NATIONAL RETAIL PROPERTIES, INC. [NNN] Filings

10-Q 1 nnn-20210930.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2021

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

For the transition period from to

Commission file number 001-11290

NATIONAL RETAIL PROPERTIES, INC.

(Exact name of registrant as specified in its charter)

Maryland

56-1431377

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer Identification No.)

450 South Orange Avenue, Suite 900

Orlando, Florida 32801

(Address of principal executive offices, including zip code)

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

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


Title of each class	Trading Symbol(s)	Name of exchange on which registered
Common Stock, $0.01 par value	NNN	New York Stock Exchange

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

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

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


Large accelerated filer	☒	Accelerated filer	☐	Non-accelerated filer	☐	Smaller reporting company	☐	Emerging growth company	☐

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

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

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

175,616,892 shares of common stock, $0.01 par value, outstanding as of October 28, 2021.

TABLE OF CONTENTS


		PAGE REFERENCE
Part I - Financial Information
Item 1.	Financial Statements:
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Income and Comprehensive Income	4
	Condensed Consolidated Statements of Cash Flows	9
	Notes to Condensed Consolidated Financial Statements	11
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	38
Part II - Other Information
Item 1.	Legal Proceedings	39
Item 1A.	Risk Factors	39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 3.	Defaults Upon Senior Securities	39
Item 4.	Mine Safety Disclosures	39
Item 5.	Other Information	39
Item 6.	Exhibits	40
Signatures		41

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

NATIONAL RETAIL PROPERTIES, INC.

and SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per share data)


	September 30, 2021			December 31, 2020
ASSETS	(unaudited)
Real estate portfolio	$	7,442,473		$	7,212,655
Real estate held for sale		9,709			5,671
Cash and cash equivalents		543,526			267,236
Receivables, net of allowance of $693 and $835, respectively		2,128			4,338
Accrued rental income, net of allowance of $4,922 and $6,947, respectively		34,341			53,958
Debt costs, net of accumulated amortization of $18,810 and $17,294, respectively		7,960			1,917
Other assets		92,808			92,069
Total assets	$	8,132,945		$	7,637,844
LIABILITIES AND EQUITY
Liabilities:
Mortgages payable, including unamortized premium and net of unamortized debt costs	$	10,875		$	11,395
Notes payable, net of unamortized discount and unamortized debt costs		3,734,764			3,209,527
Accrued interest payable		52,803			19,401
Other liabilities		74,360			78,217
Total liabilities		3,872,802			3,318,540

Equity:
Stockholders’ equity:
Preferred stock, $0.01 par value. Authorized 15,000,000 shares
5.200% Series F, 138,000 shares issued and outstanding, at stated liquidation value of $2,500 per share		345,000			345,000
Common stock, $0.01 par value. Authorized 375,000,000 shares; 175,616,386 and 175,232,971 shares issued and outstanding, respectively		1,757			1,753
Capital in excess of par value		4,649,161			4,633,771
Accumulated deficit		(720,241	)		(644,779	)
Accumulated other comprehensive income (loss)		(15,535	)		(16,445	)
Total stockholders’ equity of NNN		4,260,142			4,319,300
Noncontrolling interests		1			4
Total equity		4,260,143			4,319,304
Total liabilities and equity	$	8,132,945		$	7,637,844

See accompanying notes to condensed consolidated financial statements.

NATIONAL RETAIL PROPERTIES, INC.

and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(dollars in thousands, except per share data)

(unaudited)


	Quarter Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Revenues:
Rental income	$	180,024		$	157,865		$	537,226		$	495,891
Interest and other income from real estate transactions		333			768			1,920			1,506
		180,357			158,633			539,146			497,397
Operating expenses:
General and administrative		11,077			9,419			34,693			28,914
Real estate		6,521			6,345			20,865			20,304
Depreciation and amortization		50,976			49,404			151,831			147,528
Leasing transaction costs		86			—			146			36
Impairment losses – real estate, net of recoveries		4,781			5,695			14,647			33,062
		73,441			70,863			222,182			229,844
Gain on disposition of real estate		9,473			148			17,935			13,637
Earnings from operations		116,389			87,918			334,899			281,190
Other expenses (revenues):
Interest and other income		(61	)		(74	)		(159	)		(345	)
Interest expense		33,518			31,924			101,190			97,347
Loss on early extinguishment of debt		—			—			21,328			16,679
		33,457			31,850			122,359			113,681
Net earnings		82,932			56,068			212,540			167,509
Loss attributable to noncontrolling interests		1			1			3			3
Net earnings attributable to NNN		82,933			56,069			212,543			167,512
Series F preferred stock dividends		(4,485	)		(4,485	)		(13,455	)		(13,455	)
Net earnings attributable to common stockholders	$	78,448		$	51,584		$	199,088		$	154,057
Net earnings per share of common stock:
Basic	$	0.45		$	0.30		$	1.14		$	0.89
Diluted	$	0.45		$	0.30		$	1.14		$	0.89
Weighted average number of common shares outstanding:
Basic		174,629,442			172,681,136			174,610,026			171,706,577
Diluted		174,738,903			172,782,266			174,716,053			171,815,377
Other comprehensive income:
Net earnings attributable to NNN	$	82,933		$	56,069		$	212,543		$	167,512
Amortization of interest rate hedges		565			642			2,494			1,663
Fair value of forward starting swaps		(1,584	)		—			(1,584	)		(7,617	)
Comprehensive income attributable to NNN		81,914			56,711			213,453			161,558
Comprehensive loss attributable to noncontrolling interests		(1	)		(1	)		(3	)		(3	)
Total comprehensive income	$	81,913		$	56,710		$	213,450		$	161,555

See accompanying notes to condensed consolidated financial statements.

