Maryland (State or other jurisdiction of incorporation or organization) | 56-1431377 (I.R.S. Employer Identification No.) |
Large accelerated filer x | Accelerated filer ¨ | Non-accelerated filer ¨ | Smaller reporting company ¨ |
PAGE REFERENCE | ||
Part I - Financial Information | ||
Item 1. | ||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | |
Item 3. | ||
Item 4. | ||
Part II - Other Information | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. | ||
NATIONAL RETAIL PROPERTIES, INC. and SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (dollars in thousands, except per share data) | |||||||
March 31, 2014 | December 31, 2013 | ||||||
ASSETS | (unaudited) | ||||||
Real estate portfolio: | |||||||
Accounted for using the operating method, net of accumulated depreciation and amortization | $ | 4,316,989 | $ | 4,260,962 | |||
Accounted for using the direct financing method | 18,014 | 18,342 | |||||
Real estate held for sale | 6,220 | 7,746 | |||||
Mortgages, notes and accrued interest receivable | 20,357 | 17,119 | |||||
Commercial mortgage residual interests | 12,034 | 11,721 | |||||
Cash and cash equivalents | 5,926 | 1,485 | |||||
Receivables, net of allowance of $3,069 and $2,822, respectively | 3,690 | 4,107 | |||||
Accrued rental income, net of allowance of $3,179 and $3,181, respectively | 25,346 | 24,797 | |||||
Debt costs, net of accumulated amortization of $12,227 and $20,213, respectively | 12,221 | 12,877 | |||||
Other assets | 97,665 | 95,367 | |||||
Total assets | $ | 4,518,462 | $ | 4,454,523 | |||
LIABILITIES AND EQUITY | |||||||
Liabilities: | |||||||
Line of credit payable | $ | 91,500 | $ | 46,400 | |||
Mortgages payable, including unamortized premium of $115 and $130, respectively | 9,181 | 9,475 | |||||
Notes payable, net of unamortized discount of $10,514 and $10,816, respectively | 1,514,486 | 1,514,184 | |||||
Accrued interest payable | 27,996 | 17,142 | |||||
Other liabilities | 91,821 | 89,037 | |||||
Total liabilities | 1,734,984 | 1,676,238 | |||||
Equity: | |||||||
Stockholders’ equity: | |||||||
Preferred stock, $0.01 par value. Authorized 15,000,000 shares | |||||||
Series D, 11,500,000 depositary shares issued and outstanding, at stated liquidation value of $25 per share | 287,500 | 287,500 | |||||
Series E, 11,500,000 depositary shares issued and outstanding, at stated liquidation value of $25 per share | 287,500 | 287,500 | |||||
Common stock, $0.01 par value. Authorized 375,000,000 shares; 122,971,965 and 121,991,677 shares issued and outstanding, respectively | 1,231 | 1,221 | |||||
Excess stock, $0.01 par value. Authorized 390,000,000 shares; none issued or outstanding | — | — | |||||
Capital in excess of par value | 2,376,287 | 2,353,166 | |||||
Retained earnings (deficit) | (162,636 | ) | (147,837 | ) | |||
Accumulated other comprehensive income (loss) | (6,944 | ) | (4,505 | ) | |||
Total stockholders’ equity of NNN | 2,782,938 | 2,777,045 | |||||
Noncontrolling interests | 540 | 1,240 | |||||
Total equity | 2,783,478 | 2,778,285 | |||||
Total liabilities and equity | $ | 4,518,462 | $ | 4,454,523 |
Quarter Ended March 31, | |||||||
2014 | 2013 | ||||||
Revenues: | |||||||
Rental income from operating leases | $ | 99,055 | $ | 87,597 | |||
Earned income from direct financing leases | 443 | 508 | |||||
Percentage rent | 90 | 371 | |||||
Real estate expense reimbursement from tenants | 3,232 | 2,998 | |||||
Interest and other income from real estate transactions | 792 | 384 | |||||
Interest income on commercial mortgage residual interests | 452 | 606 | |||||
104,064 | 92,464 | ||||||
Operating expenses: | |||||||
General and administrative | 8,915 | 8,264 | |||||
Real estate | 4,340 | 3,964 | |||||
Depreciation and amortization | 28,012 | 23,716 | |||||
Impairment – commercial mortgage residual interests valuation | 158 | — | |||||
Impairment charges | 396 | 2,851 | |||||
41,821 | 38,795 | ||||||
Earnings from operations | 62,243 | 53,669 | |||||
Other expenses (revenues): | |||||||
Interest and other income | (63 | ) | (334 | ) | |||
Interest expense | 20,278 | 21,960 | |||||
20,215 | 21,626 | ||||||
Earnings from continuing operations before income tax benefit | 42,028 | 32,043 | |||||
Income tax benefit | 93 | 830 | |||||
Earnings from continuing operations | 42,121 | 32,873 | |||||
Earnings (loss) from discontinued operations, net of income tax expense | (36 | ) | 1,030 | ||||
Earnings before gain on disposition of real estate, net of income tax expense | 42,085 | 33,903 | |||||
Gain on disposition of real estate, net of income tax expense | 1,756 | — | |||||
Earnings including noncontrolling interests | 43,841 | 33,903 | |||||
Loss (earnings) attributable to noncontrolling interests: | |||||||
Continuing operations | (508 | ) | 167 | ||||
Discontinued operations | — | (4 | ) | ||||
(508 | ) | 163 | |||||
Net earnings attributable to NNN | $ | 43,333 | $ | 34,066 |
Quarter Ended March 31, | |||||||
2014 | 2013 | ||||||
Net earnings attributable to NNN | $ | 43,333 | $ | 34,066 | |||
Series D preferred stock dividends | (4,762 | ) | (4,762 | ) | |||
Series E preferred stock dividends | (4,097 | ) | — | ||||
Net earnings attributable to common stockholders | $ | 34,474 | $ | 29,304 | |||
Net earnings per share of common stock: | |||||||
Basic: | |||||||
Continuing operations | $ | 0.28 | $ | 0.25 | |||
Discontinued operations | — | 0.01 | |||||
Net earnings | $ | 0.28 | $ | 0.26 | |||
Diluted: | |||||||
Continuing operations | $ | 0.28 | $ | 0.24 | |||
Discontinued operations | — | 0.01 | |||||
Net earnings | $ | 0.28 | $ | 0.25 | |||
Weighted average number of common shares outstanding: | |||||||
Basic | 121,575,983 | 113,491,101 | |||||
Diluted | 121,866,951 | 115,850,253 | |||||
Other comprehensive income: | |||||||
Net earnings attributable to NNN | $ | 43,333 | $ | 34,066 | |||
Amortization of interest rate hedges | 135 | 60 | |||||
Fair value forward starting swaps | (3,373 | ) | (1,144 | ) | |||
Unrealized gain – commercial mortgage residual interests | 684 | 869 | |||||
Stock value adjustments | 115 | 81 | |||||
Reclassification of noncontrolling interests | — | 949 | |||||
Comprehensive income attributable to NNN | $ | 40,894 | $ | 34,881 |
Quarter Ended March 31, | |||||||
2014 | 2013 | ||||||
Cash flows from operating activities: | |||||||
Earnings including noncontrolling interests | $ | 43,841 | $ | 33,903 | |||
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||
Depreciation and amortization | 28,012 | 23,805 | |||||
Impairment charges | 459 | 2,851 | |||||
Impairment – commercial mortgage residual interests valuation | 158 | — | |||||
Amortization of notes payable discount | 302 | 1,356 | |||||
Amortization of debt costs | 656 | 907 | |||||
Amortization of mortgages payable premium | (15 | ) | (14 | ) | |||
Amortization of deferred interest rate hedges | 135 | 60 | |||||
Gain on disposition of real estate | (1,963 | ) | (505 | ) | |||
Performance incentive plan expense | 2,338 | 2,310 | |||||
Performance incentive plan payment | (2,808 | ) | (2,139 | ) | |||
Noncontrolling interest distributions | (1,208 | ) | — | ||||
Change in operating assets and liabilities, net of assets acquired and liabilities assumed in business combinations: | |||||||
Additions to held for sale real estate | — | (1,029 | ) | ||||
