NNN REIT - 10-K annual report 2015

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-K

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the fiscal year ended December 31, 2015

¨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

NATIONAL RETAIL PROPERTIES, INC.

(Exact name of registrant as specified in its charter)



Maryland (State or other jurisdiction of incorporation or organization)	56-1431377 (I.R.S. Employer Identification No.)

450 South Orange Avenue, Suite 900

Orlando, Florida 32801

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (407) 265-7348

Securities registered pursuant to Section 12(b) of the Act:



Title of each class: Common Stock, $0.01 par value 6.625% Series D Preferred Stock, $0.01 par value 5.700% Series E Preferred Stock, $0.01 par value	Name of exchange on which registered: New York Stock Exchange New York Stock Exchange New York Stock Exchange

Securities registered pursuant to section 12(g) of the Act:

None

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act Yes ¨ No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):



Large accelerated filer x	Accelerated filer ¨	Non-accelerated filer ¨	Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No x

The aggregate market value of voting common stock held by non-affiliates of the registrant as of June 30, 2015 was $4,650.752,000.

The number of shares of common stock outstanding as of January 28, 2016 was 141,046,162.

DOCUMENTS INCORPORATED BY REFERENCE:

Registrant incorporates by reference into Part III (Items 10, 11, 12, 13 and 14) of this Annual Report on Form 10-K portions of National Retail Properties, Inc.’s definitive Proxy Statement for the 2016 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission (the “Commission”) pursuant to Regulation 14A. The definitive Proxy Statement will be filed with the Commission not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

TABLE OF CONTENTS



		PAGE REFERENCE
Part I
Item 1.	Business	1
Item 1A.	Risk Factors	6
Item 1B.	Unresolved Staff Comments	14
Item 2.	Properties	14
Item 3.	Legal Proceedings	14
Item 4.	Mine Safety Disclosures	14
Part II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	15
Item 6.	Selected Financial Data	18
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 8.	Financial Statements and Supplementary Data	37
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	68
Item 9A.	Controls and Procedures	68
Item 9B.	Other Information	69
Part III
Item 10.	Directors, Executive Officers and Corporate Governance	70
Item 11.	Executive Compensation	70
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	70
Item 13.	Certain Relationships and Related Transactions, and Director Independence	70
Item 14.	Principal Accountant Fees and Services	70
Part IV
Item 15.	Exhibits and Financial Statement Schedules	71
Signatures		76

PART I

Unless the context otherwise requires, references in this Annual Report on Form 10-K to the terms “registrant” or “NNN” or the “Company” refer to National Retail Properties, Inc. and all of its consolidated subsidiaries. NNN may elect to treat certain subsidiaries as taxable real estate investment trust subsidiaries. These subsidiaries and their majority owned and controlled subsidiaries are collectively referred to as the “TRS.”

Statements contained in this Annual Report on Form 10-K, including the documents that are incorporated by reference, that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities 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. Certain factors that could cause actual results or events to differ materially from those NNN anticipates or projects are described in “Item 1A. Risk Factors” of this Annual Report on Form 10-K.

Given these uncertainties, readers are cautioned not to place undue reliance on such statements, which speak only as of the date of this Annual Report on Form 10-K or any document incorporated herein by reference. NNN undertakes no obligation to publicly release any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date of this Annual Report on Form 10-K.


Item 1.	Business

The Company

NNN, a Maryland corporation, is a fully integrated real estate investment trust (“REIT”) formed in 1984. NNN's assets include: real estate assets, mortgages and notes receivable, and commercial mortgage residual interests. NNN's consolidated financial statements are included in Item 8 of this Annual Report on Form 10-K.

Real Estate Assets

NNN acquires, owns, invests in and develops properties that are leased primarily to retail tenants under long-term net leases and are primarily held for investment ("Properties" or "Property Portfolio," or individually a "Property"). NNN owned 2,257 Properties with an aggregate gross leasable area of approximately 24,964,000 square feet, located in 47 states, with a weighted average remaining lease term of 11.4 years as of December 31, 2015. Approximately 99 percent of the Properties were leased as of December 31, 2015.

Competition

NNN generally competes with numerous other REITs, commercial developers, real estate limited partnerships and other investors including but not limited to insurance companies, pension funds and financial institutions that own, manage, finance or develop retail and net leased properties.

Employees

As of January 28, 2016, NNN employed 62 associates.

Other Information

NNN’s executive offices are located at 450 S. Orange Avenue, Suite 900, Orlando, Florida 32801, and its telephone number is (407) 265-7348. NNN has a website at www.nnnreit.com where NNN’s filings with the Securities and Exchange Commission (the "Commission") can be downloaded free of charge.

The common shares of National Retail Properties, Inc. are traded on the New York Stock Exchange (the "NYSE") under the ticker symbol "NNN." The depositary shares, each representing a 1/100^th of a share of 6.625% Series D Cumulative Redeemable Preferred Stock, par value $0.01 per share ("Series D Preferred Stock"), of NNN are traded on the NYSE under the ticker symbol "NNNPRD." The depositary shares, each representing a 1/100^th of a share of 5.700% Series E Cumulative Redeemable Preferred Stock, par value $0.01 per share (“Series E Preferred Stock”), of NNN are traded on the NYSE under the ticker symbol "NNNPRE."

Business Strategies and Policies

The following is a discussion of NNN’s operating strategy and certain of its investment, financing and other policies. These strategies and policies have been set by management and the Board of Directors and, in general, may be amended or revised from time to time by management and the Board of Directors without a vote of NNN’s stockholders.

Operating Strategies

NNN’s strategy is to invest primarily in retail real estate that is typically well located within each local market for its tenants’ retail lines of trade. Management believes that these types of properties, generally leased pursuant to triple-net leases, provide attractive opportunities for stable current returns and the potential for increased returns and capital appreciation. Triple-net leases typically require the tenant to pay property operating expenses such as insurance, utilities, repairs, maintenance, capital expenditures and real estate taxes and assessments. Initial lease terms are generally 15 to 20 years.

NNN holds real estate assets until it determines that the sale of such an asset is advantageous in view of NNN’s investment objectives. In deciding whether to sell a real estate asset, NNN may consider factors such as potential capital appreciation, net cash flow, tenant credit quality, tenant's line of trade, portfolio composition, market lease rates, local market conditions, potential use of sale proceeds and federal income tax considerations.

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

The operating strategies employed by NNN have allowed NNN to increase the annual dividend (paid quarterly) per common share for 26 consecutive years, one of only four publicly traded REITs to do so.

Investment in Real Estate or Interests in Real Estate

NNN’s management believes that single tenant, freestanding net lease retail properties will continue to provide attractive investment opportunities and that NNN is well suited to take advantage of these opportunities because of its experience in accessing capital markets, and its ability to source, underwrite and acquire properties.

In evaluating a particular acquisition, management may consider a variety of factors, including but not limited to:


•	the location, visibility and accessibility of the property,


•	the geographic area and demographic characteristics of the community, as well as the local real estate market, including potential for growth, market rents, and existing or potential competing properties or retailers,


•	the size, age and title status of the property,


•	the purchase price,


•	the non-financial terms of the proposed acquisition,


•	the availability of funds or other consideration for the proposed acquisition and the cost thereof,


•	the compatibility of the property with NNN’s existing portfolio,


•	the quality of construction and design and the current physical condition of the property,


•	the property-level operating history,


•	the financial and other characteristics of the existing tenant,


•	the tenant’s business plan, operating history and management team,


•	the tenant’s industry,


•	the terms of any leases,


•	the rent to be paid by the tenant,


•	the potential for, and current extent of, any environmental problems, and


•	any existing indebtedness encumbering the property which may be assumed or incurred in connection with acquiring or refinancing these investments.

NNN intends to engage in future investment activities in a manner that is consistent with the maintenance of its status as a REIT for federal income tax purposes. Additionally, NNN does not intend to engage in activities that will make NNN an investment company under the Investment Company Act of 1940, as amended.

Investments in Real Estate Mortgages, Commercial Mortgage Residual Interests, and Securities of or Interests in Persons Engaged in Real Estate Activities

While NNN’s primary business objectives emphasize retail properties, NNN may invest in (i) a wide variety of property and tenant types, (ii) leases, mortgages, commercial mortgage residual interests and other types of real estate interests, (iii) loans secured by personal property, (iv) loans secured by partnership or membership interests in partnerships or limited liability companies, respectively, or (v) securities of other REITs, or other issuers, including for the purpose of exercising control over such entities.

Financing Strategy

NNN’s financing objective is to manage its capital structure effectively in order to provide sufficient capital to execute its operating strategies while servicing its debt requirements and providing value to its stockholders. NNN generally utilizes debt and equity security offerings, bank borrowings, the sale of properties, and to a lesser extent, internally generated funds to meet its capital needs.

NNN typically funds its short-term liquidity requirements including investments in additional properties with cash from its $650,000,000 unsecured revolving credit facility ("Credit Facility"). As of December 31, 2015, there was no outstanding balance and $650,000,000 was available for future borrowings under the Credit Facility.

NNN anticipates it will be able to obtain additional financing for short-term and long-term liquidity requirements as further described in "Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity." 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.

The organizational documents of NNN do not limit the absolute amount or percentage of indebtedness that NNN may incur. Additionally, NNN may change its financing strategy at any time.

Strategies and Policy Changes

Any of NNN’s strategies or policies described above may be changed at any time by NNN without notice to or a vote of NNN’s stockholders.

Property Portfolio

As of December 31, 2015, NNN owned 2,257 Properties with an aggregate gross leasable area of approximately 24,964,000 square feet, located in 47 states, with a weighted average remaining lease term of 11.4 years. Approximately 99 percent of total Properties were leased as of December 31, 2015.

The following table summarizes the Property Portfolio at December 31, 2015 (in thousands):



	Size⁽¹⁾			Acquisition Cost⁽²⁾
	High	Low	Average	High		Low		Average
Land	3,733	2	103	$	8,882	$	5	$	878
Building	142	1	11	29,373		19		1,782


⁽¹⁾	Approximate square feet.


⁽²⁾	Costs vary depending upon size, local market conditions and other factors.

As of December 31, 2015, NNN has committed to fund construction commitments on leased Properties. The improvements are estimated to be completed within 12 months. These construction commitments, at December 31, 2015, are outlined in the table below (dollars in thousands):



Number of properties	27
Total commitment⁽¹⁾	$	116,394
Amount funded	$	87,406
Remaining commitment	$	28,988


⁽¹⁾	Includes land, construction costs, tenant improvements and lease costs.

Leases

The following is a summary of the general structure of the leases in the Property Portfolio, although the specific terms of each lease can vary. Generally, the Property leases provide for initial terms of 15 to 20 years. As of December 31, 2015, the weighted average remaining lease term of the Property Portfolio was approximately 11.4 years. The Properties are generally leased under net leases, pursuant to which the tenant typically bears responsibility for substantially all property costs and expenses associated with ongoing maintenance and operation, including utilities, property taxes and insurance. NNN's leases provide for annual base rental payments (payable in monthly installments) ranging from $6,000 to $2,668,000 (average of $220,000), and generally provide for increases in rent as a result of (i) fixed increases, (ii) increases in the Consumer Price Index ("CPI"), or, to a lesser extent, (iii) increases in the tenant’s sales volume.

Generally, NNN's leases provide the tenant with one or more multi-year renewal options subject to generally the same terms and conditions provided under the initial lease term. Some of the leases also provide that in the event NNN wishes to sell the Property subject to that lease, NNN first must offer the lessee the right to purchase the Property on the same terms and conditions as any offer which NNN intends to accept for the sale of the Property.

The following table summarizes the lease expirations, assuming none of the tenants exercise renewal options, of the Property Portfolio for each of the next 10 years and then thereafter in the aggregate as of December 31, 2015:



	% of Annual Base Rent⁽¹⁾	# of Properties	Gross Leasable Area⁽²⁾		% of Annual Base Rent⁽¹⁾	# of Properties	Gross Leasable Area⁽²⁾
2016	1.0%	27	363,000	2022	5.6%	96	1,143,000
2017	3.0%	52	1,084,000	2023	2.5%	55	903,000
2018	6.3%	183	1,645,000	2024	2.6%	49	767,000
2019	3.4%	80	1,109,000	2025	5.3%	132	996,000
2020	4.3%	137	1,550,000	Thereafter	61.3%	1,302	13,713,000
2021	4.7%	116	1,271,000


⁽¹⁾	Based on annualized base rent for all leases in place as of December 31, 2015.


⁽²⁾	Approximate square feet.

The following table summarizes the diversification of the Property Portfolio based on the top 10 lines of trade:



		% of Annual Base Rent⁽¹⁾
	Top 10 Lines of Trade	2015	2014	2013
1.	Convenience stores	16.7%	18.0%	19.7%
2.	Restaurants - full service	11.0%	9.1%	9.7%
3.	Restaurants - limited service	7.2%	6.5%	5.5%
4.	Automotive service	7.0%	7.2%	7.6%
5.	Family entertainment centers	5.6%	5.1%	2.3%
6.	Theaters	5.2%	5.2%	4.5%
7.	Automotive parts	4.2%	4.7%	5.1%
8.	Health and fitness	3.8%	3.9%	4.3%
9.	Recreational vehicle dealers, parts and accessories	3.6%	3.1%	3.2%
10.	Banks	3.4%	3.7%	4.1%
	Other	32.3%	33.5%	34.0%
		100.0%	100.0%	100.0%


⁽¹⁾	Based on annualized base rent for all leases in place as of December 31 of the respective year.

