# NNN REIT, Inc.: Form 10-Q for the period ended Jun 30, 2025

- Company: [NNN REIT, Inc.](/companies/nnn.md) (CIK 751364)
- Form: 10-Q
- Filed: 2025-08-05
- Accepted by EDGAR: Aug 5, 2025, 12:33 ET
- Period: 2025-06-30
- Accession: 0000950170-25-102429
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/751364/000095017025102429/nnn-20250630.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/751364/000095017025102429/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-04-01 to 2025-06-30 | $226.8m | us-gaap:Revenues |
| Revenue | 6 months, 2025-01-01 to 2025-06-30 | $457.7m | us-gaap:Revenues |
| Operating income | 3 months, 2025-04-01 to 2025-06-30 | $149.8m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2025-01-01 to 2025-06-30 | $293.6m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2025-04-01 to 2025-06-30 | $49.3m | us-gaap:InterestExpense |
| Interest expense | 6 months, 2025-01-01 to 2025-06-30 | $97.0m | us-gaap:InterestExpense |
| Net income | 3 months, 2025-04-01 to 2025-06-30 | $100.5m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2025-01-01 to 2025-06-30 | $197.0m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-04-01 to 2025-06-30 | $0.54 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2025-01-01 to 2025-06-30 | $1.05 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-04-01 to 2025-06-30 | $0.54 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2025-01-01 to 2025-06-30 | $1.05 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-04-01 to 2025-06-30 | 187,070,288 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2025-01-01 to 2025-06-30 | 187,088,160 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2025-01-01 to 2025-06-30 | $322.7m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Dividends paid | 6 months, 2025-01-01 to 2025-06-30 | $216.9m | us-gaap:PaymentsOfDividendsCommonStock |
| Cash and equivalents | at 2025-06-30 | $6.0m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Total assets | at 2025-06-30 | $9.15bn | us-gaap:Assets |
| Total liabilities | at 2025-06-30 | $4.79bn | us-gaap:Liabilities |
| Shareholders' equity | at 2025-06-30 | $4.36bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 41,444 characters.

The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes included in the Annual Report on Form 10-K of NNN REIT, Inc. for the year ended December 31, 2024 ("2024 Annual Report"). The term “NNN” or the “Company” refers to NNN REIT, Inc. and all of its consolidated subsidiaries.

### Forward-Looking Statements

The information herein contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934 (the “Exchange Act”). Also, when NNN uses any of the words “anticipate,” “assume,” “believe,” “estimate,” “expect,” “intend” or similar expressions, NNN is making forward-looking statements. Although management believes that the expectations reflected in such forward-looking statements are based upon present expectations and reasonable assumptions, NNN's actual results could differ materially from those set forth in the forward-looking statements. Further, forward-looking statements speak only as of the date they are made, and NNN undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required by law. The following is a summary of the risks and uncertainties, although not all risks and uncertainties, that could cause NNN's actual results to differ materially from those presented in NNN's forward-looking statement:

- Changes in financial and economic conditions, including inflation and tariffs impacting international trade, may have an adverse impact on NNN, its tenants and commercial real estate in general;
- Loss of rent from tenants would reduce NNN's cash flow;
- A significant portion of the source of the Property Portfolio annual base rent is concentrated in specific industry classifications, tenants and geographic locations;
- 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;
- Certain provisions of NNN's leases or loan agreements may be unenforceable;
- Competition from numerous other real estate investment trusts (“REIT”), commercial developers, real estate limited partnerships and other investors or a lack of properties for sale may impede NNN's ability to grow;
- A natural disaster or impacts of weather or other event resulting in uninsured loss may adversely affect the operations of NNN's tenants and therefore the ability of NNN's tenants to pay rent, NNN's operating results and asset values of NNN's Property Portfolio (as defined below);
- NNN's ability to fully control the management of its net-leased Properties may be limited;
- Bankrupt tenants or vacant Properties could adversely affect NNN's business or financial condition;
- Cybersecurity risks and cyber incidents as well as other significant disruptions of NNN's information technology networks and related systems and resources, or those of NNN's vendors or other third-parties, could adversely affect NNN's business, disrupt operations and expose NNN to liabilities to tenants, associates, capital providers, governmental regulators and other third parties;
- NNN relies upon cloud computing services to operate certain aspects of its business and any disruption could have an adverse effect on its financial condition and results of operations;
- Future investment in international markets could subject NNN to additional risks;
- NNN may suffer a loss in the event of a default or bankruptcy of a borrower;
- Property ownership through joint ventures and partnerships could limit NNN's control of those investments;
- NNN may be unable to obtain debt or equity capital on favorable terms, if at all;
- 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;
- NNN's ability to pay dividends in the future is subject to many factors;
- Future issuances of NNN's equity securities could dilute the interest of NNN's common stockholders;
- Owning real estate and indirect interests in real estate carries inherent risks;
- NNN's real estate investments are illiquid;
- NNN may be subject to known or unknown environmental liabilities and risks, including but not limited to liabilities and risks resulting from the existence of hazardous materials on or under Properties owned by NNN;
- NNN's failure to qualify as a REIT for federal income tax purposes could result in significant tax liability;
- Compliance with REIT requirements, including distribution requirements, may limit NNN's flexibility and may negatively affect NNN's operating decisions;
- The share ownership restrictions of the Internal Revenue Code of 1986, as amended (the "Code"), for REITs and the 9.8% share ownership limit in NNN's charter may inhibit market activity in NNN's shares of stock and restrict NNN's business combination opportunities;
- Costs of complying with changes in governmental laws and regulations may adversely affect NNN's results of operations;
- Non-compliance with Title III of the Americans with Disabilities Act of 1990 and similar state and local laws could have an adverse effect on NNN's business and operating results;
- NNN's loss of key management personnel could adversely affect performance and the value of its securities;
- NNN's failure to maintain effective internal control over financial reporting could have a material adverse effect on its business, operating results and the market value of NNN's securities;
- An epidemic or pandemic and/or the measures that international, federal, state and local governments, agencies, law enforcement and/or health authorities implement to address it, may precipitate or materially exacerbate one or more of the other risks and may significantly disrupt NNN's tenants' ability to operate their businesses and/or pay rent to NNN or prevent NNN from operating its business in the ordinary course for an extended period;
- Acts of violence, terrorist attacks or war may affect NNN's Properties, the markets in which NNN operates and NNN's results of operations;
- Changes in accounting pronouncements could adversely impact NNN's or NNN's tenants' reported financial performance;
- The market value of NNN's equity and debt securities is subject to various factors that may cause significant fluctuations or volatility;
- Even if NNN remains qualified as a REIT, NNN faces other tax liabilities that reduce operating results and cash flow; and
- Adverse legislative or regulatory tax changes could reduce NNN's earnings and cash flow and the market value of NNN's securities.

