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: May 5, 2009

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 May 5 2009, National Retail Properties, Inc. issued a press release announcing its results of operations and financial condition for the quarter ended March 31, 2009. 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 May 5, 2009, 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: May 5, 2009	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 May 5, 2009, 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
	May 5, 2009

FIRST QUARTER 2009 OPERATING RESULTS

ANNOUNCED BY NATIONAL RETAIL PROPERTIES, INC.

Orlando, Florida, May 5, 2009 – National Retail Properties, Inc. (NYSE: NNN), a real estate investment trust, today announced operating results for the quarter ended March 31, 2009. Highlights include:

Operating Results:

• Revenues, net earnings and FFO available to common stockholders:

	Quarter Ended March 31,
	2009		2008
	(in thousands, except per share data)
Revenues	$	57,963	$	54,009
Net earnings available to common stockholders	$	25,108	$	30,543
Net earnings per common share (diluted)	$	0.32	$	0.42
FFO available to common stockholders	$	35,056	$	36,160
FFO per common share (diluted)	$	0.45	$	0.50

• NNN paid cash dividends to its common shareholders of $0.375 per share during the quarter ended March 31, 2009.

• Investment Portfolio occupancy was 96.7% at March 31, 2009.

Investments and Dispositions for the quarter ended March 31, 2009:

• Investments:

• $7.6 million of development funding in the Investment Portfolio with an aggregate 105,000 square feet of gross leasable area

• $2.2 million of development funding in the Inventory Portfolio

• Dispositions:

• Three Investment properties with an aggregate 61,000 square feet of gross leasable area, with net proceeds of $4.1 million, resulting in a gain of $1.0 million

• One Inventory property with net proceeds of $4.9 million

Capital transactions for the quarter ended March 31, 2009:

• Issued 602,112 shares of common stock generating $8,852,000 of net proceeds pursuant to the Dividend Reinvestment and Stock Purchase Plan

• Repurchased $8.8 million of the Company’s outstanding 3.95% convertible senior notes due September 2026, which notes provide holders with a 2011 put option, for a discounted purchase price of $7.0 million

• Repurchased $8.5 million of the Company’s outstanding 5.125% convertible notes due June 2028, which notes provide holders with a 2013 put option, for a discounted purchase price of $6.5 million

National Retail Properties also announced revised 2009 FFO guidance from $1.70 to $1.80 per share to $1.65 to $1.75 per share. This guidance includes non-cash interest expense of approximately 7 cents per share due to changes required in accounting for convertible debt interest for fiscal years beginning after December 15, 2008. This equates to net earnings before any gains or losses from the sale of investment properties of $1.14 to $1.24 per share plus $0.51 per share of expected real estate related depreciation and amortization. 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: “Despite the uncertain economic times and weak retail environment, our first quarter results were in line with expectations. While 2009 will be a year focused on controlling expenses and maintaining occupancy, our solid results and strong balance sheet puts us on track to make this NNN’s 20^th consecutive year of increased cash dividends per share.”

National Retail Properties invests primarily in high-quality retail properties subject generally to long-term, net leases. As of March 31, 2009, the company owned 1,002 Investment properties in 44 states with a gross leasable area of approximately 11.3 million square feet. NNN is one of only four publicly traded REITs and 156 publicly traded companies in America to have increased its annual dividends for 19 or more consecutive years. For more information on the company, visit www.nnnreit.com.

Management will hold a conference call on May 5, 2009 at 2:00 p.m. EDT to review these results. The call can be accessed on National Retail Properties, Inc. 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 Properties 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.

The reported results are unaudited and there can be no assurance that the results will not vary from the final information for the quarter ended March 31, 2009. In the opinion of management, all adjustments considered necessary for a fair presentation of these reported results have been 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.

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. The results of operations for prior periods for these properties now classified as discontinued operations have been restated to reflect the results in earnings from discontinued operations for comparability purposes. 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 stockholders are not affected.

National Retail Properties, Inc.

