Exhibit 99.1
NEWS RELEASE
| | |
| For information contact: | | |
| Kevin B. Habicht | | |
| Chief Financial Officer | | |
| (407) 265-7348 | | FOR IMMEDIATE RELEASE |
| | August 4, 2010 |
SECOND QUARTER 2010 OPERATING RESULTS
ANNOUNCED BY NATIONAL RETAIL PROPERTIES, INC.
Orlando, Florida, August 4, 2010– National Retail Properties, Inc. (NYSE: NNN), a real estate investment trust, today announced operating results for the quarter and six months ended June 30, 2010. Highlights include:
Operating Results:
| | • | | Revenues, net earnings, FFO and AFFO available to common stockholders: |
| | | | | | | | | | | | |
| | | Quarter Ended
June 30, | | Six Months Ended
June 30, |
| | | 2010 | | 2009 | | 2010 | | 2009 |
| | | (in thousands, except per share data) |
| | | | |
Revenues | | $ | 56,496 | | $ | 58,185 | | $ | 113,076 | | $ | 116,328 |
| | | | |
Net earnings available to common stockholders | | $ | 19,510 | | $ | 16,394 | | $ | 34,179 | | $ | 41,501 |
Net earnings per common share (diluted) | | $ | 0.23 | | $ | 0.20 | | $ | 0.41 | | $ | 0.52 |
| | | | |
FFO available to common stockholders | | $ | 29,444 | | $ | 27,126 | | $ | 54,704 | | $ | 61,636 |
FFO per common share (diluted) | | $ | 0.36 | | $ | 0.34 | | $ | 0.66 | | $ | 0.78 |
| | | | |
AFFO available to common stockholders | | $ | 32,830 | | $ | 36,682 | | $ | 64,273 | | $ | 73,509 |
AFFO per common share (diluted) | | $ | 0.40 | | $ | 0.46 | | $ | 0.78 | | $ | 0.93 |
| | • | | NNN paid cash dividends to its common stockholders of $0.375 per share during the quarter and $0.75 for the six months ended June 30, 2010. |
| | • | | Investment Portfolio occupancy was 97.3% at June 30, 2010, as compared to 96.4% at December 31, 2009, and 96.7% at June 30, 2009. |
Investments and Dispositions for the quarter ended June 30, 2010:
| | • | | $26.2 million in the Investment Portfolio, including acquiring six properties with an aggregate 33,000 square feet of gross leasable area |
| | • | | Six Investment properties with an aggregate 57,000 square feet of gross leasable area, with net proceeds of $4.6 million, resulting in a gain of $355,000 |
| | • | | Three Inventory properties with net proceeds of $42.0 million |
| | |
450 S. Orange Ave., Suite 900 | Orlando, FL 32801 (800) NNN-REIT | www.nnnreit.com | |  |
| |
Investments and Dispositions for the six months ended June 30, 2010:
| | • | | $38.6 million in the Investment Portfolio, including acquiring 10 properties with an aggregate 97,000 square feet of gross leasable area |
| | • | | 11 Investment properties with an aggregate 71,000 square feet of gross leasable area, with net proceeds of $11.4 million, resulting in a gain of $377,000 |
| | • | | Four Inventory properties with net proceeds of $42.8 million |
Capital transactions for the quarter ended June 30, 2010:
| | • | | Issued 58,215 shares of common stock generating $1,310,000 of net proceeds pursuant to the Dividend Reinvestment and Stock Purchase Plan |
National Retail Properties also announced revised 2010 FFO guidance of $1.42 to $1.47 per share before any impairment expense and estimated AFFO to be $1.56 to $1.61 per share. The change in guidance is primarily related to projected timing of property acquisitions. This guidance equates to net earnings before any gains or losses from the sale of real estate of $0.92 to $0.97 per share plus $0.50 per share of expected real estate depreciation and amortization. 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.
Craig Macnab, Chief Executive Officer, commented: “Second quarter results were in line with our expectations and do not include the high level of lease termination fee income and gains from debt repurchases reported in 2009, which totaled $5.0 million for the second quarter of 2009 and $11.1 million for the first half of 2009. The portfolio and balance sheet remain in good shape and we were pleased to recently announce an increase in our common dividend which puts us on track for 21 consecutive years of increases in our annual dividend. While the acquisition pace for 2010 started slower than originally anticipated, the visibility has improved for the remainder of the year which will have modest impact on 2010’s operating results, but will position us well for 2011 FFO per share growth.”
