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 (Date of earliest event reported): February 9, 2023

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)

Not applicable

(Former name or former address, if changed since last report)

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, 2023, 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, 2022. 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, 2023, of National Retail Properties, Inc.
99.2	Annual Supplemental Data, dated February 9, 2023, 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, 2023	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, 2023

RECORD ANNUAL RESULTS AND 2023 GUIDANCE

ANNOUNCED BY NATIONAL RETAIL PROPERTIES, INC.

Orlando, Florida, February 9, 2023 – National Retail Properties, Inc. (NYSE: NNN), a real estate investment trust, today announced operating results for the quarter and year ended December 31, 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						Year Ended
	December 31,						December 31,
	2022			2021			2022			2021
	(in thousands, except per share data)
Revenues	$	198,520		$	187,261		$	773,053		$	726,407
Net earnings available to common stockholders	$	90,662		$	65,129		$	334,626		$	264,217
Net earnings per common share	$	0.50		$	0.37		$	1.89		$	1.51
FFO available to common stockholders	$	142,178		$	120,529		$	548,884		$	467,833
FFO per common share	$	0.79		$	0.69		$	3.10		$	2.68
Core FFO available to common stockholders	$	142,893		$	131,426		$	556,404		$	500,058
Core FFO per common share	$	0.80		$	0.75		$	3.14		$	2.86
AFFO available to common stockholders	$	145,142	(1)	$	135,132	(2)	$	568,952	(1)	$	534,792	(2)
AFFO per common share	$	0.81	(1)	$	0.77	(2)	$	3.21	(1)	$	3.06	(2)

(1)	Amounts include $681 and $5,391 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, 2022, respectively. Excluding such, AFFO per common share would have been $0.80 and $3.18 for the quarter and year ended December 31, 2022, 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 results would have been $0.76 and $2.92 for the quarter and year ended, respectively.

2022 Highlights:

•Increased annual Core FFO per common share 9.8%

•Dividend yield of 4.7% at December 31, 2022

•Annual dividend per common share increased to $2.16 marking the 33rd 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 99.4%, with a weighted average remaining lease term of 10.4 years, at December 31, 2022 as compared to 99.4% at September 30, 2022, and 99.0% at December 31, 2021

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2022 Highlights (continued):

•$847.7 million in property investments, including the acquisition of 223 properties with aggregate gross leasable area of approximately 2,629,000 square feet at an initial cash cap rate of 6.4%, with a weighted average remaining lease term of 16.2 years

•Sold 33 properties for $65.2 million, producing $17.4 million of gains on sale, at a cap rate of 5.9%

•Raised $250.2 million in net proceeds from issuance of 5,543,414 common shares

•Maintained leading debt profile: 96% is fixed-rate debt, 13.7-year weighted average debt maturity and 99.9% of properties are not encumbered with secured mortgage debt

•Total average annual shareholder returns (11.8% for the past 30 years) exceed industry equity averages for the past 1-, 2-, 5-, 10-, 15-, 20-, 25- and 30-years

Fourth Quarter 2022 Highlights:

•$260.0 million in property investments, including the acquisition of 69 properties with an aggregate gross leasable area of approximately 789,000 square feet at an initial cash cap rate of 6.6%, with a weighted average remaining lease term of 16.0 years

•Sold seven properties with net proceeds of $16.0 million, producing $6.8 million of gains on sales at a cap rate of 5.9%

•Raised $120.7 million in net proceeds from the issuance of 2,690,069 common shares

The company announced 2023 Core FFO guidance of $3.14 to $3.20 per share. The 2023 AFFO is estimated to be $3.19 to $3.25 per share. The Core FFO guidance equates to net earnings of $1.87 to $1.93 per share, plus $1.27 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: "We are delighted to report another excellent year at NNN, with record-level property acquisitions and above-average Core FFO growth in 2022. NNN’s best-in-class balance sheet and consistent, strong free cash flow positions NNN well headed into the potential macroeconomic challenges of 2023."

National Retail Properties invests primarily in high-quality retail properties subject generally to long-term, net leases. As of December 31, 2022, the company owned 3,411 properties in 48 states with a gross leasable area of approximately 35.0 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 February 9, 2023, at 10:30 a.m. ET to review these results. The call can be accessed on the National Retail Properties web site live at http://www.nnnreit.com. For those unable to listen to the live broadcast, a replay will be available on the company’s web site. In addition, a summary of any earnings guidance given on the call will be posted to the company’s web site.

Statements in this press release that are not strictly historical are “forward-looking” statements. These statements generally are characterized by the use of terms such as "believe," "expect," "intend," "may," "estimated," or other similar words or expressions. Forward-looking statements involve known and unknown risks, which may cause the company’s actual future results to differ materially from expected results. These risks include, among others, general economic conditions, including inflation, 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 and the potential impacts of COVID-19, or any epidemic or pandemic on the company's business operations, financial results and financial position on the world economy. 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

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disposition of certain assets, the company’s share of these items from the company’s noncontrolling interests 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 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.

Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate as defined by NAREIT (“EBITDA”) is a metric established by NAREIT and commonly used by real estate companies. The measure is a result of net earnings (computed in accordance with GAAP), plus interest expense, income tax expense, depreciation and amortization, excluding any gains (or including any losses) on disposition of real estate, any impairment charges and after adjustments for income and losses attributable to noncontrolling interests. Management considers the non-GAAP measure of EBITDA to be an appropriate measure of the company's performance and should be considered in addition to, net earnings or loss, as a measure of the company's operating performance. The company’s computation of EBITDA may differ from the methodology for calculating EBITDA 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 EBITDA, as defined by NAREIT, is included in the company’s Annual Supplemental Data 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,
	2022			2021			2022			2021
Revenues:
Rental income	$	198,217		$	186,633		$	771,618		$	723,859
Interest and other income from real estate transactions		303			628			1,435			2,548
		198,520			187,261			773,053			726,407
Operating expenses:
General and administrative		10,788			9,947			41,695			44,640
Real estate		7,035			7,520			26,281			28,385
Depreciation and amortization		57,322			53,389			223,834			205,220
Leasing transaction costs		61			57			320			203
Impairment losses – real estate, net of recoveries		1,088			7,310			8,309			21,957
Executive retirement costs		715			—			7,520			—
		77,009			78,223			307,959			300,405
Gain on disposition of real estate		6,787			5,159			17,443			23,094
Earnings from operations		128,298			114,197			482,537			449,096
Other expenses (revenues):
Interest and other income		(29	)		(57	)		(149	)		(216	)
Interest expense		37,665			36,684			148,065			137,874		(1)
Loss on early extinguishment of debt		—			—			—			21,328
		37,636			36,627			147,916			158,986
Net earnings		90,662			77,570			334,621			290,110
Loss attributable to noncontrolling interests		—			—			5			3
Net earnings attributable to NNN		90,662			77,570			334,626			290,113
Series F preferred stock dividends		—			(1,544	)		—			(14,999	)
Excess of redemption value over carrying value of       preferred shares redeemed		—			(10,897	)		—			(10,897	)
Net earnings available to common stockholders	$	90,662		$	65,129		$	334,626		$	264,217
Weighted average common shares outstanding:
Basic		178,779			174,750			176,404			174,711
Diluted		179,472			174,868			177,068			174,819
Net earnings per share available to common stockholders:
Basic	$	0.51		$	0.37		$	1.89		$	1.51
Diluted	$	0.50		$	0.37		$	1.89		$	1.51

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

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National Retail Properties, Inc.

(in thousands, except per share data)

(unaudited)

	Quarter Ended						Year Ended
	December 31,						December 31,
	2022			2021			2022			2021
Funds From Operations (FFO) Reconciliation:
Net earnings available to common stockholders	$	90,662		$	65,129		$	334,626		$	264,217
Real estate depreciation and amortization		57,215			53,249			223,392			204,753
Gain on disposition of real estate		(6,787	)		(5,159	)		(17,443	)		(23,094	)
Impairment losses – depreciable real estate, net of recoveries		1,088			7,310			8,309			21,957
Total FFO adjustments		51,516			55,400			214,258			203,616
FFO available to common stockholders	$	142,178		$	120,529		$	548,884		$	467,833
FFO per common share:
Basic	$	0.80		$	0.69		$	3.11		$	2.68
Diluted	$	0.79		$	0.69		$	3.10		$	2.68
Core Funds From Operations (Core FFO) Reconciliation:
Net earnings available to common stockholders	$	90,662		$	65,129		$	334,626		$	264,217
Total FFO adjustments		51,516			55,400			214,258			203,616
FFO available to common stockholders		142,178			120,529			548,884			467,833
Executive retirement costs		715			—			7,520			—
Loss on early extinguishment of debt		—			—			—			21,328
Excess of redemption value over carrying value of  preferred shares redeemed		—			10,897			—			10,897
Total Core FFO adjustments		715			10,897			7,520			32,225
Core FFO available to common stockholders	$	142,893		$	131,426		$	556,404		$	500,058
Core FFO per common share:
Basic	$	0.80		$	0.75		$	3.15		$	2.86
Diluted	$	0.80		$	0.75		$	3.14		$	2.86

5

National Retail Properties, Inc.

(in thousands, except per share data)

(unaudited)

	Quarter Ended								Year Ended
	December 31,								December 31,
	2022				2021				2022				2021
Adjusted Funds From Operations (AFFO) Reconciliation:
Net earnings available to common stockholders	$	90,662			$	65,129			$	334,626			$	264,217
Total FFO adjustments		51,516				55,400				214,258				203,616
Total Core FFO adjustments		715				10,897				7,520				32,225
Core FFO available to common stockholders		142,893				131,426				556,404				500,058
Straight-line accrued rent, net of reserves		261				2,046				3,559				21,137
Net capital lease rent adjustment		78				79				302				340
Below-market rent amortization		(100	)			(280	)			(510	)			(710	)
Stock based compensation expense		2,344				1,975				10,078				14,295
Capitalized interest expense		(334	)			(114	)			(881	)			(328	)
Total AFFO adjustments		2,249				3,706				12,548				34,734
AFFO available to common stockholders	$	145,142		(1)	$	135,132		(2)	$	568,952		(1)	$	534,792		(2)
AFFO per common share:
Basic	$	0.81		(1)	$	0.77		(2)	$	3.23		(1)	$	3.06		(2)
Diluted	$	0.81		(1)	$	0.77		(2)	$	3.21		(1)	$	3.06		(2)
Other Information:
Rental income from operating leases(3)	$	192,738			$	181,078			$	751,680			$	703,865
Earned income from direct financing leases(3)	$	146			$	154			$	595			$	623
Percentage rent(3)	$	310			$	176			$	1,541			$	706
Real estate expense reimbursement from tenants(3)	$	5,023			$	5,225			$	17,802			$	18,665
Real estate expenses		(7,035	)			(7,520	)			(26,281	)			(28,385	)
Real estate expenses, net of tenant reimbursements	$	(2,012	)		$	(2,295	)		$	(8,479	)		$	(9,720	)
Amortization of debt costs	$	1,200			$	1,164			$	4,734			$	5,186
Scheduled debt principal amortization (excluding       maturities)	$	170			$	161			$	664			$	630
Non-real estate depreciation expense	$	109			$	116			$	454			$	451

