ORLANDO, Fla., Nov. 1, 2023 /PRNewswire/ -- NNN REIT, Inc.
(NYSE: NNN), a real estate investment trust, today announced its
operating results for the quarter and nine months ended
September 30, 2023. Highlights
include:
Operating Results:
- Revenues and net earnings, FFO, Core FFO and AFFO available to
common stockholders and diluted per share amounts:
|
|
Quarter Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
|
|
|
(dollars in thousands,
except per share data)
|
|
|
Revenues
|
|
$
|
205,132
|
|
|
$
|
193,471
|
|
|
$
|
611,880
|
|
|
$
|
574,533
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings available
to common stockholders
|
|
$
|
106,787
|
|
|
$
|
88,421
|
|
|
$
|
295,658
|
|
|
$
|
243,964
|
|
|
Net earnings per common
share
|
|
$
|
0.59
|
|
|
$
|
0.50
|
|
|
$
|
1.63
|
|
|
$
|
1.38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO available to common
stockholders
|
|
$
|
147,223
|
|
|
$
|
139,760
|
|
|
$
|
437,362
|
|
|
$
|
406,706
|
|
|
FFO per common
share
|
|
$
|
0.81
|
|
|
$
|
0.79
|
|
|
$
|
2.41
|
|
|
$
|
2.31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core FFO available to
common stockholders
|
|
$
|
147,376
|
|
|
$
|
140,316
|
|
|
$
|
438,247
|
|
|
$
|
413,511
|
|
|
Core FFO per common
share
|
|
$
|
0.81
|
|
|
$
|
0.79
|
|
|
$
|
2.42
|
|
|
$
|
2.35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO available to
common stockholders
|
|
$
|
148,281
|
|
|
$
|
142,987
|
|
|
$
|
442,526
|
|
|
$
|
423,811
|
|
|
AFFO per common
share
|
|
$
|
0.82
|
|
|
$
|
0.81
|
|
|
$
|
2.44
|
|
|
$
|
2.41
|
|
|
Third Quarter 2023 Highlights:
- FFO and Core FFO per common share increased 2.5% over prior
period results
- AFFO per common share increased 1.2% over prior period
results
- Maintained high occupancy levels at 99.2%, with a weighted
average remaining lease term of 10.1 years, at September 30, 2023 as compared to 99.4% at
June 30, 2023 and December 31, 2022
- $212.5 million in property
investments, including the acquisition of 46 properties with an
aggregate gross leasable area of approximately 449,000 square feet
at an initial cash cap rate of 7.4%
- Sold 13 properties for $49.0
million, producing $20.0
million of gains on sales at a cap rate of 6.0%
- Issued $500 million principal
amount of 5.600% senior unsecured notes due 2033
- Ended the quarter with $98.3
million of cash and no amounts drawn on the $1.1 billion bank credit facility
- Maintained sector leading 12.6 year weighted average debt
maturity
Highlights for the nine months ended September 30, 2023:
- FFO per common share increased 4.3% over prior period
results
- Core FFO per common share increased 3.0% over prior period
results
- AFFO per common share increased 1.2% over prior year
results
- $550.0 million in property
investments, including the acquisition of 125 properties with an
aggregate gross leasable area of approximately 1,003,000 square
feet at an initial cash cap rate of 7.2%
- Sold 26 properties for $89.2
million, producing $40.2
million of gains on sales at a cap rate of 5.8%
- Raised $30.6 million net proceeds
from the issuance of 705,396 common shares
- Issued $500 million principal
amount of 5.600% senior unsecured notes due 2033
Core FFO guidance for 2023 was increased from a range of
$3.17 to $3.22 per share to a range of $3.19 to $3.23 per
share. The 2023 AFFO is estimated to be $3.22 to $3.26 per
share. The Core FFO guidance equates to net earnings of
$1.88 to $1.92 per share, plus $1.31 per share of expected real estate
depreciation and amortization and excludes any gains from the sale
of real estate, charges for impairments and executive retirement
costs. 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.
Steve Horn, Chief Executive
Officer, commented: "The recent $500
million 10-year unsecured note offering puts NNN in a great
position to continue to execute our multi-year strategy. As
macroeconomic headwinds continue to create challenging capital
market conditions, our free cash flow generation and $1.1 billion line of credit position NNN to
finish 2023 and begin 2024 strong."
NNN REIT invests primarily in high-quality retail properties
subject generally to long-term, net leases. As of
September 30, 2023, the company owned 3,511 properties in 49
states with a gross leasable area of approximately 35.8 million
square feet and with a weighted average remaining lease term of
10.1 years. NNN is one of only three publicly traded REITs to
have increased annual dividends for 34 or more consecutive years.