National Retail Properties invests primarily in high-quality retail properties subject generally to long-term, net leases. As of June 30, 2010, the company owned 1,014 Investment Properties in 43 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 August 4, 2010, at 10:30 a.m. ET to review these results. The call can be accessed on the National Retail Properties 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 for the quarter ended June 30, 2010. 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.
2
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.
Adjusted Funds From Operations (“AFFO”) is a non-GAAP financial measure of operating performance used by many companies in the REIT industry. AFFO further adjusts FFO for certain non-cash items that reduce or increase net income in accordance with GAAP. Management considers AFFO a useful supplemental measure of the company’s performance. The company’s computation of AFFO may differ from the calculation used by other equity REITs and therefore may not be comparable to such other REITs. A reconciliation of net earnings to AFFO is included in 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 and net earnings available to common stockholders are not affected.
3
National Retail Properties, Inc.
(in thousands, except per share data)
(unaudited)
| | | | | | | | | | | | | | | | |
| | | Quarter Ended June 30, | | | Six Months Ended June 30, | |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
Income Statement Summary | | | | | | | | | | | | | | | | |
| | | | |
Revenues: | | | | | | | | | | | | | | | | |
Rental and earned income | | $ | 53,062 | | | $ | 53,799 | | | $ | 105,871 | | | $ | 107,414 | |
Real estate expense reimbursement from tenants | | | 1,598 | | | | 2,061 | | | | 3,370 | | | | 4,403 | |
Interest and other income from real estate transactions | | | 978 | | | | 1,325 | | | | 1,928 | | | | 2,458 | |
Interest income on commercial mortgage residual interests | | | 858 | | | | 1,000 | | | | 1,907 | | | | 2,053 | |
| | | | | | | | | | | | | | | | |
| | | 56,496 | | | | 58,185 | | | | 113,076 | | | | 116,328 | |
| | | | | | | | | | | | | | | | |
Disposition of real estate, Inventory Portfolio: | | | | | | | | | | | | | | | | |
Gross proceeds | | | 5,600 | | | | — | | | | 5,600 | | | | — | |
Costs | | | (4,959 | ) | | | — | | | | (4,959 | ) | | | — | |
| | | | | | | | | | | | | | | | |
Gain | | | 641 | | | | — | | | | 641 | | | | — | |
| | | | | | | | | | | | | | | | |
| | | | |
Retail operations: | | | | | | | | | | | | | | | | |
Revenues | | | 8,696 | | | | — | | | | 15,233 | | | | — | |
Operating expenses | | | (8,265 | ) | | | (25 | ) | | | (14,935 | ) | | | (25 | ) |
| | | | | | | | | | | | | | | | |
Net | | | 431 | | | | (25 | ) | | | 298 | | | | (25 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
Operating expenses: | | | | | | | | | | | | | | | | |
General and administrative | | | 5,775 | | | | 5,784 | | | | 11,386 | | | | 11,090 | |
Real estate | | | 3,156 | | | | 3,082 | | | | 6,701 | | | | 6,590 | |
Depreciation and amortization | | | 11,961 | | | | 11,169 | | | | 23,803 | | | | 22,860 | |
Impairment - real state | | | — | | | | 1,064 | | | | — | | | | 1,064 | |
Impairment - commercial mortgage residual interests valuation adjustment | | | 165 | | | | — | | | | 3,848 | | | | — | |
Restructuring charges | | | — | | | | — | | | | — | | | | 731 | |
| | | | | | | | | | | | | | | | |
| | | 21,057 | | | | 21,099 | | | | 45,738 | | | | 42,335 | |
