8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report: February 9, 2022

NATIONAL RETAIL PROPERTIES, INC.

(exact name of registrant as specified in its charter)

Maryland	001-11290	56-1431377
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employment Identification No.)

450 South Orange Avenue, Suite 900, Orlando, Florida 32801

(Address of principal executive offices, including zip code)

(407) 265-7348

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of exchange on which registered
Common Stock, $0.01 par value	NNN	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition

period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition.

On February 9, 2022, National Retail Properties, Inc. (the "Company"), issued a press release announcing its results of operations and financial condition for the quarter and year ended December 31, 2021. The press release is attached hereto as Exhibit 99.1 to this report and the supplemental data is attached hereto as Exhibit 99.2 to this report. The press release and the supplemental data are available on the Company's website.

The information in this Form 8-K is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of such section, nor shall such information be deemed to be incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01.	Financial Statements and Exhibits.
(d) Exhibits.
99.1	Press Release, dated February 9, 2022, of National Retail Properties, Inc.
99.2	Supplemental Data, dated February 9, 2022, of National Retail Properties, Inc.
104.1	Cover Page Interactive Data File (the Cover Page Interactive Data File is embedded within the Inline XBRL document)

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	National Retail Properties, Inc.
Dated: February 9, 2022	By:	/s/ Kevin B. Habicht
		Kevin B. Habicht
		Executive Vice President and Chief Financial Officer

EX-99.1

Exhibit 99.1

 

NEWS RELEASE
For information contact:
Kevin B. Habicht
Chief Financial Officer
(407) 265-7348	FOR IMMEDIATE RELEASE
	February 9, 2022

RECORD ANNUAL RESULTS AND INCREASED 2022 GUIDANCE

ANNOUNCED BY NATIONAL RETAIL PROPERTIES, INC.

Orlando, Florida, February 9, 2022 – National Retail Properties, Inc. (NYSE: NNN), a real estate investment trust, today announced operating results for the quarter and year ended December 31, 2021. Highlights include:

Operating Results:

•Revenues and net earnings, FFO, Core FFO and AFFO available to common stockholders and diluted per share amounts:

	Quarter Ended						Year Ended
	December 31,						December 31,
	2021			2020			2021			2020
	(in thousands, except per share data)
Revenues	$	187,261		$	163,284		$	726,407		$	660,681
Net earnings available to common stockholders	$	65,129		$	56,802	(1)	$	264,217		$	210,859	(1)
Net earnings per common share	$	0.37		$	0.33	(1)	$	1.51		$	1.22	(1)
FFO available to common stockholders	$	120,529		$	107,565		$	467,833		$	428,236
FFO per common share	$	0.69		$	0.62		$	2.68		$	2.49
Core FFO available to common stockholders	$	131,426		$	109,331		$	500,058		$	446,681
Core FFO per common share	$	0.75		$	0.63		$	2.86		$	2.59
AFFO available to common stockholders	$	135,132	(2)	$	119,764	(3)	$	534,792	(2)	$	431,444	(3)
AFFO per common share	$	0.77	(2)	$	0.69	(3)	$	3.06	(2)	$	2.51	(3)

(1)Includes the write-off of $7,034 (or $0.04 per share) and $21,792 (or $0.12 per share) of receivables due to reclassifying certain tenants as cash basis for accounting purposes during the quarter and year ended December 31, 2020, respectively.

(2)Amounts include ($2,949) and ($24,945) of net straight-line accrued rent from net rent deferral repayments from the COVID-19 rent deferral lease amendments for the quarter and year ended December 31, 2021, respectively. Excluding such, AFFO per common share would have been $0.76 and $2.92 for the quarter and year ended December 31, 2021, respectively.

(3)Amounts include ($2,507) and $30,474 of net straight-line accrued rent from net rent deferrals (repayments) from the COVID-19 rent deferral lease amendments for the quarter and year ended December 31, 2020, respectively. Excluding such, AFFO per common share results would have been $0.68 and $2.68 for the quarter and year ended December 31, 2020, respectively.

2021 Highlights:

•Dividend yield of 4.4% at December 31, 2021

•Annual dividend per common share increased to $2.10 marking the 32nd consecutive year of annual dividend increases - the third longest record of consecutive annual dividend increases of all public REITs and 99% of all public companies

•Maintained high occupancy levels at 99.0%, with a weighted average remaining lease term of 10.6 years, at December 31, 2021 as compared to 98.6% at September 30, 2021, and 98.5% at December 31, 2020

2021 Highlights (continued):

•$555.4 million in property investments, including the acquisition of 156 properties with aggregate gross leasable area of approximately 1,341,000 square feet at an initial cash yield of 6.5%, with a weighted average remaining lease term of 18.2 years

•Sold 74 properties for $122.0 million, producing $23.1 million of gains on sale, at a cap rate of 7.4%

•Raised $3.8 million in net proceeds from issuance of 92,577 common shares

•Issued $450 million principal amount of 3.500% senior unsecured notes due 2051

•Issued $450 million principal amount of 3.000% senior unsecured notes due 2052

•Redeemed $350 million principal amount of 3.300% senior unsecured notes due 2023

•Redeemed all 13,800,000 depositary shares of its 5.200% Series F Preferred Stock for an aggregate redemption price of $25.111944 per depository share

•Weighted average debt maturity increased to 14.7 years (from 10.2 years at December 31, 2020)

•Expanded line of credit borrowing capacity from $900 million to $1.1 billion, reduced pricing from LIBOR plus 87.5 basis points to LIBOR plus 77.5 basis points, and extended maturity to June 2025

•Ended the year with $171.3 million of cash and no amounts drawn on the $1.1 billion bank credit facility

•99.8% of properties are unencumbered with secured mortgage debt

•Total average annual shareholder return of 12% over the past 25 years exceeds industry and general equity averages

Fourth Quarter 2021 Highlights:

•As of January 31, 2022, NNN had collected approximately 99.4% of rent originally due for the quarter ended December 31, 2021

•$100.0 million in property investments, including the acquisition of 49 properties with an aggregate gross leasable area of approximately 251,000 square feet at an initial cash yield of 6.4%, with a weighted average remaining lease term of 19.4 years

•Sold 21 properties with net proceeds of $51.0 million, producing $5.2 million of gains on sales at a cap rate of 8.0%

•Raised $0.7 million in net proceeds from the issuance of 15,911 common shares

NNN entered into rent deferral lease amendments with certain tenants for an aggregate $4,758,000 and $52,019,000 of rent originally due for the year ending December 31, 2021 and 2020, respectively. The rent deferral lease amendments required the deferred rents to be repaid at a later time during the lease term. Approximately $31,776,000 and $3,259,000 of the deferred rent was repaid in 2021 and 2020, respectively.

Core FFO guidance for 2022 was increased from a range of $2.90 to $2.97 per share to a range of $2.93 to $3.00 per share. The 2022 AFFO is estimated to be $3.01 to $3.07 per share. The Core FFO guidance equates to net earnings of $1.76 to $1.82 per share, plus $1.18 per share of expected real estate depreciation and amortization and excludes any gains from the sale of real estate, charges for impairments and executive retirement costs. The guidance is based on current plans and assumptions and subject to risks and uncertainties more fully described in this press release and the company's reports filed with the Securities and Exchange Commission.