For more information on the company, visit www.nnnreit.com.
Management will hold a conference call on November 1, 2023, at 10:30
a.m. ET to review its results of operations. The call can be
accessed on the NNN REIT website live at
http://www.nnnreit.com. For those unable to listen to the
live broadcast, a replay will be available on the company's
website. In addition, a summary of any earnings guidance
given on the call will be posted to the company's website.
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, including inflation,
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 potential impacts of an
epidemic or pandemic (such as the outbreak and worldwide spread of
a novel strain of coronavirus, and its variants ("COVID-19")) on
the company's business operations, financial results, and financial
position on the world economy. 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 (i) Annual Report on Form 10-K for the
year ended December 31, 2022 and (ii) Quarterly Reports on
Form 10-Q for the quarters ended March 31,
2023, June 30, 2023 and
September 30, 2023. 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. NNN REIT, 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.
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
noncontrolling interests 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 such
as transaction related gains, income or expense, impairments on
land or commercial mortgage residual interests, executive
retirement 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.
NNN REIT,
Inc.
|
|
(dollars in thousands,
except per share data)
|
|
(unaudited)
|
|
|
|
|
|
Quarter Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Income Statement
Summary
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
income
|
|
$
|
204,856
|
|
|
$
|
193,102
|
|
|
$
|
610,912
|
|
|
$
|
573,401
|
|
Interest and other
income from real estate transactions
|
|
|
276
|
|
|
|
369
|
|
|
|
968
|
|
|
|
1,132
|
|
|
|
|
205,132
|
|
|
|
193,471
|
|
|
|
611,880
|
|
|
|
574,533
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative
|
|
|
10,225
|
|
|
|
10,124
|
|
|
|
33,216
|
|
|
|
30,906
|
|
Real estate
|
|
|
6,459
|
|
|
|
5,875
|
|
|
|
20,141
|
|
|
|
19,246
|
|
Depreciation and
amortization
|
|
|
59,523
|
|
|
|
56,388
|
|
|
|
178,546
|
|
|
|
166,512
|
|
Leasing transaction
costs
|
|
|
96
|
|
|
|
96
|
|
|
|
223
|
|
|
|
260
|
|
Impairment losses –
real estate, net of recoveries
|
|
|
1,001
|
|
|
|
971
|
|
|
|
3,675
|
|
|
|
7,221
|
|
Executive retirement
costs
|
|
|
153
|
|
|
|
556
|
|
|
|
885
|
|
|
|
6,805
|
|
|
|
|
77,457
|
|
|
|
74,010
|
|
|
|
236,686
|
|
|
|
230,950
|
|
Gain on disposition of
real estate
|
|
|
19,992
|
|
|
|
5,889
|
|
|
|
40,222
|
|
|
|
10,656
|
|
Earnings from
operations
|
|
|
147,667
|
|
|
|
125,350
|
|
|
|
415,416
|
|
|
|
354,239
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expenses
(revenues):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other
income
|
|
|
(644)
|
|
|
|
(33)
|
|
|
|
(751)
|
|
|
|
(120)
|
|
Interest
expense
|
|
|
41,524
|
|
|
|
36,962
|
|
|
|
120,509
|
|
|
|
110,400
|
|
|
|
|
40,880
|
|
|
|
36,929
|
|
|
|
119,758
|
|
|
|
110,280
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
|
106,787
|
|
|
|
88,421
|
|
|
|
295,658
|
|
|
|
243,959
|
|
Loss attributable to
noncontrolling interests
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
5
|
|
Net earnings available
to common stockholders
|
|
$
|
106,787
|
|
|
$
|
88,421
|
|
|
$
|
295,658
|
|
|
$
|
243,964
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
181,398,273
|
|
|
|
176,900,786
|
|
|
|
181,120,963
|
|
|
|
175,542,356
|
|
Diluted
|
|
|
181,721,467
|
|
|
|
177,367,710
|
|
|
|
181,460,622
|
|
|
|
175,993,907
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share
available to common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.59
|
|
|
$
|
0.50
|
|
|
$
|
1.63
|
|
|
$
|
1.39
|
|
Diluted
|
|
$
|
0.59
|
|
|
$
|
0.50
|
|
|
$
|
1.63
|
|
|
$
|
1.38
|
|
NNN REIT,
Inc.
