NNN REIT INC.
NNN REIT INC.
- USD (-)
- 15 min delayed data - NYSE Stocks
Open: -
Change: -
Volume: -
Low: -
High: -
High / Low range: -
Type: Stocks
Ticker: NNN
ISIN:

Record Annual Results Announced By National Retail Properties, Inc.

  • 33
Record Annual Results Announced By National Retail Properties, Inc.

PR Newswire

ORLANDO, Fla., Feb. 13, 2018 /PRNewswire/ -- National Retail Properties, Inc. (NYSE: NNN), a real estate investment trust, today announced operating results for the quarter and year ended December 31, 2017.  Highlights include:

Operating Results:

  • Revenues and net earnings, FFO, Core FFO and AFFO available to common stockholders and diluted per share amounts:

Quarter Ended


Year Ended


December 31,


December 31,


2017


2016


2017


2016


(in thousands, except per share data)

Revenues

$

150,247



$

141,199



$

584,933



$

533,647










Net earnings available to common stockholders

$

63,586



$

54,044



$

217,193



$

200,877


Net earnings per common share

$

0.42



$

0.37



$

1.45



$

1.38










FFO available to common stockholders

$

95,267



$

88,717



$

359,179



$

330,544


FFO per common share

$

0.63



$

0.60



$

2.40



$

2.28










Core FFO available to common stockholders

$

95,459



$

88,717



$

376,991



$

340,643


Core FFO per common share

$

0.63



$

0.60



$

2.52



$

2.35










AFFO available to common stockholders

$

95,692



$

90,285



$

379,083



$

347,933


AFFO per common share

$

0.63



$

0.62



$

2.54



$

2.41


  • Portfolio occupancy was 99.1% at December 31, 2017 as compared to 98.8% at September 30, 2017, and 99.0% at December 31, 2016

2017 Highlights:

  • Increased annual net earnings per common share 5.1%
  • Increased annual FFO per common share 5.3%
  • Increased annual Core FFO per common share 7.2%
  • Increased annual AFFO per common share 5.4%
  • Dividend yield of 4.3% at December 31, 2017
  • Annual dividend per common share increased 4.3% to $1.86 marking the 28th consecutive year of annual dividend increases - making the company one of only three equity REITs and one of only 88 public companies with 28 or more consecutive annual dividend increases
  • Maintained high occupancy levels at 99.1% with a weighted average remaining lease term of 11.5 years

2017 Highlights (continued):

  • Invested $754.9 million in 276 properties with an aggregate gross leasable area of approximately 2,243,000 square feet at an initial cash yield of 6.9%
  • Sold 48 properties for $96.8 million, producing $36.3 million of gains on sale, net of noncontrolling interests, at a cap rate of 6.0%
  • Raised $647.9 million of new long-term capital at attractive pricing
    • Raised $253.2 million in net proceeds from the issuance of 6,051,062 common shares
    • Raised $394.7 million in net proceeds from the issuance of 3.50% senior unsecured notes due 2027
  • Paid off $250 million principal amount of 6.875% senior unsecured notes due 2017
  • Expanded unsecured bank credit facility to $900 million while extending the term to January 2022 and reducing the interest rate to LIBOR + 87.5 basis points
  • $779.5 million availability on bank credit facility at December 31, 2017
  • 99.7% of properties are unencumbered with secured mortgage debt
  • Total average annual shareholder return of over 11% for the past 5-, 10-, 15-, 20-, and 25-years exceeds industry averages

Selected Highlights for the quarter ended December 31, 2017:

  • Investments:
    • $257.4 million in property investments, including the acquisition of 94 properties with an aggregate gross leasable area of approximately 955,000 square feet at an initial cash yield of 6.9%
  • Dispositions:
    • Sold 17 properties with net proceeds of $41.0 million, producing $15.8 million of gains on sales at a cap rate of 5.7%
  • Long-term capital:
    • Raised $81.0 million in net proceeds from the issuance of 1,946,089 common shares

Jay Whitehurst, Chief Executive Officer, commented: "2017 was another very strong year for National Retail Properties in every aspect of our business.  Our healthy portfolio, our broad acquisition pipeline, and our strong balance sheet position us well to continue delivering consistent per share growth over a multi-year term and maintain our guidance of 4-5% growth in per share results for 2018."

National Retail Properties invests primarily in high-quality retail properties subject generally to long-term, net leases.  As of December 31, 2017, the company owned 2,764 properties in 48 states with a gross leasable area of approximately 29.1 million square feet and with a weighted average remaining lease term of 11.5 years.  For more information on the company, visit www.nnnreit.com.

