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 8, 2024

NNN REIT, 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 8, 2024, NNN REIT, Inc. (the "Company"), issued a press release announcing its results of operations and financial condition for the quarter and year ended December 31, 2023. 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 8, 2024, of NNN REIT, Inc.
99.2	Annual Supplemental Data, dated February 8, 2024, of NNN REIT, 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.

	NNN REIT, Inc.
Dated: February 8, 2024	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 8, 2024

2023 ANNUAL RESULTS AND 2024 GUIDANCE

ANNOUNCED BY NNN REIT, INC.

Orlando, Florida, February 8, 2024 – NNN REIT, Inc. (NYSE: NNN), a real estate investment trust, today announced operating results for the quarter and year ended December 31, 2023. 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,
	2023			2022		2023			2022
	(in thousands, except per share data)
Revenues	$	216,231		$	198,520	$	828,111		$	773,053
Net earnings available to common stockholders	$	96,682		$	90,662	$	392,340		$	334,626
Net earnings per common share	$	0.53	(1)	$	0.50	$	2.16	(1)	$	1.89
FFO available to common stockholders	$	151,712		$	142,178	$	589,074		$	548,884
FFO per common share	$	0.83	(1)	$	0.79	$	3.24	(1)	$	3.10
Core FFO available to common stockholders	$	154,281		$	142,893	$	592,528		$	556,404
Core FFO per common share	$	0.85	(1)	$	0.80	$	3.26	(1)	$	3.14
AFFO available to common stockholders	$	148,997		$	145,142	$	591,523		$	568,952
AFFO per common share	$	0.82		$	0.81	$	3.26		$	3.21

(1) During the quarter ended December 31, 2023, one tenant was reclassified to accrual basis for accounting purposes due to their improved qualitative and/or quantitative credit factors, which resulted in an increase of accrued rent in the amount of $5,573. Excluding such, net earnings per common share would have been $0.50 and $2.13, FFO per common share would have been $0.80 and $3.21 and Core FFO would have been $0.82 and $3.23 for the quarter and year ended December 31, 2023, respectively.

2023 Highlights:

•Net earnings per common share increased 14.3% over prior year results

•FFO per common share increased 4.5% over prior year results

•Core FFO per common share increased 3.8% over prior year results

•AFFO per common share increased 1.6% over prior year results

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2023 Highlights (continued):

•Dividend yield of 5.2% at December 31, 2023

•Annual dividend per common share increased to $2.23 marking the 34th consecutive year of annual dividend increases - the third longest record of consecutive annual dividend increases of all public REITs

•Maintained high occupancy levels at 99.5%, with a weighted average remaining lease term of 10.1 years, at December 31, 2023 as compared to 99.2% at September 30, 2023, and 99.4% at December 31, 2022

•$819.7 million in property investments, including the acquisition of 165 properties with aggregate gross leasable area of approximately 1,281,000 square feet at an initial cash cap rate of 7.3%, with a weighted average remaining lease term of 18.8 years

•Sold 45 properties for $115.7 million, producing $47.5 million of gains on sales, at a cap rate of 5.9%

•Raised $31.4 million in net proceeds from issuance of 726,364 common shares

•Issued $500 million principal amount of 5.600% senior unsecured notes due 2033

•Maintained sector leading 12.0 year weighted average debt maturity

•Total average annual shareholder returns (11.0% for the past 30 years) exceed industry equity averages for the past 2-, 3-, 10-, 15-, 20-, 25- and 30-years

Fourth Quarter 2023 Highlights:

•$269.7 million in property investments, including the acquisition of 40 properties with an aggregate gross leasable area of approximately 278,000 square feet at an initial cash cap rate of 7.6%, with a weighted average remaining lease term of 19.6 years

•Sold 19 properties for $26.6 million, producing $7.3 million of gains on sales, at a cap rate of 6.5%

The company announced 2024 Core FFO guidance of $3.25 to $3.31 per share. The 2024 AFFO is estimated to be $3.29 to $3.35 per share. The Core FFO guidance equates to net earnings of $1.94 to $2.00 per share, plus $1.31 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: "NNN continues to execute with excellence. In 2023, we grew Core FFO 3.8 percent, deployed over $800 million of capital in new real estate investments and successfully executed the NNN REIT name change and branding campaign. We ended the year with $132.0 million drawn on our $1.1 billion credit facility, accentuating our ability to raise capital and generate strong free cash flow and proceeds from selective asset dispositions, even in a challenging capital market environment. NNN maintains a multi-year view and is well-positioned to execute the 2024 strategy."

NNN REIT invests primarily in high-quality retail properties subject generally to long-term, net leases. As of December 31, 2023, the company owned 3,532 properties in 49 states with a gross leasable area of approximately 36.0 million square feet and a weighted average remaining lease term of 10.1 years. NNN is one of only three publicly traded REITs to have increased annual dividends for 34 or more consecutive years. For more information on the company, visit www.nnnreit.com.

Management will hold a conference call on February 8, 2024, at 10:30 a.m. ET to review these results. The call can be accessed on the NNN REIT website live at http://www.nnnreit.com. For those unable to listen to the live broadcast, a replay will be available on the company’s website. 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 an 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

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the company’s current operating plans and estimates. Actual operating results may differ materially from what is expressed or forecast in this press release. NNN REIT, 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 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, executive retirement costs, or other non-core amounts as they occur. The company’s computation of Core FFO may differ from the methodology for calculating Core FFO used by other equity REITs, and therefore, may not be comparable to such other REITs. A reconciliation of net earnings (computed in accordance with GAAP) to Core FFO is included in the financial information accompanying this release.

Adjusted Funds From Operations (“AFFO”) is a non-GAAP financial measure of operating performance used by many companies in the REIT industry. AFFO adjusts FFO for certain non-cash items that reduce or increase net income in accordance with GAAP. AFFO should not be considered an alternative to net earnings, as an indication of the company's performance or to cash flow as a measure of liquidity or ability to make distributions. Management considers AFFO a useful supplemental measure of the company’s performance. The company’s computation of AFFO may differ from the methodology for calculating AFFO used by other equity REITs, and therefore, may not be comparable to such other REITs. A reconciliation of net earnings (computed in accordance with GAAP) to AFFO is included in the financial information accompanying this release.

