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Record Annual Results Announced By National Retail Properties, Inc.

Cision

ORLANDO, Fla. , Feb. 11, 2020 /PRNewswire/ -- National Retail Properties, Inc. (NYSE: NNN), a real estate investment trust, today announced operating results for the quarter and year ended December 31, 2019.  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,


2019


2018


2019


2018


(in thousands, except per share data)

Revenues

$

173,376



$

158,976



$

670,487



$

622,661










Net earnings available to common stockholders

$

58,534



$

27,980



$

258,183



$

258,120


Net earnings per common share

$

0.34



$

0.17



$

1.56



$

1.65










FFO available to common stockholders

$

110,445



$

82,491



$

446,661



$

395,337


FFO per common share

$

0.65



$

0.52



$

2.71



$

2.53










Core FFO available to common stockholders

$

120,301



$

101,001



$

455,186



$

414,590


Core FFO per common share

$

0.70



$

0.63



$

2.76



$

2.65










AFFO available to common stockholders

$

122,205



$

103,523



$

462,325



$

418,702


AFFO per common share

$

0.71



$

0.65



$

2.80



$

2.68


 

  • Portfolio occupancy was 99.0% at December 31, 2019 as compared to 99.1% at September 30, 2019, and 98.2% at December 31, 2018

2019 Highlights:

  • Increased annual FFO per common share 7.1%
  • Increased annual Core FFO per common share 4.2%
  • Increased annual AFFO per common share 4.5%
  • Dividend yield of 3.8% at December 31, 2019
  • Annual dividend per common share increased 4.1% to $2.03 marking the 30th consecutive year of annual dividend increases - making the company one of only three equity REITs and less than 90 publicly traded companies in America to have increased annual dividends for 30 or more consecutive years
  • Maintained high occupancy levels at 99.0% with a weighted average remaining lease term of 11.2 years

2019 Highlights (continued):

  • Invested $752.5 million in 210 properties with an aggregate gross leasable area of approximately 3,164,000 square feet at an initial cash yield of 6.9%
  • Sold 59 properties for $126.2 million , producing $32.1 million of gains on sale, net of noncontrolling interest, at a cap rate of 5.9%
  • Raised $524.8 million in net proceeds from issuance of 9,706,940 common shares
  • $766.4 million availability on bank credit facility at December 31, 2019
  • 99.7% of properties are unencumbered with secured mortgage debt
  • Total average annual shareholder return of 13.6% over the past 25 years exceeds industry and general equity averages

Selected Highlights for the quarter ended December 31, 2019:

  • Investments:
  • Dispositions:
  • Long-term capital:

Jay Whitehurst , Chief Executive Officer, commented: "2019 was a year of significant milestones for National Retail Properties: our 35 th year in business; our 25 th year listed on the New York Stock Exchange, and most importantly, our 30 th year of consecutive annual dividend increases.  Our steady execution continued to produce impressive outcomes.  Our Core FFO per share increased by 4.2% over 2018 and our long-term total shareholder returns continued to exceed the REIT averages while, in our opinion, taking below average risk.  Moreover, the continued execution of our long-term focused business plan positions National Retail Properties to continue this enviable track record of consistent performance into 2020 and beyond."

National Retail Properties invests primarily in high-quality retail properties subject generally to long-term, net leases.  As of December 31, 2019, the company owned 3,118 properties in 48 states with a gross leasable area of approximately 32.5 million square feet and with a weighted average remaining lease term of 11.2 years.  For more information on the company, visit www.nnnreit.com .

Management will hold a conference call on February 11, 2020, 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, 2019.  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,



2019


2018


2019


2018

Income Statement Summary


















Revenues:









Rental income


$

173,163



$

158,827



$

669,009



$

621,399


Interest and other income from real estate transactions


213



149



1,478



1,262




173,376



158,976



670,487



622,661











Operating expenses:









General and administrative


10,127



8,267



37,651



34,248


Real estate


7,258



7,649



27,656



25,099


Depreciation and amortization


48,102



44,117



188,871



174,398


Impairment losses real estate, net of recoveries


10,868



18,494



31,992



28,211


Retirement severance costs




270





1,013




76,355



78,797



286,170



262,969


Gain on disposition of real estate


6,955



8,020



32,463



65,070


Earnings from operations


103,976



88,199



416,780



424,762











Other expenses (revenues):









Interest and other income


(200)



(1,553)



(3,112)



(1,810)


Interest expense


30,307



34,940



120,023



115,847


Leasing transaction costs


83





261




Loss on early extinguishment of debt




18,240





18,240




30,190



51,627



117,172



132,277











Net earnings


73,786



36,572



299,608



292,485


Earnings attributable to noncontrolling interests




(10)



(428)



(38)











Net earnings attributable to NNN


73,786



36,562



299,180



292,447


Series E preferred stock dividends


(911)



(4,097)



(13,201)



(16,387)


Series F preferred stock dividends


(4,485)



(4,485)



(17,940)



(17,940)


Excess of redemption value over carrying value of preferred 
     shares redeemed


(9,856)





(9,856)




Net earnings available to common stockholders


$

58,534



$

27,980



$

258,183



$

258,120