The following table summarizes the diversification of the Property Portfolio by state as of December 31, 2015:



	State	# of Properties	% of Annual Base Rent⁽¹⁾
1.	Texas	438	19.7%
2.	Florida	181	9.3%
3.	Ohio	122	5.2%
4.	North Carolina	136	5.2%
5.	Illinois	79	4.9%
6.	Georgia	111	4.5%
7.	Virginia	88	3.8%
8.	Indiana	91	3.8%
9.	Alabama	97	3.2%
10.	Tennessee	74	3.0%
	Other	840	37.4%
		2,257	100.0%


⁽¹⁾	Based on annualized base rent for all leases in place as of December 31, 2015.

As of December 31, 2015, NNN did not have any tenant that accounted for ten percent or more of its rental income.

Commercial Mortgage Residual Interests

NNN holds the commercial mortgage residual interests ("Residuals") from seven securitizations. Each of the Residuals is reported at fair value; unrealized gains or losses are reported as other comprehensive income in stockholders’ equity, and other than temporary losses as a result of a change in timing or amount of estimated cash flows are recorded as an other than temporary valuation impairment. The Residuals had an estimated fair value of $11,115,000 and $11,626,000 at December 31, 2015 and 2014, respectively.

Governmental Regulations Affecting Properties

Property Environmental Considerations. Subject to a determination of the level of risk and potential cost of remediation, NNN may acquire a property where some level of environmental contamination may exist. Investments in real property create a potential for substantial environmental liability for the owner of such property from the presence or discharge of hazardous materials on the property or the improper disposal of hazardous materials emanating from the property, regardless of fault. In order to mitigate exposure to environmental liability, NNN maintains an environmental insurance policy which provides some coverage for substantially all of the properties which expires in August 2018. As a part of its acquisition due diligence process, NNN obtains an environmental site assessment for each property. In such cases where NNN intends to acquire real estate where some level of contamination may exist, NNN generally requires the seller or tenant to (i) remediate the problem, (ii) indemnify NNN for environmental liabilities, and/or (iii) agree to other arrangements deemed appropriate by NNN, including, under certain circumstances, the purchase of environmental insurance to address environmental conditions at the property.

As of January 28, 2016, NNN has 67 Properties currently under some level of environmental remediation and/or monitoring. In general, the seller, a previous owner, the tenant or an adjacent land owner is responsible for the cost of the environmental remediation for each of these Properties.

Americans with Disabilities Act of 1990. The Properties, as commercial facilities, are required to comply with Title III of the Americans with Disabilities Act of 1990 and similar state and local laws and regulations (collectively, the "ADA"). Investigation of a property may reveal non-compliance with the ADA. The tenants will typically have primary responsibility for complying with the ADA, but NNN may incur costs if the tenant does not comply. As of January 28, 2016, NNN has not been notified by any governmental authority of, nor is NNN’s management aware of, any non-compliance with the ADA that NNN’s management believes would have a material adverse effect on its business, financial position or results of operations.

Other Regulations. State and local fire, life-safety and similar entities regulate the use of the Properties. NNN’s leases generally require each tenant to undertake primary responsibility for complying with regulations, but failure to comply could result in fines by governmental authorities, awards of damages to private litigants, or restrictions on the ability to conduct business on such properties.


Item 1A.	Risk Factors

Carefully consider the following risks and all of the other information set forth in this Annual Report on Form 10-K, including the consolidated financial statements and the notes thereto. If any of the events or developments described below were actually to occur, NNN’s business, financial condition or results of operations could be adversely affected.

Financial and economic conditions may have an adverse impact on NNN, its tenants, and commercial real estate in general.

Financial and economic conditions continue to be challenging and volatile and any worsening of such conditions, including any disruption in the capital markets, could adversely affect NNN’s business and results of operations. Such conditions could also affect the financial condition of NNN’s tenants, developers, borrowers, lenders or the institutions that hold NNN’s cash balances and short-term investments, which may expose NNN to increased risks of default by these parties.

There can be no assurance that actions of the United States Government, the Federal Reserve or other government and regulatory bodies intended to stabilize the economy or financial markets will achieve their intended effect. Additionally, some of these actions may adversely affect financial institutions, capital providers, retailers, consumers, NNN’s financial condition, NNN's results of operations or the trading price of NNN’s shares.

Potential consequences of challenging and volatile financial and economic conditions include:


•	the financial condition of NNN’s tenants may be adversely affected, which may result in tenant defaults under the leases due to bankruptcy, lack of liquidity, operational failures or for other reasons;

•

the ability to borrow on terms and conditions that NNN finds acceptable may be limited or unavailable, which could reduce NNN’s ability to pursue acquisition and development opportunities and refinance existing debt, reduce NNN’s returns from acquisition and development activities, reduce NNN’s ability to make cash distributions to its shareholders and increase NNN’s future interest expense;


•	the recognition of impairment charges on or reduced values of the Properties, which may adversely affect NNN's results of operations;


•	reduced values of the Properties may limit NNN's ability to dispose of assets at attractive prices and reduce the availability of buyer financing; and

•

the value and liquidity of NNN’s short-term investments and cash deposits could be reduced as a result of a deterioration of the financial condition of the institutions that hold NNN’s cash deposits or the institutions or assets in which NNN has made short-term investments, the dislocation of the markets for NNN’s short-term investments, increased volatility in market rates for such investments or other factors.

NNN may be unable to obtain debt or equity capital on favorable terms, if at all.

NNN may be unable to obtain capital on favorable terms, if at all, to further its business objectives or meet its existing obligations. Nearly all of NNN’s debt, including the Credit Facility, is subject to balloon principal payments due at maturity. These maturities range between 2016 and 2025. NNN's ability to make these scheduled principal payments may be adversely impacted by NNN’s inability to extend or refinance the Credit Facility, the inability to dispose of assets at an attractive price or the inability to obtain additional debt or equity capital. Capital that may be available may be materially more expensive or available under terms that are materially more restrictive which would have an adverse impact on NNN’s business, financial condition or results of operations.

Loss of revenues from tenants would reduce NNN’s cash flow.

NNN's tenants encounter significant macroeconomic, governmental and competitive forces. Adverse changes in consumer spending or consumer preferences for particular goods, services or store based retailing could severely impact their ability to pay rent. Shifts from in-store to online shopping could increase due to changing consumer shopping patterns as well as the increase in consumer adoption and use of mobile electronic devices. This expansion of e-commerce could have an adverse impact on NNN's tenant's ongoing viability. The default, financial distress, bankruptcy or liquidation of one or more of NNN’s tenants could cause substantial vacancies in the Property Portfolio. Vacancies reduce NNN’s revenues, increase property expenses and could decrease the value of each such vacant Property. Upon the expiration of a lease, the tenant may choose not to renew the lease and/or NNN may not be able to re-lease the vacant Property at a comparable lease rate or without incurring additional expenditures in connection with such renewal or re-leasing.

A significant portion of the Property Portfolio annual base rent is concentrated in specific industry classifications, tenants and in specific geographic locations.

As of December 31, 2015, approximately,


•	47.5% of the Property Portfolio annual base rent is generated from tenants in five retail lines of trade, including convenience stores (16.7%) and full-service and limited-service restaurants (18.2%),


•	21.2% of the Property Portfolio annual base rent is generated from five tenants, including Sunoco (5.9%), Mister Car Wash (4.4%), LA Fitness (3.7%), Couche-Tard Inc. (Pantry) (3.6%), and Camping World (3.6%), and


•	44.3% of the Property Portfolio annual base rent is generated from properties located in five states, including Texas (19.7%) and Florida (9.3%).

Any financial hardship and/or economic changes in these lines of trade, tenants or states could have an adverse effect on NNN’s results of operations.

Owning real estate and indirect interests in real estate carries inherent risks.

NNN’s economic performance and the value of its real estate assets are subject to the risk that if the Properties do not generate revenues sufficient to meet its operating expenses, including debt service, NNN’s cash flow and ability to pay distributions to its shareholders will be adversely affected. As a real estate company, NNN is susceptible to the following real estate industry risks, which are beyond its control:


•	changes in national, regional and local economic conditions and outlook,


•	decreases in consumer spending and retail sales or adverse changes in consumer preferences for particular goods, services or store based retailing,


•	economic downturns in the areas where the Properties are located,


•	adverse changes in local real estate market conditions, such as an oversupply of space, reduction in demand for space, intense competition for tenants, or a demographic change,


•	changes in tenant or consumer preferences that reduce the attractiveness of the Properties to tenants,


•	changes in zoning, regulatory restrictions, or tax laws, and


•	changes in interest rates or availability of financing.

All of these factors could result in decreases in market rental rates and increases in vacancy rates, which could adversely affect NNN’s results of operations.

NNN’s real estate investments are illiquid.

Because real estate investments are relatively illiquid, NNN’s ability to adjust the portfolio promptly in response to economic or other conditions is limited. Certain significant expenditures generally do not change in response to economic or other conditions, including: (i) debt service (if any), (ii) real estate taxes, and (iii) operating and maintenance costs. This combination of variable revenue and relatively fixed expenditures may result, under certain market conditions, in reduced earnings and could have an adverse effect on NNN’s financial condition.

Costs of complying with changes in governmental laws and regulations may adversely affect NNN’s results of operations.

NNN cannot predict what other laws or regulations will be enacted in the future, how future laws or regulations will be administered or interpreted, or how future laws or regulations will affect NNN or its Properties, including, but not limited to environmental laws and regulations. Compliance with new laws or regulations, or stricter interpretation of existing laws, may require NNN, its retail tenants, or consumers to incur significant expenditures, impose significant liability, restrict or prohibit business activities and could cause a material adverse effect on NNN’s results of operation.

NNN may be subject to known or unknown environmental liabilities and hazardous materials on Properties owned by NNN.

There may be known or unknown environmental liabilities associated with properties owned or acquired in the future by NNN. Certain particular uses of some properties may also have a heightened risk of environmental liability because of the hazardous materials used in performing services on those properties, such as convenience stores with underground petroleum storage tanks or auto parts and auto service businesses using petroleum products, paint and machine solvents. Some of the Properties may contain asbestos or asbestos-containing materials, or may contain or may develop mold or other bio-contaminants. Asbestos-containing materials must be handled, managed and removed in accordance with applicable governmental laws, rules and regulations. Mold and other bio-contaminants can produce airborne toxins, may cause a variety of health issues in individuals and must be remediated in accordance with applicable governmental laws, rules and regulations.

As part of its due diligence process, NNN generally obtains an environmental site assessment for each property it acquires. In cases where NNN intends to acquire real estate where some level of contamination may exist, NNN generally requires the seller or tenant to (i) remediate the contamination in accordance with applicable laws, rules and regulations, (ii) indemnify NNN for environmental liabilities, and/or (iii) agree to other arrangements deemed appropriate by NNN, including, under certain circumstances, the purchase of environmental insurance. Although sellers or tenants may be contractually responsible for remediating hazardous materials on a property and may be responsible for indemnifying NNN for any liability resulting from the use of a property and for any failure to comply with any applicable environmental laws, rules or regulations, NNN has no assurance that sellers or tenants shall be able to meet their remediation and indemnity obligations to NNN. A tenant or seller may not have the financial ability to meet its remediation and indemnity obligations to NNN when required. Furthermore, NNN may have strict liability to governmental agencies or third parties as a result of the existence of hazardous materials on Properties, whether or not NNN knew about or caused such hazardous materials to exist.

If NNN is responsible for hazardous materials located on its Properties, NNN’s liability may include investigation and remediation costs, property damage to third parties, personal injury to third parties, and governmental fines and penalties. Furthermore, the presence of hazardous materials on a Property may adversely impact the Property value or NNN’s ability to sell the Property. Significant environmental liability could impact NNN’s results of operations, ability to make distributions to shareholders, and its ability to meet its debt obligations.

In order to mitigate exposure to environmental liability, NNN maintains an environmental insurance policy which provides some coverage for substantially all of its Properties which expires in August 2018. However, the policy is subject to exclusions and limitations and does not cover all of the Properties owned by NNN, and for those Properties covered under the policy, insurance may not fully compensate NNN for any environmental liability. NNN has no assurance that the insurer on its environmental insurance policy will be able to meet its obligations under the policy. NNN may not desire to renew the environmental insurance policy in place upon expiration or a replacement policy may not be available at a reasonable cost, if at all.

NNN may not be able to successfully execute its acquisition or development strategies.

NNN may not be able to implement its investment strategies successfully. Additionally, NNN cannot assure that its Property Portfolio will expand at all, or if it will expand at any specified rate or to any specified size. In addition, investment in additional real estate assets is subject to a number of risks. Because NNN expects to invest in markets other than the ones in which its current Properties are located or properties which may be leased to tenants other than those to which NNN has historically leased properties, NNN will also be subject to the risks associated with investment in new markets or with new tenants that may be relatively unfamiliar to NNN’s management team.

NNN’s development activities are subject to, without limitation, risks relating to the availability and timely receipt of zoning and other regulatory approvals, the cost and timely completion of construction (including risks from factors beyond NNN’s control, such as weather or labor conditions or material shortages), the risk of finding tenants for the properties and the ability to obtain both construction and permanent financing on favorable terms. These risks could result in substantial unanticipated delays or expenses and, under certain circumstances, could prevent completion of development activities once undertaken or provide a tenant the opportunity to reduce rent or terminate a lease. Any of these situations may delay or eliminate proceeds or cash flows NNN expects from these projects, which could have an adverse effect on NNN’s financial condition.

NNN may not be able to dispose of properties consistent with its operating strategy.

NNN may be unable to sell properties targeted for disposition due to adverse market conditions. This may adversely affect, among other things, NNN’s ability to sell under favorable terms, execute its operating strategy, achieve target earnings or returns, retire or repay debt or pay dividends.

A change in the assumptions used to determine the value of commercial mortgage residual interests could adversely affect NNN’s financial position.