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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NNN REIT, Inc.

Income Statement Summary

(dollars in thousands, except per share data)

(unaudited)

	Quarter Ended							Year Ended
	December 31,							December 31,
	2023				2022			2023				2022
Revenues:
Rental income	$	215,178			$	198,217		$	826,090			$	771,618
Interest and other income from real estate transactions		1,053				303			2,021				1,435
		216,231				198,520			828,111				773,053
Operating expenses:
General and administrative		10,530				10,788			43,746				41,695
Real estate		8,237				7,035			28,378				26,281
Depreciation and amortization		60,079				57,322			238,625				223,834
Leasing transaction costs		76				61			299				320
Impairment losses – real estate, net of recoveries		2,315				1,088			5,990				8,309
Executive retirement costs		2,569				715			3,454				7,520
		83,806				77,009			320,492				307,959
Gain on disposition of real estate		7,263				6,787			47,485				17,443
Earnings from operations		139,688				128,298			555,104				482,537
Other expenses (revenues):
Interest and other income		(383	)			(29	)		(1,134	)			(149	)
Interest expense		43,389				37,665			163,898				148,065
		43,006				37,636			162,764				147,916
Net earnings		96,682				90,662			392,340				334,621
Loss attributable to noncontrolling interests		—				—			—				5
Net earnings available to common stockholders	$	96,682			$	90,662		$	392,340			$	334,626
Weighted average common shares outstanding:
Basic		181,425,202				178,779,100			181,200,040				176,403,656
Diluted		181,932,133				179,472,118			181,689,723				177,067,865
Net earnings per share available to common stockholders:
Basic	$	0.53			$	0.51		$	2.16			$	1.89
Diluted	$	0.53		(1)	$	0.50		$	2.16		(1)	$	1.89

(1) During the quarter ended December 31, 2023, one tenant was reclassified to accrual basis for accounting purposes due to their improved qualitative and/or quantitative credit factors, which resulted in an increase of accrued rent in the amount of $5,573. Excluding such, net earnings per common share would have been $0.50 and $2.13 for the quarter and year ended December 31, 2023, respectively.

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NNN REIT, Inc.

(dollars in thousands, except per share data)

(unaudited)

	Quarter Ended							Year Ended
	December 31,							December 31,
	2023				2022			2023				2022
Funds From Operations ("FFO") Reconciliation:
Net earnings available to common stockholders	$	96,682			$	90,662		$	392,340			$	334,626
Real estate depreciation and amortization		59,978				57,215			238,229				223,392
Gain on disposition of real estate		(7,263	)			(6,787	)		(47,485	)			(17,443	)
Impairment losses – depreciable real estate, net of recoveries		2,315				1,088			5,990				8,309
Total FFO adjustments		55,030				51,516			196,734				214,258
FFO available to common stockholders	$	151,712			$	142,178		$	589,074			$	548,884
FFO per common share:
Basic	$	0.84			$	0.80		$	3.25			$	3.11
Diluted	$	0.83		(1)	$	0.79		$	3.24		(1)	$	3.10
Core Funds From Operations ("Core FFO") Reconciliation:
Net earnings available to common stockholders	$	96,682			$	90,662		$	392,340			$	334,626
Total FFO adjustments		55,030				51,516			196,734				214,258
FFO available to common stockholders		151,712				142,178			589,074				548,884
Executive retirement costs		2,569				715			3,454				7,520
Total Core FFO adjustments		2,569				715			3,454				7,520
Core FFO available to common stockholders	$	154,281			$	142,893		$	592,528			$	556,404
Core FFO per common share:
Basic	$	0.85			$	0.80		$	3.27			$	3.15
Diluted	$	0.85		(1)	$	0.80		$	3.26		(1)	$	3.14

(1) During the quarter ended December 31, 2023, one tenant was reclassified to accrual basis for accounting purposes due to their improved qualitative and/or quantitative credit factors, which resulted in an increase of accrued rent in the amount of $5,573. Excluding such, FFO per common share would have been $0.80 and $3.21 and Core FFO would have been $0.82 and $3.23 for the quarter and year ended December 31, 2023, respectively.

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NNN REIT, Inc.

(dollars in thousands, except per share data)

(unaudited)

	Quarter Ended							Year Ended
	December 31,							December 31,
	2023				2022			2023				2022
Adjusted Funds From Operations ("AFFO") Reconciliation:
Net earnings available to common stockholders	$	96,682			$	90,662		$	392,340			$	334,626
Total FFO adjustments		55,030				51,516			196,734				214,258
Total Core FFO adjustments		2,569				715			3,454				7,520
Core FFO available to common stockholders		154,281				142,893			592,528				556,404
Straight-line accrued rent, net of reserves		(5,957	)			261			(7,453	)			3,559
Net capital lease rent adjustment		75				78			319				302
Below-market rent amortization		(82	)			(100	)		(431	)			(510	)
Stock based compensation expense		2,592				2,344			10,846				10,078
Capitalized interest expense		(1,912	)			(334	)		(4,286	)			(881	)
Total AFFO adjustments		(5,284	)			2,249			(1,005	)			12,548
AFFO available to common stockholders	$	148,997			$	145,142		$	591,523			$	568,952
AFFO per common share:
Basic	$	0.82			$	0.81		$	3.26			$	3.23
Diluted	$	0.82			$	0.81		$	3.26			$	3.21
Other Information:
Rental income from operating leases(1)	$	209,037			$	192,738		$	805,136			$	751,680
Earned income from direct financing leases(1)	$	133			$	146		$	560			$	595
Percentage rent(1)	$	241			$	310		$	1,631			$	1,541
Real estate expense reimbursement from tenants(1)	$	5,767			$	5,023		$	18,763			$	17,802
Real estate expenses		(8,237	)			(7,035	)		(28,378	)			(26,281	)
Real estate expenses, net of tenant reimbursements	$	(2,470	)		$	(2,012	)	$	(9,615	)		$	(8,479	)
Amortization of debt costs	$	1,295			$	1,200		$	4,943			$	4,734
Scheduled debt principal amortization (excluding       maturities)	$	—		(2)	$	170		$	173		(2)	$	664
Non-real estate depreciation expense	$	105			$	109		$	409			$	454

(1)	For the quarters ended December 31, 2023 and 2022, the aggregate of such amounts is $215,178 and $198,217, respectively, and $826,090 and $771,618, for the year ended December 31, 2023 and 2022, respectively, and is classified as rental income on the income statement summary.
(2)	In April 2023, NNN repaid the remaining mortgages payable principal balance of $9,774.

