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: July 30, 2007

NATIONAL RETAIL PROPERTIES, INC.

(exact name of registrant as specified in its charter)

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

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

(Address of principal executive offices, including zip code)

(407) 265-7348

(Registrant’s telephone number, including area code)

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

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

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

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

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

Item 2.02. Results of Operations and Financial Condition.

On July 30, 2007, National Retail Properties, Inc. issued a press release announcing its results of operations and financial condition for the quarter ended June 30, 2007. The press release is attached hereto as Exhibit 99.1.

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 July 30, 2007, of National Retail Properties, Inc.

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: July 30, 2007	By:	/s/ Kevin B. Habicht
		Kevin B. Habicht
		Executive Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release, dated July 30, 2007, of National Retail Properties, Inc.

EX-99.1

Exhibit 99.1

NEWS RELEASE
For information contact:
Kevin B. Habicht
Chief Financial Officer
(407) 265-7348	FOR IMMEDIATE RELEASE
	July 30, 2007

RECORD SECOND QUARTER AND FIRST HALF OPERATING RESULTS

ANNOUNCED BY NATIONAL RETAIL PROPERTIES, INC.

Orlando, Florida, July 30, 2007 – National Retail Properties, Inc. (NYSE: NNN), a real estate investment trust, today announced record operating results for the quarter ended June 30, 2007, including a 34.4% increase in revenues and a 11.9% increase in funds from operations (“FFO”) per share compared to the second quarter for 2006. Additionally, the company announced an increase of 14.3% in FFO per share for the six months ended June 30, 2007 compared to the same period for 2006. Highlights include:

Operating Results:

• Revenues and net earnings and FFO available to common shareholders:

	Quarter Ended June 30,				Six Months Ended June 30,
	2007		2006		2007		2006
Revenues	$	46,421	$	34,547	$	87,532	$	68,478
Net earnings available to common shareholders	$	46,959	$	79,199	$	71,967	$	101,645
Net earnings per common share (diluted)	$	0.70	$	1.37	$	1.13	$	1.77
FFO available to common shareholders	$	31,481	$	24,504	$	61,092	$	48,131
FFO per common share (diluted)	$	0.47	$	0.42	$	0.96	$	0.84

• Investment Portfolio occupancy was 98.4% at June 30, 2007.

Investments and Dispositions for the quarter ended June 30, 2007:

• Investments:

^¡ $337.8 million in the Investment Portfolio, including acquiring 138 properties with an aggregate 933,000 square feet of gross leasable area

^¡ $15.5 million in the Inventory Portfolio, including acquiring two properties and funding $12.0 million of development

• Dispositions:

^¡ Nine Investment properties with an aggregate 328,000 square feet of gross leasable area, with net proceeds of $53.5 million, resulting in a gain of $22.6 million

^¡ 16 Inventory properties with net proceeds of $38.7 million

450 S. Orange Ave., Suite 900 | Orlando, FL 32801
(800) NNN-REIT | www.nnnreit.com

Investments and Dispositions for the six months ended June 30, 2007:

• Investments:

^¡ $404.4 million in the Investment Portfolio, including acquiring 163 properties with an aggregate 1,047,000 square feet of gross leasable area

^¡ $31.4 million in the Inventory Portfolio, including acquiring five properties and funding $ 22.4 million of development

• Dispositions:

^¡ 14 Investment properties with an aggregate 388,000 square feet of gross leasable area, with net proceeds of $61 million, resulting in a gain of $24.4 million

^¡ 39 Inventory properties with net proceeds of $96.2 million

Capital transactions for the quarter ended June 30, 2007:

• Issued 551,577 shares of common stock generating $13.1 million of net proceeds pursuant to the Dividend Reinvestment and Stock Purchase Plan.

• Issued 750,000 shares of common stock on April 2, 2007 generating net proceeds of $17.7 million in connection with underwriters’ exercising their over allotment option related to our first quarter 2007 common stock offering.

National Retail also announced today that it expects FFO to be higher than the previously issued guidance for 2007. FFO per diluted common share for 2007 is now expected to be in the range of $1.83 to $1.87 per share, the midpoint of which represents a 10.8% increase over 2006 FFO per diluted common share. This equates to net earnings before any gains or losses from the sale of Investment properties of $1.38 to $1.42 per share plus $0.45 per share of expected real estate related depreciation and amortization. The company also announced that it currently expects full-year Investment property acquisitions to total approximately $600 to $700 million in 2007. This guidance is based on current plans and assumptions and subject to the risks and uncertainties more fully described in this press release and the company’s reports filed with the Securities and Exchange Commission.