As of December 31, 2015, the Residuals had a carrying value of $11,115,000. The value of these Residuals is based on assumptions to determine their fair value. These assumptions include, but are not limited to, discount rate, loan loss, prepayment speed and interest rate assumptions to determine their fair value. If actual experience differs materially from these assumptions, the actual future cash flow could be less than expected and the value of the Residuals, as well as NNN’s earnings, could decline.

NNN may suffer a loss in the event of a default or bankruptcy of a borrower or a tenant.

As of December 31, 2015, mortgages and notes receivables had an outstanding principal balance of $8,661,000. If a borrower defaults on a mortgage or other loan made by NNN, and does not have sufficient assets to satisfy the loan, NNN may suffer a loss of principal and interest. In the event of the bankruptcy of a borrower, NNN may not be able to recover against all or any of the assets of the borrower, or the collateral may not be sufficient to satisfy the balance due on the loan. In addition, certain of NNN’s loans may be subordinate to other debt of a borrower. These investments are typically loans secured by a borrower’s pledge of its ownership interests in the entity that owns the real estate or other assets and are typically subordinated to senior loans encumbering the underlying real estate or assets. Subordinated positions are generally subject to a higher risk of nonpayment of principal and interest than the more senior loans. If a borrower defaults on the debt senior to NNN’s loan, or in the event of the bankruptcy of a borrower, NNN’s loan will be satisfied only after the borrower’s senior creditors’ claims are

satisfied. Where debt senior to NNN’s loans exists, the presence of intercreditor arrangements may limit NNN’s ability to amend loan documents, assign the loans, accept prepayments, exercise remedies and control decisions made in bankruptcy proceedings relating to borrowers. Bankruptcy proceedings and litigation can significantly increase the time needed for NNN to acquire underlying collateral, if any, in the event of a default, during which time the collateral may decline in value. In addition, there are significant costs and delays associated with the foreclosure process.

Certain provisions of NNN’s leases or loan agreements may be unenforceable.

NNN’s rights and obligations with respect to its leases, mortgage loans or other loans are governed by written agreements. A court could determine that one or more provisions of such an agreement are unenforceable, such as a particular remedy, a master lease covenant, a loan prepayment provision or a provision governing NNN’s security interest in the underlying collateral of a borrower or lessee. NNN could be adversely impacted if this were to happen with respect to an asset or group of assets.

Property ownership through joint ventures and partnerships could limit NNN’s control of those investments.

Joint ventures or partnerships involve risks not otherwise present for direct investments by NNN. It is possible that NNN’s co-venturers or partners may have different interests or goals than NNN at any time and they may take actions contrary to NNN’s requests, policies or objectives, including NNN’s policy with respect to maintaining its qualification as a REIT. Other risks of joint venture or partnership investments include impasses on decisions because in some instances no single co-venturer or partner has full control over the joint venture or partnership, respectively, or the co-venturer or partner may become insolvent, bankrupt or otherwise unable to contribute to the joint venture or partnership, respectively. Further, disputes may develop with a co-venturer or partner over decisions affecting the property, joint venture or partnership that may result in litigation, arbitration or some other form of dispute resolution.

Competition from numerous other REITs, commercial developers, real estate limited partnerships and other investors may impede NNN’s ability to grow.

NNN may not complete suitable property acquisitions or developments on advantageous terms, if at all, due to competition for such properties with others engaged in real estate investment activities or lack of properties for sale on terms deemed acceptable to NNN. NNN’s inability to successfully acquire or develop new properties may affect NNN’s ability to achieve anticipated return on investment or realize its investment strategy, which could have an adverse effect on its results of operations.

NNN's loss of key management personnel could adversely affect performance and the value of its common stock.

NNN is dependent on the efforts of its key management. Competition for senior management personnel can be intense and NNN may not be able to retain its key management. Although NNN believes qualified replacements could be found for any departures of key management, the loss of their services could adversely affect NNN's performance and the value of its common stock.

Uninsured losses may adversely affect NNN’s operating results and asset values.

The Properties are generally covered by comprehensive liability, fire, and extended insurance coverage. NNN believes that the insurance carried on its Properties is adequate and in accordance with industry standards. There are, however, types of losses (such as from hurricanes, floods, earthquakes or other types of natural disasters or wars or other acts of violence) which may be uninsurable, self-insured by tenants, or the cost of insuring against these losses may not be economically justifiable in the opinion of tenants or NNN. If an uninsured loss occurs or a loss exceeds policy limits, NNN could lose both its invested capital and anticipated revenues from the property, thereby reducing NNN’s cash flow and asset value.

Acts of violence, terrorist attacks or war may affect the markets in which NNN operates and NNN’s results of operations.

Terrorist attacks or other acts of violence may negatively affect NNN’s operations. There can be no assurance that there will not be terrorist attacks against businesses within the United States. These attacks may directly or indirectly impact NNN’s physical facilities or the businesses or the financial condition of its tenants, developers, borrowers, lenders or financial institutions with which NNN has a relationship. The United States is engaged in armed conflict, which could have an impact on these parties. The consequences of armed conflict are unpredictable, and NNN may not be able to foresee events that could have an adverse effect on its business or be insured for such.

More generally, any of these events or threats of these events could cause consumer confidence and spending to decrease or result in increased volatility in the United States and worldwide financial markets and economies. They also could result in, or cause a deepening of, economic recession in the United States or abroad. Any of these occurrences could have an adverse impact on NNN’s financial condition or results of operations.

Vacant properties or bankrupt tenants could adversely affect NNN’s business or financial condition.

As of December 31, 2015, NNN owned 21 vacant, un-leased Properties, which accounted for approximately one percent of total Properties held in the Property Portfolio. NNN is actively marketing these properties for sale or lease but may not be able to sell or lease these properties on favorable terms or at all. The lost revenues and increased property expenses resulting from the rejection by any bankrupt tenant of any of their respective leases with NNN could have a material adverse effect on the liquidity and results of operations of NNN if NNN is unable to re-lease the Properties at comparable rental rates and in a timely manner. As of January 31, 2016, less than one percent of the total gross leasable area of the Property Portfolio was leased to tenants that have filed a voluntary petition for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code and have the right to reject or affirm their leases with NNN.

The amount of debt NNN has and the restrictions imposed by that debt could adversely affect NNN’s business and financial condition.

As of December 31, 2015, NNN had outstanding debt including mortgages payable of $23,964,000, total unsecured notes payable of $1,951,980,000 and zero outstanding on the Credit Facility. NNN’s organizational documents do not limit the level or amount of debt that it may incur. If NNN incurs additional indebtedness and permits a higher degree of leverage, debt service requirements would increase and could adversely affect NNN’s financial condition and results of operations, as well as NNN’s ability to pay principal and interest on the outstanding indebtedness or cash dividends to its stockholders. In addition, increased leverage could increase the risk that NNN may default on its debt obligations.

The amount of debt outstanding at any time could have important consequences to NNN’s stockholders. For example, it could:


•	require NNN to dedicate a substantial portion of its cash flow from operations to payments on its debt, thereby reducing funds available for operations, real estate investments and other business opportunities that may arise in the future,


•	increase NNN’s vulnerability to general adverse economic and industry conditions,


•	limit NNN’s ability to obtain any additional financing it may need in the future for working capital, debt refinancing, capital expenditures, real estate investments, development or other general corporate purposes,


•	make it difficult to satisfy NNN’s debt service requirements,


•	limit NNN’s ability to pay dividends in cash on its outstanding common and preferred stock,


•	limit NNN’s flexibility in planning for, or reacting to, changes in its business and the factors that affect the profitability of its business, and


•	limit NNN’s flexibility in conducting its business, which may place NNN at a disadvantage compared to competitors with less debt or debt with less restrictive terms.

NNN’s ability to make scheduled payments of principal or interest on its debt, or to retire or refinance such debt will depend primarily on its future performance, which to a certain extent is subject to the creditworthiness of its tenants, competition, and economic, financial, and other factors beyond its control. There can be no assurance that NNN’s business will continue to generate sufficient cash flow from operations in the future to service its debt or meet its other cash needs. If NNN is unable to generate sufficient cash flow from its business, it may be required to refinance all or a portion of its existing debt, sell assets or obtain additional financing to meet its debt obligations and other cash needs.

NNN cannot assure stockholders that any such refinancing, sale of assets or additional financing would be possible or, if possible, on terms and conditions, including but not limited to the interest rate, which NNN would find acceptable or would not result in a material decline in earnings.

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.

As of December 31, 2015, NNN had approximately $1,975,944,000 of outstanding indebtedness, of which approximately $23,964,000 was secured indebtedness. NNN’s unsecured debt instruments contain various restrictive covenants which include, among others, provisions restricting NNN’s ability to:


•	incur or guarantee additional debt,


•	make certain distributions, investments and other restricted payments,


•	enter into transactions with certain affiliates,


•	create certain liens,


•	consolidate, merge or sell NNN’s assets, and


•	pre-pay debt.

NNN’s secured debt instruments generally contain customary covenants, including, among others, provisions:


•	requiring the maintenance of the property securing the debt,


•	restricting its ability to sell, assign or further encumber the properties securing the debt,


•	restricting its ability to incur additional debt on the property securing the debt,


•	restricting its ability to amend or modify existing leases on the property securing the debt, and


•	establishing certain prepayment restrictions.

In addition, NNN’s debt instruments may contain cross-default provisions, in which case a default of NNN under one debt instrument will be a default of NNN under multiple or all debt instruments of NNN.

NNN’s ability to meet some of its debt covenants, including covenants related to the condition of the property or payment of real estate taxes, may be dependent on the performance by NNN’s tenants under their leases.

In addition, certain covenants in NNN’s debt instruments, including its Credit Facility, require NNN, among other things, to:


•	limit certain leverage ratios,


•	maintain certain minimum interest and debt service coverage ratios, and


•	limit investments in certain types of assets.

NNN’s failure to comply with certain of its debt covenants could result in defaults that accelerate the payment under such debt and limit the dividends paid to NNN’s common and preferred stockholders which would likely have a material adverse impact on NNN’s financial condition and results of operations. In addition, these defaults could impair its access to the debt and equity markets.

The market value of NNN’s equity and debt securities is subject to various factors that may cause significant fluctuations or volatility.

As with other publicly traded securities, the market price of NNN’s equity and debt securities depends on various factors, which may change from time-to-time and/or may be unrelated to NNN’s financial condition, operating performance or prospects that may cause significant fluctuations or volatility in such prices. These factors, among others, include:


•	general economic and financial market conditions,


•	level and trend of interest rates,


•	NNN’s ability to access the capital markets to raise additional capital,


•	the issuance of additional equity or debt securities,


•	changes in NNN’s funds from operations or earnings estimates,


•	changes in NNN’s debt ratings or analyst ratings,


•	NNN’s financial condition and performance,


•	market perception of NNN compared to other REITs, and


•	market perception of REITs compared to other investment sectors.

NNN’s failure to qualify as a REIT for federal income tax purposes could result in significant tax liability.

NNN intends to operate in a manner that will allow NNN to continue to qualify as a REIT. NNN believes it has been organized as, and its past and present operations qualify NNN as a REIT. However, the Internal Revenue Service (“IRS”) could successfully assert that NNN is not qualified as such. In addition, NNN may not remain qualified as a REIT in the future. Qualification as a REIT involves the application of highly technical and complex provisions of the Internal Revenue Code of 1986, as amended (the “Code”) for which there are only limited judicial or administrative interpretations and involves the determination of various factual matters and circumstances not entirely within NNN’s control. Furthermore, new tax legislation, administrative guidance or court decisions, in each instance potentially with retroactive effect, could make it more difficult or impossible for NNN to qualify as a REIT or avoid significant tax liability.

If NNN fails to qualify as a REIT, it would not be allowed a deduction for dividends paid to stockholders in computing taxable income and would become subject to federal income tax at regular corporate rates. In this event, NNN could be subject to potentially significant tax liabilities and penalties. Unless entitled to relief under certain statutory provisions, NNN would also be disqualified from treatment as a REIT for the four taxable years following the year during which the qualification was lost.

Even if NNN remains qualified as a REIT, NNN faces other tax liabilities that reduce operating results and cash flow.

Even if NNN remains qualified for taxation as a REIT, NNN is subject to certain federal, state and local taxes on its income and assets, including taxes on any undistributed income, tax on income from some activities conducted as a result of a foreclosure, and state or local income, property and transfer taxes. Any of these taxes would decrease earnings and cash available for distribution to stockholders. In addition, in order to meet the REIT qualification requirements, NNN has owned some of its assets in the TRS.

Adverse legislative or regulatory tax changes could reduce NNN’s earnings, cash flow and market price of NNN’s common stock.

At any time, the federal and state income tax laws governing REITs or the administrative interpretations of those laws may change. Any such changes may have retroactive effect, and could adversely affect NNN or its stockholders. Legislation could cause shares in non-REIT corporations to be a more attractive investment to individual investors than shares in REITs, and could have an adverse effect on the value of NNN’s common stock.

Compliance with REIT requirements, including distribution requirements, may limit NNN’s flexibility and negatively affect NNN’s operating decisions.

To maintain its status as a REIT for U.S. federal income tax purposes, NNN must meet certain requirements on an on-going basis, including requirements regarding its sources of income, the nature and diversification of its assets, the amounts NNN distributes to its stockholders and the ownership of its shares. NNN may also be required to make distributions to its stockholders when it does not have funds readily available for distribution or at times when NNN’s funds are otherwise needed to fund expenditures or debt service requirements. NNN generally will not be subject to federal income taxes on amounts distributed to stockholders, so long as it distributes 100 percent of its REIT taxable income and meets certain other requirements for qualifying as a REIT. For each of the years in the three-year period ended December 31, 2015, NNN believes it has qualified as a REIT. Notwithstanding NNN’s qualification for taxation as a REIT, NNN is subject to certain state taxes on its income and real estate.

Changes in accounting pronouncements could adversely impact NNN’s or NNN’s tenants’ reported financial performance.