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NNN REIT, Inc.

2024 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.

	2024 Guidance
Net earnings per common share excluding any gains on disposition       of real estate, impairment charges, and executive retirement costs	$1.94 - $2.00 per share
Real estate depreciation and amortization per share	$1.31 per share
Core FFO per share	$3.25 - $3.31 per share
AFFO per share	$3.29 - $3.35 per share
General and administrative expenses	$46 - $48 Million
Real estate expenses, net of tenant reimbursements	$9 - $11 Million
Acquisition volume	$400 - $500 Million
Disposition volume	$80 - $120 Million

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NNN REIT, Inc.

Balance Sheet Summary

(dollars in thousands)

(unaudited)

	December 31, 2023		December 31, 2022
Assets:
Real estate portfolio, net of accumulated depreciation and amortization	$	8,535,851	$	8,020,814
Cash and cash equivalents		1,189		2,505
Restricted cash and cash held in escrow		3,966		4,273
Receivables, net of allowance of $669 and $708, respectively		3,649		3,612
Accrued rental income, net of allowance of $4,168 and $3,836, respectively		34,611		27,795
Debt costs, net of accumulated amortization of $23,952 and $21,663, respectively		3,243		5,352
Other assets		79,459		81,694
Total assets	$	8,661,968	$	8,146,045
Liabilities:
Line of credit payable	$	132,000	$	166,200
Mortgages payable, including unamortized premium and net of unamortized debt costs		—		9,964
Notes payable, net of unamortized discount and unamortized debt costs		4,228,544		3,739,890
Accrued interest payable		34,374		23,826
Other liabilities		109,593		82,663
Total liabilities		4,504,511		4,022,543
Stockholders' equity of NNN		4,157,457		4,123,502
Total liabilities and equity	$	8,661,968	$	8,146,045
Common shares outstanding		182,474,770		181,424,670
Gross leasable area, Property Portfolio (square feet)		35,966,000		35,010,000

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NNN REIT, Inc.

Debt Summary

As of December 31, 2023

(dollars in thousands)

(unaudited)

Unsecured Debt	Principal		Principal, Net of Unamortized Discount			Stated Rate			Effective Rate			Maturity Date
Line of credit payable	$	132,000	$	132,000		SOFR + 87.5bps				6.185	%	June 2025
Unsecured notes payable:
2024		350,000		349,961			3.900	%		3.924	%	June 2024
2025		400,000		399,790			4.000	%		4.029	%	November 2025
2026		350,000		348,707			3.600	%		3.733	%	December 2026
2027		400,000		399,320			3.500	%		3.548	%	October 2027
2028		400,000		398,487			4.300	%		4.388	%	October 2028
2030		400,000		399,161			2.500	%		2.536	%	April 2030
2033		500,000		488,699			5.600	%		5.905	%	October 2033
2048		300,000		296,136			4.800	%		4.890	%	October 2048
2050		300,000		294,423			3.100	%		3.205	%	April 2050
2051		450,000		442,053			3.500	%		3.602	%	April 2051
2052		450,000		440,059			3.000	%		3.118	%	April 2052
Total		4,300,000		4,256,796
Total unsecured debt(1)	$	4,432,000	$	4,388,796
Debt costs			$	(42,595	)
Accumulated amortization				14,343
Debt costs, net of accumulated amortization				(28,252	)
Notes payable, net of unamortized discount and     unamortized debt costs			$	4,228,544

(1) Unsecured debt has a weighted average interest rate of 4.0% and a weighted average maturity of 12.0 years.

As of December 31, 2023, Net Debt / EBITDA based on current quarter EBITDA annualized is 5.5x.

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NNN REIT, Inc.

Debt Summary - Continued

As of December 31, 2023

(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, 2023, the company believes it is in compliance with the covenants.

Key Covenants	Required	December 31, 2023
Unsecured Bank Credit Facility:
Maximum leverage ratio	< 0.60	0.38
Minimum fixed charge coverage ratio	> 1.50	4.52
Maximum secured indebtedness ratio	< 0.40	—
Unencumbered asset value ratio	> 1.67	2.62
Unencumbered interest ratio	> 1.75	4.51
Unsecured Notes:
Limitation on incurrence of total debt	≤ 60%	41.5%
Limitation on incurrence of secured debt	≤ 40%	—
Debt service coverage ratio	≥ 1.50	4.5
Maintenance of total unencumbered assets	≥ 150%	241%

10

NNN REIT, Inc.

Property Portfolio

Top 20 Lines of Trade

		As of December 31,
	Lines of Trade	2023(1)	2022(2)
1.	Convenience stores	16.4%	16.5%
2.	Automotive service	15.6%	13.7%
3.	Restaurants – full service	8.7%	9.1%
4.	Restaurants – limited service	8.5%	8.9%
5.	Family entertainment centers	6.4%	5.9%
6.	Recreational vehicle dealers, parts and accessories	4.6%	4.1%
7.	Health and fitness	4.5%	4.9%
8.	Theaters	4.1%	4.3%
9.	Equipment rental	3.0%	3.1%
10.	Wholesale clubs	2.5%	2.6%
11.	Automotive parts	2.5%	2.6%
12.	Drug stores	2.4%	2.6%
13.	Home improvement	2.2%	2.3%
14.	Furniture	2.0%	2.3%
15.	Medical service providers	1.7%	1.9%
16.	General merchandise	1.4%	1.6%
17.	Consumer electronics	1.4%	1.4%
18.	Home furnishings	1.3%	1.4%
19.	Travel plazas	1.3%	1.4%
20.	Automobile auctions, wholesale	1.1%	1.3%
	Other	8.4%	8.1%
	Total	100.0%	100.0%

Top 10 States

	State	% of Total(1)		State	% of Total(1)
1.	Texas	16.8%	6.	North Carolina	3.9%
2.	Florida	9.4%	7.	Tennessee	3.8%
3.	Illinois	5.2%	8.	Indiana	3.7%
4.	Ohio	4.9%	9.	California	3.3%
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)	$818,749,000 as of December 31, 2023.
(2)	$771,984,000 as of December 31, 2022.

