EX-99.2 3 ex992-12312016.htm EXHIBIT 99.2
Exhibit 99.2
ANNUAL SUPPLEMENTAL DATA

As of December 31, 2016

TABLE OF CONTENTS

| PAGE REFERENCE
Financial Summary |
Income Statement Summary | 1
Funds From Operations (FFO) | 3
Core Funds From Operation | 3
Adjusted Funds From Operations (AFFO) | 4
Other Information | 4
Balance Sheet | 5
Debt Summary | 6
Credit Metrics | 7
Credit Facility and Note Covenants | 7
Long-Term Dividend History | 8
Transaction Summary |
Property Acquisitions | 9
Property Dispositions | 9
Property Portfolio |
Lease Expirations | 10
Top 20 Lines of Trade | 11
Top 10 States | 11
Portfolio By Region | 12
Top Tenants | 12
Same Store Rental Income | 13
Leasing Data | 13
Other Property Portfolio Data | 14
Earnings Guidance | 14

Statements in this supplemental 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 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.

INCOME STATEMENT SUMMARY
(in thousands, except per share data)
(unaudited)
|  | Quarter Ended |  | Year Ended
|  | December 31, |  | December 31,
|  | 2016 |  | 2015 |  | 2016 |  | 2015
Revenues: |  |  |  |  |  |  |  |
Rental and earned income |  | $ | 135,947 |  |  | $ | 121,106 |  |  | $ | 515,954 |  |  | $ | 465,282 |
Real estate expense reimbursement from tenants |  | 4,732 |  |  | 4,561 |  |  | 14,984 |  |  | 14,868 |
Interest and other income from real estate transactions |  | 128 |  |  | 264 |  |  | 1,032 |  |  | 988 |
Interest income on commercial mortgage residual interests |  | 392 |  |  | 446 |  |  | 1,677 |  |  | 1,778 |
|  | 141,199 |  |  | 126,377 |  |  | 533,647 |  |  | 482,916 |
Operating expenses: |  |  |  |  |  |  |  |
General and administrative |  | 9,408 |  |  | 9,657 |  |  | 36,508 |  |  | 34,736 |
Real estate |  | 6,555 |  |  | 5,575 |  |  | 20,852 |  |  | 19,776 |
Depreciation and amortization |  | 38,987 |  |  | 34,848 |  |  | 149,101 |  |  | 134,798 |
Impairment – commercial mortgage residual interests valuation |  | — |  |  | 51 |  |  | 6,830 |  |  | 531 |
Impairment losses – real estate and other charges, net of recoveries |  | 338 |  |  | 708 |  |  | 11,287 |  |  | 4,420 |
|  | 55,288 |  |  | 50,839 |  |  | 224,578 |  |  | 194,261 |
Other expenses (revenues): |  |  |  |  |  |  |  |
Interest and other income |  | (62 | ) |  | (42 | ) |  | (170 | ) |  | (109 | )
Interest expense |  | 24,429 |  |  | 24,548 |  |  | 96,352 |  |  | 90,008 |
Real estate acquisition costs |  | 42 |  |  | 33 |  |  | 563 |  |  | 927 |
|  | 24,409 |  |  | 24,539 |  |  | 96,745 |  |  | 90,826 |
Income tax expense |  | — |  |  | (9,827 | ) |  | — |  |  | (10,318 | )
Earnings before gain on disposition of real estate, net of income tax expense |  | 61,502 |  |  | 41,172 |  |  | 212,324 |  |  | 187,511 |
Gain on disposition of real estate, net of income tax expense |  | 4,624 |  |  | 1,305 |  |  | 27,182 |  |  | 10,450 |
Earnings including noncontrolling interests |  | 66,126 |  |  | 42,477 |  |  | 239,506 |  |  | 197,961 |
Earnings from continuing operations attributable to noncontrolling interests: |  | (34 | ) |  | (6 | ) |  | (6 | ) |  | (125 | )
Net earnings attributable to NNN |  | 66,092 |  |  | 42,471 |  |  | 239,500 |  |  | 197,836 |