|
(dollars in thousands,
except per share data)
|
(unaudited)
|
|
|
|
Quarter Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Funds From
Operations (FFO) Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings available
to common stockholders
|
|
$
|
106,787
|
|
|
$
|
88,421
|
|
|
$
|
295,658
|
|
|
$
|
243,964
|
|
Real estate
depreciation and amortization
|
|
|
59,427
|
|
|
|
56,257
|
|
|
|
178,251
|
|
|
|
166,177
|
|
Gain on disposition of
real estate
|
|
|
(19,992)
|
|
|
|
(5,889)
|
|
|
|
(40,222)
|
|
|
|
(10,656)
|
|
Impairment losses –
depreciable real estate, net of recoveries
|
|
|
1,001
|
|
|
|
971
|
|
|
|
3,675
|
|
|
|
7,221
|
|
Total FFO
adjustments
|
|
|
40,436
|
|
|
|
51,339
|
|
|
|
141,704
|
|
|
|
162,742
|
|
FFO available to common
stockholders
|
|
$
|
147,223
|
|
|
$
|
139,760
|
|
|
$
|
437,362
|
|
|
$
|
406,706
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO per common
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.81
|
|
|
$
|
0.79
|
|
|
$
|
2.41
|
|
|
$
|
2.32
|
|
Diluted
|
|
$
|
0.81
|
|
|
$
|
0.79
|
|
|
$
|
2.41
|
|
|
$
|
2.31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core Funds From
Operations (Core FFO) Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings available
to common stockholders
|
|
$
|
106,787
|
|
|
$
|
88,421
|
|
|
$
|
295,658
|
|
|
$
|
243,964
|
|
Total FFO
adjustments
|
|
|
40,436
|
|
|
|
51,339
|
|
|
|
141,704
|
|
|
|
162,742
|
|
FFO available to
common stockholders
|
|
|
147,223
|
|
|
|
139,760
|
|
|
|
437,362
|
|
|
|
406,706
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive retirement
costs
|
|
|
153
|
|
|
|
556
|
|
|
|
885
|
|
|
|
6,805
|
|
Total Core FFO
adjustments
|
|
|
153
|
|
|
|
556
|
|
|
|
885
|
|
|
|
6,805
|
|
Core FFO available to
common stockholders
|
|
$
|
147,376
|
|
|
$
|
140,316
|
|
|
$
|
438,247
|
|
|
$
|
413,511
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core FFO per common
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.81
|
|
|
$
|
0.79
|
|
|
$
|
2.42
|
|
|
$
|
2.36
|
|
Diluted
|
|
$
|
0.81
|
|
|
$
|
0.79
|
|
|
$
|
2.42
|
|
|
$
|
2.35
|
|
NNN REIT,
Inc.
|
(dollars in thousands,
except per share data)
|
(unaudited)
|
|
|
|
Quarter Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
|
Adjusted Funds From
Operations (AFFO) Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings available
to common stockholders
|
|
$
|
106,787
|
|
|
$
|
88,421
|
|
|
$
|
295,658
|
|
|
$
|
243,964
|
|
|
Total FFO
adjustments
|
|
|
40,436
|
|
|
|
51,339
|
|
|
|
141,704
|
|
|
|
162,742
|
|
|
Total Core FFO
adjustments
|
|
|
153
|
|
|
|
556
|
|
|
|
885
|
|
|
|
6,805
|
|
|
Core FFO available to
common stockholders
|
|
|
147,376
|
|
|
|
140,316
|
|
|
|
438,247
|
|
|
|
413,511
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Straight-line accrued
rent, net of reserves
|
|
|
(493)
|
|
|
|
655
|
|
|
|
(1,496)
|
|
|
|
3,298
|
|
|
Net capital lease rent
adjustment
|
|
|
83
|
|
|
|
76
|
|
|
|
244
|
|
|
|
225
|
|
|
Below-market rent
amortization
|
|
|
(115)
|
|
|
|
(130)
|
|
|
|
(349)
|
|
|
|
(410)
|
|
|
Stock based
compensation expense
|
|
|
2,678
|
|
|
|
2,343
|
|
|
|
8,254
|
|
|
|
7,734
|
|
|
Capitalized interest
expense
|
|
|
(1,248)
|
|
|
|
(273)
|
|
|
|
(2,374)
|
|
|
|
(547)
|
|
|
Total AFFO
adjustments
|
|
|
905
|
|
|
|
2,671
|
|
|
|
4,279
|
|
|
|
10,300
|
|
|
AFFO available to
common stockholders
|
|
$
|
148,281
|
|
|
$
|
142,987
|
|
|
$
|
442,526
|
|
|
$
|
423,811
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO per common
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.82
|
|
|
$
|
0.81
|
|
|
$
|
2.44
|
|
|
$
|
2.41
|
|
|
Diluted
|
|
$
|
0.82
|
|
|
$
|
0.81
|
|
|
$
|
2.44
|
|
|
$
|
2.41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
Information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental income from