11

NNN REIT, Inc.

Property Portfolio - Continued

Top 20 Tenants

	Tenant	# of Properties	% of Total(1)
1.	7-Eleven	138	4.4%
2.	Mister Car Wash	121	4.2%
3.	Camping World	47	3.8%
4.	Dave & Buster's	32	3.5%
5.	LA Fitness	29	3.1%
6.	GPM Investments (convenience stores)	150	3.0%
7.	Flynn Restaurant Group (Taco Bell/Arby's)	204	2.8%
8.	AMC Theatres	20	2.7%
9.	BJ's Wholesale Club	13	2.5%
10.	Mavis Tire Express Services	140	2.3%
11.	Couche Tard (Pantry)	92	2.2%
12.	Sunoco	61	2.1%
13.	Walgreens	49	1.9%
14.	Chuck E. Cheese	53	1.9%
15.	United Rentals	50	1.7%
16.	Frisch's Restaurants	68	1.6%
17.	Fikes (Convenience Stores)	58	1.5%
18.	Life Time Fitness	3	1.3%
19.	Bob Evans	106	1.3%
20.	Best Buy	16	1.3%

Lease Expirations(2)

	% of Total(1)	# of Properties	Gross Leasable Area (3)		% of Total(1)	# of Properties	Gross Leasable Area (3)
2024	1.7%	54	803,000	2030	3.3%	109	1,221,000
2025	5.1%	185	1,941,000	2031	7.3%	185	2,697,000
2026	4.8%	212	2,127,000	2032	5.9%	215	2,328,000
2027	8.2%	235	3,591,000	2033	4.9%	138	1,467,000
2028	5.7%	229	2,172,000	Thereafter	49.1%	1,831	15,592,000
2029	4.0%	119	1,744,000

(1)	Based on the annual base rent of $818,749,000, which is the annualized base rent for all leases in place as of December 31, 2023.
(2)	As of December 31, 2023, the weighted average remaining lease term is 10.1 years.
(3)	Square feet.

12

NNN REIT, Inc.

Rent Deferral Lease Amendments

The following table outlines the rent deferred and corresponding scheduled repayment of the COVID-19 rent deferral lease amendments executed as of December 31, 2023 (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	$	18,129	$	51,723		91.6	%	$	3,239	$	20	$	3,259		5.8	%		5.8	%
2021			990		3,732		4,722		8.4	%		25,935		5,841		31,776		56.3	%		62.1	%
2022	Q1		—		—		—		—			1,780		2,277		4,057		7.2	%		69.3	%
	Q2		—		—		—		—			1,729		2,276		4,005		7.1	%		76.4	%
	Q3		—		—		—		—			1,201		2,257		3,458		6.1	%		82.5	%
	Q4		—		—		—		—			681		2,277		2,958		5.3	%		87.8	%
			—		—		—		—			5,391		9,087		14,478		25.7	%		87.8	%
2023	Q1		—		—		—		—			9		1,677		1,686		3.0	%		90.8	%
	Q2		—		—		—		—			10		476		486		0.9	%		91.7	%
	Q3		—		—		—		—			—		476		476		0.8	%		92.5	%
	Q4		—		—		—		—			—		476		476		0.8	%		93.3	%
			—		—		—		—			19		3,105		3,124		5.5	%		93.3	%
2024	Q1		—		—		—		—			—		476		476		0.8	%		94.1	%
	Q2		—		—		—		—			—		476		476		0.8	%		94.9	%
	Q3		—		—		—		—			—		476		476		0.8	%		95.7	%
	Q4		—		—		—		—			—		476		476		0.9	%		96.6	%
			—		—		—		—			—		1,904		1,904		3.3	%		96.6	%
2025			—		—		—		—			—		1,904		1,904		3.4	%		100.0	%
		$	34,584	$	21,861	$	56,445		100.0	%	$	34,584	$	21,861	$	56,445		100.0	%

Adjusted Results

The following table outlines the adjusted effects of excluding the scheduled repayments of the COVID-19 rent deferral lease amendments executed as of December 31, 2023:

	Quarter Ended December 31,							Year Ended December 31,
	2023		2022		% Change			2023		2022		% Change
Core FFO per common share:
As reported	$	0.85	$	0.80		6.3	%	$	3.26	$	3.14		3.8	%
Adjusted(1)	$	0.85	$	0.78		9.0	%	$	3.24	$	3.09		4.9	%
Adjusted(2)	$	0.81	$	0.78		3.8	%	$	3.21	$	3.09		3.9	%
AFFO per common share:
As reported	$	0.82	$	0.81		1.2	%	$	3.26	$	3.21		1.6	%
Adjusted(3)	$	0.82	$	0.79		3.8	%	$	3.24	$	3.13		3.5	%

(1)	Excludes the cash basis rent repayments from the Rent Deferral Lease Amendments table above.
(2)	During the quarter ended December 31, 2023, one tenant was reclassified to accrual basis for accounting purposes due to their improved qualitative and/or quantitative credit factors, which resulted in an increase of accrued rent in the amount of $5,573. Adjusted figures exclude both the effects of the cash basis rent repayments from the Rent Deferral Lease Amendments table above and the accrued rent of $5,573.
(3)	Excludes the cash and accrual basis rent repayments from the Rent Deferral Lease Amendments table above.

13

EX-99.2

Exhibit 99.2

 

ANNUAL SUPPLEMENTAL DATA

As of December 31, 2023

TABLE OF CONTENTS

	PAGE
Financial Summary
Income Statement Summary	4
Funds From Operations (FFO)	5
Core Funds From Operations (Core FFO)	6
Adjusted Funds From Operations (AFFO)	7
Other Information	8
EBITDA	8
Balance Sheet Summary	9
Debt Summary	10
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
Rent Deferral Lease Amendments	20

2

Statements in this annual supplemental data 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 an 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, 2023.

