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Merger with VEREIT, Inc. (Tables) | 3 Months Ended
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Mar. 31, 2022
Business Combination and Asset Acquisition [Abstract] |
Schedule of fair value of the consideration transferred on the date of the acquisition | The fair value of the consideration transferred on the date of the acquisition is as follows (in thousands, except share and per share data):
Shares of VEREIT common stock and VEREIT Operating Partnership, L.P. ("OP") common units exchanged (1) |  | 229,304,035 |
Exchange Ratio |  | 0.705
|  | 161,659,345
Less: Fractional shares settled in cash |  | (1,545)
Shares of Realty Income common stock and Realty Income L.P. units issued |  | 161,657,800
Adjusted opening price of Realty common stock on November 1, 2021 (2) |  | $ | 71.236 |
Fair value of Realty common stock issued to former holders of VEREIT common stock and VEREIT OP common units |  | $ | 11,515,855 |
Fair value of VEREIT's equity-based compensation awards attributable to pre-combination services (3) |  | 44,020 |
Total non-cash consideration |  | 11,559,875 |
Cash paid for fractional shares |  | 110 |
VEREIT indebtedness paid off in connection with the merger (4) |  | 500,414 |
Consideration transferred |  | $ | 12,060,399 |
(1) Includes 229,152,001 shares of VEREIT common stock and 152,034 VEREIT OP common units outstanding as of November 1, 2021. Under the Merger Agreement, these shares and units were converted to Realty Income common stock, or in certain instances, Realty Income L.P. units, at an Exchange Ratio of 0.705 per share of VEREIT common stock or VEREIT OP common unit, as applicable. (2) The fair value of Realty Income common stock issued to former holders of VEREIT common stock and VEREIT OP common units is based on the per share opening price of Realty Income common stock of $71.00 on November 1, 2021, adjusted for the monthly dividend of $0.236 per share that former holders of VEREIT common stock and VEREIT OP common units were eligible to receive when such dividend was paid on November 15, 2021. (3) Represents the fair value of fully vested deferred stock unit awards of VEREIT common stock (“VEREIT DSU Awards”) which were converted into Realty Income common stock upon our merger with VEREIT, as well as the estimated fair value of the Realty Income replacement employee and executive stock options and restricted stock units that were granted at the closing date of our merger with VEREIT and which were attributable to pre-combination services. (4) Represents the outstanding balance of the VEREIT revolving credit facility repaid by Realty Income in connection with the closing of the merger. The amount shown in the table above was based upon the balance outstanding immediately prior to November 1, 2021.
Schedule of preliminary estimated fair values of the assets acquired and liabilities assumed at the date of acquisition | The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the date of acquisition (in thousands):
ASSETS |  |
Land |  | $ | 3,021,906 |
Buildings |  | 8,677,467 |
Total real estate held for investment |  | 11,699,373 |
Cash and cash equivalents |  | 128,411 |
Accounts receivable |  | 53,355 |
Lease intangible assets (1) |  | 3,204,773 |
Goodwill |  | 3,698,123 |
Investment in unconsolidated entities |  | 194,876 |
Other assets |  | 308,910 |
Total assets acquired |  | $ | 19,287,821 |
LIABILITIES |  |
Accounts payable and accrued expenses |  | $ | 139,836 |
Lease intangible liabilities (2) |  | 949,349 |
Other liabilities |  | 320,893 |
Mortgages payable |  | 869,027 |
Notes payable |  | 4,946,965 |
Total liabilities assumed |  | $ | 7,226,070 |
Net assets acquired, at fair value |  | $ | 12,061,751 |
Noncontrolling interests |  | $ | 1,352 |
Total purchase price |  | $ | 12,060,399 |
(1) The weighted average amortization period for acquired lease intangible assets is 9.3 years. (2) The weighted average amortization period for acquired lease intangible liabilities is 25.5 years.
Schedule of pro forma information | The following unaudited pro forma information presents a summary of our combined results of operations for the three months ended March 31, 2021, as if our merger with VEREIT had occurred on January 1, 2020 (in millions, except per share data). There are no pro forma adjustments for the three months ended March 31, 2022, as the merger was completed November 1, 2021. Amounts for the three months ended March 31, 2022, are presented for comparative purposes. The following pro forma financial information is not necessarily indicative of the results of operations had the acquisition been effected on the assumed date, nor is it necessarily an indication of trends in future results for a number of reasons, including, but not limited to, differences between the assumptions used to prepare the pro forma information, basic shares outstanding and dilutive equivalents, cost savings from operating efficiencies, potential synergies, and the impact of incremental costs incurred in integrating the businesses. In accordance with ASC 805, Business Combinations, the following information excludes the impact of the spin-off of office assets to Orion Office REIT Inc.
| Three Months Ended March 31,
| 2022 |  | 2021
Total revenues | $ | 807.3 |  |  | $ | 742.5 |
Net income | $ | 200.0 |  |  | $ | 189.8 |
Basic and diluted earnings per share | $ | 0.34 |  |  | $ | 0.36 |

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- Definition Tabular disclosure of a material business combination completed during the period, including background, timing, and recognized assets and liabilities. This table does not include leveraged buyouts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=79982066&loc=d3e1486-128463 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=79982066&loc=d3e1392-128463 + Details
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- Definition Tabular disclosure of the amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed. May include but not limited to the following: (a) acquired receivables; (b) contingencies recognized at the acquisition date; and (c) the fair value of noncontrolling interests in the acquiree. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=123413009&loc=d3e4845-128472 + Details
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