EX-99.1 2 ex991-12312015.htm EXHIBIT 99.1
NEWS RELEASE
For information contact:
Kevin B. Habicht
Chief Financial Officer
(407) 265-7348 FOR IMMEDIATE RELEASE
February 11, 2016
RECORD ANNUAL RESULTS AND INCREASED 2016 GUIDANCE
ANNOUNCED BY NATIONAL RETAIL PROPERTIES, INC.
Orlando, Florida, February 11, 2016 – National Retail Properties, Inc. (NYSE: NNN), a real estate investment trust, today announced operating results for the quarter and year ended December 31, 2015. Highlights include:
Operating Results:

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

| Quarter Ended |  | Year Ended
| December 31, |  | December 31,
| 2015 |  | 2014 |  | 2015 |  | 2014
| (in thousands, except per share data)
Revenues | $ | 126,377 |  |  | $ | 115,315 |  |  | $ | 482,914 |  |  | $ | 434,847 |
Net earnings available to common stockholders | $ | 33,612 |  |  | $ | 44,898 |  |  | $ | 162,402 |  |  | $ | 155,167 |
Net earnings per common share | $ | 0.24 |  |  | $ | 0.35 |  |  | $ | 1.20 |  |  | $ | 1.24 |
FFO available to common stockholders | $ | 67,319 |  |  | $ | 72,202 |  |  | $ | 289,193 |  |  | $ | 260,902 |
FFO per common share | $ | 0.49 |  |  | $ | 0.56 |  |  | $ | 2.15 |  |  | $ | 2.09 |
Recurring FFO available to common stockholders | $ | 76,661 |  |  | $ | 70,410 |  |  | $ | 299,171 |  |  | $ | 259,366 |
Recurring FFO per common share | $ | 0.56 |  |  | $ | 0.55 |  |  | $ | 2.22 |  |  | $ | 2.08 |
AFFO available to common stockholders | $ | 77,953 |  |  | $ | 71,895 |  |  | $ | 304,772 |  |  | $ | 263,968 |
AFFO per common share | $ | 0.57 |  |  | $ | 0.56 |  |  | $ | 2.27 |  |  | $ | 2.12 |

• | Portfolio occupancy was 99.1% at December 31, 2015 and September 30, 2015, as compared to 98.6% at December 31, 2014

2015 Highlights:

• | Increased annual Recurring FFO per common share 6.7%

• | Increased annual AFFO per common share 7.1%

• | Dividend yield of 4.3% at December 31, 2015

• | Dividends per common share increased to $1.71 marking the 26th consecutive year of annual dividend increases - making the company one of only four equity REITs and one of only 99 public companies with 26 or more consecutive annual dividend increases

• | Maintained high occupancy levels above 98.5% for the entire year with a weighted average remaining lease term of 11.4 years

2015 Highlights (continued):

• | Invested $726.3 million in 221 properties with an aggregate gross leasable area of approximately 2,706,000 square feet at an initial cash yield of 7.2%

• | Sold 19 properties for $39.1 million, producing $10.4 million of gains on sale, net of income tax and noncontrolling interest at a cap rate of 5.9%

• | Raised $723.6 million of new long-term capital at attractive pricing

◦ | Raised $328.2 million in net proceeds from the issuance of 8,770,117 common shares

◦ | Raised $395.4 million in net proceeds from the issuance of 4.00% senior unsecured notes due 2025

• | Paid off $150 million principal amount of 6.15% senior unsecured notes due 2015

• | Full $650 million availability on bank credit facility at December 31, 2015

• | 99.2% of properties are unencumbered with secured mortgage debt

• | Total shareholder return of 6.4% for 2015 exceeds peers, industry averages and general equity averages

• | Total average annual shareholder return of 14.8% over the past 25 years exceeds peers, industry averages and general equity averages

Selected Highlights for the quarter ended December 31, 2015:

• | Investments:

◦ | $159.5 million in property investments, including the acquisition of 31 properties with an aggregate gross leasable area of approximately 524,000 square feet at an initial cash yield of 7.3%