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. NNN REIT, 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

(dollars in thousands, except per share data)

(unaudited)

	Quarter Ended							Year Ended
	December 31,							December 31,
	2023				2022			2023				2022
Revenues:
Rental income	$	215,178			$	198,217		$	826,090			$	771,618
Interest and other income from real estate transactions		1,053				303			2,021				1,435
		216,231				198,520			828,111				773,053
Operating expenses:
General and administrative		10,530				10,788			43,746				41,695
Real estate		8,237				7,035			28,378				26,281
Depreciation and amortization		60,079				57,322			238,625				223,834
Leasing transaction costs		76				61			299				320
Impairment losses – real estate, net of recoveries		2,315				1,088			5,990				8,309
Executive retirement costs		2,569				715			3,454				7,520
		83,806				77,009			320,492				307,959
Gain on disposition of real estate		7,263				6,787			47,485				17,443
Earnings from operations		139,688				128,298			555,104				482,537
Other expenses (revenues):
Interest and other income		(383	)			(29	)		(1,134	)			(149	)
Interest expense		43,389				37,665			163,898				148,065
		43,006				37,636			162,764				147,916
Net earnings		96,682				90,662			392,340				334,621
Loss attributable to noncontrolling interests		—				—			—				5
Net earnings available to common stockholders	$	96,682			$	90,662		$	392,340			$	334,626
Weighted average common shares outstanding:
Basic		181,425,202				178,779,100			181,200,040				176,403,656
Diluted		181,932,133				179,472,118			181,689,723				177,067,865
Net earnings per share available to common stockholders:
Basic	$	0.53			$	0.51		$	2.16			$	1.89
Diluted	$	0.53		(1)	$	0.50		$	2.16		(1)	$	1.89

(1) During the quarter ended December 31, 2023, one tenant was reclassified to accrual basis for accounting purposes due to their improved qualitative and/or quantitative credit factors, which resulted in an increase of accrued rent in the amount of $5,573. Excluding such, net earnings per common share would have been $0.50 and $2.13 for the quarter and year ended December 31, 2023, respectively.

4

FUNDS FROM OPERATIONS ("FFO")(1)

(dollars in thousands, except per share data)

(unaudited)

	Quarter Ended							Year Ended
	December 31,							December 31,
	2023				2022			2023				2022
Net earnings available to common stockholders	$	96,682			$	90,662		$	392,340			$	334,626
Real estate depreciation and amortization		59,978				57,215			238,229				223,392
Gain on disposition of real estate		(7,263	)			(6,787	)		(47,485	)			(17,443	)
Impairment losses – depreciable real estate, net of recoveries		2,315				1,088			5,990				8,309
Total FFO adjustments		55,030				51,516			196,734				214,258
FFO available to common stockholders	$	151,712			$	142,178		$	589,074			$	548,884
FFO per common share:
Basic	$	0.84			$	0.80		$	3.25			$	3.11
Diluted	$	0.83		(2)	$	0.79		$	3.24		(2)	$	3.10

(1)	FFO is a non-GAAP financial measure. Please reference the Earnings Release for the quarter and year ended December 31, 2023 for the company's definition and explanation of how the company utilizes this metric.
(2)	During the quarter ended December 31, 2023, one tenant was reclassified to accrual basis for accounting purposes due to their improved qualitative and/or quantitative credit factors, which resulted in an increase of accrued rent in the amount of $5,573. Excluding such, FFO per common share would have been $0.80 and $3.21 for the quarter and year ended December 31, 2023, respectively.

5

CORE FUNDS FROM OPERATIONS ("Core FFO")(1)

(dollars in thousands, except per share data)

(unaudited)

	Quarter Ended					Year Ended
	December 31,					December 31,
	2023			2022		2023			2022
Net earnings available to common stockholders	$	96,682		$	90,662	$	392,340		$	334,626
Total FFO adjustments		55,030			51,516		196,734			214,258
FFO available to common stockholders		151,712			142,178		589,074			548,884
Executive retirement costs		2,569			715		3,454			7,520
Total Core FFO adjustments		2,569			715		3,454			7,520
Core FFO available to common stockholders	$	154,281		$	142,893	$	592,528		$	556,404
Core FFO per common share:
Basic	$	0.85		$	0.80	$	3.27		$	3.15
Diluted	$	0.85	(2)	$	0.80	$	3.26	(2)	$	3.14

(1)	Core FFO is a non-GAAP financial measure. Please reference the Earnings Release for the quarter and year ended December 31, 2023 for the company's definition and explanation of how the company utilizes this metric.
(2)	During the quarter ended December 31, 2023, one tenant was reclassified to accrual basis for accounting purposes due to their improved qualitative and/or quantitative credit factors, which resulted in an increase of accrued rent in the amount of $5,573. Excluding such, Core FFO would have been $0.82 and $3.23 for the quarter and year ended December 31, 2023, respectively.

6

ADJUSTED FUNDS FROM OPERATIONS ("AFFO")(1)

(dollars in thousands, except per share data)

(unaudited)

	Quarter Ended						Year Ended
	December 31,						December 31,
	2023			2022			2023			2022
Net earnings available to common stockholders	$	96,682		$	90,662		$	392,340		$	334,626
Total FFO adjustments		55,030			51,516			196,734			214,258
Total Core FFO adjustments		2,569			715			3,454			7,520
Core FFO available to common stockholders		154,281			142,893			592,528			556,404
Straight-line accrued rent, net of reserves		(5,957	)		261			(7,453	)		3,559
Net capital lease rent adjustment		75			78			319			302
Below-market rent amortization		(82	)		(100	)		(431	)		(510	)
Stock based compensation expense		2,592			2,344			10,846			10,078
Capitalized interest expense		(1,912	)		(334	)		(4,286	)		(881	)
Total AFFO adjustments		(5,284	)		2,249			(1,005	)		12,548
AFFO available to common stockholders	$	148,997		$	145,142		$	591,523		$	568,952
AFFO per common share:
Basic	$	0.82		$	0.81		$	3.26		$	3.23
Diluted	$	0.82		$	0.81		$	3.26		$	3.21

(1) AFFO is a non-GAAP financial measure. Please reference the Earnings Release for the quarter and year ended December 31, 2023 for the company's definition and explanation of how the company utilizes this metric.

