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Third Quarter 2009 Operating Results Announced by National Retail Properties, Inc.November 6, 2009 8:30 AM ET
Article tools
Quarter Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
-------- -------- -------- --------
(in thousands, except per share data)
Revenues $57,035 $58,496 $173,313 $169,404
Net earnings
available to common
stockholders $20,747 $27,070 $71,111 $85,182
Net earnings per
common share
(diluted) $0.26 $0.37 $0.89 $1.16
FFO available to
common
stockholders $31,423 $35,198 $102,480 $106,390
FFO per common
share (diluted) $0.39 $0.48 $1.29 $1.45
Quarter Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
-------- -------- -------- --------
Income Statement Summary
Revenues:
Rental and earned income $53,015 $54,638 $160,381 $156,516
Real estate expense
reimbursement from tenants 1,872 1,421 6,272 4,398
Interest and other income
from real estate
transactions 1,102 1,313 3,560 4,839
Interest income on
commercial mortgage
residual interests 1,046 1,124 3,100 3,651
-------- -------- -------- --------
57,035 58,496 173,313 169,404
-------- -------- -------- --------
Disposition of real estate,
Inventory Portfolio:
Gross proceeds 353 - 353 4,900
Costs (317) - (317) (4,879)
-------- -------- -------- --------
Gain 36 - 36 21
-------- -------- -------- --------
Retail operations:
Revenues 7,317 - 7,317 -
Operating expenses (7,550) - (7,575) -
-------- -------- -------- --------
Net (233) - (258) -
-------- -------- -------- --------
Operating expenses:
General and administrative 4,937 5,242 16,027 18,842
Real estate 3,494 2,326 10,208 6,952
Depreciation and
amortization 11,350 11,443 34,374 32,096
Impairment - real estate - - 1,064 -
Impairment - commercial
mortgage residual interests
valuation adjustment - - - 758
Restructuring costs - - 731 -
-------- -------- -------- --------
19,781 19,011 62,404 58,648
-------- -------- -------- --------
Other expenses (revenues):
Interest and other income (262) (818) (1,025) (3,047)
Interest expense 15,618 16,329 46,484 48,796
Loss on interest rate hedge - - - 804
-------- -------- -------- --------
15,356 15,511 45,459 46,553
-------- -------- -------- --------
Income tax benefit 504 1,653 1,586 6,002
Equity in earnings of
unconsolidated affiliate 105 100 315 280
Gain on note receivable
foreclosure - - 1,048 -
Gain on extinguishment of debt - - 3,432 -
-------- -------- -------- --------
Earnings from continuing
operations 22,310 25,727 71,609 70,506
Earnings from discontinued
operations:
Real estate, Investment
Portfolio (70) 2,962 4,076 12,820
Real estate, Inventory
Portfolio, net of
income tax expense 556 202 1,014 9,580
-------- -------- -------- --------
Earnings including
noncontrolling interests 22,796 28,891 76,699 92,906
Loss (earnings) attributable
to noncontrolling interests:
Continuing operations (152) (117) (502) 465
Discontinued operations (201) (8) 3 (3,100)
-------- -------- -------- --------
(353) (125) (499) (2,635)
-------- -------- -------- --------
Net earnings attributable to
National Retail
Properties, Inc. 22,443 28,766 76,200 90,271
Series C preferred stock
dividends (1,696) (1,696) (5,089) (5,089)
-------- -------- -------- --------
Net earnings available to
common stockholders
- basic and diluted $20,747 $27,070 $71,111 $85,182
======== ======== ======== ========
National Retail Properties, Inc.
