities occur. As of September 30, 2022, all of our debt and derivative instruments have been converted from LIBOR to SOFR. The interest rate swap on our term loan, which was converted to a SOFR benchmark from LIBOR during June 2022, continues to be accounted for as a cash flow hedge. The adoption of this guidance had no impact on our consolidated financial statements.
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3.Merger with VEREIT, Inc.
Merger with VEREIT
On November 1, 2021, we completed our merger with VEREIT, Inc. For further details, see note 3. Merger with VEREIT, Inc. and Orion Office REIT Inc. Divestiture, to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2021.
Our merger with VEREIT has been accounted for using the acquisition method of accounting in accordance with ASC 805, Business Combinations, with Realty Income as the accounting acquirer, which requires, among other things, that the assets acquired, and liabilities assumed be recognized at their acquisition date fair value. The fair value of the consideration transferred on the date of the acquisition is as follows (in thousands, except share and per share data):
Shares of VEREIT common stock and VEREIT Operating Partnership, L.P. ("OP") common units exchanged (1)
229,304,035 
Exchange Ratio0.705
161,659,345
Less: Fractional shares settled in cash(1,545)
Shares of Realty Income common stock and Realty Income L.P. units issued161,657,800
Adjusted opening price of Realty common stock on November 1, 2021 (2)
$71.236 
Fair value of Realty common stock issued to former holders of VEREIT common stock and VEREIT OP common units $11,515,855 
Fair value of VEREIT's equity-based compensation awards attributable to pre-combination services (3)
44,020 
Total non-cash consideration11,559,875 
Cash paid for fractional shares110 
VEREIT indebtedness paid off in connection with the merger (4)
500,414 
Consideration transferred$12,060,399 
(1) Includes 229,152,001 shares of VEREIT common stock and 152,034 VEREIT OP common units outstanding as of November 1, 2021. Under the Merger Agreement, these shares and units were converted to Realty Income common stock, or in certain instances, Realty Income L.P. units, at an Exchange Ratio of 0.705 per share of VEREIT common stock or VEREIT OP common unit, as applicable.
(2) The fair value of Realty Income common stock issued to former holders of VEREIT common stock and VEREIT OP common units is based on the per share opening price of Realty Income common stock of $71.00 on November 1, 2021, adjusted for the monthly dividend of $0.236 per share that former holders of VEREIT common stock and VEREIT OP common units were eligible to receive when such dividend was paid on November 15, 2021.
(3) Represents the fair value of fully vested deferred stock unit awards of VEREIT common stock (“VEREIT DSU Awards”) which were converted into Realty Income common stock upon our merger with VEREIT, as well as the estimated fair value of the Realty Income replacement employee and executive stock options and restricted stock units that were granted at the closing date of our merger with VEREIT and which were attributable to pre-combination services.
(4) Represents the outstanding balance of the VEREIT revolving credit facility repaid by Realty Income in connection with the closing of the merger. The amount shown in the table above was based upon the balance outstanding immediately prior to November 1, 2021.

