NEWS RELEASE
For information contact:
Kevin B. Habicht
Chief Financial Officer
(407) 265-7348 FOR IMMEDIATE RELEASE
November 2, 2020
THIRD QUARTER 2020 OPERATING RESULTS
ANNOUNCED BY NATIONAL RETAIL PROPERTIES, INC.
Orlando, Florida, November 2, 2020 – National Retail Properties, Inc. (NYSE: NNN), a real estate investment trust, today announced its operating results for the quarter and nine months ended September 30, 2020. Highlights include:
Operating Results:
•Revenues and net earnings, FFO, Core FFO and AFFO available to common stockholders and diluted per share amounts:
| Quarter Ended | Nine Months Ended | ||||||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
| (in thousands, except per share data) | |||||||||||||||||||||||
| Revenues | $ | 158,633 | $ | 168,607 | $ | 497,397 | $ | 497,111 | |||||||||||||||
| Net earnings available to common stockholders | $ | 51,584 | (1) | $ | 58,111 | $ | 154,057 | (1) | $ | 199,648 | |||||||||||||
| Net earnings per common share | $ | 0.30 | (1) | $ | 0.35 | $ | 0.89 | (1) | $ | 1.22 | |||||||||||||
| FFO available to common stockholders | $ | 106,423 | $ | 115,013 | $ | 320,670 | $ | 336,215 | |||||||||||||||
| FFO per common share | $ | 0.62 | $ | 0.70 | $ | 1.87 | $ | 2.06 | |||||||||||||||
| Core FFO available to common stockholders | $ | 106,423 | $ | 115,013 | $ | 337,349 | $ | 334,884 | |||||||||||||||
| Core FFO per common share | $ | 0.62 | $ | 0.70 | $ | 1.96 | $ | 2.05 | |||||||||||||||
| AFFO available to common stockholders | $ | 106,690 | (2) | $ | 116,870 | $ | 311,680 | (2) | $ | 340,119 | |||||||||||||
| AFFO per common share | $ | 0.62 | (2) | $ | 0.71 | $ | 1.81 | (2) | $ | 2.09 | |||||||||||||
(1) Includes a write-off of $14,758 (or $0.09 per share) of receivables due to reclassifying certain tenants as cash basis for accounting purposes during the quarter and nine months ended September 30, 2020. | |||||||||||||||||||||||
(2) For the quarter and nine months ended September 30, 2020, amounts exclude $8,499 and $38,938, respectively, of net straight-line accrued rent, resulting from the COVID-19 rent deferral lease amendments. Including the straight-line rent would result in AFFO per common share of $0.67 and $2.04 for the quarter and nine months ended September 30, 2020, respectively. | |||||||||||||||||||||||
Third Quarter 2020 Highlights:
•As of October 28, 2020, NNN had collected approximately 90% of rent originally due for the quarter ended September 30, 2020, and approximately 94% of rent originally due in October 2020.
•Portfolio occupancy was 98.4% at September 30, 2020 as compared to 98.7% at June 30, 2020 and 98.8% at March 31, 2020
•Ended the quarter with $294.9 million of cash and no amounts drawn on $900 million bank credit facility
•Invested $3.9 million in property investments, and completed construction with an aggregate 16,000 square feet of gross leasable area
•Sold 3 properties for $2.4 million producing $0.1 million of gains on sales
•Raised $10.9 million net proceeds from the issuance of 305,115 common shares
Highlights for the nine months ended September 30, 2020:
•Invested $78.0 million in property investments, including the acquisition of 21 properties with an aggregate 299,000 square feet of gross leasable area at an initial cash yield of 6.8%
•Sold 25 properties for $42.5 million producing $13.6 million of gains on sales
•Raised $64.2 million net proceeds from the issuance of 1,756,338 common shares
•Issued $400 million principal amount of 2.50% senior unsecured notes due 2030 generating net proceeds of $395.1 million
•Issued $300 million principal amount of 3.10% senior unsecured notes due 2050 generating net proceeds of $290.5 million
•Paid off $325 million principal amount of 3.800% senior unsecured notes due 2022
NNN is actively working with its tenants that have been impacted by the COVID-19 pandemic. As of October 28, 2020, NNN had collected approximately 90% of rent originally due for the quarter ended September 30, 2020, and approximately 94% of rent originally due in October 2020.