• | Dispositions:

◦ | Five properties sold with net proceeds of $5.5 million, producing $1.3 million of gains on sales, net of income tax at a cap rate of 8.4%

• | Long-term capital:

◦ | Raised $202.6 million in net proceeds from the issuance of 5,517,001 common shares

◦ | Raised $395.4 million in net proceeds from the issuance of 4.00% senior unsecured notes due 2025

• | Revoked taxable REIT subsidiary status for certain subsidiaries, which resulted in a one-time non-cash charge of $9.6 million, with projected future annual income tax expense savings

FFO guidance for 2016 was increased from a range of $2.28 to $2.34 to a range of $2.29 to $2.35 per share before any impairment expense. The 2016 AFFO is estimated to be $2.34 to $2.40 per share. The FFO guidance equates to net earnings before any gains or losses from the sale of real estate of $1.31 to $1.37 per share, plus $0.98 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: "2015 was another terrific year for National Retail Properties. For the past four years, we have grown recurring FFO per share by 9.0% per annum. Over the same timeframe, we have simultaneously strengthened our balance sheet and decreased our use of debt. With our fortress-like balance sheet and our differentiated ability to source retail properties that meet our underwriting and yield standards, I am optimistic that 2016 will be another stellar year for NNN."
National Retail Properties invests primarily in high-quality retail properties subject generally to long-term, net leases. As of December 31, 2015, the company owned 2,257 properties in 47 states with a gross leasable area of approximately 25.0 million square feet and with a weighted average remaining lease term of 11.4 years. For more information on the company, visit www.nnnreit.com.
Management will hold a conference call on February 11, 2016, at 10:30 a.m. ET to review these results. The call can be accessed on the National Retail Properties web site live at http://www.nnnreit.com. For those unable to listen to the live broadcast, a replay will be available on the company’s web site. In addition, a summary of any earnings guidance given on the call will be posted to the company’s web site.
Statements in this press release that are not strictly historical are “forward-looking” statements. These statements generally are
characterized by the use of terms such as "believe," "expect," "intend," "may," "estimated," or other similar words or expressions. Forward-looking statements involve known and unknown risks, which may cause the company’s actual future results to differ materially from expected results. These risks include, among others, general economic conditions, local real estate conditions, changes in interest rates, increases in operating costs, the preferences and financial condition of the company's tenants, the availability of capital, 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
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Securities and Exchange Commission (the “Commission”) filings, including, but not limited to, the company’s Annual Report on Form 10-K. Copies of each filing may be obtained from the company or the Commission. Such forward-looking statements should be regarded solely as reflections of the company’s current operating plans and estimates. Actual operating results may differ materially from what is expressed or forecast in this press release. National Retail Properties, Inc. undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date these statements were made.
