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

November 2, 2022

 

THIRD QUARTER 2022 OPERATING RESULTS AND INCREASED 2022 GUIDANCE

ANNOUNCED BY NATIONAL RETAIL PROPERTIES, INC.

 

Orlando, Florida, November 2, 2022 – National Retail Properties, Inc. (NYSE: NNN), a real estate investment trust, today announced its operating results for the quarter and nine months ended September 30, 2022. Highlights include:

 

Operating Results:

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

 

 

 

Quarter Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

(in thousands, except per share data)

 

 

Revenues

 

$

193,471

 

 

$

180,357

 

 

$

574,533

 

 

$

539,146

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings available to common stockholders

 

$

88,421

 

 

$

78,448

 

 

$

243,964

 

 

$

199,088

 

 

Net earnings per common share

 

$

0.50

 

 

$

0.45

 

 

$

1.38

 

 

$

1.14

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO available to common stockholders

 

$

139,760

 

 

$

124,621

 

 

$

406,706

 

 

$

347,304

 

 

FFO per common share

 

$

0.79

 

 

$

0.71

 

 

$

2.31

 

 

$

1.99

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core FFO available to common stockholders

 

$

140,316

 

 

$

124,621

 

 

$

413,511

 

 

$

368,632

 

 

Core FFO per common share

 

$

0.79

 

 

$

0.71

 

 

$

2.35

 

 

$

2.11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AFFO available to common stockholders

 

$

142,987

 

(1)

$

131,753

 

(2)

$

423,811

 

(1)

$

399,660

 

(2)

AFFO per common share

 

$

0.81

 

(1)

$

0.75

 

(2)

$

2.41

 

(1)

$

2.29

 

(2)

 

(1)

 

Amounts include $1,201 and $4,710 of net straight-line accrued rent from net rent deferral repayments from the COVID-19 rent deferral lease amendments for the quarter and nine months ended September 30, 2022, respectively. Excluding such, AFFO per common share would have been $0.80 and $2.38 for the quarter and nine months ended September 30, 2022, respectively.

 

 

 

(2)

 

Amounts include $4,294 and $21,996 of net straight-line accrued rent from net rent deferral repayments from the COVID-19 rent deferral lease amendments for the quarter and nine months ended September 30, 2021, respectively. Excluding such, AFFO per common share would have been $0.73 and $2.16 for the quarter and nine months ended September 30, 2021, respectively.

 

Third Quarter 2022 Highlights:

•
Maintained high occupancy levels at 99.4%, with a weighted average remaining lease term of 10.4 years, at September 30, 2022 as compared to 99.1% at June 30, 2022 and 99.0% at December 31, 2021
•
Invested $223.1 million in property investments, including the acquisition of 52 properties with an aggregate 613,000 square feet of gross leasable area at an initial cash yield of 6.3%
•
Sold 8 properties for $21.2 million producing $5.9 million of gains on sales
•
Raised $97.1 million net proceeds from the issuance of 2,101,476 common shares
•
Maintained sector leading 14 year weighted average debt maturity for fixed rate debt

 

 

 

1

 

Highlights for the nine months ended September 30, 2022:

•
Invested $587.7 million in property investments, including the acquisition of 154 properties with an aggregate 1,840,000 square feet of gross leasable area at an initial cash yield of 6.2%
•
Sold 26 properties for $49.2 million producing $10.7 million gains on sales
•
Raised $129.5 million net proceeds from the issuance of 2,853,345 common shares

Core FFO guidance for 2022 was increased from a range of $3.07 to $3.12 per share to a range of $3.11 to $3.15 per share. The 2022 AFFO is estimated to be $3.18 to $3.22 per share. The Core FFO guidance equates to net earnings of $1.85 to $1.89 per share, plus $1.26 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.

Steve Horn, Chief Executive Officer, commented: "National Retail Properties is in position to finish 2022 strong. Third quarter included approximately $223 million of real estate acquisitions and NNN continues to consistently have high occupancy levels and rent collections. NNN is in fantastic shape heading into next year with an exceptional balance sheet; with less than $50 million outstanding on our $1.1 billion line of credit and no material debt maturities in 2023."