As a result of the COVID-19 pandemic, as of September 30, 2020, NNN has entered into rent deferral lease amendments with certain tenants representing approximately 6% of the annual rent originally due for the year ending December 31, 2020. On average, 2.7 months of rent was deferred with approximately 77% of deferred rent originally due in the second quarter of 2020 and 23% originally due in the third quarter of 2020. Approximately 66% of this deferred rent is due to be paid to NNN by June 30, 2021 and 89% is due by December 31, 2021.
Jay Whitehurst, Chief Executive Officer, commented: “The third quarter of 2020 marks the 31st consecutive year of increased common stock dividends for National Retail Properties. This impressive record has been matched by only two other REITs, and by less than 90 US public companies. Our liquidity position remains very solid, with almost $300M of cash in the bank and no amounts drawn on our $900M line of credit. Rent collections continued to trend positively as we collected 90% of rent due for the third quarter and 94% of rent for the month of October. After taking a pause in acquisitions during the height of the pandemic and related store closures, our pipeline of acquisitions is beginning to grow, primarily driven by new transactions with our existing relationship tenants. Lastly, and most importantly, our associates have remained healthy, energized and productive during this year of unforeseen challenges.”
National Retail Properties invests primarily in high-quality retail properties subject generally to long-term, net leases. As of September 30, 2020, the company owned 3,114 properties in 48 states with a gross leasable area of approximately 32.4 million square feet and with a weighted average remaining lease term of 10.7 years. For more information on the company, visit www.nnnreit.com.
Management will hold a conference call on November 2, 2020, at 10:30 a.m. ET to review these results. The call can be accessed on the National Retail Properties web site live at http://www.nnnreit.com. For those unable to listen to the live broadcast, a replay will be available on the company’s web site. In addition, a summary of any earnings guidance given on the call will be posted to the company’s web site.
Statements in this press release that are not strictly historical are “forward-looking” statements. These statements generally are characterized by the use of terms such as "believe," "expect," "intend," "may," "estimated," or other similar words or expressions. Forward-looking statements involve known and unknown risks, which may cause the company’s actual future results to differ materially from expected results. These risks include, among others, the potential impacts of the COVID-19 pandemic on the company’s business operations, financial results and financial position and on the world economy, general economic conditions, local real estate conditions, changes in interest rates, increases in operating costs, the preferences and financial condition of the company's tenants, the availability of capital, and, risks related to the company's status as a REIT. Additional information concerning these and other factors that could cause actual results to differ materially from these forward-looking statements is contained from time to time in the company’s Securities and Exchange Commission (the "Commission”) filings, including, but not limited to, the company’s (i) Annual Report on Form 10-K for the year ended December 31, 2019 and (ii) Quarterly Report on Form 10-Q for the quarter and nine months ended September 30, 2020. Copies of each filing may be obtained from the company or the Commission. Such forward-looking statements should be regarded solely as reflections of the company’s current operating plans and estimates. Actual operating results may differ materially from what is expressed or forecast in this press release. National Retail Properties, Inc. undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date these statements were made.
Funds From Operations, commonly referred to as FFO, is a relative non-GAAP financial measure of operating performance of an equity REIT in order to recognize that income-producing real estate historically has not depreciated on the basis determined under GAAP. FFO is defined by the National Association of Real Estate Investment Trusts (“NAREIT”) and is used by the company as follows: net earnings (computed in accordance with GAAP) plus depreciation and amortization of assets unique to the real estate industry, excluding gains (or including losses), any applicable taxes and noncontrolling interests on the disposition of certain assets, the company’s share of these items from the company’s unconsolidated partnerships and any impairment charges on a depreciable real estate asset.
2
FFO is generally considered by industry analysts to be the most appropriate measure of performance of real estate companies. FFO does not necessarily represent cash provided by operating activities in accordance with GAAP and should not be considered an alternative to net earnings as an indication of the company’s performance or to cash flow as a measure of liquidity or ability to make distributions. Management considers FFO an appropriate measure of performance of an equity REIT because it primarily excludes the assumption that the value of the real estate assets diminishes predictably over time, and because industry analysts have accepted it as a performance measure. The company’s computation of FFO may differ from the methodology for calculating FFO used by other equity REITs, and therefore, may not be comparable to such other REITs. A reconciliation of net earnings (computed in accordance with GAAP) to FFO, as defined by NAREIT, is included in the financial information accompanying this release.