Jay Whitehurst, Chief Executive Officer, commented: "2021 was an outstanding year for National Retail Properties. Every aspect of our business is in great position to address the future. From a balance sheet that has tremendous capacity to fund new investments, to tenant relationships that generate high quality investments and stable long-term cash flow, to management and board leadership enhancements that put the right people in the right seats for the long-term, National Retail Properties is well-positioned to continue its consistent growth and success."

National Retail Properties invests primarily in high-quality retail properties subject generally to long-term, net leases. As of December 31, 2021, the company owned 3,223 properties in 48 states with a gross leasable area of approximately 32,753,000 million square feet and with a weighted average remaining lease term of 10.6 years. For more information on the company, visit www.nnnreit.com.

Management will hold a conference call on February 9, 2022, 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

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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 Annual Report on Form 10-K. 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.

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, loss on early extinguishment of debt 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.

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National Retail Properties, Inc.

Income Statement Summary

(in thousands, except per share data)

(unaudited)

	Quarter Ended						Year Ended
	December 31,						December 31,
	2021			2020			2021				2020
Revenues:
Rental income	$	186,633		$	162,902		$	723,859			$	658,793
Interest and other income from real estate transactions		628			382			2,548				1,888
		187,261			163,284			726,407				660,681
Operating expenses:
General and administrative		9,947			9,247			44,640				38,161
Real estate		7,520			8,059			28,385				28,362
Depreciation and amortization		53,389			49,095			205,220				196,623
Leasing transaction costs		57			40			203				76
Impairment losses – real estate, net of recoveries		7,310			4,380			21,957				37,442
Executive retirement costs		—			1,766			—				1,766
		78,223			72,587			300,405				302,430
Gain on disposition of real estate		5,159			2,601			23,094				16,238
Earnings from operations		114,197			93,298			449,096				374,489
Other expenses (revenues):
Interest and other income		(57	)		(73	)		(216	)			(417	)
Interest expense		36,684			32,084			137,874		(1)		129,431		(2)
Loss on early extinguishment of debt		—			—			21,328				16,679
		36,627			32,011			158,986				145,693
Net earnings		77,570			61,287			290,110				228,796
Loss attributable to noncontrolling interests		—			—			3				3
Net earnings attributable to NNN		77,570			61,287			290,113				228,799
Series F preferred stock dividends		(1,544	)		(4,485	)		(14,999	)			(17,940	)
Excess of redemption value over carrying value of     preferred shares redeemed		(10,897	)		—			(10,897	)			—
Net earnings available to common stockholders	$	65,129		$	56,802		$	264,217			$	210,859
Weighted average common shares outstanding:
Basic		174,750			173,310			174,711				172,110
Diluted		174,868			173,453			174,819				172,217
Net earnings per share available to common stockholders:
Basic	$	0.37		$	0.33		$	1.51			$	1.22
Diluted	$	0.37		$	0.33		$	1.51			$	1.22

(1)Includes $2,078 in connection with the redemption of 3.30% senior unsecured notes due 2023 for the year ended December 31, 2021

(2)Includes $2,291 in connection with the redemption of 3.80% senior unsecured notes due 2022 for the year ended December 31, 2020

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National Retail Properties, Inc.

(in thousands, except per share data)

(unaudited)

	Quarter Ended							Year Ended
	December 31,							December 31,
	2021			2020				2021			2020
Funds From Operations (FFO) Reconciliation:
Net earnings available to common stockholders	$	65,129		$	56,802		(1)	$	264,217		$	210,859		(1)
Real estate depreciation and amortization		53,249			48,984				204,753			196,173
Gain on disposition of real estate		(5,159	)		(2,601	)			(23,094	)		(16,238	)
Impairment losses – depreciable real estate, net of     recoveries		7,310			4,380				21,957			37,442
Total FFO adjustments		55,400			50,763				203,616			217,377
FFO available to common stockholders	$	120,529		$	107,565			$	467,833		$	428,236
FFO per common share:
Basic	$	0.69		$	0.62			$	2.68		$	2.49
Diluted	$	0.69		$	0.62			$	2.68		$	2.49
Core Funds From Operations (Core FFO) Reconciliation:
Net earnings available to common stockholders	$	65,129		$	56,802		(1)	$	264,217		$	210,859		(1)
Total FFO adjustments		55,400			50,763				203,616			217,377
FFO available to common stockholders		120,529			107,565				467,833			428,236
Executive retirement costs		—			1,766				—			1,766
Loss on early extinguishment of debt		—			—				21,328			16,679
Excess of redemption value over carrying value of     preferred shares redeemed		10,897			—				10,897			—
Total Core FFO adjustments		10,897			1,766				32,225			18,445
Core FFO available to common stockholders	$	131,426		$	109,331			$	500,058		$	446,681
Core FFO per common share:
Basic	$	0.75		$	0.63			$	2.86		$	2.60
Diluted	$	0.75		$	0.63			$	2.86		$	2.59

(1)Includes the write-off of $7,034 (or $0.04 per share) and $21,792 (or $0.12 per share) of receivables due to reclassifying certain tenants as cash basis for accounting purposes during the quarter and year ended December 31, 2020, respectively.

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National Retail Properties, Inc.

(in thousands, except per share data)

(unaudited)

	Quarter Ended								Year Ended
	December 31,								December 31,
	2021				2020				2021				2020
Adjusted Funds From Operations (AFFO) Reconciliation:
Net earnings available to common stockholders	$	65,129			$	56,802		(1)	$	264,217			$	210,859		(1)
Total FFO adjustments		55,400				50,763				203,616				217,377
Total Core FFO adjustments		10,897				1,766				32,225				18,445
Core FFO available to common stockholders		131,426				109,331				500,058				446,681
Straight-line accrued rent, net of reserves		2,046				7,437				21,137				(26,027	)
Net capital lease rent adjustment		79				66				340				210
Below-market rent amortization		(280	)			(175	)			(710	)			(887	)
Stock based compensation expense		1,975				3,275				14,295				12,855
Capitalized interest expense		(114	)			(170	)			(328	)			(1,388	)
Total AFFO adjustments		3,706				10,433				34,734				(15,237	)
AFFO available to common stockholders	$	135,132		(2)	$	119,764		(3)	$	534,792		(2)	$	431,444		(3)
AFFO per common share:
Basic	$	0.77		(2)	$	0.69		(3)	$	3.06		(2)	$	2.51		(3)
Diluted	$	0.77		(2)	$	0.69		(3)	$	3.06		(2)	$	2.51		(3)
Other Information:
Rental income from operating leases(4)	$	181,078			$	157,408			$	703,865			$	639,265
Earned income from direct financing leases(4)	$	154			$	160			$	623			$	647
Percentage rent(4)	$	176			$	114			$	706			$	842
Real estate expense reimbursement from tenants(4)	$	5,225			$	5,220			$	18,665			$	18,039
Real estate expenses		(7,520	)			(8,059	)			(28,385	)			(28,362	)
Real estate expenses, net of tenant reimbursements	$	(2,295	)		$	(2,839	)		$	(9,720	)		$	(10,323	)
Amortization of debt costs	$	1,164			$	1,085			$	5,186			$	5,009
Scheduled debt principal amortization (excluding    maturities)	$	161			$	153			$	630			$	596
Non-real estate depreciation expense	$	116			$	114			$	451			$	461

(1)Includes the write-off of $7,034 (or $0.04 per share) and $21,792 (or $0.12 per share) of receivables due to reclassifying certain tenants as cash basis for accounting purposes during the quarter and year ended December 31, 2020, respectively.

