Exhibit 99.1
NEWS RELEASE
| | |
| For information contact: | | |
| Kevin B. Habicht | | |
| Chief Financial Officer | | |
| (407) 265-7348 | | FOR IMMEDIATE RELEASE |
| | February 5, 2010 |
OPERATING RESULTS ANNOUNCED
BY NATIONAL RETAIL PROPERTIES, INC.
Orlando, Florida, February 5, 2010– National Retail Properties, Inc. (NYSE: NNN), a real estate investment trust, today announced operating results for the quarter and year ended December 31, 2009. NNN reported Recurring Funds From Operations (FFO) for the fourth quarter of $29.8 million or 36 cents per share compared to $32.6 million or 42 cents per share for the same period in 2008. For the year ended December 31, 2009, Recurring FFO was $129.0 million or $1.61 per share compared to $135.3 million or $1.82 per share for the prior year. Recurring FFO is FFO excluding gain and loss on sale of real estate in our Inventory Portfolio, gain on early debt extinguishment, restructuring charges, impairments, and loss on note foreclosure. NNN reported FFO available to common stockholders for the fourth quarter of $(12.4) million or (15) cents per share compared to $36.0 million or 46 cents per share for the same period in 2008. For the year ended December 31, 2009, FFO available to common stockholders was $90.1 million or $1.13 per share compared to $142.4 million or $1.91 per share for the prior year. Highlights include:
Operating Results:
| | • | | Revenues, net earnings, Recurring FFO and FFO available to common stockholders: |
| | | | | | | | | | | | | |
| | | Quarter Ended
December 31, | | Year Ended
December 31, |
| | | 2009 | | | 2008 | | 2009 | | 2008 |
| | | (in thousands, except per share data) |
Revenues | | $ | 57,750 | | | $ | 57,454 | | $ | 231,799 | | $ | 228,136 |
| | | | |
Net earnings (loss) available to common stockholders | | $ | (23,087 | ) | | $ | 25,186 | | $ | 48,025 | | $ | 110,368 |
Net earnings (loss) per common share (diluted) | | $ | (0.28 | ) | | $ | 0.32 | | $ | 0.60 | | $ | 1.48 |
| | | | |
Recurring FFO available to common stockholders | | $ | 29,797 | | | $ | 32,565 | | $ | 129,013 | | $ | 135,258 |
Recurring FFO per common share (diluted) | | $ | 0.36 | | | $ | 0.42 | | $ | 1.61 | | $ | 1.82 |
| | | | |
FFO available to common stockholders | | $ | (12,394 | ) | | $ | 35,964 | | $ | 90,087 | | $ | 142,355 |
FFO per common share (diluted) | | $ | (0.15 | ) | | $ | 0.46 | | $ | 1.13 | | $ | 1.91 |
| | • | | NNN paid cash dividends to its common stockholders of $0.375 per share during the quarter and $1.50 for the year ended December 31, 2009. |
| | • | | Annual dividends per share increased from $1.48 to $1.50 marking the 20th consecutive year of dividend increases - one of only 156 public companies with a dividend increase record of 20 or more years. |
| | |
450 S. Orange Ave., Suite 900 | Orlando, FL 32801 (800) NNN-REIT | www.nnnreit.com | |  |
| | • | | Investment Portfolio occupancy was 96.4% at December 31, 2009, as compared to 96.3% at September 30, 2009, and 96.7% at December 31, 2008. |
Investments and Dispositions for the quarter ended December 31, 2009:
| | • | | $7.0 million in the Investment Portfolio, including acquiring three properties with an aggregate 22,000 square feet of gross leasable area |
| | • | | Three Investment properties with an aggregate 127,000 square feet of gross leasable area, with net proceeds of $5.9 million, resulting in a gain of $759,000 |
| | • | | One Inventory property with net proceeds of $597,000 |
Investments and Dispositions for the year ended December 31, 2009:
| | • | | $36.3 million in the Investment Portfolio, including acquiring eight properties with an aggregate 290,000 square feet of gross leasable area |
| | • | | $2.6 million of development funding in the Inventory Portfolio |
| | • | | Nine Investment properties with an aggregate 234,000 square feet of gross leasable area, with net proceeds of $15.6 million, resulting in a gain of $2.4 million |
| | • | | Four Inventory properties with net proceeds of $6.3 million |
Capital transactions for the quarter ended December 31, 2009:
| | • | | Issued 518,569 shares of common stock generating $10,480,000 of net proceeds pursuant to the Dividend Reinvestment and Stock Purchase Plan |
Impairment charge summary for the quarter ended December 31, 2009:
During the quarter, NNN recorded charges totaling $42.2 million for impairments and losses primarily comprised of the following:
| | • | | $33.4 million related to 24 properties, including five undeveloped TRS land parcels |
| | • | | $8.2 million of goodwill previously recognized related to California auto service business valuation/note foreclosure |
| | • | | $0.5 million related to impairment of commercial mortgage residual interests |
Craig Macnab, Chief Executive Officer, commented: “NNN remains well positioned and our previously issued 2010 guidance is not impacted by the non-cash impairments taken this quarter. Our high quality net leased retail portfolio is 96.4% occupied and has remained at least 96% leased for the last seven years. Our balance sheet is extremely strong which will allow us to take advantage of acquisition opportunities as they become available. While the acquisition volume has not been robust, we are encouraged with the quality of the opportunities that we are seeing.”
