NNN REIT(NNN) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements NNN REIT, Inc.'s unaudited condensed consolidated financial statements for Q2 and H1 2025, covering balance sheets, income, equity, cash flows, and notes Condensed Consolidated Balance Sheets NNN REIT, Inc.'s Condensed Consolidated Balance Sheets show increased total assets, driven by real estate, and changes in liabilities and equity as of June 30, 2025 Assets, Liabilities, and Equity | ASSETS (in thousands) | June 30, 2025 (unaudited) | December 31, 2024 | | :------------------------------------------------ | :------------------------ | :------------------ | | Real estate portfolio, net | $9,023,171 | $8,746,168 | | Cash and cash equivalents | $5,973 | $8,731 | | Restricted cash and cash held in escrow | $775 | $331 | | Total assets | $9,148,677 | $8,872,728 | | LIABILITIES AND EQUITY (in thousands) | | | | Line of credit payable | $267,700 | $— | | Notes payable, net | $4,376,893 | $4,373,803 | | Total liabilities | $4,786,272 | $4,510,453 | | Total equity | $4,362,405 | $4,362,275 | | Total liabilities and equity | $9,148,677 | $8,872,728 | Condensed Consolidated Statements of Income and Comprehensive Income The Condensed Consolidated Statements of Income and Comprehensive Income show a decrease in net earnings for both the quarter and six months ended June 30, 2025, compared to the prior year, despite an increase in rental income, primarily due to higher operating expenses and interest expense Income and Comprehensive Income Summary | (dollars in thousands, except per share data) | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------------------- | :-------------------------- | :-------------------------- | :----------------------------- | :----------------------------- | | Rental income | $226,498 | $216,140 | $457,072 | $430,965 | | Total revenues | $226,802 | $216,813 | $457,656 | $432,220 | | Total operating expenses | $93,204 | $82,167 | $184,019 | $164,074 | | Gain on disposition of real estate | $16,198 | $17,621 | $20,011 | $22,442 | | Net earnings | $100,529 | $106,666 | $196,987 | $201,037 | | Basic Net earnings per share | $0.54 | $0.58 | $1.05 | $1.10 | | Diluted Net earnings per share | $0.54 | $0.58 | $1.05 | $1.10 | - Net earnings decreased by 5.76% for the quarter ended June 30, 2025, compared to the same period in 2024, and by 2.01% for the six months ended June 30, 2025, compared to the same period in 2024[11] Condensed Consolidated Statements of Equity The Condensed Consolidated Statements of Equity detail the changes in stockholders' equity for the quarter and six months ended June 30, 2025 and 2024 Changes in Stockholders' Equity | (dollars in thousands) | Balances at March 31, 2025 | Net earnings | Dividends declared and paid | Issuance of common stock (ATM) | Balances at June 30, 2025 | | :--------------------- | :------------------------- | :----------- | :-------------------------- | :----------------------------- | :------------------------ | | Common Stock | $1,881 | — | $1 | $2 | $1,884 | | Capital in Excess of Par Value | $5,203,561 | — | $637 | $10,228 | $5,217,161 | | Accumulated Deficit | $(841,164) | $100,529 | $(108,566) | — | $(849,201) | | Total Equity | $4,356,487 | $100,529 | $(107,928) | $10,230 | $4,362,405 | - Total equity increased from $4,356,487 thousand at March 31, 2025, to $4,362,405 thousand at June 30, 2025, driven by net earnings and common stock issuances, partially offset by dividends[13] Condensed Consolidated Statements of Cash Flows The Condensed Consolidated Statements of Cash Flows highlight the company's cash generation and usage across operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 Cash Flow Summary | (dollars in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $322,702 | $311,194 | | Net cash used in investing activities | $(386,969) | $(139,348) | | Net cash provided by (used in) financing activities | $61,953 | $(160,199) | | Net increase (decrease) in cash, cash equivalents and restricted cash | $(2,314) | $11,647 | | Cash, cash equivalents and restricted cash at end of period | $6,748 | $16,802 | - Cash used in investing activities significantly increased from $(139,348) thousand in 2024 to $(386,969) thousand in 2025, primarily due to higher additions to real estate[25] - Financing activities provided $61,953 thousand in cash in 2025, a substantial shift from using $(160,199) thousand in 2024, mainly due to increased proceeds from line of credit payable and reduced repayments[28] Notes to Condensed Consolidated Financial Statements This section provides detailed disclosures and explanations for the condensed consolidated financial statements, covering significant accounting policies, specifics of the real estate portfolio, debt instruments, equity transactions, fair value measurements, segment information, and subsequent events Note 1 – Organization and Summary of Significant Accounting Policies NNN REIT, Inc. is a fully integrated REIT