The reported results are preliminary and not final and there can be no assurance that the results will not vary from the final information filed on Form 10-K with the Commission for the quarter and year ended December 31, 2015. 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.
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National Retail Properties, Inc. (in thousands, except per share data) (unaudited)
|  | Quarter Ended |  | Year Ended
|  | December 31, |  | December 31,
|  | 2015 |  | 2014 |  | 2015 |  | 2014
Income Statement Summary |  |  |  |  |  |  |  |
Revenues: |  |  |  |  |  |  |  |
R e ntal and earned income |  | $ | 121,106 |  |  | $ | 110,248 |  |  | $ | 465,282 |  |  | $ | 416,842 |
Real estate expense reimbursement from tenants |  | 4,561 |  |  | 4,093 |  |  | 14,868 |  |  | 13,875 |
Interest and other income from real estate transactions |  | 264 |  |  | 510 |  |  | 986 |  |  | 2,296 |
Interest income on commercial mortgage residual interests |  | 446 |  |  | 464 |  |  | 1,778 |  |  | 1,834 |
|  | 126,377 |  |  | 115,315 |  |  | 482,914 |  |  | 434,847 |
Operating expenses: |  |  |  |  |  |  |  |
General and administrative |  | 9,657 |  |  | 7,712 |  |  | 34,736 |  |  | 32,518 |
Real estate |  | 5,575 |  |  | 5,236 |  |  | 19,774 |  |  | 18,905 |
Depreciation and amortization |  | 34,848 |  |  | 30,376 |  |  | 134,798 |  |  | 116,162 |
Impairment – commercial mortgage residual interests valuation |  | 51 |  |  | — |  |  | 531 |  |  | 256 |
Impairment losses and other charges, net of recoveries |  | 708 |  |  | 198 |  |  | 4,420 |  |  | 760 |
|  | 50,839 |  |  | 43,522 |  |  | 194,259 |  |  | 168,601 |
Other expenses (revenues): |  |  |  |  |  |  |  |
Interest and other income |  | (42 | ) |  | (113 | ) |  | (109 | ) |  | (357 | )
Interest expense |  | 24,548 |  |  | 21,830 |  |  | 90,008 |  |  | 85,510 |
Real estate acquisition costs |  | 33 |  |  | 202 |  |  | 927 |  |  | 1,391 |
|  | 24,539 |  |  | 21,919 |  |  | 90,826 |  |  | 86,544 |
Income tax benefit (expense) |  | (9,827 | ) |  | 797 |  |  | (10,318 | ) |  | 75 |
Earnings from continuing operations |  | 41,172 |  |  | 50,671 |  |  | 187,511 |  |  | 179,777 |
Earnings from discontinued operations, net of income tax expense |  | — |  |  | — |  |  | — |  |  | 124 |
Earnings before gain on disposition of real estate, net of income tax expense |  | 41,172 |  |  | 50,671 |  |  | 187,511 |  |  | 179,901 |
Gain on disposition of real estate, net of income tax expense |  | 1,305 |  |  | 3,103 |  |  | 10,450 |  |  | 11,269 |
Earnings including noncontrolling interests |  | 42,477 |  |  | 53,774 |  |  | 197,961 |  |  | 191,170 |
Earnings from continuing operations attributable to noncontrolling interests: |  | (6 | ) |  | (17 | ) |  | (125 | ) |  | (569 | )
Net earnings attributable to NNN |  | 42,471 |  |  | 53,757 |  |  | 197,836 |  |  | 190,601 |
Series D preferred stock dividends |  | (4,762 | ) |  | (4,762 | ) |  | (19,047 | ) |  | (19,047 | )
Series E preferred stock dividends |  | (4,097 | ) |  | (4,097 | ) |  | (16,387 | ) |  | (16,387 | )
Net earnings available to common stockholders |  | $ | 33,612 |  |  | $ | 44,898 |  |  | $ | 162,402 |  |  | $ | 155,167 |