(2)Amounts include ($2,949) and ($24,945) of net straight-line accrued rent from net rent deferral repayments from the COVID-19 rent deferral lease amendments for the quarter and year ended December 31, 2021, respectively. Excluding such, AFFO per common share would have been $0.76 and $2.92 for the quarter and year ended December 31, 2021, respectively.

(3)Amounts include ($2,507) and $30,474 of net straight-line accrued net rent deferrals (repayments) from the COVID-19 rent deferral lease amendments for the quarter and year ended December 31, 2020, respectively. Excluding such, AFFO per common share results would have been $0.68 and $2.68 for the quarter and year ended December 31, 2020, respectively.

(4)For the quarter and year ended December 31, 2021, the aggregate of such amounts is $186,633 and $723,859, respectively, classified as rental income on the income statement summary. For the quarter and year ended December 31, 2020, the aggregate of such amounts is $162,902 and $658,793, respectively.

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2022 Earnings Guidance:

Guidance is based on current plans and assumptions and subject to risks and uncertainties more fully described in this press release and the company's reports filed with the Commission.

	2022 Guidance
Net earnings per common share excluding any gains on disposition     of real estate, impairment charges, and executive retirement costs	$1.76 - $1.82 per share
Real estate depreciation and amortization per share	$1.18 per share
Core FFO per share	$2.93 - $3.00 per share
AFFO per share(1)	$3.01 - $3.07 per share
General and administrative expenses	$42 - $44 Million
Real estate expenses, net of tenant reimbursements	$10 - $12 Million
Acquisition volume	$550 - $650 Million
Disposition volume	$80 - $100 Million

(1)Estimates include the net straight-line accrued rent impact of the net rent repayment from the COVID-19 rent deferral
lease amendments of $5.4 million for 2022. Excluding such, AFFO per common share guidance would have been
$2.98 - $3.04 for 2022.

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National Retail Properties, Inc.

Balance Sheet Summary

(in thousands)

(unaudited)

	December 31, 2021		December 31, 2020
Assets:
Real estate portfolio	$	7,444,289	$	7,212,655
Real estate held for sale		5,557		5,671
Cash and cash equivalents		171,322		267,236
Receivables, net of allowance of $782 and $835, respectively		3,154		4,338
Accrued rental income, net of allowance of $4,587 and $6,947, respectively		31,942		53,958
Debt costs, net of accumulated amortization of $19,377 and $17,294, respectively		7,443		1,917
Other assets		87,347		92,069
Total assets	$	7,751,054	$	7,637,844
Liabilities:
Line of credit payable	$	—	$	—
Mortgages payable, including unamortized premium and net of unamortized debt costs		10,697		11,395
Notes payable, net of unamortized discount and unamortized debt costs		3,735,769		3,209,527
Accrued interest payable		23,923		19,401
Other liabilities		79,002		78,217
Total liabilities		3,849,391		3,318,540
Stockholders’ equity of NNN		3,901,662		4,319,300
Noncontrolling interests		1		4
Total equity		3,901,663		4,319,304
Total liabilities and equity	$	7,751,054	$	7,637,844
Common shares outstanding		175,636		175,233
Gross leasable area, Property Portfolio (square feet)		32,753		32,461

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National Retail Properties, Inc.

Debt Summary

As of December 31, 2021

(in thousands)

(unaudited)

Unsecured Debt	Principal		Principal, Net of Unamortized Discount			Stated Rate			Effective Rate			Maturity Date
Line of credit payable	$	—	$	—		L + 77.5 bps				—	%	June 2025
Unsecured notes payable:
2024		350,000		349,801			3.900	%		3.924	%	June 2024
2025		400,000		399,583			4.000	%		4.029	%	November 2025
2026		350,000		347,909			3.600	%		3.733	%	December 2026
2027		400,000		398,995			3.500	%		3.548	%	October 2027
2028		400,000		397,944			4.300	%		4.388	%	October 2028
2030		400,000		398,921			2.500	%		2.536	%	April 2030
2048		300,000		295,982			4.800	%		4.890	%	October 2048
2050		300,000		294,160			3.100	%		3.205	%	April 2050
2051		450,000		441,721			3.500	%		3.602	%	April 2051
2052		450,000		439,636			3.000	%		3.118	%	April 2052
Total		3,800,000		3,764,652
Total unsecured debt(1)	$	3,800,000	$	3,764,652
Debt costs			$	(38,145	)
Accumulated amortization				9,262
Debt costs, net of accumulated amortization				(28,883	)
Notes payable, net of unamortized discount and     unamortized debt costs			$	3,735,769

(1)Unsecured notes payable have a weighted average interest rate of 3.7% and a weighted average maturity of 14.7 years

Mortgages Payable	Principal Balance			Interest Rate			Maturity Date
Mortgage(1)	$	10,719			5.230	%	July 2023
Debt costs		(147	)
Accumulated amortization		125
Debt costs, net of accumulated amortization		(22	)
Mortgages payable, including unamortized    premium and net of unamortized debt costs	$	10,697

(1)Includes unamortized premium

9

National Retail Properties, Inc.

Debt Summary

As of December 31, 2021

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 December 31, 2021, the company believes it is in compliance with the covenants.

Unsecured Credit Facility Key Covenants	Required	December 31, 2021
Maximum leverage ratio	< 0.60	0.37
Minimum fixed charge coverage ratio	> 1.50	4.48
Maximum secured indebtedness ratio	< 0.40	N/C
Unencumbered asset value ratio	> 1.67	2.78
Unencumbered interest ratio	> 1.75	4.94
Unsecured Notes Key Covenants	Required	December 31, 2021
Limitation on incurrence of total debt	≤ 60%	40.6%
Limitation on incurrence of secured debt	≤ 40%	0.1%
Debt service coverage ratio	≥ 1.50	4.57
Maintenance of total unencumbered assets	≥ 150%	246%

10

National Retail Properties, Inc.