Decrease in real estate leased to others using the direct financing method | 328 | 400 | |||||
Decrease (increase) in mortgages, notes and accrued interest receivable | (137 | ) | 286 | ||||
Decrease (increase) in receivables | 417 | (148 | ) | ||||
Increase in accrued rental income | (549 | ) | (727 | ) | |||
Decrease in other assets | 742 | 61 | |||||
Increase in accrued interest payable | 10,854 | 10,603 | |||||
Decrease in other liabilities | (3,249 | ) | (2,264 | ) | |||
Other | 291 | (893 | ) | ||||
Net cash provided by operating activities | 78,604 | 68,823 | |||||
Cash flows from investing activities: | |||||||
Proceeds from the disposition of real estate | 12,301 | 4,627 | |||||
Additions to real estate: | |||||||
Accounted for using the operating method | (89,862 | ) | (51,431 | ) | |||
Increase in mortgages and notes receivable | (3,245 | ) | (739 | ) | |||
Principal payments on mortgages and notes receivable | 214 | 1,339 | |||||
Payment of lease costs | (1,084 | ) | (255 | ) | |||
Other | (16 | ) | (93 | ) | |||
Net cash used in investing activities | (81,692 | ) | (46,552 | ) |
Quarter Ended March 31, | |||||||
2014 | 2013 | ||||||
Cash flows from financing activities: | |||||||
Proceeds from line of credit payable | $ | 251,000 | $ | 186,500 | |||
Repayment of line of credit payable | (205,900 | ) | (301,300 | ) | |||
Repayment of mortgages payable | (279 | ) | (260 | ) | |||
Repayment of notes payable – convertible | — | (20,565 | ) | ||||
Proceeds from issuance of common stock | 21,144 | 166,067 | |||||
Payment of Series D preferred stock dividends | (4,762 | ) | (4,762 | ) | |||
Payment of Series E preferred stock dividends | (4,097 | ) | — | ||||
Stock issuance costs | (304 | ) | (2,264 | ) | |||
Payment of common stock dividends | (49,273 | ) | (44,321 | ) | |||
Net cash provided by (used in) financing activities | 7,529 | (20,905 | ) | ||||
Net increase in cash and cash equivalents | 4,441 | 1,366 | |||||
Cash and cash equivalents at beginning of year | 1,485 | 2,076 | |||||
Cash and cash equivalents at end of year | $ | 5,926 | $ | 3,442 | |||
Supplemental disclosure of cash flow information: | |||||||
Interest paid, net of amount capitalized | $ | 8,781 | $ | 9,297 | |||
Taxes paid | $ | 27 | $ | 19 | |||
Supplemental disclosure of noncash investing and financing activities: | |||||||
Issued 371,134 and 298,896 shares of restricted and unrestricted common stock in 2014 and 2013, respectively, pursuant to NNN’s performance incentive plan | $ | 10,345 | $ | 7,904 | |||
Issued 3,985 and 4,292 shares of common stock in 2014 and 2013, respectively, to directors pursuant to NNN’s performance incentive plan | $ | 132 | $ | 137 | |||
Issued 4,162 and 3,227 shares of common stock in 2014 and 2013, respectively, pursuant to NNN’s Deferred Director Fee Plan | $ | 66 | $ | 38 | |||
Change in other comprehensive income | $ | 2,439 | $ | 815 | |||
Note receivable accepted in connection with real estate transactions | $ | 70 | $ | — |
March 31, 2014 | ||
Property Portfolio: | ||
Total properties | 1,903 | |
Gross leasable area (square feet) | 20,632,000 | |
States | 47 |
March 31, 2014 | December 31, 2013 | ||||||
Intangible lease assets (included in Other assets): | |||||||
Value of above market in-place leases, net | $ | 11,828 | $ | 11,803 | |||
Value of in-place leases, net | 58,776 | 58,456 | |||||
Intangible lease liabilities (included in Other liabilities): | |||||||
Value of below market in-place leases, net | 28,579 | 28,708 |
Quarter Ended March 31, | |||||||
2014 | 2013 | ||||||
Basic and Diluted Earnings: | |||||||
Net earnings attributable to NNN | $ | 43,333 | $ | 34,066 | |||
Less: Series D preferred stock dividends | (4,762 | ) | (4,762 | ) | |||
Less: Series E preferred stock dividends | (4,097 | ) | — | ||||
Net earnings available to NNN’s common stockholders | 34,474 | 29,304 | |||||
Less: Earnings attributable to unvested restricted shares | (163 | ) | (102 | ) | |||
Net earnings used in basic and diluted earnings per share | $ | 34,311 | $ | 29,202 | |||
Basic and Diluted Weighted Average Shares Outstanding: | |||||||
Weighted average number of shares outstanding | 122,412,739 | 114,126,832 | |||||
Less: Unvested restricted stock | (403,309 | ) | (385,258 | ) | |||
Less: Unvested contingent shares | (433,447 | ) | (250,473 | ) | |||
Weighted average number of shares outstanding used in basic earnings per share | 121,575,983 | 113,491,101 | |||||
Effects of dilutive securities: | |||||||
Convertible debt | — | 2,191,512 | |||||
Other | 290,968 | 167,640 | |||||
Weighted average number of shares outstanding used in diluted earnings per share | 121,866,951 | 115,850,253 |
• | Level 1 – Valuation is based upon quoted prices in active markets for identical assets or liabilities. |
• | Level 2 – Valuation is based upon inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |
• | Level 3 – Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include option pricing models, discounted cash flow models and similar techniques. |
Gain or Loss on Cash Flow Hedges (1) | Unrealized Gains and Losses on Commercial Mortgage Residual Interests (2) | Unrealized Gains and Losses on Available-for-Sale Securities | Total | |||||||||||||
Beginning balance, December 31, 2013 | $ | (8,396 | ) | $ | 3,755 | $ | 136 | $ | (4,505 | ) | ||||||
Other comprehensive income (loss) | (3,373 | ) | 521 | 115 | (2,737 | ) | ||||||||||
Reclassifications from accumulated other comprehensive income to net earnings | 135 | 163 | — | 298 | (3) | |||||||||||
Net current period other comprehensive income (loss) | (3,238 | ) | 684 | 115 | (2,439 | ) | ||||||||||
Ending balance, March 31, 2014 | $ | (11,634 | ) | $ | 4,439 | $ | 251 | $ | (6,944 | ) |
March 31, 2014 | ||
Lease classification: | ||
Operating | 1,927 | |
Direct financing | 12 | |
Building portion – direct financing / land portion – operating | 1 | |
Weighted average remaining lease term | 12 Years |
March 31, 2014 | December 31, 2013 | ||||||
Land and improvements | $ | 1,675,212 | $ | 1,652,863 | |||
Buildings and improvements | 3,055,023 | 2,962,684 | |||||
Leasehold interests | 1,290 | 1,290 | |||||
4,731,525 | 4,616,837 | ||||||
Less accumulated depreciation and amortization | (440,247 | ) | (416,594 | ) | |||
4,291,278 | 4,200,243 | ||||||
Work in progress | 25,711 | 60,719 | |||||
$ | 4,316,989 | $ | 4,260,962 |
March 31, 2014 | December 31, 2013 | ||||||
Land and improvements | $ | 5,337 | $ | 5,999 | |||
Building and improvements | 6,351 | 6,811 | |||||
11,688 | 12,810 | ||||||
Less accumulated depreciation and amortization | (1,550 | ) | (1,542 | ) | |||
Less impairment | (3,918 | ) | (3,522 | ) | |||
$ | 6,220 | $ | 7,746 |
Quarter Ended March 31, | |||||||||||
2014 | 2013 | ||||||||||
# of Sold Properties | Gain | # of Sold Properties | Gain | ||||||||
Gain on disposition of real estate | 2 | $ | 1,954 | — | $ | — | |||||
Income tax expense | (198 | ) | — | ||||||||
1,756 | — | ||||||||||
Gain on disposition of real estate included in discontinued operations | 2 | 9 | 2 | 505 | |||||||
$ | 1,765 | $ | 505 |
Number of properties | 28 | ||
Total commitment(1) | $ | 97,317 | |
Amount funded | $ | 50,442 | |
Remaining commitment | $ | 46,875 |
(1) | Includes land, construction costs and tenant improvements. |
Quarter Ended March 31, | |||||||
2014 | 2013 | ||||||
Continuing operations | $ | 396 | $ | 2,851 | |||
