CONSOLIDATED BALANCE SHEETS

(In thousands, except for share and per share data) (Unaudited)

PART I - FINANCIAL INFORMATION

Unaudited Financial Statements

September 30, 2021 December 31, 2020
ASSETS
Real estate investments, at cost:
Land $ 2,724,709 $ 2,699,110
Buildings, fixtures and improvements 9,916,070 10,032,055
Intangible lease assets 1,917,251 1,872,461
Total real estate investments, at cost 14,558,030 14,603,626
Less: accumulated depreciation and amortization 4,002,377 3,833,084
Total real estate investments, net 10,555,653 10,770,542
Operating lease right-of-use assets 185,443 195,518
Investment in unconsolidated entities 80,363 81,639
Cash and cash equivalents 5,874 523,539
Restricted cash 10,803 13,842
Rent and tenant receivables and other assets, net 371,911 366,620
Goodwill 1,337,773 1,337,773
Real estate assets held for sale, net 31,073 65,583
Total assets $ 12,578,893 $ 13,355,056
LIABILITIES AND EQUITY
Mortgage notes payable, net $ 987,704 $ 1,328,835
Corporate bonds, net 4,590,348 4,584,230
Credit facility 88,000 -
Below-market lease liabilities, net 111,140 120,938
Accounts payable and accrued expenses 137,626 117,015
Deferred rent and other liabilities 58,707 63,204
Distributions payable 105,958 89,514
Operating lease liabilities 196,671 209,104
Total liabilities 6,276,154 6,512,840
Commitments and contingencies (Note 10)
Preferred stock, $0.01 par value, 100,000,000 shares authorized with 18,871,246 issued and outstanding as of December 31, 2020. - 189
Common stock, $0.01 par value, 1,500,000,000 shares authorized and 229,152,001 and 228,881,547 issued and outstanding as of September 30, 2021 and December 31, 2020, respectively 2,292 2,289
Additional paid-in capital 12,984,914 13,449,412
Accumulated other comprehensive income 831 536
Accumulated deficit (6,692,338 ) (6,617,380 )
Total stockholders' equity 6,295,699 6,835,046
Non-controlling interests 7,040 7,170
Total equity 6,302,739 6,842,216
Total liabilities and equity $ 12,578,893 $ 13,355,056

The accompanying notes are an integral part of these statements.

VEREIT, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except for per share data) (Unaudited)

Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Revenues:
Rental $ 289,671 $ 293,692 $ 870,547 $ 870,854
Fees from managed partnerships 521 1,586 1,721 2,603
Total revenues 290,192 295,278 872,268 873,457
Operating expenses:
Acquisition-related 1,373 1,050 4,155 3,742
Merger, litigation and non-routine costs, net 9,445 105 16,118 (8,577 )
Property operating 28,854 31,400 88,633 90,988
General and administrative 12,437 14,774 43,414 45,950
Depreciation and amortization 106,668 108,257 320,582 341,070
Impairments 13,272 16,397 59,250 36,871
Total operating expenses 172,049 171,983 532,152 510,044
Other expenses:
Interest expense (59,768 ) (66,935 ) (179,795 ) (197,244 )
(Loss) gain on extinguishment and forgiveness of debt, net (5 ) 61 (2,102 ) (1,419 )
Other income, net 346 73 7,101 1,026
Equity in income of unconsolidated entities 463 663 1,374 2,406
Gain on disposition of real estate and real estate assets held for sale, net 3,369 42,814 96,339 76,858
Total other expenses, net (55,595 ) (23,324 ) (77,083 ) (118,373 )
Income before taxes 62,548 99,971 263,033 245,040
Provision for income taxes (935 ) (1,054 ) (2,794 ) (3,155 )
Net income 61,613 98,917 260,239 241,885
Net income attributable to non-controlling interests (1) (48 ) (51 ) (131 ) (137 )
Net income attributable to the General Partner $ 61,565 $ 98,866 $ 260,108 $ 241,748
Basic and diluted net income per share attributable to common stockholders $ 0.25 $ 0.41 $ 1.06 $ 0.95

(1)Represents net income attributable to limited partners and a consolidated joint venture partner.

The accompanying notes are an integral part of these statements.

VEREIT, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands) (Unaudited)

Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Net income $ 61,613 $ 98,917 $ 260,239 $ 241,885
Total other comprehensive income (loss)
Unrealized gain (loss) on interest rate derivatives - 3,666 - (81,383 )
Reclassification of previous unrealized loss on interest rate derivatives into net income 99 5,441 295 11,995
Total other comprehensive income (loss) 99 9,107 295 (69,388 )
Total comprehensive income 61,712 108,024 260,534 172,497
Comprehensive income attributable to non-controlling interests (1) (48 ) (57 ) (131 ) (87 )
Total comprehensive income attributable to the General Partner $ 61,664 $ 107,967 $ 260,403 $ 172,410

(1)Represents comprehensive income attributable to limited partners and a consolidated joint venture partner.

The accompanying notes are an integral part of these statements.

VEREIT, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In thousands, except for share data) (Unaudited)

Preferred Stock Common Stock
Number
of Shares 		Par
Value 		Number
of Shares 		Par
Value 		Additional Paid-In Capital Accumulated Other Comprehensive
Income 		Accumulated
Deficit 		Total Stock-holders' Equity Non-Controlling Interests Total Equity
Balance, January 1, 2021 18,871,246 $ 189 228,881,547 $ 2,289 $ 13,449,412 $ 536 $ (6,617,380 ) $ 6,835,046 $ 7,170 $ 6,842,216
Issuance of Common Stock, net - - 35,710 - - - - - - -
Redemption of Series F Preferred Stock (4,000,000 ) (40 ) - - (99,960 ) - - (100,000 ) - (100,000 )
Repurchases of Common Stock to settle tax obligation - - (49,237 ) - (1,681 ) - - (1,681 ) - (1,681 )
Equity-based compensation, net - - 261,934 2 2,890 - - 2,892 - 2,892
Distributions declared on Common Stock - $0.462 per common share - - - - - - (105,858 ) (105,858 ) - (105,858 )
Distributions to non-controlling interest holders - - - - - - - - (70 ) (70 )
Dividend equivalents on awards granted under the Equity Plan - - - - - - (1,581 ) (1,581 ) - (1,581 )
Distributions to preferred shareholders and unitholders - - - - - - (6,506 ) (6,506 ) (19 ) (6,525 )
Net income - - - - - - 120,647 120,647 76 120,723
Other comprehensive income - - - - - 98 - 98 - 98
Balance, March 31, 2021 14,871,246 $ 149 229,129,954 $ 2,291 $ 13,350,661 $ 634 $ (6,610,678 ) $ 6,743,057 $ 7,157 $ 6,750,214
Redemption of Series F Preferred Stock - - - - (41 ) - - (41 ) - (41 )
Repurchases of Common Stock to settle tax obligation - - (18,042 ) - (100 ) - - (100 ) - (100 )
Equity-based compensation, net - - 37,704 - 4,137 - - 4,137 - 4,137
Distributions declared on Common Stock - $0.462 per common share - - - - - - (105,867 ) (105,867 ) - (105,867 )
Distributions to non-controlling interest holders - - - - - - - - (70 ) (70 )
Dividend equivalents on awards granted under the Equity Plan - - - - - - (20 ) (20 ) - (20 )
Distributions to preferred shareholders and unitholders - - - - - - (6,227 ) (6,227 ) (21 ) (6,248 )
Net income - - - - - - 77,896 77,896 7 77,903
Other comprehensive income - - - - - 98 - 98 - 98
Balance, June 30, 2021 14,871,246 $ 149 229,149,616 $ 2,291 $ 13,354,657 $ 732 $ (6,644,896 ) $ 6,712,933 $ 7,073 $ 6,720,006
Redemption of Series F Preferred Stock (14,871,246 ) (149 ) - - (372,883 ) - - (373,032 ) - (373,032 )
Repurchases of Common Stock to settle tax obligation - - (6,356 ) - (47 ) - - (47 ) - (47 )
Equity-based compensation, net - - 8,741 1 3,187 - - 3,188 - 3,188
Distributions declared on Common Stock - $0.462 per common share - - - - - - (105,868 ) (105,868 ) - (105,868 )
Distributions to non-controlling interest holders - - - - - - - - (70 ) (70 )
Dividend equivalents on awards granted under the Equity Plan - - - - - - (26 ) (26 ) - (26 )
Distributions to preferred shareholders and unitholders - - - - - - (3,113 ) (3,113 ) (11 ) (3,124 )
Net income - - - - - - 61,565 61,565 48 61,613
Other comprehensive income - - - - - 99 - 99 - 99
Balance, September 30, 2021 - $ - 229,152,001 $ 2,292 $ 12,984,914 $ 831 $ (6,692,338 ) $ 6,295,699 $ 7,040 $ 6,302,739

VEREIT, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In thousands, except for share data) (Unaudited)

Preferred Stock Common Stock
Number
of Shares 		Par
Value 		Number
of Shares 		Par
Value 		Additional
Paid-In
Capital 		Accumulated
Other
Comprehensive
Income 		Accumulated
Deficit 		Total
Stock-
holders'
Equity 		Non-
Controlling
Interests 		Total
Equity
Balance, January 1, 2020 30,871,246 $ 309 215,369,197 $ 2,153 $ 13,260,577 $ (27,670 ) $ (6,372,710 ) $ 6,862,659 $ 7,535 $ 6,870,194
Conversion of OP Units to Common Stock - - 910 - 45 - - 45 (45 ) -
Redemption of Series F Preferred Stock - - - - (27 ) - - (27 ) - (27 )
Repurchases of Common Stock to settle tax obligation - - (48,218 ) - (2,378 ) - - (2,378 ) - (2,378 )
Equity-based compensation, net - - 234,408 2 2,853 - - 2,855 - 2,855
Distributions declared on Common Stock - $0.6875 per common share - - - - - - (148,194 ) (148,194 ) - (148,194 )
Distributions to non-controlling interest holders - - - - - - - - (105 ) (105 )
Dividend equivalents on awards granted under the Equity Plan - - - - - - (1,628 ) (1,628 ) - (1,628 )
Distributions to preferred shareholders and unitholders - - - - - - (12,928 ) (12,928 ) (19 ) (12,947 )
Net income - - - - - - 86,808 86,808 55 86,863
Other comprehensive loss - - - - - (76,547 ) - (76,547 ) (55 ) (76,602 )
Balance, March 31, 2020 30,871,246 $ 309 215,556,297 $ 2,155 $ 13,261,070 $ (104,217 ) $ (6,448,652 ) $ 6,710,665 $ 7,366 $ 6,718,031
Redemption of Series F Preferred Stock - - - - (25 ) - - (25 ) - (25 )
Equity-based compensation, net - - 13,415 1 4,070 - - 4,071 - 4,071
Distributions declared on Common Stock - $0.385 per common share - - - - - - (82,997 ) (82,997 ) - (82,997 )
Distributions to non-controlling interest holders - - - - - - - - (61 ) (61 )
Dividend equivalents on awards granted under the Equity Plan - - - - - - (18 ) (18 ) - (18 )
Distributions to preferred shareholders and unitholders - - - - - - (12,928 ) (12,928 ) (20 ) (12,948 )
Repurchase of convertible notes - - - - (204 ) - - (204 ) - (204 )
Net income - - - - - - 56,074 56,074 31 56,105
Other comprehensive loss - - - - - (1,892 ) - (1,892 ) (1 ) (1,893 )
Balance, June 30, 2020 30,871,246 $ 309 215,569,712 $ 2,156 $ 13,264,911 $ (106,109 ) $ (6,488,521 ) $ 6,672,746 $ 7,315 $ 6,680,061
Issuance of Common Stock, net - - 2,659,332 27 89,252 - - 89,279 - 89,279
Redemption of Limited Partners' Common OP Units - - - - - - - - (149 ) (149 )
Redemption of Series F Preferred Stock (12,000,000 ) (120 ) - - (299,932 ) - - (300,052 ) - (300,052 )
Repurchases of Common Stock to settle tax obligation - - (250 ) - (8 ) - - (8 ) - (8 )
Equity-based compensation, net - - 19,634 - 3,211 - - 3,211 - 3,211
Distributions declared on Common Stock - $0.385 per common share - - - - - - (84,026 ) (84,026 ) - (84,026 )
Distributions to non-controlling interest holders - - - - - - - - (59 ) (59 )
Dividend equivalents on awards granted under the Equity Plan - - - - - - (24 ) (24 ) - (24 )
Distributions to preferred shareholders and unitholders - - - - - - (10,750 ) (10,750 ) (21 ) (10,771 )
Repurchase of convertible notes - - - - (26 ) - - (26 ) - (26 )
Net income - - - - - - 98,866 98,866 51 98,917
Other comprehensive income - - - - - 9,101 - 9,101 6 9,107
Balance, September 30, 2020 18,871,246 $ 189 218,248,428 $ 2,183 $ 13,057,408 $ (97,008 ) $ (6,484,455 ) $ 6,478,317 $ 7,143 $ 6,485,460

The accompanying notes are an integral part of these statements.