7

OTHER INFORMATION

(dollars in thousands)

(unaudited)

	Quarter Ended							Year Ended
	December 31,							December 31,
	2023				2022			2023				2022
Rental income from operating leases(1)	$	209,037			$	192,738		$	805,136			$	751,680
Earned income from direct financing leases(1)	$	133			$	146		$	560			$	595
Percentage rent(1)	$	241			$	310		$	1,631			$	1,541
Real estate expense reimbursement from tenants(1)	$	5,767			$	5,023		$	18,763			$	17,802
Real estate expenses		(8,237	)			(7,035	)		(28,378	)			(26,281	)
Real estate expenses, net of tenant reimbursements	$	(2,470	)		$	(2,012	)	$	(9,615	)		$	(8,479	)
Amortization of debt costs	$	1,295			$	1,200		$	4,943			$	4,734
Scheduled debt principal amortization (excluding maturities)	$	—		(2)	$	170		$	173		(2)	$	664
Non-real estate depreciation expense	$	105			$	109		$	409			$	454

(1)	For the quarters ended December 31, 2023 and 2022, the aggregate of such amounts is $215,178 and $198,217, respectively, and $826,090 and $771,618, for the year ended December 31, 2023 and 2022, respectively, and is classified as rental income on the income statement summary.
(2)	In April 2023, NNN repaid the remaining mortgages payable principal balance of $9,774.

EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION FOR REAL ESTATE ("EBITDA")(1)

(dollars in thousands)

(unaudited)

	Quarter Ended						Year Ended
	December 31,						December 31,
	2023			2022			2023			2022
Net earnings attributable to NNN	$	96,682		$	90,662		$	392,340		$	334,626
Interest expense		43,389			37,665			163,898			148,065
Depreciation and amortization		60,079			57,322			238,625			223,834
Gain on disposition of real estate		(7,263	)		(6,787	)		(47,485	)		(17,443	)
Impairment losses – real estate, net of recoveries		2,315			1,088			5,990			8,309
Loss attributable to noncontrolling interests		—			—			—			(5	)
EBITDA	$	195,202		$	179,950		$	753,368		$	697,386

(1) EBITDA is non-GAAP financial measure. Please reference the Earnings Release for the quarter and year ended December 31, 2023 for the company's definition and explanation of how the company utilizes this metric.

8

BALANCE SHEET SUMMARY

(dollars in thousands)

(unaudited)

	December 31, 2023		December 31, 2022
Assets:
Real estate portfolio, net of accumulated depreciation and amortization	$	8,535,851	$	8,020,814
Cash and cash equivalents		1,189		2,505
Restricted cash and cash held in escrow		3,966		4,273
Receivables, net of allowance of $669 and $708, respectively		3,649		3,612
Accrued rental income, net of allowance of $4,168 and $3,836, respectively		34,611		27,795
Debt costs, net of accumulated amortization of $23,952 and $21,663, respectively		3,243		5,352
Other assets		79,459		81,694
Total assets	$	8,661,968	$	8,146,045
Liabilities:
Line of credit payable	$	132,000	$	166,200
Mortgages payable, including unamortized premium and net of unamortized debt costs		—		9,964
Notes payable, net of unamortized discount and unamortized debt costs		4,228,544		3,739,890
Accrued interest payable		34,374		23,826
Other liabilities		109,593		82,663
Total liabilities		4,504,511		4,022,543
Stockholders' equity of NNN		4,157,457		4,123,502
Total liabilities and equity	$	8,661,968	$	8,146,045
Common shares outstanding		182,474,770		181,424,670
Gross leasable area, Property Portfolio (square feet)		35,966,000		35,010,000

9

DEBT SUMMARY

As of December 31, 2023

(dollars in thousands)

(unaudited)

Unsecured Debt	Principal		Principal, Net of Unamortized Discount			Stated Rate			Effective Rate			Maturity Date
Line of credit payable	$	132,000	$	132,000		SOFR + 87.5bps				6.185	%	June 2025
Unsecured notes payable:
2024		350,000		349,961			3.900	%		3.924	%	June 2024
2025		400,000		399,790			4.000	%		4.029	%	November 2025
2026		350,000		348,707			3.600	%		3.733	%	December 2026
2027		400,000		399,320			3.500	%		3.548	%	October 2027
2028		400,000		398,487			4.300	%		4.388	%	October 2028
2030		400,000		399,161			2.500	%		2.536	%	April 2030
2033		500,000		488,699			5.600	%		5.905	%	October 2033
2048		300,000		296,136			4.800	%		4.890	%	October 2048
2050		300,000		294,423			3.100	%		3.205	%	April 2050
2051		450,000		442,053			3.500	%		3.602	%	April 2051
2052		450,000		440,059			3.000	%		3.118	%	April 2052
Total		4,300,000		4,256,796
Total unsecured debt(1)	$	4,432,000	$	4,388,796
Debt costs			$	(42,595	)
Accumulated amortization				14,343
Debt costs, net of accumulated amortization				(28,252	)
Notes payable, net of unamortized discount and     unamortized debt costs			$	4,228,544

(1) Unsecured debt has a weighted average interest rate of 4.0% and a weighted average maturity of 12.0 years.

 

10

CREDIT METRICS (1)

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

	2019			2020			2021			2022			2023
Debt / Total assets (gross book)		35.3	%		34.4	%		39.9	%		40.4	%		42.0	%
Debt + preferred / Total assets (gross book)		39.3	%		38.4	%		39.9	%		40.4	%		42.0	%
Debt / EBITDA (last quarter annualized)		4.8			5.0			5.2			5.4			5.5
Debt + preferred / EBITDA (last quarter annualized)		5.3			5.6			5.2			5.4			5.5
EBITDA / Interest expense (cash)		5.0			4.6			4.7			4.7			4.5
EBITDA / Fixed charges (cash)		4.0			4.0			4.3			4.7			4.5

(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, 2023, the company believes it is in compliance with the covenants.