Discontinued operations | 63 | — | |||||
$ | 459 | $ | 2,851 |
Contractual interest expense | $ | 2,858 | |
Noncash interest charges | 1,122 | ||
Amortization of debt costs | 305 | ||
Total interest expense | $ | 4,285 |
Quarter Ended March 31, | |||||||
2014 | 2013 | ||||||
Series D preferred stock (1): | |||||||
Dividends | $ | 4,762 | $ | 4,762 | |||
Per share | 0.414063 | 0.414063 | |||||
Series E preferred stock (1): | |||||||
Dividends | 4,097 | — | |||||
Per share | 0.356250 | — | |||||
Common stock: | |||||||
Dividends | 49,273 | 44,321 | |||||
Per share | 0.405 | 0.395 |
Shares of common stock | 4,616,542 | ||
Average price per share (net) | $ | 32.56 | |
Net proceeds | $ | 150,327 | |
Stock issuance costs (1) | $ | 2,129 |
Shares of common stock | 432,000 | ||
Average price per share (net) | $ | 34.91 | |
Net proceeds | $ | 15,080 | |
Stock issuance costs (1) | $ | 265 |
Quarter Ended March 31, | |||||||
2014 | 2013 | ||||||
Shares of common stock | 184,503 | 424,995 | |||||
Net proceeds | $ | 6,107 | $ | 13,822 |
Quarter Ended March 31, | |||||||
2014 | 2013 | ||||||
Revenues: | |||||||
Rental income from operating leases | $ | — | $ | 604 | |||
Earned income from direct financing leases | — | 58 | |||||
Real estate expense reimbursement from tenants | 5 | 51 | |||||
Interest and other income from real estate transactions | — | 4 | |||||
5 | 717 | ||||||
Operating expenses: | |||||||
General and administrative | — | 2 | |||||
Real estate | (13 | ) | 20 | ||||
Depreciation and amortization | — | 89 | |||||
Impairment charges | 63 | — | |||||
50 | 111 | ||||||
Other expenses: | |||||||
Interest expense | — | 31 | |||||
— | 31 | ||||||
Earnings (loss) before gain on disposition of real estate and income tax expense | (45 | ) | 575 | ||||
Gain on disposition of real estate | 9 | 505 | |||||
Income tax expense | — | (50 | ) | ||||
Earnings (loss) from discontinued operations attributable to NNN including noncontrolling interests | (36 | ) | 1,030 | ||||
Earnings attributable to noncontrolling interests | — | (4 | ) | ||||
Earnings (loss) from discontinued operations attributable to NNN | $ | (36 | ) | $ | 1,026 |
Quarter Ended | |||
March 31, 2014 | |||
Balance at beginning of period | $ | 11,721 | |
Total gains (losses) – realized/unrealized: | |||
Included in earnings | (158 | ) | |
Included in other comprehensive income | 684 | ||
Interest income on Residuals | 452 | ||
Cash received from Residuals | (665 | ) | |
Purchases, sales, issuances and settlements, net | — | ||
Transfers in and/or out of Level 3 | — | ||
Balance at end of period | $ | 12,034 | |
Changes in gains (losses) included in earnings attributable to a change in unrealized gains (losses) relating to assets still held at the end of period | $ | 163 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
• | Financial and economic conditions may have an adverse impact on NNN, its tenants, and commercial real estate in general; |
• | NNN may be unable to obtain debt or equity capital on favorable terms, if at all; |
• | Loss of revenues from tenants would reduce NNN's cash flow; |
• | A significant portion of the source of NNN's Property Portfolio annual base rent is heavily concentrated in specific industry classifications, tenants and in specific geographic locations; |
• | Owning real estate and indirect interests in real estate carries inherent risk; |
• | NNN's real estate investments are illiquid; |
• | Costs of complying with changes in governmental laws and regulations may adversely affect NNN's results of operations; |
• | NNN may be subject to known or unknown environmental liabilities and hazardous materials on properties owned by NNN; |
• | NNN may not be able to successfully execute its acquisition or development strategies; |
• | NNN may not be able to dispose of properties consistent with its operating strategy; |
• | A change in the assumptions used to determine the value of commercial mortgage residual interests could adversely affect NNN's financial position; |
• | NNN may suffer a loss in the event of a default or bankruptcy of a borrower or a tenant; |
• | Certain provisions of NNN's leases or loan agreements may be unenforceable; |
• | Property ownership through joint ventures and partnerships could limit NNN's control of those investments; |
• | Competition from numerous other REITs, commercial developers, real estate limited partnerships and other investors may impede NNN's ability to grow; |
• | NNN's loss of key management personnel could adversely affect performance and the value of its common stock; |
• | Uninsured losses may adversely affect NNN's operating results and asset values; |
• | Acts of violence, terrorist attacks or war may adversely affect the markets in which NNN operates and NNN's results of operations; |
• | Vacant properties or bankrupt tenants could adversely affect NNN's business or financial condition; |
• | The amount of debt NNN has and the restrictions imposed by that debt could adversely affect NNN's business and financial condition; |
• | NNN is obligated to comply with financial and other covenants in its debt instruments that could restrict its operating activities, and the failure to comply with such covenants could result in defaults that accelerate the payment of such debt; |
• | The market value of NNN's equity and debt securities is subject to various factors that may cause significant fluctuations or volatility; |
• | NNN's failure to qualify as a real estate investment trust for federal income tax purposes could result in significant tax liability; |
• | Even if NNN remains qualified as a REIT, NNN faces other tax liabilities that reduce operating results and cash flow; |
• | Adverse legislative or regulatory tax changes could reduce NNN's earnings, cash flow and market price of NNN's common stock; |
• | Compliance with REIT requirements, including distribution requirements, may limit NNN's flexibility and negatively affect NNN's operating decisions; |
• | Changes in accounting pronouncements could adversely impact NNN's or NNN's tenants' reported financial performance; |
• | NNN's failure to maintain effective internal control over financial reporting could have a material adverse effect on its business, operating results and share price; |
• | NNN's ability to pay dividends in the future is subject to many factors; |
• | Cybersecurity risks and cyber incidents could adversely affect NNN's business and disrupt operations and expose NNN to liabilities to tenants, employees, and other third parties; and |
• | Future investments in international markets could subject NNN to additional risks. |
March 31, 2014 | December 31, 2013 | March 31, 2013 | ||||||
Properties Owned: | ||||||||
Number | 1,903 | 1,860 | 1,636 | |||||
Total gross leasable area (square feet) | 20,632,000 | 20,402,000 | 19,267,000 | |||||
Properties: | ||||||||
Leased and unimproved land | 1,868 | 1,827 | 1,600 | |||||
Percent of Properties – leased and unimproved land | 98 | % | 98 | % | 98 | % | ||
Weighted average remaining lease term (years) | 12 | 12 | 12 | |||||
Total gross leasable area (square feet) – leased | 20,079,000 | 19,872,000 | 18,629,000 |
% of Annual Base Rent (1) | |||||||||||
Lines of Trade | March 31, 2014 | December 31, 2013 | March 31, 2013 | ||||||||
1. | Convenience stores | 19.6 | % | 19.7 | % | 19.8 | % | ||||
