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 13, 2013
NATIONAL RETAIL PROPERTIES, INC.
(Exact name of registrant as specified in its charter)
| Maryland | 001-11290 | 56-1431377 | ||
| (State or other jurisdiction | (Commission | (IRS Employer | ||
| of incorporation) | File Number) | Identification No.) |
| 450 South Orange Avenue Suite 900 Orlando, Florida |
32801 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code (407) 265-7348
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 (see General Instruction A.2. below):
| ¨ | 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 8.01 | Other Events. |
| (a) | Recent Developments |
The information included under this Item 8.01(a) of this Current Report on Form 8-K updates and amends, and shall be deemed incorporated by reference into, registration statements filed by National Retail Properties, Inc. (the “Company”) under the Securities Act of 1933, as amended, remaining effective as of, and filed prior to, the date of this Current Report on Form 8-K.
Preliminary Financial Results
On February 7, 2013, the Company announced its preliminary financial results as of and for the quarter and year ended December 31, 2012. The following is a summary of the results announced, which results are unaudited and do not include all the information that will be contained in the Company’s audited financial statements for these periods, including the notes related thereto. The Company and its auditors have not yet finalized the Company’s financial results for the quarter and year ended December 31, 2012; therefore, information regarding these periods is subject to adjustments that could be material as the Company finalizes its results and completes its review procedures.
| Quarter
Ended December 31, |
Year
Ended December 31, |
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| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| (in thousands, except per share data) | ||||||||||||||||
| Revenues |
$ | 88,899 | $ | 72,959 | $ | $331,752 | $ | 259,939 | ||||||||
| Net earnings available to common stockholders |
$ | 35,901 | $ | 25,874 | $ | $121,489 | $ | 85,540 | ||||||||
| Net earnings per common share (diluted) |
$ | 0.32 | $ | 0.26 | $ | 1.11 | $ | 0.96 | ||||||||
| FFO available to common shareholders |
$ | 50,994 | $ | 41,038 | $ | 193,589 | $ | 139,665 | ||||||||
| FFO per common share (diluted) |
$ | 0.46 | $ | 0.42 | $ | 1.77 | $ | 1.57 | ||||||||
| December 31, 2012 |
December 31, 2011 |
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| (in thousands) | ||||||||
| Balance Sheet Summary |
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| Total assets |
$ | 3,988,026 | $ | 3,435,043 | ||||
| Total liabilities |
$ | 1,690,441 | $ | 1,431,167 | ||||
| Total equity |
$ | 2,297,585 | $ | 2,003,876 | ||||
| Quarter Ended | Year Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| (in thousands, except per share data) | ||||||||||||||||
| Funds From Operations (FFO) Reconciliation: |
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| Net earnings available to common stockholders |
$ | 35,901 | $ | 25,874 | $ | 121,489 | $ | 85,540 | ||||||||
| Real estate depreciation and amortization: |
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| Continuing operations |
20,223 | 15,239 | 74,016 | 52,638 | ||||||||||||
| Discontinued operations |
111 | 313 | 957 | 1,405 | ||||||||||||
| Joint venture real estate depreciation |
— | 44 | 112 | 178 | ||||||||||||
| Joint venture gain on disposition of real estate |
— | — | (2,341 | ) | — | |||||||||||
| Gain on disposition of real estate |
(6,510 | ) | (432 | ) | (10,956 | ) | (527 | ) | ||||||||
| Impairment losses - real estate |
1,269 | — | 10,312 | 431 | ||||||||||||
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| Total FFO adjustments |
15,093 | 15,164 | 72,100 | 54,125 | ||||||||||||
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| FFO available to common stockholders |
$ | 50,994 | $ | 41,038 | $ | 193,589 | $ | 139,665 | ||||||||
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| Weighted average common shares outstanding (diluted) |
112,013 | 98,671 | 109,118 | 88,837 | ||||||||||||
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| FFO per common share (diluted): |
$ | 0.46 | $ | 0.42 | $ | 1.77 | $ | 1.57 | ||||||||
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Common Dividend
On January 15, 2013, we announced that our Board of Directors declared a quarterly cash dividend of $0.395 per share payable on February 15, 2013 to common stockholders of record as of January 31, 2013. The dividend represents an annualized rate of $1.58 per share.
Investments and Dispositions
During the quarter ended December 31, 2012, the Company made $254.7 million in property investments, including the acquisition of 108 properties with an aggregate 907,000 square feet of gross leasable area. Also during the quarter ended December 31, 2012, the Company sold 16 properties for net proceeds of $49.0 million, producing $6.5 million of gains on sales (not included in FFO).
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) on the disposition of certain assets, the Company’s share of these items from the company’s unconsolidated partnerships and any impairment charges on a depreciable real estate asset.
