<SEC-DOCUMENT>0000751364-17-000052.txt : 20170419
<SEC-HEADER>0000751364-17-000052.hdr.sgml : 20170419
<ACCEPTANCE-DATETIME>20170309144040
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000751364-17-000052
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20170309

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NATIONAL RETAIL PROPERTIES, INC.
		CENTRAL INDEX KEY:			0000751364
		STANDARD INDUSTRIAL CLASSIFICATION:	REAL ESTATE INVESTMENT TRUSTS [6798]
		IRS NUMBER:				561431377
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		450 S ORANGE AVE
		STREET 2:		SUITE 900
		CITY:			ORLANDO
		STATE:			FL
		ZIP:			32801
		BUSINESS PHONE:		407-666-7348

	MAIL ADDRESS:	
		STREET 1:		450 SOUTH ORANGE AVE
		STREET 2:		SUITE 900
		CITY:			ORLANDO
		STATE:			FL
		ZIP:			32801

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	COMMERCIAL NET LEASE REALTY INC
		DATE OF NAME CHANGE:	19930510

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	CNL REALTY INVESTORS INC /DE/
		DATE OF NAME CHANGE:	19930429

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	CNL REALTY INVESTORS INC
		DATE OF NAME CHANGE:	19920831
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
<TEXT>
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<div><a name="s31889DCD6EA08745B7F7AFBFC89E0532"></a></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">National Retail Properties, Inc.</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">450 South Orange Avenue, Suite 900</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Orlando, Florida 32801</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(407) 265-7348</font></div></div><div><br></div><div style="line-height:120%;padding-top:72px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">March 9, 2017</font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;">Via EDGAR and FACSIMILE</font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Securities and Exchange Commission</font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">100 F Street, NE</font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Washington, DC 20549</font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Attention:&#160;&#160;&#160;&#160;Daniel Gordon </font></div><div style="line-height:120%;text-align:left;text-indent:72px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Mark Rakip</font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman; font-size:10pt;"><tr><td style="width:120px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:120%;font-size:11pt;padding-left:72px;"><font style="font-family:inherit;font-size:11pt;">Re:</font></div></td><td style="vertical-align:top;"><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">National Retail Properties, Inc.</font><font style="font-family:inherit;font-size:10pt;">&#32;<br></font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Form 10-K for the Fiscal Year Ended December 31, 2016</font></div></td></tr></table><div style="line-height:120%;text-align:left;padding-left:120px;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Filed February 13, 2017</font></div><div style="line-height:120%;text-align:left;padding-left:120px;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">File No. 1-11290 </font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Dear Gentlemen:</font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Please find the responses of National Retail Properties, Inc. (the &#8220;Company&#8221;, &#8220;we&#8221;, &#8220;us&#8221; or &#8220;our&#8221;) to your letter dated February 24, 2017, providing comments relating to the Company&#8217;s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 (the &#8220;10-K&#8221;).  In order to facilitate the review of this letter by the Staff of the Securities and Exchange Commission (the &#8220;Commission&#8221;), we have restated each of your numbered comments below and have included the Company&#8217;s response underneath each comment.</font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;text-decoration:underline;">Form 8-K filed on February 13, 2017</font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;text-decoration:underline;">Exhibit 99.1, page 5</font></div><table cellpadding="0" cellspacing="0" style="padding-bottom:16px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:48px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:120%;font-size:11pt;padding-left:0px;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">1.</font></div></td><td style="vertical-align:top;"><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">We note that you present Core FFO and Adjusted FFO on a per share basis.  It appears that the adjustments are non-cash and both measures approximate operating cash flows and could be used as liquidity measures.  Please explain to us why you believe it is appropriate to present these measures on a per share basis.  See Question 102.05 of the updated Non-GAAP Compliance and Disclosure Interpretations issued on May 17, 2016.</font></div></td></tr></table><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Response: </font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">The Company reconciles Core Funds from Operations (&#8220;Core FFO&#8221;) to Funds from Operations (&#8220;FFO&#8221;) by adjusting for GAAP income and expense amounts that it believes are infrequent and unusual in nature and/or not related to its core real estate operations.  Just as FFO adjusts for real estate related impairment charges, the Company has historically added back non-real estate related impairment charges in calculating Core FFO.  While some of these adjustments may be non-cash charges in the period of impairment, they typically represent a cash loss.  Additionally, we have excluded cash income items from our Core FFO reconciliation in recent years (e.g., notes receivable redemption income in 2013 and joint venture disposition and incentive fees in 2012).  We believe that presentation of Core FFO provides investors with a potential metric to assist in their evaluation of our operating performance across multiple periods and in comparison to the operating performance of our peers because it removes the effect of unusual items that are</font></div><div><br></div><div><div style="line-height:120%;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><div><div style="line-height:120%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">not expected to impact our operating performance on an ongoing basis.  