Craig Macnab, Chief Executive Officer, commented: “The second quarter was by far the most successful in the history of NNN. Every area of our company is executing well and this is driving our excellent FFO per share growth. Our performance in the first half of 2007 plus the visibility on our acquisition pipeline leads us to believe that 2007 will be a record year for NNN. Also, we were very pleased to increase our common dividend by 6% in the second quarter. Our capital recycling efforts continue to yield improved returns and we have generated approximately $78 million through additional property sales since the end of the second quarter.”

National Retail Properties invests primarily in high-quality retail properties subject generally to long-term, net leases. As of June 30, 2007, the company owned 859 Investment properties in 43 states with a gross leasable area of approximately 10 million square feet. For more information on the company, visit www.nnnreit.com.

Management will hold a conference call on July 30, 2007 at 2:00 p.m. EDT to review these results. The call can be accessed on National Retail’s 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. 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, local real estate conditions, changes in interest rates, increases in operating costs, the availability of capital, and the profitability of the company’s taxable subsidiary. Additional information concerning these and other factors that could cause actual results to differ materially from those forward-looking statements is contained from time to time in the company’s Securities and Exchange Commission (“SEC”) 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 SEC. Consequently, 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 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 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) on the disposition of real estate held for investment, and the company’s share of these items from the company’s unconsolidated partnerships.

2

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.

The company has determined that there are earnings from discontinued operations in each of its segments, real estate held for investment and real estate held for sale. All property dispositions from the company’s held for investment segment are classified as discontinued operations. In addition, certain properties in the company’s held for sale segment that have generated revenues before disposition are classified as discontinued operations. These held for sale properties have not historically been classified as discontinued operations; prior period comparable condensed consolidated financial statements have been restated to include these properties in its earnings from discontinued operations. These adjustments resulted in a decrease in the company’s reported total revenues and total and per share earnings from continuing operations and an increase in the company’s earnings from discontinued operations. However, the company’s total and per share FFO and net earnings available to common shareholders are not affected.

3

National Retail Properties, Inc.

(In thousands, except per share data)

(unaudited)

	Quarter Ended June 30,						Six Months Ended June 30,
	2007			2006			2007			2006
Income Statement Summary
Revenues:
Rental and earned income	$	42,842		$	30,082		$	80,240		$	59,444
Real estate expense reimbursement from tenants		1,478			892			2,747			1,739
Interest and other income from real estate transactions		957			1,626			2,157			3,051
Interest income on mortgage residual interests		1,144			1,947			2,388			4,244
		46,421			34,547			87,532			68,478
Disposition of real estate, Inventory Portfolio:
Gross proceeds		—			4,711			825			21,451
Costs		—			(4,148	)		(493	)		(14,444	)
Gain		—			563			332			7,007
Operating expenses:
General and administrative		5,946			6,777			12,267			13,618
Real estate		1,982			1,429			3,862			2,740
Depreciation and amortization		7,729			5,210			14,622			10,413
Impairment – mortgage residual interests valuation adjustment		—			842			—			2,662
Restructuring costs		—			1,580			—			1,580
		15,657			15,838			30,751			31,013
Other expenses (revenues):
Interest and other income		(1,024	)		(1,015	)		(2,327	)		(1,831	)
Interest expense		12,443			11,192			23,545			23,273
		11,419			10,177			21,218			21,442
Income tax benefit		2,421			3,435			5,217			5,294
Minority interest		148			(184	)		334			(3,292	)
Equity in earnings of unconsolidated affiliate		—			228			—			195
Earnings from continuing operations		21,914			12,574			41,446			25,227
Earnings from discontinued operations:
Real estate, Investment Portfolio		24,948			65,312			28,359			74,370
Real estate, Inventory Portfolio, net of income tax expense and minority interest		1,793			2,315			5,554			4,052
		26,741			67,627			33,913			78,422
Net earnings		48,655			80,201			75,359			103,649
Series A Preferred Stock dividends		—			(1,002	)		—			(2,004	)
Series B Convertible Preferred Stock dividends		—			—			—			(419	)
Series C Redeemable Preferred Stock dividends		(1,696	)		—			(3,392	)		—
Net earnings available to common shareholders – basic		46,959			79,199			71,967			101,226
Series B Convertible Preferred Stock dividends, if dilutive		—			—			—			419
Net earnings available to common shareholders – diluted	$	46,959		$	79,199		$	71,967		$	101,645

4

National Retail Properties, Inc.