Core Funds From Operations (“Core FFO”) is a non-GAAP measure of operating performance that adjusts FFO to eliminate the impact of certain GAAP income and expense amounts that the company believes are infrequent and unusual in nature and/or not related to its core real estate operations. Exclusion of these items from similar FFO-type metrics is common within the REIT industry, and management believes that presentation of Core FFO provides investors with a potential metric to assist in their evaluation of the company’s operating performance across multiple periods and in comparison to the operating performance of its peers because it removes the effect of unusual items that are not expected to impact the company’s operating performance on an ongoing basis. Core FFO is used by management in evaluating the performance of the company’s core business operations and is a factor in determining management compensation. Items included in calculating FFO that may be excluded in calculating Core FFO may include items like transaction related gains, income or expense, impairments on land or commercial mortgage residual interests, preferred stock redemption costs or other non-core amounts as they occur. The company’s computation of Core FFO may differ from the methodology for calculating Core FFO used by other equity REITs, and therefore, may not be comparable to such other REITs. A reconciliation of net earnings (computed in accordance with GAAP) to Core FFO is included in the financial information accompanying this release.
Adjusted Funds From Operations (“AFFO”) is a non-GAAP financial measure of operating performance used by many companies in the REIT industry. AFFO adjusts FFO for certain non-cash items that reduce or increase net income in accordance with GAAP. AFFO should not be considered an alternative to net earnings, as an indication of the company's performance or to cash flow as a measure of liquidity or ability to make distributions. Management considers AFFO a useful supplemental measure of the company’s performance. The company’s computation of AFFO may differ from the methodology for calculating AFFO used by other equity REITs, and therefore, may not be comparable to such other REITs. A reconciliation of net earnings (computed in accordance with GAAP) to AFFO is included in the financial information accompanying this release.
3
National Retail Properties, Inc.
(in thousands, except per share data)
(unaudited)
| Quarter Ended | Nine Months Ended | |||||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
| Income Statement Summary | ||||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||
| Rental income | $ | 157,865 | $ | 168,224 | $ | 495,891 | $ | 495,846 | ||||||||||||||||||
| Interest and other income from real estate transactions | 768 | 383 | 1,506 | 1,265 | ||||||||||||||||||||||
| 158,633 | 168,607 | 497,397 | 497,111 | |||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||
| General and administrative | 9,419 | 8,726 | 28,914 | 27,524 | ||||||||||||||||||||||
| Real estate | 6,345 | 6,706 | 20,304 | 20,398 | ||||||||||||||||||||||
| Depreciation and amortization | 49,404 | 48,348 | 147,528 | 140,769 | ||||||||||||||||||||||
| Leasing transaction costs | — | 51 | 36 | 178 | ||||||||||||||||||||||
Impairment losses – real estate, net of recoveries | 5,695 | 10,692 | 33,062 | 21,124 | ||||||||||||||||||||||
| 70,863 | 74,523 | 229,844 | 209,993 | |||||||||||||||||||||||
| Gain on disposition of real estate | 148 | 2,061 | 13,637 | 25,508 | ||||||||||||||||||||||
| Earnings from operations | 87,918 | 96,145 | 281,190 | 312,626 | ||||||||||||||||||||||
| Other expenses (revenues): | ||||||||||||||||||||||||||
| Interest and other income | (74) | (501) | (345) | (2,912) | ||||||||||||||||||||||
Interest expense(1) | 31,924 | 29,948 | 97,347 | 89,716 | ||||||||||||||||||||||
| Loss on early extinguishment of debt | — | — | 16,679 | — | ||||||||||||||||||||||
| 31,850 | 29,447 | 113,681 | 86,804 | |||||||||||||||||||||||
| Net earnings | 56,068 | 66,698 | 167,509 | 225,822 | ||||||||||||||||||||||
Loss (earnings) attributable to noncontrolling interests | 1 | (5) | 3 | (428) | ||||||||||||||||||||||
| Net earnings attributable to NNN | 56,069 | 66,693 | 167,512 | 225,394 | ||||||||||||||||||||||
| Series E preferred stock dividends | — | (4,097) | — | (12,291) | ||||||||||||||||||||||
| Series F preferred stock dividends | (4,485) | (4,485) | (13,455) | (13,455) | ||||||||||||||||||||||
| Net earnings available to common stockholders | $ | 51,584 | $ | 58,111 | $ | 154,057 | $ | 199,648 | ||||||||||||||||||
| Weighted average common shares outstanding: | ||||||||||||||||||||||||||
| Basic | 172,681 | 164,884 | 171,707 | 162,641 | ||||||||||||||||||||||
| Diluted | 172,782 | 165,362 | 171,815 | 163,126 | ||||||||||||||||||||||
| Net earnings per share available to common stockholders: | ||||||||||||||||||||||||||
| Basic | $ | 0.30 | $ | 0.35 | $ | 0.89 | $ | 1.23 | ||||||||||||||||||
| Diluted | $ | 0.30 | $ | 0.35 | $ | 0.89 | $ | 1.22 | ||||||||||||||||||
(1) Includes $2,291 in connection with the early redemption of 3.80% senior unsecured notes due 2022 for the nine months ended September 30, 2020. | ||||||||||||||||||||||||||
4
National Retail Properties, Inc.