National Retail Properties invests primarily in high-quality retail properties subject generally to long-term, net leases. As of December 31, 2009, the company owned 1,015 Investment Properties in 44 states with a gross leasable area of approximately 11.4 million square feet. For more information on the company, visit www.nnnreit.com.
Management will hold a conference call on February 5, 2010 at 10:30 a.m. EST to review these results. The call can be accessed on National Retail Properties, Inc. web site live athttp://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. 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 availability of capital, and the profitability of the company’s taxable subsidiary. Additional information concerning these and other factors that could cause actual results to differ materially from those forward-looking statements is contained from time to time in the company’s Securities and Exchange Commission (“SEC”) 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 SEC. Consequently, 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 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 SEC for the year ended December 31, 2009. 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) on the disposition of real estate held for investment, and the company’s share of these items from the company’s unconsolidated partnerships.
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.
For information purposes, we also provide FFO adjusted for certain non-recurring items such as gain and loss on sale of real estate in our Inventory Portfolio, gain on early debt extinguishment, restructuring charges, impairments, loss on note foreclosure and impairment charges which management defines as Recurring FFO. Although our calculation of Recurring FFO differs from FFO as defined by NAREIT and may not be comparable to that of other REITs, we believe it provides a meaningful supplemental measure of our operating performance. A reconciliation of FFO, as defined by NAREIT, to Recurring FFO is included in the financial information accompanying this release.
The company has determined that there are earnings from discontinued operations in each of its segments, real estate held for investment and real estate held for sale. All property dispositions from the company’s held for investment segment are classified as discontinued operations. In addition, certain properties in the company’s held for sale segment that have generated revenues before disposition are classified as discontinued operations. The results of operations for prior periods for these properties now classified as discontinued operations have been restated to reflect the results in earnings from discontinued operations for comparability purposes. These adjustments resulted in a decrease in the company’s reported total revenues and total and per share earnings from continuing operations and an increase in the company’s earnings from discontinued operations. However, the company’s total and per share FFO, Recurring FFO and net earnings available to common stockholders are not affected.
National Retail Properties, Inc.
(in thousands, except per share data)
(unaudited)
| | | | | | | | | | | | | | | | |
| | | Quarter Ended
December 31, | | | Year Ended
December 31, | |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
| | | | |
Income Statement Summary | | | | | | | | | | | | | | | | |
| | | | |
Revenues: | | | | | | | | | | | | | | | | |
Rental and earned income | | $ | 53,518 | | | $ | 52,886 | | | $ | 214,625 | | | $ | 210,684 | |
Real estate expense reimbursement from tenants | | | 2,104 | | | | 2,613 | | | | 8,387 | | | | 7,012 | |
Interest and other income from real estate transactions | | | 975 | | | | 970 | | | | 4,535 | | | | 5,804 | |
Interest income on commercial mortgage residual interests | | | 1,153 | | | | 985 | | | | 4,252 | | | | 4,636 | |
| | | | | | | | | | | | | | | | |
| | | 57,750 | | | | 57,454 | | | | 231,799 | | | | 228,136 | |
| | | | | | | | | | | | | | | | |
| | | | |
Disposition of real estate, Inventory Portfolio: | | | | | | | | | | | | | | | | |
Gross proceeds | | | 600 | | | | — | | | | 953 | | | | 4,900 | |
Costs | | | (599 | ) | | | — | | | | (916 | ) | | | (4,879 | ) |
| | | | | | | | | | | | | | | | |
Gain | | | 1 | | | | — | | | | 37 | | | | 21 | |
| | | | | | | | | | | | | | | | |
| | | | |
Retail operations: | | | | | | | | | | | | | | | | |
Revenues | | | 8,277 | | | | — | | | | 15,595 | | | | — | |
Operating expenses | | | (7,601 | ) | | | — | | | | (15,176 | ) | | | — | |