1

INCOME STATEMENT SUMMARY
(in thousands, except per share data)
(unaudited)
|  | Quarter Ended |  | Year Ended
|  | December 31, |  | December 31,
|  | 2016 |  | 2015 |  | 2016 |  | 2015
Net earnings attributable to NNN |  | 66,092 |  |  | 42,471 |  |  | 239,500 |  |  | 197,836 |
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 | )
Series F preferred stock dividends |  | (3,189 | ) |  | — |  |  | (3,189 | ) |  | — |
Net earnings available to common stockholders |  | $ | 54,044 |  |  | $ | 33,612 |  |  | $ | 200,877 |  |  | $ | 162,402 |
Weighted average common shares outstanding: |  |  |  |  |  |  |  |
Basic |  | 146,266 |  |  | 137,111 |  |  | 144,176 |  |  | 133,999 |
Diluted |  | 146,763 |  |  | 137,623 |  |  | 144,661 |  |  | 134,489 |
Net earnings per share available to common stockholders: |  |  |  |  |  |  |  |
Basic |  | $ | 0.37 |  |  | $ | 0.24 |  |  | $ | 1.39 |  |  | $ | 1.21 |
Diluted |  | $ | 0.37 |  |  | $ | 0.24 |  |  | $ | 1.38 |  |  | $ | 1.20 |

2

FUNDS FROM OPERATIONS (FFO)
(in thousands, except per share data)
(unaudited) |  | Quarter Ended |  | Year Ended
|  | December 31, |  | December 31,
|  | 2016 |  | 2015 |  | 2016 |  | 2015
Net earnings available to common stockholders |  | $ | 54,044 |  |  | $ | 33,612 |  |  | $ | 200,877 |  |  | $ | 162,402 |
Real estate depreciation and amortization: |  | 38,907 |  |  | 34,754 |  |  | 148,779 |  |  | 134,380 |
Gain on disposition of real estate, net of income tax and noncontrolling interests |  | (4,579 | ) |  | (1,305 | ) |  | (27,137 | ) |  | (10,397 | )
Impairment losses – depreciable real estate, net of recoveries and income tax |  | 345 |  |  | 258 |  |  | 8,025 |  |  | 2,808 |
Total FFO adjustments |  | 34,673 |  |  | 33,707 |  |  | 129,667 |  |  | 126,791 |
FFO available to common stockholders |  | $ | 88,717 |  |  | $ | 67,319 |  |  | $ | 330,544 |  |  | $ | 289,193 |
FFO per common share: |  |  |  |  |  |  |  |
Basic |  | $ | 0.61 |  |  | $ | 0.49 |  |  | $ | 2.29 |  |  | $ | 2.16 |
Diluted |  | $ | 0.60 |  |  | $ | 0.49 |  |  | $ | 2.28 |  |  | $ | 2.15 |

CORE FUNDS FROM OPERATIONS
(in thousands, except per share data)
(unaudited) |  | Quarter Ended |  | Year Ended
|  | December 31, |  | December 31,
|  | 2016 |  | 2015 |  | 2016 |  | 2015
Net earnings available to common stockholders |  | $ | 54,044 |  |  | $ | 33,612 |  |  | $ | 200,877 |  |  | $ | 162,402 |
Total FFO adjustments |  | 34,673 |  |  | 33,707 |  |  | 129,667 |  |  | 126,791 |
FFO available to common stockholders |  | 88,717 |  |  | 67,319 |  |  | 330,544 |  |  | 289,193 |
Impairment – commercial mortgage residual interests valuation |  | — |  |  | 51 |  |  | 6,830 |  |  | 531 |
Impairment losses – non-depreciable real estate and other charges |  | — |  |  | — |  |  | — |  |  | 156 |
Bad debt expense – loans |  | — |  |  | — |  |  | 3,269 |  |  | — |
Income tax benefit |  | — |  |  | (316 | ) |  | — |  |  | (316 | )
Taxable REIT subsidiary revocation election(1) |  | — |  |  | 9,607 |  |  | — |  |  | 9,607 |
Total Core FFO adjustments |  | — |  |  | 9,342 |  |  | 10,099 |  |  | 9,978 |
Core FFO available to common stockholders |  | $ | 88,717 |  |  | $ | 76,661 |  |  | $ | 340,643 |  |  | $ | 299,171 |
Core FFO per common share: |  |  |  |  |  |  |  |
Basic |  | $ | 0.61 |  |  | $ | 0.56 |  |  | $ | 2.36 |  |  | $ | 2.23 |
Diluted |  | $ | 0.60 |  |  | $ | 0.56 |  |  | $ | 2.35 |  |  | $ | 2.22 |