(in thousands, except per share data)
(unaudited)
| Quarter Ended | Nine Months Ended | |||||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
Funds From Operations (FFO) Reconciliation: | ||||||||||||||||||||||||||
| Net earnings available to common stockholders | $ | 51,584 | (1) | $ | 58,111 | $ | 154,057 | (1) | $ | 199,648 | ||||||||||||||||
| Real estate depreciation and amortization | 49,292 | 48,271 | 147,188 | 140,539 | ||||||||||||||||||||||
Gain on disposition of real estate, net of noncontrolling interests | (148) | (2,061) | (13,637) | (25,096) | ||||||||||||||||||||||
Impairment losses – depreciable real estate, net of recoveries | 5,695 | 10,692 | 33,062 | 21,124 | ||||||||||||||||||||||
| Total FFO adjustments | 54,839 | 56,902 | 166,613 | 136,567 | ||||||||||||||||||||||
| FFO available to common stockholders | $ | 106,423 | $ | 115,013 | $ | 320,670 | $ | 336,215 | ||||||||||||||||||
| FFO per common share: | ||||||||||||||||||||||||||
| Basic | $ | 0.62 | $ | 0.70 | $ | 1.87 | $ | 2.07 | ||||||||||||||||||
| Diluted | $ | 0.62 | $ | 0.70 | $ | 1.87 | $ | 2.06 | ||||||||||||||||||
| Core Funds From Operations (Core FFO) Reconciliation: | ||||||||||||||||||||||||||
| Net earnings available to common stockholders | $ | 51,584 | (1) | $ | 58,111 | $ | 154,057 | (1) | $ | 199,648 | ||||||||||||||||
| Total FFO adjustments | 54,839 | 56,902 | 166,613 | 136,567 | ||||||||||||||||||||||
| FFO available to common stockholders | 106,423 | 115,013 | 320,670 | 336,215 | ||||||||||||||||||||||
| Loss on early extinguishment of debt (early redemption of notes payable due 2022) | — | — | 16,679 | — | ||||||||||||||||||||||
| Gain on sale of equity investments | — | — | — | (1,331) | ||||||||||||||||||||||
| Total Core FFO adjustments | — | — | 16,679 | (1,331) | ||||||||||||||||||||||
| Core FFO available to common stockholders | $ | 106,423 | $ | 115,013 | $ | 337,349 | $ | 334,884 | ||||||||||||||||||
| Core FFO per common share: | ||||||||||||||||||||||||||
| Basic | $ | 0.62 | $ | 0.70 | $ | 1.96 | $ | 2.06 | ||||||||||||||||||
| Diluted | $ | 0.62 | $ | 0.70 | $ | 1.96 | $ | 2.05 | ||||||||||||||||||
(1) Includes a write-off of $14,758 (or $0.09 per share) of receivables due to reclassifying certain tenants as cash basis for accounting purposes during the quarter and nine months ended September 30, 2020. | ||||||||||||||||||||||||||
5
National Retail Properties, Inc. (in thousands, except per share data) (unaudited) | ||||||||||||||||||||||||||
| Quarter Ended | Nine Months Ended | |||||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
| Adjusted Funds From Operations (AFFO) Reconciliation: | ||||||||||||||||||||||||||
| Net earnings available to common stockholders | $ | 51,584 | (1) | $ | 58,111 | $ | 154,057 | (1) | $ | 199,648 | ||||||||||||||||
| Total FFO adjustments | 54,839 | 56,902 | 166,613 | 136,567 | ||||||||||||||||||||||
| Total Core FFO adjustments | — | — | 16,679 | (1,331) | ||||||||||||||||||||||
| Core FFO available to common stockholders | 106,423 | 115,013 | 337,349 | 334,884 | ||||||||||||||||||||||