(1)	Amounts include $681 and $5,391 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, 2022, respectively. Excluding such, AFFO per common share would have been $0.80 and $3.18 for the quarter and year ended December 31, 2022, 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 results would have been $0.76 and $2.92 for the quarter and year ended December 31, 2021, respectively.
(3)	For the quarter and year ended December 31, 2022, the aggregate of such amounts is $198,217 and $771,618, respectively, classified as rental income on the income statement summary. For the quarter and year ended December 31, 2021, the aggregate of such amounts is $186,633 and $723,859, respectively.

6

National Retail Properties, Inc.

2023 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.

	2023 Guidance
Net earnings per common share excluding any gains on disposition       of real estate, impairment charges, and executive retirement costs	$1.87 - $1.93 per share
Real estate depreciation and amortization per share	$1.27 per share
Core FFO per share	$3.14 - $3.20 per share
AFFO per share	$3.19 - $3.25 per share
General and administrative expenses	$43 - $45 Million
Real estate expenses, net of tenant reimbursements	$8 - $10 Million
Acquisition volume	$500 - $600 Million
Disposition volume	$100 - $120 Million

7

National Retail Properties, Inc.

Balance Sheet Summary

(in thousands)

(unaudited)

	December 31, 2022		December 31, 2021
Assets:
Real estate portfolio, net of accumulated depreciation and amortization	$	8,020,814	$	7,449,846
Cash and cash equivalents		2,505		171,322
Restricted cash and cash equivalents		4,273		—
Receivables, net of allowance of $708 and $782, respectively		3,612		3,154
Accrued rental income, net of allowance of $3,836 and $4,587, respectively		27,795		31,942
Debt costs, net of accumulated amortization of $21,663 and $19,377, respectively		5,352		7,443
Other assets		81,694		87,347
Total assets	$	8,146,045	$	7,751,054
Liabilities:
Line of credit payable	$	166,200	$	—
Mortgages payable, including unamortized premium and net of unamortized debt costs		9,964		10,697
Notes payable, net of unamortized discount and unamortized debt costs		3,739,890		3,735,769
Accrued interest payable		23,826		23,923
Other liabilities		82,663		79,002
Total liabilities		4,022,543		3,849,391
Stockholders’ equity of NNN		4,123,502		3,901,662
Noncontrolling interests		—		1
Total equity		4,123,502		3,901,663
Total liabilities and equity	$	8,146,045	$	7,751,054
Common shares outstanding		181,425		175,636
Gross leasable area, Property Portfolio (square feet)		35,010		32,753

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National Retail Properties, Inc.

Debt Summary

As of December 31, 2022

(in thousands)

(unaudited)

Unsecured Debt	Principal		Principal, Net of Unamortized Discount			Stated Rate			Effective Rate			Maturity Date
Line of credit payable	$	166,200	$	166,200		SOFR + 87.5bps				5.175	%	June 2025
Unsecured notes payable:
2024		350,000		349,880			3.900	%		3.924	%	June 2024
2025		400,000		399,684			4.000	%		4.029	%	November 2025
2026		350,000		348,301			3.600	%		3.733	%	December 2026
2027		400,000		399,155			3.500	%		3.548	%	October 2027
2028		400,000		398,210			4.300	%		4.388	%	October 2028
2030		400,000		399,039			2.500	%		2.536	%	April 2030
2048		300,000		296,057			4.800	%		4.890	%	October 2048
2050		300,000		294,289			3.100	%		3.205	%	April 2050
2051		450,000		441,884			3.500	%		3.602	%	April 2051
2052		450,000		439,843			3.000	%		3.118	%	April 2052
Total		3,800,000		3,766,342
Total unsecured debt(1)	$	3,966,200	$	3,932,542
Debt costs			$	(38,145	)
Accumulated amortization				11,693
Debt costs, net of accumulated amortization				(26,452	)
Notes payable, net of unamortized discount and     unamortized debt costs			$	3,739,890

(1) Unsecured notes payable have a weighted average interest rate of 3.7% and a weighted average maturity of 13.7 years.

Mortgages Payable	Principal Balance			Interest Rate			Maturity Date
Mortgage(1)	$	9,969			5.230	%	July 2023
Debt costs		(147	)
Accumulated amortization		142
Debt costs, net of accumulated amortization		(5	)
Mortgages payable, including unamortized     premium and net of unamortized debt costs	$	9,964

(1) Includes unamortized premium.

As of December 31, 2022, Debt / EBITDA based on current quarter EBITDA annualized is 5.4x.

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National Retail Properties, Inc.

Debt Summary - Continued

As of December 31, 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 December 31, 2022, the company believes it is in compliance with the covenants.