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National Retail Properties, Inc. (in thousands, except per share data) (unaudited)
|  | Quarter Ended |  | Year Ended
|  | December 31, |  | December 31,
|  | 2015 |  | 2014 |  | 2015 |  | 2014
Weighted average common shares outstanding: |  |  |  |  |  |  |  |
Basic |  | 137,111 |  |  | 128,332 |  |  | 133,999 |  |  | 124,258 |
Diluted |  | 137,623 |  |  | 128,813 |  |  | 134,489 |  |  | 124,710 |
Net earnings per share available to common stockholders: |  |  |  |  |  |  |  |
Basic: |  |  |  |  |  |  |  |
Continuing operations |  | $ | 0.24 |  |  | $ | 0.35 |  |  | $ | 1.21 |  |  | $ | 1.24 |
Net earnings |  | $ | 0.24 |  |  | $ | 0.35 |  |  | $ | 1.21 |  |  | $ | 1.24 |
Diluted: |  |  |  |  |  |  |  |
Continuing operations |  | $ | 0.24 |  |  | $ | 0.35 |  |  | $ | 1.20 |  |  | $ | 1.24 |
Net earnings |  | $ | 0.24 |  |  | $ | 0.35 |  |  | $ | 1.20 |  |  | $ | 1.24 |

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National Retail Properties, Inc. (in thousands, except per share data) (unaudited)
|  | Quarter Ended |  | Year Ended
|  | December 31, |  | December 31,
|  | 2015 |  | 2014 |  | 2015 |  | 2014
Funds From Operations (FFO) Reconciliation: |  |  |  |  |  |  |  |
Net earnings available to common stockholders |  | $ | 33,612 |  |  | $ | 44,898 |  |  | $ | 162,402 |  |  | $ | 155,167 |
Real estate depreciation and amortization: |  |  |  |  |  |  |  |
Continuing operations |  | 34,754 |  |  | 30,284 |  |  | 134,380 |  |  | 115,888 |
Discontinued operations |  | — |  |  | — |  |  | — |  |  | 3 |
Gain on disposition of real estate, net of income tax and noncontrolling interest |  | (1,305 | ) |  | (3,103 | ) |  | (10,397 | ) |  | (10,904 | )
Impairment losses – depreciable real estate, net of recoveries and income tax |  | 258 |  |  | 123 |  |  | 2,808 |  |  | 748 |
Total FFO adjustments |  | 33,707 |  |  | 27,304 |  |  | 126,791 |  |  | 105,735 |
FFO available to common stockholders |  | $ | 67,319 |  |  | $ | 72,202 |  |  | $ | 289,193 |  |  | $ | 260,902 |
FFO per common share: |  |  |  |  |  |  |  |
Basic |  | $ | 0.49 |  |  | $ | 0.56 |  |  | $ | 2.16 |  |  | $ | 2.10 |
Diluted |  | $ | 0.49 |  |  | $ | 0.56 |  |  | $ | 2.15 |  |  | $ | 2.09 |
Recurring Funds from Operations Reconciliation: |  |  |  |  |  |  |  |
Net earnings available to common stockholders |  | $ | 33,612 |  |  | $ | 44,898 |  |  | $ | 162,402 |  |  | $ | 155,167 |
Total FFO adjustments |  | 33,707 |  |  | 27,304 |  |  | 126,791 |  |  | 105,735 |
FFO available to common stockholders |  | 67,319 |  |  | 72,202 |  |  | 289,193 |  |  | 260,902 |
Impairment – commercial mortgage residual interests valuation |  | 51 |  |  | — |  |  | 531 |  |  | 256 |
Impairment losses – non-depreciable real estate |  | — |  |  | — |  |  | 156 |  |  | — |
Income tax benefit |  | (316 | ) |  | (1,792 | ) |  | (316 | ) |  | (1,792 | )
Taxable REIT subsidiary revocation election |  | 9,607 |  |  | — |  |  | 9,607 |  |  | — |
Total Recurring FFO adjustments |  | 9,342 |  |  | (1,792 | ) |  | 9,978 |  |  | (1,536 | )
Recurring FFO available to common stockholders |  | $ | 76,661 |  |  | $ | 70,410 |  |  | $ | 299,171 |  |  | $ | 259,366 |
Recurring FFO per common share: |  |  |  |  |  |  |  |
Basic |  | $ | 0.56 |  |  | $ | 0.55 |  |  | $ | 2.23 |  |  | $ | 2.09 |
Diluted |  | $ | 0.56 |  |  | $ | 0.55 |  |  | $ | 2.22 |  |  | $ | 2.08 |

