UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission File Number 1-13374 REALTY INCOME CORPORATION (Exact name of registrant as specified in its charter) Maryland 33-0580106 (State or Other Jurisdiction of Incorporation or Organization) (IRS Employer Identification No.) 11995 El Camino Real, San Diego, California, 92130 (Address of Principal Executive Offices) Registrant’s telephone number, including area code: (858) 284-5000 Securities registered pursuant to Section 12(b) of the Act: Title of each Class Trading Symbol Name of each exchange on which registered Common Stock, $0.01 Par Value O New York Stock Exchange 1.625% Notes due 2030 O30 New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer a smaller reporting company. or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ At June 30, 2020, the aggregate market value of the Registrant’s shares of common stock, $0.01 par value, held by non-affiliates of the Registrant was $20.5 billion based upon the last reported sale price of $59.50 per share on the New York Stock Exchange on June 30, 2020, the last business day of the Registrant’s most recently completed second fiscal quarter. The determination of affiliate status for purposes of this calculation is not necessarily a conclusive determination for other purposes. At February 15, 2021, the number of shares of common stock outstanding was 373,390,661. DOCUMENTS INCORPORATED BY REFERENCE Part III, Items 10, 11, 12, 13, and 14 incorporate by reference certain specific portions of the definitive Proxy Statement for Realty Income Corporation’s Annual Meeting to be held on May 18, 2021, to be filed pursuant to Regulation 14A. Only those portions of the proxy statement which are specifically incorporated by reference herein shall constitute a part of this annual report. Table of Contents REALTY INCOME CORPORATION Index to Form 10-K PART I Page Item 1: Business 2 The Company 2 Recent Developments 3 Dividend Policy 9 Business Philosophy and Strategy 10 Property Portfolio Information 19 Forward-Looking Statements 24 Item 1A: Risk Factors 25 Item 1B: Unresolved Staff Comments 39 Item 2: Properties 39 Item 3: Legal Proceedings 39 Item 4: Mine Safety Disclosures 39 PART II Item 5: Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity 40 Securities Item 6: Selected Financial Data 40 Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations 42 General 42 Liquidity and Capital Resources 42 Results of Operations 50 Funds from Operations Available to Common Stockholders (FFO) 57 Adjusted Funds from Operations Available to Common Stockholders (AFFO) 58 Impact of Inflation 60 Impact of Newly Adopted Accounting Standards 60 Item 7A: Quantitative and Qualitative Disclosures About Market Risk 60 Item 8: Financial Statements and Supplementary Data 62 Item 9: Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 95 Item 9A: Controls and Procedures 95 Item 9B: Other Information 96 PART III Item 10: Directors, Executive Officers and Corporate Governance 97 Item 11: Executive Compensation 97 Table of Contents Item 12: Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 97 Item 13: Certain Relationships, Related Transactions and Director Independence 97 Item 14: Principal Accounting Fees and Services 97 PART IV Item 15: Exhibits and Financial Statement Schedules 97 SIGNATURES 102 Table of Contents PART I Item 1: Business THE COMPANY Realty Income, The Monthly Dividend Company®, is an S&P 500 company dedicated to providing stockholders with dependable monthly dividends that increase over time. The company is structured as a real estate investment trust, or REIT, requiring it to annually distribute at least 90% of its taxable income (excluding net capital gains) in the form of dividends to its stockholders. The monthly dividends are supported by the cash flow generated from real estate owned under long-term net lease agreements with our commercial clients. Realty Income was founded in 1969, and listed on the New York Stock Exchange (NYSE: O) in 1994. Over the past 52 years, Realty Income has been acquiring and managing freestanding commercial properties that generate rental revenue under long-term net lease agreements with our commercial clients. We refer to our tenants as clients, because we strive to build mutually beneficial relationships and we believe their success is our success. The company is a member of the S&P 500 Dividend Aristocrats® index for having increased its dividend every year for more than 25 consecutive years. At December 31, 2020, we owned a diversified portfolio: • Of 6,592 properties; • With an occupancy rate of 97.9%, or 6,452 properties leased and 140 properties available for lease or sale; • Doing business in 51 separate industries; • Located in 49 U.S. states, Puerto Rico and the United Kingdom (U.K.); • With approximately 110.8 million square feet of leasable space; • With a weighted average remaining lease term (excluding rights to extend a lease at the option of our client) of approximately 9.0 years; and • With an average leasable space per property of approximately 16,810 square feet; approximately 12,340 square feet per retail property and 245,270 square feet per industrial property. Of the 6,592 properties in the portfolio at December 31, 2020, 6,555, or 99.4%, are single-client properties, of which 6,419 were leased, and the remaining are multi-client properties. Our eight senior officers owned 0.05% of our outstanding common stock with a market value of $12.5 million at February 15, 2021. Our directors and seven senior officers, as a group, owned 0.15% of our outstanding common stock with a market value of $34.3 million at February 15, 2021. Our common stock is listed on the NYSE under the ticker symbol “O” with a CUSIP number of 756109-104. Our 1.625% notes due December 2030 are listed on the NYSE under the ticker symbol "O30" with a CUSIP number of 756109-AY0. Our central index key number is 726728. In January 2021, we had 210 employees, inclusive of two part-time employees, as compared to 196 employees, inclusive of two part-time employees, in January 2020. We maintain a corporate website at www.realtyincome.com. On our website we make available, free of charge, copies of our annual report on Form 10-K, quarterly reports on Form 10-Q, Form 3s, Form 4s, Form 5s, current reports on Form 8-K, and amendments to those reports, as soon as reasonably practicable after we electronically file these reports with the Securities and Exchange Commission, or SEC. None of the information on our website is deemed to be part of this report. -2- Table of Contents RECENT DEVELOPMENTS Theater Industry Update As of December 31, 2020, our clients in the theater industry represented 5.6% of our annualized contractual rent. Given the ongoing disruption to this industry due to the COVID-19 pandemic, we performed a property-level analysis on the collectability of rent for our theater properties. Our analysis involved the assignment of quartile rankings for each asset’s pre-pandemic EBITDAR relative to each operator’s overall footprint. Other criteria utilized included an analysis of the property’s pre-pandemic annual EBITDA generation before corporate overhead, and real estate fundamentals.