Management will hold a conference call on February 13, 2018, at 10:30 a.m. ET to review these results.  The call can be accessed on the National Retail Properties web site live at http://www.nnnreit.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-K with the Commission for the quarter and year ended December 31, 2017.  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.

 

National Retail Properties, Inc.

(in thousands, except per share data)

(unaudited)



Quarter Ended


Year Ended



December 31,


December 31,



2017


2016


2017


2016

Income Statement Summary


















Revenues:









Rental and earned income


$

145,187



$

135,947



$

568,083



$

515,954


Real estate expense reimbursement from tenants


4,338



4,732



15,512



14,984


Interest and other income from real estate transactions


356



128



724



1,032


Interest income on commercial mortgage residual interests


366



392



614



1,677




150,247



141,199



584,933



533,647











Operating expenses:









General and administrative


8,712



9,408



33,805



36,508


Real estate


6,465



6,555



23,105



20,852


Depreciation and amortization


43,843



38,987



173,720



149,101


Impairment – commercial mortgage residual interests valuation








6,830


Impairment losses – real estate and other charges, net of 
     recoveries


7,708



338



8,955



11,287


Retirement severance costs


192





7,845






66,920



55,288



247,430



224,578











Other expenses (revenues):









Interest and other income


(83)



(62)



(322)



(170)


Interest expense


27,016



24,429



109,109



96,352


Real estate acquisition costs




42





563




26,933



24,409



108,787



96,745











Earnings before gain on disposition of real estate


56,394



61,502



228,716



212,324











Gain on disposition of real estate


15,791



4,624



36,655



27,182











Net earnings


72,185



66,126



265,371



239,506











Earnings attributable to noncontrolling interests


(17)



(34)



(398)



(6)











Net earnings attributable to NNN


72,168



66,092



264,973



239,500


Series D preferred stock dividends




(4,762)



(3,598)



(19,047)


Series E preferred stock dividends


(4,097)



(4,097)



(16,387)



(16,387)


Series F preferred stock dividends


(4,485)



(3,189)



(17,940)



(3,189)


Excess of redemption value over carrying value of Series D 
     preferred shares redeemed






(9,855)




Net earnings available to common stockholders


$

63,586



$

54,044



$

217,193



$

200,877




















Weighted average common shares outstanding:









Basic


151,791



146,266



149,111



144,176


Diluted


152,148



146,763



149,433



144,661











Net earnings per share available to common stockholders:









Basic


$

0.42



$

0.37



$

1.45



$

1.39


Diluted


$

0.42



$

0.37



$

1.45



$

1.38


 

 

National Retail Properties, Inc.

(in thousands, except per share data)

(unaudited)

 



Quarter Ended


Year Ended



December 31,


December 31,



2017


2016


2017


2016

Funds From Operations (FFO) Reconciliation:









Net earnings available to common stockholders


$

63,586



$

54,044



$

217,193



$

200,877


Real estate depreciation and amortization:


43,764



38,907



173,404



148,779


Gain on disposition of real estate, net of noncontrolling interests


(15,791)



(4,579)



(36,258)



(27,137)


Impairment losses – depreciable real estate, net of recoveries


3,708



345



4,840



8,025


Total FFO adjustments


31,681



34,673



141,986



129,667


FFO available to common stockholders


$

95,267



$

88,717



$

359,179



$

330,544











FFO per common share:









Basic


$

0.63



$

0.61



$

2.41



$

2.29


Diluted


$

0.63



$

0.60



$

2.40



$

2.28











Core Funds from Operations Reconciliation:









Net earnings available to common stockholders


$

63,586



$

54,044



$

217,193



$

200,877


Total FFO adjustments


31,681



34,673



141,986



129,667


FFO available to common stockholders


95,267



88,717



359,179



330,544











Excess of redemption value over carrying value of preferred

   share redemption






9,855




Impairment – commercial mortgage residual interests valuation








6,830


Impairment losses – non-depreciable real estate






112




Retirement severance costs


192





7,845




Bad debt expense – loans








3,269


Total Core FFO adjustments


192





17,812



10,099


Core FFO available to common stockholders


$

95,459



$

88,717



$

376,991



$

340,643











Core FFO per common share:









Basic


$

0.63



$

0.61



$

2.53



$

2.36


Diluted


$

0.63



$

0.60



$

2.52



$

2.35





















































































Quarter Ended


Year Ended



December 31,


December 31,



2017


2016


2017


2016

Adjusted Funds From Operations (AFFO) Reconciliation:









Net earnings available to common stockholders


$

63,586



$

54,044



$

217,193



$

200,877


Total FFO adjustments


31,681



34,673



141,986



129,667


Total Core FFO adjustments


192





17,812



10,099


Core FFO available to common stockholders


95,459



88,717



376,991



340,643











Straight-line accrued rent


(552)



(273)



(1,752)



(252)


Net capital lease rent adjustment


223



309



884



1,364


Below market rent amortization


(659)



(662)



(3,355)



(2,842)


Stock based compensation expense


1,962



2,689



8,750



10,758


Capitalized interest expense


(741)



(495)



(2,435)



(1,738)


Total AFFO adjustments


233



1,568



2,092



7,290


AFFO available to common stockholders


$

95,692



$

90,285



$

379,083



$

347,933











AFFO per common share:









Basic


$

0.63



$

0.62



$

2.54



$

2.41


Diluted


$

0.63



$

0.62



$

2.54



$

2.41











Other Information:









Percentage rent


$

715



$

776



$

1,700



$

1,735


Amortization of debt costs


$

891



$

810



$

3,502



$

3,086


Scheduled debt principal amortization (excluding maturities)


$

130



$

129



$

510



$

656


Non-real estate depreciation expense


$

82



$

83



$

327



$

333











2018 Earnings Guidance (Unchanged from November 2017):








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.



2018 Guidance

Net earnings per common share excluding any gains on sale of 
     real estate, impairment charges or retirement severance costs


$1.53 - $1.57 per share

Real estate depreciation and amortization per share


$1.07 per share

 Core FFO per share


$2.60 - $2.64 per share

  AFFO per share


$2.64 - $2.68 per share

  G&A expenses (excluding retirement severance costs)


$34 - $35 Million

  Real estate expenses, net of tenant reimbursements


$8 - $9 Million

  Acquisition volume


$500 - $600 Million

  Disposition volume


$80 - $120 Million

 

 

National Retail Properties, Inc.

(in thousands)

(unaudited)



December 31,
2017


December 31,
2016

Balance Sheet Summary










Assets:





Real estate:





Accounted for using the operating method, net of 
     accumulated depreciation and amortization


$

6,428,928



$

5,879,046


Accounted for using the direct financing method


9,650



11,230


Real estate held for sale


4,083



26,084


Cash and cash equivalents


1,364



294,540


Receivables, net of allowance


4,317



3,418


Accrued rental income, net of allowance


25,916



25,101


Debt costs, net of accumulated amortization


5,380



2,715


Other assets


80,896



92,017


Total assets


$

6,560,534



$

6,334,151







Liabilities:





Line of credit payable


$

120,500



$


Mortgages payable, including unamortized premium and net 
     of unamortized debt cost


13,300



13,878


Notes payable, net of unamortized discount and unamortized 
     debt costs


2,446,407



2,297,811


Accrued interest payable


20,311



19,665


Other liabilities


119,106



85,869


Total liabilities


2,719,624



2,417,223







Stockholders' equity of NNN


3,840,593



3,916,799


Noncontrolling interests


317



129


Total equity


3,840,910



3,916,928







Total liabilities and equity


$

6,560,534



$

6,334,151







Common shares outstanding


153,577



147,150







Gross leasable area, Property Portfolio (square feet)


29,093



27,204







 

 

National Retail Properties, Inc.

Debt Summary

As of December 31, 2017

(in thousands)

(unaudited)

Unsecured Debt


Principal


Principal,
Net of
Unamortized
Discount


Stated Rate


Effective
Rate


Maturity Date
















Line of credit payable


$

120,500



$

120,500



L + 87.5 bps


2.155%


January 2022












Unsecured notes payable:






















2021


300,000



298,209



5.500%


5.689%


July 2021

2022


325,000



322,400



3.800%


3.985%


October 2022

2023


350,000



348,520



3.300%


3.388%


April 2023

2024


350,000



349,516



3.900%


3.924%


June 2024

2025


400,000



399,214



4.000%


4.029%


November 2025

2026


350,000



346,481



3.600%


3.733%


December 2026

2027


400,000



398,412



3.500%


3.548%


October 2027

Total


2,475,000



2,462,752



















Total unsecured debt


$2,595,500



$

2,583,252



















Debt costs


(22,682)








Accumulated amortization


6,337








Debt costs, net of accumulated amortization


(16,345)