(In thousands, except per share data)
(unaudited)
Quarter Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
-------- -------- -------- --------
Weighted average common
shares outstanding:
Basic 80,344 73,717 79,232 73,041
====== ====== ====== ======
Diluted 80,455 73,818 79,335 73,141
====== ====== ====== ======
Net earnings per share
available to common
stockholders:
Basic:
Continuing operations $0.25 $0.33 $0.83 $0.90
Discontinued operations 0.01 0.04 0.06 0.26
------ ------ ------ ------
Net earnings $0.26 $0.37 $0.89 $1.16
====== ====== ====== ======
Diluted:
Continuing operations $0.25 $0.33 $0.83 $0.90
Discontinued operations 0.01 0.04 0.06 0.26
------ ------ ------ ------
Net earnings $0.26 $0.37 $0.89 $1.16
====== ====== ====== ======
Supplemental Information:
Selected Non-Cash Income
Statement Items:
------------------------
Straight-line rent $(640) $151 $(1,528) $(978)
====== ====== ======= ======
Net capital lease rent
adjustment $350 $296 $1,018 $899
====== ====== ======= ======
Above (below) market rent
amortization $(93) $(245) $(981) $(547)
====== ====== ======= ======
Stock based compensation
expense $1,016 $916 $3,152 $2,388
====== ====== ======= ======
Impairment - real estate $ - $3,930 $1,064 $4,097
====== ====== ======= ======
Impairment - mortgage
residual interests $ - $ - $ - $758
====== ====== ======= ======
Amortization of debt costs $668 $768 $2,256 $2,164
====== ====== ======= ======
Capitalized interest
expense $(163) $(436) $(1,080) $(1,408)
====== ====== ======= ======
Convertible debt
interest expense $1,451 $1,538 $4,333 $3,973
====== ====== ======= ======
Non-real estate
depreciation expense $74 $65 $227 $200
====== ====== ======= ======
Other Information:
------------------
Percentage rent $317 $202 $583 $563
====== ====== ======= ======
Net Inventory Portfolio gain
on dispositions (TRS) $22 $2,807 $580 $9,358
====== ====== ======= ======
Scheduled debt principal
amortization (excluding
maturities) $249 $298 $742 $882
====== ====== ======= ======
National Retail Properties, Inc.
(in thousands, except per share data)
(unaudited)
Quarter Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
-------- -------- -------- --------
Reconciliation of net
earnings to FFO and FFO
available to common
stockholders:
Net earnings attributable
to National Retail
Properties, Inc. $22,443 $28,766 $76,200 $90,271
Real estate
depreciation and
amortization:
Continuing
operations 10,608 10,610 31,892 29,704
Discontinued
operations 24 118 977 602
Joint venture real
estate depreciation 44 44 133 132
Gain on disposition of
real estate Investment
Portfolio - (2,644) (1,633) (9,230)
------- ------- ------- -------
FFO 33,119 36,894 107,569 111,479
Series C preferred stock
dividends (1,696) (1,696) (5,089) (5,089)
------- ------- ------- -------
FFO available to common
stockholders - basic and
diluted $31,423 $35,198 $102,480 $106,390
======= ======= ======== ========
FFO per share:
Basic $0.39 $0.48 $1.29 $1.46
======= ======= ======== ========
Diluted $0.39 $0.48 $1.29 $1.45
======= ======= ======== ========
Real Estate Disposition Summary ------------------------------- Quarter Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
------------ -------------- ------------ -----------
#of Proper #of Proper #of Proper #of Proper
-ties Gain -ties Gain -ties Gain -ties Gain
--------------------------------------------------------
Reconciliation
of gain on
disposition
between
continuing and
discontinued
operations:
Continuing
operations 1 $36 - $- 1 $36 1 $21
Discontinued
operations:
Investment
Portfolio - - 6 2,644 6 1,633 17 9,230
Inventory
Portfolio - - 9 2,807 2 558 23 12,643
Noncontrolling
interest,
Inventory
Portfolio - (14) - - - (14) - (3,306)
----- ----- ---- ------ ----- ------ --- -------
1 $22 15 $5,451 9 $2,213 41 $18,588
===== ===== ==== ====== ===== ====== === =======
Reconciliation
of gain on
disposition by
type:
Inventory
Portfolio:
Development 1 $36 1 $192 2 $582 5 $8,056
Exchange - - 8 2,615 1 12 19 4,608
Noncontrolling
interest,
Development - (14) - - - (14) - (3,306)
----- ----- ---- ------ ----- ------ --- -------
Total
Inventory
gain
(TRS) 1 22 9 2,807 3 580 24 9,358
Investment
Portfolio - - 6 2,644 6 1,633 17 9,230
----- ----- ---- ------ ----- ------ --- -------
1 $22 15 $5,451 9 $2,213 41 $18,588
===== ===== ==== ====== ===== ====== === =======
National Retail Properties, Inc.