VEREIT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) (Unaudited)

Nine Months Ended September 30,
2021 2020
Cash flows from operating activities:
Net income $ 260,239 $ 241,885
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 334,483 350,600
Gain on real estate assets, net (100,320 ) (77,117 )
Impairments 59,250 36,871
Equity-based compensation 10,217 10,137
Equity in income of unconsolidated entities (1,374 ) (2,406 )
Distributions from unconsolidated entities 1,122 1,753
(Gain) loss on other investments (691 ) 607
Loss on extinguishment and forgiveness of debt, net 2,102 1,419
Changes in assets and liabilities:
Investment in direct financing leases 1,125 1,117
Rent and tenant receivables, operating lease right-of-use and other assets, net (1,781 ) (38,277 )
Accounts payable and accrued expenses 11,331 (9,645 )
Deferred rent, operating lease and other liabilities (11,505 ) (2,936 )
Net cash provided by operating activities 564,198 514,008
Cash flows from investing activities:
Investments in real estate assets (419,139 ) (147,121 )
Capital expenditures and leasing costs (22,722 ) (21,102 )
Real estate developments (14,383 ) (16,592 )
Investments in unconsolidated entities (2,180 ) (21,348 )
Return of investment from unconsolidated entities 3,706 1,961
Proceeds from disposition of real estate 420,171 346,675
Investment in leasehold improvements and other assets (80 ) (612 )
Deposits for real estate assets (8,661 ) (1,973 )
Investments in mezzanine position - (9,959 )
Uses and refunds of deposits for real estate assets 7,060 4,036
Proceeds from the settlement of property-related insurance claims 1,148 654
Net cash (used in) provided by investing activities (35,080 ) 134,619
Cash flows from financing activities:
Proceeds from mortgage notes payable - 1,032
Payments on mortgage notes payable and other debt, including debt extinguishment costs (344,459 ) (197,382 )
Proceeds from credit facility 192,000 902,000
Payments on credit facility, including swap termination payments (104,000 ) (1,052,000 )
Proceeds from corporate bonds - 594,864
Extinguishment costs related to the redemption of corporate bonds - (26 )
Extinguishment costs related to the repurchases of convertible notes - (69,362 )
Payments of deferred financing costs (1,195 ) (7,275 )
Refunds of deferred financing costs 280 -
Repurchases of Common Stock to settle tax obligations (1,828 ) (2,386 )
Proceeds from the issuance of Common Stock, net of underwriters' discount and offering expenses 1,336 89,279
Redemption of Series F Preferred Stock (473,073 ) (300,104 )
Redemption of Limited Partners' Common OP Units - (149 )
Distributions paid (318,883 ) (418,722 )
Net cash used in financing activities (1,049,822 ) (460,231 )
Net change in cash and cash equivalents and restricted cash (520,704 ) 188,396
Cash and cash equivalents and restricted cash, beginning of period 537,381 33,880
Cash and cash equivalents and restricted cash, end of period 16,677 222,276
Reconciliation of Cash and Cash Equivalents and Restricted Cash
Cash and cash equivalents at beginning of period $ 523,539 $ 12,921
Restricted cash at beginning of period 13,842 20,959
Cash and cash equivalents and restricted cash at beginning of period 537,381 33,880
Cash and cash equivalents at end of period 5,874 207,321
Restricted cash at end of period 10,803 14,955
Cash and cash equivalents and restricted cash at end of period $ 16,677 $ 222,276

The accompanying notes are an integral part of these statements.

VEREIT OPERATING PARTNERSHIP, L.P.

CONSOLIDATED BALANCE SHEETS

(In thousands, except for unit data) (Unaudited)

September 30, 2021 December 31, 2020
ASSETS
Real estate investments, at cost:
Land $ 2,724,709 $ 2,699,110
Buildings, fixtures and improvements 9,916,070 10,032,055
Intangible lease assets 1,917,251 1,872,461
Total real estate investments, at cost 14,558,030 14,603,626
Less: accumulated depreciation and amortization 4,002,377 3,833,084
Total real estate investments, net 10,555,653 10,770,542
Operating lease right-of-use assets 185,443 195,518
Investment in unconsolidated entities 80,363 81,639
Cash and cash equivalents 5,874 523,539
Restricted cash 10,803 13,842
Rent and tenant receivables and other assets, net 371,911 366,620
Goodwill 1,337,773 1,337,773
Real estate assets held for sale, net 31,073 65,583
Total assets $ 12,578,893 $ 13,355,056
LIABILITIES AND EQUITY
Mortgage notes payable, net $ 987,704 $ 1,328,835
Corporate bonds, net 4,590,348 4,584,230
Credit facility 88,000 -
Below-market lease liabilities, net 111,140 120,938
Accounts payable and accrued expenses 137,626 117,015
Deferred rent and other liabilities 58,707 63,204
Distributions payable 105,958 89,514
Operating lease liabilities 196,671 209,104
Total liabilities 6,276,154 6,512,840
Commitments and contingencies (Note 10)
General Partner's preferred equity, 18,871,246 General Partner Series F Preferred Units issued and outstanding as of December 31, 2020. - 254,294
General Partner's common equity, 229,152,001 and 228,881,547 General Partner OP Units issued and outstanding as of September 30, 2021 and December 31, 2020, respectively 6,296,943 6,580,752
Limited Partner's preferred equity, 49,766 Limited Partner Series F Preferred Units issued and outstanding as of December 31, 2020. - 1,787
Limited Partner's common equity, 152,033 Limited Partner OP Units issued and outstanding as of each of September 30, 2021 and December 31, 2020, respectively 4,663 4,209
Total partners' equity 6,301,606 6,841,042
Non-controlling interests 1,133 1,174
Total equity 6,302,739 6,842,216
Total liabilities and equity $ 12,578,893 $ 13,355,056

The accompanying notes are an integral part of these statements.

VEREIT OPERATING PARTNERSHIP, L.P.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except for per unit data) (Unaudited)

Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Revenues:
Rental $ 289,671 $ 293,692 $ 870,547 $ 870,854
Fees from managed partnerships 521 1,586 1,721 2,603
Total revenues 290,192 295,278 872,268 873,457
Operating expenses:
Acquisition-related 1,373 1,050 4,155 3,742
Merger, litigation and non-routine costs, net 9,445 105 16,118 (8,577 )
Property operating 28,854 31,400 88,633 90,988
General and administrative 12,437 14,774 43,414 45,950
Depreciation and amortization 106,668 108,257 320,582 341,070
Impairments 13,272 16,397 59,250 36,871
Total operating expenses 172,049 171,983 532,152 510,044
Other expense:
Interest expense (59,768 ) (66,935 ) (179,795 ) (197,244 )
(Loss) gain on extinguishment and forgiveness of debt, net (5 ) 61 (2,102 ) (1,419 )
Other income, net 346 73 7,101 1,026
Equity in income of unconsolidated entities 463 663 1,374 2,406
Gain on disposition of real estate and real estate assets held for sale, net 3,369 42,814 96,339 76,858
Total other expense, net (55,595 ) (23,324 ) (77,083 ) (118,373 )
Income before taxes 62,548 99,971 263,033 245,040
Provision for income taxes (935 ) (1,054 ) (2,794 ) (3,155 )
Net income 61,613 98,917 260,239 241,885
Net loss attributable to non-controlling interests (1) 10 14 41 29
Net income attributable to the OP $ 61,623 $ 98,931 $ 260,280 $ 241,914
Basic and diluted net income per unit attributable to common unitholders $ 0.25 $ 0.41 $ 1.06 $ 0.95

(1)Represents net loss attributable to a consolidated joint venture partner.

The accompanying notes are an integral part of these statements.

VEREIT OPERATING PARTNERSHIP, L.P.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands) (Unaudited)

Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Net income $ 61,613 $ 98,917 $ 260,239 $ 241,885
Total other comprehensive income (loss)
Unrealized gain (loss) on interest rate derivatives - 3,666 - (81,383 )
Reclassification of previous unrealized loss on interest rate derivatives into net income 99 5,441 295 11,995
Total other comprehensive income (loss) 99 9,107 295 (69,388 )
Total comprehensive income 61,712 108,024 260,534 172,497
Comprehensive loss attributable to non-controlling interests (1) 10 14 41 29
Total comprehensive income attributable to the OP $ 61,722 $ 108,038 $ 260,575 $ 172,526

(1)Represents comprehensive loss attributable to a consolidated joint venture partner.

The accompanying notes are an integral part of these statements.

VEREIT OPERATING PARTNERSHIP, L.P.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In thousands, except for unit data) (Unaudited)

Preferred Units Common Units
General Partner Limited Partner General Partner Limited Partner Total
Number of
Units 		Capital Number of
Units 		Capital Number of
Units 		Capital Number of
Units 		Capital Partners'
Capital 		Non-Controlling
Interests
Balance, January 1, 2021 18,871,246 $ 254,294 49,766 $ 1,787 228,881,547 $ 6,580,752 152,033 $ 4,209 $ 6,841,042 $ 1,174 $ 6,842,216
Issuance of common OP Units, net - - - - 35,710 - - - - - -
Redemption of Series F Preferred Units (4,000,000 ) (100,000 ) - - - - - - (100,000 ) - (100,000 )
Repurchases of common OP Units to settle tax obligation - - - - (49,237 ) (1,681 ) - - (1,681 ) - (1,681 )
Equity-based compensation, net - - - - 261,934 2,892 - - 2,892 - 2,892
Distributions to Common OP Units and non-controlling interests -$0.462 per common unit - - - - - (105,858 ) - (70 ) (105,928 ) - (105,928 )
Dividend equivalents on awards granted under the Equity Plan - - - - - (1,581 ) - - (1,581 ) - (1,581 )
Distributions to Series F Preferred Units - (6,506 ) - (19 ) - - - - (6,525 ) - (6,525 )
Net income (loss) - - - - - 120,647 - 79 120,726 (3 ) 120,723
Other comprehensive income - - - - - 98 - - 98 - 98
Balance, March 31, 2021 14,871,246 $ 147,788 49,766 $ 1,768 229,129,954 $ 6,595,269 152,033 $ 4,218 $ 6,749,043 $ 1,171 $ 6,750,214
Redemption of Series F Preferred Units - (41 ) - - - - - - (41 ) - (41 )
Repurchases of common OP Units to settle tax obligation - - - - (18,042 ) (100 ) - - (100 ) - (100 )
Equity-based compensation, net - - - - 37,704 4,137 - - 4,137 - 4,137
Distributions to Common OP Units and non-controlling interests -$0.462 per common unit - - - - - (105,867 ) - (70 ) (105,937 ) - (105,937 )
Dividend equivalents on awards granted under the Equity Plan - - - - - (20 ) - - (20 ) - (20 )
Distributions to Series F Preferred Units - (6,227 ) - (21 ) - - - - (6,248 ) - (6,248 )
Net income (loss) - - - - - 77,896 - 35 77,931 (28 ) 77,903
Other comprehensive income - - - - - 98 - - 98 - 98
Balance, June 30, 2021 14,871,246 $ 141,520 49,766 $ 1,747 229,149,616 $ 6,571,413 152,033 $ 4,183 $ 6,718,863 $ 1,143 $ 6,720,006
Redemption of Series F Preferred Units (14,871,246 ) (138,407 ) (49,766 ) (1,736 ) - (233,381 ) - 492 (373,032 ) - (373,032 )
Repurchases of common OP Units to settle tax obligation - - - - (6,356 ) (47 ) - - (47 ) - (47 )
Equity-based compensation, net - - - - 8,741 3,188 - - 3,188 - 3,188
Distributions to Common OP Units and non-controlling interests -$0.462 per common unit - - - - - (105,868 ) - (70 ) (105,938 ) - (105,938 )
Dividend equivalents on awards granted under the Equity Plan - - - - - (26 ) - - (26 ) - (26 )
Distributions to Series F Preferred Units - (3,113 ) - (11 ) - - - - (3,124 ) - (3,124 )
Net income (loss) - - - - - 61,565 - 58 61,623 (10 ) 61,613
Other comprehensive income - - - - - 99 - - 99 - 99
Balance, September 30, 2021 - $ - - $ - 229,152,001 $ 6,296,943 152,033 $ 4,663 $ 6,301,606 $ 1,133 $ 6,302,739