Accounting policies and methods are fundamental to how NNN records and reports its financial condition and results of operations. From time to time the Financial Accounting Standards Board (“FASB”) and the Commission, who create and interpret appropriate accounting standards, may change the financial accounting and reporting standards or their interpretation and application of these standards that govern the preparation of NNN’s financial statements. These changes could have a material impact on NNN’s reported financial condition and results of operations. In some cases, NNN could be required to apply a new or revised standard retroactively, resulting in restating prior period financial statements. Similarly, these changes could have a material impact on NNN’s tenants’ reported financial condition or results of operations and affect their preferences regarding leasing real estate.

NNN’s failure to maintain effective internal control over financial reporting could have a material adverse effect on its business, operating results and share price.

Section 404 of the Sarbanes-Oxley Act of 2002 requires annual management assessments of the effectiveness of the Company’s internal control over financial reporting. If NNN fails to maintain the adequacy of its internal control over financial reporting, as such standards may be modified, supplemented or amended from time to time, NNN may not be able to ensure that it can conclude on an ongoing basis that it has effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002. Moreover, effective internal control over financial reporting, particularly those related to revenue recognition, are necessary for NNN to produce reliable financial reports and to maintain its qualification as a REIT and are important in helping to prevent financial fraud. If NNN cannot provide reliable financial reports or prevent fraud, its business and operating results could be harmed, REIT qualification could be jeopardized, investors could lose confidence in the Company’s reported financial information, impair the company's access to capital, and the trading price of NNN’s shares could drop significantly.

NNN’s ability to pay dividends in the future is subject to many factors.

NNN’s ability to pay dividends may be impaired if any of the risks described in this section were to occur. In addition, payment of NNN’s dividends depends upon NNN’s earnings, financial condition, maintenance of NNN’s REIT status and other factors as NNN’s Board of Directors may deem relevant from time to time.

Cybersecurity risks and cyber incidents could adversely affect NNN's business and disrupt operations and expose NNN to liabilities to tenants, employees, capital providers, and other third parties.

Cyber incidents can result from deliberate attacks or unintentional events. These incidents can include, but are not limited to, gaining unauthorized access to digital systems for purposes of misappropriating assets or sensitive information, corrupting data, or causing operational disruption. The result of these incidents could include, but are not limited to, disrupted operations, misstated financial data, liability for stolen assets or information, increased cybersecurity protection costs, litigation and reputational damage adversely affecting customer or investor confidence. These cyber incidents could negatively impact NNN, NNN's tenants and/or the capital markets.

Future investment in international markets could subject NNN to additional risks.

If NNN expands its operating strategy to include investment in international markets, NNN could face additional risks, including foreign currency exchange rate fluctuations, operational risks due to local economic and political conditions and laws and policies of the U.S. affecting foreign investment.


Item 1B.	Unresolved Staff Comments

None.


Item 2.	Properties

Please refer to Item 1. “Business.”


Item 3.	Legal Proceedings

In the ordinary course of its business, NNN is a party to various legal actions that management believes are routine in nature and incidental to the operation of the business of NNN. Management does not believe that any of these proceedings are material.


Item 4.	Mine Safety Disclosures

None.

PART II


Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

The common stock of NNN currently is traded on the NYSE under the symbol “NNN.” Set forth below is a line graph comparing the cumulative total stockholder return on NNN’s common stock, based on the market price of the common stock and assuming reinvestment of dividends, with the FTSE National Association of Real Estate Investment Trusts Equity Index (“NAREIT”) and the S&P 500 Index (“S&P”) for the five-year period commencing December 31, 2010 and ending December 31, 2015. The graph assumes an investment of $100 on December 31, 2010.

Comparison to Five-Year Cumulative Total Return

Set forth below is a line graph comparing the cumulative total stockholder return on NNN’s common stock, based on the market price of the common stock and assuming reinvestment of dividends, with the FTSE National Association of Real Estate Investment Trusts Equity Index (“NAREIT”) and the S&P 500 Index (“S&P”) for the ten-year period commencing December 31, 2005 and ending December 31, 2015. The graph assumes an investment of $100 on December 31, 2005.

Comparison to Ten-Year Cumulative Total Return

For each calendar quarter and year indicated, the following table reflects respective high, low and closing sales prices for the common stock as quoted by the NYSE and the dividends paid per share in each such period.



2015	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Year
High	$	44.43	$	42.11	$	38.91	$	40.37	$	44.43
Low	38.60		34.86		33.62		35.51		33.62
Close	40.97		35.01		36.27		40.05		40.05
Dividends paid per share	0.420		0.420		0.435		0.435		1.710

2014
High	$	36.35	$	37.65	$	38.04	$	40.49	$	40.49
Low	30.08		32.94		34.34		34.42		30.08
Close	34.32		37.19		34.57		39.37		39.37
Dividends paid per share	0.405		0.405		0.420		0.420		1.650

The following table presents the characterizations for tax purposes of such common stock dividends for the years ended December 31:



	2015				2014

Ordinary dividends	$	1.363294	79.7248	%	$	1.306992	79.2116	%
Qualified dividends	0.019005		1.1114	%	0.006212		0.3765	%
Capital gain	0.007806		0.4565	%	0.008603		0.5214	%
Unrecaptured Section 1250 Gain	0.011055		0.6465	%	0.015362		0.9310	%
Nontaxable distributions	0.308840		18.0608	%	0.312831		18.9595	%
	$	1.710000	100.0000	%	$	1.650000	100.0000	%

NNN intends to pay regular quarterly dividends to its stockholders, although all future distributions will be declared and paid at the discretion of the Board of Directors and will depend upon cash generated by operating activities, NNN’s financial condition, capital requirements, annual distribution requirements under the REIT provisions of the Code and such other factors as the Board of Directors deems relevant.

In January 2016, NNN declared dividends payable to its stockholders of $61,150,000, or $0.435 per share, of common stock.

On January 28, 2016, there were 1,829 stockholders of record of NNN's common stock.


Item 6.	Selected Financial Data

Historical Financial Highlights

(dollars in thousands, except per share data)



	2015			2014			2013			2012			2011
Gross revenues⁽¹⁾	$	483,023		$	435,248		$	397,006		$	342,059		$	271,696
Earnings from continuing operations	187,511			179,777			154,006			132,388			84,463
Earnings including noncontrolling interests	197,961			191,170			160,085			141,937			92,416
Net earnings attributable to NNN	197,836			190,601			160,145			142,015			92,325
Total assets	5,460,044			4,915,551			4,445,308			3,980,210			3,429,067
Total debt	1,975,944			1,729,891			1,560,844			1,579,148			1,333,133
Total stockholders’ equity of NNN	3,342,134			3,082,515			2,777,045			2,296,285			2,002,498
Cash dividends declared to:
Common stockholders	228,699			204,157			189,107			167,495			133,720
Series C preferred stockholders	—			—			—			1,979			6,785
Series D preferred stockholders	19,047			19,047			19,047			15,449			—
Series E preferred stockholders	16,387			16,387			8,876			—			—
Weighted average common shares:
Basic	133,998,674			124,257,558			118,204,148			106,965,156			88,100,076
Diluted	134,489,416			124,710,226			119,864,824			109,117,515			88,837,057
Per share information:
Earnings from continuing operations:
Basic	$	1.21		$	1.24		$	1.06		$	1.04		$	0.88
Diluted	1.20			1.24			1.05			1.02			0.87
Net earnings:
Basic	1.21			1.24			1.11			1.13			0.96
Diluted	1.20			1.24			1.10			1.11			0.96
Cash dividends declared to:
Common stockholders	1.71			1.65			1.60			1.56			1.53
Series C preferred depositary stockholders	—			—			—			0.537760			1.843750
Series D preferred depositary stockholders	1.656250			1.656250			1.656250			1.343403			—
Series E preferred depositary stockholders	1.425000			1.425000			0.771875			—			—
Other data:
Cash flows provided by (used in):
Operating activities	$	341,095		$	296,733		$	274,421		$	228,130		$	177,728
Investing activities	(644,544		)	(541,558		)	(568,040		)	(601,759		)	(752,068		)
Financing activities	307,105			253,944			293,028			373,623			574,374
Funds from operations – available to common stockholders⁽²⁾	289,193			260,902			228,622			193,563			139,834

⁽¹⁾

Gross revenues include revenues from NNN’s continuing and discontinued operations. Prior to January 1, 2014, in accordance with FASB guidance on Accounting for the Impairment or Disposal of Long-Lived Assets, NNN classified the revenues related to (i) all Properties which generated revenue that were sold and a leasehold interest which expired and (ii) all Properties which generated revenue and were held for sale at December 31, 2013, as discontinued operations. Effective January 1, 2014, NNN early adopted ASU 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposal of Components of an Entity.” Therefore, only disposals representing a strategic shift in operations are to be presented as discontinued operations. This requires the Company to continue to classify any Property disposal or Property classified as held for sale as of December 31, 2013, as discontinued operations prospectively. Therefore, the revenues and expenses related to these properties are presented as discontinued operations as of December 31, 2014. The Company has not classified any additional properties as discontinued operations subsequent to December 31, 2013.

⁽²⁾

The National Association of Real Estate Investment Trusts (“NAREIT”) developed Funds from Operations (“FFO”) as a relative non-GAAP financial measure of performance of a REIT in order to recognize that income-producing real estate historically has not depreciated on the basis determined under U.S. generally accepted accounting principles (“GAAP”). FFO is defined by NAREIT and is used by NNN as follows: net earnings (computed in accordance with GAAP) plus depreciation and amortization of real estate assets, excluding gains (or losses) on the disposition of certain assets, any impairment charges on a depreciable real estate asset and NNN’s share of these items from NNN’s unconsolidated partnerships and joint ventures.

Funds From Operations (FFO) Reconciliation

FFO is generally considered by industry analysts to be an appropriate measure of operating performance of real estate companies. FFO does not necessarily represent cash provided by operating activities in accordance with GAAP and should not be considered an alternative to net income as an indication of NNN’s operating performance or to cash flow as a measure of liquidity or ability to make distributions. Management considers FFO an appropriate measure of operating performance of an equity REIT because it primarily excludes the assumption that the value of the real estate assets diminishes

predictably over time, and because industry analysts have accepted it as an operating performance measure. NNN’s computation of FFO may differ from the methodology for calculating FFO used by other equity REITs, and therefore, may not be comparable to such other REITs.

The following table reconciles FFO to the most directly comparable GAAP measure, net earnings for the years ended December 31:



	2015			2014			2013			2012			2011
Reconciliation of funds from operations:
Net earnings attributable to NNN’s stockholders	$	197,836		$	190,601		$	160,145		$	142,015		$	92,325
Series C preferred stock dividends	—			—			—			(1,979		)	(6,785		)
Series D preferred stock dividends	(19,047		)	(19,047		)	(19,047		)	(15,449		)	—
Series E preferred stock dividends	(16,387		)	(16,387		)	(8,876		)	—			—
Excess of redemption value over carrying value of Series C preferred shares redeemed	—			—			—			(3,098		)	—
Net earnings available to common stockholders	162,402			155,167			132,222			121,489			85,540
Real estate depreciation and amortization:
Continuing operations	134,380			115,888			99,048			73,685			52,270
Discontinued operations	—			3			343			1,381			1,866
Joint venture real estate depreciation	—			—			—			112			176
Joint venture gain on disposition of real estate	—			—			—			(2,341		)	—
Gain on disposition of real estate, net of income tax and noncontrolling interest	(10,397		)	(10,904		)	(5,442		)	(10,956		)	(449		)
Impairment losses – depreciable real estate, net of recoveries and income tax	2,808			748			2,451			10,193			431
FFO available to common stockholders	$	289,193		$	260,902		$	228,622		$	193,563		$	139,834

For a discussion of material events affecting the comparability of the information reflected in the selected financial data, refer to “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”


Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with "Item 6. Selected Financial Data," and the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K, and the forward-looking disclaimer language in italics before "Item 1. Business."

The term "NNN" or the "Company" refers to National Retail Properties, Inc. and all of its consolidated subsidiaries. NNN may elect to treat certain subsidiaries as taxable real estate investment trust subsidiaries. These subsidiaries and their majority owned and controlled subsidiaries are collectively referred to as the "TRS."

At the close of business on December 31, 2015, NNN elected to revoke its election to classify the TRS as taxable REIT subsidiaries ("TRS Revocation Election"). This TRS Revocation Election resulted in an additional tax expense of approximately $9,607,000 for 2015.

Overview

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

NNN owned 2,257 Properties, with an aggregate gross leasable area of approximately 24,964,000 square feet, located in 47 states, with a weighted average remaining lease term of 11.4 years as of December 31, 2015. Approximately 99 percent of the Properties were leased as of December 31, 2015.

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

NNN evaluates the creditworthiness of its current and prospective tenants. This evaluation includes reviewing available financial statements, evaluating store level financial performance, press releases, public credit ratings from major credit rating agencies, industry news publications, financial market data (debt and equity pricing), and developing a thorough understanding of the tenant's business and operations, including periodically meeting with senior management of certain tenants.

NNN continues to maintain its diversification by tenant, geography and tenant’s line of trade. NNN’s highest lines of trade concentrations are the convenience store and restaurant (including full and limited service) sectors. These sectors represent a large part of the freestanding retail property marketplace and NNN’s management believes these sectors present attractive investment opportunities. The Property Portfolio is geographically concentrated in the south and southeast United States, which are regions of historically above-average population growth. Given these concentrations, any financial hardship within these sectors or geographic regions, respectively, could have a material adverse effect on the financial condition and operating performance of NNN.

As of the years ended December 31, 2015, 2014 and 2013, the Property Portfolio has remained at least 98 percent leased. As of December 31, 2015, the average remaining lease term of the Property Portfolio was 11.4 years, and has remained fairly constant over the past three years which, coupled with its net lease structure, provides enhanced probability of maintaining occupancy and operating earnings.