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National Retail Properties, Inc. (in thousands, except per share data) (unaudited)
|  | Quarter Ended |  | Year Ended
|  | December 31, |  | December 31,
|  | 2015 |  | 2014 |  | 2015 |  | 2014
Adjusted Funds From Operations (AFFO) Reconciliation: |  |  |  |  |  |  |  |
Net earnings available to common stockholders |  | $ | 33,612 |  |  | $ | 44,898 |  |  | $ | 162,402 |  |  | $ | 155,167 |
Total FFO adjustments |  | 33,707 |  |  | 27,304 |  |  | 126,791 |  |  | 105,735 |
Total Recurring FFO adjustments |  | 9,342 |  |  | (1,792 | ) |  | 9,978 |  |  | (1,536 | )
Recurring FFO available to common stockholders |  | 76,661 |  |  | 70,410 |  |  | 299,171 |  |  | 259,366 |
Straight-line accrued rent |  | (529 | ) |  | (318 | ) |  | (368 | ) |  | (1,731 | )
Net capital lease rent adjustment |  | 331 |  |  | 356 |  |  | 1,277 |  |  | 1,369 |
Below market rent amortization |  | (671 | ) |  | (692 | ) |  | (3,046 | ) |  | (2,631 | )
Stock based compensation expense |  | 2,461 |  |  | 2,450 |  |  | 9,671 |  |  | 9,224 |
Capitalized interest expense |  | (750 | ) |  | (311 | ) |  | (2,383 | ) |  | (1,629 | )
Loss on sale of mortgage receivable |  | 450 |  |  | — |  |  | 450 |  |  | — |
Total AFFO adjustments |  | 1,292 |  |  | 1,485 |  |  | 5,601 |  |  | 4,602 |
AFFO available to common stockholders |  | $ | 77,953 |  |  | $ | 71,895 |  |  | $ | 304,772 |  |  | $ | 263,968 |
AFFO per common share: |  |  |  |  |  |  |  |
Basic |  | $ | 0.57 |  |  | $ | 0.56 |  |  | $ | 2.27 |  |  | $ | 2.12 |
Diluted |  | $ | 0.57 |  |  | $ | 0.56 |  |  | $ | 2.27 |  |  | $ | 2.12 |
Other Information: |  |  |  |  |  |  |  |
Percentage rent |  | $ | 802 |  |  | $ | 585 |  |  | $ | 1,430 |  |  | $ | 1,074 |
Amortization of debt costs |  | $ | 773 |  |  | $ | 716 |  |  | $ | 2,915 |  |  | $ | 2,782 |
Scheduled debt principal amortization (excluding maturities) |  | $ | 378 |  |  | $ | 326 |  |  | $ | 1,587 |  |  | $ | 1,151 |
Non-real estate depreciation expense |  | $ | 77 |  |  | $ | 98 |  |  | $ | 418 |  |  | $ | 297 |

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National Retail Properties, Inc. (in thousands) (unaudited)
|  | December 31, 2015 |  | December 31, 2014
Balance Sheet Summary |  |  |  |
Assets: |  |  |  |
Cash and cash equivalents |  | $ | 14,260 |  |  | $ | 10,604 |
Receivables, net of allowance |  | 3,344 |  |  | 3,013 |
Mortgages, notes and accrued interest receivable, net of allowance |  | 8,688 |  |  | 11,075 |
Real estate: |  |  |  |
Accounted for using the operating method, net of accumulated depreciation and amortization |  | 5,256,274 |  |  | 4,685,001 |
Accounted for using the direct financing method |  | 14,518 |  |  | 16,974 |
Real estate held for sale |  | 32,666 |  |  | 38,074 |
Commercial mortgage residual interests |  | 11,115 |  |  | 11,626 |
Accrued rental income, net of allowance |  | 25,529 |  |  | 25,659 |
Debt costs, net of accumulated amortization |  | 4,003 |  |  | 5,290 |
Other assets |  | 89,647 |  |  | 108,235 |
Total assets |  | $ | 5,460,044 |  |  | $ | 4,915,551 |
Liabilities: |  |  |  |
Mortgages payable, including unamortized premium and net of unamortized debt cost |  | 23,964 |  |  | 26,182 |
Notes payable, net of unamortized discount and unamortized debt costs |  | 1,951,980 |  |  | 1,703,709 |
Accrued interest payable |  | 20,113 |  |  | 17,396 |
Other liabilities |  | 121,594 |  |  | 85,172 |
Total liabilities |  | 2,117,651 |  |  | 1,832,459 |
Stockholders’ equity of NNN |  | 3,342,134 |  |  | 3,082,515 |
Noncontrolling interests |  | 259 |  |  | 577 |
Total equity |  | 3,342,393 |  |  | 3,083,092 |
Total liabilities and equity |  | $ | 5,460,044 |  |  | $ | 4,915,551 |
Common shares outstanding |  | 141,008 |  |  | 132,010 |
Gross leasable area, Property Portfolio (square feet) |  | 24,964 |  |  | 22,479 |

