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## Comparison of Revenues from Continuing Operations – 2012 versus 2011 

Rental Income. Rental Income increased in amount and as a percent of the total revenues from continuing operations for the year ended December 31, 2012 as compared to the same period in 2011. The increase for the year ended December 31, 2012, is primarily due to a full year of rental income from the acquisition of 218 properties in continuing operations with a gross leasable area of approximately 3,448,000 square feet in 2011 and a partial year of rental income from the acquisition of 232 properties in continuing operations with aggregate gross leasable area of approximately 2,955,000 during 2012. In addition, the increase was partially offset by the decrease in lease termination fees. NNN recorded $661,000 as compared to $2,649,000 in lease termination and rent settlement fees during the years ended December 31, 2012 and 2011, respectively. 

Real Estate Expense Reimbursement from Tenants. Real estate expense reimbursements from tenants increased for the year ended December 31, 2012, as compared to the same period in 2011, but decreased as a percentage of total revenues from continuing operations. The increase is primarily attributable to a full year of reimbursements from properties acquired in 2011 and a partial year of reimbursements from certain newly acquired properties in 2012. 

## Analysis of Expenses from Continuing Operations 

General. Operating expenses from continuing operations increased primarily due to an increase in depreciation expense and an increase in reimbursable real estate expenses, but was partially offset by a decrease in incentive compensation during the year ended December 31, 2013, as compared to the same period in 2012. The following summarizes NNN’s expenses from continuing operations (dollars in thousands): 

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