Additional information related to these risks and uncertainties are included in "Item 1A. Risk Factors" of NNN's 2024 Annual Report.

These risks and uncertainties may cause NNN's actual future results to differ materially from expected results. Readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. NNN undertakes no obligation to update or revise such forward-looking statements, whether as a result of new information, future events or otherwise.

### Overview

NNN, a Maryland corporation, is a fully integrated REIT formed in 1984. NNN's assets primarily include real estate assets. NNN acquires, owns, invests in and develops high-quality properties that are leased primarily to tenants under long-term, net leases and are primarily held for investment ("Properties" or "Property Portfolio", or individually a "Property").

As of June 30, 2025, NNN owned 3,663 Properties in 50 states, with an aggregate gross leasable area of approximately 38,322,000 square feet, and a weighted average remaining lease term of 10 years. Approximately 98 percent of the Properties were leased as of June 30, 2025.

NNN's management team focuses on certain key indicators to evaluate the financial condition and operating performance of NNN. Key indicators include items such as: the composition of the Property Portfolio (such as tenant, line of trade and geographic diversification), the occupancy rate of the Property Portfolio, certain financial performance metrics and profitability measures, industry trends and industry performance compared to that of NNN.

NNN evaluates the creditworthiness of its significant current and prospective tenants. This evaluation may include reviewing available financial statements, store level financial performance, press releases, public credit ratings from major credit rating agencies, industry news publications and financial market data (debt and equity pricing). NNN may also evaluate the business and operations of its significant tenants, including past payment history and periodically meeting with senior management of certain tenants.

NNN continues to maintain its diversification by tenant, line of trade and geography. NNN's top five line of trade concentrations are the automotive service (18.2%), convenience store (16.5%), restaurant (including full and limited service) (15.2%) and entertainment (7.3%) sectors. NNN's management believes these sectors present attractive investment opportunities. The Property Portfolio is geographically concentrated in the southeast (25.0%) and south (24.7%) United States, which are regions of historically above-average population growth. Given these concentrations, any financial hardship within these sectors or geographic regions could have a material adverse effect on the financial condition and operating performance of NNN.

As of June 30, 2025 and 2024, the Property Portfolio remained leased at approximately 98 percent or higher and had a weighted average remaining lease term of approximately 10 years. High occupancy levels coupled with a triple-net lease structure provides enhanced probability of achieving consistent operating results.

Additional information related to NNN and the Property Portfolio is included in NNN's 2024 Annual Report.

### Results of Operations

### Property Analysis

***General.*** The following table summarizes the Property Portfolio:

| Properties Owned: | June 30, 2025 | December 31, 2024 | June 30, 2024 |
| --- | ---: | ---: | ---: |
| Number | 3,663 | 3,568 | 3,548 |
| Total gross leasable area (square feet) | 38,322,000 | 36,557,000 | 36,095,000 |
| States | 50 | 49 | 49 |
| Properties: |  |  |  |
| Leased and unimproved land | 3,590 | 3,514 | 3,522 |
| Percent of Properties – leased and unimproved land | 98% | 98% | 99% |
| Weighted average remaining lease term (years) | 10 | 10 | 10 |
| Total gross leasable area (square feet) – leased | 37,476,000 | 35,826,000 | 35,747,000 |
| Total Annualized Base Rent ("ABR")(1) | $893,782,000 | $860,562,000 | $837,568,000 |

(1) ABR represents the monthly cash base rent for all leases in place as of the end of the period multiplied by 12.