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National Retail Properties, Inc Debt Summary As of December 31, 2015 (in thousands) (unaudited)
Unsecured Debt |  | Principal |  | Principal, Net of Unamortized Discount |  | Stated Rate |  | Effective Rate |  | Maturity Date
Line of credit payable |  | $ | — |  |  | $ | — |  |  | L + 92.5 bps |  | — |  | January 2019
Unsecured notes payable: |  |  |  |  |  |  |  |  |  |
2017 |  | 250,000 |  |  | 249,796 |  |  | 6.875% |  | 6.924% |  | October 2017
2021 |  | 300,000 |  |  | 297,344 |  |  | 5.500% |  | 5.689% |  | July 2021
2022 |  | 325,000 |  |  | 321,452 |  |  | 3.800% |  | 3.985% |  | October 2022
2023 |  | 350,000 |  |  | 348,025 |  |  | 3.300% |  | 3.388% |  | April 2023
2024 |  | 350,000 |  |  | 349,389 |  |  | 3.900% |  | 3.924% |  | June 2024
2025 |  | 400,000 |  |  | 399,052 |  |  | 4.000% |  | 4.029% |  | November 2025
Total |  | 1,975,000 |  |  | 1,965,058 |  |  |  |  |  |  |
Total unsecured debt (1) |  | $ | 1,975,000 |  |  | $ | 1,965,058 |  |  |  |  |  |  |
Debt costs |  | (19,100 | ) |  |  |  |  |  |
Accumulated amortization |  | 6,022 |  |  |  |  |  |  |
Debt costs, net of accumulated amortization |  | (13,078 | ) |  |  |  |  |  |
Notes payable, net of unamortized discount and unamortized debt costs |  | $ | 1,951,980 |  |  |  |  |  |  |
(1) Unsecured notes payable have a weighted average interest rate of 4.5% and a weighted average maturity of 7 years

Mortgages Payable |  | Principal Balance |  | Interest Rate |  | Maturity Date
Mortgage(1) |  | $ | 14,555 |  |  | 5.230% |  | July 2023
Mortgage(1) |  | 5,890 |  |  | 5.750% |  | April 2016
Mortgage(1) |  | 2,804 |  |  | 6.400% |  | February 2017
Mortgage |  | 848 |  |  | 6.900% |  | January 2017
|  | 24,097 |  | (2) |  |  |
Debt costs |  | (226 | ) |  |  |  |
Accumulated amortization |  | 93 |  |  |  |  |
Debt costs, net of accumulated amortization |  | (133 | ) |  |  |  |
Mortgages payable, including unamortized premium and net of unamortized debt costs |  | $ | 23,964 |  |  |  |  |
(1) Includes unamortized premium |  |  |  |  |  |
(2) Mortgages payable have a weighted average interest rate of 5.4% and a weighted average maturity of 5 years

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National Retail Properties, Inc.
Property Portfolio
Top 20 Lines of Trade

|  |  |  | As of December 31,
|  | Line of Trade |  | 2015(1) |  | 2014(2)
1. |  | Convenience stores |  | 16.7 | % |  | 18.0 | %
2. |  | Restaurants - full service |  | 11.0 | % |  | 9.1 | %
3. |  | Restaurants - limited service |  | 7.2 | % |  | 6.5 | %
4. |  | Automotive service |  | 7.0 | % |  | 7.2 | %
5. |  | Family entertainment centers |  | 5.6 | % |  | 5.1 | %
6. |  | Theaters |  | 5.2 | % |  | 5.2 | %
7. |  | Automotive parts |  | 4.2 | % |  | 4.7 | %
8. |  | Health and fitness |  | 3.8 | % |  | 3.9 | %
9. |  | Recreational vehicle dealers, parts and accessories |  | 3.6 | % |  | 3.1 | %
10. |  | Banks |  | 3.4 | % |  | 3.7 | %
11. |  | Sporting goods |  | 3.3 | % |  | 3.5 | %
12. |  | Wholesale clubs |  | 2.6 | % |  | 2.9 | %
13. |  | Drug stores |  | 2.3 | % |  | 2.5 | %
14. |  | Consumer electronics |  | 2.2 | % |  | 2.4 | %
15. |  | Medical service providers |  | 2.2 | % |  | 2.0 | %
16. |  | Travel plazas |  | 2.1 | % |  | 2.3 | %
17. |  | General merchandise |  | 1.9 | % |  | 1.6 | %
18. |  | Home furnishings |  | 1.9 | % |  | 1.9 | %
19. |  | Home improvement |  | 1.8 | % |  | 2.1 | %
20. |  | Grocery |  | 1.7 | % |  | 1.6 | %
|  | Other |  | 10.3 | % |  | 10.7 | %
|  | Total |  | 100.0 | % |  | 100.0 | %