| | | | | | | | | | | | | | | | |
Net | | | 676 | | | | — | | | | 419 | | | | — | |
| | | | | | | | | | | | | | | | |
| | | | |
Operating expenses: | | | | | | | | | | | | | | | | |
General and administrative | | | 5,746 | | | | 6,025 | | | | 21,776 | | | | 24,878 | |
Real estate | | | 3,760 | | | | 3,307 | | | | 13,684 | | | | 10,007 | |
Depreciation and amortization | | | 12,569 | | | | 12,270 | | | | 46,769 | | | | 44,181 | |
Impairment - real estate | | | 27,050 | | | | — | | | | 28,114 | | | | 1,234 | |
Impairment - commercial mortgage residual interests valuation | | | 498 | | | | — | | | | 498 | | | | 758 | |
Restructuring costs | | | — | | | | — | | | | 731 | | | | — | |
| | | | | | | | | | | | | | | | |
| | | 49,623 | | | | 21,602 | | | | 111,572 | | | | 81,058 | |
| | | | | | | | | | | | | | | | |
| | | | |
Other expenses (revenues): | | | | | | | | | | | | | | | | |
Interest and other income | | | (350 | ) | | | (701 | ) | | | (1,375 | ) | | | (3,748 | ) |
Interest expense | | | 15,728 | | | | 15,167 | | | | 62,151 | | | | 63,964 | |
Loss on interest rate hedge | | | — | | | | — | | | | — | | | | 804 | |
| | | | | | | | | | | | | | | | |
| | | 15,378 | | | | 14,466 | | | | 60,776 | | | | 61,020 | |
| | | | | | | | | | | | | | | | |
| | | | |
Income tax benefit (expense) | | | (80 | ) | | | 1,301 | | | | 1,126 | | | | 7,178 | |
Equity in earnings of unconsolidated affiliate | | | 107 | | | | 83 | | | | 421 | | | | 364 | |
Loss on note receivable foreclosure/goodwill adjustment | | | (8,244 | ) | | | — | | | | (7,196 | ) | | | — | |
Gain on extinguishment of debt | | | — | | | | 4,961 | | | | 3,432 | | | | 4,961 | |
| | | | | | | | | | | | | | | | |
| | | | |
Earnings (loss) from continuing operations | | | (14,791 | ) | | | 27,731 | | | | 57,690 | | | | 98,582 | |
| | | | |
Earnings (loss) from discontinued operations: | | | | | | | | | | | | | | | | |
Real estate, Investment Portfolio | | | (3,565 | ) | | | (568 | ) | | | 260 | | | | 12,112 | |
Real estate, Inventory Portfolio, net of income tax expense | | | (1,945 | ) | | | (98 | ) | | | (1,551 | ) | | | 9,277 | |
| | | | | | | | | | | | | | | | |
| | | | |
Earnings (loss) including noncontrolling interests | | | (20,301 | ) | | | 27,065 | | | | 56,399 | | | | 119,971 | |
| | | | |
Loss (earnings) attributable to noncontrolling interests: | | | | | | | | | | | | | | | | |
Continuing operations | | | (1,040 | ) | | | (355 | ) | | | (1,542 | ) | | | 109 | |
Discontinued operations | | | (50 | ) | | | 172 | | | | (47 | ) | | | (2,927 | ) |
| | | | | | | | | | | | | | | | |
| | | (1,090 | ) | | | (183 | ) | | | (1,589 | ) | | | (2,818 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
Net earnings (loss) attributable to National Retail Properties, Inc. | | | (21,391 | ) | | | 26,882 | | | | 54,810 | | | | 117,153 | |
Series C preferred stock dividends | | | (1,696 | ) | | | (1,696 | ) | | | (6,785 | ) | | | (6,785 | ) |
| | | | | | | | | | | | | | | | |
Net earnings (loss) available to common stockholders - basic and diluted | | $ | (23,087 | ) | | $ | 25,186 | | | $ | 48,025 | | | $ | 110,368 | |
| | | | | | | | | | | | | | | | |
National Retail Properties, Inc.
(in thousands, except per share data)
(unaudited)
| | | | | | | | | | | | | | | |
| | | Quarter Ended
December 31, | | | Year Ended
December 31, |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 |
| | | | |
Weighted average common shares outstanding: | | | | | | | | | | | | | | | |
Basic | | | 81,668 | | | | 77,816 | | | | 79,846 | | | | 74,249 |
| | | | | | | | | | | | | | | |
Diluted | | | 81,786 | | | | 77,896 | | | | 79,953 | | | | 74,344 |
| | | | | | | | | | | | | | | |
| | | | |
Net earnings (loss) per share available to common stockholders: | | | | | | | | | | | | | | | |
Basic: | | | | | | | | | | | | | | | |
Continuing operations | | $ | (0.21 | ) | | $ | 0.33 | | | $ | 0.62 | | | $ | 1.23 |
Discontinued operations | | | (0.07 | ) | | | (0.01 | ) | | | (0.02 | ) | | | 0.25 |
| | | | | | | | | | | | | | | |
Net earnings | | $ | (0.28 | ) | | $ | 0.32 | | | $ | 0.60 | | | $ | 1.48 |
| | | | | | | | | | | | | | | |
| | | | |
Diluted: | | | | | | | | | | | | | | | |
Continuing operations | | $ | (0.21 | ) | | $ | 0.33 | | | $ | 0.61 | | | $ | 1.23 |
Discontinued operations | | | (0.07 | ) | | | (0.01 | ) | | | (0.01 | ) | | | 0.25 |
| | | | | | | | | | | | | | | |
Net earnings | | $ | (0.28 | ) | | $ | 0.32 | | | $ | 0.60 | | | $ | 1.48 |
| | | | | | | | | | | | | | | |
National Retail Properties, Inc.
