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## 3. INCOME TAXES 

We have maintained and intend to maintain our election as a REIT under the Internal Revenue Code of 1986, as amended. To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement that we currently distribute at least 90% of our taxable income to our shareholders. As a REIT, we generally will not be subject to federal income tax on distributed taxable income. No provision for federal income taxes from REIT operations has been included in the accompanying consolidated financial statements as we made distributions in excess of our taxable income in each of the three years ended December 31, 2004. If we fail to qualify as a REIT in any taxable year, then we will be subject to federal income taxes at regular corporate rates, including any applicable alternative minimum tax. Taxable income from non-REIT activities managed through taxable REIT subsidiaries is subject to applicable federal, state and local income taxes. The tax attributes of our taxable REIT subsidiaries are immaterial to the accompanying consolidated financial statements. 

The following table reconciles net income to REIT taxable income for the years ended December 31, 2004, 2003 and 2002: 

<img src='content_image/99836.jpg'>

A schedule of per share distributions we paid and reported to our shareholders is set forth in the following tables: 

<img src='content_image/99837.jpg'>

(1) The dividend declared for the fourth quarter of 2004, with a record date of January 3, 2005, will be taxable in 2005. 