operating leases(1)
|
|
$
|
200,287
|
|
|
$
|
188,840
|
|
|
$
|
596,099
|
|
|
$
|
558,942
|
|
|
Earned income from
direct financing leases(1)
|
|
$
|
140
|
|
|
$
|
148
|
|
|
$
|
427
|
|
|
$
|
449
|
|
|
Percentage
rent(1)
|
|
$
|
336
|
|
|
$
|
235
|
|
|
$
|
1,390
|
|
|
$
|
1,231
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate expense
reimbursement from tenants(1)
|
|
$
|
4,093
|
|
|
$
|
3,879
|
|
|
$
|
12,996
|
|
|
$
|
12,779
|
|
|
Real estate
expenses
|
|
|
(6,459)
|
|
|
|
(5,875)
|
|
|
|
(20,141)
|
|
|
|
(19,246)
|
|
|
Real estate expenses,
net of tenant reimbursements
|
|
$
|
(2,366)
|
|
|
$
|
(1,996)
|
|
|
$
|
(7,145)
|
|
|
$
|
(6,467)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of debt
costs
|
|
$
|
1,247
|
|
|
$
|
1,184
|
|
|
$
|
3,648
|
|
|
$
|
3,533
|
|
|
Scheduled debt
principal amortization (excluding maturities)
|
|
$
|
—
|
|
(2)
|
$
|
166
|
|
|
$
|
173
|
|
(2)
|
$
|
494
|
|
|
Non-real estate
depreciation expense
|
|
$
|
98
|
|
|
$
|
135
|
|
|
$
|
303
|
|
|
$
|
345
|
|
|
|
|
(1)
|
For the quarters ended
September 30, 2023 and 2022, the aggregate of such amounts is
$204,856 and $193,102, respectively and $610,912 and $573,401, for
the nine months ended September 30, 2023 and 2022,
respectively, and is classified as rental income on the income
statement summary.
|
(2)
|
In April 2023, NNN
repaid the remaining mortgages payable principal balance of
$9,774.
|
NNN REIT, Inc.
2023 Earnings Guidance
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 Commission.
|
|
2023
Guidance
|
Net earnings per common
share excluding any gains on disposition
of real estate, impairment charges, and
executive retirement costs
|
|
$1.88 - $1.92 per
share
|
Real estate
depreciation and amortization per share
|
|
$1.31 per
share
|
Core FFO per
share
|
|
$3.19 - $3.23 per
share
|
AFFO per
share
|
|
$3.22 - $3.26 per
share
|
General and
administrative expenses
|
|
$43 - $45
Million
|
Real estate expenses,
net of tenant reimbursements
|
|
$8 - $10
Million
|
Acquisition
volume
|
|
$700 - $800
Million
|
Disposition
volume
|
|
$100 - $120
Million
|
NNN REIT,
Inc.
|
|
(dollars in
thousands)
|
|
(unaudited)
|
|
|
|
|
|
September 30,
2023
|
|
|
December 31,
2022
|
|
Balance Sheet
Summary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
Real estate portfolio,
net of accumulated depreciation and amortization
|
|
$
|
8,346,062
|
|
|
$
|
8,020,814
|
|
Cash and cash
equivalents
|
|
|
77,137
|
|
|
|
2,505
|
|
Restricted cash and
cash held in escrow
|
|
|
21,126
|
|
|
|
4,273
|
|
Receivables, net of
allowance of $667 and $708, respectively
|
|
|
2,142
|
|
|
|
3,612
|
|
Accrued rental income,
net of allowance of $3,880 and $3,836, respectively
|
|
|
28,777
|
|
|
|
27,795
|
|
Debt costs, net of
accumulated amortization of $23,379 and $21,663,
respectively
|
|
|
3,761
|
|
|
|
5,352
|
|
Other
assets
|
|
|
82,303
|
|
|
|
81,694
|
|
Total
assets
|
|
$
|
8,561,308
|
|
|
$
|
8,146,045
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
Line of credit
payable
|
|
$
|
—
|
|
|
$
|
166,200
|
|
Mortgages payable,
including unamortized premium and net of unamortized debt
cost
|
|
|
—
|
|
|
|
9,964
|
|
Notes payable, net of
unamortized discount and unamortized debt costs
|
|
|
4,227,164
|
|
|
|
3,739,890
|
|
Accrued interest
payable
|
|
|
60,765
|
|
|
|
23,826
|
|
Other
liabilities
|
|
|
115,321
|
|
|
|
82,663
|
|
Total
liabilities
|
|
|
4,403,250
|
|
|
|
4,022,543
|
|
|
|
|
|
|
|
|
Stockholders' equity of
NNN
|
|
|
4,158,058
|
|
|
|
4,123,502
|
|
|
|
|
|
|
|
|
Total liabilities and
equity
|
|
$
|
8,561,308
|
|
|
$
|
8,146,045
|
|
|
|
|
|
|
|
|
Common shares
outstanding
|
|
|
182,440,174
|
|
|
|
181,424,670
|
|
|
|
|
|
|
|
|
Gross leasable area,
Property Portfolio (square feet)
|
|
|
35,797,000
|
|
|
|
35,010,000
|
|
NNN REIT, Inc.