primarily focused on acquiring, owning, investing in, and developing high-quality properties leased under long-term, net leases - NNN REIT, Inc operates as a single reportable segment, primarily deriving revenues from real estate leased under long-term, net leases[30][31][33] Property Portfolio Overview | Property Portfolio as of June 30, 2025 | | :------------------------------------- | | Total Properties: 3,663 | | Gross leasable area (square feet): 38,322,000 | | States: 50 | | Weighted average remaining lease term (years): 10 | - NNN adopted ASC 842, classifying most leases as operating leases where tenants are responsible for operating expenses Rental income is recognized on a straight-line basis[42][43] - For the six months ended June 30, 2025, NNN recorded a write-off of $2,099,000 in outstanding receivables and related accrued rent, reclassifying 12 tenants as cash basis for accounting purposes[46] Note 2 – Real Estate This note provides a detailed breakdown of NNN's real estate portfolio, including its composition, lease structures, intangible assets and liabilities, dispositions, construction commitments, and impairment losses Real Estate Portfolio Details | Real Estate Portfolio (dollars in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------------- | :------------ | :---------------- | | Land and improvements | $2,977,752 | $2,919,976 | | Buildings and improvements | $8,159,894 | $7,805,939 | | Less accumulated depreciation and amortization | $(2,170,211) | $(2,065,316) | | Work in progress and improvements | $43,778 | $82,411 | | Classified as held for sale | $9,205 | $283 | | Total Real Estate Portfolio | $9,023,171 | $8,746,168 | Rental Revenues | Rental Revenues (dollars in thousands) | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------- | :-------------------------- | :-------------------------- | :----------------------------- | :----------------------------- | | Rental income from operating leases | $221,714 | $211,557 | $445,770 | $420,641 | | Real estate expenses reimbursed from tenants | $4,388 | $4,206 | $9,906 | $8,940 | | Total Rental income | $226,498 | $216,140 | $457,072 | $430,965 | - Real estate held for sale increased significantly from $283,000 (two properties) at December 31, 2024, to $9,205,000 (seven properties) at June 30, 2025[48][70] Real Estate Impairments | Real Estate Impairments (dollars in thousands) | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------------- | :-------------------------- | :-------------------------- | :----------------------------- | :----------------------------- | | Total real estate impairments, net of recoveries | $4,535 | $944 | $6,047 | $2,148 | | Number of Properties (Vacant) | 6 | 2 | 8 | 2 | Note 3 – Line of Credit Payable This note details the terms of NNN's unsecured revolving credit facility, which was increased to $1.2 billion in April 2024 - NNN's unsecured revolving credit facility increased to $1,200,000,000 in April 2024[78] - As of June 30, 2025, $267,700,000 was outstanding on the Credit Facility, with $932,300,000 available for future borrowings[78] - The Credit Facility bears interest at Adjusted SOFR plus 77.5 basis points, with potential ESG-linked pricing reductions[78] Note 4 – Notes Payable and Derivatives This note discusses NNN's notes payable and derivative activities, specifically the termination of forward starting swaps in connection with a $500 million senior unsecured notes offering - NNN terminated two forward starting swaps with a notional amount of $200,000,000, resulting in a net liability of $409,000 deferred in accumulated other comprehensive income (loss)[80] - The deferred liability from terminated swaps will be amortized as an increase in interest expense over 10 years[80] - NNN reclassified $929,000 and $1,242,000 from accumulated other comprehensive income (loss) to interest expense for the six months ended June 30, 2025 and 2024, respectively[81] Note 5 – Stockholders' Equity This note details NNN's equity activities, including the Universal Shelf Registration Statement for future debt and equity issuances, and common stock issuances through the At-The-Market (ATM) equity program and the Dividend Reinvestment and Stock Purchase Plan (DRIP) - NNN has a Universal Shelf Registration Statement effective August 2023, allowing issuance of indeterminate amounts of debt and equity securities until August 2026[83][84] Common Stock Issuances (ATM) | Common Stock Issuances (ATM) (dollars in thousands, except per share data) | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------------------------------------------- | :-------------------------- | :-------------------------- | :----------------------------- | :----------------------------- | | Shares of common stock | 236,906 | 303,443 | 236,906 | 803,443 | | Average price per share (net) | $42.48 | $41.81 | $42.12 | $41.69 | | Net proceeds | $10,063 | $12,687 | $9,978 | $33,493 | Dividends Declared and Paid | Dividends Declared and