VEREIT OPERATING PARTNERSHIP, L.P.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In thousands, except for unit data) (Unaudited)

Preferred Units Common Units
General Partner Limited Partner General Partner Limited Partner Total
Number of
Units 		Capital Number of
Units 		Capital Number of
Units 		Capital Number of
Units 		Capital Partners'
Capital 		Non-Controlling
Interests
Balance, January 1, 2020 30,871,246 $ 460,504 49,766 $ 1,869 215,369,197 $ 6,402,155 157,343 $ 4,433 $ 6,868,961 $ 1,233 $ 6,870,194
Conversion of Limited Partners' Common OP Units to General Partner's Common OP Units - - - - 910 45 (910 ) (45 ) - - -
Redemption of Series F Preferred Units - (27 ) - - - - - - (27 ) - (27 )
Repurchases of common OP Units to settle tax obligation - - - - (48,218 ) (2,378 ) - - (2,378 ) - (2,378 )
Equity-based compensation, net - - - - 234,408 2,855 - - 2,855 - 2,855
Distributions to Common OP Units and non-controlling interests -$0.6875 per common unit - - - - - (148,194 ) - (105 ) (148,299 ) - (148,299 )
Dividend equivalents on awards granted under the Equity Plan - - - - - (1,628 ) - - (1,628 ) - (1,628 )
Distributions to Series F Preferred Units - (12,928 ) - (19 ) - - - - (12,947 ) - (12,947 )
Net income (loss) - - - - - 86,808 - 62 86,870 (7 ) 86,863
Other comprehensive loss - - - - - (76,547 ) - (55 ) (76,602 ) - (76,602 )
Balance, March 31, 2020 30,871,246 $ 447,549 49,766 $ 1,850 215,556,297 $ 6,263,116 156,433 $ 4,290 $ 6,716,805 $ 1,226 $ 6,718,031
Redemption of Series F Preferred Units - (25 ) - - - - - - (25 ) - (25 )
Equity-based compensation, net - - - - 13,415 4,071 - - 4,071 - 4,071
Distributions to Common OP Units and non-controlling interests -$0.3850 per common unit - - - - - (82,997 ) - (61 ) (83,058 ) - (83,058 )
Dividend equivalents on awards granted under the Equity Plan - - - - - (18 ) - - (18 ) - (18 )
Distributions to Series F Preferred Units - (12,928 ) - (20 ) - - - - (12,948 ) - (12,948 )
Repurchase of convertible notes - - - - - (204 ) - - (204 ) - (204 )
Net income (loss) - - - - - 56,074 - 39 56,113 (8 ) 56,105
Other comprehensive loss - - - - - (1,892 ) - (1 ) (1,893 ) - (1,893 )
Balance, June 30, 2020 30,871,246 $ 434,596 49,766 $ 1,830 215,569,712 $ 6,238,150 156,433 $ 4,267 $ 6,678,843 $ 1,218 $ 6,680,061
Issuance of common OP Units, net - - - - 2,659,332 89,279 - - 89,279 - 89,279
Redemption of Limited Partners' Common OP Units - - - - - - (4,400 ) (149 ) (149 ) - (149 )
Redemption of Series F Preferred Units (12,000,000 ) (300,052 ) - - - - - - (300,052 ) - (300,052 )
Repurchases of common OP Units to settle tax obligation - - - - (250 ) (8 ) - - (8 ) - (8 )
Equity-based compensation, net - - - - 19,634 3,211 - - 3,211 - 3,211
Distributions to Common OP Units and non-controlling interests - $0.3850 per common unit - - - - - (84,026 ) - (59 ) (84,085 ) - (84,085 )
Dividend equivalents on awards granted under the Equity Plan - - - - - (24 ) - - (24 ) - (24 )
Distributions to Series F Preferred Units - (10,750 ) - (21 ) - - - - (10,771 ) - (10,771 )
Repurchase of convertible notes - - - - - (26 ) - - (26 ) - (26 )
Net income (loss) - - - - - 98,866 - 65 98,931 (14 ) 98,917
Other comprehensive income - - - - - 9,101 - 6 9,107 - 9,107
Balance, September 30, 2020 18,871,246 $ 123,794 49,766 $ 1,809 218,248,428 $ 6,354,523 152,033 $ 4,130 $ 6,484,256 $ 1,204 $ 6,485,460

The accompanying notes are an integral part of these statements.

VEREIT OPERATING PARTNERSHIP, L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) (Unaudited)

Nine Months Ended September 30,
2021 2020
Cash flows from operating activities:
Net income $ 260,239 $ 241,885
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 334,483 350,600
Gain on real estate assets, net (100,320 ) (77,117 )
Impairments 59,250 36,871
Equity-based compensation 10,217 10,137
Equity in income of unconsolidated entities (1,374 ) (2,406 )
Distributions from unconsolidated entities 1,122 1,753
(Gain) loss on other investments (691 ) 607
Loss on extinguishment and forgiveness of debt, net 2,102 1,419
Changes in assets and liabilities:
Investment in direct financing leases 1,125 1,117
Rent and tenant receivables, operating lease right-of-use and other assets, net (1,781 ) (38,277 )
Accounts payable and accrued expenses 11,331 (9,645 )
Deferred rent, operating lease and other liabilities (11,505 ) (2,936 )
Net cash provided by operating activities 564,198 514,008
Cash flows from investing activities:
Investments in real estate assets (419,139 ) (147,121 )
Capital expenditures and leasing costs (22,722 ) (21,102 )
Real estate developments (14,383 ) (16,592 )
Investments in unconsolidated entities (2,180 ) (21,348 )
Return of investment from unconsolidated entities 3,706 1,961
Proceeds from disposition of real estate 420,171 346,675
Investment in leasehold improvements and other assets (80 ) (612 )
Investments in mezzanine position - (9,959 )
Deposits for real estate assets (8,661 ) (1,973 )
Uses and refunds of deposits for real estate assets 7,060 4,036
Proceeds from the settlement of property-related insurance claims 1,148 654
Net cash (used in) provided by investing activities (35,080 ) 134,619
Cash flows from financing activities:
Proceeds from mortgage notes payable - 1,032
Payments on mortgage notes payable and other debt, including debt extinguishment costs (344,459 ) (197,382 )
Proceeds from credit facility 192,000 902,000
Payments on credit facility, including swap termination payments (104,000 ) (1,052,000 )
Proceeds from corporate bonds - 594,864
Extinguishment costs related to the redemption of corporate bonds - (26 )
Extinguishment costs related to the repurchases of convertible notes - (69,362 )
Payments of deferred financing costs (1,195 ) (7,275 )
Refunds of deferred financing costs 280 -
Repurchases of Common Stock to settle tax obligations (1,828 ) (2,386 )
Proceeds from the issuance of Common Stock, net of underwriters' discount and offering expenses 1,336 89,279
Redemption of Series F Preferred Units (473,073 ) (300,104 )
Redemption of Limited Partners' Common OP Units - (149 )
Distributions paid (318,883 ) (418,722 )
Net cash used in financing activities (1,049,822 ) (460,231 )
Net change in cash and cash equivalents and restricted cash (520,704 ) 188,396
Cash and cash equivalents and restricted cash, beginning of period $ 537,381 $ 33,880
Cash and cash equivalents and restricted cash, end of period 16,677 222,276
Reconciliation of Cash and Cash Equivalents and Restricted Cash
Cash and cash equivalents at beginning of period $ 523,539 $ 12,921
Restricted cash at beginning of period 13,842 20,959
Cash and cash equivalents and restricted cash at beginning of period 537,381 33,880
Cash and cash equivalents at end of period 5,874 207,321
Restricted cash at end of period 10,803 14,955
Cash and cash equivalents and restricted cash at end of period $ 16,677 $ 222,276

The accompanying notes are an integral part of these statements.

VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021 (Unaudited)

Note 1 - Organization

VEREIT is a Maryland corporation, incorporated on December 2, 2010, that qualified as a real estate investment trust ("REIT") for U.S. federal income tax purposes beginning in the taxable year ended December 31, 2011. The OP is a Delaware limited partnership of which the General Partner is the sole general partner. VEREIT's common stock, par value $0.01 per share ("Common Stock") trades on the New York Stock Exchange ("NYSE") under the trading symbol "VER". As used herein, the terms the "Company," "we," "our" and "us" refer to VEREIT, together with its consolidated subsidiaries, including the OP.

VEREIT is a full-service real estate operating company which owns and manages one of the largest portfolios of single-tenant commercial properties in the U.S. VEREIT's business model provides equity capital to creditworthy corporations in return for long-term leases on their properties. The Company actively manages its portfolio considering a number of metrics including property type, concentration and key economic factors for appropriate balance and diversity.

Substantially all of the Company's operations are conducted through the OP. VEREIT is the sole general partner and holder of 99.9% of the common equity interests in the OP as of September 30, 2021. Under the limited partnership agreement of the OP, as amended (the "LPA"), after holding common units of limited partner interests in the OP ("OP Units") for a period of one year and meeting the other requirements in the LPA, unless we otherwise consent to an earlier redemption, holders have the right to redeem the units for the cash value of a corresponding number of shares of Common Stock, as applicable, or, at our option, a corresponding number of shares of Common Stock, subject to adjustment pursuant to the terms of the LPA. The remaining rights of the holders of OP Units are limited, however, and do not include the ability to replace the General Partner or to approve the sale, purchase or refinancing of the OP's assets.

The actions of the OP and its relationship with the General Partner are governed by the LPA. The General Partner does not have any significant assets other than its investment in the OP. Therefore, the assets and liabilities of the General Partner and the OP are the same. Additionally, pursuant to the LPA, all administrative expenses and expenses associated with the formation, continuity, existence and operation of the General Partner incurred by the General Partner on the OP's behalf shall be treated as expenses of the OP. Further, when the General Partner issues any equity instrument that has been approved by the General Partner's Board of Directors, the LPA requires the OP to issue to the General Partner equity instruments with substantially similar terms, to protect the integrity of the Company's umbrella partnership REIT structure, pursuant to which each holder of interests in the OP has a proportionate economic interest in the OP reflecting its capital contributions thereto. OP Units issued to the General Partner are referred to as "General Partner OP Units". OP Units issued to parties other than the General Partner are referred to as "Limited Partner OP Units". Series F Preferred Units issued to the General Partner were historically referred to as "General Partner Series F Preferred Units". Series F Preferred Units issued to parties other than the General Partner were historically referred to as "Limited Partner Series F Preferred Units". The LPA also provides that the OP issue debt with terms and provisions consistent with debt issued by the General Partner. The LPA will be amended to provide for the issuance of any additional class of equivalent equity instruments to the extent the General Partner's Board of Directors authorizes the issuance of any new class of equity securities.

Merger with Realty Income Corporation

On April 29, 2021, the Company and the OP entered into an Agreement and Plan of Merger (the "Merger Agreement") with Realty Income Corporation ("Realty Income"), Rams MD Subsidiary I, Inc., a wholly owned subsidiary of Realty Income ("Merger Sub 1"), and Rams Acquisition Sub II, LLC, a wholly owned subsidiary of Realty Income ("Merger Sub 2") whereby Merger Sub 2 will be merged with and into the OP (the "Partnership Merger"), with the OP continuing as the surviving entity and, immediately thereafter, VEREIT will be merged with and into Merger Sub 1, with Merger Sub 1 continuing as the surviving corporation (the "Merger" and, together with the Partnership Merger, the "Mergers").