Unsecured Credit Facility Key Covenants	Required	December 31, 2022
Maximum leverage ratio	< 0.60	0.36
Minimum fixed charge coverage ratio	> 1.50	4.76
Maximum secured indebtedness ratio	< 0.40	0.001
Unencumbered asset value ratio	> 1.67	2.81
Unencumbered interest ratio	> 1.75	4.82
Unsecured Notes Key Covenants	Required	December 31, 2022
Limitation on incurrence of total debt	≤ 60%	40.0%
Limitation on incurrence of secured debt	≤ 40%	0.1%
Debt service coverage ratio	≥ 1.50	4.68
Maintenance of total unencumbered assets	≥ 150%	250%

10

National Retail Properties, Inc.

Property Portfolio

Top 20 Lines of Trade

		As of December 31,
	Lines of Trade	2022(1)	2021(2)
1.	Convenience stores	16.5%	17.9%
2.	Automotive service	13.7%	12.3%
3.	Restaurants – full service	9.1%	9.8%
4.	Restaurants – limited service	8.9%	9.4%
5.	Family entertainment centers	5.9%	5.9%
6.	Health and fitness	4.9%	5.2%
7.	Theaters	4.3%	4.5%
8.	Recreational vehicle dealers, parts and accessories	4.1%	3.9%
9.	Equipment rental	3.1%	3.2%
10.	Automotive parts	2.6%	3.0%
11.	Wholesale clubs	2.6%	2.5%
12.	Drug stores	2.6%	1.3%
13.	Home improvement	2.3%	2.5%
14.	Furniture	2.3%	1.7%
15.	Medical service providers	1.9%	2.0%
16.	General merchandise	1.6%	1.7%
17.	Consumer electronics	1.4%	1.5%
18.	Home furnishings	1.4%	1.5%
19.	Travel plazas	1.4%	1.5%
20.	Automobile auctions, wholesale	1.3%	1.3%
	Other	8.1%	7.4%
	Total	100.0%	100.0%

Top 10 States

	State	% of Total(1)		State	% of Total(1)
1.	Texas	17.1%	6.	North Carolina	4.0%
2.	Florida	8.8%	7.	Indiana	3.8%
3.	Illinois	5.3%	8.	Tennessee	3.8%
4.	Ohio	5.2%	9.	Virginia	3.6%
5.	Georgia	4.6%	10.	California	3.5%

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

(1)	$771,984,000 as of December 31, 2022.
(2)	$713,169,000 as of December 31, 2021.

11

National Retail Properties, Inc.

Property Portfolio - Continued

Top 20 Tenants

	Tenant	# of Properties	% of Total(1)
1.	7-Eleven	138	4.7%
2.	Mister Car Wash	121	4.4%
3.	Camping World	47	3.9%
4.	LA Fitness	30	3.4%
5.	GPM Investments (Convenience Stores)	152	3.1%
6.	Dave & Buster's	28	2.9%
7.	Flynn Restaurant Group (Taco Bell/Arby's)	204	2.9%
8.	AMC Theatres	20	2.8%
9.	BJ's Wholesale Club	13	2.6%
10.	Mavis Tire Express Services	134	2.1%
11.	Sunoco	59	2.1%
12.	Walgreens	49	2.0%
13.	Chuck E. Cheese's	53	1.9%
14.	United Rentals	52	1.8%
15.	Couche Tard (Pantry)	71	1.7%
16.	Frisch's Restaurants	69	1.7%
17.	Fikes (Convenience Stores)	59	1.6%
18.	Life Time Fitness	3	1.4%
19.	Best Buy	16	1.4%
20.	Bob Evans	106	1.4%

Lease Expirations(1)

	% of Total(2)	# of Properties	Gross Leasable Area (3)		% of Total(2)	# of Properties	Gross Leasable Area (3)
2023	1.6%	83	889,000	2029	2.9%	82	1,032,000
2024	3.0%	90	1,439,000	2030	3.5%	107	1,207,000
2025	5.4%	187	1,986,000	2031	7.8%	186	2,704,000
2026	5.2%	219	2,162,000	2032	6.3%	221	2,358,000
2027	8.7%	240	3,637,000	2033	5.0%	139	1,390,000
2028	5.1%	179	1,753,000	Thereafter	45.5%	1,655	14,272,000

(1)	As of December 31, 2022, the weighted average remaining lease term is 10.4 years.
(2)	Based on the annual base rent of $771,984,000, which is the annualized base rent for all leases in place as of December 31, 2022.
(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 December 31, 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		3.0	%		90.3	%
	Q2		—		—		—		—			10		543		553		1.0	%		91.3	%
	Q3		—		—		—		—			—		543		543		0.9	%		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		100	%	$	34,584	$	22,193	$	56,777		100	%

13

EX-99.2

Exhibit 99.2

 

ANNUAL SUPPLEMENTAL DATA

As of December 31, 2022

 

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, general economic conditions, including inflation, 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 and the potential impacts of COVID-19, or any epidemic or pandemic on the company's business operations, financial results and financial position and on the world economy. 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, 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.