(1) At the close of business on December 31, 2015, NNN elected to revoke its election to classify the TRS as taxable REIT subsidiaries. This TRS revocation election resulted in an additional tax expense of approximately $9,607 for 2015.
3

ADJUSTED FUNDS FROM OPERATIONS (AFFO)
(in thousands, except per share data)
(unaudited)
|  | Quarter Ended |  | Year Ended
|  | December 31, |  | December 31,
|  | 2016 |  | 2015 |  | 2016 |  | 2015
Net earnings available to common stockholders |  | $ | 54,044 |  |  | $ | 33,612 |  |  | $ | 200,877 |  |  | $ | 162,402 |
Total FFO adjustments |  | 34,673 |  |  | 33,707 |  |  | 129,667 |  |  | 126,791 |
Total Core FFO adjustments |  | — |  |  | 9,342 |  |  | 10,099 |  |  | 9,978 |
Core FFO available to common stockholders |  | 88,717 |  |  | 76,661 |  |  | 340,643 |  |  | 299,171 |
Straight-line accrued rent |  | (273 | ) |  | (529 | ) |  | (252 | ) |  | (368 | )
Net capital lease rent adjustment |  | 309 |  |  | 331 |  |  | 1,364 |  |  | 1,277 |
Below market rent amortization |  | (662 | ) |  | (671 | ) |  | (2,842 | ) |  | (3,046 | )
Stock based compensation expense |  | 2,689 |  |  | 2,461 |  |  | 10,758 |  |  | 9,671 |
Capitalized interest expense |  | (495 | ) |  | (750 | ) |  | (1,738 | ) |  | (2,383 | )
Loss on sale of mortgage receivable |  | — |  |  | 450 |  |  | — |  |  | 450 |
Total AFFO adjustments |  | 1,568 |  |  | 1,292 |  |  | 7,290 |  |  | 5,601 |
AFFO available to common stockholders |  | $ | 90,285 |  |  | $ | 77,953 |  |  | $ | 347,933 |  |  | $ | 304,772 |
AFFO per common share: |  |  |  |  |  |  |  |
Basic |  | $ | 0.62 |  |  | $ | 0.57 |  |  | $ | 2.41 |  |  | $ | 2.27 |
Diluted |  | $ | 0.62 |  |  | $ | 0.57 |  |  | $ | 2.41 |  |  | $ | 2.27 |

OTHER INFORMATION
(in thousands)
(unaudited)
|  | Quarter Ended |  | Year Ended
|  | December 31, |  | December 31,
|  | 2016 |  | 2015 |  | 2016 |  | 2015
Percentage rent |  | $ | 776 |  |  | $ | 802 |  |  | $ | 1,735 |  |  | $ | 1,430 |
Amortization of debt costs |  | $ | 810 |  |  | $ | 773 |  |  | $ | 3,086 |  |  | $ | 2,915 |
Scheduled debt principal amortization (excluding maturities) |  | $ | 129 |  |  | $ | 378 |  |  | $ | 656 |  |  | $ | 1,587 |
Non-real estate depreciation expense |  | $ | 83 |  |  | $ | 77 |  |  | $ | 333 |  |  | $ | 418 |