Pursuant to the terms and subject to the conditions of the Merger Agreement, each VEREIT common stockholder will have the right to receive 0.705 of newly issued shares of Realty Income common stock (the "Realty Income Common Stock"), par value $0.01 per share. In addition, at the effective time of the Partnership Merger (i) each outstanding General Partner OP Unit will remain outstanding as a common unit of partnership interest in the surviving entity, and (ii) certain outstanding Limited Partner OP Units will be converted into 0.705 of a newly issued share of Realty Income Common Stock, subject to adjustment. Holders of the Limited Partner OP Units will receive cash in lieu of fractional shares.

In connection with the Merger, the Company and Realty Income intend to contribute some or all of their office real properties to a newly formed, wholly owned subsidiary ("Orion"), and, following the Merger, Realty Income intends to distribute the outstanding voting shares of common stock in Orion to the shareholders of the combined company on a pro rata basis (the "Spin-Off"). Following the consummation of the Spin-Off, the Company and Realty Income intend for Orion to operate as a separate, publicly-traded REIT. Subject to the terms and conditions of the Merger Agreement, the Company and Realty Income may also seek to sell some or all of the Orion business in connection with the closing of the Merger.

The Merger Agreement contains customary representations, warranties and covenants by each party. The Merger is subject to certain conditions which are set forth in the Merger Agreement. Stockholders of VEREIT and Realty Income have both approved the Merger. The boards of directors of the Company and Realty Income have also unanimously approved the Merger Agreement. The Merger is expected to close on November 1, 2021 subject to the satisfaction or waiver of other closing conditions specified in the Merger Agreement.

Series F Preferred Stock

On August 15, 2021, the Company redeemed all outstanding shares of Series F Preferred Stock. Concurrently with the redemption of the Series F Preferred Stock, VEREIT OP redeemed all outstanding Series F Preferred Units of VEREIT OP in accordance with the terms of VEREIT OP's agreement of limited partnership. As a result, the Company's Series F Preferred Stock was de-listed from the NYSE effective August 16, 2021.

Note 2 - Summary of Significant Accounting Policies

Basis of Accounting

The consolidated financial statements of the Company presented herein include the accounts of the General Partner and its consolidated subsidiaries, including the OP. All intercompany transactions have been eliminated upon consolidation. The financial statements are prepared on the accrual basis of accounting in accordance with generally accepted accounting principles in the United States ("U.S. GAAP"). The information furnished includes all adjustments and accruals of a normal recurring nature, which, in the opinion of management, are necessary for a fair presentation of results for the interim periods. The results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the results for the entire year or any subsequent interim period.

These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2020 of the Company, which are included in the Company's Annual Report on Form 10-K filed on February 24, 2021. Information and footnote disclosures normally included in financial statements have been condensed or omitted pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the "SEC") and U.S. GAAP.

Principles of Consolidation and Basis of Presentation

The consolidated financial statements include the accounts of the Company and its consolidated subsidiaries and a consolidated joint venture. The portion of the consolidated joint venture not owned by the Company is presented as non-controlling interest in VEREIT's and the OP's consolidated balance sheets, statements of operations, statements of comprehensive income (loss) and statements of changes in equity. In addition, certain third parties were issued OP Units and Series F Preferred Units. Holders of OP Units are considered to be non-controlling interest holders in the OP and their ownership interest in the limited partner's share is presented as non-controlling interests in VEREIT's consolidated balance sheets, statements of operations, statements of comprehensive income (loss) and statements of changes in equity. Further, a portion of the earnings and losses of the OP are allocated to non-controlling interest holders based on their respective ownership percentages. Equity is reallocated between controlling and noncontrolling interests in the OP upon a change in ownership. At the end of each annual reporting period, noncontrolling interests in the OP are adjusted to reflect their ownership percentage in the OP through a reallocation between controlling and noncontrolling interests in the OP, as applicable. As of each of September 30, 2021 and December 31, 2020, there were approximately 0.2 million Limited Partner OP Units issued and outstanding, respectively. As of December 31, 2020, there were 49,766 Limited Partner Series F Preferred Units issued and outstanding. In connection with the redemption of all shares of outstanding Series F Preferred Stock on August 15, 2021 discussed above, the OP redeemed all outstanding Series F Preferred Units.

For legal entities being evaluated for consolidation, the Company must first determine whether the interests that it holds and fees it receives qualify as variable interests in the entity. A variable interest is an investment or other interest that will absorb portions of an entity's expected losses or receive portions of the entity's expected residual returns. The Company's evaluation includes consideration of fees paid to the Company where the Company acts as a decision maker or service provider to the entity being evaluated. If the Company determines that it holds a variable interest in an entity, it evaluates whether that entity is a variable interest entity ("VIE"). VIEs are entities where investors lack sufficient equity at risk for the entity to finance its activities without additional subordinated financial support or where equity investors, as a group, lack one of the following characteristics: (a) the power to direct the activities that most significantly impact the entity's economic performance, (b) the obligation to absorb the expected losses of the entity, or (c) the right to receive the expected returns of the entity. The Company consolidates entities that are not VIEs if it has a majority voting interest or other rights that result in effectively controlling the entity.

The Company then qualitatively assesses whether it is (or is not) the primary beneficiary of a VIE, which is generally defined as the party who has a controlling financial interest in the VIE. Consideration of various factors include, but are not limited to, the Company's ability to direct the activities that most significantly impact the entity's economic performance and its obligation to absorb losses from or right to receive benefits of the VIE that could potentially be significant to the VIE. The Company consolidates any VIEs when the Company is determined to be the primary beneficiary of the VIE and the difference between consolidating the VIE and accounting for it using the equity method could be material to the Company's consolidated financial statements. The Company continually evaluates the need to consolidate these VIEs based on standards set forth in U.S. GAAP.

Reverse Stock Split - Impact to Prior Period

The Company effected a one-for-five reverse stock split of Common Stock after markets closed on December 17, 2020, whereby every five shares of VEREIT's issued and outstanding shares of Common Stock, $0.01 par value per share, were converted into one share of Common Stock, $0.01 par value per share. A corresponding reverse split of the outstanding OP Units also took effect on December 17, 2020. Certain prior period amounts have been updated to reflect the reverse stock split including stock/unit and per share/unit amounts, additional paid-in capital, common stock and dividends on the consolidated statements of operations, consolidated balance sheets, consolidated statements of equity and notes to the financial statements. The reverse stock split did not affect the Company's total stockholder's equity, the common stock par value per share or the Company's authorized shares of common stock. No fractional shares of common stock were issued as fractional shares were settled in cash.

Prior Period Correction

Subsequent to the issuance of the Company's consolidated financial statements for the year ended December 31, 2020, the Company identified an overstatement in amounts recorded to depreciation expense. As a result, the Company revised the accompanying consolidated balance sheets as of December 31, 2020 to reduce accumulated depreciation and amortization and accumulated deficit and increase the General Partner's common equity by $30.6 million. The Company also revised the accompanying consolidated statements of operations to reduce depreciation and amortization by $0.9 million for the three months ended September 30, 2020 and by $2.8 million for the nine months ended September 30, 2020, which impacted total operating expenses, income before taxes, net income and net income attributable to the OP/General Partner. Basic and diluted net income per share attributable to common stockholders/unitholders (adjusted for the one-for-five stock split) for the three months ended September 30, 2020 changed from $0.40 to $0.41 and for the nine months ended September 30, 2020 remained constant at $0.95. The Company also revised the accompanying consolidated statements of changes in equity to reduce the accumulated deficit balances and increase the General Partner's common equity at January 1, 2021 and 2020 by $30.6 million and $26.9 million, respectively. For the periods in which the Company revised net income, it made corresponding changes to net income in the accompanying consolidated statements of comprehensive income (loss), consolidated statements of changes in equity and consolidated statements of cash flows. There was no impact to net cash provided by operating activities in the accompanying consolidated statements of cash flows due to the revisions. The Company determined that the correction is not material to the previously issued consolidated financial statements.

Revenue Recognition

Rental Revenue

The Company continually reviews receivables related to rent, straight-line rent and property operating expense reimbursements and determines collectability by taking into consideration the tenant's payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. The review includes a binary assessment of whether or not substantially all of the amounts due under a tenant's lease agreement are probable of collection. For leases that are deemed probable of collection, revenue continues to be recorded on a straight-line basis over the lease term and the Company recognizes a general allowance on a portfolio-wide basis. For leases that are deemed not probable of collection, revenue is recorded as cash is received and the Company reduces rental revenue for any straight-line rent receivables. The Company recognizes all changes in the collectability assessment for an operating lease as an adjustment to rental revenue. During the three and nine months ended September 30, 2021, rental revenue increased by $1.1 million and $1.9 million, respectively, as the Company deemed certain previously reserved receivables as collectible, which exceeded amounts deemed uncollectible during the three and nine months ended September 30, 2021.

Rental revenue also includes lease termination income collected from tenants to allow for the tenant to vacate their space prior to their scheduled termination dates, as well as amortization of above and below-market leases.

Merger, litigation and non-routine costs, net

The Company incurred costs for legal, investment banking and other services associated with the Merger, as well as legal fees and settlements associated with litigations and investigations resulting from the Audit Committee Investigation (defined below) and other corporate matters which are considered non-routine.

Merger, litigation and non-routine costs, net include the following costs and recoveries (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Merger, litigation and non-routine costs, net:
Merger costs $ 9,616 $ - $ 22,289 $ -
Legal fees and settlements (1)(2) (171 ) 105 174 (6,106 )
Insurance recoveries - - (6,345 ) (2,471 )
Total $ 9,445 $ 105 $ 16,118 $ (8,577 )

(1)Includes all fees and litigation settlements associated with various corporate matters and litigations and investigations prompted by the results of the 2014 investigation conducted by the audit committee (the "Audit Committee") of the Company's Board of Directors (the "Audit Committee Investigation"), net of accrual reversals.

(2)Negative balances are the result of estimated costs accrued in prior periods that exceeded actual expenses incurred.

Equity-based Compensation

The Company had a 2011 equity-based incentive award plan (the "2011 Equity Plan") for non-executive directors, officers, other employees and advisors or consultants who provided services to the Company, as applicable, and a non-executive director restricted share plan, which were accounted for under U.S. GAAP for share-based payments. On June 3, 2021, the Company's stockholders, upon the recommendation of the Board, approved the VEREIT, Inc. 2021 Equity Incentive Plan (the "2021 Plan"), which replaced the Company's 2011 Equity Plan and the non-executive director restricted share plan. All officers, employees, non-employee directors and consultants of the Company and its subsidiaries are eligible to receive awards under the 2021 Plan, which is accounted for under U.S. GAAP for share-based payments. The expense for equity-based incentive awards is recognized over the vesting period or when the requirements for exercise of the award have been met.

As of June 3, 2021, the General Partner had cumulatively awarded under its 2011 Equity Plan approximately 4.0 million shares of Common Stock, which was comprised of 0.8 million restricted share awards ("Restricted Shares"), net of the forfeiture of 0.7 million Restricted Shares through that date, 1.9 million restricted stock units ("Restricted Stock Units"), net of the forfeiture/cancellation of 0.4 million Restricted Stock Units through that date, 0.2 million deferred stock units ("Deferred Stock Units"), and 1.1 million stock options ("Stock Options"), net of forfeiture/cancellation of 0.1 million Stock Options through that date. As of June 3, 2021, the General Partner had cumulatively awarded a total of 9,000 shares under the non-executive director restricted share plan. As of September 30, 2021, the General Partner had cumulatively awarded 1,173 Deferred Stock Units under its 2021 Plan.

As of September 30, 2021, approximately 9.1 million shares, including 0.3 million shares of Common Stock subject to awards granted under the 2011 Plan that may become available for issuance or reissuance, as applicable, under the 2021 Plan if such awards are forfeited, canceled or otherwise terminated (other than by exercise), were available for issuance under the 2021 Plan.