Property Portfolio

Top 20 Lines of Trade

		As of December 31,		% of Rent Collections Quarter Ended December 31,
	Lines of Trade	2021(1)	2020(2)	2021(3)
1.	Convenience stores	17.9%	18.2%	100.0%
2.	Automotive service	12.3%	10.3%	99.5%
3.	Restaurants – full service	9.8%	10.5%	97.3%
4.	Restaurants – limited service	9.4%	9.7%	99.6%
5.	Family entertainment centers	5.9%	5.9%	99.9%
6.	Health and fitness	5.2%	5.3%	98.9%
7.	Theaters	4.5%	4.4%	99.9%
8.	Recreational vehicle dealers, parts and accessories	3.9%	3.5%	99.9%
9.	Equipment rental	3.2%	2.6%	100.0%
10.	Automotive parts	3.0%	3.1%	99.7%
11.	Wholesale clubs	2.5%	2.6%	100.0%
12.	Home improvement	2.5%	2.6%	100.0%
13.	Medical service providers	2.0%	2.2%	98.4%
14.	Furniture	1.7%	1.7%	100.0%
15.	General merchandise	1.7%	1.7%	100.0%
16.	Consumer electronics	1.5%	1.5%	100.0%
17.	Home furnishings	1.5%	1.6%	100.0%
18.	Travel plazas	1.5%	1.5%	98.9%
19.	Automobile auctions, wholesale	1.3%	1.1%	99.9%
20.	Drug stores	1.3%	1.5%	100.0%
	Other	7.4%	8.5%	98.4%
	Total	100.0%	100.0%	99.4%

Top 10 States

	State	% of Total(1)		State	% of Total(1)
1.	Texas	16.9%	6.	Georgia	4.6%
2.	Florida	8.6%	7.	Indiana	4.0%
3.	Ohio	5.5%	8.	Tennessee	3.8%
4.	Illinois	5.5%	9.	Virginia	3.4%
5.	North Carolina	4.7%	10.	California	3.3%

As a percentage of annual base rent, which is the annualized base rent for all leases in place.

	(1) $713,169,000 as of December 31, 2021.
	(2) $675,120,000 as of December 31, 2020.
(3)	Rent collections received as of January 31, 2022, excluding the repayment of amounts previously deferred according to the rent deferral lease amendments.

11

National Retail Properties, Inc.

Property Portfolio

Top 20 Tenants

	Tenant	# of Properties	% of Total(1)
1.	7-Eleven	139	4.9%
2.	Mister Car Wash	121	4.6%
3.	Camping World	44	3.8%
4.	LA Fitness	30	3.7%
5.	GPM Investments (Convenience Stores)	152	3.2%
6.	Flynn Restaurant Group (Taco Bell/Arby's)	204	3.1%
7.	AMC Theatre	20	2.9%
8.	Couche Tard (Pantry)	82	2.7%
9.	BJ's Wholesale Club	12	2.5%
10.	Sunoco	59	2.1%
11.	Mavis Tire Express Services	123	2.1%
12.	Frisch's Restaurants	69	1.9%
13.	Main Event	18	1.8%
14.	Fikes (Convenience Stores)	59	1.7%
15.	Chuck E. Cheese's	53	1.5%
16.	Life Time Fitness	3	1.5%
17.	Best Buy	16	1.5%
18.	Bob Evans	106	1.5%
19.	Dave & Buster's	11	1.4%
20.	Pull-A-Part	20	1.3%

Lease Expirations(3)

	% of Total(1)	# of Properties	Gross Leasable Area (2)		% of Total(1)	# of Properties	Gross Leasable Area (2)
2022	2.8%	75	739,000	2028	4.7%	157	1,245,000
2023	2.6%	113	1,402,000	2029	2.8%	71	987,000
2024	3.3%	93	1,455,000	2030	3.7%	106	1,194,000
2025	5.9%	192	2,013,000	2031	8.3%	190	2,781,000
2026	5.5%	217	2,139,000	2032	5.1%	165	1,396,000
2027	8.5%	224	3,375,000	Thereafter	46.8%	1,586	13,669,000

(1)Based on the annual base rent of $713,169,000, which is the annualized base rent for all leases in place as of December 31, 2021.

(2)Square feet.

(3)As of December 31, 2021, the weighted average remaining lease term is 10.6 years.

12

National Retail Properties, Inc.

Rent Deferral Lease Amendments

(in thousands)

The following table outlines the rent deferred and corresponding scheduled repayment by quarter of the rent deferral lease amendments executed as of December 31, 2021 (dollars in thousands):

		Deferred									Scheduled Repayment
		Accrual Basis		Cash Basis		Total		% of Total			Accrual Basis		Cash Basis		Total		% of Total			Cumulative Total
2020		$	33,594	$	18,425	$	52,019		91.7	%	$	3,239	$	20	$	3,259		5.7	%		5.7	%
2021	Q1		678		2,018		2,696		4.7	%		10,059		610		10,669		18.8	%		24.5	%
	Q2		278		750		1,028		1.8	%		8,599		1,751		10,350		18.2	%		42.7	%
	Q3		34		750		784		1.4	%		4,328		1,740		6,068		10.7	%		53.4	%
	Q4		—		250		250		0.4	%		2,949		1,740		4,689		8.3	%		61.7	%
			990		3,768		4,758		8.3	%		25,935		5,841		31,776		56.0	%		61.7	%
2022	Q1		—		—		—		—			1,780		2,283		4,063		7.2	%		68.9	%
	Q2		—		—		—		—			1,729		2,284		4,013		7.1	%		76.0	%
	Q3		—		—		—		—			1,201		2,284		3,485		6.1	%		82.1	%
	Q4		—		—		—		—			681		2,284		2,965		5.2	%		87.3	%
			—		—		—		—			5,391		9,135		14,526		25.6	%		87.3	%
2023			—		—		—		—			19		3,334		3,353		5.9	%		93.2	%
2024			—		—		—		—			—		1,932		1,932		3.4	%		96.6	%
2025			—		—		—		—			—		1,931		1,931		3.4	%		100.0	%
		$	34,584	$	22,193	$	56,777				$	34,584	$	22,193	$	56,777

13

EX-99.2

Exhibit 99.2

 

ANNUAL SUPPLEMENTAL DATA

As of December 31, 2021

 

TABLE OF CONTENTS

	PAGE REFERENCE
Financial Summary
Income Statement Summary	4
Funds From Operations (FFO)	5
Core Funds From Operations	5
Adjusted Funds From Operations (AFFO)	6
Other Information	7
EBITDA	7
Balance Sheet	8
Debt Summary	9
Credit Metrics	11
Credit Facility and Note Covenants	11
Long-Term Dividend History	12
Transaction Summary
Property Acquisitions	13
Property Dispositions	13
Property Portfolio
Lease Expirations	14
Top 20 Lines of Trade	15
Top 10 States	15
Portfolio By Region	16
Top Tenants	17
Same Store Rental Income	18
Leasing Data	18
Other Property Portfolio Data	19
Earnings Guidance	19
COVID-19 Metrics	20

2

 

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 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, 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 Annual Report on Form 10-K for the year ended December 31, 2021 . 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.