Critical Accounting Policies and Estimates

The preparation of NNN’s consolidated financial statements in conformance with accounting principles generally accepted in the United States of America requires management to make estimates on assumptions that affect the reported amounts of assets, liabilities, revenues and expenses as well as other disclosures in the financial statements. 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 financial statements. A summary of NNN’s accounting policies and procedures are included in Note 1 of NNN’s consolidated financial statements. Management believes the following critical accounting policies, among others, affect its more significant estimates and assumptions used in the preparation of NNN’s consolidated financial statements.

Real Estate Portfolio. NNN records the acquisition of real estate at cost, including acquisition and closing costs. The cost of properties developed or funded by NNN includes direct and indirect costs of construction, property taxes, interest and other

miscellaneous costs incurred during the development period until the project is substantially complete and available for occupancy.

Purchase Accounting for Acquisition of Real Estate Subject to a Lease. In accordance with the Financial Accounting Standards Board ("FASB") guidance on business combinations, the fair value of the real estate acquired with in-place leases is allocated to the acquired tangible assets, consisting of land, building and tenant improvements, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, value of in-place leases, and based in each case on their fair values. Acquisition and closing costs incurred on the acquisition of real estate with an in-place lease is expensed as incurred and recorded as real estate acquisition costs.

Impairment – Real Estate. Based upon certain events or changes in circumstances, management periodically assesses its Properties for possible impairment whenever the carrying value of the asset, including accrued rental income, may not be recoverable through operations. Events or circumstances that may occur include significant changes in real estate market conditions or the ability of NNN to re-lease or sell properties that are vacant or become vacant in a reasonable period of time. Management evaluates whether an impairment in carrying value has occurred by comparing the estimated future cash flows (undiscounted and without interest charges), including the residual value of the real estate, with the carrying value of the individual asset. If an impairment is indicated, a loss will be recorded for the amount by which the carrying value of the asset exceeds its estimated fair value.

Real Estate – Held For Sale. Real estate held for sale is not depreciated and is recorded at the lower of cost or fair value, less costs to sell.

Commercial Mortgage Residual Interests, at Fair Value. Commercial mortgage residual interests, classified as available for sale, are reported at their market values with unrealized gains and losses reported as other comprehensive income in stockholders’ equity. NNN recognizes the excess of all cash flows attributable to the commercial mortgage residual interests estimated at the acquisition/transaction date over the initial investment (the accretable yield) as interest income over the life of the beneficial interest using the effective yield method. Losses are considered other than temporary valuation impairments if and when there has been a change in the timing or amount of estimated cash flows, exclusive of changes in interest rates, that leads to a loss in value.

Revenue Recognition. Rental revenues for properties under construction commence upon completion of construction of the leased asset and delivery of the leased asset to the tenant. Rental revenues for non-development real estate assets are recognized when earned in accordance with the FASB guidance on accounting for leases, based on the terms of the lease of the leased asset.

NNN's real estate is generally leased to tenants on a net lease basis, whereby the tenant is responsible for all operating expenses relating to the Property, generally including property taxes, insurance, maintenance, utilities, repairs and capital expenditures. The leases are accounted for using either the operating or the direct financing method. Such methods are described below:

Operating method – Properties with leases accounted for using the operating method are recorded at the cost of the real estate. Revenue is recognized as rentals are earned and expenses (including depreciation) are charged to operations as incurred. Buildings are depreciated on the straight-line method over their estimated useful lives. Leasehold interests are amortized on the straight-line method over the terms of their respective leases. When scheduled rental revenue varies during the lease term, income is recognized on a straight-line basis so as to produce a constant periodic rent over the term of the lease. Accrued rental income is the aggregate difference between the scheduled rents which vary during the lease term and the income recognized on a straight-line basis.

Direct financing method – Properties with leases accounted for using the direct financing method are recorded at their net investment (which at the inception of the lease generally represents the cost of the Property). Unearned income is deferred and amortized into income over the lease terms so as to produce a constant periodic rate of return on NNN’s net investment in the leases.

New Accounting Pronouncements. Refer to Note 1 of the December 31, 2015, Consolidated Financial Statements.

Use of Estimates. Additional critical accounting policies of NNN include management’s estimates and assumptions relating to the reporting of assets and liabilities, revenues and expenses and the disclosure of contingent assets and liabilities to prepare the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. Additional critical accounting policies include management’s estimates of the useful lives used in calculating depreciation expense relating to real estate assets, the recoverability of the carrying value of long-lived assets, including the commercial mortgage residual interests, the recoverability of the income tax benefit, and the collectibility of receivables from tenants, including accrued rental income. Actual results could differ from those estimates.

Results of Operations

Property Analysis

General. The following table summarizes the Property Portfolio as of December 31:



	2015		2014		2013
Properties Owned:
Number	2,257		2,054		1,860
Total gross leasable area (square feet)	24,964,000		22,479,000		20,402,000
Properties:
Leased and unimproved land	2,236		2,025		1,827
Percent of Properties – leased and unimproved land	99	%	99	%	98	%
Weighted average remaining lease term (years)	11.4		11.6		11.8
Total gross leasable area (square feet) – leased	24,544,000		21,938,000		19,872,000



	% of Annual Base Rent⁽¹⁾	# of Properties	Gross Leasable Area⁽²⁾		% of Annual Base Rent⁽¹⁾	# of Properties	Gross Leasable Area⁽²⁾
2016	1.0%	27	363,000	2022	5.6%	96	1,143,000
2017	3.0%	52	1,084,000	2023	2.5%	55	903,000
2018	6.3%	183	1,645,000	2024	2.6%	49	767,000
2019	3.4%	80	1,109,000	2025	5.3%	132	996,000
2020	4.3%	137	1,550,000	Thereafter	61.3%	1,302	13,713,000
2021	4.7%	116	1,271,000


⁽¹⁾	Based on the annualized base rent for all leases in place as of December 31, 2015.


⁽²⁾	Approximate square feet.

The following table summarizes the diversification of the Property Portfolio based on the top 10 lines of trade:



		% of Annual Base Rent⁽¹⁾
	Top 10 Lines of Trade	2015	2014	2013
1.	Convenience stores	16.7%	18.0%	19.7%
2.	Restaurants - full service	11.0%	9.1%	9.7%
3.	Restaurants - limited service	7.2%	6.5%	5.5%
4.	Automotive service	7.0%	7.2%	7.6%
5.	Family entertainment centers	5.6%	5.1%	2.3%
6.	Theaters	5.2%	5.2%	4.5%
7.	Automotive parts	4.2%	4.7%	5.1%
8.	Health and fitness	3.8%	3.9%	4.3%
9.	Recreational vehicle dealers, parts and accessories	3.6%	3.1%	3.2%
10.	Banks	3.4%	3.7%	4.1%
	Other	32.3%	33.5%	34.0%
		100.0%	100.0%	100.0%


⁽¹⁾	Based on annualized base rent for all leases in place as of December 31 of the respective year.

The following table summarizes the diversification of the Property Portfolio by state as of December 31, 2015:



	State	# of Properties	% of Annual Base Rent⁽¹⁾
1.	Texas	438	19.7%
2.	Florida	181	9.3%
3.	Ohio	122	5.2%
4.	North Carolina	136	5.2%
5.	Illinois	79	4.9%
6.	Georgia	111	4.5%
7.	Virginia	88	3.8%
8.	Indiana	91	3.8%
9.	Alabama	97	3.2%
10.	Tennessee	74	3.0%
	Other	840	37.4%
		2,257	100.0%


⁽¹⁾	Based on annualized base rent for all leases in place as of December 31, 2015.

Property Acquisitions. The following table summarizes the Property acquisitions for each of the years ended December 31 (dollars in thousands):



	2015			2014			2013
Acquisitions:
Number of Properties	221			221			275
Gross leasable area (square feet)	2,706,000			2,417,000			1,652,000
Initial cash yield	7.2		%	7.5		%	7.8		%
Total dollars invested⁽¹⁾	$	726,303		$	618,145		$	629,896


⁽¹⁾	Includes dollars invested in projects under construction or tenant improvements for each respective year.

NNN typically funds Property acquisitions either through borrowings under NNN's unsecured revolving credit facility (the "Credit Facility") or by issuing its debt or equity securities in the capital markets.

Property Dispositions. The following table summarizes the Properties sold by NNN for each of the years ended December 31 (dollars in thousands):



	2015			2014			2013
Number of properties	19			27			35
Gross leasable area (square feet)	232,000			317,000			360,000
Net sales proceeds	$	39,116		$	55,378		$	61,000
Gain, net of income tax expense and noncontrolling interests⁽¹⁾	$	10,450		$	11,424		$	5,595
Cap rate	5.9		%	7.2		%	7.5		%

⁽¹⁾ Amounts include deferred gains on previously sold properties.

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

Analysis of Revenue from Continuing Operations

General. During the year ended December 31, 2015, NNN’s rental income increased primarily due to the increase in rental income from Property acquisitions (See "Results of Operations – Property Analysis – Property Acquisitions"). NNN anticipates increases in rental income will continue to come from additional Property acquisitions and increases in rents pursuant to existing lease terms.

The following summarizes NNN’s revenues from continuing operations (dollars in thousands):



	2015		2014		2013		Percent of Total						2015 Versus 2014 Percent		2014 Versus 2013 Percent
							Percent of Total
							2015		2014		2013
Rental Income⁽¹⁾	$	465,282	$	416,842	$	376,424	96.3	%	95.9	%	95.6	%	11.6	%	10.7	%
Real estate expense reimbursement from tenants	14,868		13,875		13,340		3.1	%	3.2	%	3.4	%	7.2	%	4.0	%
Interest and other income from real estate transactions	986		2,296		1,471		0.2	%	0.5	%	0.4	%	(57.1	)%	56.1	%
Interest income on commercial mortgage residual interests	1,778		1,834		2,290		0.4	%	0.4	%	0.6	%	(3.1	)%	(19.9	)%
Total revenues from continuing operations	$	482,914	$	434,847	$	393,525	100.0	%	100.0	%	100.0	%	11.1	%	10.5	%


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

Comparison of Revenues from Continuing Operations – 2015 versus 2014

Rental Income. Rental Income increased in amount and as a percent of the total revenues from continuing operations for the year ended December 31, 2015 as compared to the same period in 2014. The increase for the year ended December 31, 2015, is primarily due to a partial year of Rental Income received as a result of the acquisition of 221 properties with aggregate gross leasable area of approximately 2,706,000 during 2015 and a full year of Rental Income received as a result of the acquisition of 221 properties with a gross leasable area of approximately 2,417,000 square feet in 2014. During the year ended December 31, 2015, NNN recorded $1,950,000 of rental revenue from a settlement with a prior tenant.

Real Estate Expense Reimbursement from Tenants. Real estate expense reimbursements from tenants increased for the year ended December 31, 2015, as compared to the same period in 2014, but decreased as a percentage of total revenues from continuing operations for the same period. The increase is primarily attributable to a full year of reimbursements from properties acquired in 2014 and a partial year of reimbursements from certain newly acquired properties in 2015.

Comparison of Revenues from Continuing Operations – 2014 versus 2013

Rental Income. Rental Income increased in amount and as a percent of the total revenues from continuing operations for the year ended December 31, 2014 as compared to the same period in 2013. The increase for the year ended December 31, 2014, is primarily due to a partial year of Rental Income received as a result of the acquisition of 221 properties with aggregate gross leasable area of approximately 2,417,000 during 2014 and a full year of Rental Income received as a result of the acquisition of 275 properties with a gross leasable area of approximately 1,652,000 square feet in 2013. In addition, the increase was partially offset by a $613,000 decrease in lease termination fees for the year ended December 31, 2014, as compared to December 31, 2013.

Real Estate Expense Reimbursement from Tenants. Real estate expense reimbursements from tenants increased for the year ended December 31, 2014, as compared to the same period in 2013, but decreased as a percentage of total revenues from continuing operations for the same period. The increase is primarily attributable to a full year of reimbursements from properties acquired in 2013 and a partial year of reimbursements from certain newly acquired properties in 2014.

Analysis of Expenses from Continuing Operations

General. Operating expenses from continuing operations increased primarily due to an increase in depreciation expense and an increase in impairments during the year ended December 31, 2015, as compared to the same period in 2014. The following summarizes NNN’s expenses from continuing operations (dollars in thousands):



	2015			2014			2013
General and administrative	$	34,736		$	32,518		$	31,095
Real estate	19,774			18,905			18,497
Depreciation and amortization	134,798			116,162			99,274
Impairment – commercial mortgage residual interests valuation	531			256			1,185
Impairment losses and other charges, net of recoveries	4,420			760			3,580
Total operating expenses	$	194,259		$	168,601		$	153,631

Interest and other income	$	(109	)	$	(357	)	$	(1,493	)
Interest expense	90,008			85,510			85,822
Real estate acquisition costs	927			1,391			1,485
Total other expenses (revenues)	$	90,826		$	86,544		$	85,814



	Percentage of Total Expenses						Percentage of Revenues from Continuing Operations						2015 Versus 2014 Percent		2014 Versus 2013 Percent
	2015		2014		2013		2015		2014		2013		2015 Versus 2014 Percent		2014 Versus 2013 Percent
General and administrative	17.9	%	19.3	%	20.3	%	7.2	%	7.5	%	7.9	%	6.8	%	4.6	%
Real estate	10.2	%	11.2	%	12.0	%	4.1	%	4.3	%	4.7	%	4.6	%	2.2	%
Depreciation and amortization	69.4	%	68.9	%	64.6	%	27.9	%	26.7	%	25.2	%	16.0	%	17.0	%
Impairment – commercial mortgage residual interests valuation	0.3	%	0.2	%	0.8	%	0.1	%	0.1	%	0.3	%	107.4	%	(78.4	)%
Impairment losses and other charges, net of recoveries	2.2	%	0.4	%	2.3	%	0.9	%	0.2	%	0.9	%	481.6	%	(78.8	)%
Total operating expenses	100.0	%	100.0	%	100.0	%	40.2	%	38.8	%	39.0	%	15.2	%	9.7	%

Interest and other income	(0.1	)%	(0.4	)%	(1.7	)%	—		(0.1	)%	(0.4	)%	(69.5	)%	(76.1	)%
Interest expense	99.1	%	98.8	%	100.0	%	18.6	%	19.7	%	21.8	%	5.3	%	(0.4	)%
Real estate acquisition costs	1.0	%	1.6	%	1.7	%	0.2	%	0.3	%	0.4	%	(33.4	)%	(6.3	)%
Total other expenses (revenues)	100.0	%	100.0	%	100.0	%	18.8	%	19.9	%	21.8	%	4.9	%	0.9	%

Comparison of Expenses from Continuing Operations – 2015 versus 2014

General and Administrative Expenses. General and administrative expenses increased for the year ended December 31, 2015, as compared to the same period in 2014, but decreased both as a percentage of total operating expenses and as a percentage of revenues from continuing operations. The increase in general and administrative expenses for the year ended December 31, 2015, is primarily attributable to an increase in incentive compensation.

