Maryland
(State or other jurisdiction of
incorporation or organization)
|
56-1431377
(I.R.S. Employer Identification No.)
|
Large accelerated filer
x
|
|
Accelerated filer
¨
|
|
Non-accelerated filer
¨
|
|
Smaller reporting company
¨
|
|
|
PAGE
REFERENCE
|
Part I - Financial Information
|
|
|
Item 1.
|
|
|
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Part II - Other Information
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
NATIONAL RETAIL PROPERTIES, INC.
and SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share data)
|
|||||||
|
June 30, 2012
|
|
December 31, 2011
|
||||
ASSETS
|
(unaudited)
|
|
|
||||
Real estate portfolio:
|
|
|
|
||||
Accounted for using the operating method, net of accumulated depreciation and amortization
|
$
|
3,485,819
|
|
|
$
|
3,225,119
|
|
Accounted for using the direct financing method
|
24,954
|
|
|
26,518
|
|
||
Real estate held for sale
|
40,351
|
|
|
36,105
|
|
||
Investment in unconsolidated affiliate
|
4,283
|
|
|
4,358
|
|
||
Mortgages, notes and accrued interest receivable, net of allowance
|
36,740
|
|
|
33,428
|
|
||
Commercial mortgage residual interests
|
12,395
|
|
|
15,299
|
|
||
Cash and cash equivalents
|
2,907
|
|
|
2,082
|
|
||
Receivables, net of allowance of $1,113 and $1,403, respectively
|
1,456
|
|
|
2,149
|
|
||
Accrued rental income, net of allowance of $3,086 and $4,870, respectively
|
25,330
|
|
|
25,187
|
|
||
Debt costs, net of accumulated amortization of $16,986 and $15,332, respectively
|
9,148
|
|
|
10,802
|
|
||
Other assets
|
60,607
|
|
|
53,382
|
|
||
Total assets
|
$
|
3,703,990
|
|
|
$
|
3,434,429
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Line of credit payable
|
$
|
142,600
|
|
|
$
|
65,600
|
|
Mortgages payable, including unamortized premium of $216 and $0, respectively
|
29,341
|
|
|
23,171
|
|
||
Notes payable – convertible, net of unamortized discount of $4,256 and $6,363, respectively
|
357,479
|
|
|
355,371
|
|
||
Notes payable, net of unamortized discount of $4,763 and $5,033, respectively
|
845,237
|
|
|
894,967
|
|
||
Accrued interest payable
|
14,440
|
|
|
15,108
|
|
||
Other liabilities
|
87,483
|
|
|
76,336
|
|
||
Total liabilities
|
1,476,580
|
|
|
1,430,553
|
|
||
|
|
|
|
|
|
||
Equity:
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.01 par value. Authorized 15,000,000 shares
|
|
|
|
||||
Series D, 11,500,000 depositary shares issued and outstanding, at stated liquidation value
of $25 per share
|
287,500
|
|
|
—
|
|
||
Series C, 3,680,000 depositary shares issued and outstanding, at stated liquidation value
of $25 per share
|
—
|
|
|
92,000
|
|
||
Common stock, $0.01 par value. Authorized 190,000,000 shares; 107,449,071 and
104,754,859 shares issued and outstanding, respectively
|
1,076
|
|
|
1,049
|
|
||
Excess stock, $0.01 par value. Authorized 205,000,000 shares; none issued or outstanding
|
—
|
|
|
—
|
|
||
Capital in excess of par value
|
2,015,121
|
|
|
1,958,225
|
|
||
Retained earnings (loss)
|
(74,123
|
)
|
|
(44,946
|
)
|
||
Accumulated other comprehensive income (loss)
|
(3,504
|
)
|
|
(3,830
|
)
|
||
Total stockholders’ equity of NNN
|
2,226,070
|
|
|
2,002,498
|
|
||
Noncontrolling interests
|
1,340
|
|
|
1,378
|
|
||
Total equity
|
2,227,410
|
|
|
2,003,876
|
|
||
Total liabilities and equity
|
$
|
3,703,990
|
|
|
$
|
3,434,429
|
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Rental income from operating leases
|
$
|
77,927
|
|
|
$
|
57,578
|
|
|
$
|
151,494
|
|
|
$
|
114,526
|
|
Earned income from direct financing leases
|
618
|
|
|
693
|
|
|
1,246
|
|
|
1,433
|
|
||||
Percentage rent
|
221
|
|
|
132
|
|
|
332
|
|
|
247
|
|
||||
Real estate expense reimbursement from tenants
|
2,505
|
|
|
2,142
|
|
|
5,337
|
|
|
4,422
|
|
||||
Interest and other income from real estate transactions
|
764
|
|
|
543
|
|
|
1,470
|
|
|
1,164
|
|
||||
Interest income on commercial mortgage residual interests
|
716
|
|
|
777
|
|
|
1,471
|
|
|
1,544
|
|
||||
|
82,751
|
|
|
61,865
|
|
|
161,350
|
|
|
123,336
|
|
||||
Retail operations:
|
|
|
|
|
|
|
|
||||||||
Revenues
|
7,784
|
|
|
12,450
|
|
|
19,008
|
|
|
21,300
|
|
||||
Operating expenses
|
(7,481
|
)
|
|
(11,760
|
)
|
|
(18,543
|
)
|
|
(20,612
|
)
|
||||
Net
|
303
|
|
|
690
|
|
|
465
|
|
|
688
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
General and administrative
|
7,024
|
|
|
6,568
|
|
|
14,627
|
|
|
13,226
|
|
||||
Real estate
|
4,025
|
|
|
3,919
|
|
|
8,597
|
|
|
7,573
|
|
||||
Depreciation and amortization
|
19,032
|
|
|
13,765
|
|
|
37,140
|
|
|
27,184
|
|
||||
Impairment – commercial mortgage residual interests valuation
|
2,718
|
|
|
267
|
|
|
2,718
|
|
|
396
|
|
||||
|
32,799
|
|
|
24,519
|
|
|
63,082
|
|
|
48,379
|
|
||||
Earnings from operations
|
50,255
|
|
|
38,036
|
|
|
98,733
|
|
|
75,645
|
|
||||
Other expenses (revenues):
|
|
|
|
|
|
|
|
||||||||
Interest and other income
|
(361
|
)
|
|
(283
|
)
|
|
(719
|
)
|
|
(625
|
)
|
||||
Interest expense
|
19,394
|
|
|
17,512
|
|
|
39,039
|
|
|
35,174
|
|
||||
|
19,033
|
|
|
17,229
|
|
|
38,320
|
|
|
34,549
|
|
||||
Earnings from continuing operations before income tax expense and equity in earnings of unconsolidated affiliate
|
31,222
|
|
|
20,807
|
|
|
60,413
|
|
|
41,096
|
|
||||
Income tax expense
|
(140
|
)
|
|
(210
|
)
|
|
(236
|
)
|
|
(191
|
)
|
||||
Equity in earnings of unconsolidated affiliate
|
155
|
|
|
104
|
|
|
305
|
|
|
213
|
|
||||
Earnings from continuing operations
|
31,237
|
|
|
20,701
|
|
|
60,482
|
|
|
41,118
|
|
||||
Earnings from discontinued operations, net of income tax expense (Note 7)
|
2,239
|
|
|
568
|
|
|
2,817
|
|
|
1,005
|
|
||||
Earnings including noncontrolling interests
|
33,476
|
|
|
21,269
|
|
|
63,299
|
|
|
42,123
|
|
||||
Loss (earnings) attributable to noncontrolling interests:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
34
|
|
|
67
|
|
|
55
|
|
|
93
|
|
||||
Discontinued operations
|
(5
|
)
|
|
(33
|
)
|
|
(17
|
)
|
|
(93
|
)
|
||||
|
29
|
|
|
34
|
|
|
38
|
|
|
—
|
|
||||
Net earnings attributable to NNN
|
$
|
33,505
|
|
|
$
|
21,303
|
|
|
$
|
63,337
|
|
|
$
|
42,123
|
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net earnings attributable to NNN
|
$
|
33,505
|
|
|
$
|
21,303
|
|
|
$
|
63,337
|
|
|
$
|
42,123
|
|
Series C preferred stock dividends
|
—
|
|
|
(1,696
|
)
|
|
(1,979
|
)
|
|
(3,392
|
)
|
||||
Series D preferred stock dividends
|
(5,926
|
)
|
|
—
|
|
|
(5,926
|
)
|
|
—
|
|
||||
Excess of redemption value over carrying value of preferred shares
redeemed
|
—
|
|
|
—
|
|
|
(3,098
|
)
|
|
—
|
|
||||
Net earnings attributable to common stockholders
|
$
|
27,579
|
|
|
$
|
19,607
|
|
|
$
|
52,334
|
|
|
$
|
38,731
|
|
Net earnings per share of common stock:
|
|
|
|
|
|
|
|
||||||||
Basic:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.24
|
|
|
$
|
0.23
|
|
|
$
|
0.47
|
|
|
$
|
0.46
|
|
Discontinued operations
|
0.02
|
|
|
—
|
|
|
0.02
|
|
|
—
|
|
||||
Net earnings
|
$
|
0.26
|
|
|
$
|
0.23
|
|
|
$
|
0.49
|
|
|
$
|
0.46
|
|
Diluted:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.24
|
|
|
$
|
0.23
|
|
|
$
|
0.46
|
|
|
$
|
0.46
|
|
Discontinued operations
|
0.02
|
|
|
—
|
|
|
0.03
|
|
|
—
|
|
||||
Net earnings
|
$
|
0.26
|
|
|
$
|
0.23
|
|
|
$
|
0.49
|
|
|
$
|
0.46
|
|
Weighted average number of common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
105,992,014
|
|
|
84,409,788
|
|
|
105,417,595
|
|
|
83,771,728
|
|
||||
Diluted
|
107,458,993
|
|
|
84,725,968
|
|
|
106,844,080
|
|
|
84,271,352
|
|
||||
Other comprehensive income:
|
|
|
|
|
|
|
|
||||||||
Net earnings attributable to NNN
|
$
|
33,505
|
|
|
$
|
21,303
|
|
|
$
|
63,337
|
|
|
$
|
42,123
|
|
Amortization of interest rate hedges
|
58
|
|
|
(42
|
)
|
|
114
|
|
|
(85
|
)
|
||||
Fair value treasury locks
|
—
|
|
|
(6,881
|
)
|
|
—
|
|
|
(5,218
|
)
|
||||
Unrealized gain - commercial mortgage residual interests
|
213
|
|
|
539
|
|
|
213
|
|
|
599
|
|
||||
Stock value adjustments
|
—
|
|
|
(7
|
)
|
|
(1
|
)
|
|
(26
|
)
|
||||
Comprehensive income attributable to NNN
|
$
|
33,776
|
|
|
$
|
14,912
|
|
|
$
|
63,663
|
|
|
$
|
37,393
|
|
|
Six Months Ended June 30,
|
||||||
|
2012
|
|
2011
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Earnings including noncontrolling interests