3

 

INCOME STATEMENT SUMMARY

(in thousands, except per share data)

(unaudited)

	Quarter Ended						Year Ended
	December 31,						December 31,
	2021			2020			2021				2020
Revenues:
Rental income	$	186,633		$	162,902		$	723,859			$	658,793
Interest and other income from real estate transactions		628			382			2,548				1,888
		187,261			163,284			726,407				660,681
Operating expenses:
General and administrative		9,947			9,247			44,640				38,161
Real estate		7,520			8,059			28,385				28,362
Depreciation and amortization		53,389			49,095			205,220				196,623
Leasing transaction costs		57			40			203				76
Impairment losses – real estate, net of recoveries		7,310			4,380			21,957				37,442
Executive retirement costs		—			1,766			—				1,766
		78,223			72,587			300,405				302,430
Gain on disposition of real estate		5,159			2,601			23,094				16,238
Earnings from operations		114,197			93,298			449,096				374,489
Other expenses (revenues):
Interest and other income		(57	)		(73	)		(216	)			(417	)
Interest expense		36,684			32,084			137,874		(1)		129,431		(2)
Loss on early extinguishment of debt		—			—			21,328				16,679
		36,627			32,011			158,986				145,693
Net earnings		77,570			61,287			290,110				228,796
Loss attributable to noncontrolling interests		—			—			3				3
Net earnings attributable to NNN		77,570			61,287			290,113				228,799
Series F preferred stock dividends		(1,544	)		(4,485	)		(14,999	)			(17,940	)
Excess of redemption value over carrying value of    preferred shares redeemed		(10,897	)		—			(10,897	)			—
Net earnings available to common stockholders	$	65,129		$	56,802		$	264,217			$	210,859
Weighted average common shares outstanding:
Basic		174,750			173,310			174,711				172,110
Diluted		174,868			173,453			174,819				172,217
Net earnings per share available to common stockholders:
Basic	$	0.37		$	0.33		$	1.51			$	1.22
Diluted	$	0.37		$	0.33		$	1.51			$	1.22

(1)	Includes $2,078 in connection with the redemption of 3.30% senior unsecured notes due 2023 for the year ended December 31, 2021
(2)	Includes $2,291 in connection with the redemption of 3.80% senior unsecured notes due 2022 for the year ended December 31, 2020

4

 

FUNDS FROM OPERATIONS (FFO)

(in thousands, except per share data)

(unaudited)

	Quarter Ended							Year Ended
	December 31,							December 31,
	2021			2020				2021			2020
Net earnings available to common stockholders	$	65,129		$	56,802		(1)	$	264,217		$	210,859		(1)
Real estate depreciation and amortization		53,249			48,984				204,753			196,173
Gain on disposition of real estate		(5,159	)		(2,601	)			(23,094	)		(16,238	)
Impairment losses – depreciable real estate, net of    recoveries		7,310			4,380				21,957			37,442
Total FFO adjustments		55,400			50,763				203,616			217,377
FFO available to common stockholders	$	120,529		$	107,565			$	467,833		$	428,236
FFO per common share:
Basic	$	0.69		$	0.62			$	2.68		$	2.49
Diluted	$	0.69		$	0.62			$	2.68		$	2.49

(1) Includes the write-off of $7,034 (or $0.04 per share) and $21,792 (or $0.12 per share) of receivables due to reclassifying certain tenants as cash basis for accounting purposes during the quarter and year ended December 31, 2020, respectively.

CORE FUNDS FROM OPERATIONS

(in thousands, except per share data)

(unaudited)

	Quarter Ended					Year Ended
	December 31,					December 31,
	2021		2020			2021		2020
Net earnings available to common stockholders	$	65,129	$	56,802	(1)	$	264,217	$	210,859	(1)
Total FFO adjustments		55,400		50,763			203,616		217,377
FFO available to common stockholders		120,529		107,565			467,833		428,236
Executive retirement costs		—		1,766			—		1,766
Loss on early extinguishment of debt		—		—			21,328		16,679
Excess of redemption value over carrying value of    preferred shares redeemed		10,897		—			10,897		—
Total Core FFO adjustments		10,897		1,766			32,225		18,445
Core FFO available to common stockholders	$	131,426	$	109,331		$	500,058	$	446,681
Core FFO per common share:
Basic	$	0.75	$	0.63		$	2.86	$	2.60
Diluted	$	0.75	$	0.63		$	2.86	$	2.59

(1) Includes the write-off of $7,034 (or $0.04 per share) and $21,792 (or $0.12 per share) of receivables due to reclassifying certain tenants as cash basis for accounting purposes during the quarter and year ended December 31, 2020, respectively.

5

 

ADJUSTED FUNDS FROM OPERATIONS (AFFO)

(in thousands, except per share data)

(unaudited)

	Quarter Ended								Year Ended
	December 31,								December 31,
	2021				2020				2021				2020
Net earnings available to common stockholders	$	65,129			$	56,802		(1)	$	264,217			$	210,859		(1)
Total FFO adjustments		55,400				50,763				203,616				217,377
Total Core FFO adjustments		10,897				1,766				32,225				18,445
Core FFO available to common stockholders		131,426				109,331				500,058				446,681
Straight-line accrued rent, net of reserves		2,046				7,437				21,137				(26,027	)
Net capital lease rent adjustment		79				66				340				210
Below-market rent amortization		(280	)			(175	)			(710	)			(887	)
Stock based compensation expense		1,975				3,275				14,295				12,855
Capitalized interest expense		(114	)			(170	)			(328	)			(1,388	)
Total AFFO adjustments		3,706				10,433				34,734				(15,237	)
AFFO available to common stockholders	$	135,132		(2)	$	119,764		(3)	$	534,792		(2)	$	431,444		(3)
AFFO per common share:
Basic	$	0.77		(2)	$	0.69		(3)	$	3.06		(2)	$	2.51		(3)
Diluted	$	0.77		(2)	$	0.69		(3)	$	3.06		(2)	$	2.51		(3)

(1)Includes the write-off of $7,034 (or $0.04 per share) and $21,792 (or $0.12 per share) of receivables due to reclassifying certain tenants as cash basis for accounting purposes during the quarter and year ended December 31, 2020, respectively.

(2)Amounts include ($2,949) and ($24,945) of net straight-line accrued rent from net rent deferral repayments from the COVID-19 rent deferral lease amendments for the quarter and year ended December 31, 2021, respectively. Excluding such, AFFO per common share would have been $0.76 and $2.92 for the quarter and year ended December 31, 2021, respectively.

(3)Amounts include ($2,507) and $30,474 of net straight-line accrued rent from net rent deferrals (repayments) from the COVID-19 rent deferral lease amendments for the quarter and year ended December 31, 2020, respectively. Excluding such, AFFO per common share results would have been $0.68 and $2.68 for the quarter and year ended December 31, 2020, respectively.