National Retail Properties invests primarily in high-quality retail properties subject generally to long-term, net leases. As of September 30, 2022, the company owned 3,349 properties in 48 states with a gross leasable area of approximately 34.3 million square feet and with a weighted average remaining lease term of 10.4 years. For more information on the company, visit www.nnnreit.com.

Management will hold a conference call on November 2, 2022, at 10:30 a.m. ET to review its results of operations. 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," "in position," "intend," "may," "estimated," or other similar words or expressions. Forward-looking statements involve known and unknown risks, which may cause the company’s actual future results to differ materially from expected results. These risks include, among others, the potential impacts of the COVID-19 pandemic on the company’s business operations, financial results and financial position and on the world economy, general economic conditions, local real estate conditions, changes in interest rates, increases in operating costs, the preferences and financial condition of the company's tenants, the availability of capital, and, risks related to the company's status as a REIT. Additional information concerning these and other factors that could cause actual results to differ materially from these forward-looking statements is contained from time to time in the company’s Securities and Exchange Commission (the "Commission”) filings, including, but not limited to, the company’s (i) Annual Report on Form 10-K for the year ended December 31, 2021 and (ii) Quarterly Reports on Form 10-Q for the quarters ended March 31, 2022, June 30, 2022 and September 30, 2022. 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

2

 

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 such as transaction related gains, income or expense, impairments on land or commercial mortgage residual interests, preferred stock redemption costs, executive retirement 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.

(in thousands, except per share data)

(unaudited)

 

 

 

Quarter Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

Income Statement Summary

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

193,102

 

 

$

180,024

 

 

$

573,401

 

 

$

537,226

 

 

Interest and other income from real estate transactions

 

 

369

 

 

 

333

 

 

 

1,132

 

 

 

1,920

 

 

 

 

 

193,471

 

 

 

180,357

 

 

 

574,533

 

 

 

539,146

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

10,124

 

 

 

11,077

 

 

 

30,906

 

 

 

34,693

 

 

Real estate

 

 

5,875

 

 

 

6,521

 

 

 

19,246

 

 

 

20,865

 

 

Depreciation and amortization

 

 

56,388

 

 

 

50,976

 

 

 

166,512

 

 

 

151,831

 

 

Leasing transaction costs

 

 

96

 

 

 

86

 

 

 

260

 

 

 

146

 

 

Impairment losses – real estate, net of recoveries

 

 

971

 

 

 

4,781

 

 

 

7,221

 

 

 

14,647

 

 

Executive retirement costs

 

 

556

 

 

 

—

 

 

 

6,805

 

 

 

—

 

 

 

 

 

74,010

 

 

 

73,441

 

 

 

230,950

 

 

 

222,182

 

 

Gain on disposition of real estate

 

 

5,889

 

 

 

9,473

 

 

 

10,656

 

 

 

17,935

 

 

Earnings from operations

 

 

125,350

 

 

 

116,389

 

 

 

354,239

 

 

 

334,899

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other expenses (revenues):

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and other income

 

 

(33

)

 

 

(61

)

 

 

(120

)

 

 

(159

)

 

Interest expense

 

 

36,962

 

 

 

33,518

 

 

 

110,400

 

 

 

101,190

 

(1)

Loss on early extinguishment of debt

 

 

—

 

 

 

—

 

 

 

—

 

 

 

21,328

 

 

 

 

 

36,929

 

 

 

33,457

 

 

 

110,280

 

 

 

122,359

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings

 

 

88,421

 

 

 

82,932

 

 

 

243,959

 

 

 

212,540

 

 

Loss attributable to noncontrolling interests

 

 

—

 

 

 

1

 

 

 

5

 

 

 

3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings attributable to NNN

 

 

88,421

 

 

 

82,933

 

 

 

243,964

 

 

 

212,543

 

 

Series F preferred stock dividends

 

 

—

 

 

 

(4,485

)

 

 

—

 

 

 

(13,455

)

 

Net earnings available to common stockholders

 

$

88,421

 