(in thousands, except per share data)

(unaudited)

Income Statement Summary	Quarter Ended March 31,
	2009			2008
Revenues:
Rental and earned income	$	53,722		$	49,858
Real estate expense reimbursement from tenants		2,353			1,560
Interest and other income from real estate transactions		834			1,235
Interest income on commercial mortgage residual interests		1,054			1,356
		57,963			54,009
Disposition of real estate, Inventory Portfolio:
Gross proceeds		—			4,900
Costs		—			(4,879	)
Gain		—			21
Operating expenses:
General and administrative		5,305			7,560
Real estate		3,587			2,390
Depreciation and amortization		11,819			9,970
Impairment – commercial mortgage residual interests valuation		—			758
Restructuring charges		731			—
		21,442			20,678
Other expenses (revenues):
Interest and other income		(347	)		(1,221	)
Interest expense		15,431			16,186
Loss on interest rate hedge		—			804
		15,084			15,769
Income tax benefit		537			2,652
Equity in earnings of unconsolidated affiliate		103			79
Gain on extinguishment of debt		2,418			—
Earnings from continuing operations		24,495			20,314
Earnings from discontinued operations:
Real estate, Investment Portfolio		2,040			5,963
Real estate, Inventory Portfolio, net of income tax expense and noncontrolling interests		444			4,948
		2,484			10,911
Net earnings including noncontrolling interests		26,979			31,225
Loss (earnings) attributable to noncontrolling interests		(175	)		1,014
Net earnings		26,804			32,239
Series C Preferred Stock dividends		(1,696	)		(1,696	)
Net earnings available to common stockholders – basic and diluted	$	25,108		$	30,543

National Retail Properties, Inc.

(in thousands, except per share data)

(unaudited)

	Quarter Ended March 31,
	2009			2008
Weighted average common shares outstanding:
Basic		78,166			72,315
Diluted		78,254			72,447
Net earnings per share available to common stockholders:
Basic:
Continuing operations	$	0.29		$	0.27
Discontinued operations		0.03			0.15
Net earnings	$	0.32		$	0.42
Diluted:
Continuing operations	$	0.29		$	0.27
Discontinued operations		0.03			0.15
Net earnings	$	0.32		$	0.42
Supplemental Information:
Selected Non-Cash Income Statement Items:
Straight-line rent	$	91		$	(579	)
Net capital lease rent adjustment	$	330		$	314
Above (below) market rent amortization	$	(153	)	$	(151	)
Stock based compensation expense	$	1,119		$	654
Impairment – real estate	$	—		$	14
Impairment – mortgage residual interests	$	—		$	758
Amortization of debt costs	$	837		$	629
Capitalized interest expense	$	(518	)	$	(531	)
Convertible debt interest expense (FSP APB 14-1)	$	1,448		$	820
Non-real estate depreciation expense	$	78		$	68
Other Information:
Percentage rent	$	147		$	58
Net Inventory Portfolio gain on disposition (TRS)	$	546		$	5,633
Scheduled debt principal amortization (excluding maturities)	$	78		$	291

National Retail Properties, Inc.

(in thousands, except per share data)

(unaudited)

	Quarter Ended March 31,
	2009			2008
Reconciliation of net earnings to FFO and FFO available to common stockholders:
Net earnings	$	26,804		$	32,239
Real estate depreciation and amortization:
Continuing operations		10,904			9,245
Discontinued operations		32			206
Joint venture real estate depreciation		44			43
Gain on disposition of real estate Investment Portfolio		(1,032	)		(3,877	)
FFO		36,752			37,856
Series C Preferred Stock dividends		(1,696	)		(1,696	)
FFO available to common stockholders – basic and diluted	$	35,056		$	36,160
FFO per share:
Basic	$	0.45		$	0.50
Diluted	$	0.45		$	0.50

Real Estate Disposition Summary

	Quarter Ended March 31,
	2009			2008
	# of Properties	Gain		# of Properties	Gain
Gain on disposition from continuing and discontinued operations as reported:
Continuing operations	—	$	—	1	$	21
Discontinued operations:
Investment Portfolio	3		1,032	4		3,877
Inventory Portfolio	1		546	7		9,128
Noncontrolling interests, Inventory Portfolio	—		—	—		(3,516	)
	4	$	1,578	12	$	9,510
Reconciliation of gain on disposition by type:
Inventory Portfolio:
Development	1	$	546	4	$	8,284
Exchange	—		—	4		865
Noncontrolling interests, Development	—		—	—		(3,516	)
Total Inventory gain (TRS)	1		546	8		5,633
Investment Portfolio	3		1,032	4		3,877
	4	$	1,578	12	$	9,510

National Retail Properties, Inc.