|
Debt Summary
|
As of
September 30, 2023
|
(dollars in
thousands)
|
(unaudited)
|
|
Unsecured Debt
|
|
Principal
|
|
|
Principal,
Net of
Unamortized
Discount
|
|
|
Stated
Rate
|
|
|
Effective
Rate
|
|
|
Maturity
Date
|
Line of credit
payable
|
|
$
|
—
|
|
|
$
|
—
|
|
|
SOFR +
87.5 bps
|
|
|
|
—
|
|
|
June 2025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unsecured notes
payable:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024
|
|
|
350,000
|
|
|
|
349,941
|
|
|
|
3.900
|
%
|
|
|
3.924
|
%
|
|
June 2024
|
2025
|
|
|
400,000
|
|
|
|
399,763
|
|
|
|
4.000
|
%
|
|
|
4.029
|
%
|
|
November
2025
|
2026
|
|
|
350,000
|
|
|
|
348,604
|
|
|
|
3.600
|
%
|
|
|
3.733
|
%
|
|
December
2026
|
2027
|
|
|
400,000
|
|
|
|
399,278
|
|
|
|
3.500
|
%
|
|
|
3.548
|
%
|
|
October 2027
|
2028
|
|
|
400,000
|
|
|
|
398,417
|
|
|
|
4.300
|
%
|
|
|
4.388
|
%
|
|
October 2028
|
2030
|
|
|
400,000
|
|
|
|
399,130
|
|
|
|
2.500
|
%
|
|
|
2.536
|
%
|
|
April 2030
|
2033
|
|
|
500,000
|
|
|
|
488,486
|
|
|
|
5.600
|
%
|
|
|
5.905
|
%
|
|
October 2033
|
2048
|
|
|
300,000
|
|
|
|
296,116
|
|
|
|
4.800
|
%
|
|
|
4.890
|
%
|
|
October 2048
|
2050
|
|
|
300,000
|
|
|
|
294,389
|
|
|
|
3.100
|
%
|
|
|
3.205
|
%
|
|
April 2050
|
2051
|
|
|
450,000
|
|
|
|
442,010
|
|
|
|
3.500
|
%
|
|
|
3.602
|
%
|
|
April 2051
|
2052
|
|
|
450,000
|
|
|
|
440,004
|
|
|
|
3.000
|
%
|
|
|
3.118
|
%
|
|
April 2052
|
Total
|
|
|
4,300,000
|
|
|
|
4,256,138
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total unsecured
debt(1)
|
|
$
|
4,300,000
|
|
|
$
|
4,256,138
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt costs
|
|
|
|
|
$
|
(42,595)
|
|
|
|
|
|
|
|
|
|
Accumulated
amortization
|
|
|
|
13,621
|
|
|
|
|
|
|
|
|
|
Debt costs, net of
accumulated amortization
|
|
|
|
(28,974)
|
|
|
|
|
|
|
|
|
|
Notes payable, net of
unamortized discount and
unamortized debt costs
|
|
|
$
|
4,227,164
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Unsecured debt has a
weighted average interest rate of 3.9% and a weighted average
maturity of 12.6 years.
|
As of September 30, 2023, Net Debt
/ EBITDA based on current quarter EBITDA annualized is 5.4x.
NNN REIT, Inc.