 

$

78,448

 

 

$

243,964

 

 

$

199,088

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

176,901

 

 

 

174,629

 

 

 

175,542

 

 

 

174,610

 

 

Diluted

 

 

177,368

 

 

 

174,739

 

 

 

175,994

 

 

 

174,716

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings per share available to common stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.50

 

 

$

0.45

 

 

$

1.39

 

 

$

1.14

 

 

Diluted

 

$

0.50

 

 

$

0.45

 

 

$

1.38

 

 

$

1.14

 

 

 

(1)

 

Includes $2,078 in connection with the redemption of 3.30% senior unsecured notes due 2023 for the nine months ended September 30, 2021.

 

4

 

National Retail Properties, Inc.

(in thousands, except per share data)

(unaudited)

 

 

 

Quarter Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

Funds From Operations (FFO) Reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings available to common stockholders

 

$

88,421

 

 

$

78,448

 

 

$

243,964

 

 

$

199,088

 

 

Real estate depreciation and amortization

 

 

56,257

 

 

 

50,865

 

 

 

166,177

 

 

 

151,504

 

 

Gain on disposition of real estate

 

 

(5,889

)

 

 

(9,473

)

 

 

(10,656

)

 

 

(17,935

)

 

Impairment losses – depreciable real estate, net of recoveries

 

 

971

 

 

 

4,781

 

 

 

7,221

 

 

 

14,647

 

 

Total FFO adjustments

 

 

51,339

 

 

 

46,173

 

 

 

162,742

 

 

 

148,216

 

 

FFO available to common stockholders

 

$

139,760

 

 

$

124,621

 

 

$

406,706

 

 

$

347,304

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.79

 

 

$

0.71

 

 

$

2.32

 

 

$

1.99

 

 

Diluted

 

$

0.79

 

 

$

0.71

 

 

$

2.31

 

 

$

1.99

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core Funds From Operations (Core FFO) Reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings available to common stockholders

 

$

88,421

 

 

$

78,448

 

 

$

243,964

 

 

$

199,088

 

 

Total FFO adjustments

 

 

51,339

 

 

 

46,173

 

 

 

162,742

 

 

 

148,216

 

 

FFO available to common stockholders

 

 

139,760

 

 

 

124,621

 

 

 

406,706

 

 

 

347,304

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Executive retirement costs

 

 

556

 

 

 

—

 

 

 

6,805

 

 

 

—

 

 

Loss on early extinguishment of debt

 

 

—

 

 

 

—

 

 

 

—

 

 

 

21,328

 

 

Total Core FFO adjustments

 

 

556

 

 

 

—

 

 

 

6,805

 

 

 

21,328

 

 

Core FFO available to common stockholders

 

$

140,316

 

 

$

124,621

 

 

$

413,511

 

 

$

368,632

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core FFO per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.79

 

 

$

0.71

 

 

$

2.36

 

 

$

2.11

 

 

Diluted

 

$

0.79

 

 

$

0.71

 

 

$

2.35

 

 

$

2.11

 

 

 

5

 

 

National Retail Properties, Inc.

(in thousands, except per share data)

(unaudited)

 

 

 

Quarter Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

Adjusted Funds From Operations (AFFO) Reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings available to common stockholders

 

$

88,421

 

 

$

78,448

 

 

$

243,964

 

 

$

199,088

 

 

Total FFO adjustments

 

 

51,339

 

 

 

46,173

 

 

 

162,742

 

 

 

148,216

 

 

Total Core FFO adjustments

 

 

556

 

 

 

—

 

 

 

6,805

 

 

 

21,328

 

 

Core FFO available to common stockholders

 

 

140,316

 

 

 

124,621

 

 

 

413,511

 

 

 

368,632

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Straight-line accrued rent, net of reserves

 

 

655

 

 

 

3,400

 

 

 

3,298

 

 

 

19,091

 

 

Net capital lease rent adjustment

 

 

76

 

 

 

77

 

 

 

225

 

 

 

262

 

 

Below-market rent amortization

 

 

(130

)

 

 

(156

)

 

 