(in thousands)

(unaudited)

Earnings from Discontinued Operations: 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 or revenue generating inventory asset that was held for sale at March 31, 2009, as discontinued operations. The following is a summary of earnings from discontinued operations.

	Quarter Ended March 31,
	2009			2008
Earnings from Discontinued Operations – Investment Portfolio:
Revenues:
Rental and earned income	$	788		$	1,462
Real estate expense reimbursement from tenants		24			25
Interest and other income from real estate transactions		298			534
		1,110			2,021
Expenses:
General and administrative		—			(79	)
Real estate		70			(206	)
Depreciation and amortization		32			206
Impairment – real estate		—			14
		102			(65	)
Gain on disposition of real estate		1,032			3,877
Earnings from discontinued operations	$	2,040		$	5,963
Earnings from Discontinued Operations – Inventory Portfolio:
Revenues:
Rental income	$	1,401		$	3,360
Real estate expense reimbursement from tenants		950			329
Interest and other income from real estate transactions		39			453
		2,390			4,142
Disposition of real estate:
Gross proceeds		4,900			69,187
Costs		(4,354	)		(60,059	)
Gain		546			9,128
Expenses:
General and administrative		48			24
Real estate		1,309			550
Depreciation and amortization		139			44
Interest		930			998
		2,426			1,616
Income tax expense		(271	)		(3,028	)
Earnings from discontinued operations including noncontrolling interests		239			8,626
Loss (earnings) attributable to noncontrolling interests		205			(3,678	)
Earnings from discontinued operations	$	444		$	4,948

National Retail Properties, Inc.

(in thousands)

Balance Sheet Summary	March 31, 2009		December 31, 2008
	(unaudited)		(Note 1)
Assets:
Cash and cash equivalents	$	1,858	$	2,626
Receivables, net of allowance		2,778		3,612
Investment in unconsolidated affiliate		4,863		4,927
Mortgages, notes and accrued interest receivable, net of allowance		60,887		60,472
Real estate, Investment Portfolio:
Accounted for using the operating method, net of accumulated depreciation and amortization		2,352,293		2,357,894
Accounted for using the direct financing method		30,911		31,240
Real estate, Inventory Portfolio, held for sale		98,889		101,106
Commercial mortgage residual interests		22,617		22,000
Accrued rental income, net of allowance		23,840		23,972
Other assets		39,829		41,622
Total assets	$	2,638,765	$	2,649,471
Liabilities:
Line of credit payable	$	22,900	$	26,500
Mortgages payable		26,043		26,290
Notes payable – convertible		341,335		356,122
Notes payable, net of unamortized discount		618,527		618,479
Other liabilities		54,205		53,134
Total liabilities		1,063,010		1,080,525
Stockholders’ equity		1,573,655		1,566,860
Noncontrolling interests		2,100		2,086
Total liabilities and equity	$	2,638,765	$	2,649,471
Common shares outstanding		79,303		78,415
Gross leasable area, Investment Portfolio (square feet)		11,295		11,251

Note 1: Includes adjustment based on the adoption of FSP APB 14-1, “Accounting for Convertible Debt Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash Settlement)”

Orange Avenue Mortgage Investments, Inc.

(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 totaled over $27.3 million since May 2005. The following summary represents the balances related to OAMI included in the company’s Balance Sheet and Income Statement Summary:

	March 31, 2009		December 31, 2008
	(unaudited)		(Note 1)
Assets:
Cash and cash equivalents	$	139	$	405
Receivables and other assets		37		39
Commercial mortgage residual interests		22,617		22,000
	$	22,793	$	22,444
Liabilities:
Income tax liability	$	5,067	$	5,195
Other liabilities		49		49
	$	5,116	$	5,244
Noncontrolling interests	$	1,464	$	1,190

	Quarter Ended March 31,
	2009			2008
	(unaudited)			(unaudited)
Revenues:
Interest income on commercial mortgage residual interests	$	1,054		$	1,356
Interest and other income		—			191
		1,054			1,547
Expenses:
General and administrative		61			78
Amortization		—			35
Impairment – commercial mortgage residual interests valuation		—			758
Interest		—			200
		61			1,071
Income tax benefit		128			407
Net earnings including noncontrolling interests		1,121			883
Earnings attributable to noncontrolling interests		(110	)		(139	)
Net earnings	$	1,011		$	744

Note1: Amounts are derived from audited consolidated financial statements included in the company’s Form 10-K.