4

BALANCE SHEET
(in thousands)
(unaudited)

|  | December 31, 2016 |  | December 31, 2015
Assets: |  |  |  |
Real estate: |  |  |  |
Accounted for using the operating method, net of accumulated depreciation and amortization |  | $ | 5,881,280 |  |  | $ | 5,231,413 |
Accounted for using the direct financing method |  | 11,230 |  |  | 14,518 |
Real estate held for sale |  | 23,850 |  |  | 57,527 |
Cash and cash equivalents |  | 294,540 |  |  | 13,659 |
Restricted cash and cash held in escrow |  | — |  |  | 601 |
Receivables, net of allowance |  | 3,418 |  |  | 3,344 |
Mortgages, notes and accrued interest receivable, net of allowance |  | 1,252 |  |  | 8,688 |
Accrued rental income, net of allowance |  | 25,101 |  |  | 25,529 |
Debt costs, net of accumulated amortization |  | 2,715 |  |  | 4,003 |
Commercial mortgage residual interests |  | 36 |  |  | 11,115 |
Other assets |  | 90,729 |  |  | 89,647 |
Total assets |  | $ | 6,334,151 |  |  | $ | 5,460,044 |
Liabilities: |  |  |  |
Line of credit payable |  | $ | — |  |  | $ | — |
Mortgages payable, including unamortized premium and net of unamortized debt cost |  | 13,878 |  |  | 23,964 |
Notes payable, net of unamortized discount and unamortized debt costs |  | 2,297,811 |  |  | 1,951,980 |
Accrued interest payable |  | 19,665 |  |  | 20,113 |
Other liabilities |  | 85,869 |  |  | 121,594 |
Total liabilities |  | 2,417,223 |  |  | 2,117,651 |
Stockholders’ equity of NNN |  | 3,916,799 |  |  | 3,342,134 |
Noncontrolling interests |  | 129 |  |  | 259 |
Total equity |  | 3,916,928 |  |  | 3,342,393 |
Total liabilities and equity |  | $ | 6,334,151 |  |  | $ | 5,460,044 |
Common shares outstanding |  | 147,150 |  |  | 141,008 |
Gross leasable area, Property Portfolio (square feet) |  | 27,204 |  |  | 24,964 |

5

DEBT SUMMARY
(in thousands)
As of December 31, 2016

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 |  |  | 249,907 |  |  | 6.875% |  | 6.924% |  | October 2017
2021 |  | 300,000 |  |  | 297,764 |  |  | 5.500% |  | 5.689% |  | July 2021
2022 |  | 325,000 |  |  | 321,917 |  |  | 3.800% |  | 3.985% |  | October 2022
2023 |  | 350,000 |  |  | 348,269 |  |  | 3.300% |  | 3.388% |  | April 2023
2024 |  | 350,000 |  |  | 349,451 |  |  | 3.900% |  | 3.924% |  | June 2024
2025 |  | 400,000 |  |  | 399,131 |  |  | 4.000% |  | 4.029% |  | November 2025
2026 |  | 350,000 |  |  | 346,153 |  |  | 3.600% |  | 3.733% |  | December 2026
Total |  | 2,325,000 |  |  | 2,312,592 |  |  |  |  |  |  |
Total unsecured debt (1) |  | $ | 2,325,000 |  |  | $ | 2,312,592 |  |  |  |  |  |  |
Debt costs |  | (21,157 | ) |  |  |  |  |  |
Accumulated amortization |  | 6,376 |  |  |  |  |  |  |
Debt costs, net of accumulated amortization |  | (14,781 | ) |  |  |  |  |  |
Notes payable, net of unamortized discount and unamortized debt costs |  | $ | 2,297,811 |  |  |  |  |  |  |
(1) Unsecured notes payable have a weighted average interest rate of 4.4% and a weighted average maturity of 6.6 years