(410

)

 

 

(430

)

 

Stock based compensation expense

 

 

2,343

 

 

 

3,898

 

 

 

7,734

 

 

 

12,320

 

 

Capitalized interest expense

 

 

(273

)

 

 

(87

)

 

 

(547

)

 

 

(215

)

 

Total AFFO adjustments

 

 

2,671

 

 

 

7,132

 

 

 

10,300

 

 

 

31,028

 

 

AFFO available to common stockholders

 

$

142,987

 

(1)

$

131,753

 

(2)

$

423,811

 

(1)

$

399,660

 

(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AFFO per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.81

 

(1)

$

0.75

 

(2)

$

2.41

 

(1)

$

2.29

 

(2)

Diluted

 

$

0.81

 

(1)

$

0.75

 

(2)

$

2.41

 

(1)

$

2.29

 

(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Information:

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental income from operating leases(3)

 

$

188,840

 

 

$

175,833

 

 

$

558,942

 

 

$

522,787

 

 

Earned income from direct financing leases(3)

 

$

148

 

 

$

154

 

 

$

449

 

 

$

469

 

 

Percentage rent(3)

 

$

235

 

 

$

195

 

 

$

1,231

 

 

$

530

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate expense reimbursement from tenants(3)

 

$

3,879

 

 

$

3,842

 

 

$

12,779

 

 

$

13,440

 

 

Real estate expenses

 

 

(5,875

)

 

 

(6,521

)

 

 

(19,246

)

 

 

(20,865

)

 

Real estate expenses, net of tenant reimbursements

 

$

(1,996

)

 

$

(2,679

)

 

$

(6,467

)

 

$

(7,425

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of debt costs

 

$

1,184

 

 

$

1,139

 

 

$

3,533

 

 

$

4,022

 

(4)

Scheduled debt principal amortization (excluding maturities)

 

$

166

 

 

$

157

 

 

$

494

 

 

$

469

 

 

Non-real estate depreciation expense

 

$

135

 

 

$

114

 

 

$

345

 

 

$

336

 

 

 

(1)

Amounts include $1,201 and $4,710 of net straight-line accrued rent from net rent deferral repayments from the COVID-19 rent deferral lease amendments for the quarter and nine months ended September 30, 2022, respectively. Excluding such, AFFO per common share would have been $0.80 and $2.38 for the quarter and nine months ended September 30, 2022, respectively.

 

 

(2)

Amounts include $4,294 and $21,996 of net straight-line accrued rent from net rent deferral repayments from the COVID-19 rent deferral lease amendments for the quarter and nine months ended September 30, 2021, respectively. Excluding such, AFFO per common share would have been $0.73 and $2.16 for the quarter and nine months ended September 30, 2021, respectively.

 

 

(3)

For the quarter and nine months ended September 30, 2022, the aggregate of such amounts is $193,102 and $573,401, respectively, and is classified as rental income on the income statement summary. For the quarter and nine months ended September 30, 2021, the aggregate of such amounts is $180,024 and $537,226, respectively.

 

 

(4)

Includes $745 in connection with the redemption of the 3.30% senior unsecured notes due 2023 for the nine months ended September 30, 2021.

 

 

6

 

National Retail Properties, Inc.

 

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

 

$1.85 - $1.89 per share

Real estate depreciation and amortization per share

 

$1.26 per share

Core FFO per share

 

$3.11 - $3.15 per share

AFFO per share(1)

 

$3.18 - $3.22 per share

General and administrative expenses

 

$40 - $42 Million

Real estate expenses, net of tenant reimbursements

 

$9 - $10 Million

Acquisition volume

 

$650 - $700 Million

Disposition volume

 

$65 - $85 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 $3.15 - $3.19 for 2022.

 

 

7

 

National Retail Properties, Inc.

