Part I – Financial Information [Item 1. Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20%28unaudited%29) This section presents NNN REIT's unaudited condensed consolidated financial statements for Q1 2024, including balance sheets, income statements, equity, cash flows, and detailed notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) **Condensed Consolidated Balance Sheet Highlights (dollars in thousands)** | Item | March 31, 2024 | December 31, 2023 | Change | % Change | | :--------------------------------------- | :------------- | :---------------- | :----- | :------- | | **Assets** | | | | | | Real estate portfolio, net | $8,586,856 | $8,535,851 | $51,005 | 0.60% | | Cash and cash equivalents | $1,128 | $1,189 | $(61) | -5.13% | | Restricted cash and cash held in escrow | $— | $3,966 | $(3,966) | -100.00% | | Total assets | $8,705,742 | $8,661,968 | $43,774 | 0.51% | | **Liabilities** | | | | | | Line of credit payable | $116,200 | $132,000 | $(15,800) | -11.97% | | Notes payable, net | $4,229,933 | $4,228,544 | $1,389 | 0.03% | | Accrued interest payable | $75,487 | $34,374 | $41,113 | 119.61% | | Total liabilities | $4,530,884 | $4,504,511 | $26,373 | 0.59% | | **Equity** | | | | | | Total equity | $4,174,858 | $4,157,457 | $17,401 | 0.42% | | Total liabilities and equity | $8,705,742 | $8,661,968 | $43,774 | 0.51% | [Condensed Consolidated Statements of Income and Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) **Condensed Consolidated Statements of Income and Comprehensive Income (dollars in thousands, except per share data)** | Item | Quarter Ended March 31, 2024 | Quarter Ended March 31, 2023 | Change | % Change | | :--------------------------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Rental income | $214,825 | $203,630 | $11,195 | 5.50% | | Total revenues | $215,407 | $204,108 | $11,299 | 5.54% | | Total operating expenses | $81,907 | $81,383 | $524 | 0.64% | | Gain on disposition of real estate | $4,821 | $6,300 | $(1,479) | -23.48% | | Earnings from operations | $138,321 | $129,025 | $9,296 | 7.20% | | Interest expense | $44,069 | $38,891 | $5,178 | 13.31% | | Net earnings | $94,371 | $90,167 | $4,204 | 4.66% | | Basic net earnings per share | $0.52 | $0.50 | $0.02 | 4.00% | | Diluted net earnings per share | $0.52 | $0.50 | $0.02 | 4.00% | | Total comprehensive income | $95,003 | $90,774 | $4,229 | 4.66% | [Condensed Consolidated Statements of Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) **Condensed Consolidated Statements of Equity Highlights (dollars in thousands)** | Item | Quarter Ended March 31, 2024 | Quarter Ended March 31, 2023 | | :--------------------------------------- | :--------------------------- | :--------------------------- | | Balances at December 31 | $4,157,457 | $4,123,502 | | Net earnings | $94,371 | $90,167 | | Dividends declared and paid | $(101,948) | $(98,677) | | Issuance of common stock (ATM equity program) | $20,925 | $16,368 | | Issuance of common stock (DRIP & director comp) | $352 | $367 | | Amortization of deferred compensation | $3,247 | $2,832 | | Amortization of interest rate hedges | $632 | $607 | | Balances at March 31 | $4,174,858 | $4,134,872 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) **Condensed Consolidated Statements of Cash Flows Highlights (dollars in thousands)** | Cash Flow Activity | Quarter Ended March 31, 2024 | Quarter Ended March 31, 2023 | Change | | :--------------------------------------- | :--------------------------- | :--------------------------- | :----- | | Net cash provided by operating activities | $190,715 | $180,822 | $9,893 | | Net cash used in investing activities | $(97,732) | $(142,346) | $44,614 | | Net cash used in financing activities | $(97,010) | $(39,928) | $(57,082) | | Net decrease in cash, cash equivalents and restricted cash | $(4,027) | $(1,452) | $(2,575) | | Cash, cash equivalents and restricted cash at end of period | $1,128 | $5,326 | $(4,198) | - Cash flows from operating activities increased by **$9.9 million**, primarily due to changes in revenues and expenses[20](index=20&type=chunk)[23](index=23&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk) - Investing activities used less cash, mainly due to lower additions to real estate[20](index=20&type=chunk)[23](index=23&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk) - Financing activities used significantly more cash, driven by increased net repayments of the Credit Facility and higher dividend payments[20](index=20&type=chunk)[23](index=23&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [Note 1 – Organization and Summary of Significant Accounting Policies](index=9&type=section&id=Note%201%20%E2%80%93%20Organization%20and%20Summary%20of%20Significant%20Accounting%20Policies) NNN REIT operates as a fully integrated REIT, detailing its organization, significant accounting policies, and key financial practices - NNN REIT, Inc. operates as a fully integrated REIT, focusing on acquiring, owning, investing in, and developing properties leased primarily to retail tenants under long-term net leases[26](index=26&type=chunk)[27](index=27&type=chunk) **Property Portfolio Snapshot (March 31, 2024)** | Metric | Value | | :-------------------------------- | :---------- | | Total Properties | 