|
$
|
63,299
|
|
|
$
|
42,123
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
||||
Performance incentive plan expense
|
3,889
|
|
|
3,297
|
|
||
Depreciation and amortization
|
37,383
|
|
|
27,678
|
|
||
Impairment losses and other charges
|
380
|
|
|
—
|
|
||
Impairment – commercial mortgage residual interests valuation
|
2,718
|
|
|
396
|
|
||
Amortization of notes payable discount
|
2,378
|
|
|
3,335
|
|
||
Amortization of deferred interest rate hedges
|
114
|
|
|
(85
|
)
|
||
Equity in earnings of unconsolidated affiliate
|
(305
|
)
|
|
(213
|
)
|
||
Distributions received from unconsolidated affiliate
|
362
|
|
|
286
|
|
||
Gain on disposition of real estate portfolio
|
(2,752
|
)
|
|
(132
|
)
|
||
Gain on note receivable and property foreclosure
|
(198
|
)
|
|
—
|
|
||
Other
|
—
|
|
|
82
|
|
||
Change in operating assets and liabilities, net of assets acquired and liabilities assumed in business combinations:
|
|
|
|
||||
Additions to held for sale real estate
|
(4,472
|
)
|
|
(212
|
)
|
||
Proceeds from disposition of held for sale real estate
|
—
|
|
|
1,058
|
|
||
Decrease in real estate leased to others using the direct financing method
|
807
|
|
|
802
|
|
||
Increase in work in process
|
(889
|
)
|
|
(575
|
)
|
||
Increase in mortgages, notes and accrued interest receivable
|
(345
|
)
|
|
(88
|
)
|
||
Decrease in receivables
|
633
|
|
|
998
|
|
||
Decrease (increase) in commercial mortgage residual interests
|
399
|
|
|
(127
|
)
|
||
Decrease (increase) in accrued rental income
|
(218
|
)
|
|
149
|
|
||
Decrease (increase) in other assets
|
487
|
|
|
(19
|
)
|
||
Decrease in accrued interest payable
|
(668
|
)
|
|
(57
|
)
|
||
Decrease in other liabilities
|
(3,490
|
)
|
|
(1,631
|
)
|
||
Increase in current tax liability
|
255
|
|
|
794
|
|
||
Net cash provided by operating activities
|
99,767
|
|
|
77,859
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Proceeds from the disposition of real estate, Investment Portfolio
|
12,024
|
|
|
807
|
|
||
Additions to real estate:
|
|
|
|
||||
Accounted for using the operating method
|
(287,923
|
)
|
|
(111,673
|
)
|
||
Accounted for using the direct financing method
|
—
|
|
|
(1,747
|
)
|
||
Increase in mortgages and notes receivable
|
(7,861
|
)
|
|
(4,090
|
)
|
||
Principal payments on mortgages and notes receivable
|
3,085
|
|
|
2,107
|
|
||
Payment of lease costs
|
(1,154
|
)
|
|
(672
|
)
|
||
Other
|
557
|
|
|
402
|
|
||
Net cash used in investing activities
|
(281,272
|
)
|
|
(114,866
|
)
|
|
Six Months Ended June 30,
|
||||||
|
2012
|
|
2011
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from line of credit payable
|
$
|
614,400
|
|
|
$
|
328,800
|
|
Repayment of line of credit payable
|
(537,400
|
)
|
|
(270,600
|
)
|
||
Payment of interest rate hedge
|
—
|
|
|
(5,300
|
)
|
||
Repayment of notes payable
|
(50,000
|
)
|
|
—
|
|
||
Payment of debt costs
|
—
|
|
|
(2,920
|
)
|
||
Repayment of mortgages payable
|
(680
|
)
|
|
(541
|
)
|
||
Proceeds from issuance of common stock
|
60,319
|
|
|
56,391
|
|
||
Proceeds from issuance of preferred stock
|
287,500
|
|
|
—
|
|
||
Redemption of preferred stock
|
(92,000
|
)
|
|
—
|
|
||
Payment of Series C preferred stock dividends
|
(1,979
|
)
|
|
(3,392
|
)
|
||
Payment of Series D preferred stock dividends
|
(5,926
|
)
|
|
—
|
|
||
Payment of common stock dividends
|
(81,511
|
)
|
|
(63,887
|
)
|
||
Noncontrolling interest distributions
|
—
|
|
|
(45
|
)
|
||
Noncontrolling interest contributions
|
—
|
|
|
41
|
|
||
Stock issuance costs
|
(10,393
|
)
|
|
—
|
|
||
Net cash provided by financing activities
|
182,330
|
|
|
38,547
|
|
||
Net increase in cash and cash equivalents
|
825
|
|
|
1,540
|
|
||
Cash and cash equivalents at beginning of year
|
2,082
|
|
|
2,048
|
|
||
Cash and cash equivalents at end of year
|
$
|
2,907
|
|
|
$
|
3,588
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Interest paid, net of amount capitalized
|
$
|
38,800
|
|
|
$
|
33,230
|
|
Taxes paid (received)
|
$
|
78
|
|
|
$
|
(487
|
)
|
Supplemental disclosure of noncash investing and financing activities:
|
|
|
|
||||
Issued 396,577 and 139,351 shares of restricted and unrestricted
common stock in 2012 and 2011, respectively, pursuant to NNN’s
performance incentive plan
|
$
|
8,576
|
|
|
$
|
3,407
|
|
Issued 8,389 and 4,623 shares of common stock in 2012 and 2011,
respectively, to directors pursuant to NNN’s performance incentive plan
|
$
|
229
|
|
|
$
|
118
|
|
Issued 10,247 and 13,879 shares of common stock in 2012 and
2011, respectively, pursuant to NNN’s Deferred Director Fee Plan
|
$
|
149
|
|
|
$
|
245
|
|
Surrender of 4,178 and of 4,494 shares of restricted common stock in 2012 and
2011, respectively
|
$
|
98
|
|
|
$
|
94
|
|
Change in other comprehensive income
|
$
|
(326
|
)
|
|
$
|
(4,730
|
)
|
Change in lease classification (direct financing lease to operating lease)
|
$
|
757
|
|
|
$
|
2,243
|
|
Mortgage payable assumed in connection with real estate transaction
|
$
|
6,634
|
|
|
$
|
—
|
|
Real estate acquired in connection with mortgage receivable foreclosure
|
$
|
490
|
|
|
$
|
—
|
|
Real estate received in note receivable foreclosure
|
$
|
1,595
|
|
|
$
|
—
|
|
|
June 30, 2012
|
|
Property Portfolio:
|
|
|
Total properties
|
1,506
|
|
Gross leasable area (square feet)
|
17,798,000
|
|
States
|
47
|
|
|
|
June 30, 2012
|
|
December 31, 2011
|
||||
Intangible lease assets (included in Other assets):
|
|
|
|
|
||||
Value of above market in-place leases, net
|
|
$
|
6,999
|
|
|
$
|
5,907
|
|
Value of in-place leases, net
|
|
38,342
|
|
|
31,970
|
|
||
Intangible lease liabilities (included in Other liabilities):
|
|
|
|
|
||||
Value of below market in-place leases, net
|
|
25,377
|
|
|
23,367
|
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Basic and Diluted Earnings:
|
|
|
|
|
|
|
|
||||||||
Net earnings attributable to NNN
|
$
|
33,505
|
|
|
$
|
21,303
|
|
|
$
|
63,337
|
|
|
$
|
42,123
|
|
Less: Series C preferred stock dividends
|
—
|
|
|
(1,696
|
)
|
|
(1,979
|
)
|
|
(3,392
|
)
|
||||
Less: Series D preferred stock dividends
|
(5,926
|
)
|
|
—
|
|
|
(5,926
|
)
|
|
—
|
|
||||
Less: Excess of redemption value over carrying value of preferred shares redeemed
|
—
|
|
|
—
|
|
|
(3,098
|
)
|
|
—
|
|
||||
Net earnings available to NNN’s common stockholders
|
27,579
|
|
|
19,607
|
|
|
52,334
|
|
|
38,731
|
|
||||
Less: Earnings attributable to unvested restricted shares
|
(180
|
)
|
|
(152
|
)
|
|
(312
|
)
|
|
(286
|
)
|
||||
Net earnings used in basic earnings per share
|
27,399
|
|
|
19,455
|
|
|
52,022
|
|
|
38,445
|
|
||||
Reallocated undistributed income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net earnings used in diluted earnings per share
|
$
|
27,399
|
|
|
$
|
19,455
|
|
|
$
|
52,022
|
|
|
$
|
38,445
|
|
|
|
|
|
|
|
|
|
||||||||
Basic and Diluted Weighted Average Shares Outstanding:
|
|
|
|
|
|
|
|
||||||||
Weighted average number of shares outstanding
|
107,006,399
|
|
|
85,309,082
|
|
|
106,321,014
|
|
|
84,635,929
|
|
||||
Less: Unvested restricted stock
|
(696,804
|
)
|
|
(647,468
|
)
|
|
(631,329
|
)
|
|
(612,375
|
)
|
||||
Less: Contingent shares
|
(317,581
|
)
|
|
(251,826
|
)
|
|
(272,090
|
)
|
|
(251,826
|
)
|
||||
Weighted average number of shares outstanding used in basic earnings
per share
|
105,992,014
|
|
|
84,409,788
|
|
|
105,417,595
|
|
|
83,771,728
|
|
||||
Effects of dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Contingent shares
|
—
|
|
|
—
|
|
|
12,735
|
|
|
—
|
|
||||
Convertible debt
|
1,310,445
|
|
|
160,006
|
|
|
1,259,319
|
|
|
346,699
|
|
||||
Common stock options
|
1,419
|
|
|
3,162
|
|
|
1,855
|
|
|
3,305
|
|
||||
Directors’ deferred fee plan
|
155,115
|
|
|
153,012
|
|
|
152,576
|
|
|
149,620
|
|
||||
Weighted average number of shares outstanding used in diluted earnings
per share
|
107,458,993
|
|
|
84,725,968
|
|
|
106,844,080
|
|
|
84,271,352
|
|
•
|
Level 1 – Valuation is based upon quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2 – Valuation is based upon inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
•
|
Level 3 – Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include option pricing models, discounted cash flow models and similar techniques.