(in thousands, except per share data)
(unaudited)
| | | | | | | | | | | | | | | | |
| | | Quarter Ended
December 31, | | | Year Ended
December 31, | |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
| | | | |
Reconciliation of net earnings (loss) available to common stockholders to FFO available to common stockholders: | | | | | | | | | | | | | | | | |
Net earnings (loss) available to common stockholders | | $ | (23,087 | ) | | $ | 25,186 | | | $ | 48,025 | | | $ | 110,368 | |
Real estate depreciation and amortization: | | | | | | | | | | | | | | | | |
Continuing operations | | | 11,350 | | | | 11,330 | | | | 43,067 | | | | 40,850 | |
Discontinued operations | | | 58 | | | | 154 | | | | 1,209 | | | | 940 | |
Joint venture real estate depreciation | | | 44 | | | | 44 | | | | 178 | | | | 177 | |
Gain on disposition of real estate - Investment Portfolio | | | (759 | ) | | | (750 | ) | | | (2,392 | ) | | | (9,980 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
FFO available to common stockholders - basic and diluted | | $ | (12,394 | ) | | $ | 35,964 | | | $ | 90,087 | | | $ | 142,355 | |
| | | | | | | | | | | | | | | | |
| | | | |
FFO available to common stockholders - basic and diluted | | $ | (12,394 | ) | | $ | 35,964 | | | $ | 90,087 | | | $ | 142,355 | |
| | | | |
Adjustments to reconcile to Recurring Funds From Operations: | | | | | | | | | | | | | | | | |
Real estate related impairments and loss | | | 42,192 | | | | 1,563 | | | | 42,208 | | | | 6,418 | |
Restructuring charges | | | — | | | | — | | | | 731 | | | | — | |
Loss on derivative instrument | | | — | | | | — | | | | — | | | | 804 | |
Gain on early debt extinguishment | | | — | | | | (4,961 | ) | | | (3,432 | ) | | | (4,961 | ) |
Gain on disposition of real estate - Inventory Portfolio - net of noncontrolling interest | | | (1 | ) | | | (1 | ) | | | (581 | ) | | | (9,358 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
Recurring Funds From Operations | | $ | 29,797 | | | $ | 32,565 | | | $ | 129,013 | | | $ | 135,258 | |
| | | | | | | | | | | | | | | | |
| | | | |
| Supplemental Information: | | | | | | | | | | | | | | | | |
| | | | |
Selected Non-Cash Income Statement Items: | | | | | | | | | | | | | | | | |
| | | | |
Straight-line accrued rent | | $ | (715 | ) | | $ | (107 | ) | | $ | (2,243 | ) | | $ | (1,085 | ) |
Net capital lease rent adjustment | | | 360 | | | | 305 | | | | 1,378 | | | | 1,204 | |
Above (below) market rent amortization | | | (93 | ) | | | (64 | ) | | | (1,074 | ) | | | (611 | ) |
Stock based compensation expense | | | 1,020 | | | | 911 | | | | 4,172 | | | | 3,299 | |
Capitalized interest expense | | | (163 | ) | | | (605 | ) | | | (1,243 | ) | | | (2,013 | ) |
Convertible debt interest expense | | | 1,476 | | | | 1,508 | | | | 5,809 | | | | 5,481 | |
Impairment - real estate | | | 33,450 | | | | 1,563 | | | | 34,514 | | | | 5,660 | |
Impairment - mortgage residual interests | | | 498 | | | | — | | | | 498 | | | | 758 | |
Loss on note receivable foreclosure/goodwill adjustment | | | 8,244 | | | | — | | | | 7,196 | | | | — | |
| | | | | | | | | | | | | | | | |
Total | | $ | 44,077 | | | $ | 3,511 | | | $ | 49,007 | | | $ | 12,693 | |
| | | | | | | | | | | | | | | | |
| | | | |
Other Information: | | | | | | | | | | | | | | | | |
| | | | |
Percentage rent | | $ | 757 | | | $ | 705 | | | $ | 1,340 | | | $ | 1,268 | |
| | | | | | | | | | | | | | | | |
| | | | |
Net Inventory Portfolio gain on disposition (TRS) | | $ | 1 | | | $ | 1 | | | $ | 581 | | | $ | 9,358 | |
| | | | | | | | | | | | | | | | |
| | | | |
Amortization of debt costs | | $ | 1,152 | | | $ | 860 | | | $ | 3,408 | | | $ | 3,024 | |
| | | | | | | | | | | | | | | | |
| | | | |
Scheduled debt principal amortization (excluding maturities) | | $ | 258 | | | $ | 308 | | | $ | 1,000 | | | $ | 1,190 | |
| | | | | | | | | | | | | | | | |
| | | | |
Non-real estate depreciation expense | | $ | 74 | | | $ | 79 | | | $ | 301 | | | $ | 279 | |
| | | | | | | | | | | | | | | | |
National Retail Properties, Inc.