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A.    Purchase Price Allocation
The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition (in thousands):
ASSETS
Land$3,021,906 
Buildings8,677,467 
Total real estate held for investment11,699,373 
Cash and cash equivalents128,411 
Accounts receivable53,355 
Lease intangible assets (1)
3,204,773 
Goodwill3,717,620 
Investment in unconsolidated entities175,379 
Other assets308,910 
Total assets acquired$19,287,821 
LIABILITIES
Accounts payable and accrued expenses$139,836 
Lease intangible liabilities (2)
949,349 
Other liabilities320,893 
Mortgages payable869,027 
Notes payable4,946,965 
Total liabilities assumed$7,226,070 
Net assets acquired, at fair value$12,061,751 
Noncontrolling interests$1,352 
Total purchase price$12,060,399 
(1) The weighted average amortization period for acquired lease intangible assets is 9.3 years.
(2) The weighted average amortization period for acquired lease intangible liabilities is 25.5 years.
The initial assessment of fair value provided in our Annual Report on Form 10-K for the year ended December 31, 2021 was preliminary and was based on information that was available to management at the time the consolidated financial statements were prepared. Measurement period adjustments were recorded during 2022 in the period in which they were determined, as if they had been completed at the acquisition date. As of September 30, 2022, measurement period adjustments, as reflected in the table above, resulted in a net increase of $54.8 million to goodwill from the initial valuation.
Approximately $3.72 billion was allocated to goodwill. Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired and liabilities assumed. The recognized goodwill was attributable to expected synergies and benefits arising from the merger transaction, including anticipated financing and overhead cost savings, potential economies of scale benefits in both customer and vendor relationships and the employee workforce onboarded from VEREIT following the closing of the merger. None of the goodwill recognized is deductible for tax purposes.
B.    Merger and Integration-Related Costs
In conjunction with our merger with VEREIT, we incurred approximately $3.7 million and $13.0 million of transaction costs during the three and nine months ended September 30, 2022, respectively, compared to approximately $16.8 million and $30.1 million of merger-related transaction costs during the three and nine months ended September 30, 2021, respectively. Merger and integration-related costs consist of advisory fees, attorney fees,
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accountant fees, SEC filing fees and additional incremental and non-recurring costs necessary to convert data and systems, retain employees and otherwise enable us to operate the acquired business or assets efficiently.
C.    Unaudited Pro Forma Financial Information
Our consolidated results of operations for the three and nine months ended September 30, 2022, include $252.6 million and $766.3 million of revenues, respectively, and $15.6 million and $41.7 million of net income associated with the results of operations of VEREIT OP, respectively.
The following unaudited pro forma information presents a summary of our combined results of operations for the three and nine months ended September 30, 2021, as if our merger with VEREIT had occurred on January 1, 2020 (in millions, except per share data). There are no pro forma adjustments for the three and nine months ended September 30, 2022, as the merger was completed November 1, 2021. Amounts for the three and nine months ended September 30, 2022 are presented for comparative purposes. The following pro forma financial information is not necessarily indicative of the results of operations had the acquisition been effected on the assumed date, nor is it necessarily an indication of trends in future results for a number of reasons, including, but not limited to, differences between the assumptions used to prepare the pro forma information, basic shares outstanding and dilutive equivalents, cost savings from operating efficiencies, potential synergies, and the impact of incremental costs incurred in integrating the businesses. In accordance with ASC 805, Business Combinations, the following information excludes the impact of the spin-off of office assets to Orion Office REIT Inc.
Three months ended September 30,Nine months ended September 30,
2022202120222021
Total revenues$837.3 $792.3 $2,455.0 $2,300.1 
Net income$220.3 $172.3 $644.1 $548.2 
Basic and diluted earnings per share$0.36 $0.31 $1.06 $1.01 

4.Supplemental Detail for Certain Components of Consolidated Balance Sheets (dollars in thousands):
A.
Accounts Receivable, net, consist of the following at:September 30, 2022December 31, 2021
Straight-line rent receivables, net$325,190 $231,943 
Client receivables, net204,058 194,825 
$529,248 $426,768 
B.
Lease intangible assets, net, consist of the following at:
September 30, 2022December 31, 2021
In-place leases
$5,054,166 $4,791,846 
Accumulated amortization of in-place leases
(1,249,683)(804,050)
Above-market leases
1,663,492 1,591,382 
Accumulated amortization of above-market leases
(403,653)(303,874)
$5,064,322 $5,275,304 
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C.
Other assets, net, consist of the following at:
September 30, 2022December 31, 2021
Financing receivables$708,755 $323,921 
Right of use asset - operating leases, net592,800 631,515 
Right of use asset - financing leases441,473 218,332 
Derivative assets and receivables – at fair value174,697 29,593 
Restricted escrow deposits90,639 68,541 
Prepaid expenses32,961 18,062 
Non-refundable escrow deposits28,556 28,560 
Credit facility origination costs, net18,430 4,352 
Corporate assets, net12,428 10,915 
Impounds related to mortgages payable10,529 5,249 
Investment in sales type lease5,926 7,492 
Note receivable 4,455 
Other items34,701 18,592 
$2,151,895 $1,369,579 

D.
Accounts payable and accrued expenses consist of the following at:
September 30, 2022December 31, 2021
Notes payable - interest payable$117,448 $108,227 
Derivative liabilities and payables – at fair value69,445 70,617 
Property taxes payable54,425 36,173 
Accrued property expenses39,057 27,344 
Accrued costs on properties under development28,961 19,665 
Value-added tax payable22,189 11,297 
Accrued income taxes14,995 19,152 
Mortgages, term loans, and credit line - interest payable4,410 3,874 
Merger and integration-related costs1,072 10,699 
Other items56,480 44,080 
$408,482 $351,128 

E.
Lease intangible liabilities, net, consist of the following at:
September 30, 2022December 31, 2021
Below-market leases
$