| | | | | | | | | | | | | | | | |
Other expenses (revenues): | | | | | | | | | | | | | | | | |
Interest and other income | | | (586 | ) | | | (416 | ) | | | (838 | ) | | | (763 | ) |
Interest expense | | | 16,034 | | | | 15,436 | | | | 32,024 | | | | 30,866 | |
| | | | | | | | | | | | | | | | |
| | | 15,448 | | | | 15,020 | | | | 31,186 | | | | 30,103 | |
| | | | | | | | | | | | | | | | |
| | | | |
Income tax (expense) benefit | | | (231 | ) | | | 424 | | | | (326 | ) | | | 848 | |
Equity in earnings of unconsolidated affiliate | | | 108 | | | | 107 | | | | 214 | | | | 209 | |
Gain (loss) on note receivable and property foreclosure | | | 51 | | | | (7,816 | ) | | | 67 | | | | (7,816 | ) |
Gain on extinguishment of debt | | | — | | | | 1,014 | | | | — | | | | 3,432 | |
| | | | | | | | | | | | | | | | |
| | | | |
Earnings from continuing operations | | | 20,991 | | | | 15,770 | | | | 37,046 | | | | 40,538 | |
| | | | |
Earnings from discontinued operations: | | | | | | | | | | | | | | | | |
Real estate, Investment Portfolio, net of income tax expense | | | 530 | | | | 2,473 | | | | 642 | | | | 4,428 | |
Real estate, Inventory Portfolio, net of income tax expense | | | 129 | | | | 22 | | | | 260 | | | | 73 | |
| | | | | | | | | | | | | | | | |
| | | 659 | | | | 2,495 | | | | 902 | | | | 4,501 | |
| | | | | | | | | | | | | | | | |
Earnings including noncontrolling interests | | | 21,650 | | | | 18,265 | | | | 37,948 | | | | 45,039 | |
| | | | |
Loss (earnings) attributable to noncontrolling interests: | | | | | | | | | | | | | | | | |
Continuing operations | | | (468 | ) | | | (171 | ) | | | (349 | ) | | | (350 | ) |
Discontinued operations | | | 24 | | | | (4 | ) | | | (28 | ) | | | 204 | |
| | | | | | | | | | | | | | | | |
| | | (444 | ) | | | (175 | ) | | | (377 | ) | | | (146 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
Net earnings attributable to NNN | | | 21,206 | | | | 18,090 | | | | 37,571 | | | | 44,893 | |
Series C preferred stock dividends | | | (1,696 | ) | | | (1,696 | ) | | | (3,392 | ) | | | (3,392 | ) |
| | | | | | | | | | | | | | | | |
Net earnings available to common stockholders | | $ | 19,510 | | | $ | 16,394 | | | $ | 34,179 | | | $ | 41,501 | |
| | | | | | | | | | | | | | | | |
4
National Retail Properties, Inc.
(in thousands, except per share data)
(unaudited)
| | | | | | | | | | | | |
| | | Quarter Ended June 30, | | Six Months Ended June 30, |
| | | 2010 | | 2009 | | 2010 | | 2009 |
| | | | |
Weighted average common shares outstanding: | | | | | | | | | | | | |
Basic | | | 82,695 | | | 79,163 | | | 82,590 | | | 78,667 |
| | | | | | | | | | | | |
Diluted | | | 82,825 | | | 79,265 | | | 82,718 | | | 78,763 |
| | | | | | | | | | | | |
| | | | |
Net earnings per share available to common stockholders: | | | | | | | | | | | | |
Basic: | | | | | | | | | | | | |
Continuing operations | | $ | 0.22 | | $ | 0.17 | | $ | 0.40 | | $ | 0.46 |
Discontinued operations | | | 0.01 | | | 0.03 | | | 0.01 | | | 0.06 |
| | | | | | | | | | | | |
Net earnings | | $ | 0.23 | | $ | 0.20 | | $ | 0.41 | | $ | 0.52 |
| | | | | | | | | | | | |
| | | | |
Diluted: | | | | | | | | | | | | |
Continuing operations | | $ | 0.22 | | $ | 0.17 | | $ | 0.40 | | $ | 0.46 |
Discontinued operations | | | 0.01 | | | 0.03 | | | 0.01 | | | 0.06 |
| | | | | | | | | | | | |
Net earnings | | $ | 0.23 | | $ | 0.20 | | $ | 0.41 | | $ | 0.52 |
| | | | | | | | | | | | |
5
National Retail Properties, Inc.