(in thousands)
(unaudited)
Earnings from Discontinued Operations:The company has classified its investment assets sold and leasehold interests expired as discontinued operations. In addition, the company has classified any investment asset or revenue generating inventory asset that was held for sale at December 31, 2009, as discontinued operations. The following is a summary of earnings from discontinued operations.
| | | | | | | | | | | | | | | | |
| | | Quarter Ended
December 31, | | | Year Ended
December 31, | |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
| | | | |
Earnings (loss) from Discontinued Operations - Investment Portfolio: | | | | | | | | | | | | | | | | |
Revenues: | | | | | | | | | | | | | | | | |
Rental and earned income | | $ | 15 | | | $ | 518 | | | $ | 3,826 | | | $ | 4,638 | |
Real estate expense reimbursement from tenants | | | 62 | | | | 61 | | | | 182 | | | | 176 | |
Interest and other income from real estate transactions | | | 115 | | | | 8 | | | | 121 | | | | 434 | |
| | | | | | | | | | | | | | | | |
| | | 192 | | | | 587 | | | | 4,129 | | | | 5,248 | |
| | | | | | | | | | | | | | | | |
| | | | |
Expenses: | | | | | | | | | | | | | | | | |
General and administrative | | | 4 | | | | 4 | | | | 4 | | | | (74 | ) |
Real estate | | | 148 | | | | 184 | | | | 742 | | | | 520 | |
Depreciation and amortization | | | 58 | | | | 154 | | | | 1,209 | | | | 940 | |
Impairment - real estate | | | 4,306 | | | | 1,563 | | | | 4,306 | | | | 1,730 | |
| | | | | | | | | | | | | | | | |
| | | 4,516 | | | | 1,905 | | | | 6,261 | | | | 3,116 | |
| | | | | | | | | | | | | | | | |
| | | | |
Gain on disposition of real estate | | | 759 | | | | 750 | | | | 2,392 | | | | 9,980 | |
| | | | | | | | | | | | | | | | |
| | | | |
Earnings (loss) from discontinued operations attributable to National Retail Properties, Inc. | | $ | (3,565 | ) | | $ | (568 | ) | | $ | 260 | | | $ | 12,112 | |
| | | | | | | | | | | | | | | | |
| | | | |
Earnings (loss) from Discontinued Operations - Inventory Portfolio: | | | | | | | | | | | | | | | | |
Revenues: | | | | | | | | | | | | | | | | |
Rental income | | $ | 1,219 | | | $ | 1,528 | | | $ | 4,975 | | | $ | 8,785 | |
Real estate expense reimbursement from tenants | | | 206 | | | | 17 | | | | 1,513 | | | | 867 | |
Interest and other income from real estate transactions | | | 37 | | | | 28 | | | | 141 | | | | 568 | |
| | | | | | | | | | | | | | | | |
| | | 1,462 | | | | 1,573 | | | | 6,629 | | | | 10,220 | |
| | | | | | | | | | | | | | | | |
| | | | |
Disposition of real estate: | | | | | | | | | | | | | | | | |
Gross proceeds | | | — | | | | 615 | | | | 5,402 | | | | 151,713 | |
Costs | | | — | | | | (614 | ) | | | (4,844 | ) | | | (139,069 | ) |
| | | | | | | | | | | | | | | | |
Gain | | | — | | | | 1 | | | | 558 | | | | 12,644 | |
| | | | | | | | | | | | | | | | |
| | | | |
Expenses: | | | | | | | | | | | | | | | | |
General and administrative | | | 30 | | | | (40 | ) | | | 116 | | | | 22 | |
Real estate | | | 232 | | | | 227 | | | | 2,169 | | | | 1,468 | |
Depreciation and amortization | | | 64 | | | | 61 | | | | 323 | | | | 226 | |
Impairment - real estate | | | 2,094 | | | | — | | | | 2,094 | | | | 2,696 | |
Interest | | | 984 | | | | 1,378 | | | | 3,790 | | | | 5,290 | |
| | | | | | | | | | | | | | | | |
| | | 3,404 | | | | 1,626 | | | | 8,492 | | | | 9,702 | |
| | | | | | | | | | | | | | | | |
| | | | |
Income tax expense | | | 3 | | | | 46 | | | | 246 | | | | 3,885 | |
| | | | | | | | | | | | | | | | |
| | | | |
Earnings (loss) from discontinued operations including noncontrolling interests | | | (1,945 | ) | | | (98 | ) | | | (1,551 | ) | | | 9,277 | |
Loss (earnings) attributable to noncontrolling interests | | | (50 | ) | | | 172 | | | | (47 | ) | | | (2,927 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
Earnings (loss) from discontinued operations attributable to National Retail Properties, Inc. | | $ | (1,995 | ) | | $ | 74 | | | $ | (1,598 | ) | | $ | 6,350 | |
| | | | | | | | | | | | | | | | |
National Retail Properties, Inc.