3,546 | | Gross leasable area (square feet) | 36,137,000 | | States of operation | 49 | | Weighted average remaining lease term | 10.0 years | - The company recorded **$1,859,000** in capitalized interest during the development period for the quarter ended March 31, 2024, a significant increase from **$405,000** in the prior year period[32](index=32&type=chunk) - NNN reclassified **$444,000** of outstanding receivables and accrued rent to cash basis for accounting purposes in Q1 2024, compared to **$232,000** in Q1 2023, indicating a higher amount of uncollectible rent in the current period[42](index=42&type=chunk) **Cash Basis Tenants as of March 31** | Metric | 2024 | 2023 | | :-------------------------------- | :--- | :--- | | Number of tenants | 10 | 10 | | As a percent of Total Properties | 3.5% | 5.0% | | As a percent of Total annual base rent | 5.1% | 7.1% | | As a percent of Total gross leasable area | 4.9% | 6.7% | - Real estate held for sale increased significantly to **$22,239,000** (five properties) at March 31, 2024, from **$4,573,000** (one property) at December 31, 2023, indicating a strategic increase in planned dispositions[44](index=44&type=chunk) - NNN estimates an additional **$1,980,000** will be reclassified as an increase in interest expense over the next 12 months from previously terminated interest rate hedges[76](index=76&type=chunk) [Note 2 – Real Estate](index=15&type=section&id=Note%202%20%E2%80%93%20Real%20Estate) This note details NNN's real estate portfolio composition, accounting, lease structures, dispositions, construction commitments, and impairment losses **Real Estate Portfolio (dollars in thousands)** | Item | March 31, 2024 | December 31, 2023 | | :--------------------------------------- | :------------- | :---------------- | | Land and improvements | $2,888,657 | $2,878,400 | | Buildings and improvements | $7,459,462 | $7,368,873 | | Total real estate (gross) | $10,348,474 | $10,247,628 | | Less accumulated depreciation and amortization | $(1,913,861) | $(1,863,451) | | Work in progress and improvements | $127,025 | $144,068 | | Classified as held for sale | $22,239 | $4,573 | | Total real estate portfolio, net | $8,586,856 | $8,535,851 | **Rental Income Breakdown (dollars in thousands)** | Item | Quarter Ended March 31, 2024 | Quarter Ended March 31, 2023 | | :--------------------------------------- | :--------------------------- | :--------------------------- | | Rental income from operating leases | $209,084 | $198,183 | | Earned income from direct financing leases | $119 | $144 | | Percentage rent | $888 | $763 | | Real estate expense reimbursement from tenants | $4,734 | $4,540 | | Total rental income | $214,825 | $203,630 | **Real Estate Dispositions (dollars in thousands)** | Item | Quarter Ended March 31, 2024 | Quarter Ended March 31, 2023 | | :--------------------------------------- | :--------------------------- | :--------------------------- | | Number of Sold Properties | 6 | 6 | | Net Gain on disposition of real estate | $4,821 | $6,300 | **Real Estate Impairments (dollars in thousands)** | Item | Quarter Ended March 31, 2024 | Quarter Ended March 31, 2023 | | :--------------------------------------- | :--------------------------- | :--------------------------- | | Total real estate impairments, net of recoveries | $1,204 | $2,640 | | Number of Properties (Occupied) | 3 | 1 | | Number of Properties (Vacant) | — | 3 | - NNN has committed to fund construction on **39 properties** with a remaining commitment of **$117,104,000** as of March 31, 2024, indicating ongoing development activities[71](index=71&type=chunk) [Note 3 – Line of Credit Payable](index=17&type=section&id=Note%203%20%E2%80%93%20Line%20of%20Credit%20Payable) NNN's $1.1 billion revolving credit facility had a weighted average outstanding balance of $116.1 million and an interest rate of 6.26% for Q1 2024. The facility matures in June 2025, with extension options, and includes an accordion feature to increase size up to $2 billion. NNN was in compliance with all financial covenants **Credit Facility Details (Quarter Ended March 31, 2024)** | Metric | Value | | :--------------------------------------- | :---------------- | | Total facility size | $1,100,000,000 | | Weighted average outstanding balance | $116,067,000 | | Weighted average interest rate | 6.26% | | Outstanding balance as of March 31, 2024 | $116,200,000 | | Available for future borrowings | $983,800,000 | | Maturity date | June 2025 (with extension options) | [Note 4 – Notes Payable and Derivatives](index=18&type=section&id=Note%204%20%E2%80%93%20Notes%20Payable%20and%20Derivatives) NNN had no derivative financial instruments outstanding as of March 31, 2024. The company reclassified $632,000 from accumulated other comprehensive income (loss) to interest expense for Q1 2024, related to previously terminated interest rate hedges, and estimates an additional $1,980,000 will be reclassified over the next 12 months - NNN reclassified **$632,000** from accumulated other comprehensive income (loss) to interest expense for the quarter ended March 31, 2024, related to previously terminated interest rate hedges[76](index=76&type=chunk) - An estimated **$1,980,000** will be reclassified over the next 12 months[76](index=76&type=chunk) - NNN