6

 

OTHER INFORMATION

(in thousands, except per share data)

(unaudited)

	Quarter Ended						Year Ended
	December 31,						December 31,
	2021			2020			2021			2020
Rental income from operating leases(1)	$	181,078		$	157,408		$	703,865		$	639,265
Earned income from direct financing leases(1)	$	154		$	160		$	623		$	647
Percentage rent(1)	$	176		$	114		$	706		$	842
Real estate expense reimbursement from tenants(1)	$	5,225		$	5,220		$	18,665		$	18,039
Real estate expenses		(7,520	)		(8,059	)		(28,385	)		(28,362	)
Real estate expenses, net of tenant reimbursements	$	(2,295	)	$	(2,839	)	$	(9,720	)	$	(10,323	)
Amortization of debt costs	$	1,164		$	1,085		$	5,186		$	5,009
Scheduled debt principal amortization (excluding    maturities)	$	161		$	153		$	630		$	596
Non-real estate depreciation expense	$	116		$	114		$	451		$	461

(1)For the quarter and year ended December 31, 2021, the aggregate of such amounts is $186,633 and $723,859, respectively, classified as rental income on the income statement summary. For the quarter and year ended December 31, 2020, the aggregate of such amounts is $162,902 and $658,793, respectively.

EBITDA

Earnings before Interest, Taxes, Depreciation and Amortization for Real Estate (dollars in thousands):

	Quarter Ended December 31,						Year Ended December 31,
	2021			2020			2021			2020
Net earnings attributable to NNN	$	77,570		$	61,287		$	290,113		$	228,799
Interest expense		36,684			32,084			137,874			129,431
Depreciation and amortization		53,389			49,095			205,220			196,623
Gain on disposition of real estate		(5,159	)		(2,601	)		(23,094	)		(16,238	)
Impairment losses – real estate, net of recoveries		7,310			4,380			21,957			37,442
Loss attributable to noncontrolling interests		—			—			(3	)		(3	)
EBITDA	$	169,794		$	144,245		$	632,067		$	576,054

7

 

BALANCE SHEET

(in thousands, except per share data)

(unaudited)

	December 31, 2021		December 31, 2020
Assets:
Real estate portfolio	$	7,444,289	$	7,212,655
Real estate held for sale		5,557		5,671
Cash and cash equivalents		171,322		267,236
Receivables, net of allowance of $782 and $835, respectively		3,154		4,338
Accrued rental income, net of allowance of $4,587 and $6,947, respectively		31,942		53,958
Debt costs, net of accumulated amortization of $19,377 and $17,294, respectively		7,443		1,917
Other assets		87,347		92,069
Total assets	$	7,751,054	$	7,637,844
Liabilities:
Line of credit payable	$	—	$	—
Mortgages payable, including unamortized premium and net of unamortized debt costs		10,697		11,395
Notes payable, net of unamortized discount and unamortized debt costs		3,735,769		3,209,527
Accrued interest payable		23,923		19,401
Other liabilities		79,002		78,217
Total liabilities		3,849,391		3,318,540
Stockholders’ equity of NNN		3,901,662		4,319,300
Noncontrolling interests		1		4
Total equity		3,901,663		4,319,304
Total liabilities and equity	$	7,751,054	$	7,637,844
Common shares outstanding		175,636		175,233
Gross leasable area, Property Portfolio (square feet)		32,753		32,461

8

 

DEBT SUMMARY

As of December 31, 2021 (in thousands):

Unsecured Debt	Principal		Principal, Net of Unamortized Discount			Stated Rate			Effective Rate			Maturity Date
Line of credit payable	$	—	$	—		L + 77.5 bps				—	%	June 2025
Unsecured notes payable:
2024		350,000		349,801			3.900	%		3.924	%	June 2024
2025		400,000		399,583			4.000	%		4.029	%	November 2025
2026		350,000		347,909			3.600	%		3.733	%	December 2026
2027		400,000		398,995			3.500	%		3.548	%	October 2027
2028		400,000		397,944			4.300	%		4.388	%	October 2028
2030		400,000		398,921			2.500	%		2.536	%	April 2030
2048		300,000		295,982			4.800	%		4.890	%	October 2048
2050		300,000		294,160			3.100	%		3.205	%	April 2050
2051		450,000		441,721			3.500	%		3.602	%	April 2051
2052		450,000		439,636			3.000	%		3.118	%	April 2052
Total		3,800,000		3,764,652
Total unsecured debt(1)	$	3,800,000	$	3,764,652
Debt costs			$	(38,145	)
Accumulated amortization				9,262
Debt costs, net of accumulated amortization				(28,883	)
Notes payable, net of unamortized discount and     unamortized debt costs			$	3,735,769

(1) Unsecured notes payable have a weighted average interest rate of 3.7% and a weighted average maturity of 14.7 years

9

 

DEBT SUMMARY (continued)

As of December 31, 2021 (in thousands):DEBT SUMMARYEBT SUMMARY

Mortgages Payable	Principal Balance			Interest Rate			Maturity Date
Mortgage(1)	$	10,719			5.230	%	July 2023
Debt costs		(147	)
Accumulated amortization		125
Debt costs, net of accumulated amortization		(22	)
Mortgages payable, including unamortized    premium and net of unamortized debt costs	$	10,697

(1) Includes unamortized premium

 

10

 

CREDIT METRICS (1)

Ratings: Moody's Baa1; S&P BBB+

	2017			2018			2019			2020			2021
Debt / Total assets (gross book)		35.3	%		34.6	%		35.3	%		34.4	%		39.9	%
Debt + preferred / Total assets (gross book)		44.0	%		42.6	%		39.3	%		38.4	%		39.9	%
Debt / EBITDA (last quarter annualized)		4.9			4.8			4.9			5.0			5.2
Debt + Pref Stock / EBITDA		6.1			5.9			5.5			5.5			5.2
EBITDA / Interest expense (cash)		4.7			4.8			5.0			4.6			4.7
EBITDA / Fixed charges (cash)		3.5			3.7			4.0			4.0			4.3

(1) Debt amounts used in calculations are net of cash balances.

CREDIT FACILITY AND NOTES 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 December 31, 2021, the company believes it is in compliance with the covenants.

Unsecured Credit Facility Key Covenants	Required	December 31, 2021
Maximum leverage ratio	< 0.60	0.37
Minimum fixed charge coverage ratio	> 1.50	4.48
Maximum secured indebtedness ratio	< 0.40	N/C
Unencumbered asset value ratio	> 1.67	2.78
Unencumbered interest ratio	> 1.75	4.94
Unsecured Notes Key Covenants	Required	December 31, 2021
Limitation on incurrence of total debt	≤ 60%	40.6%
Limitation on incurrence of secured debt	≤ 40%	0.1%
Debt service coverage ratio	≥ 1.50	4.57
Maintenance of total unencumbered assets	≥ 150%	246%

11

 

LONG-TERM DIVIDEND HISTORY

 

12

 

PROPERTY ACQUISITIONS

(dollars in thousands)

	Year Ended December 31,
	2021			2020
Total dollars invested(1)	$	555,415		$	179,967
Number of Properties		156			63
Gross leasable area (square feet)(2)		1,341,000			449,000
Cash cap rate		6.5	%		6.5	%
Weighted average lease term		18.2			18.3

(1)Includes dollars invested in projects under construction or tenant improvements for each respective year.

(2)Includes additional square footage from completed construction on existing Properties.