FFO is generally considered by industry analysts to be the most appropriate measure of performance of real estate companies. FFO does not necessarily represent cash provided by operating activities in accordance with GAAP and should not be considered an alternative to net earnings as an indication of the company’s performance or to cash flow as a measure of liquidity or ability to make distributions. Management considers FFO an appropriate measure of performance of an equity REIT because it primarily excludes the assumption that the value of the real estate assets diminishes predictably over time, and because industry analysts have accepted it as a performance measure. The Company’s computation of FFO may differ from the methodology for calculating FFO used by other equity REITs, and therefore, may not be comparable to such other REITs. A reconciliation of net earnings (computed in accordance with GAAP) to FFO, as defined by NAREIT, is included in this Current Report on Form 8-K. FFO 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.
| (b) | Additional Material Federal Income Tax Considerations |
The information included in Exhibit 99.1 (the “Tax Exhibit”) to this Current Report on Form 8-K provides a summary of certain additional material federal income tax considerations relevant to an investment in equity securities of the Company. The information in the Tax Exhibit amends in part the discussion under the heading “Material Federal Income Tax Considerations” contained in or incorporated by reference into registration statements filed by the Company under the Securities Act of 1933, as amended, remaining effective as of, and filed prior to, the date of this Current Report on Form 8-K, and the Tax Exhibit shall be deemed incorporated by reference into each such registration statement.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
| 99.1 | Additional Material Federal Income Tax Considerations |
SIGNATURE
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. | ||
| By: | /s/ Kevin B. Habicht | |
| Name: | Kevin B. Habicht | |
| Title: | Executive Vice President, | |
| Chief Financial Officer, | ||
| Assistant Secretary and Treasurer | ||
Dated: February 13, 2013
Exhibit 99.1
ADDITIONAL MATERIAL FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of certain additional material federal income tax considerations with respect to our qualification as a REIT and the ownership of our common or preferred stock. As supplemented and updated by this summary, and by the discussion in any applicable prospectus supplement, investors should review the discussion in the applicable prospectus under the heading “Material Federal Income Tax Considerations” for a more detailed summary of the federal income tax consequences of the purchase, ownership and disposition of our stock and our election to be subject to federal income tax as a REIT.
New Tax Rates for U.S. Individuals, Estates and Trusts
In the applicable prospectus under the heading “Material Federal Income Tax Considerations,” there are various references to the 15% maximum tax rates applicable to long-term capital gains and qualified dividend income of U.S. individuals, estates and trusts through the end of 2012, when such reduced rates were scheduled to expire. In addition, ordinary income of U.S. individuals, estates and trusts was subject to a reduced maximum 35% tax rate that was also scheduled to expire at the end of 2012. On January 2, 2013, President Obama signed into law the American Taxpayer Relief Act of 2012, or the 2012 Relief Act, which, among other things, permanently extends most of the reduced rates for U.S. individuals, estates and trusts with respect to ordinary income, qualified dividend income and long-term capital gains that had expired on December 31, 2012. The 2012 Relief Act, however, does not extend all of the reduced rates for high-income taxpayers. Beginning January 1, 2013, in the case of married couples filing joint returns with taxable income in excess of $450,000, heads of households with taxable income in excess of $425,000 and other individuals with taxable income in excess of $400,000, the maximum rates on ordinary income will be 39.6% (as compared to 35% prior to 2013) and the maximum rates on long-term capital gains and qualified dividend income will be 20% (as compared to 15% prior to 2013). Estates and trusts have more compressed rate schedules. As before, REIT dividends generally are not treated as qualified dividend income. Prospective stockholders are urged to consult their tax advisors regarding the effect of the new tax rates and other tax provisions in the 2012 Relief Act on an investment in our stock.
Unearned Income Medicare Tax
Under the Health Care and Education Reconciliation Act of 2010, amending the Patient Protection and Affordable Care Act, high-income U.S. individuals, estates, and trusts are subject to an additional 3.8% tax on net investment income in tax years beginning after December 31, 2012. For these purposes, net investment income includes dividends and gains from sales of stock. In the case of an individual, the tax is 3.8% of the lesser of the individuals’ net investment income or the excess of the individuals’ modified adjusted gross income over $250,000 in the case of a married individual filing a joint return or a surviving spouse, $125,000 in the case of a married individual filing a separate return, or $200,000 in the case of a single individual. Taxable U.S. stockholders that are individuals, estates or trusts should consult their tax advisors regarding the effect, if any, of this tax on their ownership and disposition of our stock.
Recent Changes in U.S. Federal Income Tax Withholding
After December 31, 2013, withholding at a rate of 30% will be required on dividends in respect of, and after December 31, 2016, withholding at a rate of 30% will be required on gross proceeds from the sale of, shares of our stock held by or through certain foreign financial institutions (including investment funds), unless such institution enters into an agreement with the Secretary of the Treasury (unless alternative procedures apply pursuant to an applicable intergovernmental agreement between the United States and the relevant foreign government) to report, on an annual basis, information with respect to shares in, and accounts maintained by, the institution to the extent such shares or accounts are held by certain U.S. persons or by certain non-U.S. entities that are wholly or partially owned by U.S. persons. Accordingly, the entity through which our shares are held will affect the determination of whether such withholding is required. Similarly, after December 31, 2013, dividends in respect of, and after December 31, 2016, gross proceeds from the sale of, our shares held by an investor that is a non-financial non-U.S. entity will be subject to withholding at a rate of 30%, unless such entity either (i) certifies to us that such entity does not have any “substantial U.S. owners” or (ii) provides certain information regarding the entity’s “substantial U.S. owners,” which we will in turn provide to the Secretary of the Treasury. Non-U.S. stockholders are encouraged to consult with their tax advisers regarding the possible implications of these rules on their investment in our stock.