|
|
June 30, 2012
|
|
Lease classification:
|
|
|
Operating
|
1,493
|
|
Direct financing
|
14
|
|
Building portion – direct financing / land portion – operating
|
5
|
|
Weighted average remaining lease term
|
12 Years
|
|
|
June 30, 2012
|
|
December 31, 2011
|
||||
Land and improvements
|
$
|
1,390,175
|
|
|
$
|
1,315,339
|
|
Buildings and improvements
|
2,309,079
|
|
|
2,118,303
|
|
||
Leasehold interests
|
1,290
|
|
|
1,290
|
|
||
|
3,700,544
|
|
|
3,434,932
|
|
||
Less accumulated depreciation and amortization
|
(302,435
|
)
|
|
(270,023
|
)
|
||
|
3,398,109
|
|
|
3,164,909
|
|
||
Work in progress
|
87,710
|
|
|
60,210
|
|
||
|
$
|
3,485,819
|
|
|
$
|
3,225,119
|
|
|
June 30, 2012
|
|||||||||||||
|
# of
Properties |
|
Total
Commitment (1) |
|
Amount
Funded |
|
Remaining
Commitment |
|||||||
Real Estate Portfolio
|
54
|
|
|
$
|
167,243
|
|
|
$
|
127,693
|
|
|
$
|
39,550
|
|
|
June 30, 2012
|
|
December 31, 2011
|
||
Discount rate
|
25
|
%
|
|
25
|
%
|
Average life equivalent CPR
(1)
speeds range
|
0.80% to 20.42% CPR
|
|
|
2.18% to 18.57% CPR
|
|
Foreclosures:
|
|
|
|
||
Frequency curve default model
|
0.1% - 3.9% range
|
|
|
0.2% - 4.7% range
|
|
Loss severity of loans in foreclosure
|
20
|
%
|
|
20
|
%
|
Yield:
|
|
|
|
||
LIBOR
|
Forward 3-month curve
|
|
|
Forward 3-month curve
|
|
Prime
|
Forward curve
|
|
|
Forward curve
|
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Unrealized gains
|
$
|
213
|
|
|
$
|
539
|
|
|
$
|
213
|
|
|
$
|
599
|
|
Other than temporary valuation impairment
|
2,718
|
|
|
267
|
|
|
2,718
|
|
|
396
|
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2012
|
|
2011
|
||||
Series C preferred stock
(1)
:
|
|
|
|
|||||
|
Dividends
|
$
|
1,979
|
|
|
$
|
3,392
|
|
|
Per share
|
0.5378
|
|
|
0.9218
|
|
||
|
|
|
|
|
||||
Series D preferred stock
(2)
:
|
|
|
|
|||||
|
Dividends
|
5,926
|
|
|
—
|
|
||
|
Per share
|
0.5153
|
|
|
—
|
|
||
|
|
|
|
|
||||
Common stock:
|
|
|
|
|||||
|
Dividends
|
81,511
|
|
|
63,887
|
|
||
|
Per share
|
0.770
|
|
|
0.760
|
|
|
Six Months Ended June 30,
|
||||||
|
2012
|
|
2011
|
||||
Shares of common stock
|
1,881,807
|
|
|
2,284,335
|
|
||
Net proceeds
|
$
|
49,476
|
|
|
$
|
56,447
|
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Rental income from operating leases
|
$
|
687
|
|
|
$
|
1,273
|
|
|
$
|
1,571
|
|
|
$
|
2,163
|
|
Earned income from direct financing leases
|
—
|
|
|
20
|
|
|
6
|
|
|
40
|
|
||||
Interest and other income from real estate transactions
|
110
|
|
|
165
|
|
|
262
|
|
|
359
|
|
||||
|
797
|
|
|
1,458
|
|
|
1,839
|
|
|
2,562
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
General and administrative
|
4
|
|
|
3
|
|
|
7
|
|
|
7
|
|
||||
Real estate
|
192
|
|
|
346
|
|
|
478
|
|
|
621
|
|
||||
Depreciation and amortization
|
35
|
|
|
132
|
|
|
95
|
|
|
263
|
|
||||
Impairment losses and other charges
|
345
|
|
|
—
|
|
|
380
|
|
|
—
|
|
||||
|
576
|
|
|
481
|
|
|
960
|
|
|
891
|
|
||||
Other expenses (revenues):
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
360
|
|
|
340
|
|
|
717
|
|
|
681
|
|
||||
|
360
|
|
|
340
|
|
|
717
|
|
|
681
|
|
||||
Earnings before gain on disposition of real estate and income tax
expense
|
(139
|
)
|
|
637
|
|
|
162
|
|
|
990
|
|
||||
Gain on disposition of real estate
|
2,438
|
|
|
1
|
|
|
2,752
|
|
|
132
|
|
||||
Income tax expense
|
(60
|
)
|
|
(70
|
)
|
|
(97
|
)
|
|
(117
|
)
|
||||
Earnings from discontinued operations attributable to NNN
|
2,239
|
|
|
568
|
|
|
2,817
|
|
|
1,005
|
|
||||
Earnings attributable to noncontrolling interests
|
(5
|
)
|
|
(33
|
)
|
|
(17
|
)
|
|
(93
|
)
|
||||
Earnings from discontinued operations attributable to NNN
|
$
|
2,234
|
|
|
$
|
535
|
|
|
$
|
2,800
|
|
|
$
|
912
|
|
|
Six Months Ended June 30, 2012
|
||
Balance at beginning of period
|
$
|
15,299
|
|
Total gains (losses) – realized/unrealized:
|
|
||
Included in earnings
|
(2,718
|
)
|
|
Included in other comprehensive income
|
213
|
|
|
Interest income on Residuals
|
1,471
|
|
|
Cash received from Residuals
|
(1,870
|
)
|
|
Purchases, sales, issuances and settlements, net
|
—
|
|
|
Transfers in and/or out of Level 3
|
—
|
|
|
Balance at end of period
|
$
|
12,395
|
|
Changes in gains (losses) included in earnings attributable to a change in unrealized gains (losses) relating to
assets still held at the end of period
|
$
|
(130
|
)
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Current financial and economic conditions may have an adverse impact on NNN, its tenants, and commercial real estate in general;
|
•
|
NNN may be unable to obtain debt or equity capital on favorable terms, if at all;
|
•
|
Loss of revenues from tenants would reduce NNN's cash flow;
|
•
|
A significant portion of the source of NNN's Property Portfolio annual base rent is heavily concentrated in specific industry classifications, tenants and in specific geographic locations;
|
•
|
Owning real estate and indirect interests in real estate carries inherent risk;
|
•
|
NNN's real estate investments are illiquid;
|
•
|
Costs of complying with changes in governmental laws and regulations may adversely affect NNN's results of operations;
|
•
|
NNN may be subject to known or unknown environmental liabilities and hazardous materials on properties owned by NNN;
|
•
|
NNN may not be able to successfully execute its acquisition or development strategies;
|
•
|
NNN may not be able to dispose of properties consistent with its operating strategy;
|
•
|
A change in the assumptions used to determine the value of commercial mortgage residual interests could adversely affect NNN's financial position;
|
•
|
NNN may suffer a loss in the event of a default or bankruptcy of a borrower or a tenant;
|
•
|
Certain provisions of NNN's leases or loan agreements may be unenforceable;
|
•
|
Property ownership through joint ventures and partnerships could limit NNN's control of those investments;
|
•
|
Competition with numerous other REITs, commercial developers, real estate limited partnerships and other investors may impede NNN's ability to grow;
|
•
|
NNN's loss of key management could adversely affect performance and the value of its common stock;
|
•
|
Uninsured losses may adversely affect NNN's ability to pay outstanding indebtedness;
|
•
|
Acts of violence, terrorist attacks or war may adversely affect the markets in which NNN operates and NNN's results of operations;
|
•
|
Vacant properties or bankrupt tenants could adversely affect NNN's business or financial condition;
|
•
|
The amount of debt NNN has and the restrictions imposed by that debt could adversely affect NNN's business and financial condition;
|
•
|
NNN is obligated to comply with financial and other covenants in its debt instruments that could restrict its operating activities, and the failure to comply with such covenants could result in defaults that accelerate the payment of such debt;
|
•
|
The market value of NNN's equity and debt securities is subject to various factors that may cause significant fluctuations or volatility;
|
•
|
NNN's failure to qualify as a real estate investment trust for federal income tax purposes could result in significant tax liability;
|
•
|
Even if NNN remains qualified as a REIT, NNN may face other tax liabilities that reduce operating results and cash flow;
|
•
|
Adverse legislative or regulatory tax changes could reduce NNN's earnings, cash flow and market price of NNN's common stock;
|
•
|
Compliance with REIT requirements, including distribution requirements, may limit NNN's flexibility and negatively affect NNN's operating decisions;
|
•
|
Changes in accounting pronouncements could adversely impact NNN's or NNN's tenants' reported financial
|
•
|
NNN's failure to maintain effective internal control over financial reporting could have a material adverse effect on its business, operating results and share price;
|
•
|
NNN's ability to pay dividends in the future is subject to many factors; and
|
•
|
Cybersecurity risks and cyber incidents could adversely affect NNN's business and disrupt operations.