2. | Restaurants – full service | 9.5 | % | 9.7 | % | 10.7 | % | ||||
3. | Automotive service | 7.5 | % | 7.6 | % | 7.7 | % | ||||
4. | Restaurants – limited service | 6.0 | % | 5.5 | % | 5.2 | % | ||||
5. | Automotive parts | 5.1 | % | 5.1 | % | 5.5 | % | ||||
6. | Theaters | 4.5 | % | 4.5 | % | 4.8 | % | ||||
7. | Health and fitness | 4.2 | % | 4.3 | % | 3.6 | % | ||||
8. | Bank | 4.1 | % | 4.1 | % | 0.2 | % | ||||
9. | Sporting goods | 3.7 | % | 3.7 | % | 4.0 | % | ||||
10. | Recreational vehicle dealers, parts and accessories | 3.3 | % | 3.2 | % | 2.9 | % | ||||
Other | 32.5 | % | 32.6 | % | 35.6 | % | |||||
100.0 | % | 100.0 | % | 100.0 | % |
Quarter Ended March 31, | |||||||
2014 | 2013 | ||||||
Acquisitions: | |||||||
Number of Properties | 47 | 17 | |||||
Gross leasable area (square feet) | 309,000 | 162,000 | |||||
Initial cash yield | 7.7 | % | 8.7 | % | |||
Total dollars invested(1) | $ | 94,041 | $ | 42,588 |
Quarter Ended March 31, | |||||||
2014 | 2013 | ||||||
Number of properties | 4 | 2 | |||||
Gross leasable area (square feet) | 84,000 | 21,000 | |||||
Net sales proceeds | $ | 11,245 | $ | 3,569 | |||
Net gain, net of income tax expense | $ | 1,765 | $ | 505 |
Quarter Ended March 31, | |||||||||||||||
Percent of Total | |||||||||||||||
2014 | 2013 | Percent Increase (Decrease) | 2014 | 2013 | |||||||||||
Rental Income(1) | $ | 99,588 | $ | 88,476 | 12.6% | 95.7 | % | 95.7 | % | ||||||
Real estate expense reimbursement from tenants | 3,232 | 2,998 | 7.8% | 3.1 | % | 3.2 | % | ||||||||
Interest and other income from real estate transactions | 792 | 384 | 106.3% | 0.8 | % | 0.4 | % | ||||||||
Interest income on commercial mortgage residual interests | 452 | 606 | (25.4)% | 0.4 | % | 0.7 | % | ||||||||
Total revenues from continuing operations | $ | 104,064 | $ | 92,464 | 12.5% | 100.0 | % | 100.0 | % |
Percent Increase (Decrease) | Percentage of Total | Percentage of Revenues from Continuing Operations | |||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||
General and administrative | $ | 8,915 | $ | 8,264 | 7.9% | 21.3 | % | 21.3 | % | 8.6 | % | 8.9 | % | ||||||||
Real estate | 4,340 | 3,964 | 9.5% | 10.4 | % | 10.2 | % | 4.2 | % | 4.3 | % | ||||||||||
Depreciation and amortization | 28,012 | 23,716 | 18.1% | 67.0 | % | 61.1 | % | 26.9 | % | 25.6 | % | ||||||||||
Impairment – commercial mortgage residual interests valuation | 158 | — | N/C (1) | 0.4 | % | — | 0.2 | % | — | ||||||||||||
Impairment charges | 396 | 2,851 | (86.1)% | 0.9 | % | 7.4 | % | 0.4 | % | 3.1 | % | ||||||||||
Total operating expenses | $ | 41,821 | $ | 38,795 | 7.8% | 100.0 | % | 100.0 | % | 40.3 | % | 41.9 | % | ||||||||
Interest and other income | $ | (63 | ) | $ | (334 | ) | (81.1)% | (0.3 | )% | (1.5 | )% | (0.1 | )% | (0.4 | )% | ||||||
Interest expense | 20,278 | 21,960 | (7.7)% | 100.3 | % | 101.5 | % | 19.5 | % | 23.7 | % | ||||||||||
Total other expenses | $ | 20,215 | $ | 21,626 | (6.5)% | 100.0 | % | 100.0 | % | 19.4 | % | 23.3 | % |
(i) | the issuance in April 2013 of $350,000,000 principal amount of notes payable with a maturity of April 2023, and stated interest rate of 3.300%; |
(ii) | the settlement of $223,035,000 principal amount of 5.125% convertible notes payable in 2013; and |
(iii) | a $54,687,000 decrease in the weighted average debt outstanding on the credit facility for the quarter ended March 31, 2014 as compared to the quarter ended March 31, 2013, and a slightly lower weighted average interest rate for the quarter ended March 31, 2014, as compared to the same period in 2013. |
2014 | 2013 | ||||||||||||||||||
# of Sold Properties | Gain | Earnings | # of Sold Properties | Gain | Earnings | ||||||||||||||
Properties | 2 | $ | 9 | $ | (36 | ) | 2 | $ | 505 | $ | 1,026 |
Quarter Ended March 31, | |||||||
2014 | 2013 | ||||||
Cash and cash equivalents: | |||||||
Provided by operating activities | $ | 78,604 | $ | 68,823 | |||
Used in investing activities | (81,692 | ) | (46,552 | ) | |||
Provided by (used in) financing activities | 7,529 | (20,905 | ) | ||||
Increase | 4,441 | 1,366 | |||||
Net cash at beginning of period | 1,485 | 2,076 | |||||
Net cash at end of period | $ | 5,926 | $ | 3,442 |
• | $45,100,000 in net proceeds from NNN's Credit Facility, |
• | $6,107,000 in net proceeds from the issuance of 184,503 shares of common stock in connection with the Dividend Reinvestment and Stock Purchase Plan ("DRIP"), |
• | $15,080,000 in net proceeds from the issuance of 432,000 shares of common stock in connection with the at-the-market ("ATM") equity program, |
• | $49,273,000 in dividends paid to common stockholders, |
• | $4,762,000 in dividends paid to holders of the depositary shares of NNN’s Series D Preferred Stock, and |
• | $4,097,000 in dividends paid to holders of the depositary shares of NNN’s Series E Preferred Stock. |
Number of properties | 28 | |||
Total commitment(1) | $ | 97,317 | ||
Amount funded | $ | 50,442 | ||
Remaining commitment | $ | 46,875 |
(1) | Includes land, construction costs and tenant improvements. |
Quarter Ended March 31, | ||||||||
2014 | 2013 | |||||||
Series D preferred stock (1): | ||||||||
Dividends | $ | 4,762 | $ | 4,762 | ||||
Per share | 0.414063 | 0.414063 | ||||||
Series E preferred stock (1): | ||||||||
Dividends | 4,097 | — | ||||||
Per share | 0.356250 | — | ||||||
Common stock: | ||||||||
Dividends | 49,273 | 44,321 | ||||||
Per share | 0.405 | 0.395 | ||||||
March 31, 2014 | Percentage of Total | December 31, 2013 | Percentage of Total | ||||||||
Line of credit payable | $ | 91,500 | 5.7% | $ | 46,400 | 3.0% | |||||
Mortgages payable | 9,181 | 0.6% | 9,475 | 0.6% | |||||||
Notes payable | 1,514,486 | 93.7% | 1,514,184 | 96.4% | |||||||
Total outstanding debt | $ | 1,615,167 | 100.0% | $ | 1,570,059 | 100.0% |
Contractual interest expense | $ | 2,858 | |
Noncash interest charges | 1,122 | ||
Amortization of debt costs | 305 | ||
Total interest expense | $ | 4,285 |
Shares of common stock | 4,616,542 | ||
Average price per share (net) | $ | 32.56 | |
Net proceeds | $ | 150,327 | |
Stock issuance costs (1) | $ | 2,129 |
Shares of common stock | 432,000 | ||
Average price per share (net) | $ | 34.91 | |
Net proceeds | $ | 15,080 | |
Stock issuance costs (1) | $ | 265 |
Quarter Ended March 31, | |||||||
2014 | 2013 | ||||||
Shares of common stock | 184,503 | 424,995 | |||||
Net proceeds | $ | 6,107 | $ | 13,822 |
Quarter Ended March 31, | |||||||
2014 | 2013 | ||||||
Unrealized gains | $ | 684 | $ | 869 | |||
Other than temporary valuation impairment | 158 | — |
Debt Obligations (dollars in thousands) | ||||||||||||||||||||
Variable Rate Debt | Fixed Rate Debt | |||||||||||||||||||
Credit Facility | Mortgages(1) | Unsecured Debt(2) | ||||||||||||||||||
Debt Obligation | Weighted Average Interest Rate | Debt Obligation | Weighted Average Effective Interest Rate | Debt Obligation | Effective Interest Rate | |||||||||||||||
2014 | $ | — | — | $ | 864 | 6.88 | % | $ | 149,989 | 5.91 | % | |||||||||
2015 | — | — | 1,207 | 6.86 | % | 149,915 | 6.19 | % | ||||||||||||
2016 | 91,500 | 1.24 | % | 6,842 | 5.95 | % | — | — | ||||||||||||
2017 | — | — | 147 | 8.03 | % | 249,619 | 6.92 | % | ||||||||||||
2018 | — | — | 86 | 9.00 | % | — | — | |||||||||||||
Thereafter | — | — | 35 | 9.00 | % | 964,963 | 4.29 | % | ||||||||||||