Paid (dollars in thousands, except per share data) | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------------------------------- | :-------------------------- | :-------------------------- | :----------------------------- | :----------------------------- | | Dividends | $108,566 | $103,159 | $216,901 | $205,843 | | Per share | $0.5800 | $0.5650 | $1.1600 | $1.1300 | Note 6 – Fair Value of Financial Instruments This note addresses the fair value measurement of NNN's financial instruments - The carrying value of NNN's Credit Facility approximates fair value due to its variable interest rate[87] Fair Value of Notes Payable | Fair Value of Notes Payable (dollars in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------------------- | :------------ | :---------------- | | Fair value of notes payable | $3,974,301 | $3,894,030 | - Fair value of notes payable is determined using Level 1 valuation inputs (quoted market prices) as they are publicly traded[88] Note 7 – Segment Information NNN operates as a single reportable segment, with its Chief Executive Officer serving as the Chief Operating Decision Maker (CODM) - NNN's operations are reported within one reportable segment, deriving revenues primarily from real estate leased under long-term net leases[90] - The Chief Executive Officer acts as the Chief Operating Decision Maker (CODM), assessing performance and allocating resources based on net earnings and total assets[91][92] Note 8 – Subsequent Events This note discloses a significant subsequent event: the closing of a public offering on July 1, 2025, for $500 million principal amount of 4.600% senior unsecured notes due February 15, 2031 - On July 1, 2025, NNN closed a public offering of $500,000,000 principal amount of 4.600% senior unsecured notes due February 15, 2031[93] - The public offering price was 99.182% of the principal amount, yielding 4.766% to maturity[93] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on NNN's financial condition and operating performance, including forward-looking statements, an overview of the business, detailed analysis of revenues and expenses, liquidity and capital resources, capital structure, and critical accounting estimates Forward-Looking Statements This section outlines the inherent risks and uncertainties that could cause NNN's actual results to differ materially from its forward-looking statements - Forward-looking statements are subject to risks including changes in financial/economic conditions, loss of rent from tenants, concentration in specific industries/geographies, and inability to execute acquisition/disposition strategies[95] - Other risks include natural disasters, cybersecurity incidents, inability to obtain capital on favorable terms, debt restrictions, and compliance with REIT tax requirements[95][102] Overview NNN REIT, Inc is a fully integrated REIT that acquires, owns, invests in, and develops high-quality properties leased under long-term, net leases - As of June 30, 2025, NNN owned 3,663 properties in 50 states, with approximately 38,322,000 square feet of gross leasable area[99] - The Property Portfolio maintained approximately 98% occupancy and a weighted average remaining lease term of 10 years as of June 30, 2025[99][104] - Top line of trade concentrations include automotive service (18.2%), convenience stores (16.5%), and restaurants (15.2%)[103][107] Results of Operations This section analyzes NNN's operating performance, detailing changes in its property portfolio, revenues, and expenses Property Analysis NNN's property portfolio grew to 3,663 properties by June 30, 2025, with an increased Annualized Base Rent (ABR) Property Portfolio Summary | Property Portfolio Summary | June 30, 2025 | December 31, 2024 | June 30, 2024 | | :------------------------- | :------------ | :---------------- | :------------ | | Properties Owned (Number) | 3,663 | 3,568 | 3,548 | | Total gross leasable area (sq ft) | 38,322,000 | 36,557,000 | 36,095,000 | | Total Annualized Base Rent (ABR) | $893,782,000 | $860,562,000 | $837,568,000 | Property Acquisitions | Property Acquisitions (dollars in thousands) | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------- | :-------------------------- | :-------------------------- | :----------------------------- | :----------------------------- | | Number of Properties | 45 | 16 | 127 | 36 | | Total dollars invested | $232,536 | $110,542 | $464,929 | $235,034 | | Weighted average cap rate | 7.4% | 7.9% | 7.4% | 8.0% | Property Dispositions | Property Dispositions (dollars in thousands) | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------- | :-------------------------- | :-------------------------- | :----------------------------- | :----------------------------- | | Number of properties | 23 | 14 | 33 | 20 | | Net sales proceeds | $51,248 | $67,274 | $67,087 | $85,805 | | Net gain on disposition of real estate | $16,198 | $17,621 | $20,011 | $22,442 | | Weighted average cap rate | 6.2% | 