(In thousands, except per share data)

(unaudited)

		Quarter Ended June 30,						Six Months Ended June 30,
		2007			2006			2007			2006
Weighted average common shares outstanding:
Basic		66,432			57,259			63,399			56,368
Diluted		66,664			57,785			63,596			57,376
Net earnings per share available to common shareholders:
Basic:
Continuing operations	$	0.31		$	0.20		$	0.60		$	0.41
Discontinued operations		0.40			1.18			0.54			1.39
Net earnings	$	0.71		$	1.38		$	1.14		$	1.80
Diluted:
Continuing operations	$	0.30		$	0.20		$	0.59		$	0.40
Discontinued operations		0.40			1.17			0.54			1.37
Net earnings	$	0.70		$	1.37		$	1.13		$	1.77
Supplemental Information:
Percentage rent	$	141		$	55		$	599		$	511
Earned income from direct financing leases	$	1,764		$	2,356		$	3,585		$	4,758
Decrease in real estate classified as direct financing leases		(2,406	)		(3,098	)		(4,867	)		(6,276	)
Net direct financing lease adjustment		(642	)		(742	)		(1,282	)		(1,518	)
Accrued rental income (straight-line)		701			3,371			1,391			4,127
Net lease accounting adjustments	$	59		$	2,629		$	109		$	2,609
Net Inventory Portfolio gain on disposition	$	1,714		$	2,343		$	6,383		$	6,724
Capitalized interest	$	826		$	551		$	1,444		$	1,032
Scheduled debt principal amortization (excluding maturities)	$	451		$	419		$	902		$	1,171

5

National Retail Properties, Inc.

(in thousands, except per share data)

(unaudited)

	Quarter Ended June 30,						Six Months Ended June 30,
	2007			2006			2007			2006
Reconciliation of net earnings to FFO and FFO available to common shareholders:
Net earnings	$	48,655		$	80,201		$	75,359		$	103,649
Real estate depreciation and amortization:
Continuing operations		7,149			4,752			13,459			9,343
Discontinued operations		19			179			75			1,580
Partnership real estate depreciation		—			140			—			280
Partnership gain on sale of asset		—			(265	)		—			(265	)
Gain on disposition of real estate Investment Portfolio		(22,646	)		(59,501	)		(24,409	)		(64,452	)
FFO		33,177			25,506			64,484			50,135
Series A Preferred Stock dividends		—			(1,002	)		—			(2,004	)
Series B Convertible Preferred Stock dividends		—			—			—			(419	)
Series C Redeemable Preferred Stock dividends		(1,696	)		—			(3,392	)		—
FFO available to common shareholders – basic		31,481			24,504			61,092			47,712
Series B Convertible Preferred Stock dividends – if dilutive		—			—			—			419
FFO available to common shareholders – diluted	$	31,481		$	24,504		$	61,092		$	48,131
FFO per share:
Basic	$	0.47		$	0.43		$	0.96		$	0.85
Diluted	$	0.47		$	0.42		$	0.96		$	0.84

Real Estate Disposition Summary

	Quarter Ended June 30,								Six Months Ended June 30,
	2007				2006				2007				2006
	# of Properties	Gain			# of Properties	Gain			# of Properties	Gain			# of Properties	Gain
Reconciliation of gain on disposition between continuing and discontinued operations:
Continuing operations	—	$	—		1	$	563		1	$	332		2	$	7,007
Discontinued operations:
Investment Portfolio	9		22,646		3		59,501		14		24,409		6		64,452
Inventory Portfolio	16		1,893		18		2,566		38		6,230		26		3,726
Minority interest, Inventory Portfolio	—		(179	)	—		(787	)	—		(179	)	—		(4,009	)
	25	$	24,360		22	$	61,843		53	$	30,792		34	$	71,176
Reconciliation of gain on disposition of type:
Inventory Portfolio:
Development	3	$	1,018		2	$	1,661		8	$	2,814		4	$	8,458
Exchange	13		875		17		1,468		31		3,748		24		2,275
Minority interest, Development	—		(179	)	—		(787	)	—		(179	)	—		(4,009	)
Total Inventory gain	16		1,714		19		2,342		39		6,383		28		6,724
Investment Portfolio	9		22,646		3		59,501		14		24,409		6		64,452
	25	$	24,360		22	$	61,843		53	$	30,792		34	$	71,176

6

National Retail Properties, Inc.