(in thousands)
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended December 31, | | Year Ended December 31, | |
| | | 2009 | | 2008 | | 2009 | | | 2008 | |
| | | # of
Properties | | Gain | | # of
Properties | | Gain | | # of
Properties | | Gain | | | # of
Properties | | Gain | |
Real Estate Disposition Summary: | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Reconciliation of gain on disposition between continuing and discontinued operations: | | | | | | | | | | | | | | | | | | | | | | |
Continuing operations | | 1 | | $ | 1 | | — | | $ | — | | 2 | | $ | 37 | | | 1 | | $ | 21 | |
Discontinued operations: | | | | | | | | | | | | | | | | | | | | | | |
Investment Portfolio | | 3 | | | 759 | | 2 | | | 750 | | 9 | | | 2,392 | | | 19 | | | 9,980 | |
Inventory Portfolio | | — | | | — | | 1 | | | 1 | | 2 | | | 558 | | | 24 | | | 12,644 | |
Noncontrolling interest, Inventory Portfolio | | — | | | — | | — | | | — | | — | | | (14 | ) | | — | | | (3,307 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
| | 4 | | $ | 760 | | 3 | | $ | 751 | | 13 | | $ | 2,973 | | | 44 | | $ | 19,338 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Reconciliation of gain on disposition by type: | | | | | | | | | | | | | | | | | | | | | | |
Inventory Portfolio: | | | | | | | | | | | | | | | | | | | | | | |
Development | | 1 | | $ | 1 | | 1 | | $ | 1 | | 3 | | $ | 583 | | | 6 | | $ | 8,058 | |
Exchange | | — | | | — | | — | | | — | | 1 | | | 12 | | | 19 | | | 4,607 | |
Noncontrolling interest, Development | | — | | | — | | — | | | — | | — | | | (14 | ) | | — | | | (3,307 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Total Inventory gain (TRS) | | 1 | | | 1 | | 1 | | | 1 | | 4 | | | 581 | | | 25 | | | 9,358 | |
| | | | | | | | |
Investment Portfolio | | 3 | | | 759 | | 2 | | | 750 | | 9 | | | 2,392 | | | 19 | | | 9,980 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
| | 4 | | $ | 760 | | 3 | | $ | 751 | | 13 | | $ | 2,973 | | | 44 | | $ | 19,338 | |
| | | | | | | | | | | | | | | | | | | | | | |
National Retail Properties, Inc.
(in thousands)
(unaudited)
| | | | | | |
| | | December 31,
2009 | | December 31,
2008 |
Balance Sheet Summary | | | | | | |
| | |
Assets: | | | | | | |
Cash and cash equivalents | | $ | 15,225 | | $ | 2,626 |
Receivables, net of allowance | | | 1,946 | | | 3,612 |
Investment in unconsolidated affiliate | | | 4,703 | | | 4,927 |
Mortgages, notes and accrued interest receivable | | | 41,976 | | | 60,472 |
Real estate, Investment Portfolio: | | | | | | |
Accounted for using the operating method, net of accumulated depreciation and amortization | | | 2,329,827 | | | 2,373,878 |
Accounted for using the direct financing method | | | 31,317 | | | 31,240 |
Real estate, Inventory Portfolio, held for sale | | | 72,423 | | | 85,122 |
Commercial mortgage residual interests | | | 20,153 | | | 22,000 |
Accrued rental income, net of allowance | | | 25,745 | | | 23,972 |
Other assets | | | 47,647 | | | 41,622 |
| | | | | | |
| | |
Total assets | | $ | 2,590,962 | | $ | 2,649,471 |
| | | | | | |
| | |
Liabilities: | | | | | | |
Line of credit payable | | $ | — | | $ | 26,500 |
Mortgages payable | | | 25,290 | | | 26,290 |
Notes payable - convertible | | | 343,380 | | | 356,122 |
Notes payable, net of unamortized discount | | | 618,676 | | | 618,479 |
Other liabilities | | | 36,754 | | | 53,134 |
| | | | | | |
Total liabilities | | | 1,024,100 | | | 1,080,525 |
| | |
Stockholders’ equity of National Retail Properties, Inc. | | | 1,564,240 | | | 1,566,860 |
Noncontrolling interests | | | 2,622 | | | 2,086 |
| | | | | | |
Total equity | | | 1,566,862 | | | 1,568,946 |
| | |
Total liabilities and equity | | $ | 2,590,962 | | $ | 2,649,471 |
| | | | | | |
| | |
Common shares outstanding | | | 82,428 | | | 78,340 |
| | | | | | |
| | |
Gross leasable area, Investment Portfolio (square feet) | | | 11,373 | | | 11,251 |
| | | | | | |
Orange Avenue Mortgage Investments, Inc.
