Note 15 – Earnings from Discontinued Operations: Note 16 – Derivatives: NNN classified the revenues and expenses related to properties which generated revenue and were sold or generated revenue  and were held for sale as of December 31, 2013, as discontinued operations. The following is a summary of the earnings from  discontinued operations for each of the years ended December 31 (dollars in thousands): In accordance with the guidance on derivatives and hedging, NNN records all derivatives on the balance sheet at fair value. The  accounting for changes in the fair value of derivatives depends on the intended use of the derivative and the resulting  designation. Derivatives used to hedge the exposure to changes in the fair value of an asset, liability, or firm commitment  attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives used to hedge the  exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. NNN’s objective in using derivatives is to add stability to interest expense and to manage its exposure to interest rate  movements or other identified risks. To accomplish this objective, NNN primarily uses treasury locks, forward swaps (“forward  hedges”) and interest rate swaps as part of its cash flow hedging strategy. Treasury locks and forward starting swaps are used to  hedge forecasted debt issuances. Treasury locks designated as cash flow hedges lock in the yield/price of a treasury security.  Forward swaps also lock the associated swap spread. Interest rate swaps designated as cash flow hedges hedging the variable  cash flows associated with floating rate debt involve the receipt of variable rate amounts in exchange for fixed-rate payments  over the life of the agreements without exchange of the underlying principal amount. For derivatives designated as cash flow hedges, the effective portion of changes in the fair value of the derivative is initially  reported in other comprehensive income (outside of earnings) and subsequently reclassified to earnings when the hedged  transaction affects earnings, and the ineffective portion of changes in the fair value of the derivative is recognized directly in  earnings.  70 2013 2012 2011 Revenues: Rental income from operating leases $ 2,631 $ 7,342 $ 10,520 Earned income from direct financing leases 190 324 420 Percentage rent 1 27 27 Real estate expense reimbursement from tenants 327 383 466 Interest and other income from real estate transactions 37 17 62 3,186 8,093 11,495 Operating expenses: General and administrative 219 20 41 Real estate 600 1,026 1,041 Depreciation and amortization 371 1,480 1,957 Impairment losses and other charges 2,149 7,026 431 3,339 9,552 3,470 Other expenses (revenues): Interest expense 580 732 695 580 732 695 Earnings (loss) before gain on disposition of real estate and income tax expense (733) (2,191) 7,330 Gain on disposition of real estate 6,272 10,956 424 Income tax expense (467) (56) (78) Earnings from discontinued operations attributable to NNN including noncontrolling interests 5,072 8,709 7,676 Earnings attributable to noncontrolling interests (226) (29) (100) Earnings from discontinued operations attributable to NNN $ 4,846 $ 8,680 $ 7,576