(in thousands, except per share data)
(unaudited)
| | | | | | | | | | | | | | | | |
| | | Quarter Ended June 30, | | | Six Months Ended June 30, | |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
Funds From Operations (FFO) Reconciliation: | | | | | | | | | | | | | | | | |
Net earnings available to common stockholders | | $ | 19,510 | | | $ | 16,394 | | | $ | 34,179 | | | $ | 41,501 | |
Real estate depreciation and amortization: | | | | | | | | | | | | | | | | |
Continuing operations | | | 10,754 | | | | 10,342 | | | | 21,322 | | | | 21,118 | |
Discontinued operations | | | 24 | | | | 958 | | | | 69 | | | | 1,118 | |
Joint venture real estate depreciation | | | 44 | | | | 44 | | | | 89 | | | | 89 | |
Gain on disposition of real estate - Investment Portfolio | | | (355 | ) | | | (600 | ) | | | (377 | ) | | | (1,632 | ) |
Gain on disposition of real estate - Inventory Portfolio (TRS) | | | (533 | ) | | | (12 | ) | | | (578 | ) | | | (558 | ) |
| | | | | | | | | | | | | | | | |
Total FFO adjustments | | | 9,934 | | | | 10,732 | | | | 20,525 | | | | 20,135 | |
| | | | | | | | | | | | | | | | |
FFO available to common stockholders | | $ | 29,444 | | | $ | 27,126 | | | $ | 54,704 | | | $ | 61,636 | |
| | | | | | | | | | | | | | | | |
| | | | |
FFO per share: | | | | | | | | | | | | | | | | |
Basic | | $ | 0.36 | | | $ | 0.34 | | | $ | 0.66 | | | $ | 0.78 | |
| | | | | | | | | | | | | | | | |
Diluted | | $ | 0.36 | | | $ | 0.34 | | | $ | 0.66 | | | $ | 0.78 | |
| | | | | | | | | | | | | | | | |
| | | | |
Adjusted Funds From Operations (AFFO) Reconciliation: | | | | | | | | | | | | | | | | |
Net earnings available to common stockholders | | $ | 19,510 | | | $ | 16,394 | | | $ | 34,179 | | | $ | 41,501 | |
Total FFO adjustments | | | 9,934 | | | | 10,732 | | | | 20,525 | | | | 20,135 | |
| | | | | | | | | | | | | | | | |
FFO available to common stockholders | | | 29,444 | | | | 27,126 | | | | 54,704 | | | | 61,636 | |
| | | | |
Straight-line accrued rent | | | 130 | | | | (979 | ) | | | (190 | ) | | | (888 | ) |
Net capital lease rent adjustment | | | 381 | | | | 338 | | | | 753 | | | | 668 | |
Below market rent amortization | | | (96 | ) | | | (735 | ) | | | (192 | ) | | | (888 | ) |
Stock based compensation expense | | | 1,463 | | | | 1,017 | | | | 2,576 | | | | 2,136 | |
Capitalized interest expense | | | (132 | ) | | | (399 | ) | | | (185 | ) | | | (917 | ) |
Convertible debt interest expense | | | 1,526 | | | | 1,434 | | | | 3,026 | | | | 2,882 | |
Impairment - property and intangible | | | — | | | | 1,064 | | | | — | | | | 1,064 | |
Impairment - commercial mortgage residual interests valuation adjustment | | | 165 | | | | — | | | | 3,848 | | | | — | |
(Gain) loss on note receivable and property foreclosures | | | (51 | ) | | | 7,816 | | | | (67 | ) | | | 7,816 | |
| | | | | | | | | | | | | | | | |
Total AFFO adjustments | | | 3,386 | | | | 9,556 | | | | 9,569 | | | | 11,873 | |
| | | | | | | | | | | | | | | | |
AFFO available to common stockholders | | $ | 32,830 | | | $ | 36,682 | | | $ | 64,273 | | | $ | 73,509 | |
| | | | | | | | | | | | | | | | |
| | | | |
AFFO per share: | | | | | | | | | | | | | | | | |
Basic | | $ | 0.40 | | | $ | 0.46 | | | $ | 0.78 | | | $ | 0.93 | |
| | | | | | | | | | | | | | | | |
Diluted | | $ | 0.40 | | | $ | 0.46 | | | $ | 0.78 | | | $ | 0.93 | |
| | | | | | | | | | | | | | | | |
| | | | |
Other Information: | | | | | | | | | | | | | | | | |
| | | | |
Percentage rent | | $ | 129 | | | $ | 119 | | | $ | 184 | | | $ | 266 | |
| | | | | | | | | | | | | | | | |
| | | | |
Amortization of debt costs | | $ | 1,146 | | | $ | 751 | | | $ | 2,279 | | | $ | 1,588 | |
| | | | | | | | | | | | | | | | |
| | | | |
Scheduled debt principal amortization (excluding maturities) | | $ | 280 | | | $ | 245 | | | $ | 533 | | | $ | 493 | |
| | | | | | | | | | | | | | | | |
| | | | |
Non-real estate depreciation expense | | $ | 66 | | | $ | 76 | | | $ | 212 | | | $ | 154 | |
| | | | | | | | | | | | | | | | |
6
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 or revenue generating inventory asset that was held for sale at June 30, 2010, as discontinued operations. The following is a summary of earnings from discontinued operations.
