We own over 2,600 properties, diversified across 38 industries and 137 companies, located throughout 49 states in the US.

• Freestanding buildings (not attached to any other structure)
• Prime locations with good access and visibility

Since our tenants tend to provide goods and services that consumers use nearly every day, the majority of our properties fall into, what we generally describe as, retail categories. However, the tenants that generate the most amount of lease revenue for us are in the convenience store, chain restaurant, movie theater, and health and fitness industries.

The leases with our tenants are usually triple-net leases, which means that besides paying us rent every month, the tenant is responsible for the majority of the property's operating expenses (taxes, maintenance and insurance). This reduces the risk to us of rising property operating expenses and frees up more of the rent to pay monthly dividends.

• 15 to 20-year leases have tended to be reliable generators of cash to pay dividends
• Owning real estate for cash provides a more unencumbered cash flow
• Properties leased under triple-net leases tend to eliminate the costly upkeep and tax costs usually associated with owning real estate as these costs are generally paid for by our tenants.

• Funds to acquire new properties generally comes from cash on hand or from our $425 million acquisition credit facility led by Wells Fargo. We permanently fund property purchases with the proceeds from common stock, bonds, or preferred stock offerings.
• Access to capital to fund growth is important - REIT tax status limits the amount of retained earnings that can be used to grow our business
• Our balance sheet has historically been considered to be one of the healthiest in our industry.

• Rent increases built into leases have historically provided an increase of 0.2% to 2% in same store rental increases every year
• Additional growth has traditionally come by acquiring new properties thereby increasing our lease revenue base

We generally increase our earnings in two primary ways:

1. Increasing the size of our real estate portfolio
   • We are able to generate increasing cash flow from our new property acquisitions based on the spread, or difference, we achieve between the cost of the capital we use to acquire the property and the return, or lease yield, we receive from the property we buy.

     For example:

     Lease Yield - Cost of Capital = Spread

   • The lease yield is the return we receive based on rental or lease payments relative to the price we paid for the property.
   • The "cost of capital" is the cost of the capital we receive when we issue common stock, preferred stock, or bonds.
2. Regular rent increases on the real estate we already own
   • Typically, we have experienced rent increases on our portfolio

When we became a public company in 1994, we elected to be taxed as a "real estate investment trust" (or REIT, pronounced "reet") because our primary assets are the properties that we own and because the REIT tax status provides us with a tax treatment favorable to the payment of dividends.

As long as we meet certain operating metrics and pay out 90% of our taxable income as dividends to shareholders, we pay no federal income tax. This eliminates the "double taxation" of the dividends our shareholders receive.

View the following tables for information regarding our real estate portfolio for the year ended 3/31/12.