The following table summarizes the diversification of the Property Portfolio for the top 20 lines of trade as a percentage of ABR:

|  | Lines of Trade | June 30, 2025 | December 31, 2024 | June 30, 2024 |
| --- | --- | ---: | ---: | ---: |
| 1. | Automotive service | 18.2% | 17.1% | 16.9% |
| 2. | Convenience stores | 16.5% | 17.0% | 16.2% |
| 3. | Restaurants – limited service | 8.2% | 8.4% | 8.5% |
| 4. | Entertainment | 7.3% | 7.2% | 6.6% |
| 5. | Restaurants – full service | 7.0% | 7.8% | 8.4% |
| 6. | Dealerships | 6.7% | 5.8% | 5.4% |
| 7. | Health and fitness | 4.1% | 3.9% | 4.0% |
| 8. | Theaters | 3.8% | 4.0% | 4.1% |
| 9. | Equipment rental | 3.1% | 3.2% | 3.3% |
| 10. | Automotive parts | 2.4% | 2.4% | 2.4% |
| 11. | Wholesale clubs | 2.3% | 2.4% | 2.4% |
| 12. | Drug stores | 2.1% | 2.2% | 2.3% |
| 13. | Home improvement | 2.0% | 2.1% | 2.2% |
| 14. | Medical service providers | 1.9% | 1.8% | 1.8% |
| 15. | Pet supplies and services | 1.6% | 1.3% | 1.2% |
| 16. | Discount retail | 1.4% | 1.6% | 1.6% |
| 17. | Furniture | 1.3% | 1.3% | 2.0% |
| 18. | Travel plazas | 1.2% | 1.2% | 1.3% |
| 19. | Consumer electronics | 1.2% | 1.3% | 1.3% |
| 20. | Home furnishings | 1.1% | 1.1% | 1.3% |
|  | Other | 6.6% | 6.9% | 6.8% |
|  |  | 100.0% | 100.0% | 100.0% |
|  | ABR | $893,782,000 | $860,562,000 | $837,568,000 |

***Property Acquisitions.*** The following table summarizes the Property acquisitions (dollars in thousands):

| Acquisitions: | Quarter Ended June 30, 2025 | 2024 | Six Months Ended June 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Number of Properties | 45 | 16 | 127 | 36 |
| Gross leasable area (square feet)(1) | 1,399,000 | 272,000 | 2,230,000 | 555,000 |
| Weighted average cap rate(2) | 7.4% | 7.9% | 7.4% | 8.0% |
| Total dollars invested(3) | $232,536 | $110,542 | $464,929 | $235,034 |

(1) Includes additional square footage from completed construction on existing Properties.

(2) Calculated as the initial cash annual base rent divided by the total purchase price of the Properties.

(3) Includes dollars invested in projects under construction or tenant improvements for each respective period.

NNN typically funds Property acquisitions either through borrowings under NNN's Credit Facility (as defined in "Capital Structure – Line of Credit Payable"), by issuing its debt or equity securities in the capital markets, with undistributed funds from operations, or with proceeds from the sale of Properties.

***Property Dispositions.*** The following table summarizes the properties sold by NNN (dollars in thousands):

|  | Quarter Ended June 30, 2025 | 2024 | Six Months Ended June 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Number of properties | 23 | 14 | 33 | 20 |
| Gross leasable area (square feet) | 358,000 | 303,000 | 430,000 | 417,000 |
| 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(1) | 6.2% | 7.7% | 5.7% | 7.4% |

(1) Calculated as the cash annual base rent divided by the total gross proceeds received for the properties.

NNN typically uses the disposition proceeds to either pay down the Credit Facility or reinvest in real estate.

### Analysis of Revenues

The following table summarizes NNN's revenues (dollars in thousands):

|  | Quarter Ended June 30, 2025 | 2024 | Percent Increase (Decrease) | Six Months Ended June 30, 2025 | 2024 | Percent Increase (Decrease) |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Rental Revenues(1) | $222,110 | $211,934 | 4.8% | $447,166 | $422,025 | 6.0% |
| Real estate expenses reimbursed from tenants(2) | 4,388 | 4,206 | 4.3% | 9,906 | 8,940 | 10.8% |
| Rental income | 226,498 | 216,140 | 4.8% | 457,072 | 430,965 | 6.1% |
| 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% |

(1) Includes rental income from operating leases, earned income from direct financing leases and percentage rent ("Rental Revenues").

(2) See "Results of Operations – Analysis of Expenses – Real Estate" for additional information.

***Rental Income.*** Rental income increased for the quarter and six months ended June 30, 2025, as compared to the same periods in 2024. The increase is primarily due to the Rental Revenues from NNN's recent Property acquisitions (see "Results of Operations – Property Analysis – Property Acquisitions").

