Earnings
ORLANDO, Fla., Aug. 3, 2021 – National Retail Properties, Inc. (NYSE: NNN), a real estate investment trust, today announced its operating results for the quarter and six months ended June 30, 2021.  Highlights include: Operating Results:
  • Revenues and net earnings, FFO, Core FFO and AFFO available to common stockholders and diluted per share amounts:
 

Quarter Ended

Six Months Ended

June 30,

June 30,

2021

2020

2021

2020

(in thousands, except per share data)

Revenues

$

179,011

$

163,701

$

358,789

$

338,764

Net earnings available to common stockholders

$

68,538

$

41,780

$

120,640

$

102,473

Net earnings per common share

$

0.39

$

0.24

$

0.69

$

0.60

FFO available to common stockholders

$

122,862

$

111,738

$

222,683

$

214,247

FFO per common share

$

0.70

$

0.65

$

1.27

$

1.25

Core FFO available to common stockholders

$

122,862

$

111,738

$

244,011

$

230,926

Core FFO per common share

$

0.70

$

0.65

$

1.40

$

1.35

AFFO available to common stockholders

$

134,375

(1)

$

83,240

(2)

$

267,908

(1)

$

204,990

(2)

AFFO per common share

$

0.77

(1)

$

0.49

(2)

$

1.53

(1)

$

1.20

(2)

(1)   Amounts include $8,323 and $17,706 of net straight-line accrued rent from rent deferral repayments from the COVID-19 rent deferral lease amendments for the quarter and six months ended June 30, 2021, respectively. Excluding such, AFFO per common share would have been $0.72 and $1.43 for the quarter and six months ended June 30, 2021, respectively.

(2)   Amounts exclude $30,223 of net straight-line accrued rent from rent deferral repayments from the COVID-19 rent deferral lease amendments. Including such, AFFO per common share would have been $0.66 and $1.37 for the quarter and six months ended June 30, 2020, respectively.
Second Quarter 2021 Highlights:
  • As of July 28, 2021, NNN had collected approximately 99% of rent originally due for the quarter ended June 30, 2021, and approximately 99% of rent originally due in July 2021
  • Maintained high occupancy levels at 98.3%, with a weighted average remaining lease term of 10.6 years, at June 30, 2021 as compared to 98.3% at March 31, 2021 and 98.5% at December 31, 2020
  • Invested $102.9 million in property investments, including the acquisition of 29 properties with an aggregate 173,000 square feet of gross leasable area at an initial cash yield of 6.7%
  • Sold 15 properties for $22.9 million producing $4.2 million of gains on sales
  • Expanded line of credit borrowing capacity from $900 million to $1.1 billion, reduced pricing from LIBOR plus 87.5 basis points to LIBOR plus 77.5 basis points, and extended maturity to June 2025.
  • Ended the quarter with $249.6 million of cash and no amounts drawn on the $1.1 billion bank credit facility
First Half of 2021 Highlights:
  • Invested $208.6 million in property investments, including the acquisition of 58 properties with an aggregate 528,000 square feet of gross leasable area at an initial cash yield of 6.5%
  • Sold 26 properties for $40.4 million producing $8.5 million of gains on sales
  • Raised $2.4 million net proceeds from the issuance of 61,430 common shares
  • Issued $450 million principal amount of 3.500% senior unsecured notes due 2051
  • Redeemed $350 million principal amount of 3.300% senior unsecured notes due 2023
  • Weighted average debt maturity increased to 13.0 years
NNN has entered into rent deferral lease amendments with certain tenants for an aggregate $51,799,000 and $4,758,000 of rent originally due for the years ended December 31, 2020 and December 31, 2021, respectively. The rent deferral lease amendments require the deferred rents to be repaid at a later time during the lease term. Approximately $3,259,000 of deferred rent was repaid in 2020 and approximately $21,151,000 of deferred rent was repaid in the six months ending June 30, 2021. Core FFO guidance for 2021 was increased from a range of $2.70 to $2.75 to a range of $2.75 to $2.80 per share. The 2021 AFFO is estimated to be $2.95 to $3.00 per share. The Core FFO guidance equates to net earnings of $1.60 to $1.65 per share, plus $1.15 per share of expected real estate depreciation and amortization and excludes any gains from the sale of real estate and any charges for impairments or loss on early extinguishment of debt. 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 produced another quarter of strong results, driven by continued high occupancy, impressive rent collections and solid acquisitions from relationship tenants, all supported by a low leverage, flexible balance sheet. In addition to our recently announced increase in the common stock dividend, thus making 2021 our 32nd consecutive year of increased annual dividends, we are pleased today to increase our guidance for 2021 Core FFO per share, reflecting a return to our pre-pandemic strategy to generate consistent mid-single digits per share growth on a multi-year basis. With almost $250M of cash in the bank and no material debt maturities until 2024, we are well positioned for the balance of 2021 and beyond.” National Retail Properties invests primarily in high-quality retail properties subject generally to long-term, net leases.  As of June 30, 2021, the company owned 3,173 properties in 48 states with a gross leasable area of approximately 32.7 million square feet and with a weighted average remaining lease term of 10.6 years.  For more information on the company, visit nnnreit.nnnr.staging.findsomewinmore.com. Management will hold a conference call on August 3, 2021, 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. Please click here for the full financial tables. 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, the potential impacts of the COVID-19 pandemic on the company’s business operations, financial results and financial position and on the world economy, 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 (i) Annual Report on Form 10-K for the year ended December 31, 2020 and (ii) Quarterly Report on Form 10-Q for the quarter and six months ended June 30, 2021.  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. 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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