3

 

INCOME STATEMENT SUMMARY

(in thousands, except per share data)

(unaudited)

	Quarter Ended						Year Ended
	December 31,						December 31,
	2022			2021			2022			2021
Revenues:
Rental income	$	198,217		$	186,633		$	771,618		$	723,859
Interest and other income from real estate transactions		303			628			1,435			2,548
		198,520			187,261			773,053			726,407
Operating expenses:
General and administrative		10,788			9,947			41,695			44,640
Real estate		7,035			7,520			26,281			28,385
Depreciation and amortization		57,322			53,389			223,834			205,220
Leasing transaction costs		61			57			320			203
Impairment losses – real estate, net of recoveries		1,088			7,310			8,309			21,957
Executive retirement costs		715			—			7,520			—
		77,009			78,223			307,959			300,405
Gain on disposition of real estate		6,787			5,159			17,443			23,094
Earnings from operations		128,298			114,197			482,537			449,096
Other expenses (revenues):
Interest and other income		(29	)		(57	)		(149	)		(216	)
Interest expense		37,665			36,684			148,065			137,874		(1)
Loss on early extinguishment of debt		—			—			—			21,328
		37,636			36,627			147,916			158,986
Net earnings		90,662			77,570			334,621			290,110
Loss attributable to noncontrolling interests		—			—			5			3
Net earnings attributable to NNN		90,662			77,570			334,626			290,113
Series F preferred stock dividends		—			(1,544	)		—			(14,999	)
Excess of redemption value over carrying value of      preferred shares redeemed		—			(10,897	)		—			(10,897	)
Net earnings available to common stockholders	$	90,662		$	65,129		$	334,626		$	264,217
Weighted average common shares outstanding:
Basic		178,779			174,750			176,404			174,711
Diluted		179,472			174,868			177,068			174,819
Net earnings per share available to common stockholders:
Basic	$	0.51		$	0.37		$	1.89		$	1.51
Diluted	$	0.50		$	0.37		$	1.89		$	1.51

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

4

 

FUNDS FROM OPERATIONS (FFO)(1)

(in thousands, except per share data)

(unaudited)

	Quarter Ended						Year Ended
	December 31,						December 31,
	2022			2021			2022			2021
Net earnings available to common stockholders	$	90,662		$	65,129		$	334,626		$	264,217
Real estate depreciation and amortization		57,215			53,249			223,392			204,753
Gain on disposition of real estate		(6,787	)		(5,159	)		(17,443	)		(23,094	)
Impairment losses – depreciable real estate, net of      recoveries		1,088			7,310			8,309			21,957
Total FFO adjustments		51,516			55,400			214,258			203,616
FFO available to common stockholders	$	142,178		$	120,529		$	548,884		$	467,833
FFO per common share:
Basic	$	0.80		$	0.69		$	3.11		$	2.68
Diluted	$	0.79		$	0.69		$	3.10		$	2.68

(1) FFO is a non-GAAP financial measure. Please reference the Earnings Release for the quarter and year ended December 31, 2022 for the company's definition and explanation of how the company utilizes this metric.

CORE FUNDS FROM OPERATIONS (Core FFO)(1)

(in thousands, except per share data)

(unaudited)

	Quarter Ended				Year Ended
	December 31,				December 31,
	2022		2021		2022		2021
Net earnings available to common stockholders	$	90,662	$	65,129	$	334,626	$	264,217
Total FFO adjustments		51,516		55,400		214,258		203,616
FFO available to common stockholders		142,178		120,529		548,884		467,833
Executive retirement costs		715		—		7,520		—
Loss on early extinguishment of debt		—		—		—		21,328
Excess of redemption value over carrying value of      preferred shares redeemed		—		10,897		—		10,897
Total Core FFO adjustments		715		10,897		7,520		32,225
Core FFO available to common stockholders	$	142,893	$	131,426	$	556,404	$	500,058
Core FFO per common share:
Basic	$	0.80	$	0.75	$	3.15	$	2.86
Diluted	$	0.80	$	0.75	$	3.14	$	2.86

(1) Core FFO is a non-GAAP financial measure. Please reference the Earnings Release for the quarter and year ended December 31, 2022 for the company's definition and explanation of how the company utilizes this metric.

5

 

ADJUSTED FUNDS FROM OPERATIONS (AFFO)(1)

(in thousands, except per share data)

(unaudited)

	Quarter Ended								Year Ended
	December 31,								December 31,
	2022				2021				2022				2021
Net earnings available to common stockholders	$	90,662			$	65,129			$	334,626			$	264,217
Total FFO adjustments		51,516				55,400				214,258				203,616
Total Core FFO adjustments		715				10,897				7,520				32,225
Core FFO available to common stockholders		142,893				131,426				556,404				500,058
Straight-line accrued rent, net of reserves		261				2,046				3,559				21,137
Net capital lease rent adjustment		78				79				302				340
Below-market rent amortization		(100	)			(280	)			(510	)			(710	)
Stock based compensation expense		2,344				1,975				10,078				14,295
Capitalized interest expense		(334	)			(114	)			(881	)			(328	)
Total AFFO adjustments		2,249				3,706				12,548				34,734
AFFO available to common stockholders	$	145,142		(2)	$	135,132		(3)	$	568,952		(2)	$	534,792		(3)
AFFO per common share:
Basic	$	0.81		(2)	$	0.77		(3)	$	3.23		(2)	$	3.06		(3)
Diluted	$	0.81		(2)	$	0.77		(3)	$	3.21		(2)	$	3.06		(3)

(1)	AFFO is a non-GAAP financial measure. Please reference the Earnings Release for the quarter and year ended December 31, 2022 for the company's definition and explanation of how the company utilizes this metric.
(2)	Amounts include $681 and $5,391 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, 2022, respectively. Excluding such, AFFO per common share would have been $0.80 and $3.18 for the quarter and year ended December 31, 2022, respectively.
(3)	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 results would have been $0.76 and $2.92 for the quarter and year ended December 31, 2021, respectively.