PROPERTY DISPOSITIONS

(dollars in thousands)

	Year Ended December 31,
	2021								2020
	Occupied			Vacant		Total			Occupied			Vacant		Total
Number of properties		34			40		74			25			13		38
Gross leasable area (square feet)		429,000			586,000		1,015,000			240,000			185,000		425,000
Acquisition costs	$	93,172		$	91,947	$	185,119		$	39,390		$	26,903	$	66,293
Net book value	$	61,489		$	40,061	$	101,550		$	22,754		$	12,870	$	35,624
Net sale proceeds	$	78,018		$	44,000	$	122,018		$	40,992		$	13,496	$	54,488
Cash cap rate		7.4	%		—		7.4	%		6.1	%		—		6.1	%

13

 

LEASE EXPIRATIONS

	% of Total(1)	# of Properties	Gross Leasable Area (2)		% of Total(1)	# of Properties	Gross Leasable Area (2)
2022	2.8%	75	739,000	2028	4.7%	157	1,245,000
2023	2.6%	113	1,402,000	2029	2.8%	71	987,000
2024	3.3%	93	1,455,000	2030	3.7%	106	1,194,000
2025	5.9%	192	2,013,000	2031	8.3%	190	2,781,000
2026	5.5%	217	2,139,000	2032	5.1%	165	1,396,000
2027	8.5%	224	3,375,000	Thereafter	46.8%	1,586	13,669,000

(1)Based on the annual base rent of $713,169,000, which is the annualized base rent for all leases in place as of December 31, 2021.

(2)Square feet.

 

14

 

TOP 20 LINES OF TRADE

		As of December 31, 2021		As of December 31, 2020
	Lines of Trade	% of Total(1)	# of Properties	% of Total(2)	# of Properties
1.	Convenience stores	17.9%	654	18.2%	649
2.	Automotive service	12.3%	449	10.3%	373
3.	Restaurants – full service	9.8%	421	10.5%	445
4.	Restaurants – limited service	9.4%	603	9.7%	568
5.	Family entertainment centers	5.9%	91	5.9%	98
6.	Health and fitness	5.2%	33	5.3%	34
7.	Theaters	4.5%	33	4.4%	32
8.	Recreational vehicle dealers, parts and accessories	3.9%	47	3.5%	38
9.	Equipment rental	3.2%	95	2.6%	80
10.	Automotive parts	3.0%	155	3.1%	156
11.	Wholesale clubs	2.5%	12	2.6%	11
12.	Home improvement	2.5%	50	2.6%	49
13.	Medical service providers	2.0%	83	2.2%	85
14.	Furniture	1.7%	45	1.7%	46
15.	General merchandise	1.7%	73	1.7%	73
16.	Consumer electronics	1.5%	17	1.5%	16
17.	Home furnishings	1.5%	15	1.6%	15
18.	Travel plazas	1.5%	25	1.5%	25
19.	Automobile auctions, wholesale	1.3%	14	1.1%	12
20.	Drug stores	1.3%	32	1.5%	35
	Other	7.4%	276	8.5%	303
	Total	100.0%	3,223	100.0%	3,143

(1) Based on the annual base rent of $713,169,000, which is the annualized base rent for all leases in place as of December 31, 2021.

(2) Based on the annual base rent of $675,120,000, which is the annualized base rent for all leases in place as of December 31, 2020.

TOP 10 STATES

	State	% of Total(1)		State	% of Total(1)
1.	Texas	16.9%	6.	Georgia	4.6%
2.	Florida	8.6%	7.	Indiana	4.0%
3.	Ohio	5.5%	8.	Tennessee	3.8%
4.	Illinois	5.5%	9.	Virginia	3.4%
5.	North Carolina	4.7%	10.	California	3.3%

(1) Based on the annual base rent of $713,169,000, which is the annualized base rent for all leases in place as of December 31, 2021.

15

 

PORTFOLIO BY REGION

As a percentage of annual base rent - December 31, 2021

 

16

 

TOP TENANTS

Creditworthy Retailers

▪17.9% of annual base rent is from tenants with investment grade rated debt

▪75.9% of annual base rent is from tenants that are publicly traded and/or have rated debt

▪Top 25 tenants (55.5% of annual base rent) operate an average of 1,063 stores each

Top 20 Tenants

	Tenant	# of Properties	% of Total(1)
1.	7-Eleven	139	4.9%
2.	Mister Car Wash	121	4.6%
3.	Camping World	44	3.8%
4.	LA Fitness	30	3.7%
5.	GPM Investments (Convenience Stores)	152	3.2%
6.	Flynn Restaurant Group (Taco Bell/Arby's)	204	3.1%
7.	AMC Theatre	20	2.9%
8.	Couche Tard (Pantry)	82	2.7%
9.	BJ's Wholesale Club	12	2.5%
10.	Sunoco	59	2.1%
11.	Mavis Tire Express Services	123	2.1%
12.	Frisch's Restaurants	69	1.9%
13.	Main Event	18	1.8%
14.	Fikes (Convenience Stores)	59	1.7%
15.	Chuck E. Cheese's	53	1.5%
16.	Life Time Fitness	3	1.5%
17.	Best Buy	16	1.5%
18.	Bob Evans	106	1.5%
19.	Dave & Buster's	11	1.4%
20.	Pull-A-Part	20	1.3%

(1)Based on the annual base rent of $713,169,000, which is the annualized base rent for all leases in place as
of December 31, 2021.

17

 

SAME STORE RENTAL INCOME

(dollars in thousands)

Same Store Rental Income – Properties (Cash Basis) (1)
Number of properties		2,995
Year ended December 31, 2021	$	681,808
Year ended December 31, 2020	$	596,137
Change (in dollars)	$	85,671
Change (percent)		14.4	%

(1) Includes all properties owned for current and prior year period excluding any properties
under development or re-development.

LEASING DATA

(dollars in thousands)

Year Ended December 31, 2021	Renewals With Same Tenant(1)			Vacancy Re-Lease To New Tenant			Releasing Totals
Number of leases		122			30			152
Prior cash rents	$	31,183		$	7,226		$	38,409
New cash rents	$	29,774		$	5,723		$	35,497		(2)
Recovery rate		95.5	%		79.2	%		92.4	%
Tenant improvements	$	1,659		$	3,573		$	5,232

(1)Long-term renewal rate for the period of 2010 through 2020 was 83.7%.

(2)Represents 5.0% of total annualized base rent as of December 31, 2021.

18

 

OTHER PROPERTY PORTFOLIO DATA

As of December 31, 2021

Tenant Financials

	# of Properties		% of Annual Base Rent (1)
Property Level Financial Information		2,716		81	%
Tenant Corporate Financials		2,503		79	%

Rent Increases	% of Annual Base Rent (1)
	Annual			Five Year			Other			Total
CPI		35	%		46	%		1	%		82	%
Fixed		2	%		11	%		1	%		14	%
No increases		—			—			4	%		4	%
		37	%		57	%		6	%		100	%

Lease Structure

•91.8% of the company's annual base rent is from triple net leases leases

•95.2% of the company's annual base rent is from triple net leases or double net leases (with roof warranty)

•28.1% of the company's annual base rent is from master leases

•96.4% of the company's annual base rent is from leases containing future lease renewal options

•0.3% of the company's annual base rent is from leases containing purchase options

(1) Based on the annual base rent of $713,169,000, which is the annualized base rent for all leases in place as of December 31, 2021.