Mortgages Payable |  | Interest Rate |  | Maturity Date |  | Principal Balance |
Mortgage(1) |  | 5.230 | % |  | July 2023 |  | $ | 13,987 |  |
Debt costs |  |  |  |  |  | (147 | ) |
Accumulated amortization |  | 38 |  |
Debt costs, net of accumulated amortization |  | (109 | ) |
Mortgages payable, including unamortized premium and net of unamortized debt costs |  | $ | 13,878 |  |
(1) Includes unamortized premium |  |  |

6

CREDIT METRICS (1) |  |
Ratings: Moody’s Baa1; S&P BBB+; Fitch BBB+ |  |  |  |  |  |  |  |  |  |  |
| 2012 |  | 2013 |  | 2014 |  | 2015 |  | 2016 |  | 2016 Pro Forma Pfd Stock Redemption(2)
Debt / Total assets (gross book) | 37.5 | % |  | 32.9 | % |  | 32.6 | % |  | 33.2 | % |  | 30.2 | % |  | 34.5 | %
Debt + preferred / Total assets (gross book) | 44.3 | % |  | 44.9 | % |  | 43.3 | % |  | 42.9 | % |  | 43.9 | % |  | 44.0 | %
Debt / EBITDA (last quarter annualized) | 5.1 |  |  | 4.3 |  |  | 4.2 |  |  | 4.4 |  |  | 4.0 |  |  | 4.6 |
Debt / EBITDA (last four quarters) | 5.3 |  |  | 4.5 |  |  | 4.5 |  |  | 4.6 |  |  | 4.3 |  |  | 4.9 |
Debt + Pref Stock / EBITDA | 6.3 |  |  | 6.1 |  |  | 6.0 |  |  | 5.9 |  |  | 6.2 |  |  | 6.2 |
EBITDA / Interest expense (cash) | 3.7 |  |  | 4.1 |  |  | 4.4 |  |  | 4.6 |  |  | 4.8 |  |  |
EBITDA / Fixed charges (cash) | 3.0 |  |  | 3.1 |  |  | 3.1 |  |  | 3.3 |  |  | 3.4 |  |  |

(1) Debt amounts used in calculation are net of cash balances.
(2) Pro forma credit metrics reflect redemption of Series D Preferred shares in February 2017 using $287.5 million of cash balances available
on December 31, 2016

CREDIT FACILITY AND NOTES 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 December 31, 2016, the company believes it is in compliance with the covenants.

Unsecured Credit Facility Key Covenants |  | Required |  | December 31, 2016
Maximum leverage ratio |  | < 0.60 |  | 0.32
Minimum fixed charge coverage ratio |  | > 1.50 |  | 3.44
Maximum secured indebtedness ratio |  | < 0.40 |  | 0.002
Unencumbered asset value ratio |  | > 1.67 |  | 3.15
Unencumbered interest ratio |  | > 1.75 |  | 5.37
Unsecured Notes Key Covenants |  | Required |  | December 31, 2016
Limitation on incurrence of total debt |  | ≤ 60% |  | 32.6%
Limitation on incurrence of secured debt |  | ≤ 40% |  | 0.2%
Debt service coverage ratio |  | ≥ 1.50 |  | 4.82
Maintenance of total unencumbered assets |  | ≥ 150% |  | 307.2%

7

LONG-TERM DIVIDEND HISTORY

8

PROPERTY ACQUISITIONS

(dollars in thousands)

|  | Year Ended December 31,
|  | 2016 |  | 2015
Total dollars invested |  | $ | 846,906 |  |  | $ | 726,303 |
Number of Properties |  | 313 |  |  | 221 |
Gross leasable area (square feet) |  | 2,734,000 |  |  | 2,706,000 |
Cash cap rate |  | 6.9 | % |  | 7.2 | %