Top 10 States

| State |  |  | % of Total(1) |  |  | State |  |  | % of Total(1)
1. | Texas |  |  | 19.7 | % |  | 6. | Georgia |  |  | 4.5 | %
2. | Florida |  |  | 9.3 | % |  | 7. | Virginia |  |  | 3.8 | %
3. | Ohio |  |  | 5.2 | % |  | 8. | Indiana |  |  | 3.8 | %
4. | North Carolina |  |  | 5.2 | % |  | 9. | Alabama |  |  | 3.2 | %
5. | Illinois |  |  | 4.9 | % |  | 10. | Tennessee |  |  | 3.0 | %

(1) | Based on the annualized base rent for all leases in place as of December 31, 2015.

(2) | Based on the annualized base rent for all leases in place as of December 31, 2014.

10

National Retail Properties, Inc.
Property Portfolio
Top Tenants (>2.0%)

|  |  | Properties |  | % of Total (1)
| Sunoco |  | 125 |  | 5.9%
| Mister Car Wash |  | 90 |  | 4.4%
| LA Fitness |  | 25 |  | 3.7%
| Couche-Tard (Pantry) |  | 86 |  | 3.6%
| Camping World |  | 32 |  | 3.6%
| 7-Eleven |  | 77 |  | 3.5%
| SunTrust |  | 121 |  | 3.3%
| AMC Theatre |  | 16 |  | 3.0%
| Chuck E. Cheese's |  | 53 |  | 2.7%
| BJ's Wholesale Club |  | 7 |  | 2.6%
| Frisch's Restaurant |  | 74 |  | 2.4%
| Gander Mountain |  | 12 |  | 2.4%
| Bell American (Taco Bell) |  | 78 |  | 2.2%
| Best Buy |  | 19 |  | 2.1%

Lease Expirations(2)

|  | % of Total(1) |  | # of Properties |  | Gross Leasable Area (3) |  |  |  | % of Total(1) |  | # of Properties |  | Gross Leasable Area (3)
2016 |  | 1.0% |  | 27 |  | 363,000 |  |  | 2022 |  | 5.6% |  | 96 |  | 1,143,000 |
2017 |  | 3.0% |  | 52 |  | 1,084,000 |  |  | 2023 |  | 2.5% |  | 55 |  | 903,000 |
2018 |  | 6.3% |  | 183 |  | 1,645,000 |  |  | 2024 |  | 2.6% |  | 49 |  | 767,000 |
2019 |  | 3.4% |  | 80 |  | 1,109,000 |  |  | 2025 |  | 5.3% |  | 132 |  | 996,000 |
2020 |  | 4.3% |  | 137 |  | 1,550,000 |  |  | 2026 |  | 5.8% |  | 162 |  | 1,624,000 |
2021 |  | 4.7% |  | 116 |  | 1,271,000 |  |  | Thereafter |  | 55.5% |  | 1,140 |  | 12,089,000 |

(1) | Based on the annual base rent of $487,410,000, which is the annualized base rent for all leases in place as of December 31, 2015.

(2) | As of December 31, 2015, the weighted average remaining lease term is 11.4 years.

(3) | Square feet.

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