Total | $ | 91,500 | 1.24 | % | $ | 9,181 | 6.30 | % | $ | 1,514,486 | 5.08 | % | ||||||||
Fair Value: | ||||||||||||||||||||
March 31, 2014 | $ | 91,500 | $ | 9,181 | $ | 1,584,594 | ||||||||||||||
December 31, 2013 | $ | 46,400 | $ | 9,475 | $ | 1,555,672 |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings. Not applicable. |
Item 1A. | Risk Factors. There were no material changes in NNN's risk factors disclosed in Item 1A. Risk Factors of NNN's Annual Report on Form 10-K for the year ended December 31, 2013. |
Item 3. | Defaults Upon Senior Securities. Not applicable. |
Item 4. | Mine Safety Disclosures. Not applicable. |
Item 5. | Other Information. Not applicable. |
Item 6. | Exhibits |
3. | Articles of Incorporation and Bylaws | |||
3.1 | First Amended and Restated Articles of Incorporation of the Registrant, as amended (filed as Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 3, 2012, and incorporated herein by reference). | |||
3.2 | Articles Supplementary Establishing and Fixing the Rights and Preferences of 6.625% Series D Cumulative Preferred Stock, par value $0.01 per share, dated February 21, 2012 (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K dated February 23, 2012, incorporated herein by reference). | |||
3.3 | Articles Supplementary Establishing and Fixing the Rights and Preferences of 5.700% Series E Cumulative Preferred Stock, par value $0.01 per share, dated May 29, 2013 (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K dated May 30, 2013, incorporated herein by reference). | |||
3.4 | Third Amended and Restated Bylaws of the Registrant, dated May 1, 2006, as amended (filed as Exhibit 3.4 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 19, 2014, and incorporated herein by reference). | |||
3.5 | Second Amendment to the Third Amended and Restated Bylaws of the Registrant, dated December 13, 2007 (filed as Exhibit 3.5 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 19, 2014, and incorporated herein by reference). | |||
3.6 | Third Amendment to the Third Amended and Restated Bylaws of the Registrant, dated February 13, 2014 (filed as Exhibit 3.6 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 19, 2014, and incorporated herein by reference). | |||
4. | Instruments Defining the Rights of Security Holders, Including Indentures | |||
4.1 | Specimen Certificate of Common Stock, par value $0.01 per share, of the Registrant (filed as Exhibit 3.4 to the Registrant’s Registration Statement No. 1-11290 on Form 8-B filed with the Securities and Exchange Commission and incorporated herein by reference). | |||
4.2 | Indenture, dated as of March 25, 1998, between the Registrant and First Union National Bank, as trustee (filed as Exhibit 4.4 to the Registrant’s Registration Statement on Form S-3 (Registration No. 333-132095) filed with the Securities and Exchange Commission on February 28, 2006, and incorporated herein by reference). | |||
4.3 | Form of Supplemental Indenture No. 5 dated as of June 18, 2004, by and among Registrant and Wachovia Bank, National Association, Trustee, relating to $150,000,000 of 6.25% Notes due 2014 (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated June 15, 2004 and filed with the Securities and Exchange Commission on June 18, 2004, and incorporated herein by reference). | |||
4.4 | Form of 6.25% Notes due 2014 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated June 15, 2004 and filed with the Securities and Exchange Commission on June 18, 2004, and incorporated herein by reference). | |||
4.5 | Form of Supplemental Indenture No. 6 dated as of November 17, 2005, by and among Registrant and Wachovia Bank, National Association, Trustee, relating to $150,000,000 of 6.15% Notes due 2015 (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated November 14, 2005 and filed with the Securities and Exchange Commission on November 17, 2005, and incorporated herein by reference). | |||
4.6 | Form of 6.15% Notes due 2015 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated November 14, 2005 and filed with the Securities and Exchange Commission on November 17, 2005, and incorporated herein by reference). | |||
4.7 | Specimen certificate representing the 6.625% Series D Cumulative Redeemable Preferred Stock, par value $.01 per share, of the Registrant (filed as Exhibit 4.4 to the Registrant’s Registration Statement on Form 8-A dated February 22, 2012 and filed with the Securities and Exchange Commission on February 22, 2012, and incorporated herein by reference). | |||
4.8 | Deposit Agreement, among the Registrant, American Stock Transfer & Trust Company, as Depositary, and the holders of depositary receipts (filed as Exhibit 4.20 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 4, 2012, and incorporated herein by reference). | |||
4.9 | Form of Supplemental Indenture No. 8 between National Retail Properties, Inc. and U.S. Bank National Association relating to 6.875% Notes due 2017 (filed as Exhibit 4.1 to Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on September 4, 2007, and incorporated herein by reference). | |||
4.10 | Form of 6.875% Notes due 2017 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on September 4, 2007, and incorporated herein by reference). | |||
4.11 | Form of Ninth Supplemental Indenture between National Retail Properties, Inc. and U.S. Bank National Association relating to 5.125% Convertible Senior Notes due 2028 (filed as Exhibit 4.1 to Registrants’ Current Report on Form 8-K dated February 27, 2008 and filed with the Securities and Exchange Commission on March 4, 2008, and incorporated herein by reference). | |||
4.12 | Form of 5.125% Convertible Senior Notes due 2028 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated February 27, 2008 and filed with the Securities and Exchange Commission on March 4, 2008, and incorporated herein by reference). | |||
4.13 | Form of Tenth Supplemental Indenture between National Retail Properties, Inc. and U.S. Bank National Association relating to 5.500% Notes due 2021 (filed as Exhibit 4.1 to Registrant's Current Report on Form 8-K and filed with the Securities and Exchange Commission on July 6, 2011, and incorporated herein by reference). | |||
4.14 | Form of 5.500% Notes due 2021 (filed as Exhibit 4.2 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on July 6, 2011, and incorporated herein by reference). | |||
4.15 | Form of Eleventh Supplemental Indenture between National Retail Properties, Inc. and U.S. Bank National Association relating to 3.800% Notes due 2022 (filed as Exhibit 4.1 to Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on August 14, 2012 and incorporated herein by reference). | |||
4.16 | Form of 3.800% Notes due 2022 (filed as Exhibit 4.2 to Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on August 14, 2012 and incorporated herein by reference). | |||
4.17 | Form of Twelfth Supplemental Indenture between National Retail Properties, Inc. and U.S. Bank National Association relating to 3.300% Notes due 2023 (filed as Exhibit 4.1 to Registrant's Current Report on Form 8-K dated April 9, 2013, filed with the Securities and Exchange Commission on April 15, 2013 and incorporated herein by reference). | |||
4.18 | Form of 3.300% Notes due 2022 (filed as Exhibit 4.2 to Registrant's Current Report on Form 8-K dated April 9, 2013, filed with the Securities and Exchange Commission on April 15, 2013 and incorporated herein by reference). | |||