| | | | | | | | | | | | | | | | |
| | | Quarter Ended June 30, | | | Six Months Ended June 30, | |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
Earnings from Discontinued Operations - Investment Portfolio: | | | | | | | | | | | | | | | | |
Revenues: | | | | | | | | | | | | | | | | |
Rental and earned income | | $ | 230 | | | $ | 2,931 | | | $ | 343 | | | $ | 4,132 | |
Real estate expense reimbursement from tenants | | | 12 | | | | 73 | | | | 13 | | | | 117 | |
Interest and other income from real estate transactions | | | — | | | | — | | | | 28 | | | | — | |
Interest and other income from non-real estate | | | — | | | | 3 | | | | — | | | | 3 | |
| | | | | | | | | | | | | | | | |
| | | 242 | | | | 3,007 | | | | 384 | | | | 4,252 | |
| | | | | | | | | | | | | | | | |
| | | | |
Expenses: | | | | | | | | | | | | | | | | |
General and administrative | | | — | | | | — | | | | — | | | | 3 | |
Real estate | | | 26 | | | | 173 | | | | 36 | | | | 333 | |
Depreciation and amortization | | | 24 | | | | 958 | | | | 69 | | | | 1,118 | |
| | | | | | | | | | | | | | | | |
| | | 50 | | | | 1,131 | | | | 105 | | | | 1,454 | |
| | | | | | | | | | | | | | | | |
| | | | |
Gain on disposition of real estate | | | 355 | | | | 600 | | | | 377 | | | | 1,632 | |
Income tax expense | | | (17 | ) | | | (3 | ) | | | (14 | ) | | | (2 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
Earnings from discontinued operations attributable to NNN | | $ | 530 | | | $ | 2,473 | | | $ | 642 | | | $ | 4,428 | |
| | | | | | | | | | | | | | | | |
| | | | |
Earnings from Discontinued Operations – Inventory Portfolio: | | | | | | | | | | | | | | | | |
Revenues: | | | | | | | | | | | | | | | | |
Rental income | | $ | 1,216 | | | $ | 1,136 | | | $ | 2,368 | | | $ | 2,232 | |
Real estate expense reimbursement from tenants | | | 154 | | | | 175 | | | | 1,141 | | | | 1,116 | |
Interest and other income from real estate transactions | | | 461 | | | | 19 | | | | 496 | | | | 57 | |
Interest and other income from non-real estate | | | 2 | | | | — | | | | 2 | | | | — | |
| | | | | | | | | | | | | | | | |
| | | 1,833 | | | | 1,330 | | | | 4,007 | | | | 3,405 | |
| | | | | | | | | | | | | | | | |
Disposition of real estate: | | | | | | | | | | | | | | | | |
Gross proceeds | | | 36,668 | | | | 502 | | | | 37,470 | | | | 5,402 | |
Costs | | | (36,455 | ) | | | (490 | ) | | | (37,170 | ) | | | (4,844 | ) |
| | | | | | | | | | | | | | | | |
Gain | | | 213 | | | | 12 | | | | 300 | | | | 558 | |
| | | | | | | | | | | | | | | | |
| | | | |
Expenses: | | | | | | | | | | | | | | | | |
General and administrative | | | 19 | | | | 21 | | | | 56 | | | | 65 | |
Real estate | | | 380 | | | | 333 | | | | 1,421 | | | | 1,631 | |
Depreciation and amortization | | | 55 | | | | 59 | | | | 116 | | | | 198 | |
Interest | | | 943 | | | | 896 | | | | 1,886 | | | | 1,826 | |
| | | | | | | | | | | | | | | | |
| | | 1,397 | | | | 1,309 | | | | 3,479 | | | | 3,720 | |
| | | | | | | | | | | | | | | | |
| | | | |
Income tax expense | | | (520 | ) | | | (11 | ) | | | (568 | ) | | | (170 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
Earnings from discontinued operations including noncontrolling interests | | | 129 | | | | 22 | | | | 260 | | | | 73 | |
Loss (earnings) attributable to noncontrolling interests | | | 24 | | | | (4 | ) | | | (28 | ) | | | 204 | |
| | | | | | | | | | | | | | | | |
| | | | |
Earnings from discontinued operations attributable to NNN | | $ | 153 | | | $ | 18 | | | $ | 232 | | | $ | 277 | |
| | | | | | | | | | | | | | | | |
7
National Retail Properties, Inc.