NATIONAL RETAIL PROPERTIES, INC.

and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

Quarter Ended September 30, 2021

(dollars in thousands, except per share data)

(Unaudited)


	Series F Preferred Stock		Common Stock		Capital in Excess of Par Value			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity of NNN			Noncontrolling Interests			Total Equity
Balances at June 30, 2021	$	345,000	$	1,757	$	4,644,593		$	(705,958	)	$	(14,516	)	$	4,270,876		$	2		$	4,270,878
Net earnings		—		—		—			82,933			—			82,933			(1	)		82,932
Dividends declared and paid:
$0.3250 per depositary share of Series F preferred stock		—		—		—			(4,485	)		—			(4,485	)		—			(4,485	)
$0.5300 per share of common stock		—		—		634			(92,731	)		—			(92,097	)		—			(92,097	)
Issuance of common stock:
7,443 shares – director compensation		—		—		306			—			—			306			—			306
1,811 shares – stock purchase plan		—		—		86			—			—			86			—			86
Stock issuance costs		—		—		(51	)		—			—			(51	)		—			(51	)
Amortization of deferred compensation		—		—		3,593			—			—			3,593			—			3,593
Amortization of interest rate hedges		—		—		—			—			565			565			—			565
Fair value of forward starting swaps		—		—		—			—			(1,584	)		(1,584	)		—			(1,584	)
Balances at September 30, 2021	$	345,000	$	1,757	$	4,649,161		$	(720,241	)	$	(15,535	)	$	4,260,142		$	1		$	4,260,143

See accompanying notes to condensed consolidated financial statements.

NATIONAL RETAIL PROPERTIES, INC.

and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

Quarter Ended September 30, 2020

(dollars in thousands, except per share data)

(Unaudited)


	Series F Preferred Stock		Common Stock		Capital in Excess of Par Value			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity of NNN			Noncontrolling Interests			Total Equity
Balances at June 30, 2020	$	345,000	$	1,735	$	4,554,958		$	(573,174	)	$	(17,724	)	$	4,310,795		$	5		$	4,310,800
Net earnings		—		—		—			56,069			—			56,069			(1	)		56,068
Dividends declared and paid:
$0.3250 per depositary share of Series F preferred stock		—		—		—			(4,485	)		—			(4,485	)		—			(4,485	)
$0.5200 per share of common stock		—		1		3,147			(89,947	)		—			(86,799	)		—			(86,799	)
Issuance of common stock:
8,865 shares – director compensation		—		1		268			—			—			269			—			269
1,908 shares – stock purchase plan		—		—		68			—			—			68			—			68
216,373 shares – ATM equity program		—		2		8,137			—			—			8,139			—			8,139
Stock issuance costs		—		—		(484	)		—			—			(484	)		—			(484	)
Amortization of deferred compensation		—		—		2,991			—			—			2,991			—			2,991
Amortization of interest rate hedges		—		—		—			—			642			642			—			642
Balances at September 30, 2020	$	345,000	$	1,739	$	4,569,085		$	(611,537	)	$	(17,082	)	$	4,287,205		$	4		$	4,287,209

See accompanying notes to condensed consolidated financial statements.

NATIONAL RETAIL PROPERTIES, INC.

and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

Nine Months Ended September 30, 2021

(dollars in thousands, except per share data)

(Unaudited)


	Series F Preferred Stock		Common Stock		Capital in Excess of Par Value		Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity of NNN			Noncontrolling Interests			Total Equity
Balances at December 31, 2020	$	345,000	$	1,753	$	4,633,771	$	(644,779	)	$	(16,445	)	$	4,319,300		$	4		$	4,319,304
Net earnings								212,543						212,543			(3	)		212,540
Dividends declared and paid:
$0.9750 per depositary share of Series F preferred stock		—		—		—		(13,455	)		—			(13,455	)		—			(13,455	)
$1.5700 per share of common stock		—		—		1,841		(274,550	)		—			(272,709	)		—			(272,709	)
Issuance of common stock:
22,642 shares – director compensation		—		—		840		—			—			840

NATIONAL RETAIL PROPERTIES, INC. [NNN] Filings
10-Q	[2021-11-02]
10-Q	[2021-08-03]
10-Q	[2021-05-04]
10-K	[2021-02-11]
10-Q	[2020-11-02]
10-Q	[2020-08-03]
10-Q	[2020-05-04]
10-K	[2020-02-11]
10-Q	[2019-10-31]
10-Q	[2019-08-01]
10-Q	[2019-05-01]
10-K	[2019-02-12]
10-Q	[2018-11-01]
10-Q	[2018-08-01]
10-Q	[2018-05-01]
10-K	[2018-02-13]
10-Q	[2017-11-02]
10-Q	[2017-08-01]
10-Q	[2017-05-02]
10-K	[2017-02-13]
10-Q	[2016-11-03]
10-Q	[2016-08-02]
10-Q	[2016-05-02]
10-K	[2016-02-12]
10-Q	[2015-11-03]
10-Q	[2015-07-30]
10-Q	[2015-05-05]
10-K	[2015-02-20]
10-Q	[2014-11-04]
10-Q	[2014-08-05]
10-Q	[2014-05-01]
10-K	[2014-02-19]
10-Q	[2013-11-05]
10-Q	[2013-08-01]
10-Q	[2013-05-02]
10-K	[2013-02-22]
10-Q	[2012-11-05]
10-Q	[2012-08-03]
10-Q	[2012-05-04]
10-K	[2012-02-24]