7.7% | 5.7% | 7.4% | Analysis of Revenues NNN's total revenues increased by 4.6% for the quarter and 5.9% for the six months ended June 30, 2025, primarily driven by a rise in rental income from recent property acquisitions Revenues by Category | Revenues (dollars in thousands) | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | Percent Increase (Decrease) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Percent Increase (Decrease) | | :------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :----------------------------- | :----------------------------- | :-------------------------- | | Rental Revenues | $222,110 | $211,934 | 4.8% | $447,166 | $422,025 | 6.0% | | Real estate expenses reimbursed from tenants | $4,388 | $4,206 | 4.3% | $9,906 | $8,940 | 10.8% | | Interest and other income from real estate transactions | $304 | $673 | (54.8%) | $584 | $1,255 | (53.5%) | | Total revenues | $226,802 | $216,813 | 4.6% | $457,656 | $432,220 | 5.9% | - Rental income increased due to revenues from recent Property acquisitions[111] Analysis of Expenses NNN's total operating expenses increased by 13.4% for the quarter and 12.2% for the six months ended June 30, 2025 Operating Expenses and Interest Expense | Expenses (dollars in thousands) | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | Percent Increase (Decrease) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Percent Increase (Decrease) | | :------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :----------------------------- | :----------------------------- | :-------------------------- | | General and administrative | $11,217 | $11,789 | (4.9%) | $24,225 | $24,373 | (0.6%) | | Non-reimbursed real estate | $4,450 | $2,552 | 74.4% | $8,307 | $4,972 | 67.1% | | Depreciation and amortization | $68,349 | $62,503 | 9.4% | $132,966 | $123,118 | 8.0% | | Impairment losses – real estate, net of recoveries | $4,535 | $944 | 380.4% | $6,047 | $2,148 | 181.5% | | Retirement and severance costs | $191 | $153 | 24.8% | $2,364 | $470 | 403.0% | | Total operating expenses | $93,204 | $82,167 | 13.4% | $184,019 | $164,074 | 12.2% | | Interest expense | $49,282 | $46,577 | 5.8% | $97,005 | $90,646 | 7.0% | - Non-reimbursed real estate expenses increased significantly due to an increase in the number of vacant properties[112] - Retirement and severance costs increased primarily due to costs associated with the retirement and transition agreement of the former Executive Vice President and Chief Financial Officer[115] Liquidity and Capital Resources NNN's liquidity strategy focuses on funding operating expenses, dividends, property acquisitions, and debt obligations through a combination of cash from operations, its Credit Facility, debt/equity issuances, and property sales Financing Strategy NNN's financing objective is to effectively manage its capital structure to support operating and investing strategies, service debt, maintain an investment-grade credit rating, and provide stockholder value - NNN's financing objective is to manage its capital structure to fund operations, service debt, maintain investment-grade credit rating, and provide stockholder value[118] - Sources of capital include debt/equity issuances, borrowings from banks, property sales, and internally generated funds[118] Cash Flows For the six months ended June 30, 2025, cash provided by operating activities increased to $322.7 million, sufficient to cover distributions Cash Flow Summary | Cash Flows (dollars in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Provided by operating activities | $322,702 | $311,194 | | Used in investing activities | $(386,969) | $(139,348) | | Provided by (used in) financing activities | $61,953 | $(160,199) | | Net cash at end of period | $6,748 | $16,802 | - Cash provided by operating activities increased by $11.5 million (3.7%) for the six months ended June 30, 2025, compared to the same period in 2024[120][121] - Financing activities for the six months ended June 30, 2025, included $267.7 million in net borrowings from the Credit Facility and $11.6 million from common stock issuances, while paying $216.9 million in dividends[127] Material Cash Requirements NNN's material cash requirements include long-term debt maturities, interest payments, common stock dividends, and property construction costs Contractual Cash Obligations | Material Cash Requirements (dollars in thousands) | Total 2025 | 2026 | 2027 | 2028 | 2029 | Thereafter | | :------------------------------------------------ | :--------- | :--- | :--- | :--- | :--- | :--------- | | Long-term debt (principal) | $4,450,000 | $400,000 | $350,000 | $400,000 | $400,000 | $— | $2,900,000 | | Long-term debt – interest | $1,973,381 | $87,125 | $161,725 | $146,733 | $132,067 | $118,450 | $1,327,281 | | Credit Facility | $267,700 | $— | $— | $— | $267,700 | $— | $— | | Total contractual cash obligations | $6,691,081 | $487,125 | $511,725 | $546,733 | $799,767 | $118,450 | $4,227,281 | Property