### Analysis of Expenses

The following table summarizes NNN's expenses (dollars in thousands):

|  | Quarter Ended June 30, 2025 | 2024 | Percent Increase (Decrease) | Six Months Ended June 30, 2025 | 2024 | Percent Increase (Decrease) |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| General and administrative | $11,217 | $11,789 | (4.9)% | $24,225 | $24,373 | (0.6)% |
| Real estate: |  |  |  |  |  |  |
| Reimbursed from tenants | 4,388 | 4,206 | 4.3% | 9,906 | 8,940 | 10.8% |
| Non-reimbursed | 4,450 | 2,552 | 74.4% | 8,307 | 4,972 | 67.1% |
| Total real estate | 8,838 | 6,758 | 30.8% | 18,213 | 13,912 | 30.9% |
| Depreciation and amortization | 68,349 | 62,503 | 9.4% | 132,966 | 123,118 | 8.0% |
| Leasing transaction costs | 74 | 20 | 270.0% | 204 | 53 | 284.9% |
| 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 and other income | $(15) | $(976) | (98.5)% | $(344) | $(1,095) | (68.6)% |
| Interest expense | 49,282 | 46,577 | 5.8% | 97,005 | 90,646 | 7.0% |
| Total other expenses | $49,267 | $45,601 | 8.0% | $96,661 | $89,551 | 7.9% |

| As a percentage of total revenues: |  |  |  |  |
| --- | ---: | ---: | ---: | ---: |
| General and administrative | 4.9% | 5.4% | 5.3% | 5.6% |
| Non-reimbursed real estate | 2.0% | 1.2% | 1.8% | 1.2% |

***Real Estate.*** Total real estate expenses increased for the quarter and six months ended June 30, 2025, as compared to the same periods in 2024. NNN focuses on non-reimbursed real estate expenses (total real estate expenses, net of reimbursements from tenants). These expenses are typically attributable to (i) Properties for which the lease terms do not obligate the tenant to pay certain operating expenses, or (ii) vacant Properties. Non-reimbursed real estate expenses increased in amount and as a percentage of total revenues for the quarter and six months ended June 30, 2025, as compared to the same periods in 2024 primarily due to an increase in the number of vacant properties.

***Depreciation and Amortization.*** Depreciation and amortization expenses increased for the quarter and six months ended June 30, 2025, as compared to the same periods in 2024. The increase was primarily attributable to the increase in NNN's Property Portfolio from recent acquisitions (see "Results of Operations – Property Analysis – Property Acquisitions") and was partially offset by recent dispositions (see "Results of Operations – Property Analysis – Property Dispositions").

***Impairment Losses – Real Estate, Net of Recoveries.*** As a result of NNN's review of long-lived real estate assets, including identifiable intangible assets, NNN recognized real estate impairments, net of recoveries for the quarters and six months ended June 30, 2025 and 2024, which were less than one percent of NNN's total assets for the respective periods as reported on the Condensed Consolidated Balance Sheets. Due to NNN's core business of investing in real estate leased primarily to tenants under long-term net leases, the inherent risks of owning commercial real estate and unknown potential changes in financial and economic conditions that may impact NNN's tenants, NNN believes it is reasonably possible to incur real estate impairment charges in the future.

***Retirement and Severance Costs.*** Retirement and severance costs increased for the six months ended June 30, 2025, as compared to the same period in 2024, primarily due to costs in connection with the retirement and transition agreement of the former Executive Vice President and Chief Financial Officer.

***Interest Expense.*** Interest expense increased for the quarter and six months ended June 30, 2025, as compared to the same periods in 2024. The following represents the primary changes in fixed rate long-term debt that impacted interest expense (dollars in thousands):

| Transaction | Effective Date | Principal | Stated Rate | Original Maturity |
| --- | --- | ---: | ---: | --- |
| Issuance 2034 Notes | May 2024 | $500,000 | 5.500% | June 2034 |
| Redemption 2024 Notes | June 2024 | (350,000) | 3.900% | June 2024 |

The increase in interest expense was partially offset by the Credit Facility having a weighted average outstanding balance of $113,919,000 with a weighted average interest rate of 5.22% for the six months ended June 30, 2025, compared to a weighted average outstanding balance of $111,966,000 with a weighted average interest rate of 6.26% for the six months ended June 30, 2024.

### Liquidity and Capital Resources

NNN's demand for funds has been and will continue to be primarily for (i) payment of operating expenses and dividends, (ii) property acquisitions and construction commitments, (iii) capital expenditures, (iv) payment of principal and interest on its outstanding debt, and (v) other investments.

***Financing Strategy.*** NNN's financing objective is to manage its capital structure effectively in order to provide sufficient capital to execute its operating and investing strategies while servicing its debt requirements, maintaining its investment grade credit rating, staggering debt maturities and providing value to NNN's stockholders. NNN's capital resources have and will continue to include, if available (i) proceeds from issuing debt or equity in the capital markets; (ii) secured or unsecured borrowings from banks or other lenders; (iii) proceeds from the sale of Properties; and (iv) to a lesser extent, by internally generated funds as well as undistributed funds from operations. However, there can be no assurance that additional financing or capital will be available, or that the terms will be acceptable or advantageous to NNN.