does not use derivatives for trading or speculative purposes and had no derivative financial instruments outstanding at March 31, 2024[77](index=77&type=chunk) [Note 5 – Stockholders' Equity](index=18&type=section&id=Note%205%20%E2%80%93%20Stockholders%27%20Equity) NNN has a Universal Shelf Registration Statement for various securities and operates an At-The-Market (ATM) equity program, issuing 500,000 shares for $20.8 million net proceeds in Q1 2024. The Dividend Reinvestment and Stock Purchase Plan (DRIP) issued 19,494 shares for $709,000 net proceeds. Dividends declared and paid were $0.5650 per share, totaling $102.7 million for the quarter **ATM Equity Program Issuances (dollars in thousands, except per share data)** | Item | Quarter Ended March 31, 2024 | Quarter Ended March 31, 2023 | | :--------------------------------------- | :--------------------------- | :--------------------------- | | Shares of common stock | 500,000 | 349,809 | | Average price per share (net) | $41.61 | $45.95 | | Net proceeds | $20,806 | $16,074 | | Stock issuance costs | $119 | $294 | **DRIP Issuances (dollars in thousands)** | Item | Quarter Ended March 31, 2024 | Quarter Ended March 31, 2023 | | :--------------------------------------- | :--------------------------- | :--------------------------- | | Shares of common stock | 19,494 | 17,760 | | Net proceeds | $709 | $822 | **Dividends Declared and Paid (dollars in thousands, except per share data)** | Item | Quarter Ended March 31, 2024 | Quarter Ended March 31, 2023 | | :--------------------------------------- | :--------------------------- | :--------------------------- | | Dividends | $102,684 | $99,401 | | Per share | $0.5650 | $0.5500 | [Note 6 – Fair Value of Financial Instruments](index=19&type=section&id=Note%206%20%E2%80%93%20Fair%20Value%20of%20Financial%20Instruments) The carrying value of NNN's Credit Facility approximates its fair value. As of March 31, 2024, the fair value of NNN's publicly traded notes payable was $3,762,576,000, based on Level 1 quoted market prices **Fair Value of Notes Payable (dollars in thousands)** | Date | Fair Value | | :--------------------------------------- | :------------- | | March 31, 2024 | $3,762,576 | | December 31, 2023 | $3,801,367 | [Note 7 – Subsequent Events](index=19&type=section&id=Note%207%20%E2%80%93%20Subsequent%20Events) In April 2024, NNN amended its Credit Facility, increasing borrowing capacity from $1.1 billion to $1.2 billion and extending the maturity date from June 2025 to April 2028, with options to extend to April 2029 - In April 2024, NNN amended its Credit Facility, increasing borrowing capacity from **$1.1 billion** to **$1.2 billion** and extending the maturity date from June 2025 to April 2028, with options to extend to April 2029[84](index=84&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses NNN's financial condition, operating performance, property portfolio, revenues, expenses, liquidity, capital resources, and critical accounting estimates [Forward-Looking Statements](index=20&type=section&id=Forward-Looking%20Statements) - The report contains forward-looking statements, and actual results may differ materially due to various risks and uncertainties, including changes in economic conditions, tenant performance, market competition, and regulatory compliance[86](index=86&type=chunk)[87](index=87&type=chunk)[89](index=89&type=chunk) [Overview](index=21&type=section&id=Overview) - NNN is a REIT focused on acquiring, owning, investing in, and developing properties leased primarily to retail tenants under long-term net leases[90](index=90&type=chunk) **Property Portfolio Overview (March 31, 2024)** | Metric | Value | | :-------------------------------- | :---------- | | Total Properties owned | 3,546 | | States of operation | 49 | | Aggregate gross leasable area | 36,137,000 sq ft | | Weighted average remaining lease term | 10.0 years | | Occupancy rate | ~99% | - NNN maintains diversification by tenant, geography, and line of trade, with significant concentrations in restaurant (**17.1%**), automotive service (**16.3%**), and convenience store (**16.2%**) sectors, and geographically in the southeast (**26.5%**) and south (**22.9%**) United States[95](index=95&type=chunk) [Results of Operations](index=22&type=section&id=Results%20of%20Operations) [Property Analysis](index=22&type=section&id=Property%20Analysis) NNN's property portfolio grew to 3,546 properties with 36.1 million square feet of gross leasable area as of March 31, 2024, maintaining a 99% occupancy rate and a 10.0-year weighted average remaining lease term. The company acquired 20 properties for $124.5 million at an 8.0% cap rate and disposed of 6 properties for $18.5 million net proceeds, realizing a $4.8 million net gain **Property Portfolio Summary** | Metric | March 31, 2024 | December 31, 2023 | March 31, 2023 | | :--------------------------------------- | :------------- | :---------------- | :------------- | | Properties Owned (Number) | 3,546 | 3,532 | 3,449 | | Total gross leasable area (sq ft) | 36,137,000 | 35,966,000 | 35,251,000 | | Percent of Properties – leased | 99% | 99% | 99% | | Weighted average remaining lease term (years) | 10.0 | 10.1 | 10.3 | | Total annualized base rent | $831,010,000 | $818,749,000 | $781,909,000 | **Property Acquisitions (dollars in thousands)** | Metric | Quarter Ended March 31, 2024 | Quarter Ended March 31, 2023 | | :--------------------------------------- | :--------------------------- | :--------------------------- | | Number of Properties | 20 | 43 | | Gross leasable area (sq ft) | 284,000 | 275,000 | | Cap rate | 8.0% | 7.0% | | Total dollars invested | $124,492 | $156,244 | **Property Dispositions (dollars in thousands)** | Metric | Quarter Ended March 31, 2024 | Quarter Ended March 31, 2023 | | :--------------------------------------- | :--------------------------- | :--------------------------- | | Number of properties | 6 | 6 | | Gross leasable area (sq ft) | 113,000 | 16,000 | | Net sales proceeds | $18,531 | $11,925 | | Net gain on disposition of real estate | $4,821 | $6,300 | | Cap rate | 6.4% | 6.6% | [Analysis of Revenues](index=24&type=section&id=Analysis%20of%20Revenues) Total revenues increased by 5.5% to $215.4 million for the quarter ended March 31, 2024, primarily driven by a 5.5% increase in rental income to $214.8 million, largely due to recent property acquisitions **Revenue Analysis (dollars in thousands)** | Item | Quarter Ended March 31, 2024 | Quarter Ended March 31, 2023 | Percent Increase | | :--------------------------------------- | :--------------------------- | :--------------------------- | :--------------- | | Rental Revenues | $210,091 | $199,090 | 5.5% | | Real estate expense reimbursement | $4,734 | $4,540 | 4.3% | | Rental income | $214,825 | $203,630 | 5.5% | | Interest and other income from real estate transactions | $582 | $478 | 21.8% | | Total revenues | $215,407 | $204,108 | 5.5% | - The increase in rental income is primarily attributed to rental revenues from NNN's recent Property acquisitions[105](index=105&type=chunk) [Analysis of Expenses](index=25&type=section&id=Analysis%20of%20Expenses) Total operating expenses increased slightly by 0.6% to $81.9 million, while total other expenses rose by 13.1% to $43.95 million, mainly due to a 13.3% increase in interest expense. Impairment losses on real estate decreased significantly by 54.4% to $1.2 million **Expense Analysis (dollars in thousands)** | Item | Quarter Ended March 31, 2024 | Quarter Ended March 31, 2023 | Percent Change | | :--------------------------------------- | :--------------------------- | :--------------------------- | :------------- | | General and administrative | $12,584 | $12,251 | 2.7% | | Real estate | $7,154 | $6,846 | 4.5% | | Depreciation and amortization | $60,615 | $59,148 | 2.5% | | Impairment losses – real estate, net of recoveries | $1,204 | $2,640 | (54.4)% | | Total operating expenses | $81,907 | $81,383 | 0.6% | | Interest expense | $44,069 | $38,891 | 13.3% | | Total other expenses | $43,950 | $38,858 | 13.1% | - Interest expense increased by **13.3%** primarily due to the issuance of **$500 million** aggregate principal amount of 5.600% notes due October 2033[108](index=108&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) [Cash Flows](index=26&type=section&id=Cash%20Flows) NNN's cash and cash equivalents decreased to $1.1 million at March 31, 2024. Operating activities provided $190.7 million, investing activities used $97.7 million, and financing activities used $97.0 million. The net decrease in cash, cash equivalents, and restricted cash was $4.0 million **Cash Flow Summary (dollars in thousands)** | Activity | Quarter Ended March 31, 2024 | Quarter Ended March 31, 2023 | | :--------------------------------------- | :--------------------------- | :--------------------------- | | Provided by operating activities | $190,715 | $180,822 | | Used in investing activities | $(97,732) | $(142,346) | | Used in financing activities | $(97,010) | $(39,928) | | Net decrease | $(4,027) | $(1,452) | | Net cash at end of period | $1,128 | $5,326 | - Financing activities for Q1 2024 included **$15.8 million** in net repayments of the Credit Facility, **$20.8 million** from ATM equity program, **$0.7 million** from DRIP, and **$102.7 million** in common stock dividends[113](index=113&type=chunk) [Material Cash Requirements](index=27&type=section&id=Material%20Cash%20Requirements) NNN's material cash requirements include long-term debt maturities of $4.3 billion, interest on long-term debt of $1.9 billion, and $117.1 million in remaining construction commitments. The company anticipates meeting these obligations through operating cash, current capital resources, its Credit Facility, debt/equity financings, and asset dispositions **Material Cash Requirements (dollars in thousands) as of March 31, 2024** | Obligation | Total | 2024 | 2025 | 2026 | 2027 | 2028 | Thereafter | | :--------------------------------------- | :---------- | :----- | :----- | :----- | :----- | :----- | :---------- | | Long-term debt (principal) | $4,300,000 | $350,000 | $400,000 | $350,000 | $400,000 | $400,000 | $2,400,000 | | Long-term debt – interest | $1,918,308 | $115,906 | $148,750 | $134,225 | $119,233 | $104,567 | $1,295,627 | | Credit Facility | $116,200 | $— | $116,200 | $— | $— | $— | $— | | Headquarters office lease | $9,897 | $631 | $210 | $981 | $1,005 | $1,030 | $6,040 | | Total contractual cash obligations | $6,344,405 | $466,537 | $665,160 | $485,206 | $520,238 | $505,597 | $3,701,667 | **Property Construction Commitments (dollars in thousands) as of March 31, 2024** | Item | Amount | | :--------------------------------------- | :------- | | Total commitment | $320,410 | | Less amount funded | $(203,306) | | Remaining commitment | $117,104 | - As of March 31, 2024, NNN owned **22 vacant, un-leased properties**, accounting for less than one percent of total properties and aggregate gross leasable area[120](index=120&type=chunk) [Capital Structure](index=28&type=section&id=Capital%20Structure) **Total Outstanding Debt (dollars in thousands)** | Item | March 31, 2024 | Percentage of Total | December 31, 2023 | Percentage of Total | | :--------------------------------------- | :------------- | :------------------ | :---------------- | :------------------ | | Line of credit payable | $116,200 | 2.7% | $132,000 | 3.0% | | Notes payable | $4,229,933 | 97.3% | $4,228,544 | 97.0% | | Total outstanding debt | $4,346,133 | 100.0% | $4,360,544 | 100.0% | - In April 2024, NNN amended its Credit Facility, increasing borrowing capacity from **$1.1 billion** to **$1.2 billion** and extending the maturity date from June 2025 to April 2028, with options to extend to April 2029[124](index=124&type=chunk) **Common Stock Issuances via ATM (dollars in thousands, except per share data)** | Item | Quarter Ended March 31, 2024 | Quarter Ended March 31, 2023 | | :--------------------------------------- | :--------------------------- | :--------------------------- | | Shares of common stock | 500,000 | 349,809 | | Average price per share (net) | $41.61 | $45.95 | | Net proceeds | $20,806 | $16,074 | **Common Stock Issuances via DRIP (dollars in thousands)** | Item | Quarter Ended March 31, 2024 | Quarter Ended March 31, 2023 | | :--------------------------------------- | :--------------------------- | :--------------------------- | | Shares of common stock | 19,494 | 17,760 | | Net proceeds | $709 | $822 | [Critical Accounting Estimates](index=30&type=section&id=Critical%20Accounting%20Estimates) - NNN's critical accounting estimates involve management's judgments and assumptions, particularly regarding real estate acquisitions, asset recoverability, and lease payment collectability[132](index=132&type=chunk) - No material changes to these policies occurred during the quarter[132](index=132&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) NNN is exposed to interest rate risk from its variable rate Credit Facility and fixed rate long-term debt. The company manages this risk by borrowing at both fixed and variable rates and periodically using derivatives, though no derivatives were outstanding as of March 31, 2024. A one percent increase in variable rate debt interest would have increased interest expense by less than one percent for the quarter - NNN is exposed to interest rate risk primarily from its variable rate Credit Facility and fixed rate long-term debt[133](index=133&type=chunk) - The company's objective is to limit the impact of interest rate changes and reduce borrowing costs[133](index=133&type=chunk) **Debt Obligations and Market Risk (dollars in thousands) as of March 31, 2024** | Year | Variable Rate Debt (Credit Facility) | Weighted Average Interest Rate | Fixed Rate Debt (Unsecured Debt) | Effective Interest Rate | | :--------------------------------------- | :--------------------------------------- | :----------------------------- | :------------------------------- | :---------------------- | | 2024 | $— | — | $350,000 | 3.92% | | 2025 | $116,200 | 6.26% | $400,000 | 4.03% | | 2026 | $— | — | $350,000 | 3.73% | | 2027 | $— | — | $400,000 | 3.55% | | 2028 | $— | — | $400,000 | 4.39% | | Thereafter | $— | — | $2,400,000 | 3.92% | | Total | $116,200 | 6.26% | $4,300,000 | 3.93% | | Fair Value (March 31, 2024) | $116,200 | | $3,762,576 | | | Fair Value (December 31, 2023) | $132,000 | | $3,801,367 | | - If interest rates on NNN's variable rate debt increased by **one percent**, interest expense would have increased by less than **one percent** for the quarter ended March 31, 2024[135](index=135&type=chunk) [Item 4. Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) NNN's management, including its Chief Executive Officer, Chief Financial Officer, and Chief Accounting and Technology Officer, concluded that the company's disclosure controls and procedures were effective as of March 31, 2024. There were no material changes in internal control over financial reporting during the most recent fiscal quarter - NNN's Chief Officers concluded that the design and operation of the company's disclosure controls and procedures were effective as of March 31, 2024[138](index=138&type=chunk) - There were no material changes in NNN's internal control over financial reporting during the most recent fiscal quarter[139](index=139&type=chunk) Part II – Other Information [Item 1. Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) This section states that there are no legal proceedings applicable to NNN REIT, Inc - Not applicable[141](index=141&type=chunk) [Item 1A. Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) This section indicates that there were no material changes to the risk factors previously disclosed in NNN's Annual Report on Form 10-K for the year ended December 31, 2023 - There were no material changes in NNN's risk factors disclosed in Item 1A. Risk Factors in NNN's Annual Report on Form 10-K for the year ended December 31, 2023[141](index=141&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section states that there are no unregistered sales of equity securities and use of proceeds applicable to NNN REIT, Inc - Not applicable[143](index=143&type=chunk) [Item 3. Defaults Upon Senior Securities](index=33&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there are no defaults upon senior securities applicable to NNN REIT, Inc - Not applicable[143](index=143&type=chunk) [Item 4. Mine Safety Disclosures](index=33&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that there are no mine safety disclosures applicable to NNN REIT, Inc - Not applicable[143](index=143&type=chunk) [Item 5. Other Information](index=33&type=section&id=Item%205.%20Other%20Information) This section states that there is no other information applicable to NNN REIT, Inc - Not applicable[143](index=143&type=chunk) [Item 6. Exhibits](index=33&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the SEC as part of the report, including the Third Amended and Restated Credit Agreement, Section 302 and 906 Certifications from the CEO and CFO, and Interactive Data Files (Inline XBRL) - Key exhibits include the Third Amended and Restated Credit Agreement (dated April 16, 2024), Section 302 Certifications from the CEO and CFO, Section 906 Certifications from the CEO and CFO, and Interactive Data Files (Inline XBRL) for financial statements[143](index=143&type=chunk) [Signatures](index=35&type=section&id=Signatures) The report was duly signed on May 1, 2024, by Stephen A. Horn, Jr., Chief Executive Officer, President and Director, and Kevin B. Habicht, Chief Financial Officer, Executive Vice President and Director - The report was signed on **May 1, 2024**, by Stephen A. Horn, Jr. (CEO, President, and Director) and Kevin B. Habicht (CFO, Executive Vice President, and Director)[147](index=147&type=chunk)[148](index=148&type=chunk)

[Operating and Financial Highlights](index=1&type=section&id=Operating%20Results) NNN REIT reported strong Q1 2024 results with year-over-year growth in key financial metrics, high occupancy, and strategic property investments Q1 2024 Operating Results vs. Q1 2023 | Metric | 2024 (in thousands, except per share data) | 2023 (in thousands, except per share data) | |---|---|---| | Revenues | $ 215,407 | $ 204,108 | | Net earnings | $ 94,371 | $ 90,167 | | Net earnings per share | $ 0.52 | $ 0.50 | | FFO | $ 151,261 | $ 145,549 | | FFO per share | $ 0.83 | $ 0.80 | | Core FFO | $ 151,578 | $ 145,972 | | Core FFO per share | $ 0.83 | $ 0.80 | | AFFO | $ 153,259 | $ 148,166 | | AFFO per share | $ 0.84 | $ 0.82 | - FFO and Core FFO per share increased by **3.8%** year-over-year, while AFFO per share increased by **2.4%**[3](index=3&type=chunk) - The company maintained a high occupancy rate of **99.4%** with a weighted average remaining lease term of **10.0 years**[3](index=3&type=chunk) - During the quarter, NNN invested **$124.5 million** in 20 new properties, sold six properties for **$18.5 million**, and raised **$21.5 million** in net proceeds from issuing common shares[3](index=3&type=chunk) - CEO Steve Horn emphasized the quarter's predictable performance, highlighting the **$125 million** in property acquisitions at an **8.0%** initial cash cap rate and an **18-year** weighted average lease term[4](index=4&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) This section presents the unaudited summary financial statements for Q1 2024, detailing the company's financial performance and position [Income Statement Summary](index=4&type=section&id=Income%20Statement%20Summary) Q1 2024 total revenues increased to **$215.4 million** from **$204.1 million** year-over-year, with net earnings growing to **$94.4 million** Q1 2024 Income Statement Summary (unaudited) | Metric | 2024 (in thousands) | 2023 (in thousands) | |---|---|---| | **Revenues** | **$215,407** | **$204,108** | | Rental income | $214,825 | $203,630 | | **Operating expenses** | **$81,907** | **$81,383** | | Depreciation and amortization | $60,615 | $59,148 | | **Earnings from operations** | **$138,321** | **$129,025** | | Interest expense | $44,069 | $38,891 | | **Net earnings** | **$94,371** | **$90,167** | | **Diluted Net earnings per share** | **$0.52** | **$0.50** | [Balance Sheet Summary](index=8&type=section&id=Balance%20Sheet%20Summary) As of March 31, 2024, total assets were **$8.71 billion**, with liabilities at **$4.53 billion** and equity at **$4.17 billion** Balance Sheet Summary (unaudited) | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | |---|---|---| | **Assets** | | | | Real estate portfolio, net | $8,586,856 | $8,535,851 | | Total assets | **$8,705,742** | **$8,661,968** | | **Liabilities** | | | | Line of credit payable | $116,200 | $132,000 | | Notes payable, net | $4,229,933 | $4,228,544 | | Total liabilities | **$4,530,884** | **$4,504,511** | | **Total equity** | **$4,174,858** | **$4,157,457** | | Total liabilities and equity | **$8,705,742** | **$8,661,968** | [Reconciliation of Non-GAAP Financial