Thus, we do not view Core FFO as being a liquidity measure. </font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">We calculate Adjusted Funds from Operations (&#8220;AFFO&#8221;) by starting with Core FFO and adjusting for certain non-cash items that reduce or increase net income in accordance with GAAP.  However, not all non-cash expenses are included in this reconciliation that a liquidity measure would entail (e.g., deferred financing costs, capital expenditures, leasing costs, etc.).  We exclude certain income or expense items from AFFO that we consider more reflective of investing activities, other non-cash income and expense items and the income and expense effects of other activities that are not a fundamental attribute of our business plan.  By providing AFFO, we believe we are presenting useful information that assists investors and analysts to better assess the sustainability of our ongoing operating performance without the impacts of transactions that are not related to the ongoing performance of our property portfolio.  Thus, we do not view AFFO as being a liquidity measure.</font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Core FFO and AFFO are widely used non-GAAP financial measures in the real estate investment trust industry, and we incorporate Core FFO and AFFO as part of our financial information filed with the Commission and provided to investors in response to feedback from numerous institutional investors and industry analysts who were already making similar adjustments to our reported FFO metric. We understand that such investors and analysts use these per share results in evaluating relative valuation of various REITs. Therefore, we believe that Core FFO and AFFO provide meaningful supplemental operating performance information to investors.  </font></div><div style="line-height:120%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Further, Core FFO is used by management and the board in evaluating the performance of the Company&#8217;s core business operations.  Core FFO is also a factor used by the Compensation Committee of our Board of Directors in setting management compensation.  Therefore, we believe setting forth the calculation of this information is additive to our overall disclosure and transparency for investors.</font></div><div style="line-height:120%;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">We understand the importance to investors of GAAP metrics and ensuring that those metrics are prominently presented in our filings. We believe that our GAAP metrics take greater prominence in our filings than the non-GAAP measures discussed above, especially as compared to other comparable companies in the REIT industry.</font></div><div style="line-height:120%;text-align:left;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;">Please be advised that, in connection with the Staff&#8217;s comment and the Company&#8217;s response thereto, the Company hereby acknowledges that:</font></div><div style="line-height:120%;text-align:left;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;"><br></font></div><table cellpadding="0" cellspacing="0" style="padding-bottom:16px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:48px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:120%;font-size:11.5pt;padding-left:24px;"><font style="font-family:inherit;font-size:11.5pt;">&#8226;</font></div></td><td style="vertical-align:top;"><div style="line-height:120%;text-align:left;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;">the Company is responsible for the adequacy and accuracy of the disclosure in the above-referenced filing;</font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="padding-bottom:16px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:48px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:120%;font-size:11.5pt;padding-left:24px;"><font style="font-family:inherit;font-size:11.5pt;">&#8226;</font></div></td><td style="vertical-align:top;"><div style="line-height:120%;text-align:left;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;">Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing; and</font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman; font-size:10pt;"><tr><td style="width:48px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:120%;font-size:11.5pt;padding-left:24px;"><font style="font-family:inherit;font-size:11.5pt;">&#8226;</font></div></td><td style="vertical-align:top;"><div style="line-height:120%;text-align:left;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;">the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.</font></div></td></tr></table><div style="line-height:120%;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">2</font></div></div><hr style="page-break-after:always"><div><div style="line-height:120%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><div><br></div><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">If you have any further questions or require additional information, please do not hesitate to contact me at (407) 265-7348.</font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Thank you for your consideration in these matters.</font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Sincerely,</font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;text-decoration:underline;">/s/ Kevin B. Habicht</font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Kevin B. Habicht</font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Executive Vice President, Chief Financial Officer,</font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Treasurer and Assistant Secretary</font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">National Retail Properties, Inc.</font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">cc: Jeffrey B. Grill, Pillsbury Winthrop Shaw Pittman LLP</font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;"><br></font></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">3</font></div></div>	</body>
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