(in thousands)

(unaudited)

 

 

 

September 30,
2022

 

 

December 31,
2021

 

Balance Sheet Summary

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

Real estate portfolio

 

$

7,826,292

 

 

$

7,449,846

 

Cash and cash equivalents

 

 

3,277

 

 

 

171,322

 

Receivables, net of allowance of $664 and $782, respectively

 

 

2,978

 

 

 

3,154

 

Accrued rental income, net of allowance of $3,924 and $4,587, respectively

 

 

28,231

 

 

 

31,942

 

Debt costs, net of accumulated amortization of $21,085 and $19,377, respectively

 

 

5,858

 

 

 

7,443

 

Other assets

 

 

85,211

 

 

 

87,347

 

Total assets

 

$

7,951,847

 

 

$

7,751,054

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Line of credit payable

 

$

47,500

 

 

$

—

 

Mortgages payable, including unamortized premium and net of unamortized debt cost

 

 

10,151

 

 

 

10,697

 

Notes payable, net of unamortized discount and unamortized debt costs

 

 

3,738,843

 

 

 

3,735,769

 

Accrued interest payable

 

 

57,384

 

 

 

23,923

 

Other liabilities

 

 

91,037

 

 

 

79,002

 

Total liabilities

 

 

3,944,915

 

 

 

3,849,391

 

 

 

 

 

 

 

 

Stockholders' equity of NNN

 

 

4,006,932

 

 

 

3,901,662

 

Noncontrolling interests

 

 

—

 

 

 

1

 

Total equity

 

 

4,006,932

 

 

 

3,901,663

 

 

 

 

 

 

 

 

Total liabilities and equity

 

$

7,951,847

 

 

$

7,751,054

 

 

 

 

 

 

 

 

Common shares outstanding

 

 

178,732

 

 

 

175,636

 

 

 

 

 

 

 

 

Gross leasable area, Property Portfolio (square feet)

 

 

34,265

 

 

 

32,753

 

 

 

8

 

National Retail Properties, Inc.

Debt Summary

As of September 30, 2022

(in thousands)

(unaudited)

 

Unsecured Debt

 

Principal

 

 

Principal,
Net of
Unamortized
Discount

 

 

Stated
Rate

 

 

Effective
Rate

 

 

Maturity Date

Line of credit payable

 

$

47,500

 

 

$

47,500

 

 

L + 77.5 bps

 

 

 

3.007

%

 

June 2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unsecured notes payable:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2024

 

 

350,000

 

 

 

349,860

 

 

 

3.900

%

 

 

3.924

%

 

June 2024

2025

 

 

400,000

 

 

 

399,659

 

 

 

4.000

%

 

 

4.029

%

 

November 2025

2026

 

 

350,000

 

 

 

348,202

 

 

 

3.600

%

 

 

3.733

%

 

December 2026

2027

 

 

400,000

 

 

 

399,114

 

 

 

3.500

%

 

 

3.548

%

 

October 2027

2028

 

 

400,000

 

 

 

398,142

 

 

 

4.300

%

 

 

4.388

%

 

October 2028

2030

 

 

400,000

 

 

 

399,009

 

 

 

2.500

%

 

 

2.536

%

 

April 2030

2048

 

 

300,000

 

 

 

296,038

 

 

 

4.800

%

 

 

4.890

%

 

October 2048

2050

 

 

300,000

 

 

 

294,256

 

 

 

3.100

%

 

 

3.205

%

 

April 2050

2051

 

 

450,000

 

 

 

441,843

 

 

 

3.500

%

 

 

3.602

%

 

April 2051

2052

 

 

450,000

 

 

 

439,790

 

 

 

3.000

%

 

 

3.118

%

 

April 2052

Total

 

 

3,800,000

 

 

 

3,765,913

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total unsecured debt(1)

 

$

3,847,500

 

 

$

3,813,413

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt costs

 

 

 

 

$

(38,145

)

 

 

 

 

 

 

 

 

Accumulated amortization

 

 

 

11,075

 

 

 

 

 

 

 

 

 

Debt costs, net of accumulated amortization

 

 

 

(27,070

)

 

 

 

 

 

 

 

 

Notes payable, net of unamortized discount and
    unamortized debt costs

 

 

$

3,738,843

 

 

 

 

 

 

 

 

 

 

(1)

 

Unsecured notes payable have a weighted average interest rate of 3.7% and a weighted average maturity of 14.0 years.