|
|
June 30, 2012
|
|
December 31, 2011
|
|
June 30, 2011
|
|||
Properties Owned:
|
|
|
|
|
|
|||
Number
|
1,506
|
|
|
1,422
|
|
|
1,248
|
|
Total gross leasable area (square feet)
|
17,798,000
|
|
|
16,428,000
|
|
|
13,623,000
|
|
Properties:
|
|
|
|
|
|
|||
Leased and operated
|
1,471
|
|
|
1,375
|
|
|
1,209
|
|
Percent of Properties – leased and operated
|
98
|
%
|
|
97
|
%
|
|
97
|
%
|
Weighted average remaining lease term (years)
|
12
|
|
|
12
|
|
|
12
|
|
Total gross leasable area (square feet) – leased and operated
|
17,331,000
|
|
|
15,681,000
|
|
|
12,912,000
|
|
|
|
|
|
% of Annual Base Rent
(1)
|
|||||||
|
|
Lines of Trade
|
|
June 30, 2012
|
|
December 31, 2011
|
|
June 30, 2011
|
|||
1.
|
|
Convenience stores
|
|
22.6
|
%
|
|
24.6
|
%
|
|
22.9
|
%
|
2.
|
|
Restaurants - full service
|
|
11.4
|
%
|
|
9.4
|
%
|
|
10.6
|
%
|
3.
|
|
Automotive parts
|
|
6.0
|
%
|
|
6.5
|
%
|
|
7.6
|
%
|
4.
|
|
Automotive service
|
|
5.9
|
%
|
|
4.9
|
%
|
|
5.3
|
%
|
5.
|
|
Theaters
|
|
4.6
|
%
|
|
5.0
|
%
|
|
5.7
|
%
|
6.
|
|
Sporting goods
|
|
4.5
|
%
|
|
4.8
|
%
|
|
4.5
|
%
|
7.
|
|
Wholesale clubs
|
|
3.7
|
%
|
|
4.0
|
%
|
|
0.4
|
%
|
8.
|
|
Restaurants - limited service
|
|
3.6
|
%
|
|
3.6
|
%
|
|
4.2
|
%
|
9.
|
|
Drug Stores
|
|
3.2
|
%
|
|
3.2
|
%
|
|
3.8
|
%
|
10.
|
|
Consumer electronics
|
|
3.2
|
%
|
|
3.5
|
%
|
|
2.5
|
%
|
|
|
Other
|
|
31.3
|
%
|
|
30.5
|
%
|
|
32.5
|
%
|
|
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Acquisitions:
|
|
|
|
|
|
|
|
||||||||
Number of Properties
|
27
|
|
|
25
|
|
|
94
|
|
|
54
|
|
||||
Gross leasable area (square feet)
|
880,000
|
|
|
303,000
|
|
|
1,473,000
|
|
|
657,000
|
|
||||
Total dollars invested
(1)
|
$
|
114,980
|
|
|
$
|
54,208
|
|
|
$
|
312,958
|
|
|
$
|
109,261
|
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Number of properties
|
7
|
|
|
—
|
|
|
10
|
|
|
2
|
|
||||
Gross leasable area (square feet)
|
81,000
|
|
|
—
|
|
|
101,000
|
|
|
11,000
|
|
||||
Net sales proceeds
|
$
|
6,589
|
|
|
$
|
—
|
|
|
$
|
11,741
|
|
|
$
|
1,831
|
|
Net gain
|
$
|
2,438
|
|
|
$
|
—
|
|
|
$
|
2,752
|
|
|
$
|
86
|
|
|
Quarter Ended June 30,
|
|
|
|
Six Months Ended June 30,
|
|
|
||||||||||||||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
Percent
Increase (Decrease) |
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
Percent
Increase (Decrease) |
||||||||||||
|
|
|
|
|
Percent of Total
|
|
|
|
|
|
|
|
Percent of Total
|
|
|
||||||||||||||||
Rental Income
(1)
|
$
|
78,766
|
|
|
$
|
58,403
|
|
|
95.2
|
%
|
|
94.4
|
%
|
|
34.9%
|
|
$
|
153,072
|
|
|
$
|
116,206
|
|
|
94.9
|
%
|
|
94.2
|
%
|
|
31.7%
|
Real estate expense reimbursement from tenants
|
2,505
|
|
|
2,142
|
|
|
3.0
|
%
|
|
3.5
|
%
|
|
16.9%
|
|
5,337
|
|
|
4,422
|
|
|
3.3
|
%
|
|
3.6
|
%
|
|
20.7%
|
||||
Interest and other income from real estate transactions
|
764
|
|
|
543
|
|
|
0.9
|
%
|
|
0.9
|
%
|
|
40.7%
|
|
1,470
|
|
|
1,164
|
|
|
0.9
|
%
|
|
0.9
|
%
|
|
26.3%
|
||||
Interest income on commercial mortgage residual interests
|
716
|
|
|
777
|
|
|
0.9
|
%
|
|
1.2
|
%
|
|
(7.9)%
|
|
1,471
|
|
|
1,544
|
|
|
0.9
|
%
|
|
1.3
|
%
|
|
(4.7)%
|
||||
Total revenues from continuing operations
|
$
|
82,751
|
|
|
$
|
61,865
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
33.8%
|
|
$
|
161,350
|
|
|
$
|
123,336
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
30.8%
|
|
|
|
|
|
Percent Increase (Decrease) |
|
Percentage of Total
|
|
Percentage of
Revenues from
Continuing Operations
|
||||||||||||
|
2012
|
|
2011
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|||||||||
General and administrative
|
$
|
7,024
|
|
|
$
|
6,568
|
|
|
6.9%
|
|
21.4
|
%
|
|
26.8
|
%
|
|
8.5
|
%
|
|
10.6
|
%
|
Real estate
|
4,025
|
|
|
3,919
|
|
|
2.7%
|
|
12.3
|
%
|
|
16.0
|
%
|
|
4.9
|
%
|
|
6.3
|
%
|
||
Depreciation and amortization
|
19,032
|
|
|
13,765
|
|
|
38.3%
|
|
58.0
|
%
|
|
56.1
|
%
|
|
23.0
|
%
|
|
22.3
|
%
|
||
Impairment – commercial mortgage residual interests valuation
|
2,718
|
|
|
267
|
|
|
918.0%
|
|
8.3
|
%
|
|
1.1
|
%
|
|
3.3
|
%
|
|
0.4
|
%
|
||
Total operating expenses
|
$
|
32,799
|
|
|
$
|
24,519
|
|
|
33.8%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
39.7
|
%
|
|
39.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest and other income
|
$
|
(361
|
)
|
|
$
|
(283
|
)
|
|
27.6%
|
|
(1.9
|
)%
|
|
(1.6
|
)%
|
|
(0.4
|
)%
|
|
(0.5
|
)%
|
Interest expense
|
19,394
|
|
|
17,512
|
|
|
10.7%
|
|
101.9
|
%
|
|
101.6
|
%
|
|
23.4
|
%
|
|
28.3
|
%
|
||
Total other expenses
|
$
|
19,033
|
|
|
$
|
17,229
|
|
|
10.5%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
23.0
|
%
|
|
27.8
|
%
|
|
|
|
|
|
Percent Increase (Decrease) |
|
Percentage of Total
|
|
Percentage of
Revenues from
Continuing Operations
|
||||||||||||
|
2012
|
|
2011
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|||||||||
General and administrative
|
$
|
14,627
|
|
|
$
|
13,226
|
|
|
10.6%
|
|
23.2
|
%
|
|
27.3
|
%
|
|
9.1
|
%
|
|
10.7
|
%
|
Real estate
|
8,597
|
|
|
7,573
|
|
|
13.5%
|
|
13.6
|
%
|
|
15.7
|
%
|
|
5.3
|
%
|
|
6.1
|
%
|
||
Depreciation and amortization
|
37,140
|
|
|
27,184
|
|
|
36.6%
|
|
58.9
|
%
|
|
56.2
|
%
|
|
23.0
|
%
|
|
22.0
|
%
|
||
Impairment – commercial mortgage residual interests valuation
|
2,718
|
|
|
396
|
|
|
586.4%
|
|
4.3
|
%
|
|
0.8
|
%
|
|
1.7
|
%
|
|
0.3
|
%
|
||
Total operating expenses
|
$
|
63,082
|
|
|
$
|
48,379
|
|
|
30.4%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
39.1
|
%
|
|
39.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest and other income
|
$
|
(719
|
)
|
|
$
|
(625
|
)
|
|
15.0%
|
|
(1.9
|
)%
|
|
(1.8
|
)%
|
|
(0.4
|
)%
|
|
(0.5
|
)%
|
Interest expense
|
39,039
|
|
|
35,174
|
|
|
11.0%
|
|
101.9
|
%
|
|
101.8
|
%
|
|
24.2
|
%
|
|
28.5
|
%
|
||
Total other expenses
|
$
|
38,320
|
|
|
$
|
34,549
|
|
|
10.9%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
23.8
|
%
|
|
28.0
|
%
|
(i)
|
the issuance of $300,000,000 in July 2011 of notes payable with a maturity of July 2021, and stated interest rate of 5.500%, and
|
(ii)
|
the decrease of $138,154,000 in the weighted average debt outstanding on the Credit Facility for the six months ended June 30, 2012, as compared to the same period in 2011.
