Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Schedule of Deferred Tax Assets and Liabilities

The significant components of the net deferred income tax asset consist of the following at December 31 (dollars in thousands):



	2017			2016
Deferred tax assets:
Capital loss carryforward	$	—		$	830
Net operating loss carryforward	3,899			5,088
	3,899			5,918
Valuation allowance	(3,858		)	(5,743		)
Total deferred tax assets	41			175

Deferred tax liabilities:
Built-in gain	(41		)	(175		)
Total deferred tax liabilities	(41		)	(175		)

Net deferred tax asset	$	—		$	—

Schedule of Components of Income Tax Expense (Benefit)

The income tax benefit (expense) consists of the following components for the years ended December 31 (dollars in thousands):



	2017		2016		2015
Net earnings before income taxes	$	264,973	$	239,500	$	208,511
Provision for income tax benefit (expense):
Current:
Federal	—		—		(58		)
State and local	—		—		(129		)
Deferred:
Federal	—		—		(8,935		)
State and local	—		—		(1,553		)
Total expense for income taxes	—		—		(10,675		)
Net earnings attributable to NNN’s stockholders	$	264,973	$	239,500	$	197,836

Schedule of Effective Income Tax Rate Reconciliation

The total income tax benefit (expense) differs from the amount computed by applying the statutory federal tax rate to net earnings before taxes as follows for the years ended December 31 (dollars in thousands):



	2017			2016			2015
Federal expense at statutory tax rate	$	—		$	—		$	(70,894	)
Nontaxable income of NNN	—			—			69,651
State taxes, net of federal benefit	—			—			(141		)
Expiration of built-in gain tax	—			—			316
Loss carryforwards increase (decrease) ⁽²⁾	(2,019		)	55			—
Built-in gain tax liability ^{(1), (2)}	134			22			(197		)
TRS Revocation Election ⁽¹⁾	—			—			(4,363		)
Valuation allowance (increase) decrease ^{(1), (2)}	1,885			(77		)	(5,047		)
Total tax expense	$	—		$	—		$	(10,675	)

⁽¹⁾ The change for the year ended December 31, 2015, is due to TRS Revocation Election.

⁽²⁾ The change for the year ended December 31, 2017, includes an amount attributable to the federal tax rate change

within the Tax Cuts and Jobs Act signed into law on December 22, 2017. The net income statement effect of the

federal rate change is zero.