The following is a summary of equity-based compensation expense for the three and nine months ended September 30, 2021 (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Time-Based Restricted Stock Units (1) $ 1,537 $ 1,412 $ 4,480 $ 4,195
Long-Term Incentive-Based Restricted Stock Units 1,455 1,416 4,009 3,916
Deferred Stock Units 27 53 1,138 1,071
Stock Options 169 330 590 955
Total $ 3,188 $ 3,211 $ 10,217 $ 10,137

(1)Includes stock compensation expense attributable to awards for which the requisite service period begins prior to the assumed future grant date.

As of September 30, 2021, total unrecognized compensation expense related to these awards was approximately $21.2 million, with an aggregate weighted-average remaining term of 2.3 years.

Recent Accounting Pronouncements

Reference Rate Reform

During the first quarter of 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the first quarter of 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future London Inter-Bank Offer Rate ("LIBOR")-indexed cash flows to assume that the index applicable to future hedged transactions matched the index on the corresponding derivatives. During the fourth quarter of 2020, the Company terminated its interest rate swap agreements with an aggregate $900.0 million notional amount and terminated its forward starting interest rate swaps with a total notional amount of $400.0 million, both of which were designated as cash flow hedges, in connection with the early repayment of borrowings under the Credit Facility Term Loan (as defined in Note 6 - Debt), as discussed in Note 7 - Derivatives and Hedging Activities. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

Note 3 - Real Estate Investments and Related Intangibles

Property Acquisitions

During the nine months ended September 30, 2021, the Company acquired controlling financial interests in 134 commercial properties for an aggregate purchase price of $419.2 million (the "2021 Acquisitions"), which includes $4.0 million of external acquisition-related expenses that were capitalized. Additionally, the Company placed in service one build-to-suit development project in which the Company invested $45.5 million, including $0.9 million of external acquisition-related expenses and interest that were capitalized and the land parcel acquired during the year ended December 31, 2020.

During the nine months ended September 30, 2020, the Company acquired controlling financial interests in 25 commercial properties for an aggregate purchase price of $147.1 million (the "2020 Acquisitions"), which includes the land parcel and capitalized external acquisition-related expenses and interest for the build-to-suit development discussed above.

The following table presents the allocation of the fair values of the assets acquired and liabilities assumed during the periods presented (in thousands):

Nine Months Ended September 30,
2021 2020
Real estate investments, at cost:
Land $ 77,303 $ 19,953
Buildings, fixtures and improvements 249,850 95,728
Total tangible assets 327,153 115,681
Acquired intangible assets:
In-place leases and other intangibles (1) 40,056 15,739
Above-market leases (2) 54,698 15,701
Assumed intangible liabilities:
Below-market leases (3) (2,726 ) -
Total purchase price of assets acquired $ 419,181 $ 147,121

(1)The weighted average amortization period for acquired in-place leases and other intangibles is 15.6 years and 18.1 years for 2021 Acquisitions and 2020 Acquisitions, respectively.

(2)The weighted average amortization period for acquired above-market leases is 18.2 years and 20.1 years for 2021 Acquisitions and 2020 Acquisitions, respectively.

(3)The weighted average amortization period for assumed below-market leases is 19.9 years for 2021 Acquisitions.

Property Dispositions and Real Estate Assets Held for Sale

During the nine months ended September 30, 2021, the Company disposed of 83 properties, for an aggregate sales price of $432.7 million. The dispositions resulted in proceeds of $420.2 million after closing costs. The Company recorded a gain of $96.5 million related to the dispositions, which is included in gain on disposition of real estate and real estate assets held for sale, net in the accompanying consolidated statements of operations.

During the nine months ended September 30, 2020, the Company disposed of 63 properties, including the sale of three consolidated properties to the office partnership, for an aggregate sales price of $376.2 million, of which our share was $373.4 million after the profit participation payments related to the disposition of four Red Lobster properties. The dispositions resulted in proceeds of $346.7 million after closing costs, including proceeds from the contribution of properties to the office partnership. The Company recorded a gain of $77.2 million related to the sales which is included in gain on disposition of real estate and real estate assets held for sale, net in the accompanying consolidated statements of operations.

As of September 30, 2021, there were seven properties classified as held for sale with a carrying value of $31.1 million, included in real estate assets held for sale, net, primarily comprised of land of $6.6 million and building, fixtures and improvements, net of $24.2 million, in the accompanying consolidated balance sheets, and are expected to be sold in the next 12 months as part of the Company's portfolio management strategy. During the nine months ended September 30, 2021 and 2020, the Company recorded losses of $0.2 million and $0.3 million, respectively, related to held for sale properties.

Intangible Lease Assets and Liabilities

Intangible lease assets and liabilities of the Company consisted of the following as of September 30, 2021 and December 31, 2020 (amounts in thousands, except weighted-average useful life):

Weighted-
Average Useful
Life 		September 30,
2021 		December 31,
2020
Intangible lease assets:
In-place leases and other intangibles, net of accumulated amortization of $845,355 and $810,597, respectively 17.4 $ 697,879 $ 745,026
Leasing commissions, net of accumulated amortization of $9,352 and $7,565, respectively 9.9 17,347 16,042
Above-market lease assets and deferred lease incentives, net of accumulated amortization of $137,033 and $125,455, respectively 23.2 210,285 167,776
Total intangible lease assets, net $ 925,511 $ 928,844
Intangible lease liabilities:
Below-market leases, net of accumulated amortization of $113,251 and $106,504, respectively 20.2 $ 111,140 $ 120,938

The aggregate amount of amortization of above-market and below-market leases and deferred lease incentives included as a net decrease to rental revenue was $4.5 million and $1.9 million for the nine months ended September 30, 2021 and 2020, respectively. The aggregate amount of in-place leases, leasing commissions and other lease intangibles amortized and included in depreciation and amortization expense was $84.7 million and $103.5 million for the nine months ended September 30, 2021 and 2020, respectively.

The following table provides the projected amortization expense and adjustments to rental revenue related to the intangible lease assets and liabilities for the next five years as of September 30, 2021 (in thousands):

Remainder
of 2021 		2022 2023 2024 2025 2026
In-place leases and other intangibles:
Total projected to be included in amortization expense $ 26,485 $ 94,760 $ 85,369 $ 76,406 $ 64,463 $ 58,180
Leasing commissions:
Total projected to be included in amortization expense 753 2,878 2,441 2,212 1,953 1,736
Above-market lease assets and deferred lease incentives:
Total projected to be deducted from rental revenue 5,446 21,975 21,070 19,718 18,283 16,231
Below-market lease liabilities:
Total projected to be included in rental revenue 3,481 12,924 12,248 10,494 9,290 8,766

Consolidated Joint Venture

The Company had an interest in one consolidated joint venture that owned one property as of September 30, 2021 and December 31, 2020. As of September 30, 2021 and December 31, 2020, the consolidated joint venture had total assets of $30.7 million and $33.0 million, respectively, of which $27.8 million and $29.1 million, respectively, were real estate investments, net of accumulated depreciation and amortization at each of the respective dates. The property is secured by a mortgage note payable, which is non-recourse to the Company and had a balance of $14.8 million as of December 31, 2020. During the three months ended September 30, 2021, the Company repaid the balance in full and there were no amounts outstanding as of September 30, 2021. The Company has the ability to control operating and financing policies of the consolidated joint venture. There are restrictions on the use of these assets as the Company is generally required to obtain the approval of the joint venture partner in accordance with the joint venture agreement for any major transactions. The Company and the joint venture partner are subject to the provisions of the joint venture agreement, which includes provisions for when additional contributions may be required to fund certain cash shortfalls.

Investment in Unconsolidated Entities

The following is a summary of the Company's investments in unconsolidated entities as of September 30, 2021 and December 31, 2020 and for the nine months ended September 30, 2021 and 2020 (dollar amounts in thousands):

Ownership
% (1)		 Number of
Properties 		Carrying Amount of
Investment

Equity in Income

Nine Months Ended

Investment September 30, 2021 September
30, 2021 		December
31, 2020 		September
30, 2021 		September
30, 2020
Industrial Partnership 20 % 7 $ 42,949 $ 45,378 $ 753 $ 584
Office Partnership (2) 20 % 5 14,588 13,435 621 380
Faison JV Bethlehem GA (3) - % - - - - 1,442
Total unconsolidated joint ventures $ 57,537 $ 58,813 $ 1,374 $ 2,406
Preferred equity (4) 22,826 22,826 - -
Total investment in unconsolidated entities $ 80,363 $ 81,639 $ 1,374 $ 2,406

____________________________________

(1)The Company's ownership interest reflects its legal ownership interest. Legal ownership may, at times, not equal the Company's economic interest in the listed properties because of various provisions in certain joint venture agreements regarding capital contributions, distributions of cash flow based on capital account balances, allocations of profits and losses and payments of preferred returns. As a result, the Company's actual economic interest (as distinct from its legal ownership interest) in certain of the properties could fluctuate from time to time and may not wholly align with its legal ownership interests.

(2)During the nine months ended September 30, 2021, the office partnership acquired one property from a third party for a purchase price of $26.4 million.

(3)During the nine months ended September 30, 2020, the Company had a 90% ownership interest in one property. On October 30, 2020, the Company closed on the purchase of the joint venture partner's 10% ownership interest.

(4)Represents a preferred equity interest in the development of one distribution center in which the Company is entitled to receive a cumulative preferred return of 9% per year on its contributions of $22.8 million. The Company has no further obligation to make additional contributions.

The aggregate debt outstanding of unconsolidated joint ventures and for the development of one distribution center in which the Company holds a preferred equity interest was $673.8 million and $550.5 million as of September 30, 2021 and December 31, 2020, respectively, which is non-recourse to the Company, as discussed in Note 6 - Debt.

The Company and the respective unconsolidated joint venture partners are subject to the provisions of the applicable joint venture agreements, which include provisions for when additional contributions may be required to fund certain cash shortfalls.

Note 4 - Rent and Tenant Receivables and Other Assets, Net

Rent and tenant receivables and other assets, net consisted of the following as of September 30, 2021 and December 31, 2020 (in thousands):

September 30, 2021 December 31, 2020
Straight-line rent receivable, net $ 289,312 $ 278,831
Accounts receivable, net 49,328 53,051
Deferred costs, net (1) 2,662 5,185
Investment in direct financing leases, net 5,422 6,547
Investment in Retained REITs (2) 7,948 7,255
Prepaid expenses 6,223 3,850
Leasehold improvements, property and equipment, net (3) 3,081 3,991
Other assets, net 7,935 7,910
Total $ 371,911 $ 366,620

(1)Amortization expense for deferred costs related to the revolving credit facilities totaled $0.8 million for each of the three months ended September 30, 2021 and 2020, respectively, and $2.5 million and $2.3 million for the nine months ended September 30, 2021 and 2020, respectively. Accumulated amortization for deferred costs related to the revolving credit facilities was $55.4 million and $52.9 million as of September 30, 2021 and December 31, 2020, respectively.

(2)On February 1, 2018, the Company sold certain of its equity investments to CCA Acquisition, LLC, an affiliate of CIM Group, LLC, retaining interests in Cole Office & Industrial REIT (CCIT II), Inc. ("CCIT II"), Cole Office & Industrial REIT (CCIT III), Inc. ("CCIT III") and Cole Credit Property Trust V, Inc. ("CCPT V" and, collectively with CCIT II and CCIT III, the "Retained REITs"). On December 21, 2020, CIM Real Estate Finance Trust, Inc. acquired CCIT III and CCPT V. On March 1, 2021, Griffin Capital Essential Asset REIT, Inc. acquired CCIT II. Subsequent to the Company's sale of Cole Capital, it carries these investments at fair value, as it does not exert significant influence over the Retained REITs, and any changes in the fair value are recognized in other income, net in the accompanying consolidated statement of operations. During the nine months ended September 30, 2021 and 2020, the Company recognized a gain of $0.7 million and a loss of $0.6 million, respectively, related to the change in fair value.