|
|
2012
|
|
2011
|
||||||||||||||||||
# of Sold
Properties
|
|
Gain
|
|
Earnings
|
|
# of Sold
Properties
|
|
Gain
|
|
Earnings
|
|||||||||||
Properties
|
7
|
|
|
$
|
2,438
|
|
|
$
|
2,239
|
|
|
—
|
|
|
$
|
1
|
|
|
$
|
568
|
|
Noncontrolling interests
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(33
|
)
|
||||
|
7
|
|
|
$
|
2,438
|
|
|
$
|
2,234
|
|
|
—
|
|
|
$
|
1
|
|
|
$
|
535
|
|
|
2012
|
|
2011
|
||||||||||||||||||
# of Sold
Properties
|
|
Gain
|
|
Earnings
|
|
# of Sold
Properties
|
|
Gain
|
|
Earnings
|
|||||||||||
Properties
|
10
|
|
|
$
|
2,752
|
|
|
$
|
2,817
|
|
|
2
|
|
|
$
|
87
|
|
|
$
|
1,005
|
|
Noncontrolling interests
|
—
|
|
|
—
|
|
|
(17
|
)
|
|
—
|
|
|
—
|
|
|
(93
|
)
|
||||
|
10
|
|
|
$
|
2,752
|
|
|
$
|
2,800
|
|
|
2
|
|
|
$
|
87
|
|
|
$
|
912
|
|
|
Six Months Ended June 30,
|
||||||
|
2012
|
|
2011
|
||||
Cash and cash equivalents:
|
|
|
|
||||
Provided by operating activities
|
$
|
99,767
|
|
|
$
|
77,859
|
|
Used in investing activities
|
(281,272
|
)
|
|
(114,866
|
)
|
||
Provided by financing activities
|
182,330
|
|
|
38,547
|
|
||
Increase
|
825
|
|
|
1,540
|
|
||
Net cash at beginning of period
|
2,082
|
|
|
2,048
|
|
||
Net cash at end of period
|
$
|
2,907
|
|
|
$
|
3,588
|
|
•
|
$77,000 in net proceeds from NNN's credit facility,
|
•
|
$277,645,000 in net proceeds from the issuance of 11,500,000 depositary shares representing interests in NNN's 6.625% Series D Cumulative Redeemable Preferred Stock (the "Series D Preferred Stock") in February,
|
•
|
$92,000,000 paid to fully redeem NNN's 7.375% Series C Cumulative Redeemable Preferred Stock (the "Series C Preferred Stock"),
|
•
|
$49,476,000
in net proceeds from the issuance of
1,881,807
shares of common stock in connection with the Dividend Reinvestment and Stock Purchase Plan ("DRIP"),
|
•
|
$10,527,000
in net proceeds from the issuance of approximately
395,000
shares of common stock in connection with the at-the-market ("ATM") equity program,
|
•
|
$81,511,000
in dividends paid to common stockholders,
|
•
|
$1,979,000
in dividends paid to holders of the depositary shares of NNN’s Series C Preferred Stock,
|
•
|
$5,926,000
in dividends paid to holders of the depositary shares of NNN’s Series D Preferred Stock, and
|
•
|
$50,000,000 in repayment of notes payable.
|
|
# of
Properties |
|
Total
Commitment (1) |
|
Amount
Funded |
|
Remaining
Commitment |
|||||||
Real Estate Portfolio
|
54
|
|
|
$
|
167,243
|
|
|
$
|
127,693
|
|
|
$
|
39,550
|
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2012
|
|
2011
|
||||
Series C preferred stock
(1)
:
|
|
|
|
|||||
|
Dividends
|
$
|
1,979
|
|
|
$
|
3,392
|
|
|
Per share
|
0.5378
|
|
|
0.9218
|
|
||
|
|
|
|
|
||||
Series D preferred stock
(2)
:
|
|
|
|
|||||
|
Dividends
|
5,926
|
|
|
—
|
|
||
|
Per share
|
0.5153
|
|
|
—
|
|
||
|
|
|
|
|
||||
Common stock:
|
|
|
|
|||||
|
Dividends
|
81,511
|
|
|
63,887
|
|
||
|
Per share
|
0.770
|
|
|
0.760
|
|
|
June 30, 2012
|
|
Percentage of
Total
|
|
December 31, 2011
|
|
Percentage of
Total
|
||||
Line of credit payable
|
$
|
142,600
|
|
|
10.4%
|
|
$
|
65,600
|
|
|
4.9%
|
Mortgages payable
|
29,341
|
|
|
2.1%
|
|
23,171
|
|
|
1.8%
|
||
Notes payable – convertible
|
357,479
|
|
|
26.0%
|
|
355,371
|
|
|
26.5%
|
||
Notes payable
|
845,237
|
|
|
61.5%
|
|
894,967
|
|
|
66.8%
|
||
Total outstanding debt
|
$
|
1,374,657
|
|
|
100.0%
|
|
$
|
1,339,109
|
|
|
100.0%
|
Terms
|
|
2026 Notes
(1)(3)
|
|
2028 Notes
(1)(4)
|
|
||||
Issue date
|
|
September 2006
|
|
|
March 2008
|
|
|
||
Net proceeds
|
|
$
|
168,650
|
|
|
$
|
228,576
|
|
|
Stated interest rate
|
|
3.950
|
%
|
|
5.125
|
%
|
(5)
|
||
Debt issuance costs
|
|
$
|
3,850
|
|
(2)
|
$
|
5,459
|
|
|
Earliest conversion date
(6)
|
|
September 2025
|
|
|
June 2027
|
|
|
||
Earliest put option date
|
|
September 2016
|
|
|
June 2013
|
|
|
||
Maturity date
|
|
September 2026
|
|
|
June 2028
|
|
|
||
Original principal
|
|
$
|
172,500
|
|
|
$
|
234,035
|
|
|
Repurchases
|
|
(33,800
|
)
|
|
(11,000
|
)
|
|
||
Outstanding principal balance at June 30, 2012
|
|
$
|
138,700
|
|
|
$
|
223,035
|
|
|
(1)
|
Debt issuance costs include underwriting discounts and commissions, legal and accounting fees, rating agency fees and printing expenses. These costs have been deferred and are being amortized over the period to the earliest put option date of the holders using the effective interest method.
|
(2)
|
The debt issuance costs associated with the 2026 Notes are fully amortized.
|
(3)
|
The conversion rate per $1 principal amount was 42.4552 shares of NNN's common stock, which is equivalent to a conversion price of $23.5542 per share of common stock.
|
(4)
|
The conversion rate per $1 principal amount was 39.4381 shares of NNN’s common stock, which is equivalent to a conversion price of $25.3562 per share of common stock.
|
(5)
|
With the adoption of the accounting guidance on convertible debt securities in 2009, the effective interest rate for the Notes is
|
(6)
|
Prior to the earliest respective conversion date, the notes are only convertible in limited circumstances pursuant to the terms of the notes.
|
Notes
|
|
Issue Date
|
|
Principal
|
|
Discount
(3)
|
|
Net
Price
|
|
Stated
Rate
|
|
Effective
Rate
(4)
|
|
Maturity
Date
|
||||||
2014
(1)(2)(5)
|
|
June 2004
|
|
$
|
150,000
|
|
|
$
|
440
|
|
|
$
|
149,560
|
|
|
6.250%
|
|
5.910%
|
|
June 2014
|
2015
(1)
|
|
November 2005
|
|
150,000
|
|
|
390
|
|
|
149,610
|
|
|
6.150%
|
|
6.185%
|
|
December 2015
|
|||
2017
(1)(6)
|
|
September 2007
|
|
250,000
|
|
|
877
|
|
|
249,123
|
|
|
6.875%
|
|
6.924%
|
|
October 2017
|
|||
2021
(1)(7)
|
|
July 2011
|
|
300,000
|
|
|
4,269
|
|
|
295,731
|
|
|
5.500%
|
|
5.690%
|
|
July 2021
|
(1)
|
The proceeds from the note issuance were used to pay down outstanding indebtedness of NNN’s Credit Facility.