Measures](index=5&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) This section reconciles GAAP Net Earnings to non-GAAP metrics FFO, Core FFO, and AFFO, detailing per share performance for Q1 2024 Q1 2024 FFO and Core FFO Reconciliation | Metric | 2024 (in thousands, except per share) | 2023 (in thousands, except per share) | |---|---|---| | **Net earnings** | **$94,371** | **$90,167** | | Total FFO adjustments | $56,890 | $55,382 | | **FFO** | **$151,261** | **$145,549** | | Diluted FFO per share | $0.83 | $0.80 | | Total Core FFO adjustments | $317 | $423 | | **Core FFO** | **$151,578** | **$145,972** | | Diluted Core FFO per share | $0.83 | $0.80 | Q1 2024 AFFO Reconciliation | Metric | 2024 (in thousands, except per share) | 2023 (in thousands, except per share) | |---|---|---| | **Core FFO** | **$151,578** | **$145,972** | | Total AFFO adjustments | $1,681 | $2,194 | | **AFFO** | **$153,259** | **$148,166** | | Diluted AFFO per share | $0.84 | $0.82 | [2024 Full-Year Guidance](index=7&type=section&id=2024%20Earnings%20Guidance) NNN REIT provided its full-year 2024 guidance, projecting Core FFO and AFFO per share ranges, alongside acquisition and disposition volumes 2024 Guidance | Metric | 2024 Guidance | |---|---| | Net earnings per share (excluding certain items) | $1.94 - $2.00 per share | | Core FFO per share | $3.25 - $3.31 per share | | AFFO per share | $3.29 - $3.35 per share | | Acquisition volume | $400 - $500 Million | | Disposition volume | $80 - $120 Million | [Debt Summary](index=9&type=section&id=Debt%20Summary) This section details the company's debt profile and covenant compliance as of March 31, 2024, highlighting a strong balance sheet [Debt Composition](index=9&type=section&id=Debt%20Summary) As of March 31, 2024, total unsecured debt was approximately **$4.42 billion** with a **4.0%** weighted average interest rate and **11.8-year** weighted average maturity Unsecured Debt Summary as of March 31, 2024 | Debt Type | Principal (in thousands) | Stated Rate | Maturity Date | |---|---|---|---| | Line of credit payable | $116,200 | SOFR + 87.5 bps | June 2025 | | Unsecured notes payable | $4,300,000 | Various (2.500% - 5.600%) | 2024 - 2052 | | **Total Unsecured Debt** | **$4,416,200** | **(W.A. 4.0%)** | **(W.A. 11.8 years)** | - As of March 31, 2024, the Net Debt / EBITDA ratio based on annualized current quarter EBITDA is **5.5x**[26](index=26&type=chunk) [Key Financial Covenants](index=10&type=section&id=Credit%20Facility%20and%20Note%20Covenants) The company reported full compliance with all key financial covenants for its unsecured credit facility and notes as of March 31, 2024 Covenant Compliance as of March 31, 2024 | Key Covenants (Unsecured Bank Credit Facility) | Required | Actual | |---|---|---| | Maximum leverage ratio | < 0.60 | 0.39 | | Minimum fixed charge coverage ratio | > 1.50 | 4.43 | | Unencumbered asset value ratio | > 1.67 | 2.64 | | **Key Covenants (Unsecured Notes)** | **Required** | **Actual** | | Limitation on incurrence of total debt | ≤ 60% | 40.9% | | Debt service coverage ratio | ≥ 1.50 | 4.4 | [Property Portfolio Analysis](index=11&type=section&id=Property%20Portfolio) As of March 31, 2024, NNN's portfolio comprised **3,546** properties across 49 states, highly diversified by line of trade, geography, and tenancy - As of March 31, 2024, the company owned **3,546** properties in 49 states with a gross leasable area of approximately **36.1 million square feet** and a weighted average remaining lease term of **10.0 years**[4](index=4&type=chunk) [Diversification by Line of Trade and Geography](index=11&type=section&id=Top%2020%20Lines%20of%20Trade) The portfolio demonstrates strong diversification by industry and location, with top lines of trade and key states highlighted Top 5 Lines of Trade by Annual Base Rent (2024) | Lines of Trade | % of Annual Base Rent | |---|---| | 1. Automotive service | 16.3% | | 2. Convenience stores | 16.2% | | 3. Restaurants – full service | 8.6% | | 4. Restaurants – limited service | 8.5% | | 5. Family entertainment centers | 6.7% | Top 5 States by Annual Base Rent | State | % of Total | |---|---| | 1. Texas | 16.9% | | 2. Florida | 9.4% | | 3. Illinois | 5.1% | | 4. Ohio | 4.9% | | 5. Georgia | 4.8% | [Tenant and Lease Expiration Profile](index=12&type=section&id=Top%2020%20Tenants) The tenant base is highly granular, with the largest tenant comprising **4.4%** of annual base rent, and a well-staggered lease expiration schedule Top 5 Tenants by Annual Base Rent | Tenant | % of Total | |---|---| | 1. 7-Eleven | 4.4% | | 2. Mister Car Wash | 4.1% | | 3. Camping World | 3.8% | | 4. Dave & Buster's | 3.5% | | 5. LA Fitness | 3.0% | Lease Expirations by % of Annual Base Rent | Year | % of Total | |---|---| | 2024 | 1.2% | | 2025 | 4.5% | | 2026 | 4.7% | | 2027 | 8.1% | | Thereafter | 50.1% |

ORLANDO, Fla., May 1, 2024 /PRNewswire/ -- NNN REIT, Inc. (NYSE: NNN), a real estate investment trust, today announced its operating results for the quarter ended March 31, 2024. Highlights include: Operating Results: Revenues and net earnings, FFO, Core FFO and AFFO and diluted per share amounts: Quarter EndedMarch 31, 2024 2023 (dollars in thousands, except per share data) Revenues $ 215,407 $ 204,108 Net earnings $ 94,371 $ 90,167 <td colspa ...

