Realty Income Corporation

Tax and financial reporting · Tax compliance and changes in tax law

Property taxes may increase without notice. Real estate property taxes on our properties (including properties we develop or acquire) may increase as property tax rates change and as those properties are assessed or reassessed by tax authorities.

Legal and litigation · Product liability and warranty claims

Uninsured property liability; Property damage or casualty losses, including physical or weather-related damage to properties.

Industry regulation · Safety and environmental regulations

Expenditures for capital improvements, including requirements to bring properties into compliance with applicable U.S. and non-U.S. federal, state and local laws and regulations such as the Americans with Disabilities Act of 1990, state and local fire and safety regulations, and building performance standards (such as, for example, energy, water, and waste efficiency).

Industry regulation · Licensing and permits

We may face extensive regulations from gaming and other regulatory authorities regarding current and future gaming properties. The ownership, operation, and management of gaming facilities are subject to extensive regulation. Gaming authorities also retain great discretion such that gaming regulations can impact our gaming clients, individuals associated with the operation of gaming properties, and us as the owner of the real estate and landlord related to such facilities.

Credit and liquidity · Debt service and covenant compliance

Our credit agreements, mortgages and other debt documents could limit or, in certain cases, prohibit the payment of dividends and other distributions to holders of our common stock and any outstanding preferred stock. For example, the credit agreements governing our revolving credit facility and term loans generally provide that, if an event of default exists, we may not pay any dividends or make other distributions.

Credit and liquidity · Credit risk and customer defaults

Inability to collect rental revenue from our clients due to financial hardship, including bankruptcy.

Market and investment · Interest rate and yield curve risk

Changes in interest rates and operating expenses (including energy costs, shortages and rationing) are risks associated with real estate ownership that may have a negative impact on our revenue.

Capital structure and performance · Dividend policy and capital allocation

Distribution requirements imposed by law limit our flexibility. To maintain our status as a REIT for federal income tax purposes, we generally are required to distribute to our stockholders at least 90% of our taxable income, excluding net capital gains, each year.

Credit and liquidity · Access to capital and financing

Future issuances of equity securities could dilute the interest of holders of our common stock. Our future growth will depend upon our ability to raise additional capital. Raising capital through the issuance of equity securities, including securities exchangeable into our equity securities or convertible debt securities, can dilute the interests of holders of our common stock.

International and currency · International operations and emerging markets

We are subject to additional risks from our international investments and debt. We have acquired and may continue to make investments outside of the U.S. These investments may expose us to a variety of risks that are different from and in addition to those commonly found in the U.S.

Cybersecurity and data protection · Data breaches and cyber attacks

We rely on information technology in our operations, and any material failure, inadequacy, interruption or security failure of that technology could harm our business. We, like all businesses, are subject to cyberattacks and security incidents, which threaten the confidentiality, integrity and availability of our systems and information resources.

Digital transformation and innovation · Artificial intelligence and automation

The use of emerging technologies, including artificial intelligence, entails risks including risks relating to the possibility of intellectual property infringement or misappropriation; data privacy; potential for inaccuracy; bias; new or enhanced governmental or regulatory scrutiny, requirements, litigation, or other liability; ethical concerns; negative perceptions as to automation and artificial intelligence; cybersecurity concerns; or other complications or liabilities.

Corporate governance · Internal controls and risk management

Inherent limitations of internal controls over financial statements, disclosure controls and safeguarding of assets may adversely impact our financial condition and results of operations. Our internal controls over financial reporting, disclosure controls and procedures and our operating internal controls may not prevent or detect financial misstatements or loss of assets because of inherent limitations.

Corporate governance · Shareholder rights and activism

Our charter contains restrictions upon ownership of our common stock. Our charter contains restrictions on ownership and transfer of our common stock intended to, among other purposes, assist us in maintaining our status as a REIT for U.S. federal and/or state income tax purposes.

Market position and competition · Competitive pressure and market share loss

We face competition in the acquisition and operation of our properties. We expect competition from businesses, individuals, fiduciary accounts and plans, and other entities engaged in real estate investment and financing. This competition may result in a higher cost for properties we wish to purchase.

Customer and revenue · Customer retention and subscription renewal

Inability to re-lease properties upon termination of existing leases; Flat leases, leases with above-market rental rates or renewal of leases at lower rental rates.

Strategic execution · Merger acquisition and divestiture risks

We may acquire properties or portfolios of properties through tax deferred contribution transactions in exchange for partnership units in an operating partnership that, under certain circumstances, may be exchanged for shares of our common stock, resulting in stockholder dilution. This acquisition structure may have the effect of, among other things, reducing the amount of tax depreciation we could deduct over the tax life of the acquired properties.

Customer and revenue · Customer concentration and key customer dependence

Our success is dependent on the financial stability of our clients. The success of our business is dependent on the financial stability of the clients occupying our properties. A default of a client on its lease payments may cause us to lose anticipated revenue from an investment property.

Natural and catastrophic events · Climate change and environmental impact

The impacts of extreme weather events or climate change and the varying local, state and federal regulatory landscape impacting properties to address the impacts of climate change.

Human capital and workforce · Key personnel dependence and succession

We depend on key personnel. We depend on the efforts of our executive officers and key employees and the loss of their services could have a material adverse effect on our results of operations or financial condition.