4.19 | Specimen certificate representing the 5.700% Series E Cumulative Redeemable Preferred Stock, par value $.01 per share, of the Registrant (filed as Exhibit 4.3 to the Registrant’s Registration Statement on Form 8-A filed with the Securities and Exchange Commission on May 30, 2013 and incorporated herein by reference). | |||
4.20 | Deposit Agreement, among the Registrant, American Stock Transfer & Trust Company, as Depositary, and the holders of depositary receipts (filed as Exhibit 4.1 to the Registrant’s Registration Statement on Form 8-A filed with the Securities and Exchange Commission on May 30, 2013 and incorporated herein by reference). | |||
10. | Material Contracts | |||
10.1 | 2007 Performance Incentive Plan (filed as Annex A to the Registrant’s 2007 Annual Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on April 3, 2007, and incorporated herein by reference). | |||
10.2 | Form of Restricted Stock Agreement between NNN and the Participant of NNN (filed as Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 15, 2005, and incorporated herein by reference). | |||
10.3 | Employment Agreement dated as of December 1, 2008, between the Registrant and Craig Macnab (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference). | |||
10.4 | Employment Agreement dated as of December 1, 2008, between the Registrant and Julian E. Whitehurst (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference). | |||
10.5 | Employment Agreement dated as of December 1, 2008, between the Registrant and Kevin B. Habicht (filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference). | |||
10.6 | Employment Agreement dated as of December 1, 2008, between the Registrant and Paul E. Bayer (filed as Exhibit 10.5 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference). | |||
10.7 | Employment Agreement dated as of December 1, 2008, between the Registrant and Christopher P. Tessitore (filed as Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference). | |||
10.8 | Form of Indemnification Agreement (as entered into between the Registrant and each of its directors and executive officers) (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on June 12, 2009, and incorporated herein by reference). | |||
10.9 | Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Craig Macnab (filed as Exhibit 10.10 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference). | |||
10.10 | Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Julian E. Whitehurst (filed as Exhibit 10.11 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference). | |||
10.11 | Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Kevin B. Habicht (filed as Exhibit 10.12 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference). | |||
10.12 | Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Paul E. Bayer (filed as Exhibit 10.13 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference). | |||
10.13 | Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Christopher P. Tessitore (filed as Exhibit 10.14 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference). | |||
10.14 | Amended and Restated Credit Agreement, dated as of May 25, 2011, by and among the Registrant, certain lenders and Wells Fargo Bank, National Association, as the Administrative Agent (filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on June 6, 2011, and incorporated herein by reference). | |||
10.15 | Form of Restricted Award Agreement - Performance between NNN and the Participant of NNN (filed as Exhibit 10.15 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 4, 2012, and incorporated herein by reference). | |||
10.16 | Form of Restricted Award Agreement - Service between NNN and the Participant of NNN (filed as Exhibit 10.16 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 4, 2012, and incorporated herein by reference). | |||
10.17 | Form of Restricted Award Agreement - Special Grant between NNN and the Participant of NNN (filed as Exhibit 10.17 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 4, 2012, and incorporated herein by reference). | |||
10.18 | First Amendment to Amended and Restated Credit Agreement, dated as of October 31, 2012, by and among the Registrant, certain lenders and Wells Fargo Bank, National Association, as the Administrative Agent (filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on November 1, 2012, and incorporated herein by reference). | |||
10.19 | Employment Agreement dated as of January 2, 2014, between the Registrant and Stephen A. Horn, Jr. (filed as Exhibit 10.19 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 19, 2014, and incorporated herein by reference). | |||
31. | Section 302 Certifications | |||
31.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith). | |||
31.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith). | |||
32. | Section 906 Certifications | |||
32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith). | |||
32.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith). | |||
99. | Additional Exhibits | |||
99.1 | Certification of Chief Executive Officer pursuant to Section 303A.12(a) of the New York Stock Exchange Listed Company Manual (filed as Exhibit 99.1 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 19, 2014). | |||
101. | Interactive Data File | |||
101.1 | The following materials from National Retail Properties, Inc. Quarterly Report on Form 10-Q for the period ended March 31, 2014, formatted in Extensible Business Reporting Language: (i) condensed consolidated balance sheets, (ii) condensed consolidated statements of comprehensive income, (iii) condensed consolidated statements of cash flows, and (iv) notes to condensed consolidated financial statements. As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934 (filed herewith). |
NATIONAL RETAIL PROPERTIES, INC. | ||
By: | /s/ Craig Macnab | |
Craig Macnab | ||
Chairman of the Board and Chief Executive Officer | ||
By: | /s/ Kevin B. Habicht | |
Kevin B. Habicht | ||
Chief Financial Officer, Executive Vice President and Director |
3. | Articles of Incorporation and Bylaws | ||
3.1 | First Amended and Restated Articles of Incorporation of the Registrant, as amended (filed as Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 3, 2012, and incorporated herein by reference). | ||
3.2 | Articles Supplementary Establishing and Fixing the Rights and Preferences of 6.625% Series D Cumulative Preferred Stock, par value $0.01 per share, dated February 21, 2012 (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K dated February 23, 2012, incorporated herein by reference). | ||
3.3 | Articles Supplementary Establishing and Fixing the Rights and Preferences of 5.700% Series E Cumulative Preferred Stock, par value $0.01 per share, dated May 29, 2013 (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K dated May 30, 2013, incorporated herein by reference). | ||
3.4 | Third Amended and Restated Bylaws of the Registrant, dated May 1, 2006, as amended (filed as Exhibit 3.4 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 19, 2014, and incorporated herein by reference). | ||
3.5 | Second Amendment to the Third Amended and Restated Bylaws of the Registrant, dated December 13, 2007 (filed as Exhibit 3.5 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 19, 2014, and incorporated herein by reference). | ||