NNN typically expects to fund both its short-term and long-term liquidity requirements, including investments in additional properties, with cash and cash equivalents, cash provided from operations, borrowings from NNN's Credit Facility or proceeds from the sale of Properties. As of June 30, 2025, NNN had $6,748,000 of cash, cash equivalents and restricted cash or cash held in escrow and $932,300,000 was available for future borrowings under the Credit Facility. NNN may also fund liquidity requirements with new debt or equity issuances, although newly issued debt may be at higher interest rates than the rates on NNN's existing outstanding debt. NNN also has the ability to limit future property acquisitions and strategically increase property dispositions. NNN expects these sources of liquidity and the discretionary nature of its property acquisition funding needs will allow NNN to meet its financial obligations over the long term.

***Cash Flows.*** NNN had $6,748,000 of cash, cash equivalents and restricted cash, of which $775,000 was restricted cash or cash held in escrow at June 30, 2025. The table below summarizes NNN's cash flows (dollars in thousands):

| Cash, cash equivalents and restricted cash: | Six Months Ended June 30, 2025 | 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) |
| Increase (decrease) | (2,314) | 11,647 |
| Net cash at beginning of period | 9,062 | 5,155 |
| Net cash at end of period | $6,748 | $16,802 |

27

Cash flow activities include:

***Operating Activities.*** Cash provided by operating activities represents cash received primarily from rental income less cash used for general and administrative and interest expenses. NNN's cash flow from operating activities has been sufficient to pay the distributions for each period presented. The change in cash provided by operations for the six months ended June 30, 2025 and 2024, is primarily the result of changes in revenues and expenses as discussed in “Results of Operations.” Cash generated from operations is expected to fluctuate in the future.

***Investing Activities.*** Changes in cash for investing activities are primarily attributable to the acquisitions and dispositions of Properties as discussed in "Results of Operations – Property Analysis." NNN typically uses cash on hand, borrowings from its Credit Facility or proceeds from the sale of Properties to fund the acquisition of its Properties.

***Financing Activities.*** NNN's financing activities for the six months ended June 30, 2025, included the following significant transactions:

- $267,700,000 in net borrowings of NNN's Credit Facility,
- $9,978,000 from the issuance of 236,906 shares of common stock in connection with the at-the-market equity program ("ATM"),
- $1,363,000 from the issuance of 34,092 shares of common stock in connection with the Dividend Reinvestment and Stock Purchase Plan ("DRIP"), and
- $216,901,000 in dividends paid to common stockholders.

### Material Cash Requirements

NNN's material cash requirements include (i) long-term debt maturities; (ii) interest on long-term debt; (iii) common stock dividends (although all future distributions will be declared and paid at the discretion of the Board of Directors); and (iv) to a lesser extent, Property construction and other Property related costs that may arise.

The table below presents material cash requirements related to NNN's long-term obligations outstanding as of June 30, 2025 (see "Capital Structure") (dollars in thousands):

|  | Date of Obligation Total | 2025 | 2026 | 2027 | 2028 | 2029 | Thereafter |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Long-term debt(1)(2) | $4,450,000 | $400,000 | $350,000 | $400,000 | $400,000 | $— | $2,900,000 |
| Long-term debt – interest(2)(3) | 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 |

(1) Includes only principal amounts outstanding under notes payable and excludes unamortized note discounts and debt costs.

(2) Excludes $500,000 aggregate principal amount of 4.600% notes due February 2031 issued in July 2025 (see "Capital Structure – Debt Securities – Notes Payable").

(3) Interest calculation on notes payable based on stated rate of the principal amount.

***Property Construction.*** NNN has committed to fund construction on 20 Properties. The improvements of such Properties are estimated to be completed within 12 to 18 months. These construction commitments, at June 30, 2025, are outlined in the table below (dollars in thousands):

|  |  |
| --- | ---: |
| Total commitment(1) | $103,177 |
| Less amount funded | (64,352) |
| Remaining commitment | $38,825 |

(1) Includes land, construction costs, tenant improvements, lease costs, capitalized interest and third-party costs.

Management anticipates satisfying these obligations with a combination of NNN's cash provided from operations, current capital resources on hand, its Credit Facility, debt or equity financings and property dispositions.

***Properties.*** Typically, the Property leases provide for initial terms of 10 to 20 years and a triple-net lease structure, pursuant to which the tenant bears responsibility for operating expenses of the Property, including utilities, real estate taxes and assessments, property and liability insurance, maintenance, repairs and capital expenditures. Therefore, management anticipates that capital demands to meet obligations with respect to these Properties will be modest for the foreseeable future and can be met with funds from operations and working capital. Certain Properties are subject to leases under which NNN retains responsibility for specific costs and expenses associated with the Property. Management anticipates the costs associated with these Properties, NNN's vacant Properties or those Properties that become vacant will also be met with funds from operations and working capital. NNN may be required to borrow under its Credit Facility or use other sources of capital in the event of significant capital expenditures or major repairs.