NNN Retail Properties Fund I LLC

(dollars in thousands)

In September 2007, the company entered into a joint venture, NNN Retail Properties Fund I LLC, with an affiliate of Crow Holdings Realty Partners IV, L.P. The company owns a 15 percent equity interest, and the following summary represents the Balance Sheet and Income Statement Summary for the joint venture. The company’s investment in the joint venture is included in the company’s Balance Sheet Summary under “Investment in unconsolidated affiliate.”

	March 31, 2009		December 31, 2008
	(unaudited)		(Note 1)
Assets:
Cash and cash equivalents	$	914	$	833
Receivables		200		202
Real estate		74,167		74,463
Other assets		1,056		1,135
	$	76,337	$	76,633
Liabilities:
Notes payable	$	43,600	$	43,600
Other liabilities		1,911		1,677
Total liabilities		45,511		45,277
Members’ equity		30,826		31,356
Total liabilities and equity	$	76,337	$	76,633

	Quarter Ended March 31,
	2009		2008
	(unaudited)		(unaudited)
Revenues:
Rental income	$	1,565	$	1,497
Expenses:
General and administrative		104		71
Real estate		5		5
Depreciation and amortization		371		353
Interest		462		597
		942		1,026
Net earnings	$	623	$	471

Note 1: Amounts are derived from an audited consolidated financial statement.

National Retail Properties, Inc.

Investment Portfolio

Top 20 Lines of Trade

		As of March 31
	Line of Trade	2009 (1)		2008 (2)
1.	Convenience stores	25.4	%	23.0	%
2.	Automotive service	8.9	%	8.1	%
3.	Restaurants - full service	8.8	%	9.6	%
4.	Theaters	6.0	%	6.4	%
5.	Automotive parts	6.0	%	4.7	%
6.	Drug stores	4.0	%	4.3	%
7.	Books	3.9	%	4.1	%
8.	Restaurants – limited service	3.3	%	3.5	%
9.	Sporting goods	3.3	%	3.7	%
10.	Family entertainment centers	3.0	%	2.0	%
11.	Grocery	2.9	%	2.8	%
12.	Consumer electronics	2.6	%	4.1	%
13.	Furniture	2.5	%	2.8	%
14.	Office supplies	2.5	%	2.6	%
15.	Travel plazas	2.4	%	2.9	%
16.	Beer, wine and liquor	1.7	%	2.0	%
17.	Auto dealerships	1.3	%	2.0	%
18.	Home furnishings	1.2	%	1.4	%
19.	Financial services	1.2	%	0.5	%
20.	Equipment rental	1.2	%	1.2	%
	Other	7.9	%	8.3	%
	Total	100.0	%	100.0	%

Top 10 States

	State	% of Total(1)			State	% of Total(1)
1.	Texas	19.8	%	6.	Georgia	5.3	%
2.	Florida	9.7	%	7.	Indiana	4.2	%
3.	Illinois	6.6	%	8.	Pennsylvania	4.0	%
4.	North Carolina	5.9	%	9.	Ohio	3.1	%
5.	California	5.5	%	10.	Colorado	3.0	%

Lease Expirations

	% of Total(1)		# of Properties	Gross Leasable Area(3)		% of Total(1)		# of Properties	Gross Leasable Area(3)
2009	0.4	%	12	199,000	2015	2.5	%	19	463,000
2010	2.6	%	37	396,000	2016	1.9	%	15	287,000
2011	1.9	%	20	333,000	2017	4.4	%	26	751,000
2012	3.3	%	34	482,000	2018	3.0	%	24	418,000
2013	4.5	%	38	844,000	2019	4.2	%	41	656,000
2014	4.6	%	41	604,000	Thereafter	66.7	%	662	5,217,000

⁽¹⁾ Based on annual base rent of $221,248,000, which is the annualized base rent for all leases in place as of March 31, 2009.

⁽²⁾ Based on annual base rent of $209,409,000, which is the annualized base rent for all leases in place as of March 31, 2008.

⁽³⁾ Square feet.