6

 

OTHER INFORMATION

(in thousands)

(unaudited)

	Quarter Ended						Year Ended
	December 31,						December 31,
	2022			2021			2022			2021
Rental income from operating leases(1)	$	192,738		$	181,078		$	751,680		$	703,865
Earned income from direct financing leases(1)	$	146		$	154		$	595		$	623
Percentage rent(1)	$	310		$	176		$	1,541		$	706
Real estate expense reimbursement from tenants(1)	$	5,023		$	5,225		$	17,802		$	18,665
Real estate expenses		(7,035	)		(7,520	)		(26,281	)		(28,385	)
Real estate expenses, net of tenant reimbursements	$	(2,012	)	$	(2,295	)	$	(8,479	)	$	(9,720	)
Amortization of debt costs	$	1,200		$	1,164		$	4,734		$	5,186
Scheduled debt principal amortization (excluding maturities)	$	170		$	161		$	664		$	630
Non-real estate depreciation expense	$	109		$	116		$	454		$	451

(1) For the quarter and year ended December 31, 2022, the aggregate of such amounts is $198,217 and $771,618, respectively, classified as rental income on the income statement summary. For the quarter and year ended December 31, 2021, the aggregate of such amounts is $186,633 and $723,859, respectively.

EBITDA(1)

Earnings before Interest, Taxes, Depreciation and Amortization for Real Estate:

(in thousands)

(unaudited)

	Quarter Ended December 31,						Year Ended December 31,
	2022			2021			2022			2021
Net earnings attributable to NNN	$	90,662		$	77,570		$	334,626		$	290,113
Interest expense		37,665			36,684			148,065			137,874
Depreciation and amortization		57,322			53,389			223,834			205,220
Gain on disposition of real estate		(6,787	)		(5,159	)		(17,443	)		(23,094	)
Impairment losses – real estate, net of recoveries		1,088			7,310			8,309			21,957
Loss attributable to noncontrolling interests		—			—			(5	)		(3	)
EBITDA	$	179,950		$	169,794		$	697,386		$	632,067

(1) EBITDA is non-GAAP financial measure. Please reference the Earnings Release for the quarter and ended December 31, 2022 for the company's definition and explanation of how the company utilizes this metric.

7

 

BALANCE SHEET

(in thousands)

(unaudited)

	December 31, 2022		December 31, 2021
Assets:
Real estate portfolio, net of accumulated depreciation and amortization	$	8,020,814	$	7,449,846
Cash and cash equivalents		2,505		171,322
Restricted cash and cash equivalents		4,273		—
Receivables, net of allowance of $708 and $782, respectively		3,612		3,154
Accrued rental income, net of allowance of $3,836 and $4,587, respectively		27,795		31,942
Debt costs, net of accumulated amortization of $21,663 and $19,377, respectively		5,352		7,443
Other assets		81,694		87,347
Total assets	$	8,146,045	$	7,751,054
Liabilities:
Line of credit payable	$	166,200	$	—
Mortgages payable, including unamortized premium and net of unamortized debt costs		9,964		10,697
Notes payable, net of unamortized discount and unamortized debt costs		3,739,890		3,735,769
Accrued interest payable		23,826		23,923
Other liabilities		82,663		79,002
Total liabilities		4,022,543		3,849,391
Stockholders’ equity of NNN		4,123,502		3,901,662
Noncontrolling interests		—		1
Total equity		4,123,502		3,901,663
Total liabilities and equity	$	8,146,045	$	7,751,054
Common shares outstanding		181,425		175,636
Gross leasable area, Property Portfolio (square feet)		35,010		32,753

8

 

DEBT SUMMARY

As of December 31, 2022 (dollars in thousands):

(unaudited)

Unsecured Debt	Principal		Principal, Net of Unamortized Discount			Stated Rate			Effective Rate			Maturity Date
Line of credit payable	$	166,200	$	166,200		SOFR + 87.5bps				5.175	%	June 2025
Unsecured notes payable:
2024		350,000		349,880			3.900	%		3.924	%	June 2024
2025		400,000		399,684			4.000	%		4.029	%	November 2025
2026		350,000		348,301			3.600	%		3.733	%	December 2026
2027		400,000		399,155			3.500	%		3.548	%	October 2027
2028		400,000		398,210			4.300	%		4.388	%	October 2028
2030		400,000		399,039			2.500	%		2.536	%	April 2030
2048		300,000		296,057			4.800	%		4.890	%	October 2048
2050		300,000		294,289			3.100	%		3.205	%	April 2050
2051		450,000		441,884			3.500	%		3.602	%	April 2051
2052		450,000		439,843			3.000	%		3.118	%	April 2052
Total		3,800,000		3,766,342
Total unsecured debt(1)	$	3,966,200	$	3,932,542
Debt costs			$	(38,145	)
Accumulated amortization				11,693
Debt costs, net of accumulated amortization				(26,452	)
Notes payable, net of unamortized discount and     unamortized debt costs			$	3,739,890

(1) Unsecured notes payable have a weighted average interest rate of 3.7% and a weighted average maturity of 13.7 years.

9

 

DEBT SUMMARY (continued)

As of December 31, 2022 (in thousands):DEBT S SMMARY

Mortgages Payable	Principal Balance			Interest Rate			Maturity Date
Mortgage(1)	$	9,969			5.230	%	July 2023
Debt costs		(147	)
Accumulated amortization		142
Debt costs, net of accumulated amortization		(5	)
Mortgages payable, including unamortized     premium and net of unamortized debt costs	$	9,964

(1) Includes unamortized premium.