(in thousands)
(unaudited)
In May 2005, the company acquired a 78.9 percent equity investment of OAMI for $9.4 million. The company’s 78.9 percent share of OAMI’s net cash flow has totaled over $28.9 million since May 2005. The following summary represents the balances related to OAMI included in the company’s Balance Sheet and Income Statement Summary:
| | | | | | |
| | | December 31,
2009 | | December 31,
2008 |
| | |
Assets: | | | | | | |
Cash and cash equivalents | | $ | 1,088 | | $ | 405 |
Receivables and other assets | | | 43 | | | 39 |
Commercial mortgage residual interests | | | 20,153 | | | 22,000 |
| | | | | | |
| | $ | 21,284 | | $ | 22,444 |
| | | | | | |
| | |
Liabilities: | | | | | | |
Income tax liability | | $ | 4,732 | | $ | 5,195 |
Other liabilities | | | 49 | | | 49 |
| | | | | | |
| | $ | 4,781 | | $ | 5,244 |
| | | | | | |
| | |
Noncontrolling interests | | $ | 1,579 | | $ | 1,449 |
| | | | | | |
| | | | | | | | | | | | | | | | |
| | | Quarter Ended
December 31, | | | Year Ended
December 31, | |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
| | | | |
Revenues: | | | | | | | | | | | | | | | | |
Interest income on commercial mortgage residual interests | | $ | 1,153 | | | $ | 985 | | | $ | 4,252 | | | $ | 4,636 | |
Interest and other income | | | — | | | | 1 | | | | 45 | | | | 218 | |
| | | | | | | | | | | | | | | | |
| | | 1,153 | | | | 986 | | | | 4,297 | | | | 4,854 | |
| | | | | | | | | | | | | | | | |
| | | | |
Expenses: | | | | | | | | | | | | | | | | |
General and administrative | | | 58 | | | | 62 | | | | 270 | | | | 267 | |
Amortization | | | — | | | | — | | | | — | | | | 35 | |
Impairment - commercial mortgage residual interests valuation | | | 498 | | | | — | | | | 498 | | | | 758 | |
Interest | | | — | | | | — | | | | — | | | | 200 | |
| | | | | | | | | | | | | | | | |
| | | 556 | | | | 62 | | | | 768 | | | | 1,260 | |
| | | | | | | | | | | | | | | | |
| | | | |
Income tax benefit | | | 131 | | | | 325 | | | | 463 | | | | 1,572 | |
| | | | | | | | | | | | | | | | |
| | | | |
Earnings including noncontrolling interests | | | 728 | | | | 1,249 | | | | 3,992 | | | | 5,166 | |
Earnings attributable to noncontrolling interests | | | (181 | ) | | | (143 | ) | | | (517 | ) | | | (650 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
Net earnings attributable to National Retail Properties, Inc. | | $ | 547 | | | $ | 1,106 | | | $ | 3,475 | | | $ | 4,516 | |
| | | | | | | | | | | | | | | | |
NNN Retail Properties Fund I LLC
(in thousands)
(unaudited)
In September 2007, the company entered into a joint venture, NNN Retail Properties Fund I LLC, with an affiliate of Crow Holdings Realty Partners IV, L.P. The company owns a 15 percent equity interest, and the following summary represents the Balance Sheet and Income Statement Summary for the joint venture. The company’s investment in the joint venture is included in the company’s Balance Sheet Summary under “Investment in unconsolidated affiliate.”
| | | | | | |
| | | December 31,
2009 | | December 31,
2008 |
| | |
Assets: | | | | | | |
Cash and cash equivalents | | $ | 829 | | $ | 833 |
Receivables | | | 200 | | | 202 |
Real estate | | | 73,279 | | | 74,463 |
Other assets | | | 838 | | | 1,135 |
| | | | | | |
| | $ | 75,146 | | $ | 76,633 |
| | | | | | |
| | |
Liabilities: | | | | | | |
Notes payable | | $ | 43,600 | | $ | 43,600 |
Other liabilities | | | 1,427 | | | 1,677 |
| | | | | | |
Total liabilities | | | 45,027 | | | 45,277 |
| | | | | | |
| | |
Members’ equity | | | 30,119 | | | 31,356 |
| | | | | | |
| | |
Total liabilities and equity | | $ | 75,146 | | $ | 76,633 |
| | | | | | |
| | | | | | | | | | | | |
| | | Quarter Ended
December 31, | | Year Ended
December 31, |
| | | 2009 | | 2008 | | 2009 | | 2008 |
| | | | |
Revenues: | | | | | | | | | | | | |
Rental income | | $ | 1,565 | | $ | 1,565 | | $ | 6,261 | | $ | 6,192 |
| | | | | | | | | | | | |
| | | | |
Expenses: | | | | | | | | | | | | |
General and administrative | | | 72 | | | 142 | | | 328 | | | 347 |
Real estate | | | 4 | | | 47 | | | 19 | | | 61 |
Depreciation and amortization | | | 369 | | | 368 | | | 1,496 | | | 1,445 |
Interest | | | 472 | | | 517 | | | 1,861 | | | 2,164 |
| | | | | | | | | | | | |
| | | 917 | | | 1,074 | | | 3,704 | | | 4,017 |
| | | | | | | | | | | | |
| | | | |
Net earnings | | $ | 648 | | $ | 491 | | $ | 2,557 | | $ | 2,175 |
| | | | | | | | | | | | |
National Retail Properties, Inc.