The lost revenues and increased property expenses resulting from vacant Properties or the inability to collect lease payments could have a material adverse effect on the liquidity and results of operations if NNN is unable to re-lease the Properties at comparable rental rates and in a timely manner.

As of June 30, 2025, NNN owned 73 vacant, un-leased Properties which accounted for two percent of total Properties and approximately two percent of aggregate gross leasable area held in the Property Portfolio.

Additionally, as of July 31, 2025, approximately one percent of total annualized base rent, less than one percent of total Properties and less than four percent of aggregate gross leasable area held in the Property Portfolio was leased to two tenants currently in bankruptcy under Chapter 11 of the U.S. Bankruptcy Code. As a result, these tenants have the right to reject or affirm their leases with NNN.

NNN generally monitors the financial performance of its significant tenants on an ongoing basis.

***Dividends.*** One of NNN's primary objectives is to distribute a substantial portion of its funds available from operations to its stockholders in the form of dividends, while retaining sufficient cash for reserves and working capital purposes and maintaining its status as a REIT.

The following table outlines the dividends declared and paid for NNN's common stock (dollars in thousands, except per share data):

|  | Quarter Ended June 30, 2025 | 2024 | Six Months Ended June 30, 2025 | 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 which is payable in August 2025 to its common stockholders of record as of July 31, 2025.

### Capital Structure

NNN has used, and expects to use in the future, various forms of debt and equity securities primarily to fund property acquisitions and construction on its Properties and to pay down or refinance its outstanding debt.

The following is a summary of NNN's total debt outstanding as of (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% |

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***Line of Credit Payable.*** In April 2024, NNN amended certain terms of its credit agreement to, among other things, increase borrowing capacity under its unsecured revolving credit facility from $1,100,000,000 to $1,200,000,000 (the "Credit Facility"). The Credit Facility had a weighted average outstanding balance of $113,919,000 and a weighted average interest rate of 5.22% during the six months ended June 30, 2025. The Credit Facility has a base interest rate of the Secured Overnight Financing Rate ("SOFR") plus a SOFR adjustment of 10 basis points ("Adjusted SOFR"). The Credit Facility bears interest at Adjusted SOFR plus 77.5 basis points; however, such interest rate may change pursuant to a tiered interest rate structure based on NNN's debt rating. Additionally, as part of NNN's environmental, social and governance ("ESG") initiative, pricing may be reduced if specified ESG metrics are achieved. The Credit Facility matures in April 2028, unless the Company exercises its options to extend maturity to April 2029. The Credit Facility also includes an accordion feature which permits NNN to increase the facility size up to $2,000,000,000, subject to lender approval. In connection with the Credit Facility, loan costs are classified as *debt costs* on the Condensed Consolidated Balance Sheets. As of June 30, 2025, there was $267,700,000 outstanding and $932,300,000 available for future borrowings under the Credit Facility, and NNN was in compliance with each of the Credit Facility financial covenants.

***Universal Shelf Registration Statement.*** In August 2023, NNN filed a shelf registration statement with the Securities and Exchange Commission (the "Commission") which became automatically effective ("Universal Shelf"). The Universal Shelf permits the issuance by NNN of an indeterminate amount of debt and equity securities, including preferred stock, depositary shares, common stock, stock purchase contracts, rights, warrants and units.

***Debt Securities – Notes Payable.*** Each of NNN's outstanding series of unsecured notes is summarized in the table below (dollars in thousands):

| Notes(1) | Issue Date | Principal | Discount(2) | Net Price | Stated Rate | Effective Rate(3) | Maturity Date |
| --- | --- | ---: | ---: | ---: | ---: | ---: | --- |
| 2025(4) | October 2015 | $400,000 | $964 | $399,036 | 4.000% | 4.029% | November 2025(5)(6) |
| 2026(4) | December 2016 | 350,000 | 3,860 | 346,140 | 3.600% | 3.733% | December 2026(5) |
| 2027(4) | September 2017 | 400,000 | 1,628 | 398,372 | 3.500% | 3.548% | October 2027(5) |
| 2028(4) | September 2018 | 400,000 | 2,848 | 397,152 | 4.300% | 4.388% | October 2028(5) |
| 2030(4) | March 2020 | 400,000 | 1,288 | 398,712 | 2.500% | 2.536% | April 2030(5) |
| 2033 | August 2023 | 500,000 | 11,620 | 488,380 | 5.600% | 5.905% | October 2033 |
| 2034 | May 2024 | 500,000 | 6,160 | 493,840 | 5.500% | 5.662% | June 2034 |
| 2048 | September 2018 | 300,000 | 4,239 | 295,761 | 4.800% | 4.890% | October 2048 |
| 2050 | March 2020 | 300,000 | 6,066 | 293,934 | 3.100% | 3.205% | April 2050 |
| 2051 | March 2021 | 450,000 | 8,406 | 441,594 | 3.500% | 3.602% | April 2051 |
| 2052(4) | September 2021 | 450,000 | 10,422 | 439,578 | 3.000% | 3.118% | April 2052 |

(1) The proceeds from each note issuance were used to (i) pay down the outstanding balance on NNN's Credit Facility, (ii) redeem notes payable prior to maturity, (iii) redeem outstanding preferred stock, (iv) fund future property acquisitions, and/or (v) for general corporate purposes.