(in thousands)
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended June 30, | | Six Months Ended June 30, |
| | | 2010 | | | 2009 | | 2010 | | | 2009 |
| | | # 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 | | 2 | | $ | 641 | | | — | | $ | — | | 2 | | $ | 641 | | | — | | $ | — |
Discontinued operations: | | | | | | | | | | | | | | | | | | | | | | |
Investment Portfolio | | 6 | | | 355 | | | 3 | | | 600 | | 11 | | | 377 | | | 6 | | | 1,632 |
Inventory Portfolio | | 1 | | | 213 | | | 1 | | | 12 | | 2 | | | 300 | | | 2 | | | 558 |
Noncontrolling interest, Inventory Portfolio | | — | | | (321 | ) | | — | | | — | | — | | | (363 | ) | | — | | | — |
| | | | | | | | | | | | | | | | | | | | | | |
| | 9 | | $ | 888 | | | 4 | | $ | 612 | | 15 | | $ | 955 | | | 8 | | $ | 2,190 |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Reconciliation of gain on disposition by type: | | | | | | | | | | | | | | | | | | | | | | |
Inventory Portfolio: | | | | | | | | | | | | | | | | | | | | | | |
Development | | 3 | | $ | 854 | | | — | | $ | — | | 4 | | $ | 941 | | | 1 | | $ | 546 |
Exchange | | — | | | — | | | 1 | | | 12 | | — | | | — | | | 1 | | | 12 |
Noncontrolling interest, Development | | — | | | (321 | ) | | — | | | — | | — | | | (363 | ) | | — | | | — |
| | | | | | | | | | | | | | | | | | | | | | |
Total Inventory gain (TRS) | | 3 | | | 533 | | | 1 | | | 12 | | 4 | | | 578 | | | 2 | | | 558 |
| | | | | | | | |
Investment Portfolio | | 6 | | | 355 | | | 3 | | | 600 | | 11 | | | 377 | | | 6 | | | 1,632 |
| | | | | | | | | | | | | | | | | | | | | | |
| | 9 | | $ | 888 | | | 4 | | $ | 612 | | 15 | | $ | 955 | | | 8 | | $ | 2,190 |
| | | | | | | | | | | | | | | | | | | | | | |
8
National Retail Properties, Inc.
(in thousands)
(unaudited)
| | | | | | |
| | | June 30,
2010 | | December 31,
2009 |
Balance Sheet Summary | | | | | | |
| | |
Assets: | | | | | | |
Cash and cash equivalents | | $ | 51,832 | | $ | 15,225 |
Receivables, net of allowance | | | 3,645 | | | 1,946 |
Investment in unconsolidated affiliate | | | 4,612 | | | 4,703 |
Mortgages, notes and accrued interest receivable | | | 42,886 | | | 41,976 |
Real estate, Investment Portfolio: | | | | | | |
Accounted for using the operating method, net of accumulated depreciation and amortization | | | 2,335,018 | | | 2,328,576 |
Accounted for using the direct financing method | | | 30,564 | | | 31,317 |
Real estate, Inventory Portfolio, held for sale | | | 31,933 | | | 72,423 |
Commercial mortgage residual interests | | | 15,148 | | | 20,153 |
Accrued rental income, net of allowance | | | 25,766 | | | 25,745 |
Other assets | | | 45,994 | | | 48,898 |
| | | | | | |
| | |
Total assets | | $ | 2,587,398 | | $ | 2,590,962 |
| | | | | | |
| | |
Liabilities: | | | | | | |
Mortgages payable | | $ | 30,189 | | $ | 25,290 |
Notes payable - convertible | | | 346,406 | | | 343,380 |
Notes payable, net of unamortized discount | | | 618,780 | | | 618,676 |
Other liabilities | | | 40,309 | | | 36,754 |
| | | | | | |
Total liabilities | | | 1,035,684 | | | 1,024,100 |
| | |
Stockholders’ equity of NNN | | | 1,549,203 | | | 1,564,240 |
Noncontrolling interests | | | 2,511 | | | 2,622 |
| | | | | | |
Total equity | | | 1,551,714 | | | 1,566,862 |
| | |
Total liabilities and equity | | $ | 2,587,398 | | $ | 2,590,962 |
| | | | | | |
| | |
Common shares outstanding | | | 83,376 | | | 82,428 |
| | | | | | |
| | |
Gross leasable area, Investment Portfolio (square feet) | | | 11,399 | | | 11,373 |
| | | | | | |
9
Orange Avenue Mortgage Investments, Inc.