3.6 | Third Amendment to the Third Amended and Restated Bylaws of the Registrant, dated February 13, 2014 (filed as Exhibit 3.6 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 19, 2014, and incorporated herein by reference). | ||
4. | Instruments Defining the Rights of Security Holders, Including Indentures | ||
4.1 | Specimen Certificate of Common Stock, par value $0.01 per share, of the Registrant (filed as Exhibit 3.4 to the Registrant’s Registration Statement No. 1-11290 on Form 8-B filed with the Securities and Exchange Commission and incorporated herein by reference). | ||
4.2 | Indenture, dated as of March 25, 1998, between the Registrant and First Union National Bank, as trustee (filed as Exhibit 4.4 to the Registrant’s Registration Statement on Form S-3 (Registration No. 333-132095) filed with the Securities and Exchange Commission on February 28, 2006, and incorporated herein by reference). | ||
4.3 | Form of Supplemental Indenture No. 5 dated as of June 18, 2004, by and among Registrant and Wachovia Bank, National Association, Trustee, relating to $150,000,000 of 6.25% Notes due 2014 (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated June 15, 2004 and filed with the Securities and Exchange Commission on June 18, 2004, and incorporated herein by reference). | ||
4.4 | Form of 6.25% Notes due 2014 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated June 15, 2004 and filed with the Securities and Exchange Commission on June 18, 2004, and incorporated herein by reference). | ||
4.5 | Form of Supplemental Indenture No. 6 dated as of November 17, 2005, by and among Registrant and Wachovia Bank, National Association, Trustee, relating to $150,000,000 of 6.15% Notes due 2015 (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated November 14, 2005 and filed with the Securities and Exchange Commission on November 17, 2005, and incorporated herein by reference). | ||
4.6 | Form of 6.15% Notes due 2015 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated November 14, 2005 and filed with the Securities and Exchange Commission on November 17, 2005, and incorporated herein by reference). | ||
4.7 | Specimen certificate representing the 6.625% Series D Cumulative Redeemable Preferred Stock, par value $.01 per share, of the Registrant (filed as Exhibit 4.4 to the Registrant’s Registration Statement on Form 8-A dated February 22, 2012 and filed with the Securities and Exchange Commission on February 22, 2012, and incorporated herein by reference). | ||
4.8 | Deposit Agreement, among the Registrant, American Stock Transfer & Trust Company, as Depositary, and the holders of depositary receipts (filed as Exhibit 4.20 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 4, 2012, and incorporated herein by reference). | ||
4.9 | Form of Supplemental Indenture No. 8 between National Retail Properties, Inc. and U.S. Bank National Association relating to 6.875% Notes due 2017 (filed as Exhibit 4.1 to Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on September 4, 2007, and incorporated herein by reference). | ||
4.10 | Form of 6.875% Notes due 2017 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on September 4, 2007, and incorporated herein by reference). | ||
4.11 | Form of Ninth Supplemental Indenture between National Retail Properties, Inc. and U.S. Bank National Association relating to 5.125% Convertible Senior Notes due 2028 (filed as Exhibit 4.1 to Registrants’ Current Report on Form 8-K dated February 27, 2008 and filed with the Securities and Exchange Commission on March 4, 2008, and incorporated herein by reference). | ||
4.12 | Form of 5.125% Convertible Senior Notes due 2028 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated February 27, 2008 and filed with the Securities and Exchange Commission on March 4, 2008, and incorporated herein by reference). | ||
4.13 | Form of Tenth Supplemental Indenture between National Retail Properties, Inc. and U.S. Bank National Association relating to 5.500% Notes due 2021 (filed as Exhibit 4.1 to Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on July 6, 2011, and incorporated herein by reference). | ||
4.14 | Form of 5.500% Notes due 2021 (filed as Exhibit 4.2 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on July 6, 2011, and incorporated herein by reference). | ||
4.15 | Form of Eleventh Supplemental Indenture between National Retail Properties, Inc. and U.S. Bank National Association relating to 3.800% Notes due 2022 (filed as Exhibit 4.1 to Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on August 14, 2012 and incorporated herein by reference). | ||
4.16 | Form of 3.800% Notes due 2022 (filed as Exhibit 4.2 to Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on August 14, 2012 and incorporated herein by reference). | ||
4.17 | Form of Twelfth Supplemental Indenture between National Retail Properties, Inc. and U.S. Bank National Association relating to 3.300% Notes due 2023 (filed as Exhibit 4.1 to Registrant's Current Report on Form 8-K dated April 9, 2013, filed with the Securities and Exchange Commission on April 15, 2013 and incorporated herein by reference). | ||
4.18 | Form of 3.300% Notes due 2022 (filed as Exhibit 4.2 to Registrant's Current Report on Form 8-K dated April 9, 2013, filed with the Securities and Exchange Commission on April 15, 2013 and incorporated herein by reference). | ||
4.19 | Specimen certificate representing the 5.700% Series E Cumulative Redeemable Preferred Stock, par value $.01 per share, of the Registrant (filed as Exhibit 4.3 to the Registrant’s Registration Statement on Form 8-A filed with the Securities and Exchange Commission on May 30, 2013 and incorporated herein by reference). | ||
4.20 | Deposit Agreement, among the Registrant, American Stock Transfer & Trust Company, as Depositary, and the holders of depositary receipts (filed as Exhibit 4.1 to the Registrant’s Registration Statement on Form 8-A filed with the Securities and Exchange Commission on May 30, 2013 and incorporated herein by reference). | ||
10. | Material Contracts | ||
10.1 | 2007 Performance Incentive Plan (filed as Annex A to the Registrant’s 2007 Annual Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on April 3, 2007, and incorporated herein by reference). | ||
10.2 | Form of Restricted Stock Agreement between NNN and the Participant of NNN (filed as Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 15, 2005, and incorporated herein by reference). | ||
10.3 | Employment Agreement dated as of December 1, 2008, between the Registrant and Craig Macnab (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference). | ||
10.4 | Employment Agreement dated as of December 1, 2008, between the Registrant and Julian E. Whitehurst (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference). | ||
10.5 | Employment Agreement dated as of December 1, 2008, between the Registrant and Kevin B. Habicht (filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference). | ||
10.6 | Employment Agreement dated as of December 1, 2008, between the Registrant and Paul E. Bayer (filed as Exhibit 10.5 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference). | ||