(in thousands)
(unaudited)
Earnings from Discontinued Operations: The company has classified its
investment assets sold and leasehold interests expired as discontinued
operations. In addition, the company has classified any investment asset
or revenue generating inventory asset that was held for sale at September
30, 2009, as discontinued operations. The following is a summary of
earnings from discontinued operations.
Quarter Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
-------- -------- -------- --------
Earnings from Discontinued
Operations - Investment
Portfolio:
--------------------------
Revenues:
Rental and earned income $32 $527 $3,572 $3,776
Real estate expense
reimbursement from tenants 2 42 103 109
Interest and other income from
real estate transactions 3 - 5 421
------ ------ ------ ------
37 569 3,680 4,306
------ ------ ------ ------
Expenses:
General and administrative - - - (79)
Real estate 83 133 260 26
Depreciation and
amortization 24 118 977 602
Impairment - real estate - - - 167
------ ------ ------ ------
107 251 1,237 716
------ ------ ------ ------
Gain on disposition of
real estate - 2,644 1,633 9,230
------ ------ ------ ------
Earnings (loss) from
discontinued operations
attributable to National
Retail Properties, Inc. $(70) $2,962 $4,076 $12,820
======= ====== ====== =======
Earnings from Discontinued
Operations - Inventory
Portfolio:
--------------------------
Revenues:
Rental income $1,851 $2,648 $4,722 $8,882
Real estate expense
reimbursement from
tenants 201 301 1,335 857
Interest and other income
from real estate
transactions 47 109 104 540
------ ------ ------ ------
2,099 3,058 6,161 10,279
------ ------ ------ ------
Disposition of real estate:
Gross proceeds - 52,185 5,402 151,098
Costs - (49,378) (4,844) (138,455)
------ ------ ------ ------
Gain - 2,807 558 12,643
------ ------ ------ ------
Expenses:
General and administrative 21 23 89 72
Real estate 326 403 1,989 1,299
Depreciation and
amortization 60 53 258 164
Impairment - real estate - 3,930 - 3,930
Interest 919 1,136 2,746 3,912
------ ------ ------ ------
1,326 5,545 5,082 9,377
------ ------ ------ ------
Income tax expense (217) (118) (623) (3,965)
------ ------ ------ ------
Earnings from discontinued
operations including
noncontrolling interests 556 202 1,014 9,580
Loss (earnings) attributable
to noncontrolling interests (201) (8) 3 (3,100)
------ ------ ------ ------
Earnings from discontinued
operations attributable
to National Retail
Properties, Inc. $355 $194 $1,017 $6,480
====== ====== ====== ======
National Retail Properties, Inc.