(3)Amortization expense for leasehold improvements totaled $0.1 million and $0.4 million for the three and nine months ended September 30, 2021, respectively, with no related write-offs. Amortization expense for leasehold improvements totaled $0.1 million and $0.4 million for the three and nine months ended September 30, 2020, respectively, with no related write-offs. Accumulated amortization was $3.8 million and $3.4 million as of September 30, 2021 and December 31, 2020, respectively. Depreciation expense for property and equipment totaled $0.2 million and $0.8 million for the three and nine months ended September 30, 2021, respectively, with no related write-offs. Depreciation expense for property and equipment totaled $0.3 million and $0.8 million for the three and nine months ended September 30, 2020, respectively, with no related write-offs. Accumulated depreciation was $7.3 million and $6.5 million as of September 30, 2021 and December 31, 2020, respectively.

Note 5 - Fair Value Measures

The Company determines fair value based on quoted prices when available or through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. U.S. GAAP guidance defines three levels of inputs that may be used to measure fair value:

Level 1 - Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability.

Level 3 - Unobservable inputs reflect the entity's own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques.

The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter. Changes in the type of inputs may result in a reclassification for certain assets. The Company does not expect that changes in classifications between levels will be frequent.

Items Measured at Fair Value on a Recurring Basis

The fair value of the Investment in Retained REITs was $7.9 million and $7.3 million as of September 30, 2021 and December 31, 2020, respectively. The fair values were estimated using the net asset value per share, as most recently disclosed by each applicable REIT. Each of the Retained REIT's share redemption programs includes restrictions that limit the number of shares redeemed by the respective Retained REIT.

The following are reconciliations of the changes in assets and liabilities with Level 3 inputs in the fair value hierarchy for the nine months ended September 30, 2021 and 2020 (in thousands):

Investment in
Retained REITs
Beginning balance, January 1, 2021 $ 7,255
Unrealized gain included in other income, net 693
Ending Balance, September 30, 2021 $ 7,948
Beginning balance, January 1, 2020 $ 7,552
Unrealized loss included in other income, net (609 )
Ending Balance, September 30, 2020 $ 6,943

Items Measured at Fair Value on a Non-Recurring Basis

Certain financial and nonfinancial assets and liabilities are measured at fair value on a non-recurring basis and are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment.

Real Estate and Other Investments - The Company performs quarterly impairment review procedures for real estate investments, leasehold improvements and property and equipment, right of use assets and investments in unconsolidated entities, primarily through continuous monitoring of events and changes in circumstances that could indicate the carrying value of these investments may not be recoverable.

As part of the Company's quarterly impairment review procedures, net real estate assets representing 56 properties were deemed to be impaired resulting in impairment charges of $59.3 million during the nine months ended September 30, 2021 that relate to certain office, retail and restaurant properties which, during the nine months ended September 30, 2021, were identified by management for potential sale or were determined would not be re-leased by the tenant. There were no impairment charges directly attributable to the COVID-19 pandemic during the nine months ended September 30, 2021.

During the nine months ended September 30, 2020, net real estate assets related to 47 properties, were deemed to be impaired resulting in impairment charges of $36.9 million. The impairment charges relate to certain retail and restaurant properties whose tenants filed for Chapter 11 bankruptcy during the nine months ended September 30, 2020, were identified by management for potential sale or were determined would not be re-leased by the tenant.

The Company estimates fair values using Level 3 inputs and uses a combined income and market approach, specifically using discounted cash flow analysis and recent comparable sales transactions. The evaluation of real estate assets for potential impairment requires the Company's management to exercise significant judgment and make certain key assumptions, including, but not limited to, the following: (1) capitalization rate; (2) discount rates; (3) number of years property will be held; (4) property operating expenses; and (5) re-leasing assumptions including number of months to re-lease, market rental revenue and required tenant improvements. There are inherent uncertainties in making these estimates such as market conditions and performance and sustainability of the Company's tenants. For the Company's impairment tests for the real estate assets during the nine months ended September 30, 2021, the Company used a range of discount rates from 7.9% to 10.5% with a weighted-average rate of 8.6% and capitalization rates from 7.4% to 10.0% with a weighted-average rate of 8.1%.

Goodwill - The Company evaluates goodwill for impairment annually or more frequently when an event occurs or circumstances change that indicate the carrying value may not be recoverable. The Company performed the annual qualitative assessment for goodwill during the fourth quarter of 2020, which resulted in no impairments. The Company continues to monitor factors that may impact the fair value of goodwill including, but not limited to, market comparable company multiples, stock price, interest rates, and global economic conditions including the COVID-19 pandemic.

Fair Value of Financial Instruments

The fair value of short-term financial instruments such as cash and cash equivalents, restricted cash and accounts payable approximate their carrying value in the accompanying consolidated balance sheets due to their short-term nature and are classified as Level 1 under the fair value hierarchy. The fair values of the Company's financial instruments are reported below (dollar amounts in thousands):

Level Carrying Amount
at September 30,
2021 		Fair Value at
September 30,
2021 		Carrying Amount
at December 31,
2020 		Fair Value at
December 31, 2020
Liabilities (1):
Mortgage notes payable and other debt, net 2 $ 991,699 $ 1,031,324 $ 1,334,689 $ 1,384,490
Corporate bonds, net 2 4,625,208 5,044,711 4,622,951 5,123,588
Credit facility 2 88,000 88,000 - -
Total liabilities $ 5,704,907 $ 6,164,035 $ 5,957,640 $ 6,508,078

(1)Current and prior period liabilities' carrying and fair values exclude net deferred financing costs.

Debt - The fair value is estimated by an independent third party using a discounted cash flow analysis, based on management's estimates of observable market interest rates. Corporate bonds are valued using quoted market prices in active markets with limited trading volume when available.

Note 6 - Debt

As of September 30, 2021, the Company had $5.7 billion of debt outstanding, including net premiums (discounts) and net deferred financing costs, with a weighted-average years to maturity of 5.5 years and a weighted-average interest rate of 3.86%. The following table summarizes the carrying value of debt as of September 30, 2021 and December 31, 2020, and the debt activity for the nine months ended September 30, 2021 (in thousands):

Nine Months Ended September 30, 2021
Balance as of
December 31,
2020 		Debt Issuances Repayments,
Extinguishment
and
Assumptions 		Accretion and
Amortization 		Balance as of
September 30,
2021
Mortgage notes payable:
Outstanding balance $ 1,333,195 $ - $ (341,392 ) $ - $ 991,803
Net premiums (discounts) (1) 1,495 - (1,041 ) (558 ) (104 )
Deferred costs (5,855 ) - 349 1,511 (3,995 )
Mortgage notes payable, net 1,328,835 - (342,084 ) 953 987,704
Corporate bonds:
Outstanding balance 4,650,000 - - - 4,650,000
Discount (2) (27,049 ) - - 2,257 (24,792 )
Deferred costs (38,721 ) - - 3,861 (34,860 )
Corporate bonds, net 4,584,230 - - 6,118 4,590,348
Credit facility - 192,000 (104,000 ) - 88,000
Total debt $ 5,913,065 $ 192,000 $ (446,084 ) $ 7,071 $ 5,666,052

(1)Net premiums (discounts) on mortgage notes payable were recorded upon the assumption of the respective mortgage notes in relation to the various mergers and acquisitions. Amortization of these net premiums is recorded as a reduction to interest expense over the remaining term of the respective mortgage notes using the effective-interest method.

(2)Discounts on the corporate bonds were recorded based upon the fair value of the respective debt instruments as of the respective issuance dates. Amortization of these discounts is recorded as an increase to interest expense over the remaining term of the respective debt instruments using the effective-interest method.

Mortgage Notes Payable

The Company's mortgage notes payable consisted of the following as of September 30, 2021 (dollar amounts in thousands):

Encumbered
Properties 		Net Carrying Value
of Collateralized
Properties (1)		 Outstanding
Balance

Weighted-Average

Interest Rate (2)

 Weighted-Average
Years to Maturity (3)
Fixed-rate debt 216 $ 1,160,118 $ 991,803 4.88 % 1.9

(1) Net carrying value is real estate assets, including investment in direct financing leases, net of real estate liabilities.

(2) Weighted average interest rate is computed using the interest rate in effect until the anticipated repayment date. Should the loan not be repaid at the anticipated repayment date, the applicable interest rate will increase as specified in the respective loan agreement until the extended maturity date.

(3) Weighted average years remaining to maturity is computed using the anticipated repayment date as specified in each loan agreement, where applicable.

The table above does not include mortgage notes associated with unconsolidated joint ventures and preferred equity investments of $673.8 million, which are non-recourse to the Company.

The Company's mortgage loan agreements generally restrict corporate guarantees and require the maintenance of financial covenants, including maintenance of certain financial ratios (such as debt service coverage ratios and minimum net operating income). The mortgage loan agreements contain no dividend restrictions except in the event of default or when a distribution would drive liquidity below the applicable thresholds. As of September 30, 2021, the Company believes that it was in compliance with the financial covenants under the mortgage loan agreements and had no restrictions on the payment of dividends.

The following table summarizes the scheduled aggregate principal repayments due on mortgage notes subsequent to September 30, 2021 (in thousands):

Total
October 1, 2021 - December 31, 2021 $ 399
2022 239,201
2023 124,217
2024 621,021
2025 1,078
2026 1,138
Thereafter 4,749
Total $ 991,803

Corporate Bonds

As of September 30, 2021, the OP had $4.65 billion aggregate principal amount of senior unsecured notes (the "Senior Notes") outstanding comprised of the following (dollar amounts in thousands):

Outstanding Balance
September 30, 2021 		Interest Rate Maturity Date
Senior Notes due 2024 $ 500,000 4.600 % February 6, 2024
Senior Notes due 2025 550,000 4.625 % November 1, 2025
Senior Notes due 2026 600,000 4.875 % June 1, 2026
Senior Notes due 2027 600,000 3.950 % August 15, 2027
Senior Notes due January, 2028 600,000 3.400 % January 15, 2028
Senior Notes due June, 2028 500,000 2.200 % June 15, 2028
Senior Notes due 2029 600,000 3.100 % December 15, 2029
Senior Notes due 2032 700,000 2.850 % December 15, 2032
Total balance and weighted-average interest rate $ 4,650,000 3.685 %

The Senior Notes are guaranteed by the General Partner. The OP may redeem all or a part of any series of the Senior Notes at any time, at its option, for the redemption prices set forth in the indenture governing the Senior Notes. Generally, 60 to 90 days prior to maturity, the redemption price will be equal to 100% of the principal amount of the Senior Notes. The Senior Notes are registered under the Securities Act of 1933, as amended (the "Securities Act") and are freely transferable.

The indenture governing our Senior Notes requires us to maintain financial ratios which include maintaining (i) a maximum limitation on incurrence of total debt less than or equal to 65% of Total Assets (as defined in the indenture), (ii) maximum limitation on incurrence of secured debt less than or equal to 40% of Total Assets (as defined in the indenture), (iii) a minimum debt service coverage ratio of at least 1.5x and (iv) a minimum unencumbered asset value of at least 150% of the aggregate principal amount of all of the outstanding Unsecured Debt (as defined in the indenture). As of September 30, 2021, the Company believes that it was in compliance with the financial covenants of our Senior Notes based on the covenant limits and calculations in place at that time.

On October 8, 2021, Realty Income announced the commencement of exchange offers and consent solicitations for all of the outstanding series of unsecured notes issued by the OP and guaranteed by the General Partner. The exchange offers and consent solicitations are being conducted in connection with, and are conditioned upon, the completion of the Merger.

Credit Facility

On May 23, 2018, the General Partner, as guarantor, and the OP, as borrower, entered into a credit agreement with Wells Fargo Bank, National Association as administrative agent and other lenders party thereto (the "Credit Agreement"). The Credit Agreement provided for maximum borrowings of $2.9 billion, originally consisting of a $2.0 billion unsecured revolving credit facility (the "Revolving Credit Facility") and a $900.0 million unsecured term loan facility (the "Credit Facility Term Loan," together with the Revolving Credit Facility, the "Credit Facility"). Effective December 27, 2019, the Company reduced the amount available under its Revolving Credit Facility from $2.0 billion to $1.5 billion. On May 27, 2020, the Operating Partnership and the Company, entered into Amendment No. 1 to the Credit Agreement (the "Amendment") which, among other things, modified the measurement period for certain financial covenants (and relevant associated definitions) from either the prior quarterly period annualized or the prior six month period to the four consecutive fiscal quarter period most recently ending. During the fourth quarter of 2020, the Company repaid the outstanding balance of $900.0 million on the Credit Facility Term Loan in connection with the termination of the related interest rate swap agreements discussed in Note 7 - Derivatives and Hedging Activities.

