Overview

At Realty Income, we take corporate responsibility seriously. We are committed to reducing our environmental footprint, to maintaining high ethical standards in our business, and to upholding our responsibilities as the leaders of a public company operating for the benefit of our shareholders. How we manage the physical, human and financial resources that enable us to acquire and own the assets supporting the payment of monthly dividends, demonstrates this corporate responsibility.

Environment

We research and implement environmentally friendly practices in our corporate office in order to leave as small an environmental footprint as possible. Many of the practices we follow in our operations are good for the environment, good for our employees and good for our business. We exercise environmentally friendly practices in the following areas:

Energy Conservation
Recycling and Reuse
Paperless Environment

Energy Conservation

We promote energy savings in our workplace wherever possible. The practices that we encourage are as follows:

• We encourage our employees to turn off computers and printers at the end of the day
• Fax machines and copiers are set at Energy Saver mode
• Employees are encouraged to use duplex copy mode whenever possible
• Automated “lights out” system is activated in every office
• HVAC hours are programmed to reflect business hours only

We have also engaged in environmentally friendly practices for our headquarters building as:

• Our building was constructed according to the highest State of California Energy Standards
• We utilize solar power and our corporate headquarters building was constructed with dual-paned windows, which increases energy efficiency and reduces our carbon foot print
• Energy use in 2011 decreased by 22% and utility savings of 24% were realized, as compared to 2010

Recycling and Reuse

Whenever possible, and when it is practical, we encourage the use of recycled products and the recycling of materials we use during our operations. The practices that we encourage and/or employ are as follows:

• Our annual report is printed on 100% recycled paper
• We recycle all paper and other recyclable materials that are used throughout the day
• Recycling bins are in place in all areas where materials are regularly disposed of
• Cell phones, wireless devices, and office equipment are recycled or donated whenever possible
• Toner cartridges for printers are recycled
• Company mugs are distributed to help control the use of disposable paper products

Paperless Environment

We continue to pursue a “paperless” environment for employees. This reduces costs, saves trees and increases productivity by eliminating manual tasks. In turn, we benefit from reduced printing costs and streamlined workflow. The practices that we encourage and/or employ are as follows:

• We encourage file-sharing networks and environments to produce and edit documents and eliminate the printing and dissemination of hard copy documents
• We implemented a digital communications environment for all board reporting during 2011 to eliminate the production of paper reports
• We implemented the digital sharing of news, articles, and other information to eliminate waste and increase employee productivity

With respect to the investment properties that we own, they are all leased, under long-term, net leases, to corporate tenants in retail, and other commercial enterprises. Net leases require that the tenant be responsible for the maintenance and operation of the property, thus we have limited control over the business operations of our tenants, but we encourage energy conservation and environmental sustainability practices wherever possible.

Social Responsibility and Ethics

Our commitment to being socially responsible and ethical in our business dealings encompasses our relationships with employees, vendors and tenants. Our employees enjoy the following:

• Compensation that is in line with those of our peers and competitors
• Company paid medical and dental insurance for our employees and their families
• Participation in a 401K plan with matching contributions made by the Company
• Generous vacation and personal time off benefits
• Paid maternity leave and an infant-at-work program for all new parents
• Access to members of our Board of Directors to report any suspicion of misconduct by any member of senior management or our executive team

We also have a long-standing commitment to equal employment opportunity and adhere to all Equal Employment Opportunity Policy guidelines.

Vendors and Tenants can anticipate that we:

• Abide by the highest standards of business ethics as outlined in our Corporate Code of Business Ethics
• Apply the principles of full and fair disclosure in all of our business dealings, as outlined in our Corporate Code of Business Ethics
• Are committed to dealing fairly with all of our customers, suppliers and competitors

Corporate Governance

We also believe that nothing is more important than a company’s reputation for integrity and serving as a responsible fiduciary for shareholders. Our board of directors, senior management and employees are committed to managing the Company for the benefit of our shareholders and, as such, are focused on maintaining good corporate governance practices. As such our:

• Board of Directors is comprised of seven independent, non-employee Directors and one employee Director, our Chief Executive Officer and Vice Chairman of the Board
• We employ a majority vote standard for director elections and the Board is elected on an annual basis
• Compensation Committee of the Board of Directors conducts annual compensation reviews for our key executives and compensates each individual based on reaching certain performance metrics that determine the success of the Company
• All of our employees and Board of Directors adhere to the corporate governance principles outlined in our Corporate Governance Guidelines