(in thousands)
(unaudited)
The company acquired a 79.9 percent equity investment of OAMI for $9.4 million. The company’s 79.9 percent share of OAMI’s net cash flow has totaled over $30.7 million since May 2005. The following summary represents the balances related to OAMI included in the company’s Balance Sheet and Income Statement Summary:
| | | | | | |
| | | June 30,
2010 | | December 31,
2009 |
Assets: | | | | | | |
Cash and cash equivalents | | $ | 1,921 | | $ | 1,088 |
Receivables and other assets | | | 13 | | | 43 |
Commercial mortgage residual interests | | | 15,148 | | | 20,153 |
| | | | | | |
| | $ | 17,082 | | $ | 21,284 |
| | | | | | |
| | |
Liabilities: | | | | | | |
Income tax liability | | $ | 4,481 | | $ | 4,732 |
Other liabilities | | | 49 | | | 49 |
| | | | | | |
| | $ | 4,530 | | $ | 4,781 |
| | | | | | |
| | |
Noncontrolling interests | | $ | 1,231 | | $ | 1,579 |
| | | | | | |
| | | | | | | | | | | | | | | | |
| | | Quarter Ended June 30, | | | Six Months Ended June 30, | |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| | | | |
Revenues: | | | | | | | | | | | | | | | | |
Interest income on commercial mortgage residual interests | | $ | 858 | | | $ | 1,000 | | | $ | 1,907 | | | $ | 2,054 | |
Interests and other income | | | — | | | | 44 | | | | — | | | | 44 | |
| | | | | | | | | | | | | | | | |
| | | 858 | | | | 1,044 | | | | 1,907 | | | | 2,098 | |
| | | | | | | | | | | | | | | | |
| | | | |
Expenses: | | | | | | | | | | | | | | | | |
General and administrative | | | 62 | | | | 73 | | | | 156 | | | | 134 | |
Impairment – commercial mortgage residual interests valuation adjustment | | | 165 | | | | — | | | | 3,848 | | | | — | |
| | | | | | | | | | | | | | | | |
| | | 227 | | | | 73 | | | | 4,004 | | | | 134 | |
| | | | | | | | | | | | | | | | |
| | | | |
Income tax benefit | | | 157 | | | | 87 | | | | 251 | | | | 215 | |
| | | | | | | | | | | | | | | | |
| | | | |
Net earnings (loss) including noncontrolling interests | | | 788 | | | | 1,058 | | | | (1,846 | ) | | | 2,179 | |
Earnings attributable to noncontrolling interests | | | (102 | ) | | | (112 | ) | | | (9 | ) | | | (222 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
Net earnings (loss) attributable to NNN | | $ | 686 | | | $ | 946 | | | $ | (1,855 | ) | | $ | 1,957 | |
| | | | | | | | | | | | | | | | |
10
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.”
| | | | | | |
| | | June 30,
2010 | | December 31,
2009 |
Assets: | | | | | | |
Cash and cash equivalents | | $ | 916 | | $ | 829 |
Receivables | | | 200 | | | 200 |
Real estate | | | 72,687 | | | 73,279 |
Other assets | | | 684 | | | 838 |
| | | | | | |
| | $ | 74,487 | | $ | 75,146 |
| | | | | | |
| | |
Liabilities: | | | | | | |
Notes payable | | $ | 43,600 | | $ | 43,600 |
Other liabilities | | | 1,331 | | | 1,427 |
| | | | | | |
Total liabilities | | | 44,931 | | | 45,027 |
| | | | | | |
| | |
Members’ equity | | | 29,556 | | | 30,119 |
| | | | | | |
| | |
Total liabilities and equity | | $ | 74,487 | | $ | 75,146 |
| | | | | | |
| | | | | | | | | | | | |
| | | Quarter Ended June 30, | | Six Months Ended June 30, |
| | | 2010 | | 2009 | | 2010 | | 2009 |
Revenues: | | | | | | | | | | | | |
Rental income | | $ | 1,565 | | $ | 1,565 | | $ | 3,130 | | $ | 3,130 |
| | | | | | | | | | | | |
| | | | |
Expenses: | | | | | | | | | | | | |
General and administrative | | | 77 | | | 76 | | | 184 | | | 180 |
Real estate | | | 5 | | | 5 | | | 10 | | | 10 |
Depreciation and amortization | | | 369 | | | 370 | | | 737 | | | 741 |
Interest | | | 456 | | | 467 | | | 903 | | | 929 |
| | | | | | | | | | | | |
| | | 907 | | | 918 | | | 1,834 | | | 1,860 |
| | | | | | | | | | | | |
| | | | |
Net earnings | | $ | 658 | | $ | 647 | | $ | 1,296 | | $ | 1,270 |
| | | | | | | | | | | | |
11
National Retail Properties, Inc.