 

10

 

CREDIT METRICS (1)

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

	2018			2019			2020			2021			2022
Debt / Total assets (gross book)		34.6	%		35.3	%		34.4	%		39.9	%		40.4	%
Debt + preferred / Total assets (gross book)		42.6	%		39.3	%		38.4	%		39.9	%		40.4	%
Debt / EBITDA (last quarter annualized)		4.7			4.8			5.0			5.2			5.4
Debt + preferred / EBITDA (last quarter annualized)		5.8			5.3			5.6			5.2			5.4
EBITDA / Interest expense (cash)		4.8			5.0			4.6			4.7			4.7
EBITDA / Fixed charges (cash)		3.7			4.0			4.0			4.3			4.7

(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, 2022, the company believes it is in compliance with the covenants.

Unsecured Credit Facility Key Covenants	Required	December 31, 2022
Maximum leverage ratio	< 0.60	0.36
Minimum fixed charge coverage ratio	> 1.50	4.76
Maximum secured indebtedness ratio	< 0.40	0.001
Unencumbered asset value ratio	> 1.67	2.81
Unencumbered interest ratio	> 1.75	4.82
Unsecured Notes Key Covenants	Required	December 31, 2022
Limitation on incurrence of total debt	≤ 60%	40.0%
Limitation on incurrence of secured debt	≤ 40%	0.1%
Debt service coverage ratio	≥ 1.50	4.68
Maintenance of total unencumbered assets	≥ 150%	250%

11

 

LONG-TERM DIVIDEND HISTORY

 

12

 

PROPERTY ACQUISITIONS

(dollars in thousands)

	Year Ended December 31,
	2022			2021
Total dollars invested(1)	$	847,747		$	555,415
Number of Properties		223			156
Gross leasable area (square feet)(2)		2,629,000			1,341,000
Cap rate (3)		6.4	%		6.5	%

Weighted average lease term greater than 15 years on acquisitions for December 31, 2022 and 2021.
(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.
(3)	The cap rate is a weighted average, calculated as the intial cash annual base rent divided by the total purchase price of the Properties.

PROPERTY DISPOSITIONS

(dollars in thousands)

	Year Ended December 31,
	2022								2021
	Occupied			Vacant		Total			Occupied			Vacant		Total
Number of properties		17			16		33			34			40		74
Gross leasable area (square feet)		138,000			173,000		311,000			429,000			586,000		1,015,000
Acquisition costs	$	39,446		$	38,282	$	77,728		$	93,172		$	91,947	$	185,119
Net book value	$	25,515		$	22,258	$	47,773		$	61,489		$	40,061	$	101,550
Net sale proceeds	$	41,190		$	24,026	$	65,216		$	78,018		$	44,000	$	122,018
Cap rate(1)		5.9	%		—		5.9	%		7.4	%		—		7.4	%

(1) The cap rate is a weighted average, calculated as the cash annual base rent divided by the total sales price of the properties.

13

 

LEASE EXPIRATIONS(1)

	% of Total(2)	# of Properties		Gross Leasable Area (3)			% of Total(2)	# of Properties		Gross Leasable Area (3)
2023	1.6%		83		889,000	2029	2.9%		82		1,032,000
2024	3.0%		90		1,439,000	2030	3.5%		107		1,207,000
2025	5.4%		187		1,986,000	2031	7.8%		186		2,704,000
2026	5.2%		219		2,162,000	2032	6.3%		221		2,358,000
2027	8.7%		240		3,637,000	2033	5.0%		139		1,390,000
2028	5.1%		179		1,753,000	Thereafter	45.5%		1,655		14,272,000

(1)	As of December 31, 2022, the weighted average remaining lease term is 10.4 years.
(2)	Based on the annual base rent of $771,984,000, which is the annualized base rent for all leases in place as of December 31, 2022.
(3)	Square feet.

 

14

 

TOP 20 LINES OF TRADE

		As of December 31, 2022			As of December 31, 2021
	Lines of Trade	% of Total(1)	# of Properties		% of Total(2)	# of Properties
1.	Convenience stores	16.5%		650	17.9%		654
2.	Automotive service	13.7%		528	12.3%		449
3.	Restaurants – full service	9.1%		420	9.8%		421
4.	Restaurants – limited service	8.9%		611	9.4%		603
5.	Family entertainment centers	5.9%		88	5.9%		91
6.	Health and fitness	4.9%		34	5.2%		33
7.	Theaters	4.3%		33	4.5%		33
8.	Recreational vehicle dealers, parts and accessories	4.1%		52	3.9%		47
9.	Equipment rental	3.1%		100	3.2%		95
10.	Automotive parts	2.6%		152	3.0%		155
11.	Wholesale clubs	2.6%		13	2.5%		12
12.	Drug stores	2.6%		67	1.3%		32
13.	Home improvement	2.3%		50	2.5%		50
14.	Furniture	2.3%		80	1.7%		45
15.	Medical service providers	1.9%		84	2.0%		83
16.	General merchandise	1.6%		74	1.7%		73
17.	Consumer electronics	1.4%		17	1.5%		17
18.	Home furnishings	1.4%		16	1.5%		15
19.	Travel plazas	1.4%		24	1.5%		25
20.	Automobile auctions, wholesale	1.3%		15	1.3%		14
	Other	8.1%		303	7.4%		276
	Total	100.0%		3,411	100.0%		3,223

(1)	Based on the annual base rent of $771,984,000, which is the annualized base rent for all leases in place as of December 31, 2022.
(2)	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.

