EX-99.1 2 nnn-ex99_1.htm EX-99.1 EX-99.1

 

Exhibit 99.1

img41624055_0.jpg 

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

2

 

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.

3

 

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

4

 

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.

5

 

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.

 

 

6

 

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.

7

 

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

 

 

8

 

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