A restaurant waitress serves guests. alvarez/E+ via Getty Images Hard truths. Some people avoid them. Some people find liberation in them. I tend to fit in the latter group. One of the tougher truths of life that applies to personal finances is as follows: As long as there is life, bills tend to follow not far behind. Upon entering adulthood, this becomes a distressing reality for many. Unless somebody has someone who sets them up with a carefully constructed multi-million-dollar trust fund, they will pro ...

Funtap Thesis Given the current macroeconomic environment and high interest rates REITs have taken a hit on their valuations. NNN REIT Inc (NYSE:NNN) is a REIT that offers good diversification amongst sectors and tenants, have good debt management as well as debt maturity profile and trades at an attractive valuation which makes NNN a buy. Introduction and Performance NNN is a real estate investment trust (REIT) with a well diversified portfolio of triple net leased properties across the United States. ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the fiscal year ended December 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from to . Commission file number 001-11290 NNN REIT, INC. (Exact name of registrant as specified in its charter) Maryland 56-1431377 (State or other jurisdiction o ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the quarterly period ended September 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from to Commission file number 001-11290 NNN REIT, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organiz ...

Financial Data and Key Metrics Changes - The company reported quarterly core FFO results of $0.80 per share for Q2 2023, an increase of $0.03 or 1.3% over the previous year [11] - Year-to-date core FFO results were $1.60 per share, representing a 2.6% increase over the prior year [11] - The AFFO for the first half of 2023 was $1.62 per share, a 1.3% increase over the previous year [11] - The AFFO dividend payout ratio for the first half of 2023 was approximately 68%, resulting in about $95 million of free cash flow [12] Business Line Data and Key Metrics Changes - The portfolio consists of 3,479 freestanding single-tenant properties with a high occupancy level of 99.4%, maintained for four consecutive quarters [3] - Nearly 90% of leases up for renewal during the quarter were extended at 105% of the prior rent [3] - The company sold 7 properties during the quarter, raising $28 million at a 5.1% cap rate, with year-to-date proceeds from property sales totaling $40 million at a 5.6% cap rate [8] Market Data and Key Metrics Changes - The initial cash cap rate for the first half of 2023 was 7.1%, which is 90 basis points higher year-over-year [4] - The company observed a 20 basis point increase in cap rates from Q1 to Q2 2023, with expectations of a slight increase of 10 to 20 basis points in the second half of the year [4][74] Company Strategy and Development Direction - The company announced an increase in its 2023 core FFO guidance to a range of $3.17 to $3.22 per share, reflecting a long-standing strategy aimed at consistent per share growth [6][13] - NNN has increased its acquisition guidance to $600 million to $700 million for the year, focusing on long-term lease deals with durations of 15 to 20 years [7] - The company maintains a strong balance sheet with over $750 million of liquidity and no material debt maturities until mid-2024 [14][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current economic and capital market uncertainties, with a focus on maintaining high occupancy and strong lease renewals [40] - The company anticipates a return to a more normal growth cadence in 2024, with expectations of mid-single-digit per share growth [80] - Management noted that the credit watch list remains largely unchanged, with no significant concerns regarding tenant health [72] Other Important Information - The company has a disciplined approach to acquisitions, emphasizing relationship-based business models and targeting sale-leaseback transactions [32] - The company has begun to utilize its bank line more frequently in response to the current interest rate environment, with a weighted average debt maturity of over 12 years [39] Q&A Session All Questions and Answers Question: Can you talk about the new AFFO guidance and what kept the high end of guidance from moving higher? - The capitalized interest from increased split-funded acquisitions is a drag on AFFO for this year relative to prior years [44] Question: What are the bad debt assumptions in your guidance? - The company typically assumes a 1% rent loss annually, but current trends suggest it will be closer to 0.5% this year [46][84] Question: Can you provide an update on the credit watch list and any exposures? - The company has seen no significant changes in the credit watch list, with recent bankruptcies having minimal impact on revenue [72][86] Question: How is the acquisition pipeline evolving compared to 3 to 6 months ago? - The acquisition pipeline is stronger now than it was 3 to 6 months ago, with a robust sale-leaseback market [88]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from to Commission file number 001-11290 NNN REIT, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from to Commission file number 001-11290 NNN REIT, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organizatio ...