(2) The note discounts are amortized to interest expense over the respective term of each debt obligation using the effective interest method.

(3) Includes the effects of the discount at issuance.

(4) NNN entered into forward starting swaps which hedged the risk of changes in forecasted interest payments on forecasted issuance of long-term debt. Upon the issuance of a series of unsecured notes, NNN terminated such derivatives, and the resulting fair value was deferred in other comprehensive income. The deferred liability (asset) is being amortized over the term of the hedged forecasted transaction using the effective interest method.

(5) The aggregate principal balance of the unsecured note maturities for the next five years is $1,950,000.

(6) NNN may use proceeds from the Credit Facility and/or potential debt or equity offerings to repay the outstanding debt.

Each series of the notes represents senior, unsecured obligations of NNN and is subordinated to all secured debt of NNN. NNN may redeem each series of notes, in whole or in part, at any time prior to the par call date for the notes at the redemption price as set forth in the applicable supplemental indenture relating to the notes; provided, however, that if NNN redeems the notes on or after the par call date, the redemption price will equal 100 percent of the principal amount of the notes to be redeemed, plus accrued and unpaid interest thereon to, but not including, the redemption date.

In connection with the outstanding note offerings, NNN incurred debt issuance costs totaling $43,820,000 consisting primarily of underwriting discounts and commissions, legal and accounting fees, rating agency fees and printing expenses. Debt issuance costs for all note issuances have been deferred and presented as a reduction to notes payable and are being amortized over the term of the respective notes using the effective interest method.

In accordance with the terms of the indentures, pursuant to which NNN's notes have been issued, NNN is required to meet certain restrictive financial covenants, which, among other things, require NNN to maintain (i) certain leverage ratios and (ii) certain interest coverage. At June 30, 2025, NNN was in compliance with those covenants.

In June 2025, NNN filed a prospectus supplement to the prospectus contained in its August 2023 shelf registration

statement and, in July 2025, issued $500,000,000 aggregate principal amount of 4.600% notes due February 2031 (the “2031 Notes”).

The 2031 Notes were sold at a discount with an aggregate net price of $495,910,000 with interest payable semi-annually on February 15 and August 15, commencing on February 15, 2026. The discount of $4,090,000 is being amortized to interest expense over the term of the notes using the effective interest method. The effective interest rate for the 2031 Notes after accounting for the note discount is 4.766%.

NNN received approximately $491,710,000 of net proceeds in connection with the issuance of the 2031 Notes, after incurring debt issuance costs consisting primarily of underwriting discounts and commissions, legal and accounting fees, rating agency fees and printing expenses, totaling $4,200,000 for the 2031 Notes. NNN intends to use the net proceeds to repay NNN's outstanding indebtedness under its Credit Facility, to fund future property acquisitions and for general corporate purposes.

The 2031 Notes are senior, unsecured obligations of NNN and are subordinated to all secured debt of NNN. NNN may redeem the 2031 Notes, in whole or in part, at any time prior to the par call date at the redemption price as set forth in the supplemental indenture dated July 1, 2025, relating to the 2031 Notes; provided, however, that if NNN redeems the notes on or after the par call date, the redemption price will equal 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest thereon to, but not including, the redemption date.

NNN previously entered into two forward starting swaps with an aggregate notional amount of $200,000,000. Upon pricing of the 2031 Notes, NNN terminated the forward starting swaps resulting in a net liability of $409,000, which was deferred in accumulated other comprehensive income and will be amortized as an increase in interest expense over 10 years.

### Equity Securities

***At-The-Market Offerings.*** NNN has established an ATM which allows NNN to sell shares of common stock from time to time. The following table outlines NNN's ATM:

| Shelf registration statement: Effective date Termination date | 2023 ATM August 2023 August 2026 |
| --- | ---: |
| Total allowable shares | 17,500,000 |
| Total shares issued as of June 30, 2025 | 4,889,006 |

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The following table outlines the common stock issuances pursuant to NNN's ATM (dollars in thousands, except per share data):

|  | Quarter Ended June 30, 2025 | 2024 | Six Months Ended June 30, 2025 | 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 |
| Stock issuance costs(1) | $167 | $115 | $252 | $234 |

(1) Stock issuance costs consist primarily of underwriters' and agent's fees and commissions and legal and accounting fees.

