Earnings
Orlando, Florida, November 2, 2020 – 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, 2020.  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,

2020

 2019 2020

2019

(in thousands, except per share data)
Revenues

$

 158,633 $ 168,607 $ 497,397 $

497,111
Net earnings available to common stockholders

$

 51,584 (1) $ 58,111 $ 154,057 (1) $

199,648
Net earnings per common share

$

 0.30 (1) $ 0.35 $ 0.89 (1) $

1.22
FFO available to common stockholders

$

 106,423 $ 115,013 $ 320,670 $

336,215
FFO per common share

$

 0.62 $ 0.70 $ 1.87 $

2.06
Core FFO available to common stockholders

$

 106,423 $ 115,013 $ 337,349 $

334,884
Core FFO per common share

$

 0.62 $ 0.70 $ 1.96 $

2.05
AFFO available to common stockholders

$

 106,690 (2) $ 116,870 $ 311,680 (2) $

340,119
AFFO per common share

$

 0.62 (2) $ 0.71 $ 1.81 (2) $

2.09
(1)   Includes a write-off of $14,758 (or $0.09 per share) of receivables due to reclassifying certain tenants as cash basis for accounting purposes during the quarter and nine months ended September 30, 2020.
(2)   For the quarter and nine months ended September 30, 2020, amounts exclude $8,499 and $38,938, respectively, of net straight-line accrued rent, resulting from the COVID-19 rent deferral lease amendments. Including the straight-line rent would result in AFFO per common share of $0.67 and $2.04 for the quarter and nine months ended September 30, 2020, respectively.
  Third Quarter 2020 Highlights:
  • Portfolio occupancy was 98.4% at September 30, 2020 as compared to 98.7% at June 30, 2020 and 98.8% at March 31, 2020
  • Invested $3.9 million in property investments, and completed construction with an aggregate 16,000 square feet of gross leasable area
  • Sold 3 properties for $2.4 million producing $0.1 million of gains on sales
  • Raised $10.9 million net proceeds from the issuance of 305,115 common shares
  • Ended the quarter with $294.9 million of cash and no amounts drawn on $900 million bank credit facility
Highlights for the nine months ended September 30, 2020:
  • Invested $78.0 million in property investments, including the acquisition of 21 properties with an aggregate 299,000 square feet of gross leasable area at an initial cash yield of 6.8%
  • Sold 25 properties for $42.5 million producing $13.6 million of gains on sales
  • Raised $64.2 million net proceeds from the issuance of 1,756,338 common shares
  • Issued $400 million principal amount of 2.50% senior unsecured notes due 2030 generating net proceeds of $395.1 million
  • Issued $300 million principal amount of 3.10% senior unsecured notes due 2050 generating net proceeds of $290.5 million
  • Paid off $325 million principal amount of 3.800% senior unsecured notes due 2022
NNN is actively working with its tenants that have been impacted by the COVID-19 pandemic. As of October [12/19], 2020, NNN had collected approximately [90%] of rent originally due for the quarter ended September 30, 2020, and approximately [93%] of rent originally due in October 2020. [#s will be updated before filing] As a result of the COVID-19 pandemic, as of September 30, 2020, NNN has entered into rent deferral lease amendments with certain tenants representing approximately 6% of the annual rent originally due for the year ending December 31, 2020. On average, 2.7 months of rent was deferred with approximately 77% of deferred rent originally due in the second quarter of 2020 and 23% originally due in the third quarter of 2020. Approximately 66% of this deferred rent is due to be paid to NNN by June 30, 2021 and 89% is due by December 31, 2021. Jay Whitehurst, Chief Executive Officer, commented: “The third quarter of 2020 marks the 31st consecutive year of increased common stock dividends for National Retail Properties.  This impressive record has been matched by only two other REITs, and by less than 90 US public companies.  Our liquidity position remains very solid, with almost $300M of cash in the bank and no amounts drawn on our $900M line of credit.  Rent collections continued to trend positively as we collected [90%] of rent due for the third quarter and  [93%] of rent for the month of October.  After taking a pause in acquisitions during the height of the pandemic and related store closures, our pipeline of acquisitions is beginning to grow, primarily driven by new transactions with our existing relationship tenants. Lastly, and most importantly, our associates have remained healthy, energized and productive during this year of unforeseen challenges.” National Retail Properties invests primarily in high-quality retail properties subject generally to long-term, net leases.  As of September 30, 2020, the company owned 3,114 properties in 48 states with a gross leasable area of approximately 32.4 million square feet and with a weighted average remaining lease term of 10.7 years.  For more information on the company, visit nnnreit.nnnr.staging.findsomewinmore.com. Management will hold a conference call on November 2, 2020, 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, 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, 2019 and (ii) Quarterly Report on Form 10-Q for the quarter and nine months ended September 30, 2020.  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. http://investors.nnnreit.com/file/Index?KeyFile=405826469        

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