|
(2)
|
The proceeds from the note issuance were used to repay the obligation of notes maturing in 2004.
|
(3)
|
The note discounts are amortized to interest expense over the respective term of each debt obligation using the effective interest method.
|
(4)
|
Includes the effects of the discount, treasury lock gain / loss and swap gain / loss (as applicable).
|
(5)
|
NNN entered into a forward starting interest rate swap agreement which fixed a swap rate of 4.61% on a notional amount of $94,000. Upon issuance of the 2014 Notes, NNN terminated the forward starting interest rate swap agreement resulting in a gain of $4,148. The gain has been deferred and is being amortized as an adjustment to interest expense over the term of the 2014 Notes using the effective interest method.
|
(6)
|
NNN entered into an interest rate hedge with a notional amount of $100,000. Upon issuance of the 2017 Notes, NNN terminated the interest rate hedge agreement resulting in a liability of $3,260, of which $3,228 was recorded to other comprehensive income. The liability has been deferred and is being amortized as an adjustment to interest expense over the term of the 2017 Notes using the effective interest method.
|
(7)
|
NNN entered into two interest rate hedges with a total notional amount of $150,000. Upon issuance of the 2021 Notes, NNN terminated the interest rate hedge agreements resulting in a liability of $5,300, of which $5,218 was deferred in other comprehensive income. The deferred liability is being amortized over the term of the 2021 Notes using the effective interest method.
|
|
Six Months Ended June 30,
|
||||||
|
2012
|
|
2011
|
||||
Shares of common stock
|
1,881,807
|
|
|
2,284,335
|
|
||
Net proceeds
|
$
|
49,476
|
|
|
$
|
56,447
|
|
|
June 30, 2012
|
|
December 31, 2011
|
||
Discount rate
|
25
|
%
|
|
25
|
%
|
Average life equivalent CPR
(1)
speeds range
|
0.80% to 20.42% CPR
|
|
|
2.18% to 18.57% CPR
|
|
Foreclosures:
|
|
|
|
||
Frequency curve default model
|
0.1% - 3.9% range
|
|
|
0.2% - 4.7% range
|
|
Loss severity of loans in foreclosure
|
20
|
%
|
|
20
|
%
|
Yield:
|
|
|
|
||
LIBOR
|
Forward 3-month curve
|
|
|
Forward 3-month curve
|
|
Prime
|
Forward curve
|
|
|
Forward curve
|
|
|
|
|
|
||
(1)
Conditional prepayment rate
|
|
|
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Unrealized gains
|
$
|
213
|
|
|
$
|
539
|
|
|
$
|
213
|
|
|
$
|
599
|
|
Other than temporary valuation impairment
|
2,718
|
|
|
267
|
|
|
2,718
|
|
|
396
|
|
Debt Obligations (dollars in thousands)
|
||||||||||||||||||||
|
Variable Rate Debt
|
|
Fixed Rate Debt
|
|||||||||||||||||
|
Credit Facility
|
|
Mortgages
(1)
|
|
Unsecured Debt
(2)
|
|||||||||||||||
|
Debt
Obligation
|
|
Weighted
Average
Interest Rate
|
|
Debt
Obligation
|
|
Weighted
Average Effective
Interest Rate
|
|
Debt
Obligation
|
|
Effective
Interest
Rate
|
|||||||||
2012
|
$
|
—
|
|
|
|
|
|
$
|
18,739
|
|
|
6.92
|
%
|
|
$
|
—
|
|
|
|
|
2013
|
—
|
|
|
|
|
|
1,127
|
|
|
6.79
|
%
|
|
218,779
|
|
|
7.19
|
%
|
|||
2014
|
—
|
|
|
|
|
|
1,158
|
|
|
7.16
|
%
|
|
149,892
|
|
|
5.91
|
%
|
|||
2015
|
142,600
|
|
|
1.78
|
%
|
|
1,207
|
|
|
6.67
|
%
|
|
149,838
|
|
|
6.19
|
%
|
|||
2016
|
—
|
|
|
|
|
|
6,842
|
|
|
5.26
|
%
|
|
138,700
|
|
|
5.84
|
%
|
|||
Thereafter
|
—
|
|
|
|
|
|
268
|
|
|
8.47
|
%
|
|
545,507
|
|
|
6.25
|
%
|
|||
Total
|
$
|
142,600
|
|
|
|
|
|
$
|
29,341
|
|
|
6.53
|
%
|
|
$
|
1,202,716
|
|
|
6.33
|
%
|
Fair Value:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
June 30, 2012
|
$
|
142,600
|
|
|
|
|
$
|
29,341
|
|
|
|
|
$
|
1,347,658
|
|
|
|
|||
December 31, 2011
|
$
|
65,600
|
|
|
|
|
$
|
23,171
|
|
|
|
|
$
|
1,362,922
|
|
|
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings.
Not applicable.
|
Item 1A.
|
Risk Factors.
There were no material changes in NNN's risk factors disclosed in Item 1A. Risk Factors of NNN's Annual Report on Form 10-K for the year ended
December 31, 2011
.
|
Item 3.
|
Defaults Upon Senior Securities.
Not applicable.
|
Item 4.
|
Mine Safety Disclosures.
Not applicable.
|
Item 5.
|
Other Information.
Not applicable.
|
Item 6.
|
Exhibits
|
|
3.
|
Articles of Incorporation and Bylaws
|
|||
|
|
|
3.1
|
First Amended and Restated Articles of Incorporation of the Registrant, as amended (filed herewith).
|
|
|
|
|
|
|
|
|
|
|
3.2
|
Articles Supplementary Establishing and Fixing the Rights and Preferences of 6.625% Series D Cumulative Redeemable Preferred Stock, par value $0.01 per share, dated February 21, 2012 (filed as Exhibit 3.1 to the Registrant's Current Report on Form 8-K dated February 23, 2012 and filed with the Securities and Exchange Commission on February 23, 2012, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
3.3
|
Third Amended and Restated Bylaws of the Registrant, as amended (filed as Exhibit 3.2 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on May 1, 2006, and incorporated herein by reference; second amendment filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 14, 2007, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
4.
|
Instruments Defining the Rights of Security Holders, Including Indentures
|
|||
|
|
|
|
|
|
|
|
|
4.1
|
Specimen Certificate of Common Stock, par value $0.01 per share, of the Registrant (filed as Exhibit 3.4 to the Registrant’s Registration Statement No. 1-11290 on Form 8-B filed with the Securities and Exchange Commission and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
4.2
|
Indenture, dated as of March 25, 1998, between the Registrant and First Union National Bank, as trustee (filed as Exhibit 4.4 to the Registrant’s Registration Statement on Form S-3 (Registration No. 333-132095) filed with the Securities and Exchange Commission on February 28, 2006, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
4.3
|
Form of Supplemental Indenture No. 4 dated as of May 30, 2002, by and among Registrant and Wachovia Bank, National Association, Trustee, relating to $50,000,000 of 7.75% Notes due 2012 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on June 4, 2002, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
4.4
|
Form of 7.75% Notes due 2012 (filed as Exhibit 4.3 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on June 4, 2002, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
4.5
|
Form of Supplemental Indenture No. 5 dated as of June 18, 2004, by and among Registrant and Wachovia Bank, National Association, Trustee, relating to $150,000,000 of 6.25% Notes due 2014 (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated June 15, 2004 and filed with the Securities and Exchange Commission on June 18, 2004, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
4.6
|
Form of 6.25% Notes due 2014 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated June 15, 2004 and filed with the Securities and Exchange Commission on June 18, 2004, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
4.7
|
Form of Supplemental Indenture No. 6 dated as of November 17, 2005, by and among Registrant and Wachovia Bank, National Association, Trustee, relating to $150,000,000 of 6.15% Notes due 2015 (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated November 14, 2005 and filed with the Securities and Exchange Commission on November 17, 2005, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
4.8
|
Form of 6.15% Notes due 2015 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated November 14, 2005 and filed with the Securities and Exchange Commission on November 17, 2005, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
4.9
|
Seventh Supplemental Indenture, dated as of September 13, 2006, between National Retail Properties, Inc. and U.S. Bank National Association relating to 3.95% Convertible Senior Notes due 2026 (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated September 7, 2006 and filed with the Securities and Exchange Commission on September 13, 2006, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
4.10
|
Form of 3.95% Convertible Senior Notes due 2026 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated September 7, 2006 and filed with the Securities and Exchange Commission on September 13, 2006, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
4.11
|
Specimen certificate representing the 7.375% Series C Cumulative Redeemable Preferred Stock, par value $.01 per share (the "Series C Preferred Stock"), of the Registrant (filed as Exhibit 4.4 to the Registrant’s Registration Statement on Form 8-A dated October 11, 2006 and filed with the Securities and Exchange Commission on October 12, 2006, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
4.12
|
Deposit Agreement, among the Registrant, American Stock Transfer & Trust Company, as Depositary, and the holders of depositary receipts relating to the Series C Preferred Stock (filed as Exhibit 4.18 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 6, 2006, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
4.13
|
Form of Supplemental Indenture No. 8 between National Retail Properties, Inc. and U.S. Bank National Association relating to 6.875% Notes due 2017 (filed as Exhibit 4.1 to Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on September 4, 2007, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
4.14
|
Form of 6.875% Notes due 2017 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on September 4, 2007, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
4.15
|
Form of Ninth Supplemental Indenture between National Retail Properties, Inc. and U.S. Bank National Association relating to 5.125% Convertible Senior Notes due 2028 (filed as Exhibit 4.1 to Registrants’ Current Report on Form 8-K dated February 27, 2008 and filed with the Securities and Exchange Commission on March 4, 2008, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
4.16
|
Form of 5.125% Convertible Senior Notes due 2028 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated February 27, 2008 and filed with the Securities and Exchange Commission on March 4, 2008, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
4.17
|
Form of Tenth Supplemental Indenture between National Retail Properties, Inc. and U.S. Bank National Association relating to 5.500% Notes due 2021 (filed as Exhibit 4.1 to Registrant's Current Report on Form 8-K dated July 6, 2011 and filed with the Securities and Exchange Commission on July 6, 2011, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
4.18
|
Form of 5.500% Notes due 2021 (filed as Exhibit 4.2 to the Registrant's Current Report on Form 8-K dated July 6, 2011 and filed with the Securities and Exchange Commission on July 6, 2011, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
4.19
|
Specimen certificate representing the 6.625% Series D Cumulative Redeemable Preferred Stock, par value $.01 per share (the "Series D Preferred Stock"), of the Registrant (filed as Exhibit 4.3 to the Registrant’s Registration Statement on Form 8-A dated February 22, 2012 and filed with the Securities and Exchange Commission on February 22, 2012, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
4.20
|
Deposit Agreement, among the Registrant, American Stock Transfer & Trust Company, as Depositary, and the holders of depositary receipts relating to the Series D Preferred Stock (filed herewith).