Construction Commitments | Property Construction Commitments (dollars in thousands) | | :------------------------------------------------------- | | Total commitment: $103,177 |\n| Less amount funded: $(64,352) |\n| Remaining commitment: $38,825 | - Management expects to meet these obligations using cash from operations, current capital resources, the Credit Facility, debt/equity financings, and property dispositions[126] Properties NNN's properties are primarily under triple-net leases, where tenants cover operating expenses, minimizing capital demands for the company - NNN's Property leases are typically triple-net, with tenants responsible for operating expenses, leading to modest capital demands for NNN[128] - As of June 30, 2025, NNN owned 73 vacant, un-leased Properties, representing 2% of total Properties and gross leasable area[129] - As of July 31, 2025, approximately 1% of total annualized base rent was leased to two tenants in Chapter 11 bankruptcy, which could adversely affect liquidity[130] Dividends NNN's primary objective is to distribute a substantial portion of its funds from operations as dividends while maintaining REIT status and sufficient cash reserves - NNN aims to distribute a substantial portion of funds from operations as dividends to stockholders[131] Dividends Declared and Paid | Dividends Declared and Paid (dollars in thousands, except per share data) | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------------------------------- | :-------------------------- | :-------------------------- | :----------------------------- | :----------------------------- | | Dividends | $108,566 | $103,159 | $216,901 | $205,843 | | Per share | $0.5800 | $0.5650 | $1.1600 | $1.1300 | - In July 2025, NNN declared a dividend of $0.6000 per share, payable in August 2025[131] Capital Structure NNN's capital structure primarily consists of notes payable and a line of credit, used to fund acquisitions, construction, and debt refinancing Total Debt Outstanding | Total Debt Outstanding (dollars in thousands) | June 30, 2025 | Percentage of Total | December 31, 2024 | Percentage of Total | | :-------------------------------------------- | :------------ | :------------------ | :---------------- | :------------------ | | Line of credit payable | $267,700 | 5.8% | $— | — | | Notes payable | $4,376,893 | 94.2% | $4,373,803 | 100.0% | | Total debt outstanding | $4,644,593 | 100.0% | $4,373,803 | 100.0% | Line of Credit Payable NNN's unsecured revolving credit facility was increased to $1.2 billion in April 2024, maturing in April 2028 (extendable to April 2029) - The Credit Facility's borrowing capacity was increased to $1,200,000,000 in April 2024[133] - As of June 30, 2025, $267,700,000 was outstanding and $932,300,000 was available under the Credit Facility[133] - The Credit Facility matures in April 2028, with options to extend to April 2029, and includes an accordion feature up to $2,000,000,000[133] Universal Shelf Registration Statement In August 2023, NNN filed a Universal Shelf Registration Statement, allowing for the issuance of an indeterminate amount of debt and equity securities, including common stock, preferred stock, and other instruments - NNN filed a Universal Shelf Registration Statement in August 2023, permitting the issuance of an indeterminate amount of debt and equity securities[134] Debt Securities – Notes Payable NNN's notes payable consist of various unsecured series with maturities ranging from 2025 to 2052, totaling $4.45 billion in principal Notes Payable Details | Notes Payable (dollars in thousands) | Principal | Stated Rate | Effective Rate | Maturity Date | | :----------------------------------- | :-------- | :---------- | :------------- | :------------ | | 2025 Notes | $400,000 | 4.000% | 4.029% | November 2025 | | 2026 Notes | $350,000 | 3.600% | 3.733% | December 2026 | | 2027 Notes | $400,000 | 3.500% | 3.548% | October 2027 | | 2028 Notes | $400,000 | 4.300% | 4.388% | October 2028 | | 2030 Notes | $400,000 | 2.500% | 2.536% | April 2030 | | 2033 Notes | $500,000 | 5.600% | 5.905% | October 2033 | | 2034 Notes | $500,000 | 5.500% | 5.662% | June 2034 | | 2048 Notes | $300,000 | 4.800% | 4.890% | October 2048 | | 2050 Notes | $300,000 | 3.100% | 3.205% | April 2050 | | 2051 Notes | $450,000 | 3.500% | 3.602% | April 2051 | | 2052 Notes | $450,000 | 3.000% | 3.118% | April 2052 | - In July 2025, NNN issued $500,000,000 of 4.600% notes due February 2031, with net proceeds of approximately $491,710,000[138][140] - The proceeds from the 2031 Notes are intended to repay the Credit Facility, fund future property acquisitions, and for general corporate purposes[140] Equity Securities NNN utilizes an At-The-Market (ATM) equity program and a Dividend Reinvestment and Stock Purchase Plan (DRIP) to issue common stock ATM Offerings | ATM Offerings (dollars in thousands, except per share data) | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------------------------------- | :-------------------------- | :-------------------------- | :----------------------------- | :----------------------------- | | Shares of common stock | 236,906 | 303,443 | 236,906 | 803,443 | | Average price per share (net) | $42.48 | $41.81 | $42.12 | $41.69 | | Net proceeds | $10,063 | $12,687 | $9,978 | $33,493 | DRIP Issuances | DRIP Issuances (dollars in thousands) | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :-------------------------- | :-------------------------- | :----------------------------- | :----------------------------- | | Shares of common stock | 17,316 | 14,815 | 34,092 | 34,309 | | Net proceeds | $707 | $604 | $1,363 | $1,313 | - As of June 30, 2025, 4,889,006 shares had been issued under the 2023 ATM program, out of 17,500,000 allowable shares[143] Critical Accounting Estimates NNN's financial statements rely on management's estimates and assumptions, particularly concerning real estate acquisition accounting, the recoverability of long-lived assets, and the collectability of lease payments - Significant accounting policies include management's estimates for real estate acquisition accounting, recoverability of long-lived assets, and probability of lease payment collections[65][145] - Estimates are sensitive to current and future market and economic conditions, and actual results may differ materially[65][145] - No material changes were made to critical accounting policies during the periods covered by this report[145] Item 3. Quantitative and Qualitative Disclosures About Market Risk NNN is exposed to interest rate risk primarily from its variable rate Credit Facility and fixed rate long-term debt - NNN is exposed to interest rate risk from its variable rate Credit Facility and fixed rate long-term debt[146] - As of June 30, 2025, NNN had no outstanding derivative financial instruments[146] Debt Obligations | Debt Obligations (dollars in thousands) | Variable Rate Debt (Credit Facility) | Fixed Rate Debt (Unsecured Debt) | | :-------------------------------------- | :----------------------------------- | :------------------------------- | | Total Debt Obligation | $267,700 | $4,450,000 | | Weighted Average Interest Rate | 5.22% | 4.12% | | Fair Value (June 30, 2025) | $267,700 | $3,974,301 | - 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 six months ended June 30, 2025[148] Item 4. Controls and Procedures 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 June 30, 2025 - NNN's Chief Officers concluded that disclosure controls and procedures were effective as of June 30, 2025[151] - No material changes in internal control over financial reporting occurred during the most recent fiscal quarter[152] PART II. OTHER INFORMATION Item 1. Legal Proceedings This section states that there are no applicable legal proceedings to report - No legal proceedings are applicable for this reporting period[154] Item 1A. Risk Factors 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, 2024 - No material changes in risk factors were disclosed compared to the 2024 Annual Report on Form 10-K[154] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section states that there are no applicable unregistered sales of equity securities or use of proceeds to report - No unregistered sales of equity securities and use of proceeds are applicable for this reporting period[156] Item 3. Defaults Upon Senior Securities This section states that there are no applicable defaults upon senior securities to report - No defaults upon senior securities are applicable for this reporting period[156] Item 4. Mine Safety Disclosures This section states that there are no applicable mine safety disclosures to report - No mine safety disclosures are applicable for this reporting period[156] Item 5. Other Information This section states that there is no other information to report - No other information is applicable for this reporting period[156] Item 6. Exhibits This section lists the exhibits filed with the Securities and Exchange Commission as part of this report, including supplemental indentures, employment letters, Section 302 and 906 certifications, and Interactive Data Files (Inline XBRL) - Exhibits include the Twenty-third Supplemental Indenture for 4.600% Notes due 2031 and the form of these notes[156] - An Employment Letter for Joshua P Lewis, dated August 1, 2025, is filed as Exhibit 10.1[156] - Section 302 and 906 Certifications from the Chief Executive Officer and Chief Financial Officer are filed herewith[156] Signatures This section contains the signatures of NNN REIT, Inc.'s authorized officers, Stephen A Horn, Jr (President, Chief Executive Officer and Director) and Vincent H Chao (Executive Vice President and Chief Financial Officer), certifying the filing of the report on August 5, 2025 - The report was signed by Stephen A Horn, Jr, President, Chief Executive Officer and Director, and Vincent H Chao, Executive Vice President and Chief Financial Officer, on August 5, 2025[160][161]