(in thousands)

(unaudited)

Earnings from Discontinued Operations – Investment Portfolio: In accordance with Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS No. 144”), the company has classified its investment assets sold and leasehold interests expired subsequent to December 31, 2001, the effective date of SFAS No. 144, as discontinued operations. In addition, the company has classified any investment asset that was held for sale at June 30, 2007, as discontinued operations. The following is a summary of earnings from discontinued operations from the Investment Portfolio.

	Quarter Ended June 30,						Six Months Ended June 30,
	2007			2006			2007			2006
Revenues:
Rental and earned income	$	2,195		$	7,787		$	3,906		$	15,556
Real estate expense reimbursement from tenants		13			252			90			880
Interest and other income from real estate transactions		193			155			319			265
		2,401			8,194			4,315			16,701
Expenses:
General and administrative		(46	)		69			(46	)		94
Real estate		31			876			147			2,563
Interest		—			672			—			1,959
Depreciation and amortization		19			179			75			1,580
Impairment – real estate		95			420			189			420
		99			2,216			365			6,616
Gain on disposition of real estate		22,646			59,501			24,409			64,452
Loss on extinguishment of mortgage payable		—			(167	)		—			(167	)
Earnings from discontinued operations	$	24,948		$	65,312		$	28,359		$	74,370
Earnings from Discontinued Operations – Inventory Portfolio:
Revenues:
Rental income	$	2,206		$	2,076		$	5,056		$	4,002
Real estate expense reimbursement from tenants		164			102			461			150
Interest and other income from real estate transactions		40			—			45			—
		2,410			2,178			5,562			4,152
Disposition of real estate:
Gross proceeds		40,355			18,192			100,008			27,253
Costs		(38,462	)		(15,626	)		(93,778	)		(23,527	)
Gain		1,893			2,566			6,230			3,726
Expenses:
General and administrative		16			52			24			53
Real estate		368			126			796			155
Depreciation and amortization		12			—			32			—
Interest		594			179			1,410			315
		990			357			2,262			523
Income tax expense		(1,097	)		(1,417	)		(3,398	)		(2,479	)
Minority interest		(423	)		(655	)		(578	)		(824	)
Earnings from discontinued operations	$	1,793		$	2,315		$	5,554		$	4,052

7

National Retail Properties, Inc.

(in thousands)

Balance Sheet Summary	June 30, 2007		December 31, 2006
	(unaudited)		(Note 1)
Assets:
Cash and cash equivalents	$	2,516	$	1,675
Restricted cash		37,707		36,587
Receivables, net of allowance		6,258		7,915
Mortgages, notes and accrued interest receivable, net of allowance		42,158		30,945
Real estate, Investment Portfolio:
Accounted for using the operating method, net of accumulated depreciation and amortization:
Held for investment		1,797,937		1,431,428
Held for sale		9,568		9,568
Accounted for using the direct financing method:
Held for investment		41,962		53,693
Held for sale		17,249		17,641
Real estate, Inventory Portfolio, held for sale		169,827		228,159
Mortgage residual interests		28,384		31,512
Accrued rental income, net of allowance		25,590		26,413
Other assets		39,887		41,249
Total assets	$	2,219,043	$	1,916,785
Liabilities and shareholders’ equity:
Line of credit payable		172,600		28,000
Mortgages payable		34,991		35,892
Notes payable – secured		22,500		24,500
Notes payable – convertible		172,500		172,500
Notes payable, net of unamortized discount		489,876		489,804
Financing lease obligation		26,041		26,041
Income tax liability		3,579		6,340
Other liabilities		46,347		36,105
Minority interest		1,382		1,098
Shareholders’ equity		1,249,227		1,096,505
Total liabilities and equity	$	2,219,043	$	1,916,785
Common shares outstanding		67,075		59,823
Gross leasable area, Investment Portfolio		10,000		9,341

Note 1: Amounts are derived from audited consolidated financial statements included in the company’s Form 10-K reflecting reclassifications for discontinued operations within the Investment Portfolio.