TOP 10 STATES

	State	% of Total(1)		State	% of Total(1)
1.	Texas	17.1%	6.	North Carolina	4.0%
2.	Florida	8.8%	7.	Indiana	3.8%
3.	Illinois	5.3%	8.	Tennessee	3.8%
4.	Ohio	5.2%	9.	Virginia	3.6%
5.	Georgia	4.6%	10.	California	3.5%

(1) Based on the annual base rent of $771,984,000, which is the annualized base rent for all leases in place as of December 31, 2022.

15

 

PORTFOLIO BY REGION

As a percentage of annual base rent - December 31, 2022

 

Based on the annual base rent of $771,984,000, which is the annualized base rent for all leases in place as of December 31, 2022.

16

 

TOP TENANTS

Creditworthy Retailers

▪17.5% of annual base rent is from tenants with investment grade rated debt

▪73.9% of annual base rent is from tenants that are publicly traded and/or have rated debt

▪Top 25 tenants (55.4% of annual base rent) operate an average of 1,653 stores each

	Tenant	# of Properties	% of Total(1)
1.	7-Eleven	138	4.7%
2.	Mister Car Wash	121	4.4%
3.	Camping World	47	3.9%
4.	LA Fitness	30	3.4%
5.	GPM Investments (Convenience Stores)	152	3.1%
6.	Dave & Buster's	28	2.9%
7.	Flynn Restaurant Group (Taco Bell/Arby's)	204	2.9%
8.	AMC Theatres	20	2.8%
9.	BJ's Wholesale Club	13	2.6%
10.	Mavis Tire Express Services	134	2.1%
11.	Sunoco	59	2.1%
12.	Walgreens	49	2.0%
13.	Chuck E. Cheese's	53	1.9%
14.	United Rentals	52	1.8%
15.	Couche Tard (Pantry)	71	1.7%
16.	Frisch's Restaurants	69	1.7%
17.	Fikes (Convenience Stores)	59	1.6%
18.	Life Time Fitness	3	1.4%
19.	Best Buy	16	1.4%
20.	Bob Evans	106	1.4%

(1) Based on the annual base rent of $771,984,000, which is the annualized base rent for all leases in place as of December 31, 2022.

17

 

SAME STORE RENTAL INCOME

(dollars in thousands)

Same Store Rental Income – Properties (Cash Basis) (1)
Number of properties		3,026
Year ended December 31, 2022 (2)	$	676,882
Year ended December 31, 2021 (2)	$	666,538
Change (in dollars)	$	10,344
Change (percent)		1.6	%

(1)	Includes all properties owned for current and prior year period excluding any properties under development or re-development.
(2)	Excludes the impact of the rent deferral lease amendments (Reference page 20 of this Annual Supplemental Data).

LEASING DATA

(dollars in thousands)

Year Ended December 31, 2022	Renewals With Same Tenant(1)			Vacancy Re-Lease To New Tenant			Releasing Totals
Number of leases		91			32			123
Prior cash rents	$	21,378		$	5,514		$	26,892
New cash rents	$	17,571		$	4,671		$	22,242		(2)
Recovery rate		82.2	%		84.7	%		82.7	%
Tenant improvements	$	5,897		$	2,781		$	8,678

(1)	Long-term renewal rate for the period of 2010 through 2022 was 83.1%.
(2)	Represents 2.9% of total annualized base rent as of December 31, 2022.

18

 

OTHER PROPERTY PORTFOLIO DATA

As of December 31, 2022

Tenant Financials

	# of Properties		% of Annual Base Rent (1)
Property Level Financial Information		2,865		80	%
Tenant Corporate Financials		2,661		78	%

Rent Increases	% of Annual Base Rent (1)
	Annual	Five Year	Other	Total
CPI	35%	57%	1%	93%
Fixed	2%	—	1%	3%
No increases	—	—	4%	4%
	37%	57%	6%	100%

Lease Structure - as a percentage of the Company's annual base rent(1)

•92.0% is from triple net leases

•95.2% is from triple net leases or double net leases (with roof warranty)

•28.7% is from master leases

•98.4% is from leases containing future lease renewal options

•0.2% is from leases containing purchase options

(1) Based on the annual base rent of $771,984,000, which is the annualized base rent for all leases in place as of December 31, 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.

	2023 Guidance
Net earnings per common share excluding any gains on disposition       of real estate, impairment charges, and executive retirement costs	$1.87 - $1.93 per share
Real estate depreciation and amortization per share	$1.27 per share
Core FFO per share	$3.14 - $3.20 per share
AFFO per share	$3.19 - $3.25 per share
General and administrative expenses	$43 - $45 Million
Real estate expenses, net of tenant reimbursements	$8 - $10 Million
Acquisition volume	$500 - $600 Million
Disposition volume	$100 - $120 Million

19

 

COVID-19 METRICS

The following table outlines the rent deferred and corresponding scheduled repayment by quarter of the rent deferral lease amendments executed as of December 31, 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		3.0	%		90.3	%
	Q2		—		—		—		—			10		543		553		1.0	%		91.3	%
	Q3		—		—		—		—			—		543		543		0.9	%		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		100	%	$	34,584	$	22,193	$	56,777		100	%

20

XML

Cover	Feb. 09, 2023
Entity Information [Line Items]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Feb. 09, 2023
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