| Straight-line accrued rent, net of reserves | (2,419) | (542) | (33,464) | (1,702) | ||||||||||||||||||||||
| Net capital lease rent adjustment | 61 | 170 | 144 | 508 | ||||||||||||||||||||||
| Below-market rent amortization | (301) | (178) | (711) | (579) | ||||||||||||||||||||||
| Stock based compensation expense | 3,258 | 2,734 | 9,580 | 7,805 | ||||||||||||||||||||||
| Capitalized interest expense | (332) | (327) | (1,218) | (797) | ||||||||||||||||||||||
| Total AFFO adjustments | 267 | 1,857 | (25,669) | 5,235 | ||||||||||||||||||||||
| AFFO available to common stockholders | $ | 106,690 | (2) | $ | 116,870 | $ | 311,680 | (2) | $ | 340,119 | ||||||||||||||||
| AFFO per common share: | ||||||||||||||||||||||||||
| Basic | $ | 0.62 | (2) | $ | 0.71 | $ | 1.82 | (2) | $ | 2.09 | ||||||||||||||||
| Diluted | $ | 0.62 | (2) | $ | 0.71 | $ | 1.81 | (2) | $ | 2.09 | ||||||||||||||||
| Other Information: | ||||||||||||||||||||||||||
Rental income from operating leases(3) | $ | 153,825 | $ | 163,673 | $ | 481,858 | $ | 482,306 | ||||||||||||||||||
Earned income from direct financing leases(3) | $ | 161 | $ | 204 | $ | 487 | $ | 624 | ||||||||||||||||||
Percentage rent(3) | $ | 160 | $ | 329 | $ | 728 | $ | 1,051 | ||||||||||||||||||
Real estate expense reimbursement from tenants(3) | $ | 3,719 | $ | 4,017 | $ | 12,818 | $ | 11,865 | ||||||||||||||||||
| Real estate expenses | (6,345) | (6,706) | (20,304) | (20,398) | ||||||||||||||||||||||
| Real estate expenses, net of tenant reimbursements | $ | (2,626) | $ | (2,689) | $ | (7,486) | $ | (8,533) | ||||||||||||||||||
| Amortization of debt costs | $ | 1,082 | $ | 936 | $ | 3,924 | (4) | $ | 2,787 | |||||||||||||||||
Scheduled debt principal amortization (excluding maturities) | $ | 149 | $ | 141 | $ | 443 | $ | 422 | ||||||||||||||||||
| Non-real estate depreciation expense | $ | 114 | $ | 80 | $ | 347 | $ | 238 | ||||||||||||||||||
(1)Includes a write-off of $14,758 (or $0.09 per share) of receivables due to reclassifying certain tenants as cash basis for accounting purposes during the quarter and nine months ended September 30, 2020.
(2)For the quarter and nine months ended September 30, 2020, amounts exclude $8,499 and $38,938, respectively, of net straight-line accrued rent, resulting from the COVID-19 rent deferral lease amendments. Including the straight-line rent would result in AFFO per common share of $0.67 and $2.04 for the quarter and nine months ended September 30, 2020, respectively.
(3)The condensed consolidated financial statements for the quarter and nine months ended September 30, 2020 and 2019 are presented under the new accounting standard, ASU 2016-02, "Leases (Topic 842)." For the quarter and nine months ended September 30, 2020, the aggregate of such amounts is $157,865 and $495,891, respectively, and is classified as rental income on the income statement summary. For the quarter and nine months ended September 30, 2019, the aggregate of such amounts is $168,224 and $495,846, respectively.
(4)Includes $851 in connection with the redemption of the 3.80% senior unsecured notes due 2022 for the nine months ended September 30, 2020.
6
National Retail Properties, Inc.