Debt Summary –
Continued
As of September 30,
2023
(unaudited)
Credit Facility and Note Covenants
The following is a summary of key financial covenants for the
company's unsecured credit facility and notes, as defined and
calculated per the terms of the facility's credit agreement and the
notes' governing documents, respectively, which are included in the
company's filings with the Commission. These calculations, which
are not based on U.S. GAAP measurements, are presented to investors
to show that as of September 30, 2023, the company believes it
is in compliance with the covenants.
Unsecured Credit
Facility Key Covenants
|
|
Required
|
|
September 30,
2023
|
Maximum leverage
ratio
|
|
< 0.60
|
|
0.38
|
Minimum fixed charge
coverage ratio
|
|
> 1.50
|
|
4.65
|
Maximum secured
indebtedness ratio
|
|
< 0.40
|
|
—
|
Unencumbered asset
value ratio
|
|
> 1.67
|
|
2.67
|
Unencumbered interest
ratio
|
|
> 1.75
|
|
4.63
|
|
|
|
|
|
Unsecured Notes Key
Covenants
|
|
Required
|
|
September 30,
2023
|
Limitation on
incurrence of total debt
|
|
≤ 60%
|
|
40.8 %
|
Limitation on
incurrence of secured debt
|
|
≤ 40%
|
|
—
|
Debt service coverage
ratio
|
|
≥ 1.50
|
|
4.6
|
Maintenance of total
unencumbered assets
|
|
≥ 150%
|
|
245 %
|
NNN REIT,
Inc.
|
Property
Portfolio
|
|
Top 20 Lines of
Trade
|
|
|
|
|
|
As of
September 30,
|
|
|
Lines of
Trade
|
|
2023(1)
|
|
2022(2)
|
1.
|
|
Convenience
stores
|
|
16.8 %
|
|
16.7 %
|
2.
|
|
Automotive
service
|
|
14.7 %
|
|
13.6 %
|
3.
|
|
Restaurants – full
service
|
|
8.8 %
|
|
9.4 %
|
4.
|
|
Restaurants – limited
service
|
|
8.8 %
|
|
9.0 %
|
5.
|
|
Family entertainment
centers
|
|
5.8 %
|
|
6.0 %
|
6.
|
|
Recreational vehicle
dealers, parts and accessories
|
|
4.7 %
|
|
4.1 %
|
7.
|
|
Health and
fitness
|
|
4.6 %
|
|
4.9 %
|
8.
|
|
Theaters
|
|
4.2 %
|
|
4.3 %
|
9.
|
|
Equipment
rental
|
|
3.0 %
|
|
3.2 %
|
10.
|
|
Wholesale
clubs
|
|
2.5 %
|
|
2.4 %
|
11.
|
|
Drug stores
|
|
2.5 %
|
|
1.2 %
|
12.
|
|
Automotive
parts
|
|
2.5 %
|
|
2.9 %
|
13.
|
|
Home
improvement
|
|
2.3 %
|
|
2.4 %
|
14.
|
|
Furniture
|
|
2.1 %
|
|
2.3 %
|
15.
|
|
Medical service
providers
|
|
1.8 %
|
|
1.9 %
|
16.
|
|
General
merchandise
|
|
1.5 %
|
|
1.6 %
|
17.
|
|
Consumer
electronics
|
|
1.4 %
|
|
1.5 %
|
18.
|
|
Home
furnishings
|
|
1.3 %
|
|
1.5 %
|
19.
|
|
Travel
plazas
|
|
1.3 %
|
|
1.5 %
|
20.
|
|
Automobile auctions,
wholesale
|
|
1.2 %
|
|
1.3 %
|
|
|
Other
|
|
8.2 %
|
|
8.3 %
|
|
|
Total
|
|
100.0 %
|
|
100.0 %
|
Top 10
States
|
|
|
|
State
|
|
% of
Total(1)
|
|
|
|
State
|
|
% of
Total(1)
|
1.
|
|
Texas
|
|
17.1 %
|
|
6.
|
|
North
Carolina
|
|
4.0 %
|
2.
|
|
Florida
|
|
9.3 %
|
|
7.
|
|
Indiana
|
|
3.8 %
|
3.
|
|
Illinois
|
|
5.2 %
|
|
8.
|
|
Tennessee
|
|
3.8 %
|
4.
|
|
Ohio
|
|
5.0 %
|
|
9.
|
|
California
|
|
3.4 %
|
5.
|
|
Georgia
|
|
4.6 %
|
|
10.
|
|
Virginia
|
|
3.4 %
|
|
As a percentage of
annual base rent, which is the annualized base rent for all leases
in place.
|
|
(1)
|
$800,194,000 as of
September 30, 2023.