As of September 30, 2021, $88.0 million was outstanding under the Revolving Credit Facility. The maximum aggregate dollar amount of letters of credit that may be outstanding at any one time under the Credit Facility is $50.0 million. As of September 30, 2021, there were $1.3 million of letters of credit outstanding.

The Revolving Credit Facility generally bears interest at an annual rate of LIBOR plus 0.775% to 1.55% or Base Rate plus 0.00% to 0.55% (based upon the General Partner's then current credit rating). "Base Rate" is defined as the highest of the prime rate, the federal funds rate plus 0.50% or a floating rate based on one month LIBOR plus 1.0%, determined on a daily basis. The Credit Facility Term Loan generally bore interest at an annual rate of LIBOR plus 0.85% to 1.75%, or Base Rate plus 0.00% to 0.75% (based upon the General Partner's then current credit rating). In addition, the Credit Agreement provides the flexibility for interest rate auctions, pursuant to which, at the Company's election, the Company may request that lenders make competitive bids to provide revolving loans, which competitive bids may be at pricing levels that differ from the foregoing interest rates.

In the event of default, at the election of a majority of the lenders (or automatically upon a bankruptcy event of default with respect to the OP or the General Partner), the commitments of the lenders under the Credit Facility will terminate, and payment of any unpaid amounts in respect of the Credit Facility will be accelerated. The Revolving Credit Facility terminates on May 23, 2022, unless extended in accordance with the terms of the Credit Agreement. The Credit Agreement provides for two six-month extension options with respect to the Revolving Credit Facility, exercisable at the OP's election and subject to certain customary conditions, as well as certain customary "amend and extend" provisions. At any time, upon timely notice by the OP and subject to any breakage fees, the OP may prepay borrowings under the Credit Facility (subject to certain limitations applicable to the prepayment of any loans obtained through an interest rate auction, as described above). The OP incurs a facility fee equal to 0.10% to 0.30% per annum (based upon the General Partner's then current credit rating) multiplied by the commitments (whether or not utilized) in respect of the Revolving Credit Facility. The OP also incurs customary administrative agent, letter of credit issuance, letter of credit fronting, extension and other fees.

The Credit Facility requires restrictions on corporate guarantees, as well as the maintenance of financial covenants, including the maintenance of certain financial ratios (such as specified debt to equity and debt service coverage ratios). The key financial covenants in the Credit Facility, as defined and calculated per the terms of the Credit Agreement, include maintaining (i) a maximum leverage ratio less than or equal to 60%, (ii) a minimum fixed charge coverage ratio of at least 1.5x, (iii) a secured leverage ratio less than or equal to 45%, (iv) a total unencumbered asset value ratio less than or equal to 60% and (v) a minimum unencumbered interest coverage ratio of at least 1.75x. The Company believes that it was in compliance with the financial covenants pursuant to the Credit Agreement and is not restricted from accessing any borrowing availability under the Credit Facility as of September 30, 2021.

Note 7 - Derivatives and Hedging Activities

Cash Flow Hedges of Interest Rate Risk

As of September 30, 2021 and December 31, 2020, the Company had no interest rate swaps that were designated as qualifying hedging relationships. The Company had interest rate swap agreements with an aggregate $900.0 million notional amount, which were designated as cash flow hedges, and forward starting interest rate swaps with a total notional amount of $400.0 million, which were designated as cash flow hedges, that were terminated during the fourth quarter of 2020.

During the three and nine months ended September 30, 2020, the Company recorded unrealized gains of $3.7 million and unrealized losses of $81.4 million for changes in the fair value of the cash flow hedges in accumulated other comprehensive income. There were no such gains or losses recorded during the three and nine months ended September 30, 2021.

The Company reclassified previous losses of $0.1 million and $0.3 million for the three and nine months ended September 30, 2021, respectively, and losses of $5.4 million and $12.0 million for the three and nine months ended September 30, 2020, respectively, from accumulated other comprehensive income (loss) into interest expense as a result of the hedged transactions impacting earnings.

During the next twelve months, the Company estimates that an additional $0.4 million will be reclassified from other comprehensive income (loss) as an increase to interest expense.

Note 8 - Supplemental Cash Flow Disclosures

Supplemental cash flow information was as follows for the nine months ended September 30, 2021 and 2020 (in thousands):

Nine Months Ended September 30,
2021 2020
Supplemental disclosures:
Cash paid for interest $ 165,441 $ 176,694
Cash paid for income taxes $ 4,017 $ 5,601
Non-cash investing and financing activities:
Accrued capital expenditures, tenant improvements and real estate developments $ 10,499 $ 8,831
Real estate contributions to office partnership $ - $ 17,240
Distributions declared and unpaid $ 105,958 $ 85,421
Real estate investments received from lease related transactions $ 3,982 $ 259
Note receivable for disposal of real estate investments $ 4,500 $ -

Note 9 - Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consisted of the following as of September 30, 2021 and December 31, 2020 (in thousands):

September 30, 2021 December 31, 2020
Accrued interest $ 49,091 $ 44,164
Accrued real estate and other taxes 32,032 27,689
Accrued merger costs, legal fees and litigation settlements 12,775 11,245
Accounts payable 1,363 1,895
Accrued other 42,365 32,022
Total $ 137,626 $ 117,015

Note 10 - Commitments and Contingencies

The Company is party to various legal proceedings and claims which it believes are routine in nature and incidental to the operation of its business. Although we do not expect that these legal proceedings and claims will have a material adverse effect on our financial position, liquidity or results of operations, an adverse result in one or more matters could negatively affect our results in the period in which they occur, or in future periods.

As previously disclosed, on April 29, 2021, the Company entered into the Merger Agreement with Realty Income, Merger Sub 1 and Merger Sub 2. Pursuant to the terms and conditions of the Merger Agreement, upon the closing, (i) Merger Sub 2 will be merged with and into the OP, with the OP continuing as the surviving entity and, immediately following the Partnership Merger, (ii) VEREIT, Inc. will be merged with and into Merger Sub 1, with Merger Sub 1 continuing as the surviving corporation.

In connection with the proposed Mergers, Realty Income filed with the SEC a registration statement on Form S-4 containing a joint proxy statement/prospectus, as amended, and the Company filed a definitive proxy statement and Realty Income filed a definitive proxy statement/prospectus with the SEC, each dated June 29, 2021 (collectively, the "joint proxy statement/prospectus"), which the Company and Realty Income first mailed to their respective shareholders and stockholders on or about July 9, 2021.

Following the announcement of the Merger Agreement, purported stockholders of the Company filed twelve lawsuits challenging disclosures related to the Merger (the "Complaints"). The Complaints are Stein v. VEREIT, Inc., et al., Case No. 1:21-cv-01409 (D. Md. June 7, 2021) (the "Stein Complaint"); Bowles v. VEREIT, Inc., et al., Case No. 1:21-cv-00845 (D. Del. June 10, 2021) (the "Bowles Complaint"); Leach v. VEREIT, Inc., et al., Case No. 1:21-cv-05270 (S.D.N.Y. June 14, 2021) (the "Leach Complaint"); Jenkins v. VEREIT, Inc., et al., Case No. 1:21-cv-05286 (S.D.N.Y. June 15, 2021) (the "Jenkins Complaint"); Tacka v. VEREIT, Inc., et al., Case No. 1:21-cv-05357 (S.D.N.Y. June 17, 2021) (the "Tacka Complaint"); Congregation Zichron Moishe v. VEREIT, Inc., et al., Case No. 1:21-cv-01729 (D. Colo. June 24, 2021) (the "Congregation Zichron Moishe Complaint"); Mishra v. VEREIT, Inc., et al., Case No. 1:21-cv-01758 (D. Colo. June 28, 2021) (the "Mishra Complaint"); Walker v. VEREIT, Inc., et al., Case No. 1:21-cv-01791 (D. Colo. July 1, 2021) (the "Walker Complaint"); Ciccotelli v. VEREIT, Inc., et al., Case No. 2:21-cv-02983 (E.D. Pa. July 2, 2021) (the "Ciccotelli Complaint"); Upton v. VEREIT, Inc., et al., Case No. 1:21-cv-06129 (S.D.N.Y. July 16, 2021) (the "Upton Complaint"); Matten v. VEREIT, Inc., et al., Case No. 1:21-cv-06212 (S.D.N.Y. July 21, 2021) (the "Matten Complaint"); and Halberstam v. VEREIT, Inc., et al., Case No. 1:21-cv-02000 (D. Colo. July 23, 2021 (the "Halberstam Complaint").

The Stein, Leach, Tacka, Matten and Halberstam Complaints name VEREIT, Inc. and the members of the Company's board of directors as defendants. The Congregation Zichron Moishe, Mishra, Walker and Upton Complaints name VEREIT, Inc., the OP, and the members of the Company's board of directors as defendants. The Bowles and Ciccotelli Complaints name VEREIT, Inc., the members of the Company's board of directors, OP, Realty Income, Merger Sub 1 and Merger Sub 2 as defendants. The Jenkins Complaint names VEREIT, Inc., the members of the Company's board of directors, Realty Income, Merger Sub 1 and Merger Sub 2 as defendants.

Each of the Complaints alleges that VEREIT, Inc. and the members of the Company's board of directors violated Section 14(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and Rule 14a-9 promulgated thereunder by preparing and disseminating a registration statement that misstates or omits certain allegedly material information. Each of the Complaints also alleges that the members of the Company's board of directors violated Section 20(a) of the Exchange Act by causing the Company to disseminate a misleading registration statement. The Bowles and Ciccotelli Complaints further allege that Realty Income and the OP violated Section 20(a) of the Exchange Act. The Mishra, Congregation Zichron Moishe, Walker and Upton Complaints further allege that Realty Income and the OP violated Section 14(a) of the Exchange Act and Rule 14a-9 promulgated thereunder. The Jenkins Complaint further alleges that Realty Income, Merger Sub 1 and Merger Sub 2 violated Section 14(a) of the Exchange Act and Rule 14a-9 promulgated thereunder, that the members of the Company's board of directors have violated the fiduciary duties they owe towards the Company's stockholders by causing the Company to enter into the Merger at an unfair price and through an unfair process, and that VEREIT, Inc., Realty Income, Merger Sub 1 and Merger Sub 2 aided and abetted this alleged breach of fiduciary duty.

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

The Company and all of the individual defendants named in the Complaints believe that the claims asserted in the Complaints are entirely without merit. While the defendants believe that the disclosures set forth in the joint proxy statement/prospectus comply fully with applicable law, to moot plaintiffs' disclosure claims and to avoid nuisance, potential expense and delay, on July 30, 2021, the Company voluntarily supplemented the joint proxy statement/prospectus with certain disclosures. In light of these additional disclosures, counsel for the plaintiffs who filed the Complaints agreed to dismiss, or seek authority from their clients to dismiss, their respective actions. Nothing in the Company's supplemental disclosures will be deemed an admission of the legal necessity or materiality under applicable law of any of the disclosures set forth therein or of the existence of any misrepresentations or omissions in the joint proxy statement/prospectus. To the contrary, the Company denies all allegations in the Complaints that any additional disclosure was or is required. Between August 2, 2021 and October 27, 2021, plaintiffs' counsel in all of the cases voluntarily dismissed their respective complaints.

Purchase Commitments

In the normal course of business, the Company enters into various types of commitments to purchase real estate properties. These commitments are generally subject to the Company's customary due diligence process and, accordingly, a number of specific conditions must be met before the Company is obligated to purchase the properties.

Environmental Matters

In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. The Company has not been notified by any governmental authority of any non-compliance, liability or other claim, and is not aware of any other environmental condition, in each case, that it believes will have a material adverse effect on the results of operations.

Note 11 - Leases

Lessor

The Company is the lessor for its 3,882 retail, restaurant, office and industrial properties. The Company's operating and direct financing leases have non-cancelable lease terms of 0.08 years to 25.0 years. Certain leases with tenants include options to extend or terminate the lease agreements or to purchase the underlying asset. Lease agreements may also contain rent increases that are based on an index or rate (e.g., the consumer price index ("CPI") or LIBOR). The Company believes the residual value risk is not a primary risk because of the long-lived nature of the assets.