(in thousands)
(unaudited)
| September 30, 2020 | December 31, 2019 | |||||||||||||
| Balance Sheet Summary | ||||||||||||||
| Assets: | ||||||||||||||
| Real estate: | ||||||||||||||
Accounted for using the operating method, net of accumulated depreciation and amortization | $ | 7,167,992 | $ | 7,287,374 | ||||||||||
Accounted for using the direct financing method | 4,060 | 4,204 | ||||||||||||
| Real estate held for sale | 5,408 | 9,661 | ||||||||||||
Cash and cash equivalents | 294,860 | 1,112 | ||||||||||||
| Receivables, net of allowance of $879 and $506, respectively | 4,126 | 2,874 | ||||||||||||
| Accrued rental income, net of allowance of $7,978 and $1,842, respectively | 61,754 | 28,897 | ||||||||||||
| Debt costs, net of accumulated amortization | 2,340 | 2,783 | ||||||||||||
| Other assets | 94,157 | 97,962 | ||||||||||||
Total assets | $ | 7,634,697 | $ | 7,434,867 | ||||||||||
Liabilities: | ||||||||||||||
Line of credit payable | $ | — | $ | 133,600 | ||||||||||
Mortgages payable, including unamortized premium and net of unamortized debt cost | 11,565 | 12,059 | ||||||||||||
Notes payable, net of unamortized discount and unamortized debt costs | 3,208,533 | 2,842,698 | ||||||||||||
| Accrued interest payable | 51,327 | 18,250 | ||||||||||||
| Other liabilities | 76,063 | 96,578 | ||||||||||||
Total liabilities | 3,347,488 | 3,103,185 | ||||||||||||
Stockholders' equity of NNN | 4,287,205 | 4,331,675 | ||||||||||||
Noncontrolling interests | 4 | 7 | ||||||||||||
Total equity | 4,287,209 | 4,331,682 | ||||||||||||
Total liabilities and equity | $ | 7,634,697 | $ | 7,434,867 | ||||||||||
| Common shares outstanding | 173,727 | 171,694 | ||||||||||||
| Gross leasable area, Property Portfolio (square feet) | 32,421 | 32,460 | ||||||||||||
7
National Retail Properties, Inc. Debt Summary As of September 30, 2020 (in thousands) (unaudited) | ||||||||||||||||||||||||||||||||
| Unsecured Debt | Principal | Principal, Net of Unamortized Discount | Stated Rate | Effective Rate | Maturity Date | |||||||||||||||||||||||||||
| Line of credit payable | $ | — | $ | — | L + 87.5 bps | 2.556 | % | January 2022 | ||||||||||||||||||||||||
| Unsecured notes payable: | ||||||||||||||||||||||||||||||||
| 2023 | 350,000 | 349,256 | 3.300 | % | 3.388 | % | April 2023 | |||||||||||||||||||||||||
| 2024 | 350,000 | 349,708 | 3.900 | % | 3.924 | % | June 2024 | |||||||||||||||||||||||||
| 2025 | 400,000 | 399,461 | 4.000 | % | 4.029 | % | November 2025 | |||||||||||||||||||||||||
| 2026 | 350,000 | 347,440 | 3.600 | % | 3.733 | % | December 2026 | |||||||||||||||||||||||||
| 2027 | 400,000 | 398,804 | 3.500 | % | 3.548 | % | October 2027 | |||||||||||||||||||||||||
| 2028 | 400,000 | 397,626 | 4.300 | % | 4.388 | % | October 2028 | |||||||||||||||||||||||||
| 2030 | 400,000 | 398,777 | 2.500 | % | 2.536 | % | April 2030 | |||||||||||||||||||||||||
| 2048 | 300,000 | 295,893 | 4.800 | % | 4.890 | % | October 2048 | |||||||||||||||||||||||||
| 2050 | 300,000 | 294,003 | 3.100 | % | 3.205 | % | April 2050 | |||||||||||||||||||||||||
| Total | 3,250,000 | 3,230,968 | ||||||||||||||||||||||||||||||
Total unsecured debt(1) | $ | 3,250,000 | $ | 3,230,968 | ||||||||||||||||||||||||||||
| Debt costs | (31,140) | |||||||||||||||||||||||||||||||
| Accumulated amortization | 8,705 | |||||||||||||||||||||||||||||||
| Debt costs, net of accumulated amortization | (22,435) | |||||||||||||||||||||||||||||||
| Notes payable, net of unamortized discount and unamortized debt costs | $ | 3,208,533 | ||||||||||||||||||||||||||||||
(1)Unsecured notes payable have a weighted average interest rate of 3.7% and a weighted average maturity of 10.4 years. | ||||||||||||||||||||||||||||||||
| Mortgages Payable | Principal Balance | Interest Rate | Maturity Date | ||||||||||||||||||||
Mortgage(1) | $ | 11,609 | 5.230 | % | July 2023 | ||||||||||||||||||
| Debt costs | (147) | ||||||||||||||||||||||
| Accumulated amortization | 103 | ||||||||||||||||||||||
Debt costs, net of accumulated amortization | (44) | ||||||||||||||||||||||
Mortgages payable, including unamortized premium and net of unamortized debt costs | $ | 11,565 | |||||||||||||||||||||
(1) Includes unamortized premium | |||||||||||||||||||||||
8
National Retail Properties, Inc.