EARNINGS GUIDANCE

Guidance is based on current plans and assumptions and subject to risks and uncertainties more fully described in this press release and the company's reports filed with the Securities and Exchange Commission.

	2022 Guidance
Net earnings per common share excluding any gains on disposition     of real estate, impairment charges, and executive retirement costs	$1.76 - $1.82 per share
Real estate depreciation and amortization per share	$1.18 per share
Core FFO per share	$2.93 - $3.00 per share
AFFO per share(1)	$3.01 - $3.07 per share
General and administrative expenses	$42 - $44 Million
Real estate expenses, net of tenant reimbursements	$10 - $12 Million
Acquisition volume	$550 - $650 Million
Disposition volume	$80 - $100 Million

(1) Estimates include the net straight-line accrued rent impact of the net rent repayment from the COVID-19 rent deferral lease amendments of $5.4 million for 2022. Excluding such, AFFO per common share guidance would have been $2.98 - $3.04 for 2022.

19

 

COVID-19 METRICS

Collections

The following table details NNN's rent collections as of January 31, 2022, excluding the repayment of amounts previously deferred according to the rent deferral lease amendments:

	Quarter Ended
	March 31, 2021(1)	June 30,     2021(2)	September 30, 2021(3)	December 31, 2021(4)
Collected, as of January 31, 2022	97.7%	99.1%	99.2%	99.4%
Deferred	1.6%	0.6%	0.4%	0.1%
Abated	0.1%	—	—	—
Outstanding, as of January 31, 2022	0.6%	0.3%	0.4%	0.5%
Total	100.0%	100.0%	100.0%	100.0%

As a percentage of annual base rent, which is the annualized base rent for all leases in place.

(1)$684,283,000 as of March 31, 2021

(2)$689,364,000 as of June 30, 2021

(3)$706,162,000 as of September 30, 2021

(4)$713,169,000 as of December 31, 2021

20

 

Collections by Line of Trade

The following table details NNN's rent collections received as of January 31, 2022, excluding the repayment of amounts previously deferred according to the rent deferral lease amendments, by NNN's top 20 lines of trade:

			% of Rent Collected
		% of Total	Quarter Ended
	Lines Of Trade	Annual Base Rent(4)	March 31, 2021(1)	June 30, 2021(2)	September 30, 2021(3)	December 31, 2021(4)
1.	Convenience stores	17.9%	100.0%	99.9%	99.8%	100.0%
2.	Automotive service	12.3%	99.5%	99.7%	99.7%	99.5%
3.	Restaurants – full service	9.8%	91.7%	93.9%	94.8%	97.3%
4.	Restaurants – limited service	9.4%	99.9%	99.7%	99.7%	99.6%
5.	Family entertainment centers	5.9%	99.9%	99.9%	99.9%	99.9%
6.	Health and fitness	5.2%	94.3%	99.6%	100.0%	98.9%
7.	Theaters	4.5%	77.3%	97.1%	99.8%	99.9%
8.	Recreational vehicle dealers, parts and accessories	3.9%	100.0%	100.0%	99.8%	99.9%
9.	Equipment rental	3.2%	100.0%	100.0%	100.0%	100.0%
10.	Automotive parts	3.0%	100.0%	100.0%	98.3%	99.7%
11.	Wholesale clubs	2.5%	99.5%	100.0%	99.5%	100.0%
12.	Home improvement	2.5%	100.0%	100.0%	100.0%	100.0%
13.	Medical service providers	2.0%	99.8%	98.8%	98.5%	98.4%
14.	Furniture	1.7%	99.1%	98.7%	99.8%	100.0%
15.	General merchandise	1.7%	99.3%	99.5%	100.0%	100.0%
16.	Consumer electronics	1.5%	100.0%	100.0%	100.0%	100.0%
17.	Home furnishings	1.5%	100.0%	100.0%	100.0%	100.0%
18.	Travel plazas	1.5%	100.0%	100.0%	100.0%	98.9%
19.	Automobile auctions, wholesale	1.3%	100.0%	100.0%	100.0%	99.9%
20.	Drug stores	1.3%	100.0%	100.0%	100.0%	100.0%
	Other	7.4%	99.6%	99.3%	97.9%	98.4%
	Total	100.0%	97.7%	99.1%	99.2%	99.4%

As a percentage of annual base rent, which is the annualized base rent for all leases in place.

(1)$684,283,000 as of March 31, 2021

(2)$689,364,000 as of June 30, 2021

(3)$706,162,000 as of September 30, 2021

(4)$713,169,000 as of December 31, 2021

21

 

The following table outlines the rent deferred and corresponding scheduled repayment by quarter of the rent deferral lease amendments executed as of December 31, 2021 (dollars in thousands):

		Deferred									Scheduled Repayment
		Accrual Basis		Cash Basis		Total		% of Total			Accrual Basis		Cash Basis		Total		% of Total			Cumulative Total
2020		$	33,594	$	18,425	$	52,019		91.7	%	$	3,239	$	20	$	3,259		5.7	%		5.7	%
2021	Q1		678		2,018		2,696		4.7	%		10,059		610		10,669		18.8	%		24.5	%
	Q2		278		750		1,028		1.8	%		8,599		1,751		10,350		18.2	%		42.7	%
	Q3		34		750		784		1.4	%		4,328		1,740		6,068		10.7	%		53.4	%
	Q4		—		250		250		0.4	%		2,949		1,740		4,689		8.3	%		61.7	%
			990		3,768		4,758		8.3	%		25,935		5,841		31,776		56.0	%		61.7	%
2022	Q1		—		—		—		—			1,780		2,283		4,063		7.2	%		68.9	%
	Q2		—		—		—		—			1,729		2,284		4,013		7.1	%		76.0	%
	Q3		—		—		—		—			1,201		2,284		3,485		6.1	%		82.1	%
	Q4		—		—		—		—			681		2,284		2,965		5.2	%		87.3	%
			—		—		—		—			5,391		9,135		14,526		25.6	%		87.3	%
2023			—		—		—		—			19		3,334		3,353		5.9	%		93.2	%
2024			—		—		—		—			—		1,932		1,932		3.4	%		96.6	%
2025			—		—		—		—			—		1,931		1,931		3.4	%		100.0	%
		$	34,584	$	22,193	$	56,777				$	34,584	$	22,193	$	56,777

22

XML

Cover	Feb. 09, 2022
Entity Information [Line Items]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Feb. 09, 2022
Entity File Number	001-11290
Entity Registrant Name	NATIONAL RETAIL PROPERTIES, INC.
Entity Central Index Key	0000751364
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	56-1431377
Entity Address, Address Line One	450 South Orange Avenue
Entity Address, Address Line Two	Suite 900
Entity Address, City or Town	Orlando,
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	32801
City Area Code	407
Local Phone Number	265-7348
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	NNN
Security Exchange Name	NYSE
Entity Emerging Growth Company	false
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false