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## To Our Stockholders: 

We are pleased to report that 2013 was a successful and transformative year for Inland American. GLYPH<T_h> rough the thoughtful execution of our strategic initiatives, including more than $1.2 billion in acquisitions, we made meaningful progress on our stated plan to shift our diversi fi ed portfolio of assets toward the retail, lodging and student housing sectors. While executing this repositioning, we hit our performance targets for net operating income and funds from operations. Importantly, our three key asset classes are already delivering promising results, and we believe that we are poised to realize additional value as the economic recovery picks up pace. 

GLYPH<T_h> anks to the strong performance of our portfolio, we continued to make regular distributions to our stockholders. Maintaining a sustainable annualized distribution rate has been a priority for our Board and management team, and will remain a core principle moving forward. Our portfolio of cash-generative assets, coupled with our leadership team’s extensive experience and unwavering focus on operational excellence, provide a solid foundation to support our distributions. 

GLYPH<T_h> roughout 2013, our team pursued our strategy with dedication and intensity. We believe we have generated impressive results that re fl ect our commitment to creating value for stockholders. 

## Acquisition, Disposition and Tender O ff er Liquidity 

In 2013 we focused on cultivating our strong portfolio of retail, lodging and student housing properties, while shedding non-core assets to generate capital for reinvestment and liquidity for our stockholders. As part of this e ff ort, we executed two large-scale, transformative transactions: the $460 million sale of our apartment portfolio and the $2.1 billion sale of our net lease assets. 

We recorded a net pro fi t on each portfolio sale based on the original purchase price of these assets. GLYPH<T_h> e two transactions provided us with approximately $1 billion to redeploy into our target asset classes and provided a liquidity option for our stockholders in the form of a tender o ff er. 

When we announced the net lease transaction in August 2013, we were con fi dent that we would be able to allocate some of the proceeds to a liquidity opportunity for our stockholders. Consistent with that goal, we announced in March 2014 that our Board had approved the commencement of a $350 million modi fi ed “Dutch Auction” tender o ff er. GLYPH<T_h> e Board and management team believe this was the best course of action for all of our stockholders. Stockholders that wanted to maintain their position in Inland American could do so, and potentially bene fi t from the Company’s long- term strategy, which we believe will produce improved cash performance and increase the value of our stock in the future. GLYPH<T_h> e tender o ff er also balanced the immediate liquidity need for some of our stockholders who were looking to sell some or all of their position in the Company. 

GLYPH<T_h> e Board evaluated several alternatives and determined that a Dutch Auction tender o ff er provided management and the Board increased fl exibility to allocate more funds to this share repurchase strategy than other options. For example, reinstating a general share repurchase program was an option the Board considered, but there are limits to the amount the Company can repurchase through such a program. Under existing law, repurchases under a general repurchase program may not, over any 12-month period, exceed more than 5% of our issued and outstanding shares at the beginning of the 12-month period. No such limitation exists with a tender o ff er. In fact, we purchased over 6.6% of shares outstanding during the tender o ff er that expired on April, 25, 2014 at 5:00 PM ET . Inland American accepted for purchase over 60.6 million shares of stock at a purchase price of $6.50, for an aggregate total of approximately $394.3 million. 

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