PROPERTY DISPOSITIONS

(dollars in thousands)

| Year Ended December 31,
| 2016 |  | 2015
| Occupied |  | Vacant |  |  | Total |  |  | Occupied |  | Vacant |  |  | Total |
Number of properties | 33 |  | 5 |  | (1 | ) | 38 |  |  | 11 |  | 8 |  | (1 | ) | 19 |
Gross leasable area (square feet) | 419,000 |  | 71,000 |  |  | 490,000 |  |  | 106,000 |  | 126,000 |  |  | 232,000 |
Acquisition costs | $ | 91,203 |  | $ | 7,787 |  |  | $ | 98,990 |  |  | $ | 28,092 |  | $ | 11,264 |  |  | $ | 39,356 |
Net book value | $ | 73,041 |  | $ | 2,992 |  |  | $ | 76,033 |  |  | $ | 24,535 |  | $ | 3,892 |  |  | $ | 28,427 |
Net sale proceeds | $ | 99,954 |  | $ | 3,261 |  |  | $ | 103,215 |  |  | $ | 35,030 |  | $ | 4,086 |  |  | $ | 39,116 |
Cash cap rate | 6.8 | % | — |  |  | 6.8 | % |  | 5.9 | % | — |  |  | 5.9 | %

(1) Includes two excess land parcels
9

LEASE EXPIRATIONS

|  | % of Total(1) |  | # of Properties |  | Gross Leasable Area (2) |  |  |  | % of Total(1) |  | # of Properties |  | Gross Leasable Area (2)
2017 |  | 1.2 | % |  | 27 |  |  | 502,000 |  |  | 2023 |  | 2.5 | % |  | 85 |  |  | 1,014,000 |
2018 |  | 3.2 | % |  | 90 |  |  | 1,153,000 |  |  | 2024 |  | 2.6 | % |  | 50 |  |  | 883,000 |
2019 |  | 3.0 | % |  | 76 |  |  | 1,122,000 |  |  | 2025 |  | 5.0 | % |  | 132 |  |  | 1,116,000 |
2020 |  | 3.8 | % |  | 132 |  |  | 1,571,000 |  |  | 2026 |  | 6.0 | % |  | 181 |  |  | 1,830,000 |
2021 |  | 4.4 | % |  | 122 |  |  | 1,320,000 |  |  | 2027 |  | 9.0 | % |  | 190 |  |  | 2,842,000 |
2022 |  | 6.1 | % |  | 111 |  |  | 1,456,000 |  |  | Thereafter |  | 53.2 | % |  | 1,305 |  |  | 11,891,000 |

(1) | Based on the annual base rent of $543,446,000, which is the annualized base rent for all leases in place as of December 31, 2016.

(2) | Square feet.