Key Covenants	Required	December 31, 2023
Unsecured Bank Credit Facility:
Maximum leverage ratio	< 0.60	0.38
Minimum fixed charge coverage ratio	> 1.50	4.52
Maximum secured indebtedness ratio	< 0.40	—
Unencumbered asset value ratio	> 1.67	2.62
Unencumbered interest ratio	> 1.75	4.51
Unsecured Notes:
Limitation on incurrence of total debt	≤ 60%	41.5%
Limitation on incurrence of secured debt	≤ 40%	—
Debt service coverage ratio	≥ 1.50	4.5
Maintenance of total unencumbered assets	≥ 150%	241%

11

LONG-TERM DIVIDEND HISTORY

 

12

PROPERTY ACQUISITIONS

(dollars in thousands)

	Year Ended December 31,
	2023			2022
Total dollars invested(1)	$	819,710		$	847,747
Number of Properties		165			223
Gross leasable area (square feet)(2)		1,281,000			2,629,000
Cap rate (3)		7.3	%		6.4	%
Weighted average lease term		18.8			16.2

(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 initial cash annual base rent divided by the total purchase price of the Properties.

PROPERTY DISPOSITIONS

(dollars in thousands)

	Year Ended December 31,
	2023								2022
	Occupied			Vacant		Total			Occupied			Vacant		Total
Number of properties		24			21		45			17			16		33
Gross leasable area (square feet)		177,000			116,000		293,000			138,000			173,000		311,000
Acquisition costs	$	69,790		$	25,036	$	94,826		$	39,446		$	38,282	$	77,728
Net book value	$	55,098		$	13,133	$	68,231		$	25,515		$	22,258	$	47,773
Net sale proceeds	$	97,822		$	17,894	$	115,716		$	41,190		$	24,026	$	65,216
Cap rate(1)		5.9	%		—		5.9	%		5.9	%		—		5.9	%

(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)
2024	1.7%		54		803,000	2030	3.3%		109		1,221,000
2025	5.1%		185		1,941,000	2031	7.3%		185		2,697,000
2026	4.8%		212		2,127,000	2032	5.9%		215		2,328,000
2027	8.2%		235		3,591,000	2033	4.9%		138		1,467,000
2028	5.7%		229		2,172,000	Thereafter	49.1%		1,831		15,592,000
2029	4.0%		119		1,744,000

(1)	As of December 31, 2023, the weighted average remaining lease term is 10.1 years.
(2)	Based on the annual base rent of $818,749,000, which is the annualized base rent for all leases in place as of December 31, 2023.
(3)	Square feet.

 

14

TOP 20 LINES OF TRADE

		As of December 31, 2023		As of December 31, 2022
	Lines of Trade	% of Total(1)	# of Properties	% of Total(2)	# of Properties
1.	Convenience stores	16.4%	661	16.5%	650
2.	Automotive service	15.6%	629	13.7%	528
3.	Restaurants – full service	8.7%	417	9.1%	420
4.	Restaurants – limited service	8.5%	610	8.9%	611
5.	Family entertainment centers	6.4%	94	5.9%	88
6.	Recreational vehicle dealers, parts and accessories	4.6%	62	4.1%	52
7.	Health and fitness	4.5%	33	4.9%	34
8.	Theaters	4.1%	33	4.3%	33
9.	Equipment rental	3.0%	99	3.1%	100
10.	Wholesale clubs	2.5%	13	2.6%	13
11.	Automotive parts	2.5%	144	2.6%	152
12.	Drug stores	2.4%	66	2.6%	67
13.	Home improvement	2.2%	50	2.3%	50
14.	Furniture	2.0%	75	2.3%	80
15.	Medical service providers	1.7%	79	1.9%	84
16.	General merchandise	1.4%	72	1.6%	74
17.	Consumer electronics	1.4%	17	1.4%	17
18.	Home furnishings	1.3%	13	1.4%	16
19.	Travel plazas	1.3%	24	1.4%	24
20.	Automobile auctions, wholesale	1.1%	15	1.3%	15
	Other	8.4%	326	8.1%	303
	Total	100.0%	3,532	100.0%	3,411

As a percentage of annual base rent, which is the annualized base rent for all leases in place.
	(1)	$818,749,000 as of December 31, 2023.
	(2)	$771,984,000 as of December 31, 2022.

TOP 10 STATES

	State	% of Total(1)		State	% of Total(1)
1.	Texas	16.8%	6.	North Carolina	3.9%
2.	Florida	9.4%	7.	Tennessee	3.8%
3.	Illinois	5.2%	8.	Indiana	3.7%
4.	Ohio	4.9%	9.	California	3.3%
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)	$818,749,000 as of December 31, 2023.

15

PORTFOLIO BY REGION

As a percentage of annual base rent - December 31, 2023

 

Based on the annual base rent of $818,749,000, which is the annualized base rent for all leases in place as of December 31, 2023.

16

TOP TENANTS

Creditworthy Retailers

▪17.1% of annual base rent is from tenants with investment grade rated debt

▪74.0% of annual base rent is from tenants that are publicly traded and/or have rated debt

▪Top 20 tenants (49.0% of annual base rent) operate an average of 1,570 stores each

Top 20 Tenants

	Tenant	# of Properties	% of Total(1)
1.	7-Eleven	138	4.4%
2.	Mister Car Wash	121	4.2%
3.	Camping World	47	3.8%
4.	Dave & Buster's	32	3.5%
5.	LA Fitness	29	3.1%
6.	GPM Investments (convenience stores)	150	3.0%
7.	Flynn Restaurant Group (Taco Bell/Arby's)	204	2.8%
8.	AMC Theatres	20	2.7%
9.	BJ's Wholesale Club	13	2.5%
10.	Mavis Tire Express Services	140	2.3%
11.	Couche Tard (Pantry)	92	2.2%
12.	Sunoco	61	2.1%
13.	Walgreens	49	1.9%
14.	Chuck E. Cheese	53	1.9%
15.	United Rentals	50	1.7%
16.	Frisch's Restaurants	68	1.6%
17.	Fikes (Convenience Stores)	58	1.5%
18.	Life Time Fitness	3	1.3%
19.	Bob Evans	106	1.3%
20.	Best Buy	16	1.3%

(1) Based on the annual base rent of $818,749,000, which is the annualized base rent for all leases in place as of December 31, 2023.