|
|
|
|
|
|
|
|
|
10.
|
Material Contracts
|
|||
|
|
|
|
|
|
|
|
|
10.1
|
2007 Performance Incentive Plan (filed as Annex A to the Registrant’s 2007 Annual Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on April 3, 2007, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
10.2
|
Form of Restricted Stock Agreement between NNN and the Participant of NNN (filed as Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 15, 2005, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
10.3
|
Employment Agreement dated as of December 1, 2008, between the Registrant and Craig Macnab (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
10.4
|
Employment Agreement dated as of December 1, 2008, between the Registrant and Julian E. Whitehurst (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
10.5
|
Employment Agreement dated as of December 1, 2008, between the Registrant and Kevin B. Habicht (filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
10.6
|
Employment Agreement dated as of December 1, 2008, between the Registrant and Paul E. Bayer (filed as Exhibit 10.5 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
10.7
|
Employment Agreement dated as of December 1, 2008, between the Registrant and Christopher P. Tessitore (filed as Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
10.8
|
Form of Indemnification Agreement (as entered into between the Registrant and each of its directors and executive officers) (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on June 12, 2009, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
10.9
|
Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Craig Macnab (filed as Exhibit 10.10 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
10.10
|
Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Julian E. Whitehurst (filed as Exhibit 10.11 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
10.11
|
Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Kevin B. Habicht (filed as Exhibit 10.12 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
10.12
|
Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Paul E. Bayer (filed as Exhibit 10.13 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
10.13
|
Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Christopher P. Tessitore (filed as Exhibit 10.14 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
10.14
|
Amended and Restated Credit Agreement, dated as of May 25, 2011, by and among the Registrant, certain lenders and Wells Fargo Bank, National Association, as the Administrative Agent (filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on June 6, 2011, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
10.15
|
Form of Restricted Award Agreement - Performance between NNN and the Participant of NNN (filed as Exhibit 10.15 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 4, 2012, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
10.16
|
Form of Restricted Award Agreement - Service between NNN and the Participant of NNN (filed as Exhibit 10.16 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 4, 2012, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
10.17
|
Form of Restricted Award Agreement - Special Grant between NNN and the Participant of NNN (filed as Exhibit 10.17 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 4, 2012, and incorporated herein by reference).
|
|
|
|
|
|
|
NATIONAL RETAIL PROPERTIES, INC.
|
||
|
|
|
By:
|
/s/ Craig Macnab
|
|
|
Craig Macnab
|
|
|
Chairman of the Board and Chief Executive Officer
|
|
|
|
|
By:
|
/s/ Kevin B. Habicht
|
|
|
Kevin B. Habicht
|
|
|
Chief Financial Officer,
|
|
|
Executive Vice President and Director
|
|
3.
|
Articles of Incorporation and Bylaws
|
||
|
|
|
|
|
3.1
|
First Amended and Restated Articles of Incorporation of the Registrant, as amended (filed herewith).
|
|
|
|
|
|
|
3.2
|
Articles Supplementary Establishing and Fixing the Rights and Preferences of 6.625% Series D Cumulative Redeemable Preferred Stock, par value $0.01 per share, dated February 21, 2012 (filed as Exhibit 3.1 to the Registrant's Current Report on Form 8-K dated February 23, 2012 and filed with the Securities and Exchange Commission on February 23, 2012, and incorporated herein by reference).
|
|
|
|
|
|
|
3.3
|
Third Amended and Restated Bylaws of the Registrant, as amended (filed as Exhibit 3.2 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on May 1, 2006, and incorporated herein by reference; second amendment filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 14, 2007, and incorporated herein by reference).
|
|
|
|
|
|
4.
|
Instruments Defining the Rights of Security Holders, Including Indentures
|
||
|
|
|
|
|
4.1
|
|
Specimen Certificate of Common Stock, par value $0.01 per share, of the Registrant (filed as Exhibit 3.4 to the Registrant’s Registration Statement No. 1-11290 on Form 8-B filed with the Securities and Exchange Commission and incorporated herein by reference).
|
|
|
|
|
|
4.2
|
|
Indenture, dated as of March 25, 1998, between the Registrant and First Union National Bank, as trustee (filed as Exhibit 4.4 to the Registrant’s Registration Statement on Form S-3 (Registration No. 333-132095) filed with the Securities and Exchange Commission on February 28, 2006, and incorporated herein by reference).
|
|
|
|
|
|
4.3
|
|
Form of Supplemental Indenture No. 4 dated as of May 30, 2002, by and among Registrant and Wachovia Bank, National Association, Trustee, relating to $50,000,000 of 7.75% Notes due 2012 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on June 4, 2002, and incorporated herein by reference).
|
|
|
|
|
|
4.4
|
|
Form of 7.75% Notes due 2012 (filed as Exhibit 4.3 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on June 4, 2002, and incorporated herein by reference).
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|
|
|
|
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4.5
|
|
Form of Supplemental Indenture No. 5 dated as of June 18, 2004, by and among Registrant and Wachovia Bank, National Association, Trustee, relating to $150,000,000 of 6.25% Notes due 2014 (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated June 15, 2004 and filed with the Securities and Exchange Commission on June 18, 2004, and incorporated herein by reference).
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|
|
|
|
|
4.6
|
|
Form of 6.25% Notes due 2014 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated June 15, 2004 and filed with the Securities and Exchange Commission on June 18, 2004, and incorporated herein by reference).
|
|
|
|
|
|
4.7
|
|
Form of Supplemental Indenture No. 6 dated as of November 17, 2005, by and among Registrant and Wachovia Bank, National Association, Trustee, relating to $150,000,000 of 6.15% Notes due 2015 (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated November 14, 2005 and filed with the Securities and Exchange Commission on November 17, 2005, and incorporated herein by reference).
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|
|
|
|
|
4.8
|
|
Form of 6.15% Notes due 2015 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated November 14, 2005 and filed with the Securities and Exchange Commission on November 17, 2005, and incorporated herein by reference).
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|
|
|
|
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4.9
|
|
Seventh Supplemental Indenture, dated as of September 13, 2006, between National Retail Properties, Inc. and U.S. Bank National Association relating to 3.95% Convertible Senior Notes due 2026 (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated September 7, 2006 and filed with the Securities and Exchange Commission on September 13, 2006, and incorporated herein by reference).
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|
|
|
|
|
4.10
|
|
Form of 3.95% Convertible Senior Notes due 2026 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated September 7, 2006 and filed with the Securities and Exchange Commission on September 13, 2006, and incorporated herein by reference).
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|
|
|
|
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4.11
|
|
Specimen certificate representing the 7.375% Series C Cumulative Redeemable Preferred Stock, par value $.01 per share (the "Series C Preferred Stock"), of the Registrant (filed as Exhibit 4.4 to the Registrant’s Registration Statement on Form 8-A dated October 11, 2006 and filed with the Securities and Exchange Commission on October 12, 2006, and incorporated herein by reference).
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|
|
|
|
4.12
|
|
Deposit Agreement, among the Registrant, American Stock Transfer & Trust Company, as Depositary, and the holders of depositary receipts relating to the Series C Preferred Stock (filed as Exhibit 4.18 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 6, 2006, and incorporated herein by reference).
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|
|
|
|
|
4.13
|
|
Form of Supplemental Indenture No. 8 between National Retail Properties, Inc. and U.S. Bank National Association relating to 6.875% Notes due 2017 (filed as Exhibit 4.1 to Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on September 4, 2007, and incorporated herein by reference).
|
|
|
|
|
|
4.14
|
|
Form of 6.875% Notes due 2017 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on September 4, 2007, and incorporated herein by reference).