Notes payable, net of unamortized discount and
unamortized debt costs (1)


$

2,446,407



















(1) Unsecured notes payable have a weighted average interest rate of 4.0% and a weighted average maturity of 6.9 years

 

 

Mortgages Payable


Principal
Balance


Interest Rate


Maturity Date

Mortgage(1)


$

13,392



5.230%


July 2023


Debt costs


(147)






Accumulated amortization


55






Debt costs, net of accumulated amortization


(92)






Mortgages payable, including unamortized premium and
net of unamortized debt costs


$

13,300













(1) Includes unamortized premium







 

 

National Retail Properties, Inc.
Property Portfolio











Top 20 Lines of Trade










As of December 31,



Line of Trade


2017(1)


2016(2)

1.


Convenience stores


18.1

%


16.9

%

2.


Restaurants - full service


12.1

%


11.8

%

3.


Restaurants - limited service


7.6

%


7.5

%

4.


Automotive service


6.9

%


6.6

%

5.


Family entertainment centers


6.4

%


5.8

%

6.


Health and fitness


5.6

%


5.7

%

7.


Theaters


4.8

%


4.9

%

8.


Automotive parts


3.6

%


3.9

%

9.


Recreational vehicle dealers, parts and accessories


3.4

%


3.4

%

10.


Banks


2.5

%


3.1

%

11.


Medical service providers


2.4

%


2.4

%

12.


Wholesale clubs


2.2

%


2.4

%

13.


Equipment Rental


2.0

%


0.7

%

14.


Drug stores


1.9

%


2.1

%

15.


Furniture


1.9

%


1.9

%

16.


General Merchandise


1.8

%


1.8

%

17.


Home Improvement


1.8

%


1.8

%

18.


Consumer Electronics


1.8

%


2.0

%

19.


Travel Plazas


1.8

%


1.9

%

20.


Home furnishings


1.6

%


1.7

%



Other


9.8

%


11.7

%



Total


100.0

%


100.0

%


Top 10 States













State



% of Total(1)



State



% of Total(1)

1.

Texas



18.2

%


6.

Georgia



4.3

%

2.

Florida



8.7

%


7.

Tennessee



4.0

%

3.

Illinois



5.4

%


8.

Virginia



3.9

%

4.

Ohio



5.3

%


9.

Indiana



3.9

%

5.

North Carolina



5.1

%


10.

Alabama



3.1

%



























(1)

Based on the annualized base rent for all leases in place as of December 31, 2017.

(2)

Based on the annualized base rent for all leases in place as of December 31, 2016.

 

 

National Retail Properties, Inc.
Property Portfolio







Top Tenants (≥ 2.0%)










Properties


% of Total (1)


Sunoco


124


5.1%


Camping World


46


4.2%


Mister Car Wash


96


4.1%


LA Fitness


30


3.8%


AMC Theaters


20


3.4%


Couche-Tard (Pantry)


86


3.2%


7-Eleven


77


3.1%


GPM Investments (Convenience Stores)


103


2.8%


Bell American (Taco Bell)


115


2.6%


Chuck E. Cheese's


53


2.3%


Suntrust


101


2.3%


BJ's Wholesale Club


8


2.2%


Frisch's Restaurant


74


2.0%

 

 

Lease Expirations(2)






















% of
Total(1)


# of
Properties


Gross
Leasable
Area (3)




% of
Total(1)


# of
Properties


Gross
Leasable
Area (3)

2018


2.0%


61


787,000



2024


2.2%


50


833,000


2019


2.7%


75


1,081,000



2025


4.7%


128


1,123,000


2020


3.5%


127


1,559,000



2026


5.6%


184


1,854,000


2021


4.1%


121


1,320,000



2027


8.7%


197


2,766,000


2022


6.4%


125


1,697,000



2028


5.5%


171


1,326,000


2023


2.6%


99


1,143,000



Thereafter


52.0%


1,395


13,214,000



















(1)

Based on the annual base rent of $585,304,000, which is the annualized base rent for all leases in place as of
December 31, 2017.

(2)

As of December 31, 2017, the weighted average remaining lease term is 11.5 years.

(3)

Square feet.

 

   

Cision View original content:http://www.prnewswire.com/news-releases/record-annual-results-announced-by-national-retail-properties-inc-300597523.html

SOURCE National Retail Properties, Inc.

PR Newswire
PR Newswire

PR Newswire's news distribution, targeting, monitoring and marketing solutions help you connect and engage with target audiences across the globe.