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Income Taxes | 12 Months Ended
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Dec. 31, 2012
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes: NNN treats some depreciation expense and certain other items differently for tax than for financial reporting purposes. The principal differences between NNN’s effective tax rates for the years ended December 31, 2012, 2011 and 2010, and the statutory rates relate to state taxes and nondeductible expenses. For income tax purposes, NNN has taxable REIT subsidiaries in which certain real estate activities are conducted. In 2010, NNN acquired the 21.1% non-controlling interest in its majority owned and controlled subsidiary, OAMI, pursuant to which OAMI became a wholly owned subsidiary of NNN. OAMI has remaining tax liabilities relating to the built-in gain of its assets. The significant components of the net income tax asset consist of the following at December 31 (dollars in thousands):
| 2012 |  | 2011
Deferred tax assets: |  |  |
Cost basis | $ | 1,118 |  |  | $ | 386 |
Deferred income | 247 |  |  | 151 |
Reserves | 3,735 |  |  | 11,035 |
Goodwill | — |  |  | 3,524 |
Excess interest expense carryforward | 4,508 |  |  | 5,299 |
Net operating loss carryforward | 5,829 |  |  | 6,805 |
| 15,437 |  |  | 27,200 |
Valuation allowance | — |  |  | (18,021 | )
Total deferred tax assets | 15,437 |  |  | 9,179 |
Deferred tax liabilities: |  |  |
Built-in gain | (2,924 | ) |  | (3,537 | )
Depreciation | (756 | ) |  | (1,103 | )
Other | (546 | ) |  | (267 | )
Total deferred tax liabilities | (4,226 | ) |  | (4,907 | )
Net deferred tax asset | $ | 11,211 |  |  | $ | 4,272 |
In assessing the ability to realize a deferred tax asset, management considers whether it is more likely than not that some portion or the entire deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. The net operating loss carryforwards were generated by NNN’s taxable REIT subsidiaries. The net operating loss carryforwards begin to expire in 2028. Based upon the level of historical taxable income, projections for future taxable income, and tax strategies available to NNN over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that NNN will realize all of the benefits of these deductible differences that existed as of December 31, 2012. As noted in Note 1, during the year ended December 31, 2012, NNN identified certain immaterial errors related to deferred tax assets and the related valuation allowance. NNN decreased deferred tax assets and the related valuation allowance by $10,350,000 each to correct a gross-up error and reversed its valuation allowance by $6,493,000 to reflect an overstatement of its valuation allowance recorded in the years ended December 31, 2010 and 2009. Furthermore, NNN determined in the year ended December 31, 2012 that its available sources of income supported realizability of all of its gross deferred tax assets. In 2012, NNN reversed the remaining valuation allowance and recorded an income tax benefit of $1,178,000. The decrease in the valuation allowance for the years ended December 31, 2012 and 2011 was $18,021,000 and $0, respectively. The income tax benefit (expense) consists of the following components for the years ended December 31, (as adjusted) (dollars in thousands):
| 2012 |  | 2011 |  | 2010
Net earnings before income taxes | $ | 135,124 |  |  | $ | 93,302 |  |  | $ | 74,097 |
Provision for income tax benefit (expense): |  |  |  |  |
Current: |  |  |  |  |
Federal | (41 | ) |  | (79 | ) |  | (254 | )
State and local | (7 | ) |  | (15 | ) |  | (48 | )
Deferred: |  |  |  |  |
Federal | 5,776 |  |  | (801 | ) |  | (744 | )
State and local | 1,163 |  |  | (82 | ) |  | (54 | )
Total benefit (expense) for income taxes | 6,891 |  |  | (977 | ) |  | (1,100 | )
Net earnings attributable to NNN’s stockholders | $ | 142,015 |  |  | $ | 92,325 |  |  | $ | 72,997 |
The total income tax benefit (expense) differs from the amount computed by applying the statutory federal tax rate to net earnings before taxes as follows for the years ended December 31 (dollars in thousands):
| 2012 |  | 2011 |  | 2010
Federal benefit (expense) at statutory tax rate | $ | (45,942 | ) |  | $ | (31,723 | ) |  | $ | (25,193 | )
Nontaxable income of NNN | 44,746 |  |  | 30,380 |  |  | 26,415 |
State taxes, net of federal benefit | (139 | ) |  | (156 | ) |  | 142 |
Amortization of Built-in Gain Tax for GAAP | 613 |  |  | 531 |  |  | 663 |
Other | (58 | ) |  | (9 | ) |  | (6 | )
Valuation allowance (increase) decrease | 7,671 |  |  | — |  |  | (3,121 | )
Total tax benefit (expense) | $ | 6,891 |  |  | $ | (977 | ) |  | $ | (1,100 | )
In June 2006, the FASB issued additional guidance, which clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements included in Income Taxes. The interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. NNN, in accordance with FASB guidance included in Income Taxes, has analyzed its various federal and state filing positions. NNN believes that its income tax filing positions and deductions are well documented and supported. Additionally, NNN believes that its accruals for tax liabilities are adequate. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to the FASB guidance. In addition, NNN did not record a cumulative effect adjustment related to the adoption of the FASB guidance. NNN has had no increases or decreases in unrecognized tax benefits for current or prior years since the date of adoption. Further, no interest or penalties have been included since no reserves were recorded and no significant increases or decreases are expected to occur within the next 12 months. When applicable, such interest and penalties will be recorded in non-operating expenses. The periods that remain open under federal statute are 2009 through 2012. NNN also files in many states with varying open years under statute.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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