(in thousands)
Balance Sheet Summary September 30, December 31,
2009 2008
------------ -----------
(unaudited) (Note 1)
Assets:
Cash and cash equivalents $23,251 $2,626
Receivables, net of allowance 2,221 3,612
Investment in unconsolidated affiliate 4,732 4,927
Mortgages, notes and accrued
interest receivable 43,100 60,472
Real estate, Investment Portfolio:
Accounted for using the operating method,
net of accumulated depreciation and
amortization 2,346,198 2,357,894
Accounted for using the direct
financing method 31,677 31,240
Real estate, Inventory Portfolio, held for sale 98,580 101,106
Commercial mortgage residual interests 23,722 22,000
Accrued rental income, net of allowance 25,081 23,972
Other assets 53,042 41,622
---------- ----------
Total assets $2,651,604 $2,649,471
========== ==========
Liabilities:
Line of credit payable $ - $26,500
Mortgages payable 25,548 26,290
Notes payable - convertible 341,904 356,122
Notes payable, net of unamortized discount 618,626 618,479
Other liabilities 54,344 53,134
---------- ----------
Total liabilities 1,040,422 1,080,525
Stockholders' equity of National Retail
Properties, Inc. 1,608,329 1,566,860
Noncontrolling interests 2,853 2,086
---------- ----------
Total equity 1,611,182 1,568,946
Total liabilities and equity $2,651,604 $2,649,471
========== ==========
Common shares outstanding 82,010 78,415
========== ==========
Gross leasable area, Investment
Portfolio (square feet) 11,412 11,251
========== ==========
Note 1: Includes adjustment based on the adoption of the new Financial
Accounting Standards Board guidance on convertible debt
instruments that may be settled in cash upon conversion.
Orange Avenue Mortgage Investments, Inc.
(in thousands)
In May 2005, the company acquired a 78.9 percent equity investment of OAMI
for $9.4 million. The company's 78.9 percent share of OAMI's net cash
flow has totaled over $27.3 million since May 2005. The following summary
represents the balances related to OAMI included in the company's Balance
Sheet and Income Statement Summary:
September 30, December 31,
2009 2008
------------ -----------
(unaudited) (Note 1)
Assets:
Cash and cash equivalents $255 $405
Receivables and other assets 36 39
Commercial mortgage residual interests 23,722 22,000
------- -------
$24,013 $22,444
======= =======
Liabilities:
Income tax liability $4,862 $5,195
Other liabilities 50 49
------- -------
$4,912 $5,244
======= =======
Noncontrolling interests $1,962 $1,449
====== ======
Quarter Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
-------- -------- -------- --------
(unaudited) (unaudited) (unaudited) (unaudited)
Revenues:
Interest income on
commercial mortgage
residual interests $1,046 $1,124 $3,100 $3,651
Interest and other
income - 7 44 217
------ ------ ------ ------
1,046 1,131 3,144 3,868
------ ------ ------ ------
Expenses:
General and administrative 79 58 213 205
Amortization - - - 35
Impairment - commercial
mortgage residual interests
valuation - - - 758
Interest - - - 200
------ ------ ------ ------
79 58 213 1,198
------ ------ ------ ------
Income tax benefit 117 457 332 1,247
------ ------ ------ ------
Earnings including
noncontrolling interests 1,084 1,530 3,263 3,917
Earnings attributable to
noncontrolling interests (114) (188) (336) (507)
------ ------ ------ ------
Net earnings attributable
to National Retail
Properties, Inc. $970 $1,342 $2,927 $3,410
====== ====== ====== ======
Note 1: Amounts are derived from audited consolidated financial
statements included in the company's Form 8-K filed on June 24,
2009.
NNN Retail Properties Fund I LLC
(dollars in thousands)
In September 2007, the company entered into a joint venture, NNN Retail
Properties Fund I LLC, with an affiliate of Crow Holdings Realty Partners
IV, L.P. The company owns a 15 percent equity interest, and the following
summary represents the Balance Sheet and Income Statement Summary for the
joint venture. The company's investment in the joint venture is included
in the company's Balance Sheet Summary under "Investment in unconsolidated
affiliate."