 

 

Mortgages Payable

 

Principal
Balance

 

 

Interest
Rate

 

 

Maturity Date

Mortgage(1)

 

$

10,160

 

 

 

5.230

%

 

July 2023

 

 

 

 

 

 

 

 

 

Debt costs

 

 

(147

)

 

 

 

 

 

Accumulated amortization

 

 

138

 

 

 

 

 

 

Debt costs, net of accumulated amortization

 

 

(9

)

 

 

 

 

 

Mortgages payable, including unamortized
    premium and net of unamortized debt costs

 

$

10,151

 

 

 

 

 

 

 

(1)

 

Includes unamortized premium

 

As of September 30, 2022, Debt / EBITDA based on current quarter EBITDA annualized is 5.3x.

 

9

 

National Retail Properties, Inc.

Debt Summary – Continued

As of September 30, 2022

(unaudited)

 

Credit Facility and Note Covenants

 

The following is a summary of key financial covenants for the company's unsecured credit facility and notes, as defined and calculated per the terms of the facility's credit agreement and the notes' governing documents, respectively, which are included in the company's filings with the Commission. These calculations, which are not based on U.S. GAAP measurements, are presented to investors to show that as of September 30, 2022, the company believes it is in compliance with the covenants.

 

Unsecured Credit Facility Key Covenants

 

Required

 

September 30, 2022

Maximum leverage ratio

 

< 0.60

 

0.36

Minimum fixed charge coverage ratio

 

> 1.50

 

4.69

Maximum secured indebtedness ratio

 

< 0.40

 

  0.001

Unencumbered asset value ratio

 

> 1.67

 

2.83

Unencumbered interest ratio

 

> 1.75

 

4.82

 

 

 

 

 

Unsecured Notes Key Covenants

 

Required

 

September 30, 2022

Limitation on incurrence of total debt

 

≤ 60%

 

40%

Limitation on incurrence of secured debt

 

≤ 40%

 

0.1%

Debt service coverage ratio

 

≥ 1.50

 

4.65

Maintenance of total unencumbered assets

 

≥ 150%

 

252%

 

10

 

National Retail Properties, Inc.

Property Portfolio

 

Top 20 Lines of Trade

 

 

 

 

As of September 30,

 

 

Lines of Trade

 

2022(1)

 

2021(2)

1.

 

Convenience stores

 

16.7%

 

17.6%

2.

 

Automotive service

 

13.6%

 

12.1%

3.

 

Restaurants – full service

 

9.4%

 

9.9%

4.

 

Restaurants – limited service

 

9.0%

 

9.0%

5.

 

Family entertainment centers

 

6.0%

 

5.9%

6.

 

Health and fitness

 

4.9%

 

5.1%

7.

 

Theaters

 

4.3%

 

4.5%

8.

 

Recreational vehicle dealers, parts and accessories

 

4.1%

 

4.0%

9.

 

Equipment rental

 

3.2%

 

3.2%

10.

 

Automotive parts

 

2.9%

 

3.1%

11.

 

Wholesale clubs

 

2.4%

 

2.5%

12.

 

Home improvement

 

2.4%

 

2.5%

13.

 

Furniture

 

2.3%

 

1.7%

14.

 

Medical service providers

 

1.9%

 

2.1%

15.

 

General merchandise

 

1.6%

 

1.7%

16.

 

Consumer electronics

 

1.5%

 

1.5%

17.

 

Home furnishings

 

1.5%

 

1.5%

18.

 

Travel plazas

 

1.5%

 

1.5%

19.

 

Automobile auctions, wholesale

 

1.3%

 

1.3%

20.

 

Drug stores

 

1.2%

 

1.3%

 

 

Other

 

8.3%

 

8.0%

 

 

Total

 

100.0%

 

100.0%

 

Top 10 States

 

 

State

 

% of
Total(1)

 

 

 

State

 

% of
Total(1)

1.

 

Texas

 

17.1%

 

6.

 

North Carolina

 

4.1%

2.

 

Florida

 

8.7%

 

7.