Investment Portfolio
Top 20 Lines of Trade
| | | | | | | | |
| | | | | As of December 31 | |
| | | Line of Trade | | 2009 (1) | | | 2008 (2) | |
| 1. | | Convenience stores | | 26.7 | % | | 25.7 | % |
| 2. | | Restaurants - full service | | 9.2 | % | | 8.7 | % |
| 3. | | Automotive parts | | 6.8 | % | | 5.1 | % |
| 4. | | Theaters | | 6.3 | % | | 6.1 | % |
| 5. | | Automotive service | | 5.7 | % | | 8.9 | % |
| 6. | | Books | | 4.1 | % | | 4.0 | % |
| 7. | | Drug stores | | 4.1 | % | | 4.0 | % |
| 8. | | Restaurants - limited service | | 3.5 | % | | 3.3 | % |
| 9. | | Sporting goods | | 3.2 | % | | 3.3 | % |
| 10. | | Grocery | | 2.9 | % | | 2.6 | % |
| 11. | | Consumer electronics | | 2.7 | % | | 3.2 | % |
| 12. | | Office supplies | | 2.6 | % | | 2.5 | % |
| 13. | | Travel plazas | | 2.5 | % | | 2.4 | % |
| 14. | | Furniture | | 2.5 | % | | 2.5 | % |
| 15. | | Beer, wine and liquor | | 1.8 | % | | 1.7 | % |
| 16. | | Health and fitness | | 1.6 | % | | 0.1 | % |
| 17. | | General merchandise | | 1.3 | % | | 1.3 | % |
| 18. | | Auto dealerships | | 1.3 | % | | 1.3 | % |
| 19. | | Equipment rental | | 1.2 | % | | 1.2 | % |
| 20. | | Financial services | | 1.2 | % | | 1.2 | % |
| | Other | | 8.8 | % | | 10.9 | % |
| | | | | | | | |
| | Total | | 100.0 | % | | 100.0 | % |
| | | | | | | | |
Top 10 States
| | | | | | | | | | | | | | |
| | | State | | % of Total(1) | | | | | | | State | | % of Total(1) | |
1. | | Texas | | 20.1 | % | | | | 6. | | Indiana | | 4.4 | % |
2. | | Florida | | 10.0 | % | | | | 7. | | Pennsylvania | | 4.3 | % |
3. | | Illinois | | 7.0 | % | | | | 8. | | Ohio | | 3.8 | % |
4. | | North Carolina | | 6.3 | % | | | | 9. | | Tennessee | | 3.1 | % |
5. | | Georgia | | 5.5 | % | | | | 10. | | Arizona | | 2.8 | % |
| (1) | Based on annual base rent of $211,993,000, which is the annualized base rent for all leases in place as of December 31, 2009. |
| (2) | Based on annual base rent of $219,326,000, which is the annualized base rent for all leases in place as of December 31, 2008. |
National Retail Properties, Inc.
Investment Portfolio
Top Tenants
| | | | | |
| | | Properties | | % of Total(1) | |
Pantry | | 96 | | 9.1 | % |
Susser | | 86 | | 8.7 | % |
Kerasotes Theatres | | 16 | | 6.3 | % |
Road Ranger | | 34 | | 4.0 | % |
Mister Car Wash | | 40 | | 3.7 | % |
Pull-A-Part | | 20 | | 3.6 | % |
Pep Boys | | 16 | | 3.1 | % |
Best Buy | | 7 | | 2.6 | % |
Barnes & Noble | | 9 | | 2.5 | % |
Logans Roadhouse | | 17 | | 2.3 | % |
CVS | | 16 | | 2.0 | % |
OfficeMax | | 12 | | 2.0 | % |
Lease Expirations
| | | | | | | | | | | | | | | | |
| | | % of
Total(1) | | | # of
Properties | | Gross Leasable
Area(2) | | | | % of
Total(1) | | | # of
Properties | | Gross Leasable
Area(2) |
| 2010 | | 2.3 | % | | 36 | | 408,000 | | 2016 | | 1.7 | % | | 13 | | 240,000 |
| 2011 | | 2.1 | % | | 21 | | 389,000 | | 2017 | | 4.3 | % | | 27 | | 676,000 |
| 2012 | | 3.3 | % | | 34 | | 484,000 | | 2018 | | 2.9 | % | | 24 | | 345,000 |
| 2013 | | 4.7 | % | | 39 | | 849,000 | | 2019 | | 4.3 | % | | 42 | | 632,000 |
| 2014 | | 5.0 | % | | 44 | | 622,000 | | 2020 | | 3.0 | % | | 40 | | 336,000 |
| 2015 | | 3.1 | % | | 22 | | 539,000 | | Thereafter | | 63.3 | % | | 636 | | 4,988,000 |
| (1) | Based on annual base rent of $211,993,000, which is the annualized base rent for all leases in place as of December 31, 2009. |