The components of rental revenue from the Company's operating and direct financing leases were as follows (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Fixed:
Cash rent $ 264,466 $ 255,996 $ 799,943 $ 778,697
Straight-line rent 3,560 12,595 12,392 18,053
Lease intangible amortization (1,164 ) (393 ) (4,541 ) (1,929 )
Property operating cost reimbursements 1,373 1,581 4,045 4,372
Sub-lease (1) 4,898 5,175 14,623 15,718
Total fixed 273,133 274,954 826,462 814,911
Variable (2) 16,422 18,585 43,711 55,438
Income from direct financing leases 116 153 374 505
Total rental revenue $ 289,671 $ 293,692 $ 870,547 $ 870,854

(1) The Company's tenants are generally sub-tenants under certain ground leases and are responsible for paying the rent under these leases.

(2) Includes costs reimbursed related to property operating expenses, common area maintenance and percentage rent, including these costs reimbursed by ground lease sub-tenants.

The following table presents future minimum operating lease payments due to the Company over the next five years and thereafter as of September 30, 2021 (in thousands). These amounts exclude contingent rent payments, as applicable, that may be collected from certain tenants based on provisions related to sales thresholds and increases in annual rent based on exceeding certain economic indexes.

Future Minimum
Operating Lease Payments 		Future Minimum
Direct Financing Lease Payments (1)
October 1, 2021 - December 31, 2021 $ 251,110 $ 501
2022 1,009,650 1,925
2023 954,282 1,565
2024 890,154 510
2025 790,230 169
2026 730,788 171
Thereafter 4,532,336 484
Total $ 9,158,550 $ 5,325

(1) Related to 18 properties which are subject to direct financing leases and, therefore, revenue is recognized as rental income on the discounted cash flows of the lease payments. Amounts reflect undiscounted cash flows to be received by the Company under the lease agreements on these respective properties.

Lessee

The Company is the lessee under ground lease arrangements and corporate office leases. All leases for which the Company is the lessee meet the criteria of an operating lease. The Company's leases have remaining lease terms of 0.2 years to 77.9 years, some of which include options to extend. The weighted average remaining lease term for the Company's operating leases was 15.6 years as of September 30, 2021. Under certain ground lease arrangements, the Company pays variable costs, including property operating expenses and common area maintenance, which are generally reimbursed by the ground lease sub-tenants. The weighted average discount rate for the Company's operating leases was 4.91% as of September 30, 2021. As the Company's leases do not provide an implicit rate, the Company used an estimated incremental borrowing rate based on the information available at the adoption date in determining the present value of lease payments.

The Company incorporated renewal periods in the calculation of the majority of ground lease right-of-use assets and lease liabilities. Pursuant to certain leases, the Company is required to execute renewal options available under the ground lease through the building lease term. No renewals were incorporated in the calculation of the corporate lease right-of-use assets and liabilities, as it is not reasonably certain that the Company will exercise the options. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The following table presents the lease expense components for the three and nine months ended September 30, 2021 and 2020 (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Operating lease cost (1) $ 5,704 $ 5,933 $ 16,932 $ 19,643
Sublease income (2) $ (4,898 ) $ (5,175 ) $ (14,623 ) $ (15,718 )

(1) No cash paid for operating lease liabilities was capitalized.

(2) The Company's tenants are generally sub-tenants under certain ground leases and are responsible for paying the rent under these leases.

During the nine months ended September 30, 2021, the Company reduced the right-of-use assets and operating lease liabilities by $0.6 million and $4.1 million, respectively, for non-cash activity related to dispositions and lease modifications. The Company increased the right-of-use assets and operating lease liabilities each by $0.9 million during the nine months ended September 30, 2020.

The following table reflects the maturity analysis of payments due from the Company over the next five years and thereafter for ground lease obligations, which are substantially reimbursable by our tenants, and office lease obligations as of September 30, 2021 (in thousands).

Future Minimum
Lease Payments
October 1, 2021 - December 31, 2021 $ 5,649
2022 21,069
2023 20,571
2024 19,942
2025 19,644
2026 18,247
Thereafter 187,379
Total 292,501
Less: imputed interest 95,830
Total $ 196,671

Note 12 - Equity

Reverse Stock Split

The Company's one-for-five reverse stock split of its Common Stock took effect after markets closed on December 17, 2020, following the filing of amendments to its charter with the Maryland State Department of Assessments and Taxation whereby every five shares of VEREIT's issued and outstanding shares of Common Stock, $0.01 par value per share, were converted into one share of Common Stock, $0.01 par value per share. VEREIT's Common Stock began trading on the NYSE on a split-adjusted basis beginning December 18, 2020. Fractional shares resulting from the reverse stock split were paid in cash based on the trailing average closing price of VEREIT's Common Stock on the NYSE for a period of three days prior to the effective date. The reverse stock split affected all record holders of VEREIT's Common Stock uniformly and did not affect any record holder's percentage ownership interest, except for de minimus changes as a result of the elimination of fractional shares. Trading in the Common Stock continued on the NYSE under the symbol "VER" but the Common Stock was assigned a new CUSIP number. The reverse stock split reduced the number of shares of Common Stock outstanding but did not affect the number of VEREIT's authorized shares of Common Stock. A corresponding reverse split of the outstanding OP Units also took effect on December 17, 2020.

Common Stock and General Partner OP Units

The General Partner is authorized to issue up to 1.5 billion shares of Common Stock.

As of September 30, 2021, the General Partner had approximately 229.2 million shares of Common Stock issued and outstanding. Additionally, the Operating Partnership had approximately 229.2 million General Partner OP Units issued and outstanding as of September 30, 2021, corresponding to the General Partner's outstanding shares of Common Stock.

Common Stock Continuous Offering Program

On February 25, 2021, the Company established a new continuous equity offering program pursuant to which the Company can sell shares of Common Stock having an aggregate offering price of up to $1.5 billion in "at-the-market" offerings or certain other transactions (the "New ATM Program"). Under the New ATM Program, the Company may also enter into one or more forward transactions under separate master forward sale confirmations and related supplemental confirmations for the sale of shares of its common stock on a forward basis.

The New ATM Program replaced the Company's prior continuous equity offering program, which was effective April 15, 2019 (the "Prior ATM Program" and collectively with the New ATM Program, the "ATM Program"). The proceeds from any sale of shares under the ATM Program have been and will be used for general corporate purposes, which may include funding potential acquisitions and repurchasing or repaying outstanding indebtedness.

During the nine months ended September 30, 2021, the Company issued an aggregate of 35,710 shares under the Prior ATM Program, at a weighted average price per share of $37.90, for gross proceeds of $1.4 million. The weighted average price per share, net of commissions, was $37.42, for net proceeds of $1.3 million. As of September 30, 2021, the Company sold an aggregate of $572.2 million under the Prior ATM Program, which had an initial capacity of $750.0 million. No shares have been issued under the New ATM Program as of September 30, 2021.

Series F Preferred Stock and Series F Preferred OP Units

On August 15, 2021, the Company redeemed all outstanding shares of Series F Preferred Stock. Concurrently with the redemption of the Series F Preferred Stock, VEREIT OP redeemed all outstanding Series F Preferred Units of VEREIT OP in accordance with the terms of VEREIT OP's agreement of limited partnership. The shares of Series F Preferred Stock were redeemed at a redemption price of $25.00 per share.

Common Stock Dividends

On August 4, 2021, the Company's Board of Directors declared a quarterly cash dividend for the third quarter of 2021 of $0.462 per share of Common Stock. The dividend was paid on October 15, 2021 to Common Stock stockholders of record as of September 30, 2021. An equivalent distribution by the Operating Partnership is applicable per OP Unit.

Share Repurchase Program

The Company has a share repurchase program (the "Share Repurchase Program"), that permits the Company to repurchase up to $200.0 million of its outstanding Common Stock through May 6, 2022. Under the Share Repurchase Program, repurchases can be made through open market purchases, privately negotiated transactions, structured or derivative transactions, including accelerated stock repurchase transactions, or other methods of acquiring shares in accordance with applicable securities laws and other legal requirements. The Share Repurchase Program does not obligate the Company to make any repurchases at a specific time or in a specific situation and repurchases are influenced by prevailing market conditions, the trading price of the Common Stock, the Company's financial performance and other conditions. Shares of Common Stock repurchased by the Company under the Share Repurchase Program, if any, will be returned to the status of authorized but unissued shares of Common Stock. As of September 30, 2021, there were no share repurchases under the Share Repurchase Program.

Note 13 - Net Income (Loss) Per Share/Unit

Net Income (Loss) Per Share

The following is a summary of the basic and diluted net income per share computation for the General Partner for the three and nine months ended September 30, 2021 and 2020 (dollar amounts in thousands):

Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Net income $ 61,613 $ 98,917 $ 260,239 $ 241,885
Net income attributable to non-controlling interests (48 ) (51 ) (131 ) (137 )
Net income attributable to the General Partner 61,565 98,866 260,108 241,748
Dividends to preferred shares and units (3,124 ) (10,771 ) (15,897 ) (36,667 )
Net income available to common stockholders used in basic net income per share 58,441 88,095 244,211 205,081
Income attributable to limited partners 58 65 172 166
Net income used in diluted net income per share $ 58,499 $ 88,160 $ 244,383 $ 205,247
Weighted average number of Common Stock outstanding - basic 229,271,106 216,737,561 229,227,755 216,002,172
Effect of Limited Partner OP Units and dilutive securities 908,334 290,114 661,115 285,993
Weighted average number of common shares - diluted 230,179,440 217,027,675 229,888,870 216,288,165
Basic and diluted net income per share attributable to common stockholders $ 0.25 $ 0.41 $ 1.06 $ 0.95

Net Income (Loss) Per Unit

The following is a summary of the basic and diluted net income per unit attributable to common unitholders, which includes all common General Partner unitholders and limited partner unitholders, for the three and nine months ended September 30, 2021 and 2020 (dollar amounts in thousands):

Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Net income $ 61,613 $ 98,917 $ 260,239 $ 241,885
Net loss attributable to non-controlling interests 10 14 41 29
Net income attributable to the Operating Partnership 61,623 98,931 260,280 241,914
Dividends to preferred shares and units (3,124 ) (10,771 ) (15,897 ) (36,667 )
Net income used in basic and diluted net income per unit $ 58,499 $ 88,160 $ 244,383 $ 205,247
Weighted average number of common units outstanding - basic 229,423,140 216,891,891 229,379,789 216,157,976
Effect of dilutive securities 756,300 135,784 509,081 130,189
Weighted average number of common units - diluted 230,179,440 217,027,675 229,888,870 216,288,165
Basic and diluted net income per unit attributable to common unitholders $ 0.25 $ 0.41 $ 1.06 $ 0.95

Note 14 - Subsequent Events

Common Stock Dividend

On October 14, 2021, the Company's Board of Directors declared a monthly cash dividend of $0.154 per share of Common Stock for the month of October, which represents one-third of its prior quarterly dividend. The dividend will be payable on November 15, 2021 to shareholders of record on November 2, 2021, only if the Merger has not closed prior to that date.

Unsecured Notes Exchange Offers

On October 8, 2021, Realty Income commenced offers to exchange all validly tendered and accepted notes of each of the series of notes issued by VEREIT Operating Partnership listed in the table in Note 6 - Debt, for notes to be issued by Realty Income (collectively, the "Realty Notes"). A Registration Statement on Form S-4 (File No. 333-260165) (the "Registration Statement") relating to the issuance of the Realty Notes was filed with the SEC on October 8, 2021 and was declared effective by the SEC on October 22, 2021. On October 25, 2021 Realty Income announced that as of October 22, 2021, more than 95% of the aggregate principal amount of each of the series of outstanding Senior Notes were validly tendered and not validly withdrawn in connection with the previously announced exchange offers. The exchange offers will expire on November 5, 2021, and are conditioned upon, among other things, the consummation of the Merger.

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Realty Income Corporation published this content on 12 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 November 2021 22:02:17 UTC.