Real Estate. Real estate expenses increased for the year ended December 31, 2015, as compared to the same period in 2014, but decreased both as a percentage of total operating expenses and as a percentage of revenues from continuing operations. The increase is primarily due to the increase in tenant reimbursable expenses related to a partial year of reimbursable expenses from certain properties acquired in 2015 and a full year of reimbursable expenses from certain properties acquired in 2014.

Depreciation and Amortization. Depreciation and amortization expenses increased in amount and as a percentage of total operating expenses and as a percentage of revenues from continuing operations for the year ended December 31, 2015, as compared to the year ended December 31, 2014. The increase in expenses is primarily due to the acquisition of 221 properties with an aggregate gross leasable area of approximately 2,706,000 square feet in 2015 and 221 properties with an aggregate gross leasable area of approximately 2,417,000 square feet during 2014.

Impairment Losses and Other Charges, Net of Recoveries. NNN reviews long-lived assets for impairment whenever certain events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Events or circumstances that may occur include changes in real estate market conditions, the ability of NNN to re-lease properties that are currently vacant or become vacant, and the ability to sell properties at an attractive price. Management evaluates whether an impairment in value has occurred by comparing the estimated future cash flows (undiscounted and without interest charges), including the residual value of the real estate, with the carrying cost of the individual asset. If an impairment is indicated, a loss will be recorded for the amount by which the carrying value of the asset exceeds its fair value. During the years ended December 31, 2015 and 2014, NNN recorded $3,970,000 and $760,000, respectively, of real estate impairments. NNN also recorded a $450,000 loss on the sale of a mortgage receivable during the year ended December 31, 2015.

Interest Expense. Interest expense increased in total and as a percentage of total other expenses (revenues) for the year ended December 31, 2015, as compared to the same period in 2014, and decreased as a percentage of revenues from continuing operations.

The following represents the primary changes in debt that have impacted interest expense:


(i)	the issuance in May 2014 of $350,000,000 principal amount of notes payable with a maturity of June 2024, and stated interest rate of 3.900%;


(ii)	the repayment in June 2014 of $150,000,000 principal amount of notes payable with a stated interest rate of 6.250%;


(iii)	the assumption of a mortgage in September 2014 of $2,824,000 in connection with a Property acquisition with an interest rate of 6.400%;


(iv)	the assumption of a mortgage in November 2014 of $14,430,000 in connection with the acquisition of Properties with an interest rate of 5.230%;


(v)	the issuance in October 2015 of $400,000,000 principal amount of notes payable with a maturity of November 2025, and stated interest rate of 4.000%


(vi)	the repayment in December 2015 of $150,000,000 principal amount of notes payable with a stated interest rate of 6.150%; and


(vii)	the increase of $22,092,000 in the weighted average debt outstanding on the Credit Facility for the year ended December 31, 2015, as compared to the same period in 2014, and a slightly lower weighted average interest rate for the year ended December 31, 2015, as compared to the same period in 2014.

Comparison of Expenses from Continuing Operations – 2014 versus 2013

General and Administrative Expenses. General and administrative expenses increased for the year ended December 31, 2014, as compared to the same period in 2013, but decreased both as a percentage of total operating expenses and as a percentage of revenues from continuing operations. The increase in general and administrative expenses for the year ended December 31, 2014, is primarily attributable to an increase in incentive compensation.

Real Estate. Real estate expenses increased for the year ended December 31, 2014, as compared to the same period in 2013, but decreased both as a percentage of total operating expenses and as a percentage of revenues from continuing operations. The increase is primarily due to the increase in tenant reimbursable expenses related to a partial year of reimbursable expenses from certain properties acquired in 2014 and a full year of reimbursable expenses from certain properties acquired in 2013. Additionally, real estate expenses incurred on vacant properties increased for the year ended December 31, 2014. The increase was partially offset by a decrease in real estate expenses that are not reimbursable by the tenant for the year ended December 31, 2014, as compared to the same period in 2013.

Depreciation and Amortization. Depreciation and amortization expenses increased in amount and as a percentage of total operating expenses and as a percentage of revenues from continuing operations for the year ended December 31, 2014, as compared to the year ended December 31, 2013. The increase in expenses is primarily due to the acquisition of 221 properties with an aggregate gross leasable area of approximately 2,417,000 square feet in 2014 and 275 properties with an aggregate gross leasable area of approximately 1,652,000 square feet during 2013.

Interest Expense. Interest expense decreased for the year ended December 31, 2014, as compared to the same period in 2013, and decreased as a percentage of revenues from continuing operations and as a percentage of total other expenses (revenues).

The following represents the primary changes in debt that have impacted interest expense:


(i)	the issuance in April 2013 of $350,000,000 principal amount of notes payable with a maturity of April 2023, and stated interest rate of 3.300%;


(ii)	the settlement of $223,035,000 principal amount of 5.125% convertible notes payable in 2013;


(iii)	the issuance in May 2014 of $350,000,000 principal amount of notes payable with a maturity of June 2024, and stated interest rate of 3.900%;


(iv)	the repayment in June 2014 of $150,000,000 principal amount of notes payable with a stated interest rate of 6.250%;


(v)	the assumption of a mortgage in September 2014 of $2,824,000 in connection with a Property acquisition with an interest rate of 6.400%;


(vi)	the assumption of a mortgage in November 2014 of $14,430,000 in connection with the acquisition of Properties with an interest rate of 5.230%; and


(vii)	the increase of $15,188,000 in the weighted average debt outstanding on the Credit Facility for the year ended December 31, 2014, as compared to the same period in 2013.

Impact of Inflation

NNN’s leases typically contain provisions to mitigate the adverse impact of inflation on NNN’s results of operations. Tenant leases generally provide for limited increases in rent as a result of fixed increases, increases in the consumer price index, and/or, to a lesser extent, increases in the tenant’s sales volume. During times when inflation is greater than increases in rent, rent increases will not keep up with the rate of inflation.

Properties are leased to tenants under long-term, net leases which typically require the tenant to pay certain operating expenses for a Property, thus, NNN’s exposure to inflation is reduced with respect to these expenses. Inflation may have an adverse impact on NNN’s tenants.

Liquidity

General. NNN’s demand for funds has been and will continue to be primarily for (i) payment of operating expenses and cash dividends; (ii) Property acquisitions and development; (iii) origination of mortgages and notes receivable; (iv) capital expenditures; (v) payment of principal and interest on its outstanding indebtedness; and (vi) other investments.

NNN expects to meet short-term liquidity requirements through cash provided from operations and NNN’s Credit Facility. As of December 31, 2015, there was no outstanding balance and $650,000,000 was available for future borrowings under the Credit Facility. NNN anticipates its long-term capital needs will be funded by the Credit Facility, cash provided from operations, the issuance of long-term debt or the issuance of common or preferred equity or other instruments convertible into or exchangeable for common or preferred equity. 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.

Cash and Cash Equivalents. The table below summarizes NNN’s cash flows for each of the years ended December 31 (dollars in thousands):



	2015			2014			2013
Cash and cash equivalents:
Provided by operating activities	$	341,095		$	296,733		$	274,421
Used in investing activities	(644,544		)	(541,558		)	(568,040		)
Provided by financing activities	307,105			253,944			293,028
Increase (decrease)	3,656			9,119			(591		)
Net cash at beginning of period	10,604			1,485			2,076
Net cash at end of period	$	14,260		$	10,604		$	1,485

Cash provided by operating activities represents cash received primarily from Rental Income and interest income less cash used for general and administrative 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 years ended December 31, 2015, 2014 and 2013, 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.

Changes in cash for investing activities are primarily attributable to acquisitions and dispositions of Properties. NNN typically uses proceeds from its Credit Facility to fund the acquisition of its Properties.

NNN’s financing activities for the year ended December 31, 2015, included the following significant transactions:


•	$395,436,000 in net proceeds from the issuance of the 4.00% notes payable in October,


•	$150,000,000 in repayment of the 6.15% notes payable in December,


•	$7,182,000 in net proceeds from the issuance of 196,584 shares of common stock in connection with the Dividend Reinvestment and Stock Purchase Plan (“DRIP”),


•	$321,067,000 in net proceeds from the issuance of 8,573,533 shares of common stock in connection with the at-the-market ("ATM") equity program,


•	$19,047,000 in dividends paid to holders of the depositary shares of NNN’s Series D Preferred Stock,


•	$16,387,000 in dividends paid to holders of the depositary shares of NNN’s Series E Preferred Stock, and


•	$228,699,000 in dividends paid to common stockholders.

Financing Strategy. NNN’s financing objective is to manage its capital structure effectively in order to provide sufficient capital to execute its operating strategy while servicing its debt requirements, maintaining its investment grade credit rating, staggering debt maturities and providing value to NNN’s stockholders. NNN generally utilizes debt and equity security offerings, bank borrowings, proceeds from the disposition of certain properties, and to a lesser extent, internally generated funds to meet its capital needs.

NNN typically funds its short-term liquidity requirements, including investments in additional Properties, with cash from its Credit Facility. As of December 31, 2015, there was no outstanding balance and $650,000,000 was available for future borrowings under the Credit Facility.

As of December 31, 2015, NNN’s ratio of total debt to total gross assets (before accumulated depreciation and amortization) was approximately 33 percent and the ratio of secured indebtedness to total gross assets was less than one percent. The ratio of total debt to total market capitalization was approximately 25 percent. Certain financial agreements to which NNN is a party contain covenants that limit NNN’s ability to incur additional debt under certain circumstances. The organizational documents of NNN do not limit the absolute amount or percentage of indebtedness that NNN may incur. Additionally, NNN may change its financing strategy.

Contractual Obligations and Commercial Commitments. The information in the following table summarizes NNN’s contractual obligations and commercial commitments outstanding as of December 31, 2015. The table presents principal cash flows by year-end of the expected maturity for debt obligations and commercial commitments outstanding as of December 31, 2015.



	Expected Maturity Date (dollars in thousands)
	Total		2016		2017		2018		2019		2020		Thereafter
Long-term debt⁽¹⁾	$	1,998,414	$	7,196	$	253,276	$	538	$	567	$	596	$	1,736,241
Operating lease	7,176		714		728		743		758		773		3,460
Total contractual cash obligations⁽²⁾	$	2,005,590	$	7,910	$	254,004	$	1,281	$	1,325	$	1,369	$	1,739,701


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


⁽²⁾	Excludes $20,113 of accrued interest payable.

In addition to the contractual obligations outlined above, NNN has committed to fund construction commitments on leased Properties. The improvements are estimated to be completed within 12 months. These construction commitments, at December 31, 2015, are outlined in the table below (dollars in thousands):



Number of properties	27
Total commitment⁽¹⁾	$	116,394
Amount funded	$	87,406
Remaining commitment	$	28,988


⁽¹⁾	Includes land, construction costs, tenant improvements and lease costs.

As of December 31, 2015, NNN did not have any other material contractual cash obligations, such as purchase obligations, financing lease obligations or other long-term liabilities other than those reflected in the table. In addition to items reflected in the table, NNN has issued preferred stock with cumulative preferential cash distributions, as described below under “Dividends.”

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 asset dispositions.

Generally the Properties are leased under long-term net leases. 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 of the 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 the 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.

The lost revenues and increased property expenses resulting from vacant Properties or uncollectibility of lease revenues could have a material adverse effect on the liquidity and results of operations if NNN is unable to release the Properties at comparable rental rates and in a timely manner. As of December 31, 2015, NNN owned 21 vacant, un-leased Properties which accounted for approximately one percent of total Properties. Additionally, as of January 31, 2016, less than one percent of the total gross leasable area of the Property Portfolio was leased to tenants that have filed a voluntary petition for 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.

Dividends. NNN has made an election to be taxed as a REIT under Sections 856 through 860 of the Code, as amended, and related regulations and intends to continue to operate so as to remain qualified as a REIT for federal income tax purposes. NNN generally will not be subject to federal income tax on income that it distributes to its stockholders, provided that it distributes 100 percent of its REIT taxable income and meets certain other requirements for qualifying as a REIT. If NNN fails to qualify as a REIT in any taxable year, it will be subject to federal income tax on its taxable income at regular corporate rates and will not be permitted to qualify for treatment as a REIT for federal income tax purposes for the four years following the year during which qualification is lost. Such an event could materially adversely affect NNN’s income and ability to pay dividends.