10.7 | Employment Agreement dated as of December 1, 2008, between the Registrant and Christopher P. Tessitore (filed as Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference). | ||
10.8 | Form of Indemnification Agreement (as entered into between the Registrant and each of its directors and executive officers) (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on June 12, 2009, and incorporated herein by reference). | ||
10.9 | Amendment to Employment Agreement, dated as of November 8, 2010, between the Registrant and Craig Macnab (filed as Exhibit 10.10 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference). | ||
10.10 | Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Julian E. Whitehurst (filed as Exhibit 10.11 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference). | ||
10.11 | Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Kevin B. Habicht (filed as Exhibit 10.12 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference). | ||
10.12 | Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Paul E. Bayer (filed as Exhibit 10.13 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference). | ||
10.13 | Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Christopher P. Tessitore (filed as Exhibit 10.14 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference). | ||
10.14 | Amended and Restated Credit Agreement, dated as of May 25, 2011, by and among the Registrant, certain lenders and Wells Fargo Bank, National Association, as the Administrative Agent (filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on June 6, 2011, and incorporated herein by reference). | ||
10.15 | Form of Restricted Award Agreement - Performance between NNN and the Participant of NNN (filed as Exhibit 10.15 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 4, 2012, and incorporated herein by reference). | ||
10.16 | Form of Restricted Award Agreement - Service between NNN and the Participant of NNN (filed as Exhibit 10.16 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 4, 2012, and incorporated herein by reference). | ||
10.17 | Form of Restricted Award Agreement - Service between NNN and the Participant of NNN (filed as Exhibit 10.17 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 4, 2012, and incorporated herein by reference). | ||
10.18 | First Amendment to Amended and Restated Credit Agreement, dated as of October 31, 2012, by and among the Registrant, certain lenders and Wells Fargo Bank, National Association, as the Administrative Agent (filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on November 1, 2012, and incorporated herein by reference). | ||
10.19 | Employment Agreement dated as of January 2, 2014, between the Registrant and Stephen A. Horn, Jr. (filed as Exhibit 10.19 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 19, 2014, and incorporated herein by reference). | ||
31. | Section 302 Certifications | ||
31.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith). |
31.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith). | ||
32. | Section 906 Certifications | ||
32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith). | ||
32.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith). | ||
99. | Additional Exhibits | ||
99.1 | Certification of Chief Executive Officer pursuant to Section 303A.12(a) of the New York Stock Exchange Listed Company Manual (filed as Exhibit 99.1 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 19, 2014). | ||
101. | Interactive Data File | ||
101.1 | The following materials from National Retail Properties, Inc. Quarterly Report on Form 10-Q for the period ended March 31, 2014, formatted in Extensible Business Reporting Language: (i) condensed consolidated balance sheets, (ii) condensed consolidated statements of comprehensive income, (iii) condensed consolidated statements of cash flows, and (iv) notes to condensed consolidated financial statements. As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934 (filed herewith). |
1. | I have reviewed this report on Form 10-Q of National Retail Properties, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
May 1, 2014 | /s/ Craig Macnab | |||
Date | Name: | Craig Macnab | ||
Title: | Chairman of the Board and Chief Executive Officer |
1. | I have reviewed this report on Form 10-Q of National Retail Properties, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
May 1, 2014 | /s/ Kevin B. Habicht | |||
Date | Name: | Kevin B. Habicht | ||
Title: | Chief Financial Officer |
May 1, 2014 | /s/ Craig Macnab | |||
Date | Name: | Craig Macnab | ||
Title: | Chairman of the Board and Chief Executive Officer |
May 1, 2014 | /s/ Kevin B. Habicht | |||
Date | Name: | Kevin B. Habicht | ||
Title: | Chief Financial Officer |
Stockholders' Equity (Details) (USD $)
In Thousands, except Share data, unless otherwise specified |
1 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | ||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 29, 2012
|
Mar. 31, 2014
|
Mar. 31, 2013
|
Mar. 31, 2014
Series D Depositary Share
|
Mar. 31, 2013
Series D Depositary Share
|
Dec. 31, 2013
Series D Depositary Share
|
May 31, 2013
Series E Depositary Share
|
Mar. 31, 2014
Series E Depositary Share
|
Mar. 31, 2013
Series E Depositary Share
|
Dec. 31, 2013
Series E Depositary Share
|
Mar. 31, 2014
DRIP and ATM Equity Program
|
Mar. 31, 2013
DRIP and ATM Equity Program
|
Mar. 31, 2014
ATM Equity Program 2012
|
Mar. 31, 2013
ATM Equity Program 2012
|
May 31, 2012
ATM Equity Program 2012
Common Stock
|
Mar. 31, 2014
ATM Equity Program 2013
|
Mar. 31, 2013
ATM Equity Program 2013
|
Mar. 31, 2013
ATM Equity Program 2013
Common Stock
|
Apr. 30, 2014
Subsequent Event
|
||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||
Dividends | $ 4,762 | [1] | $ 4,762 | [1] | $ 4,097 | [1] | $ 0 | [1] | ||||||||||||||||||||||
Per share | $ 0.414063 | [1] | $ 0.414063 | [1] | $ 0.356250 | [1] | $ 0.000000 | [1] | ||||||||||||||||||||||
Dividends | 49,273 | 44,321 | ||||||||||||||||||||||||||||
Per share | $ 0.405 | $ 0.395 | ||||||||||||||||||||||||||||
Shares of common stock | 0 | 4,616,542 | 432,000 | 0 | ||||||||||||||||||||||||||
Average price per share (net) | $ 32.56 | $ 34.91 | ||||||||||||||||||||||||||||
Net proceeds | 150,327 | 15,080 | ||||||||||||||||||||||||||||
Stock issuance costs | 304 | 2,264 | 9,856 | 2,129 | [2] | 265 | [2] | 135 | [2] | |||||||||||||||||||||
Common stock, dividends, per share, declared (in dollars per share) | $ 0.405 | |||||||||||||||||||||||||||||
Preferred stock, shares issued (in shares) | 11,500,000 | 11,500,000 | 11,500,000 | 11,500,000 | 11,500,000 | |||||||||||||||||||||||||
Preferred stock, dividend rate, percentage | 5.70% | |||||||||||||||||||||||||||||
Preferred stock, redemption price per share (in dollars per share) | $ 25.00 | |||||||||||||||||||||||||||||
Proceeds from issuance of Series E preferred stock | 287,500 | |||||||||||||||||||||||||||||
Shares available for issuance under at market offering program (in shares) | 9,000,000 | 9,000,000 | ||||||||||||||||||||||||||||
Common stock, shares reserved for future issuance, dividend reinvestment plan (in shares) | 16,000,000 | |||||||||||||||||||||||||||||
Shares of common stock | 184,503 | 424,995 | ||||||||||||||||||||||||||||
Net proceeds | $ 21,144 | $ 166,067 | $ 6,107 | $ 13,822 | ||||||||||||||||||||||||||
|
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