***Dividend Reinvestment and Stock Purchase Plan.*** In February 2024, NNN filed a shelf registration statement for its DRIP with the Commission that was automatically effective and permits NNN to issue up to 4,000,000 shares of common stock. NNN's DRIP provides an economical and convenient way for current stockholders and other interested new investors to invest in NNN's common stock. The following outlines the common stock issuances pursuant to NNN's DRIP (dollars in thousands):

|  | Quarter Ended June 30, 2025 | 2024 | Six Months Ended June 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Shares of common stock | 17,316 | 14,815 | 34,092 | 34,309 |
| Net proceeds | $707 | $604 | $1,363 | $1,313 |

### Critical Accounting Estimates

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by U.S. generally accepted accounting principles. The unaudited condensed consolidated financial statements reflect all adjustments (including normal recurring accruals) which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. The preparation of NNN's unaudited condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses as well as other disclosures in the unaudited condensed consolidated financial statements. Estimates are sensitive to evaluations by management about current and future expectations of market and economic conditions. On an ongoing basis, management evaluates its estimates and assumptions; however, actual results may differ from these estimates and assumptions, which in turn could have a material impact on NNN's consolidated financial statements. A summary of NNN's critical accounting estimates is included in NNN's 2024 Annual Report. NNN has not made any material changes to these policies during the periods covered by this Quarterly Report on Form 10-Q.

## Market risk

As filed, 3,248 characters.

NNN is exposed to interest rate risk primarily as a result of its variable rate Credit Facility and its fixed rate long-term debt which is used to finance NNN's Property acquisitions and construction commitments, as well as for general corporate purposes. NNN's interest rate risk management objective is to limit the impact of interest rate changes on earnings and cash flows and to reduce overall borrowing costs. To achieve its objectives, NNN borrows at both fixed and variable rates on its long-term debt and periodically uses derivatives to hedge the interest rate risk of future borrowings. As of June 30, 2025, NNN had no outstanding derivatives.

As of June 30, 2025, NNN's variable rate Credit Facility had $267,700,000 outstanding and a weighted average outstanding balance of $113,919,000 with a weighted average interest rate of 5.22% for the six months ended June 30, 2025 compared to a weighted average outstanding balance of $111,966,000 with a weighted average interest rate of 6.26% for the same period in 2024.

The information in the table below summarizes NNN's market risks associated with its debt obligations outstanding. The table presents, by year of expected maturity, principal payments and related interest rates for debt obligations outstanding as of June 30, 2025. The table incorporates only those debt obligations that existed as of June 30, 2025, and it does not consider those debt obligations or positions which could arise after this date and therefore has limited predictive value. As a result, NNN's ultimate realized gain or loss with respect to interest rate fluctuations will depend on the exposures that arise during the period, NNN's hedging strategies at that time and interest rates. If interest rates on NNN's variable rate debt increased by one percent, NNN's interest expense would have increased by less than one percent for the six months ended June 30, 2025.

| Debt Obligations(1) (dollars in thousands) | Variable Rate Debt Credit Facility Debt Obligation | Weighted Average Interest Rate | Fixed Rate Debt Unsecured Debt(2) Principal Debt Obligation | Effective Interest Rate |  |
| --- | ---: | ---: | ---: | ---: | ---: |
| 2025 | $— | — | $400,000 | 4.03% |  |
| 2026 | — | — | 350,000 | 3.73% |  |
| 2027 | — | — | 400,000 | 3.55% |  |
| 2028 | 267,700 | 5.22% | 400,000 | 4.39% |  |
| 2029 | — | — | — | — |  |
| Thereafter(3) | — | — | 2,900,000 | 4.22% | (4) |
| Total | $267,700 | 5.22% | $4,450,000 | 4.12% |  |
| Fair Value: |  |  |  |  |  |
| June 30, 2025 | $267,700 |  | $3,974,301 |  |  |
| December 31, 2024 | $— |  | $3,894,030 |  |  |

(1) NNN's unsecured debt obligations have a weighted average interest rate of 4.2% and a weighted average maturity of 11.1 years.

(2) Includes NNN's notes payable, each exclude unamortized discounts and debt costs. The fair value is based upon quoted market prices as of the close of the period, which is a Level 1 valuation since NNN's notes payable are publicly traded on the over-the-counter market.

(3) Excludes $500,000 aggregate principal amount of 4.600% notes due February 2031 issued in July 2025 (see "Capital Structure – Debt Securities – Notes Payable").

(4) Weighted average effective interest rate for years after 2029.

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## Controls and procedures

As filed, 967 characters.

***Evaluation of Disclosure Controls and Procedures.*** An evaluation was performed under the supervision and with the participation of NNN's management, including NNN's Chief Executive Officer, Chief Financial Officer and Chief Accounting and Technology Officer ("NNN's Chief Officers"), of the effectiveness as of June 30, 2025, of the design and operation of NNN's disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act. Based on that evaluation, NNN's Chief Officers concluded that the design and operation of these disclosure controls and procedures were effective as of the end of the period covered by this report.

***Changes in Internal Control over Financial Reporting.*** There has been no change in NNN's internal control over financial reporting that occurred during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, NNN's internal control over financial reporting.

## Risk factors

As filed, 161 characters.

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, 2024.

Filed Aug 5, 2025.
Source: SEC EDGAR, the filing index for accession 0000950170-25-102429. Last ingested by Listed: Oct 24, 2026, 14:54 ET. No prices; not investment advice.