NNN REIT(NNN) - 2024 Q2 - Quarterly Report

Rental Income and Tenants - NNN recorded $20,883,000 in rental income for the six months ended June 30, 2024, compared to$30,088,000 for the same period in 2023, indicating a decrease of approximately 30.5%[27] - The company recognized $11,108,000 in rental income during the quarter ended June 30, 2024, from tenants classified to cash basis, down from$14,523,000 in the same quarter of 2023, a decrease of approximately 23.5%[27] - As of June 30, 2024, NNN had 11 tenants classified as cash basis for accounting purposes, representing 3.4% of total properties, down from 5.0% in 2023[26] - The total annual base rent for cash basis tenants was $837,568,000 as of June 30, 2024, a decrease from$794,475,000 in 2023, reflecting a reduction of 5.0%[26] - NNN's total gross leasable area with cash basis tenants was 4.8% as of June 30, 2024, down from 6.8% in 2023, indicating a reduction in exposure to cash basis tenants[26] Financial Performance - Net earnings for Q2 2024 were $106.666 million, an increase from$98.704 million in Q2 2023, representing an increase of 10.0%[39] - Rental income from operating leases for Q2 2024 was $211.557 million, compared to$197.629 million in Q2 2023, reflecting an increase of 7.0%[51] - NNN recognized a net straight-line accrued rental income of ($131,000) for the six months ended June 30, 2024, compared to$1.003 million for the same period in 2023[52] Assets and Real Estate - As of June 30, 2024, NNN's total real estate portfolio value was $10.416 billion, up from$10.248 billion as of December 31, 2023, indicating a growth of 1.6%[49] - NNN's real estate held for sale amounted to $9,442,000 as of June 30, 2024, compared to$4,573,000 as of December 31, 2023, indicating an increase of 106.5%[28] - The company reported a total of 6 properties classified as held for sale as of June 30, 2024, compared to 1 property as of December 31, 2023[50] Cash and Debt Management - NNN held $14,672,000 in restricted cash and cash held in escrow as of June 30, 2024, compared to$3,966,000 as of December 31, 2023, showing an increase of 269.5%[34] - NNN's debt costs associated with unsecured notes were $43,820,000 as of June 30, 2024, compared to$42,595,000 as of December 31, 2023, reflecting an increase of 2.9%[35] - The weighted average outstanding balance of NNN's Credit Facility was $111,966,000 with a weighted average interest rate of 6.26$500,000,000 of 5.500% notes due June 2034, with net proceeds of approximately $489,390,000 after debt issuance costs of$4,450,000[60] - NNN redeemed $350,000,000 of 3.900$103,159,000, an increase from $99,745,000 in Q2 2023, with a per share dividend of$0.5650[66] - NNN's average shares outstanding for diluted earnings per share increased to 182.807 million in Q2 2024 from 181.628 million in Q2 2023[39] Impairments and Write-offs - The company recorded a write-off of $473,000 in outstanding receivables for the six months ended June 30, 2024, compared to$348,000 in 2023, representing a rise of 36.0%[26] - NNN recognized real estate impairments of $944,000 for the quarter ended June 30, 2024, compared to$34,000 for the same quarter in 2023[56] Future Commitments and Evaluations - As of June 30, 2024, NNN has committed to fund construction on 27 properties with a total commitment of $249,365,000, of which$174,649,000 has been funded, leaving a remaining commitment of $74,716,000[55] - The company is currently evaluating the potential impact of new accounting standards on its future disclosures, including ASU 2023-07 and ASU 2023-09[43][44] Comprehensive Income and Fair Value - NNN's accumulated other comprehensive income (loss) decreased to$(8.869) million as of June 30, 2024, from a beginning balance of $(10.111) million[41] - The fair value of NNN's notes payable was$3,864,675,000 as of June 30, 2024, compared to $3,801,367,000 as of December 31, 2023[67]