Earnings
Orlando, Florida, October 31, 2019 – National Retail Properties, Inc. (NYSE: NNN), a real estate investment trust, today announced its operating results for the quarter and nine months ended September 30, 2019.  Highlights include: Operating Results:
  • Revenues and net earnings, FFO, Core FFO and AFFO available to common stockholders and diluted per share amounts:

Quarter Ended

Nine Months Ended

September 30,

September 30,

2019

 2018 2019

2018
(in thousands, except per share data)
Revenues $

168,607

 $

155,331

 $

497,111

 $

463,683
Net earnings available to common stockholders $

58,111

 $

73,450

 $

199,648

 $

230,140
Net earnings per common share $

0.35

 $

0.47

 $

1.22

 $

1.48
FFO available to common stockholders $

115,013

 $

105,134

 $

336,215

 $

312,847
FFO per common share $

0.70

 $

0.67

 $

2.06

 $

2.02
Core FFO available to common stockholders $

115,013

 $

105,356

 $

334,884

 $

313,590
Core FFO per common share $

0.70

 $

0.67

 $

2.05

 $

2.02
AFFO available to common stockholders $

116,870

 $

106,997

 $

340,119

 $

315,180
AFFO per common share $

0.71

 $

0.68

 $

2.09

 $

2.03
Third Quarter 2019 Highlights:
  • FFO and Core FFO per common share increased 4.5% over prior year results
  • AFFO per common share increased 4.4% over prior year results
  • Portfolio occupancy was 99.1% at September 30, 2019 as compared to 98.8% on June 30, 2019 and 98.2% on March 31, 2019
  • Invested $116.8 million in property investments, including the acquisition of 27 properties with an aggregate 533,000 square feet of gross leasable area at an initial cash yield of 6.8%
  • Sold 13 properties for $33.5 million producing $2.1 million of gains on sales
  • Raised $434.6 million net proceeds from the issuance of 8,020,285 common shares
Highlights for the nine months ended September 30, 2019:
  • FFO per share increased 2.0% over prior year results
  • Core FFO per share increased 1.5% over prior year results
  • AFFO per common share increased 3.0% over prior year results
  • Invested $509.6 million in property investments, including the acquisition of 131 properties with an aggregate 2,645,000 square feet of gross leasable area at an initial cash yield of 6.9%
  • Sold 43 properties for $94.8 million producing $25.1 million of gains on sales, net of noncontrolling interest
  • Raised $521.8 million in net proceeds from issuance of 9,653,149 common shares
Core FFO guidance for 2019 was increased from a range of $2.71 to $2.76 per share to a range of $2.74 to $2.77 per share. The 2019 AFFO is estimated to be $2.79 to $2.82 per share. The Core FFO guidance equates to net earnings of $1.60 to $1.63 per share, plus $1.14 per share of expected real estate depreciation and amortization and excludes any gains from the sale of real estate, any charges for impairments and preferred stock redemption charges. 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. The company also announced 2020 Core FFO guidance of $2.83 to $2.87 per share and estimated 2020 AFFO to be $2.90 to $2.94 per share. The Core FFO guidance equates to net earnings of $1.70 to $1.74 per share, plus $1.13 per share of expected real estate depreciation and amortization and excludes any gains from the sale of real estate, and any charges for impairments. 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. Jay Whitehurst, Chief Executive Officer, commented: “National Retail Properties posted another quarter of solid results, highlighted by increasing our annual common stock dividend for the 30th consecutive year and by raising over $434 million of well-priced equity. Driven by our high occupancy rate, strong performance in acquisitions and dispositions and a fortress-like balance sheet, we are pleased to raise our guidance for 2019 and to introduce 2020 guidance.  We run our business with a long-term focus, characterized by consistent per share growth on a multi-year basis, and our guidance for 2019 and 2020 reflects that consistent philosophy.” National Retail Properties invests primarily in high-quality retail properties subject generally to long-term, net leases.  As of September 30, 2019, the company owned 3,057 properties in 48 states with a gross leasable area of approximately 32.2 million square feet and with a weighted average remaining lease term of 11.2 years.  For more information on the company, visit nnnreit.com. Management will hold a conference call on October 31, 2019, at 10:30 a.m. ET to review these results.  The call can be accessed on the National Retail Properties web site live at https://nnnreit.nnnr.staging.findsomewinmore.com/.  For those unable to listen to the live broadcast, a replay will be available on the company’s web site.  In addition, a summary of any earnings guidance given on the call will be posted to the company’s web site. Statements in this press release that are not strictly historical are “forward-looking” statements.  These statements generally are characterized by the use of terms such as “believe,” “expect,” “intend,” “may,” “estimated,” or other similar words or expressions. Forward-looking statements involve known and unknown risks, which may cause the company’s actual future results to differ materially from expected results.  These risks include, among others, general economic conditions, 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, and, risks related to the company’s status as a REIT.  Additional information concerning these and other factors that could cause actual results to differ materially from these forward-looking statements is contained from time to time in the company’s Securities and Exchange Commission (the “Commission”) filings, including, but not limited to, the company’s Annual Report on Form 10-K.  Copies of each filing may be obtained from the company or the Commission.  Such forward-looking statements should be regarded solely as reflections of the company’s current operating plans and estimates.  Actual operating results may differ materially from what is expressed or forecast in this press release.  National Retail Properties, Inc. undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date these statements were made.  The reported results are preliminary and not final and there can be no assurance that the results will not vary from the final information filed on Form 10-Q with the Commission for the quarter and nine months ended September 30, 2019.  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 (“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 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 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 like transaction related gains, income or expense, impairments on land or commercial mortgage residual interests, preferred stock redemption 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.

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