nnn-20210331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended March 31, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from to

Commission file number 001-11290

NATIONAL RETAIL PROPERTIES, INC.

(Exact name of registrant as specified in its charter)


Maryland			56-1431377
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

450 South Orange Avenue, Suite 900

Orlando, Florida 32801

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (407) 265-7348

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of exchange on which registered
Common Stock, $0.01 par value	NNN	New York Stock Exchange
Depositary Shares, each representing one-hundredth of a share of 5.200% Series F Preferred Stock, $0.01 par value	NNN/PF	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date.

175,580,463 shares of common stock, $0.01 par value, outstanding as of April 29, 2021.

TABLE OF CONTENTS


		PAGE REFERENCE
Part I - Financial Information
Item 1.	Financial Statements:
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Income and Comprehensive Income	4
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	29
Part II - Other Information
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3.	Defaults Upon Senior Securities	30
Item 4.	Mine Safety Disclosures	30
Item 5.	Other Information	30
Item 6.	Exhibits	31
Signatures		32

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

NATIONAL RETAIL PROPERTIES, INC.

and SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per share data)


	March 31, 2021		December 31, 2020
ASSETS	(unaudited)
Real estate portfolio	$	7,249,613	$	7,212,655
Real estate held for sale	6,498		5,671
Cash and cash equivalents	311,231		267,236

Receivables, net of allowance of $846 and $835, respectively	4,611		4,338
Accrued rental income, net of allowance of $6,030 and $6,947, respectively	45,450		53,958
Debt costs, net of accumulated amortization of $17,764 and $17,294, respectively	1,492		1,917
Other assets	93,308		92,069
Total assets	$	7,712,203	$	7,637,844
LIABILITIES AND EQUITY
Liabilities:

Mortgages payable, including unamortized premium and net of unamortized debt costs	$	11,222	$	11,395
Notes payable, net of unamortized discount and unamortized debt costs	3,298,302		3,209,527
Accrued interest payable	44,668		19,401
Other liabilities	70,172		78,217
Total liabilities	3,424,364		3,318,540

Equity:
Stockholders’ equity:
Preferred stock, $0.01 par value. Authorized 15,000,000 shares

5.200% Series F, 138,000 shares issued and outstanding, at stated liquidation value of $2,500 per share	345,000		345,000
Common stock, $0.01 par value. Authorized 375,000,000 shares; 175,579,683 and 175,232,971 shares issued and outstanding, respectively	1,757		1,753
Capital in excess of par value	4,639,680		4,633,771
Accumulated deficit	(683,525)		(644,779)
Accumulated other comprehensive income (loss)	(15,077)		(16,445)
Total stockholders’ equity of NNN	4,287,835		4,319,300
Noncontrolling interests	4		4
Total equity	4,287,839		4,319,304
Total liabilities and equity	$	7,712,203	$	7,637,844

See accompanying notes to condensed consolidated financial statements.

NATIONAL RETAIL PROPERTIES, INC.

and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(dollars in thousands, except per share data)

(unaudited)


	Quarter Ended March 31,
	2021		2020
Revenues:
Rental income	$	179,198	$	174,547




Interest and other income from real estate transactions	580		516
	179,778		175,063
Operating expenses:
General and administrative	11,748		10,100
Real estate	7,725		7,635
Depreciation and amortization	49,980		49,188
Leasing transaction costs	38		36
Impairment losses – real estate, net of recoveries	2,131		5,513
	71,622		72,472
Gain on disposition of real estate	4,281		12,770
Earnings from operations	112,437		115,361
Other expenses (revenues):
Interest and other income	(65)		(164)
Interest expense	34,587		33,670
Loss on early extinguishment of debt	21,328		16,679
	55,850		50,185
Net earnings	56,587		65,176
Loss attributable to noncontrolling interests	—		2
Net earnings attributable to NNN	56,587		65,178

Series F preferred stock dividends	(4,485)		(4,485)

Net earnings attributable to common stockholders	$	52,102	$	60,693
Net earnings per share of common stock:
Basic	$	0.30	$	0.35
Diluted	$	0.30	$	0.35
Weighted average number of common shares outstanding:
Basic	174,589,300		171,039,017
Diluted	174,714,617		171,231,828
Other comprehensive income:
Net earnings attributable to NNN	$	56,587	$	65,178
Amortization of interest rate hedges	1,368		383
Fair value of forward starting swaps	—		(7,617)


Comprehensive income attributable to NNN	57,955		57,944
Comprehensive income attributable to noncontrolling interests	—		2
Total comprehensive income	$	57,955	$	57,946

See accompanying notes to condensed consolidated financial statements.

NATIONAL RETAIL PROPERTIES, INC.

and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

Quarter Ended March 31, 2021

(dollars in thousands, except per share data)

(Unaudited)


	Series F Preferred Stock		Common Stock		Capital in Excess of Par Value		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity of NNN		Noncontrolling Interests		Total Equity
Balances at December 31, 2020	$	345,000	$	1,753	$	4,633,771	$	(644,779)	$	(16,445)	$	4,319,300	$	4	$	4,319,304
Net earnings	—		—		—		56,587		—		56,587		—		56,587
Dividends declared and paid:
$0.3250 per depositary share of Series F preferred stock	—		—		—		(4,485)		—		(4,485)		—		(4,485)
$