Investment Portfolio
Top 20 Lines of Trade
| | | | | | | | |
| | | Line of Trade | | As of June 30, | |
| | | 2010 (1) | | | 2009 (2) | |
1. | | Convenience stores | | 26.2 | % | | 26.4 | % |
2. | | Restaurants - full service | | 9.2 | % | | 9.2 | % |
3. | | Automotive parts | | 6.8 | % | | 6.3 | % |
4. | | Theaters | | 6.2 | % | | 6.3 | % |
5. | | Automotive service | | 5.6 | % | | 5.5 | % |
6. | | Drug stores | | 4.4 | % | | 4.2 | % |
7. | | Books | | 4.0 | % | | 4.1 | % |
8. | | Restaurants - limited service | | 3.2 | % | | 3.5 | % |
9. | | Sporting goods | | 3.2 | % | | 3.2 | % |
10. | | Grocery | | 2.8 | % | | 2.9 | % |
11. | | Consumer electronics | | 2.7 | % | | 2.7 | % |
12. | | Furniture | | 2.6 | % | | 2.6 | % |
13. | | Office supplies | | 2.5 | % | | 2.6 | % |
14. | | Travel plazas | | 2.4 | % | | 2.4 | % |
15. | | Beer, wine and liquor | | 1.6 | % | | 1.9 | % |
16. | | Health and fitness | | 1.6 | % | | 1.5 | % |
17. | | Equipment rental | | 1.3 | % | | 1.2 | % |
18. | | Family entertainment centers | | 1.3 | % | | 1.6 | % |
19. | | General merchandise | | 1.3 | % | | 1.2 | % |
20. | | Auto dealerships | | 1.3 | % | | 1.3 | % |
| | Other | | 9.8 | % | | 9.4 | % |
| | | | | | | | |
| | Total | | 100.0 | % | | 100.0 | % |
| | | | | | | | |
Top 10 States
| | | | | | | | | | | | | | |
| | | State | | % of Total(1) | | | | | | | State | | % of Total(1) | |
1. | | Texas | | 19.8 | % | | | | 6. | | Indiana | | 4.3 | % |
2. | | Florida | | 9.7 | % | | | | 7. | | Pennsylvania | | 4.2 | % |
3. | | Illinois | | 6.8 | % | | | | 8. | | Ohio | | 4.0 | % |
4. | | North Carolina | | 6.2 | % | | | | 9. | | Tennessee | | 3.0 | % |
5. | | Georgia | | 5.4 | % | | | | 10. | | Colorado | | 2.9 | % |
| (1) | Based on the annualized base rent for all leases in place as of June 30, 2010. |
| (2) | Based on the annualized base rent for all leases in place as of June 30, 2009. |
12
National Retail Properties, Inc.
Investment Portfolio
Top Tenants
| | | | | |
| | | Properties | | % of Total(1) | |
Pantry | | 96 | | 8.9 | % |
Susser | | 86 | | 8.6 | % |
AMC Theatre | | 16 | | 6.2 | % |
Road Ranger | | 34 | | 3.9 | % |
Mister Car Wash | | 40 | | 3.6 | % |
Pull-A-Part | | 20 | | 3.5 | % |
Pep Boys | | 17 | | 3.2 | % |
Best Buy | | 7 | | 2.6 | % |
Barnes & Noble | | 9 | | 2.5 | % |
Logans Roadhouse | | 17 | | 2.2 | % |
CVS | | 16 | | 2.0 | % |
Lease Expirations
| | | | | | | | | | | | | | | | |
| | | % of
Total(1) | | | # of
Properties | | Gross Leasable
Area(2) | | | | % of
Total(1) | | | # of
Properties | | Gross Leasable
Area(2) |
| 2010 | | 0.9 | % | | 19 | | 184,000 | | 2016 | | 1.9 | % | | 15 | | 320,000 |
| 2011 | | 1.8 | % | | 21 | | 330,000 | | 2017 | | 4.2 | % | | 28 | | 682,000 |
| 2012 | | 3.3 | % | | 35 | | 510,000 | | 2018 | | 2.8 | % | | 24 | | 345,000 |
| 2013 | | 4.6 | % | | 38 | | 822,000 | | 2019 | | 4.3 | % | | 41 | | 618,000 |
| 2014 | | 4.9 | % | | 44 | | 617,000 | | 2020 | | 3.5 | % | | 43 | | 375,000 |
| 2015 | | 4.2 | % | | 33 | | 689,000 | | Thereafter | | 63.6 | % | | 634 | | 5,205,000 |
| (1) | Based on the annual base rent of $217,215,000, which is the annualized base rent for all leases in place as of June 30, 2010. |
13