17

SAME STORE RENTAL INCOME

(dollars in thousands)

Properties (Cash Basis) (1)
Number of properties		3,128
Year ended December 31, 2023 (2)	$	711,693
Year ended December 31, 2022 (2)	$	702,643
Change (in dollars)	$	9,050
Change (percent)		1.3	%

(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 "Rent Deferral Lease Amendments" section of this Annual Supplemental Data).

LEASING DATA

(dollars in thousands)

Year Ended December 31, 2023	Renewals With Same Tenant(1)			Vacancy Re-Lease To New Tenant			Releasing Totals
Number of leases		109			23			132
New cash rents	$	20,266		$	4,355		$	24,621
Prior cash rents	$	19,003		$	4,566		$	23,569		(2)
Recovery rate		106.6	%		95.4	%		104.5	%
Tenant improvements	$	500		$	3,233		$	3,733

(1)	Long-term renewal rate for the period of 2010 through 2023 was 83.1%.
(2)	Represents 2.9% of total annualized base rent as of December 31, 2023.

18

OTHER PROPERTY PORTFOLIO DATA

As of December 31, 2023

Tenant Financials

	# of Properties	% of Annual Base Rent (1)
Property level financial information	2,980	81%
Tenant corporate financials	2,763	78%

Rent Increases	% of Annual Base Rent (1)
	Annual	Five Year	Other	Total
CPI	37%	56%	1%	94%
Fixed	2%	—	1%	3%
No increases	—	—	3%	3%
	39%	56%	5%	100%

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

•92.6% is from triple net leases

•95.5% is from triple net leases or double net leases (with roof warranty)

•29.9% is from master leases

•98.3% is from leases containing future lease renewal options

•0.5% is from leases containing purchase options

(1) Based on the annual base rent of $818,749,000, which is the annualized base rent for all leases in place as of December 31, 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.

	2024 Guidance
Net earnings per common share excluding any gains on disposition       of real estate, impairment charges, and executive retirement costs	$1.94 - $2.00 per share
Real estate depreciation and amortization per share	$1.31 per share
Core FFO per share	$3.25 - $3.31 per share
AFFO per share	$3.29 - $3.35 per share
General and administrative expenses	$46 - $48 Million
Real estate expenses, net of tenant reimbursements	$9 - $11 Million
Acquisition volume	$400 - $500 Million
Disposition volume	$80 - $120 Million

19

RENT DEFERRAL LEASE AMENDMENTS

The following table outlines the rent deferred and corresponding scheduled repayment by quarter of the rent deferral lease amendments executed as of December 31, 2023 (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	$	18,129	$	51,723		91.6	%	$	3,239	$	20	$	3,259		5.8	%		5.8	%
2021			990		3,732		4,722		8.4	%		25,935		5,841		31,776		56.3	%		62.1	%
2022	Q1		—		—		—		—			1,780		2,277		4,057		7.2	%		69.3	%
	Q2		—		—		—		—			1,729		2,276		4,005		7.1	%		76.4	%
	Q3		—		—		—		—			1,201		2,257		3,458		6.1	%		82.5	%
	Q4		—		—		—		—			681		2,277		2,958		5.3	%		87.8	%
			—		—		—		—			5,391		9,087		14,478		25.7	%		87.8	%
2023	Q1		—		—		—		—			9		1,677		1,686		3.0	%		90.8	%
	Q2		—		—		—		—			10		476		486		0.9	%		91.7	%
	Q3		—		—		—		—			—		476		476		0.8	%		92.5	%
	Q4		—		—		—		—			—		476		476		0.8	%		93.3	%
			—		—		—		—			19		3,105		3,124		5.5	%		93.3	%
2024	Q1		—		—		—		—			—		476		476		0.8	%		94.1	%
	Q2		—		—		—		—			—		476		476		0.8	%		94.9	%
	Q3		—		—		—		—			—		476		476		0.8	%		95.7	%
	Q4		—		—		—		—			—		476		476		0.9	%		96.6	%
			—		—		—		—			—		1,904		1,904		3.3	%		96.6	%
2025			—		—		—		—			—		1,904		1,904		3.4	%		100.0	%
		$	34,584	$	21,861	$	56,445		100.0	%	$	34,584	$	21,861	$	56,445		100.0	%

20

RENT DEFERRAL LEASE AMENDMENTS (continued)

Adjusted Results

The following table outlines the adjusted effects of excluding the scheduled repayments of the COVID-19 rent deferral lease amendments executed as of December 31, 2023:

	Quarter Ended December 31,							Year Ended December 31,
	2023		2022		% Change			2023		2022		% Change
Core FFO per common share:
As reported	$	0.85	$	0.80		6.3	%	$	3.26	$	3.14		3.8	%
Adjusted(1)	$	0.85	$	0.78		9.0	%	$	3.24	$	3.09		4.9	%
Adjusted(2)	$	0.81	$	0.78		3.8	%	$	3.21	$	3.09		3.9	%
AFFO per common share:
As reported	$	0.82	$	0.81		1.2	%	$	3.26	$	3.21		1.6	%
Adjusted(3)	$	0.82	$	0.79		3.8	%	$	3.24	$	3.13		3.5	%

(1)	Excludes the cash basis rent repayments from the Rent Deferral Lease Amendments table above.
(2)	During the quarter ended December 31, 2023, one tenant was reclassified to accrual basis for accounting purposes due to their improved qualitative and/or quantitative credit factors, which resulted in an increase of accrued rent in the amount of $5,573. Adjusted figures exclude both the effects of the cash basis rent repayments from the Rent Deferral Lease Amendments table above and the accrued rent of $5,573.
(2)	Excludes the cash and accrual basis rent repayments from the Rent Deferral Lease Amendments table above.

21

XML

Cover	Feb. 08, 2024
Entity Information [Line Items]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Feb. 08, 2024
Entity File Number	001-11290
Entity Registrant Name	NNN REIT, 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