10

TOP 20 LINES OF TRADE

|  |  |  | As of December 31, 2016 |  | As of December 31, 2015
|  | Line of Trade |  | % of Total(1) |  | Properties |  | % of Total(2) |  | Properties
1. |  | Convenience stores |  | 16.9 | % |  | 502 |  |  | 16.7 | % |  | 448 |
2. |  | Restaurants - full service |  | 11.8 | % |  | 414 |  |  | 11.0 | % |  | 294 |
3. |  | Restaurants - limited service |  | 7.5 | % |  | 347 |  |  | 7.2 | % |  | 297 |
4. |  | Automotive service |  | 6.6 | % |  | 201 |  |  | 7.0 | % |  | 197 |
5. |  | Family entertainment centers |  | 5.8 | % |  | 88 |  |  | 5.6 | % |  | 80 |
6. |  | Health and fitness |  | 5.7 | % |  | 35 |  |  | 3.8 | % |  | 28 |
7. |  | Theaters |  | 4.9 | % |  | 30 |  |  | 5.2 | % |  | 30 |
8. |  | Automotive parts |  | 3.9 | % |  | 182 |  |  | 4.2 | % |  | 183 |
9. |  | Recreational vehicle dealers, parts and accessories |  | 3.4 | % |  | 32 |  |  | 3.6 | % |  | 32 |
10. |  | Banks |  | 3.1 | % |  | 124 |  |  | 3.4 | % |  | 124 |
11. |  | Sporting goods |  | 2.5 | % |  | 15 |  |  | 3.3 | % |  | 21 |
12. |  | Medical service providers |  | 2.4 | % |  | 76 |  |  | 2.2 | % |  | 60 |
13. |  | Wholesale clubs |  | 2.4 | % |  | 8 |  |  | 2.6 | % |  | 7 |
14. |  | Drug stores |  | 2.1 | % |  | 39 |  |  | 2.3 | % |  | 39 |
15. |  | Consumer electronics |  | 2.0 | % |  | 20 |  |  | 2.2 | % |  | 20 |
16. |  | Travel plazas |  | 1.9 | % |  | 28 |  |  | 2.1 | % |  | 29 |
17. |  | Furniture |  | 1.9 | % |  | 42 |  |  | 1.1 | % |  | 24 |
18. |  | General merchandise |  | 1.8 | % |  | 58 |  |  | 1.9 | % |  | 60 |
19. |  | Home improvement |  | 1.8 | % |  | 23 |  |  | 1.8 | % |  | 21 |
20. |  | Home furnishings |  | 1.7 | % |  | 18 |  |  | 1.9 | % |  | 18 |
|  | Other |  | 9.9 | % |  | 253 |  |  | 10.9 | % |  | 245 |
|  | Total |  | 100.0 | % |  | 2,535 |  |  | 100.0 | % |  | 2,257 |

(1) Based on the annualized base rent for all leases in place as of December 31, 2016.
(2) Based on the annualized base rent for all leases in place as of December 31, 2015.

TOP 10 STATES

| State |  | % of Total(1) |  | Properties |  |  | State |  | Properties |  | % of Total(1)
1. | Texas |  | 18.4 | % |  | 448 |  |  | 6. | Georgia |  | 118 |  |  | 4.3 | %
2. | Florida |  | 9.1 | % |  | 197 |  |  | 7. | Indiana |  | 118 |  |  | 4.2 | %
3. | Illinois |  | 5.7 | % |  | 132 |  |  | 8. | Virginia |  | 88 |  |  | 3.5 | %
4. | Ohio |  | 5.7 | % |  | 165 |  |  | 9. | Alabama |  | 101 |  |  | 3.0 | %
5. | North Carolina |  | 4.7 | % |  | 134 |  |  | 10. | Tennessee |  | 77 |  |  | 2.8 | %
(1) Based on the annualized base rent for all leases in place as of December 31, 2016.

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PORTFOLIO BY REGION

As a percentage of annual base rent - December 31, 2016

TOP TENANTS

Creditworthy Retailers

▪ | 20% of annual base rent is from tenants with investment grade rated debt

▪ | 65% of annual base rent is from tenants that are publicly traded and/or have rated debt

▪ | Top 25 tenants (59% of annual base rent) operate an average of over 1,000 stores each

Top Tenants (>2.0%) |  | Properties |  | % of Total (1)
Sunoco |  | 125 |  |  | 5.4 | %
Mister Car Wash |  | 90 |  |  | 4.0 | %
LA Fitness |  | 29 |  |  | 3.8 | %
AMC Theatres |  | 20 |  |  | 3.5 | %
Camping World |  | 32 |  |  | 3.4 | %
Couche-Tard (Pantry) |  | 86 |  |  | 3.3 | %
7-Eleven |  | 77 |  |  | 3.3 | %
SunTrust |  | 121 |  |  | 3.0 | %
Bell American (Taco Bell) |  | 115 |  |  | 2.8 | %
Chuck E. Cheese's |  | 53 |  |  | 2.5 | %
BJ's Wholesale Club |  | 8 |  |  | 2.4 | %
Frisch's Restaurant |  | 74 |  |  | 2.2 | %
Gander Mountain |  | 12 |  |  | 2.2 | %
Bob Evans |  | 117 |  |  | 2.0 | %

| Rent Coverage (With Corp. Overhead) |  | Fixed Charge Coverage
Range | 1.1x - 7.4x |  | 0.9x - 4.9x
Average | 3.6x |  | 2.5x
Weighted average | 3.8x |  | 2.5x