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|
|
|
|
|
4.15
|
|
Form of Ninth Supplemental Indenture between National Retail Properties, Inc. and U.S. Bank National Association relating to 5.125% Convertible Senior Notes due 2028 (filed as Exhibit 4.1 to Registrants’ Current Report on Form 8-K dated February 27, 2008 and filed with the Securities and Exchange Commission on March 4, 2008, and incorporated herein by reference).
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|
|
|
|
|
4.16
|
|
Form of 5.125% Convertible Senior Notes due 2028 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated February 27, 2008 and filed with the Securities and Exchange Commission on March 4, 2008, and incorporated herein by reference).
|
|
|
|
|
|
4.17
|
|
Form of Tenth Supplemental Indenture between National Retail Properties, Inc. and U.S. Bank National Association relating to 5.500% Notes due 2021 (filed as Exhibit 4.1 to Registrant's Current Report on Form 8-K dated July 6, 2011 and filed with the Securities and Exchange Commission on July 6, 2011, and incorporated herein by reference).
|
|
|
|
|
|
4.18
|
|
Form of 5.500% Notes due 2021 (filed as Exhibit 4.2 to the Registrant's Current Report on Form 8-K dated July 6, 2011 and filed with the Securities and Exchange Commission on July 6, 2011, and incorporated herein by reference).
|
|
|
|
|
|
4.19
|
|
Specimen certificate representing the 6.625% Series D Cumulative Redeemable Preferred Stock, par value $.01 per share (the "Series D Preferred Stock"), of the Registrant (filed as Exhibit 4.3 to the Registrant’s Registration Statement on Form 8-A dated February 22, 2012 and filed with the Securities and Exchange Commission on February 22, 2012, and incorporated herein by reference).
|
|
|
|
|
|
4.20
|
|
Deposit Agreement, among the Registrant, American Stock Transfer & Trust Company, as Depositary, and the holders of depositary receipts relating to the Series D Preferred Stock (filed herewith).
|
|
|
|
|
10.
|
Material Contracts
|
||
|
|
|
|
|
10.1
|
|
2007 Performance Incentive Plan (filed as Annex A to the Registrant’s 2007 Annual Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on April 3, 2007, and incorporated herein by reference).
|
|
|
|
|
|
10.2
|
|
Form of Restricted Stock Agreement between NNN and the Participant of NNN (filed as Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 15, 2005, and incorporated herein by reference).
|
|
|
|
|
|
10.3
|
|
Employment Agreement dated as of December 1, 2008, between the Registrant and Craig Macnab (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).
|
|
|
|
|
|
10.4
|
|
Employment Agreement dated as of December 1, 2008, between the Registrant and Julian E. Whitehurst (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).
|
|
|
|
|
|
10.5
|
|
Employment Agreement dated as of December 1, 2008, between the Registrant and Kevin B. Habicht (filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).
|
|
|
|
|
|
10.6
|
|
Employment Agreement dated as of December 1, 2008, between the Registrant and Paul E. Bayer (filed as Exhibit 10.5 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).
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|
|
|
|
|
10.7
|
|
Employment Agreement dated as of December 1, 2008, between the Registrant and Christopher P. Tessitore (filed as Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).
|
|
|
|
|
101.1
|
|
The following materials from National Retail Properties, Inc. Quarterly Report on Form 10-Q for the period ended June 30, 2012, formatted in Extensible Business Reporting Language: (i) condensed consolidated balance sheets, (ii) condensed consolidated statements of comprehensive income, (iii) condensed consolidated statements of cash flows, and (iv) notes to condensed consolidated financial statements. As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934 (filed herewith).
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|
|
|
Part I
|
|
First Amended and Restated Articles of Incorporation of Commercial Net Lease Realty, Inc.
|
|
|
|
Part II
|
|
Amendment to First Amended and Restated Articles of Incorporation of Commercial Net Lease Realty, Inc.
|
|
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|
|
|
Articles of Merger Merging Commercial Net Lease Realty Services, Inc. Into Commercial Net Lease Realty, Inc.
|
|
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|
|
Amendment to First Amended and Restated Articles of Incorporation of Commercial Net Lease Realty, Inc.
|
|
|
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|
|
Amendment to First Amended and Restated Articles of Incorporation of National Retail Properties, Inc.
|
|
|
|
Robert A. Bourne
|
|
Ted B. Lanier
|
Edward Clark
|
|
James M. Seneff, Jr.
|
Clifford R. Hinkle
|
|
|
(i)
|
|
The designation of the series, which may be by distinguishing number, letter or title;
|
|
|
|
(ii)
|
|
The dividend rate on the shares of the series, if any, whether any dividends shall be cumulative and, if so, from which date or dates, and the relative rights of priority, if any, of payment of dividends on shares of the series;
|
|
|
|
(iii)
|
|
The redemption rights, including conditions and the price or prices, if any, for shares of the series;
|
|
|
|
(iv)
|
|
The terms and amounts of any sinking fund for the purchase or redemption of shares of the series;
|
|
|
|
(v)
|
|
The rights of the shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation, and the relative rights of priority, if any, of payment of shares of the series;
|
|
|
|
(vi)
|
|
Whether the shares of the series shall be convertible into shares of any other class or series, or any other security, of the Corporation or any other corporation or other entity, and, if so, the specification of such other class or series of such other security, the conversion price or prices or dates on which such shares shall be convertible and all other terms and conditions upon which such conversion may be made;
|
|
|
|
(vii)
|
|
Restrictions on the issuance of shares of the same series or of any other class or series;
|
|
|
|
(viii)
|
|
The voting rights, if any, of the holders of shares of the series; and
|
|
|
|
(ix)
|
|
Any other relative rights, preferences and limitations on that series.
|
|
|
|
|
|
By:
|
|
/s/ Gary M. Ralston
|
|
|
|
|
|
|
|
|
|
Gary M. Ralston, President
|
|
|
|
|
|
|
|
ATTEST
|
|
|
||
|
|
|
|
|
By:
|
|
/s/ Kevin B. Habicht
|
|
|
|
|
|
|
|
|
|
Kevin B. Habicht, Secretary
|
|
|
|
|
|
ATTEST:
|
|
Commercial Net Lease Realty, Inc.
|
|
|
|
/s/ Kella W. Schaible
|
|
/s/ Julian E. Whitehurst
|
|
|
|
Kella W. Schaible
|
|
Julian E. Whitehurst
|
Assistant Secretary
|
|
Executive Vice President and Chief Operating officer
|
|
|
|
|
|
|
|
|
|
|
|
COMMERCIAL NET LEASE REALTY SERVICES, INC., a Maryland corporation
|
||
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Kevin B. Habicht
|
|
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Kevin B. Habicht
|
|
|
|
|
Title:
|
|
Executive Vice President
|
|
|
|
|
|
|
|
ATTEST:
|
|
|
|
|
||
|
|
|
|
|
|
|
/s/ Julian E. Whitehurst
|
|
|
|
|
||
|
|
|
|
|
||
Name:
|
|
Julian E. Whitehurst
|
|
|
|
|
Title:
|
|
Secretary
|
|
|
|
|
|
|
|
|
|
|
|
Dated: October 31, 2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMMERCIAL NET LEASE REALTY, INC., a Maryland corporation
|
||
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Julian E. Whitehurst
|
|
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Julian E. Whitehurst
|
|
|
|
|
Title:
|
|
Executive Vice President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ATTEST:
|
|
|
|
|
||
|
|
|
|
|
|
|
/s/ Kevin B. Habicht
|
|
|
|
|
||
|
|
|
|
|
||
Name:
|
|
Kevin B. Habicht
|
|
|
|
|
Title:
|
|
Assistant Secretary
|
|
|
|
|
|
|
|
|
|
|
|
Dated: October 31, 2005
|
|
|
|
|
|
|
|
ATTEST: |
|
Commercial Net Lease Realty, Inc.
|
/s/ Kella W. Schaible
|
|
/s/ Julian E. Whitehurst
|
Kella W. Schaible
|
|
Julian E. Whitehurst
|
Assistant Secretary
|
|
Executive Vice President and Chief Operating Officer
|
Attest:
|
|
NATIONAL RETAIL PROPERTIES, INC.
|
/s/ Christopher P. Tessitore
|
|
/s/ Kevin B. Habicht
|
Christopher P. Tessitore
Executive Vice President, General Counsel and Secretary |
|
Kevin B. Habicht
Executive Vice President, Chief Financial Officer, Assistant Secretary and Treasurer |
1.
|
I have reviewed this report on Form 10-Q of National Retail Properties, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
August 3, 2012
|
|
|
|
/s/ Craig Macnab
|
Date
|
|
Name:
|
|
Craig Macnab
|
|
|
Title:
|
|
Chairman of the Board and Chief Executive Officer
|
1.
|
I have reviewed this report on Form 10-Q of National Retail Properties, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
August 3, 2012
|
|
|
|
/s/ Kevin B. Habicht
|
Date
|
|
Name:
|
|
Kevin B. Habicht
|
|
|
Title:
|
|
Chief Financial Officer
|
August 3, 2012
|
|
|
|
/s/ Craig Macnab
|
Date
|
|
Name:
|
|
Craig Macnab
|
|
|
Title:
|
|
Chairman of the Board and Chief Executive Officer
|
August 3, 2012
|
|
|
|
/s/ Kevin B. Habicht
|
Date
|
|
Name:
|
|
Kevin B. Habicht
|
|
|
Title:
|
|
Chief Financial Officer
|