8

Orange Avenue Mortgage Investments, Inc. (“OAMI”)

(in thousands)

In May 2005, the company acquired a 78.9 percent equity investment of OAMI for $9.4 million. The company’s 78.9 percent share of OAMI’s net cash flow has been over $20.5 million since May 2005. The following summary represents the balances related to OAMI included in the company’s Balance Sheet and Income Statement Summary:

	June 30, 2007		December 31, 2006
	(unaudited)		(Note 1)
Assets:
Cash and cash equivalents	$	179	$	823
Restricted cash		20,369		17,165
Receivables and other assets		4,411		5,246
Mortgage residual interests		28,384		31,512
	$	53,343	$	54,746
Liabilities:
Notes payable – secured	$	22,500	$	24,500
Income tax liability		7,988		9,480
Other liabilities		149		410
	$	30,637	$	34,390
Minority interest	$	1,701	$	1,217

	Quarter Ended June 30,						Six Months Ended June 30,
	2007			2006			2007			2006
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Revenues:
Interest income on mortgage residual interests	$	1,144		$	1,947		$	2,388		$	4,244
Interest and other income		430			404			1,132			800
		1,574			2,351			3,520			5,044
Expenses:
General and administrative		85			177			210			347
Amortization		51			66			115			133
Impairment – mortgage residual interests valuation adjustments		—			842			—			2,662
Interest		619			718			1,232			1,424
		755			1,803			1,557			4,566
Income tax benefit		689			1,337			1,459			2,695
Minority interest		(203	)		(225	)		(484	)		(304	)
Net earnings	$	1,305		$	1,660		$	2,938		$	2,869

Note 1: Amounts are derived from audited consolidated financial statements included in the company’s Form 10-K.

9

National Retail Properties, Inc.

Investment Portfolio

Top 20 Lines of Trade

		As of June 30,
	Line of Trade	2007 (1)		2006 (2)
1.	Convenience stores	24.5	%	15.2	%
2.	Restaurants – full service	10.6	%	6.3	%
3.	Drug stores	6.6	%	10.5	%
4.	Sporting goods	5.8	%	7.9	%
5.	Books	4.8	%	6.3	%
6.	Consumer electronics	4.7	%	6.0	%
7.	Restaurants – limited service	4.2	%	5.1	%
8.	Grocery	3.9	%	6.9	%
9.	Furniture	3.4	%	5.0	%
10.	Travel plazas	3.3	%	3.8	%
11.	Office supplies	3.2	%	4.5	%
12.	Car washes	2.5	%	—
13.	Family entertainment centers	2.4	%	—
14.	Auto dealerships	2.1	%	2.3	%
15.	General merchandise	2.0	%	2.8	%
16.	Beer, wine and liquor	1.9	%	2.3	%
17.	Craft, fabric and novelty	1.6	%	1.7	%
18.	Equipment rental	1.6	%	2.1	%
19.	Home furnishings	1.6	%	2.6	%
20.	Automotive parts	1.5	%	0.1	%
	Other	7.8	%	8.6	%
	Total	100.0	%	100.0	%

Top 10 States

	State	% of Total(1)			State	% of Total(1)
1.	Texas	21.3	%	6.	Illinois	3.5	%
2.	Florida	12.0	%	7.	Virginia	3.4	%
3.	North Carolina	7.4	%	8.	Ohio	3.3	%
4.	Georgia	5.1	%	9.	Missouri	3.2	%
5.	Pennsylvania	4.5	%	10.	Colorado	3.1	%

Lease Expirations

	% of Total(1)		# of Properties	Gross Leasable Area(3)		% of Total(1)		# of Properties	Gross Leasable Area(3)
2007	0.2	%	4	89,000	2013	4.8	%	32	721,000
2008	1.2	%	17	275,000	2014	5.9	%	36	568,000
2009	2.3	%	26	519,000	2015	3.7	%	23	574,000
2010	3.4	%	37	394,000	2016	3.4	%	21	456,000
2011	2.5	%	21	347,000	2017	5.5	%	26	703,000
2012	4.3	%	35	561,000	Thereafter	62.8	%	567	4,540,000

⁽¹⁾ Based on annual base rent of $177,858,000, which is the annualized base rent for all leases in place as of June 30, 2007.

⁽²⁾ Based on annual base rent of $136,739,000, which is the annualized base rent for all leases in place as of June 30, 2006.

⁽³⁾ Square feet.

10