Second Quarter 2014 Operating Results And Increased 2014 FFO Guidance Announced By National Retail Properties, Inc.

ORLANDO, Fla., Aug. 5, 2014 /PRNewswire/ -- National Retail Properties, Inc. (NYSE: NNN), a real estate investment trust, today announced its operating results for the quarter ended June 30, 2014.  Highlights include:

Operating Results:

• Revenues and net earnings, FFO, Recurring FFO and AFFO available to common stockholders and diluted per share amounts:

Second Quarter 2014 Highlights:

• FFO per share and Recurring FFO per share increased 11.1% over prior year results
• AFFO per share increased 8.5% over prior year results
• Portfolio occupancy increased to 98.5% at June 30, 2014, as compared to 98.2% at March 31, 2014 and December 31, 2013
• Invested $92.0 million in 34 properties with an aggregate 213,000 square feet of gross leasable area at an initial cash yield of 7.5%
• Sold 10 properties for $15.0 million producing $3.1 million of gains on sales, net of income tax
• Raised $54.2 million in net proceeds from the issuance of 1,535,102 common shares
• Issued $350 million principal amount of 3.90% senior unsecured notes due 2024 generating net proceeds of $346.1 million
• Paid off $150 million principal amount of 6.25% senior unsecured notes due 2014

First Half 2014 Highlights:

• FFO per share increased 9.8% over prior year results
• Recurring FFO per share increased 8.6% over prior year results
• AFFO per share increased 5.2% over prior year results
• Invested $186.0 million in 81 properties with an aggregate 522,000 square feet of gross leasable area at an initial cash yield of 7.6%
• Sold 14 properties for $26.2 million producing $4.3 million of gains on sales, net of income tax and noncontrolling interest
• Raised $421.4 million of new long term capital at attractive pricing
  • Raised $75.3 million in net proceeds from the issuance of 2,151,605 common shares
  • Raised $346.1 million in net proceeds from the issuance of 3.90% senior unsecured notes due 2024
• Paid off $150 million principal amount of 6.25% senior unsecured notes due 2014
• Paid off $46.4 million bank credit facility balance leaving full availability of $500 million

On July 17, 2014, Standard & Poor's Rating Services raised National Retail Properties unsecured debt rating to BBB+.

National Retail Properties announced an increase in 2014 FFO guidance from a range of $1.95 to $2.00 to a range of $2.00 to $2.04 per share before any impairment expense. 2014 AFFO is estimated to be $2.05 to $2.09 per share. The FFO guidance equates to net earnings before any gains or losses from the sale of real estate of $1.12 to $1.16 per share, plus $0.88 per share of expected real estate depreciation, amortization and impairments.  The guidance is based on current plans and assumptions and subject to risks and uncertainties more fully described in this press release and the company's reports filed with the Securities and Exchange Commission.

Craig Macnab, Chief Executive Officer, commented:  "We continue to source attractive retail properties for acquisition. With the rent growth provided in the leases, our investment returns remain very attractive. Also, we continue to raise well-priced long-term capital. This has allowed us to increase our 2014 FFO guidance. Our recently announced quarterly dividend increase paves the way for 2014 becoming the 25th consecutive year of annual dividend increases and is a record that puts NNN in a notably small group of public companies."

National Retail Properties invests primarily in high-quality retail properties subject generally to long-term, net leases.  As of June 30, 2014, the company owned 1,927 properties in 47 states with a gross leasable area of approximately 20.8 million square feet.  For more information on the company, visit www.nnnreit.com.

Management will hold a conference call on August 5, 2014, 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.  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, risks related to the company's status as a REIT and the profitability of the company's taxable subsidiary.  Additional information concerning these and other factors that could cause actual results to differ materially from these forward-looking statements is contained from time to time in the company's Securities and Exchange Commission ("SEC") filings, including, but not limited to, the company's Annual Report on Form 10-K.  Copies of each filing may be obtained from the company or the SEC.  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-Q with the SEC for the quarter and six months ended June 30, 2014.  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.

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.

In April 2014, the FASB issued Accounting Standards Update ("ASU") 2014-08, "Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360):  Reporting Discontinued Operations and Disclosures of Disposal of Components of an Entity," effective for fiscal years beginning on or after December 15, 2014, with early adoption permitted beginning January 1, 2014.  Under ASU 2014-08, only disposals representing a strategic shift in operations are to be presented as discontinued operations. NNN has elected early adoption of ASU 2014-08. This requires the Company to continue to classify any property disposal or property classified as held for sale as of December 31, 2013 as discontinued operations prospectively.  Therefore, the revenues and expenses related to these properties are presented as discontinued operations as of June 30, 2014.  The Company did not classify any additional properties as discontinued operations subsequent to December 31, 2013. The adoption of ASU 2014-08 did not have a significant impact on NNN's financial position or results of operations.

SOURCE National Retail Properties, Inc.