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

The following table outlines the dividends declared and paid for NNN's common stock for the years ended December 31 (dollars in thousands, except per share data):



	2015		2014		2013
Dividends	$	228,699	$	204,157	$	189,107
Per share	1.710		1.650		1.600

The following presents the characterizations for tax purposes of such common stock dividends for the years ended December 31:



	2015				2014				2013
Ordinary dividends	$	1.363294	79.7248	%	$	1.306992	79.2116	%	$	1.224568	76.5355	%
Qualified dividends	0.019005		1.1114	%	0.006212		0.3765	%	0.056784		3.5490	%
Capital gain	0.007806		0.4565	%	0.008603		0.5214	%	—		—
Unrecaptured Section 1250 Gain	0.011055		0.6465	%	0.015362		0.9310	%	0.000650		0.0406	%
Nontaxable distributions	0.308840		18.0608	%	0.312831		18.9595	%	0.317998		19.8749	%
	$	1.710000	100.0000	%	$	1.650000	100.0000	%	$	1.600000	100.0000	%

On January 15, 2016, NNN declared a dividend of $0.435 per share, payable February 16, 2016 to its common stockholders of record as of January 29, 2016.

Holders of NNN’s preferred stock issuances are entitled to receive, when and as authorized by the Board of Directors, cumulative preferential cash distributions based on the stated rate and liquidation preference per annum. The following table outlines the dividends declared and paid for NNN's preferred stock for the years ended December 31 (dollars in thousands, except per share data):



		2015	2014	2013
Series D Preferred Stock ⁽¹⁾:
	Dividends	19,047	19,047	19,047
	Per share	1.656250	1.656250	1.656250

Series E Preferred Stock ⁽²⁾:
	Dividends	16,387	16,387	8,876
	Per share	1.425000	1.425000	0.771875

⁽¹⁾The Series D Preferred Stock has no maturity date and will remain outstanding unless redeemed.

⁽²⁾The Series E Preferred Stock dividends paid during the quarter ended September 30, 2013 include accumulated and unpaid dividends from the issuance date through the declaration date. The Series E Preferred Stock has no maturity date and will remain outstanding unless redeemed.

The following presents the characterizations for tax purposes of such preferred stock dividends for the years ended December 31:



	2015						2014						2013
	Series E		Series D		Percentage of Total		Series E		Series D		Percentage of Total		Series E ⁽¹⁾		Series D		Percentage of Total
Ordinary dividends	$	1.385670	$	1.610538	97.2400	%	$	1.393700	$	1.619870	97.8035	%	$	0.741150	$	1.590323	96.0195	%
Qualified dividends	0.020141		0.023409		1.4134	%	0.005738		0.006670		0.4027	%	0.030332		0.065084		3.9296	%
Capital gain	0.007937		0.009225		0.5570	%	0.009177		0.010666		0.6440	%	—		—		—
Unrecaptured Section 1250 Gain	0.011252		0.013078		0.7896	%	0.016385		0.019044		1.1498	%	0.000393		0.000843		0.0509	%
	$	1.425000	$	1.656250	100.0000	%	$	1.425000	$	1.656250	100.0000	%	$	0.771875	$	1.656250	100.0000	%

⁽¹⁾ The Series E preferred stock was issued in May 2013.

Capital Resources

Generally, cash needs for Property acquisitions, mortgages and notes receivable investments, debt payments, capital expenditures, development and other investments have been funded by equity and debt offerings, bank borrowings, the sale of properties and, to a lesser extent, by internally generated funds. Cash needs for operating and interest expenses and dividends have generally been funded by internally generated funds. If available, future sources of capital include proceeds from the public or private offering of NNN’s debt or equity securities, secured or unsecured borrowings from banks or other lenders, proceeds from the sale of properties, as well as undistributed funds from operations.

Debt

The following is a summary of NNN’s total outstanding debt as of December 31 (dollars in thousands):



	2015		Percentage of Total		2014		Percentage of Total
Mortgages payable	23,964		1.2	%	26,182		1.5	%
Notes payable	1,951,980		98.8	%	1,703,709		98.5	%
Total outstanding debt	$	1,975,944	100.0	%	$	1,729,891	100.0	%

Indebtedness. NNN expects to use indebtedness primarily for property acquisitions and development of single-tenant retail properties, either directly or through investment interests, and mortgages and notes receivable. Additionally, indebtedness may be used to refinance existing indebtedness.

Line of Credit Payable. In October 2014, NNN amended and restated its credit agreement increasing the borrowing capacity under its unsecured revolving credit facility from $500,000,000 to $650,000,000 and amended certain other terms under the former revolving credit facility (as the context requires, the previous and new revolving credit facility, the “Credit Facility”). The Credit Facility had a weighted average outstanding balance of $78,682,000 and a weighted average interest rate of 1.1% for the year ended December 31, 2015. The Credit Facility matures January 2019, with an option to extend maturity to January 2020. As of December 31, 2015, the Credit Facility bears interest at LIBOR plus 92.5 basis points; however, such interest rate may change pursuant to a tiered interest rate structure based on NNN's debt rating. The Credit Facility also includes an accordion feature to increase the facility size up to $1,000,000,000. As of December 31, 2015, there was no outstanding balance and $650,000,000 was available for future borrowings under the Credit Facility.

In accordance with the terms of the Credit Facility, NNN is required to meet certain restrictive financial covenants, which, among other things, require NNN to maintain certain (i) leverage ratios, (ii) debt service coverage, (iii) cash flow coverage, and (iv) investment limitations. At December 31, 2015, NNN was in compliance with those covenants. In the event that NNN violates any of these restrictive financial covenants, it could cause the indebtedness under the Credit Facility to be accelerated and may impair NNN’s access to the debt and equity markets and limit NNN’s ability to pay dividends to its common and preferred stockholders, each of which would likely have a material adverse impact on NNN’s financial condition and results of operations.

Mortgages Payable. The following table outlines the mortgages payable included in NNN’s consolidated financial statements (dollars in thousands):



Entered⁽¹⁾	Initial Balance		Interest Rate	Maturity⁽²⁾	Carrying Value of Encumbered Asset(s)⁽³⁾		Outstanding Principal Balance at December 31,
Entered⁽¹⁾	Initial Balance		Interest Rate	Maturity⁽²⁾	Carrying Value of Encumbered Asset(s)⁽³⁾		2015			2014
December 2001	$	698	9.00%	April 2019	$	—	$	—		$	223
December 2001	485		9.00%	April 2019	—		—			116
February 2004	6,952		6.90%	January 2017	10,313		848			1,577
March 2005	1,015		8.14%	September 2016	—		—			222
June 2012⁽⁴⁾⁽⁵⁾	6,850		5.75%	April 2016	8,341		5,890			6,180
September 2014⁽⁴⁾	2,957		6.40%	February 2017	3,691		2,804			2,922
November 2014⁽⁴⁾	15,151		5.23%	July 2023	21,889		14,555			15,099
					$	44,234	24,097			26,339

Debt costs							(226		)	(226		)
Accumulated amortization							93			69
Debt costs, net of accumulated amortization							(133		)	(157		)
Mortgages payable, including unamortized premium and net of unamortized debt costs							$	23,964		$	26,182


⁽¹⁾	Date entered represents the date that NNN acquired real estate subject to a mortgage securing a loan.


⁽²⁾	Monthly payments include interest and principal, if any; the balance is due at maturity.


⁽³⁾	Each loan is secured by a first mortgage lien on certain of the Properties. The carrying values of the assets at December 31, 2015.


⁽⁴⁾	Initial balance and outstanding principal balance includes unamortized premium.


⁽⁵⁾	NNN repaid the outstanding principal balance in January 2016.

Notes Payable. Each of NNN’s outstanding series of non-convertible 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
2017⁽⁴⁾	September 2007	250,000	877	249,123	6.875%	6.924%	October 2017
2021⁽⁵⁾	July 2011	300,000	4,269	295,731	5.500%	5.689%	July 2021
2022	August 2012	325,000	4,989	320,011	3.800%	3.985%	October 2022
2023⁽⁶⁾	April 2013	350,000	2,594	347,406	3.300%	3.388%	April 2023
2024⁽⁷⁾	May 2014	350,000	707	349,293	3.900%	3.924%	June 2024
2025⁽⁸⁾	October 2015	400,000	964	399,036	4.000%	4.029%	November 2025


⁽¹⁾	The proceeds from the note issuance were used to pay down outstanding indebtedness of NNN’s Credit Facility, fund future property acquisitions and 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.

⁽⁴⁾

NNN entered into an interest rate hedge with a notional amount of $100,000. Upon issuance of the 2017 Notes, NNN terminated the interest rate hedge agreement resulting in a liability of $3,260, of which $3,228 was recorded to other comprehensive income. The liability has been deferred and is being amortized as an adjustment to interest expense over the term of the 2017 Notes using the effective interest method.


⁽⁵⁾	NNN entered into two interest rate hedges with a total notional amount of $150,000. Upon issuance of the 2021 Notes, NNN terminated the interest rate hedge agreements resulting in a liability of $5,300, of which $5,218 was deferred in other comprehensive income. The deferred liability is being amortized over the term of the 2021 Notes using the effective interest method.


⁽⁶⁾	NNN entered into four forward starting swaps with an aggregate notional amount of $240,000. Upon issuance of the 2023 Notes, NNN terminated the forward starting swaps resulting in a liability of $3,156, of which $3,141 was deferred in other comprehensive income. The deferred liability is being amortized over the term of the note using the effective interest method.


⁽⁷⁾	NNN entered into three forward starting swaps with an aggregate notional amount of $225,000. Upon issuance of the 2024 Notes, NNN terminated the forward starting swaps resulting in a liability of $6,312, which was deferred in other comprehensive income. The deferred liability is being amortized over the term of the note using the effective interest method.


⁽⁸⁾	NNN entered into four forward starting swaps with an aggregate notional amount of $300,000. Upon issuance of the 2025 Notes, NNN terminated the forward starting swaps resulting in a liability of $13,369, which was deferred in other comprehensive income. The deferred liability is being amortized over the term of the note using the effective interest method.

Each series of notes represents senior, unsecured obligations of NNN and is subordinated to all secured indebtedness of NNN. The notes are redeemable at the option of NNN, in whole or in part, at a redemption price equal to the sum of (i) the principal amount of the notes being redeemed plus accrued and unpaid interest thereon through the redemption date, and (ii) the make-whole amount, if any, as defined in the applicable supplemental indenture relating to the notes.

In connection with the outstanding note offerings, NNN incurred debt issuance costs totaling $17,782,000 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 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 December 31, 2015, NNN was in compliance with those covenants. NNN’s failure to comply with certain of its debt covenants could result in defaults that accelerate the payment under such debt and limit the dividends paid to NNN’s common and preferred stockholders which would likely have a material adverse impact on NNN’s financial condition and results of operations. In addition, these defaults could impair its access to the debt and equity markets.

In June 2014, NNN repaid the $150,000,000 6.250% notes payable that were due in June 2014.

In December 2015, NNN repaid the $150,000,000 6.150% notes payable that were due in December 2015.

Debt and Equity Securities

NNN has used, and expects to use in the future, issuances of debt and equity securities primarily to pay down its outstanding indebtedness and to finance investment acquisitions. In February 2015, NNN filed a shelf registration statement with the Securities and Exchange Commission (the “Commission”) which was automatically effective and permits the issuance by NNN of an indeterminate amount of debt and equity securities.

A description of NNN’s outstanding series of publicly held notes is found under “Debt – Notes Payable” above.

NNN completed the following underwritten public offerings of cumulative redeemable preferred stock that are still outstanding ("Preferred Stock Shares") (dollars in thousands, except per share data):



Series	Dividend Rate⁽¹⁾		Issued	Depositary Shares Outstanding⁽²⁾	Gross Proceeds		Stock Issuance Costs⁽³⁾		Dividend Per Depositary Share		Earliest Redemption Date⁽⁴⁾
Series D⁽⁵⁾	6.625	%	February 2012	11,500,000	$	287,500	$	9,855	$	1.656250	February 2017
Series E⁽⁶⁾	5.700	%	May 2013	11,500,000	287,500		9,856		1.425000		May 2018


⁽¹⁾	Holders are entitled to receive, when and as authorized by the Board of Directors, cumulative preferential cash dividends.


⁽²⁾	Representing 1/100th of a preferred share. Each issuance included 1,500,000 depositary shares in connection with the underwriters' over-allotment.


⁽³⁾	Consisting primarily of underwriting commissions and fees, rating agency fees, legal and accounting fees and printing expenses.


⁽⁴⁾	NNN may redeem the preferred stock underlying the depositary shares at a redemption price of $2,500.00 per share (or $25.00 per depositary share), plus all accumulated and unpaid dividends.


⁽⁵⁾	NNN used the net proceeds to redeem the 7.375% Series C Cumulative Redeemable Preferred Stock for an aggregate redemption price of $92,000, excluding accumulated dividends of $283. NNN used the remainder of the net proceeds for general corporate purposes, including repaying outstanding indebtedness under its Credit Facility.


⁽⁶⁾	NNN used the net proceeds from the offering for general corporate purposes and funding property acquisitions.

The Preferred Stock Shares underlying the depositary shares rank senior to NNN’s common stock with respect to dividend rights and rights upon liquidation, dissolution or winding up of NNN. The Preferred Stock Shares have no maturity date and will remain outstanding unless redeemed. In addition, upon a change of control, as defined in the articles supplementary fixing the rights and preferences of the Preferred Stock Shares, NNN may redeem the Preferred Stock Shares underlying the depositary shares at a redemption price of $2,500.00 per share (or $25.00 per depositary share), plus all accumulated and unpaid dividends, and in limited circumstances the holders of depositary shares may convert some or all of their Preferred Stock Shares into shares of NNN's common stock at conversion rates provided in the related articles supplementary. As of February 12, 2016, the Preferred Stock Shares were not redeemable or convertible.