(1) Based on the annual base rent of $543,446,000, which is the annualized base rent for all leases in place as of December 31, 2016.
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SAME STORE RENTAL INCOME

(dollars in thousands)

Same Store Rental Income (Cash Basis) (1) |
Number of leases | 1,972 |
Year ended December 31, 2016 | $ | 424,920 |
Year ended December 31, 2015 | $ | 421,497 |
Increase (in dollars) | $ | 3,423 |
Increase (percent) | 0.8 | %
(1) Includes all properties owned for current and prior year period excluding any vacant properties or properties under development or re-development. |

LEASING DATA

(dollars in thousands)

|  | Renewals With Same Tenant(1) |  |  |  |  |
Year Ended December 31, 2016 |  | SunTrust | Other | Total |  | Vacancy Re-lease To New Tenant |  | Re-leasing Totals |
Number of leases |  | 90 |  | 49 |  | 139 |  |  | 16 |  |  | 155 |  |
Prior cash rents |  | $ | 12,527 |  | $ | 9,537 |  | $ | 22,064 |  |  | $ | 2,726 |  |  | $ | 24,790 |  |
New cash rents |  | $ | 12,715 |  | $ | 9,627 |  | $ | 22,342 |  |  | $ | 2,266 |  |  | $ | 24,608 |  | (2)
Re-leasing spread |  | 101.5 | % | 100.9 | % | 101.3 | % |  | 83.1 | % |  | 99.3 | % |
Tenant improvements |  | $ | — |  | $ | 102 |  | $ | 102 |  |  | $ | 3,925 |  |  | $ | 4,027 |  |

(1) | Renewal rate for past five years (2011-2016) was 88%

(2) | Represents 4.5% of total annualized base rent as of December 31, 2016

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OTHER PROPERTY PORTFOLIO DATA

As of December 31, 2016
Tenant Financials

|  | # of Properties |  | % of Annual Base Rent
Property Level Financial Information |  | 2,058 |  |  | 79 | %
Tenant Corporate Financials |  | 1,871 |  |  | 76 | %

Rent Increases | % of Annual Base Rent
| Annual |  |  | Five Year |  |  | Other |  |  | Total |
CPI – Based | 33 | % |  | 40 | % |  | 2 | % |  | 75 | %
Fixed Rate | 4 | % |  | 13 | % |  | 3 | % |  | 20 | %
No increases | — |  |  | — |  |  | 5 | % |  | 5 | %
| 37 | % |  | 53 | % |  | 10 | % |  | 100 | %

Lease Structure

▪ | 90% of the company's annual base rent is from NNN leases

▪ | 94% of the company's annual base rent is from NNN leases and NN leases (with roof warranty)

EARNINGS GUIDANCE

Core FFO guidance for 2017 is $2.42 to $2.48 per share. The 2017 AFFO is estimated to be $2.46 to $2.52 per share. The FFO guidance equates to net earnings of $1.37 to $1.43 per share, plus $1.05 per share of expected real estate depreciation and amortization and excludes any gains from the sale of real estate and any charges for impairments, severance costs, or preferred stock redemption charges. 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.

|  | 2017 Guidance
Net earnings per common share excluding any gains on sale of real estate, impairment charges, severance charges or charges in connection with preferred stock redemption |  | $1.37 - $1.43 per share
Real estate depreciation and amortization per share |  | $1.05 per share
Core FFO per share |  | $2.42 - $2.48 per share
AFFO per share |  | $2.46 - $2.52 per share
G&A expenses (excluding severance charges) |  | $34 - $35 Million
Real estate expenses, net of tenant reimbursements |  | $6.0 - $6.5 Million
Acquisition volume |  | $500 - $600 Million
Disposition volume |  | $80 - $120 Million

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