Debt Summary
As of September 30, 2020
Credit Facility and Note Covenants
The following is a summary of key financial covenants for the company's unsecured credit facility and notes, as defined and calculated per the terms of the facility's credit agreement and the notes' governing documents, respectively, which are included in the company's filings with the Commission. These calculations, which are not based on U.S. GAAP measurements, are presented to investors to show that as of September 30, 2020, the company believes it is in compliance with the covenants.
| Unsecured Credit Facility Key Covenants | Required | September 30, 2020 | |||||||||||||||
| Maximum leverage ratio | < 0.60 | 0.38 | |||||||||||||||
| Minimum fixed charge coverage ratio | > 1.50 | 3.93 | |||||||||||||||
| Maximum secured indebtedness ratio | < 0.40 | 0.001 | |||||||||||||||
| Unencumbered asset value ratio | > 1.67 | 2.67 | |||||||||||||||
| Unencumbered interest ratio | > 1.75 | 4.58 | |||||||||||||||
| September 30, 2020 | |||||||||||||||||
| Unsecured Notes Key Covenants | Required | Notes Due (1) | Notes Due (2) | ||||||||||||||
| Limitation on incurrence of total debt | ≤ 60% | 36.1% | 36.2% | ||||||||||||||
| Limitation on incurrence of secured debt | ≤ 40% | 0.1% | 0.1% | ||||||||||||||
| Debt service coverage ratio | ≥ 1.50 | 4.55 | 4.55 | ||||||||||||||
| Maintenance of total unencumbered assets | ≥ 150% | 277.1% | 276.9% | ||||||||||||||
(1) Calculations pursuant to covenants for notes payable due 2023-2028 and 2048 | |||||||||||||||||
(2) Calculations pursuant to covenants for notes payable due 2030 and 2050 | |||||||||||||||||
9
National Retail Properties, Inc.
Property Portfolio
Top 20 Lines of Trade
% of Rent Collections Quarter Ended September 30, 2020(3) | ||||||||||||||||||||||||||
| As of September 30, | ||||||||||||||||||||||||||
| Line of Trade | 2020(1) | 2019(2) | ||||||||||||||||||||||||
| 1. | Convenience stores | 18.2 | % | 17.5 | % | 99.9 | % | |||||||||||||||||||
| 2. | Restaurants – full service | 10.5 | % | 11.3 | % | 76.2 | % | |||||||||||||||||||
| 3. | Automotive service | 10.2 | % | 9.3 | % | 100.0 | % | |||||||||||||||||||
| 4. | Restaurants – limited service | 8.8 | % | 8.8 | % | 73.6 | % | |||||||||||||||||||
| 5. | Family entertainment centers | 6.7 | % | 6.8 | % | 85.2 | % | |||||||||||||||||||
| 6. | Health and fitness | 5.3 | % | 5.3 | % | 84.9 | % | |||||||||||||||||||
| 7. | Theaters | 4.5 | % | 4.8 | % | 32.9 | % | |||||||||||||||||||
| 8. | Recreational vehicle dealers, parts and accessories | 3.5 | % | 3.5 | % | 99.7 | % | |||||||||||||||||||
| 9. | Automotive parts | 3.1 | % | 3.2 | % | 100.0 | % | |||||||||||||||||||
| 10. | Equipment rental | 2.6 | % | 2.7 | % | 100.0 | % | |||||||||||||||||||
| 11. | Home improvement | 2.6 | % | 2.6 | % | 99.0 | % | |||||||||||||||||||
| 12. | Wholesale clubs | 2.6 | % | 2.6 | % | 99.6 | % | |||||||||||||||||||
| 13. | Medical service providers | 2.2 | % | 2.2 | % | 98.8 | % | |||||||||||||||||||
| 14. | General merchandise | 1.7 | % | 1.8 | % | 99.9 | % | |||||||||||||||||||
| 15. | Furniture | 1.7 | % | 1.6 | % | 96.9 | % | |||||||||||||||||||
| 16. | Home furnishings | 1.6 | % | 1.7 | % | 99.2 | % | |||||||||||||||||||
| 17. | Consumer electronics | 1.5 | % | 1.5 | % | 100.0 | % | |||||||||||||||||||
| 18. | Travel plazas | 1.5 | % | 1.6 | % | 100.0 | % | |||||||||||||||||||
| 19. | Drug stores | 1.5 | % | 1.6 | % | 100.0 | % | |||||||||||||||||||
| 20. | Bank | 1.3 | % | 1.4 | % | 100.0 | % | |||||||||||||||||||
| Other | 8.4 | % | 8.2 | % | 98.5 | % | ||||||||||||||||||||
| Total | 100.0 | % | 100.0 | % | 90.1 | % | ||||||||||||||||||||
Top 10 States
| State | % of Total(1) | State | % of Total(1) | ||||||||||||||||||||||||||||||||
| 1. | Texas | 17.6 | % | 6. | Georgia | 4.5 | % | ||||||||||||||||||||||||||||
| 2. | Florida | 8.8 | % | 7. | Indiana | 4.2 | % | ||||||||||||||||||||||||||||
| 3. | Ohio | 5.9 | % | 8. | Tennessee | 3.7 | % | ||||||||||||||||||||||||||||
| 4. | Illinois | 5.1 | % | 9. | Virginia | 3.5 | % | ||||||||||||||||||||||||||||
| 5. | North Carolina | 4.5 | % | 10. | California | 3.3 | % | ||||||||||||||||||||||||||||
(1) Based on the annual base rent of 674,077,000, which is the annualized base rent for all leases in place as of September 30, 2020. | |||||||||||||||||||||||||||||||||||
(2) Based on the annual base rent of $658,347,000, which is the annualized base rent for all leases in place as of September 30, 2019. | |||||||||||||||||||||||||||||||||||
(3) Rent collections received as of October 28, 2020. | |||||||||||||||||||||||||||||||||||
10
National Retail Properties, Inc.