|
|
(2)
|
$752,785,000 as of
September 30, 2022.
|
NNN REIT,
Inc.
|
Property Portfolio –
Continued
|
|
Top 20
Tenants
|
|
|
|
Tenant
|
|
# of
Properties
|
|
% of
Total(1)
|
1.
|
|
7-Eleven
|
|
138
|
|
4.5 %
|
2.
|
|
Mister Car
Wash
|
|
121
|
|
4.3 %
|
3.
|
|
Camping
World
|
|
47
|
|
3.9 %
|
4.
|
|
LA Fitness
|
|
29
|
|
3.2 %
|
5.
|
|
GPM Investments
(Convenience Stores)
|
|
152
|
|
3.1 %
|
6.
|
|
Flynn Restaurant Group
(Taco Bell/Arby's)
|
|
204
|
|
2.8 %
|
7.
|
|
Dave &
Busters
|
|
28
|
|
2.8 %
|
8.
|
|
AMC Theatre
|
|
20
|
|
2.8 %
|
9.
|
|
BJ's Wholesale
Club
|
|
13
|
|
2.5 %
|
10.
|
|
Couche Tard
(Pantry)
|
|
91
|
|
2.3 %
|
11.
|
|
Mavis Tire Express
Services
|
|
138
|
|
2.2 %
|
12.
|
|
Sunoco
|
|
61
|
|
2.1 %
|
13.
|
|
Walgreens
|
|
49
|
|
1.9 %
|
14.
|
|
Chuck-E-Cheese
|
|
53
|
|
1.9 %
|
15.
|
|
United
Rentals
|
|
51
|
|
1.8 %
|
16.
|
|
Frisch's
Restaurants
|
|
68
|
|
1.6 %
|
17.
|
|
Fikes (Convenience
Stores)
|
|
58
|
|
1.6 %
|
18.
|
|
Life Time
Fitness
|
|
3
|
|
1.4 %
|
19.
|
|
Bob Evans
|
|
106
|
|
1.4 %
|
20.
|
|
Best Buy
|
|
16
|
|
1.4 %
|
Lease
Expirations(2)
|
|
|
|
% of
Total(1)
|
|
# of
Properties
|
|
Gross Leasable
Area(3)
|
|
|
|
% of
Total(1)
|
|
# of
Properties
|
|
Gross Leasable
Area(3)
|
2023
|
|
0.2 %
|
|
12
|
|
134,000
|
|
2029
|
|
3.9 %
|
|
107
|
|
1,603,000
|
2024
|
|
1.8 %
|
|
64
|
|
868,000
|
|
2030
|
|
3.4 %
|
|
109
|
|
1,221,000
|
2025
|
|
5.2 %
|
|
184
|
|
1,936,000
|
|
2031
|
|
7.5 %
|
|
187
|
|
2,717,000
|
2026
|
|
4.9 %
|
|
213
|
|
2,131,000
|
|
2032
|
|
6.1 %
|
|
216
|
|
2,329,000
|
2027
|
|
8.3 %
|
|
235
|
|
3,591,000
|
|
2033
|
|
4.9 %
|
|
137
|
|
1,427,000
|
2028
|
|
5.8 %
|
|
228
|
|
2,161,000
|
|
Thereafter
|
|
48.0 %
|
|
1,790
|
|
15,344,000
|
|
|
|
(1)
|
|
Based on the annual
base rent of $800,194,000, which is the annualized base rent for
all leases in place as of September 30, 2023.
|
(2)
|
|
As of
September 30, 2023, the weighted average remaining lease term
is 10.1 years.
|
(3)
|
|
Square feet.
|
NNN REIT, Inc.