 

Indiana

 

3.9%

3.

 

Illinois

 

5.4%

 

8.

 

Tennessee

 

3.8%

4.

 

Ohio

 

5.3%

 

9.

 

California

 

3.5%

5.

 

Georgia

 

4.7%

 

10.

 

Virginia

 

3.3%

 

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

 

(1)

$752,785,000 as of September 30, 2022.

 

(2)

$706,162,000 as of September 30, 2021.

 

 

 

 

 

 

 

 

 

 

 

11

 

National Retail Properties, Inc.

Property Portfolio – Continued

 

Top 20 Tenants

 

 

Tenant

 

# of
Properties

 

% of
Total(1)

1.

 

7-Eleven

 

  138

 

4.8%

2.

 

Mister Car Wash

 

  121

 

4.4%

3.

 

Camping World

 

  47

 

4.0%

4.

 

LA Fitness

 

  30

 

3.4%

5.

 

GPM Investments (Convenience Stores)

 

  152

 

3.2%

6.

 

Flynn Restaurant Group (Taco Bell/Arby's)

 

  204

 

3.0%

7.

 

Dave & Buster's

 

  28

 

2.9%

8.

 

AMC Theatre

 

  20

 

2.7%

9.

 

BJ's Wholesale Club

 

  13

 

2.4%

10.

 

Mavis Tire Express Services

 

  134

 

2.2%

11.

 

Sunoco

 

  59

 

2.1%

12.

 

Chuck E. Cheese's

 

  53

 

2.0%

13.

 

Couche Tard (Pantry)

 

  71

 

1.8%

14.

 

Frisch's Restaurants

 

  69

 

1.8%

15.

 

Fikes (Convenience Stores)

 

  59

 

1.7%

16.

 

Life Time Fitness

 

  3

 

1.5%

17.

 

Ahern Rentals

 

  40

 

1.4%

18.

 

Best Buy

 

  16

 

1.4%

19.

 

Bob Evans

 

  106

 

1.4%

20.

 

Pull-A-Part

 

  20

 

1.3%

 

 

Lease Expirations(2)

 

 

% of
Total(1)

 

# of
Properties

 

Gross Leasable
Area(3)

 

 

 

% of
Total(1)

 

# of
Properties

 

Gross Leasable
Area(3)

2022

 

0.4%

 

  8

 

  180,000

 

2028

 

5.0%

 

  175

 

  1,573,000

2023

 

1.7%

 

  87

 

  987,000

 

2029

 

2.9%

 

  81

 

  1,025,000

2024

 

3.1%

 

  91

 

  1,445,000

 

2030

 

3.5%

 

  107

 

  1,207,000

2025

 

5.6%

 

  188

 

  1,992,000

 

2031

 

7.9%

 

  188

 

  2,718,000

2026

 

5.3%

 

  218

 

  2,157,000

 

2032

 

6.6%

 

  222

 

  2,363,000

2027

 

8.7%

 

  240

 

  3,635,000

 

Thereafter

 

49.3%

 

  1,723

 

  14,814,000

 

(1)

 

Based on the annual base rent of $752,785,000, which is the annualized base rent for all leases in place as of September 30, 2022.

(2)

 

As of September 30, 2022, the weighted average remaining lease term is 10.4 years.

(3)

 

Square feet.

 

12

 

National Retail Properties, Inc.

Rent Deferral Lease Amendments

(in thousands)

 

The following table outlines the rent deferred and corresponding scheduled repayment of the COVID-19 rent deferral lease amendments executed as of September 30, 2022 (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

 

 

 

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

Q1

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

9

 

 

 

1,704

 

 

 

1,713

 

 

 

2.9

%

 

 

90.2

%

 

Q2

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

10

 

 

 

543

 

 

 

553

 

 

 

1.0

%

 

 

91.2

%

 

Q3

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

—

 

 

 

543

 

 

 

543

 

 

 

1.0

%

 

 

92.2

%

 

Q4

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

—

 

 

 

544

 

 

 

544

 

 

 

1.0

%

 

 

93.2

%

 

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

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