September 30, December 31,
2009 2008
------------ -----------
(unaudited)
Assets:
Cash and cash equivalents $825 $833
Receivables 200 202
Real estate 73,575 74,463
Other assets 884 1,135
------- -------
$75,484 $76,633
======= =======
Liabilities:
Notes payable $43,600 $43,600
Other liabilities 1,696 1,677
------- -------
Total liabilities 45,296 45,277
------- -------
Members' equity 30,188 31,356
------ ------
Total liabilities and equity $75,484 $76,633
======= =======
Quarter Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
-------- -------- -------- --------
(unaudited) (unaudited) (unaudited) (unaudited)
Revenues:
Rental income $1,565 $1,565 $4,695 $4,627
------ ------ ------ ------
Expenses:
General and administrative 75 67 255 205
Real estate 5 5 15 14
Depreciation and
amortization 386 362 1,127 1,077
Interest 461 528 1,390 1,647
------ ------ ------ ------
927 962 2,787 2,943
------ ------ ------ ------
Net earnings $638 $603 $1,908 $1,684
====== ====== ====== ======
National Retail Properties, Inc.
Investment Portfolio
Top 20 Lines of Trade
---------------------
As of September 30,
Line of Trade 2009 (1) 2008 (2)
------------- -------- --------
1. Convenience stores 26.3% 25.5%
2. Restaurants - full service 9.0% 8.8%
3. Theaters 6.3% 6.2%
4. Automotive parts 6.3% 4.8%
5. Automotive service 5.7% 8.1%
6. Drug stores 4.1% 4.0%
7. Books 4.1% 4.0%
8. Restaurants - limited service 3.5% 3.4%
9. Sporting goods 3.2% 3.2%
10. Grocery 2.9% 2.7%
11. Consumer electronics 2.7% 3.7%
12. Office supplies 2.6% 2.5%
13. Furniture 2.5% 2.5%
14. Travel plazas 2.4% 2.4%
15. Beer, wine and liquor 1.8% 1.7%
16. Family entertainment centers 1.6% 3.0%
17. Health and fitness 1.5% 0.1%
18. General merchandise 1.3% 1.6%
19. Auto dealerships 1.3% 1.3%
20. Financial services 1.2% 1.2%
Other 9.7% 9.3%
------ ------
Total 100.0% 100.0%
====== ======
Top 10 States
-------------
State % of Total(1) State % of Total(1)
----- ------------ ----- -------------
1. Texas 20.1% 6. Indiana 4.4%
2. Florida 10.0% 7. Ohio 4.1%
3. Illinois 7.0% 8. Pennsylvania 3.9%
4. North Carolina 6.3% 9. Tennessee 3.0%
5. Georgia 5.6% 10. Arizona 2.8%
(1) Based on annual base rent of $211,601,000, which is the annualized
base rent for all leases in place as of September 30, 2009.
(2) Based on annual base rent of $216,782,000, which is the annualized
base rent for all leases in place as of September 30, 2008.
National Retail Properties, Inc.
Investment Portfolio
Top Tenants
-----------
Properties % Base Rent(1)
---------- --------------
Pantry 96 9.1%
Susser 86 8.7%
Kerasotes Theatres 16 6.3%
Road Ranger 34 4.0%
Mister Car Wash 40 3.7%
Pull-A-Part 20 3.5%
Pep Boys 14 2.8%
Best Buy 7 2.6%
Barnes & Noble 9 2.5%
Logans Roadhouse 17 2.3%
CVS 16 2.0%
OfficeMax 12 2.0%
Lease Expirations
-----------------
Gross Gross
% of # of Leasable % of # of Leasable
Total(1) Properties Area(2) Total(1) Properties Area(2)
2009 0.3% 8 154,000 2015 3.0% 20 518,000
2010 2.3% 33 314,000 2016 1.7% 13 240,000
2011 2.1% 21 391,000 2017 4.0% 25 674,000
2012 3.4% 34 482,000 2018 2.9% 23 343,000
2013 4.7% 39 848,000 2019 4.2% 41 628,000
2014 5.6% 43 671,000 Thereafter 65.8% 655 5,317,000
(1) Based on annual base rent of $211,601,000, which is the annualized
base rent for all leases in place as of September 30, 2009.
(2) Square feet.
SOURCE National Retail Properties, Inc.
Copyright 2009 PR Newswire
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