Rent Deferral Lease
Amendments
The following table outlines the rent deferred and corresponding
scheduled repayment of the COVID-19 rent deferral lease amendments
executed as of September 30, 2023 (dollars in
thousands):
|
|
|
Deferred
|
|
|
|
Scheduled
Repayment
|
|
|
|
|
Accrual
Basis
|
|
|
Cash
Basis
|
|
|
Total
|
|
|
% of
Total
|
|
|
|
Accrual
Basis
|
|
|
Cash
Basis
|
|
|
Total
|
|
|
% of
Total
|
|
|
Cumulative
Total
|
|
2020
|
|
|
$
|
33,594
|
|
|
$
|
18,129
|
|
|
$
|
51,723
|
|
|
|
91.6
|
%
|
|
|
$
|
3,239
|
|
|
$
|
20
|
|
|
$
|
3,259
|
|
|
|
5.8
|
%
|
|
|
5.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
|
|
|
990
|
|
|
|
3,732
|
|
|
|
4,722
|
|
|
|
8.4
|
%
|
|
|
|
25,935
|
|
|
|
5,841
|
|
|
|
31,776
|
|
|
|
56.3
|
%
|
|
|
62.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022
|
Q1
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
1,780
|
|
|
|
2,277
|
|
|
|
4,057
|
|
|
|
7.2
|
%
|
|
|
69.3
|
%
|
|
Q2
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
1,729
|
|
|
|
2,276
|
|
|
|
4,005
|
|
|
|
7.1
|
%
|
|
|
76.4
|
%
|
|
Q3
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
1,201
|
|
|
|
2,257
|
|
|
|
3,458
|
|
|
|
6.1
|
%
|
|
|
82.5
|
%
|
|
Q4
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
681
|
|
|
|
2,277
|
|
|
|
2,958
|
|
|
|
5.3
|
%
|
|
|
87.8
|
%
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
5,391
|
|
|
|
9,087
|
|
|
|
14,478
|
|
|
|
25.7
|
%
|
|
|
87.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
Q1
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
9
|
|
|
|
1,677
|
|
|
|
1,686
|
|
|
|
3.0
|
%
|
|
|
90.8
|
%
|
|
Q2
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
10
|
|
|
|
476
|
|
|
|
486
|
|
|
|
0.9
|
%
|
|
|
91.7
|
%
|
|
Q3
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
476
|
|
|
|
476
|
|
|
|
0.8
|
%
|
|
|
92.5
|
%
|
|
Q4
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
476
|
|
|
|
476
|
|
|
|
0.8
|
%
|
|
|
93.3
|
%
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
19
|
|
|
|
3,105
|
|
|
|
3,124
|
|
|
|
5.5
|
%
|
|
|
93.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024
|
Q1
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
476
|
|
|
|
476
|
|
|
|
0.8
|
%
|
|
|
94.1
|
%
|
|
Q2
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
476
|
|
|
|
476
|
|
|
|
0.8
|
%
|
|
|
94.9
|
%
|
|
Q3
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
476
|
|
|
|
476
|
|
|
|
0.8
|
%
|
|
|
95.7
|
%
|
|
Q4
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
476
|
|
|
|
476
|
|
|
|
0.9
|
%
|
|
|
96.6
|
%
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
1,904
|
|
|
|
1,904
|
|
|
|
3.3
|
%
|
|
|
96.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2025
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
1,904
|
|
|
|
1,904
|
|
|
|
3.4
|
%
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
34,584
|
|
|
$
|
21,861
|
|
|
$
|
56,445
|
|
|
|
100.0
|
%
|
|
|
$
|
34,584
|
|
|
$
|
21,861
|
|
|
$
|
56,445
|
|
|
|
100.0
|
%
|
|
|
|
Adjusted Results
The following table outlines the adjusted effects of excluding
the scheduled repayments of the COVID-19 rent deferral lease
amendments executed as of September 30, 2023:
|
|
Quarter Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2023
|
|
|
2022
|
|
|
% Change
|
|
|
2023
|
|
|
2022
|
|
|
% Change
|
|
Core FFO per common
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As reported
|
|
$
|
0.81
|
|
|
$
|
0.79
|
|
|
|
2.5
|
%
|
|
$
|
2.42
|
|
|
$
|
2.35
|
|
|
|
3.0
|
%
|
Adjusted(1)
|
|
$
|
0.81
|
|
|
$
|
0.78
|
|
|
|
3.8
|
%
|
|
$
|
2.40
|
|
|
$
|
2.31
|
|
|
|
3.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO per common
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As reported
|
|
$
|
0.82
|
|
|
$
|
0.81
|
|
|
|
1.2
|
%
|
|
$
|
2.44
|
|
|
$
|
2.41
|
|
|
|
1.2
|
%
|
Adjusted(2)
|
|
$
|
0.81
|
|
|
$
|
0.79
|
|
|
|
2.5
|
%
|
|
$
|
2.42
|
|
|
$
|
2.34
|
|
|
|
3.4
|
%
|
|
|
(1)
|
Excludes the cash basis
rent repayments from the Rent Deferral Lease Amendments table
above.
|
(2)
|
Excludes the cash and
accrual basis rent repayments from the Rent Deferral Lease
Amendments table above.
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/third-quarter-2023-operating-results-and-increased-2023-guidance-announced-by-nnn-reit-inc-301973373.html
SOURCE NNN REIT, Inc.