Property Portfolio
Top 20 Tenants
| Properties | % of Total(1) | ||||||||||||||||
| 1. | 7-Eleven | 140 | 5.1 | % | |||||||||||||
| 2. | Mister Car Wash | 115 | 4.5 | % | |||||||||||||
| 3. | Camping World | 47 | 4.4 | % | |||||||||||||
| 4. | LA Fitness | 30 | 3.8 | % | |||||||||||||
| 5. | Flynn Restaurant Group (Taco Bell/Arby's) | 203 | 3.5 | % | |||||||||||||
| 6. | GPM Investments (Convenience Stores) | 151 | 3.3 | % | |||||||||||||
| 7. | AMC Theatre | 19 | 2.8 | % | |||||||||||||
| 8. | Couche Tard (Pantry) | 82 | 2.7 | % | |||||||||||||
| 9. | BJ's Wholesale Club | 11 | 2.6 | % | |||||||||||||
| 10. | Sunoco | 59 | 2.2 | % | |||||||||||||
| 11. | Mavis Tire Express Services | 120 | 2.2 | % | |||||||||||||
| 12. | Chuck-E-Cheese's | 53 | 2.1 | % | |||||||||||||
| 13. | Main Event | 18 | 1.8 | % | |||||||||||||
| 14. | Frisch's Restaurants | 74 | 1.8 | % | |||||||||||||
| 15. | Bob Evans | 116 | 1.7 | % | |||||||||||||
| 16. | Fikes (Convenience Stores) | 56 | 1.6 | % | |||||||||||||
| 17. | Best Buy | 15 | 1.5 | % | |||||||||||||
| 18. | Life Time Fitness | 3 | 1.5 | % | |||||||||||||
| 19. | Dave & Buster's | 11 | 1.5 | % | |||||||||||||
| 20. | Pull-A-Part | 20 | 1.3 | % | |||||||||||||
Lease Expirations(2)
% of Total(1) | # of Properties | Gross Leasable Area(3) | % of Total(1) | # of Properties | Gross Leasable Area(3) | |||||||||||||||||||||||||||||||||||||||
| 2020 | 0.3 | % | 21 | 170,000 | 2026 | 4.4 | % | 170 | 1,716,000 | |||||||||||||||||||||||||||||||||||
| 2021 | 3.3 | % | 117 | 1,166,000 | 2027 | 6.6 | % | 176 | 2,517,000 | |||||||||||||||||||||||||||||||||||
| 2022 | 5.4 | % | 121 | 1,563,000 | 2028 | 5.1 | % | 164 | 1,237,000 | |||||||||||||||||||||||||||||||||||
| 2023 | 2.9 | % | 116 | 1,436,000 | 2029 | 3.1 | % | 76 | 1,054,000 | |||||||||||||||||||||||||||||||||||
| 2024 | 3.6 | % | 97 | 1,484,000 | 2030 | 3.6 | % | 103 | 1,105,000 | |||||||||||||||||||||||||||||||||||
| 2025 | 6.3 | % | 199 | 2,100,000 | Thereafter | 55.4 | % | 1,700 | 16,001,000 | |||||||||||||||||||||||||||||||||||
(1)Based on the annual base rent of $674,077,000, which is the annualized base rent for all leases in place as of September 30, 2020.
(2)As of September 30, 2020, the weighted average remaining lease term is 10.7 years.
(3)Square feet.
11