Common Stock Issuances. In November 2014, NNN filed a prospectus supplement to the prospectus contained in its February 2012 shelf registration statement and issued 5,462,500 shares (including 712,500 shares in connection with the underwriters' over-allotment) of common stock at a price of $38.16 per share and received net proceeds of $199,961,000. In connection with this offering, NNN incurred stock issuance costs totaling approximately $8,488,000, consisting primarily of underwriters' fees and commissions, legal and accounting fees and printing expenses. The Company used the net proceeds from this offering to repay outstanding indebtedness under the Credit Facility, to fund property acquisitions and for general corporate purposes.

Dividend Reinvestment and Stock Purchase Plan. In February 2015, NNN filed a shelf registration statement with the Commission for its Dividend Reinvestment and Stock Purchase Plan (“DRIP”) which permits the issuance by NNN of 16,000,000 shares of common stock. The following outlines the common stock issuances pursuant to the DRIP for the year ended December 31 (dollars in thousands):



	2015		2014		2013
Shares of common stock	196,584		422,406		764,891
Net proceeds	$	7,182	$	14,817	$	25,407

The proceeds from the issuances were used to pay down outstanding indebtedness of NNN’s Credit Facility, fund future property acquisitions and for general corporate purposes.

At The Market Offerings. NNN has established an at-the-market equity program ("ATM") which allows NNN to sell shares of common stock from time to time. The following outlines NNN's ATM programs:



	2015 ATM	2013 ATM	2012 ATM
Established date	February 2015	March 2013	May 2012
Termination date	February 2018	February 2015	February 2015
Total allowable shares	10,000,000	9,000,000	9,000,000
Total shares issued as of December 31, 2015	8,359,533	6,252,812	8,958,840

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



	Year Ended December 31,
	2015				2014		2013
	2015 ATM		2013 ATM		2013 ATM		2013 ATM		2012 ATM
Shares of common stock	8,359,533		214,000		3,758,362		2,280,450		4,676,542
Average price per share (net)	$	37.39	$	39.84	$	35.90	$	37.80	$	32.60
Net proceeds	$	312,542	$	8,525	$	134,919	$	86,208	$	152,435
Stock issuance costs⁽¹⁾	$	3,886	$	130	$	2,195	$	1,613	$	2,161

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

There were no common stock issuances pursuant to the 2012 ATM for the years ended December 31, 2015 and 2014.

Commercial Mortgage Residual Interests

NNN holds the commercial mortgage residual interests ("Residuals") from seven securitizations. Each of the Residuals is recorded at fair value. Unrealized gains and losses are reported as other comprehensive income in stockholders’ equity and other than temporary losses as a result of a change in the timing or amount of estimated cash flows are recorded as an other than temporary valuation impairment.

The following table summarizes the recognition of unrealized gains and/or losses recorded as other comprehensive income as well as other than temporary valuation impairment as of December 31 (dollars in thousands):



	2015			2014		2013
Unrealized gains (losses)	$	(585	)	$	875	$	511
Other than temporary valuation impairment	531			256		1,185

Based on the expected timing of future cash flows relating to the Residuals certain valuation assumptions are made. During the years ended December 31, 2015, 2014 and 2013, NNN recorded an other than temporary valuation adjustment as a reduction of earnings from operations. The following table summarizes the key assumptions used in determining the value of the Residuals as of December 31:



	2015		2014
Discount rate	20	%	20	%
Average life equivalent CPR⁽¹⁾ speeds range	0.87% to 21.73% CPR		0.87% to 26.30% CPR
Foreclosures:
Frequency curve default model	0.72% - 1.57% range		0.70% - 2.45% range
Loss severity of loans in foreclosure	20	%	20	%
Yield:
LIBOR	Forward 3-month curve		Forward 3-month curve
Prime	Forward curve		Forward curve


⁽¹⁾	Conditional prepayment rate

Item7A.Quantitative and Qualitative Disclosures About Market Risk

NNN is exposed to interest rate risk primarily as a result of its variable rate Credit Facility and its fixed rate debt which is used to finance NNN’s development and acquisition activities, 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 lower its overall borrowing costs. To achieve its objectives, NNN borrows at both fixed and variable rates on its long-term debt. As of December 31, 2015, NNN had no outstanding derivatives.

The information in the table below summarizes NNN’s market risks associated with its debt obligations outstanding as of December 31, 2015 and 2014. The table presents principal payments and related interest rates by year for debt obligations outstanding as of December 31, 2015. NNN has a variable interest rate risk on its Credit Facility which had no outstanding balance as of December 31, 2015. The weighted average rate for the Credit Facility for the year ended December 31, 2015, was 1.1%. The outstanding balance of the Credit Facility as of December 31, 2015 and 2014 was $0. The table incorporates only those debt obligations that existed as of December 31, 2015, and it does not consider those debt obligations or positions which could arise after this date. Moreover, because firm commitments are not presented in the table below, the information presented therein 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 year ended December 31, 2015.



Debt Obligations (dollars in thousands)
	Fixed Rate Debt
	Mortgages⁽¹⁾			Unsecured Debt⁽²⁾
	Debt Obligation		Weighted Average Interest Rate	Debt Obligation		Effective Interest Rate
2016	$	7,344	5.84%	$	—	—
2017	3,362		6.20%	249,796		6.92%
2018	623		5.23%	—		—
2019	653		5.23%	—		—
2020	681		5.23%	—		—
Thereafter	11,434		5.23%	1,715,262		4.16%	⁽³⁾
Total	$	24,097	5.40%	$	1,965,058	4.51%
Fair Value:
December 31, 2015	$	24,097		$	2,007,242
December 31, 2014	$	26,339		$	1,813,439


⁽¹⁾	NNN's mortgages payable include unamortized premiums and exclude debt costs.


⁽²⁾	Includes NNN’s notes payable net of unamortized discounts and exclude debt costs. NNN uses market prices quoted from Bloomberg, a third party, which is a Level 1 input, to determine the fair value.


⁽³⁾	Weighted average effective interest rate for periods after 2020.

NNN is also exposed to market risks related to NNN’s Residuals. Factors that may impact the market value of the Residuals include delinquencies, loan losses, prepayment speeds and interest rates. The Residuals, which are reported at market value, had a carrying value of $11,115,000 and $11,626,000 as of December 31, 2015 and 2014, respectively. Unrealized gains and losses are reported as other comprehensive income in stockholders’ equity. Losses are considered other than temporary and reported as a valuation impairment in earnings from operations if and when there has been a change in the timing or amount of estimated cash flows that leads to a loss in value.

Item 8. Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of National Retail Properties, Inc. and Subsidiaries

We have audited National Retail Properties, Inc. and Subsidiaries’ internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). National Retail Properties, Inc. and Subsidiaries’ management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, National Retail Properties, Inc. and Subsidiaries maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of National Retail Properties, Inc. and Subsidiaries as of December 31, 2015 and 2014, and the related consolidated statements of income and comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2015 and our report dated February 12, 2016 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Certified Public Accountants

Orlando, Florida

February 12, 2016

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of National Retail Properties, Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheets of National Retail Properties, Inc. and Subsidiaries as of December 31, 2015 and 2014, and the related consolidated statements of income and comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2015. Our audits also included the financial statement schedules listed in the Index at Item 15(a). These financial statements and schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of National Retail Properties, Inc. and Subsidiaries at December 31, 2015 and 2014, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2015, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedules, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), National Retail Properties, Inc.’s internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 12, 2016 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Certified Public Accountants

Orlando, Florida

February 12, 2016

NATIONAL RETAIL PROPERTIES, INC.

and SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per share data)



ASSETS	December 31, 2015			December 31, 2014
Real estate portfolio:
Accounted for using the operating method, net of accumulated depreciation and amortization	$	5,256,274		$	4,685,001
Accounted for using the direct financing method	14,518			16,974
Real estate held for sale	32,666			38,074
Mortgages, notes and accrued interest receivable, net of allowance of $5 at December 31, 2015	8,688			11,075
Commercial mortgage residual interests	11,115			11,626
Cash and cash equivalents	14,260			10,604
Receivables, net of allowance of $566 and $1,784, respectively	3,344			3,013
Accrued rental income, net of allowance of $3,078 and $3,086, respectively	25,529			25,659
Debt costs, net of accumulated amortization of $9,877 and $8,514, respectively	4,003			5,290
Other assets	89,647			108,235
Total assets	$	5,460,044		$	4,915,551
LIABILITIES AND EQUITY
Liabilities:
Mortgages payable, including unamortized premium and net of unamortized debt costs	$	23,964		$	26,182
Notes payable, net of unamortized discount and unamortized debt costs	1,951,980			1,703,709
Accrued interest payable	20,113			17,396
Other liabilities	121,594			85,172
Total liabilities	2,117,651			1,832,459
Commitments and contingencies (Note 20)
Equity:
Stockholders’ equity:
Preferred stock, $0.01 par value. Authorized 15,000,000 shares
6.625% Series D, 115,000 shares issued and outstanding, at stated liquidation value of $2,500 per share	287,500			287,500
5.700% Series E, 115,000 shares issued and outstanding, at stated liquidation value of $2,500 per share	287,500			287,500
Common stock, $0.01 par value. Authorized 375,000,000 shares; 141,007,725 and 132,010,104 shares issued and outstanding, respectively	1,412			1,322
Capital in excess of par value	3,049,198			2,711,678
Retained earnings (loss)	(263,124		)	(196,827		)
Accumulated other comprehensive income (loss)	(20,352		)	(8,658		)
Total stockholders’ equity of NNN	3,342,134			3,082,515
Noncontrolling interests	259			577
Total equity	3,342,393			3,083,092
Total liabilities and equity	$	5,460,044		$	4,915,551

See accompanying notes to consolidated financial statements.

NATIONAL RETAIL PROPERTIES, INC.

and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(dollars in thousands, except per share data)



	Year Ended December 31,
	2015			2014			2013
Revenues:
Rental income from operating leases	$	462,346		$	414,043		$	372,913
Earned income from direct financing leases	1,506			1,725			1,955
Percentage rent	1,430			1,074			1,556
Real estate expense reimbursement from tenants	14,868			13,875			13,340
Interest and other income from real estate transactions	986			2,296			1,471
Interest income on commercial mortgage residual interests	1,778			1,834			2,290
	482,914			434,847			393,525
Operating expenses:
General and administrative	34,736			32,518			31,095
Real estate	19,774			18,905			18,497
Depreciation and amortization	134,798			116,162			99,274
Impairment – commercial mortgage residual interests valuation	531			256			1,185
Impairment losses and other charges, net of recoveries	4,420			760			3,580
	194,259			168,601			153,631
Earnings from operations	288,655			266,246			239,894
Other expenses (revenues):
Interest and other income	(109		)	(357		)	(1,493		)
Interest expense	90,008			85,510			85,822
Real estate acquisition costs	927			1,391			1,485
	90,826			86,544			85,814
Earnings from continuing operations before income tax benefit (expense)	197,829			179,702			154,080
Income tax benefit (expense)	(10,318		)	75			(74		)
Earnings from continuing operations	187,511			179,777			154,006
Earnings from discontinued operations, net of income tax expense	—			124			5,972
Earnings before gain on disposition of real estate, net of income tax expense	187,511			179,901			159,978
Gain on disposition of real estate, net of income tax expense	10,450			11,269			107
Earnings including noncontrolling interests	197,961			191,170			160,085
Loss (earnings) attributable to noncontrolling interests:
Continuing operations	(125		)	(569		)	223
Discontinued operations	—			—			(163		)
	(125		)	(569		)	60
Net earnings attributable to NNN	$	197,836		$	190,601		$	160,145

See accompanying notes to consolidated financial statements.

NATIONAL RETAIL PROPERTIES, INC.

and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(dollars in thousands, except per share data)



	Year Ended December 31,
	2015			2014			2013

Net earnings attributable to NNN	$	197,836		$	190,601		$	160,145
Series D preferred stock dividends	(19,047		)	(19,047		)	(19,047		)
Series E preferred stock dividends	(16,387		)	(16,387		)	(8,876		)
Net earnings attributable to common stockholders	$	162,402		$	155,167		$	132,222
Net earnings per share of common stock:
Basic:
Continuing operations	$	1.21		$	1.24		$	1.06
Discontinued operations	—			—			0.05
Net earnings	$	1.21		$	1.24		$	1.11
Diluted:
Continuing operations	$	1.20		$	1.24		$	1.05
Discontinued operations	—			—			0.05
Net earnings	$	1.20		$	1.24		$	1.10
Weighted average number of common shares outstanding:
Basic	133,998,674			124,257,558			118,204,148
Diluted	134,489,416			124,710,226			119,864,824
Other comprehensive income:
Net earnings attributable to NNN	$	197,836		$	190,601		$	160,145
Amortization of interest rate hedges	1,902			1,129			438
Fair value forward starting swaps	(13,369		)	(6,312		)	(3,141		)
Net gain (loss) – commercial mortgage residual interests	(339		)	1,038			(438		)
Net gain (loss) – available-for-sale securities	112			(8		)	69
Reclassification of noncontrolling interests	—			—			949
Comprehensive income attributable to NNN	$	186,142		$	186,448		$	158,022

See accompanying notes to consolidated financial statements.

NATIONAL RETAIL PROPERTIES, INC.

and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

Years Ended December 31, 2015, 2014 and 2013

(dollars in thousands, except per share data)



	Series D Preferred Stock		Series E Preferred Stock		Common Stock		Capital in Excess of Par Value			Retained Earnings (Loss)			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity			Noncontrolling Interests			Total Equity
Balances at December 31, 2012	$	287,500	$	—	$	1,117	$	2,101,002		$	(90,952	)	$	(2,382	)	$	2,296,285		$	1,300		$	2,297,585
Net earnings	—		—		—		—			160,145			—			160,145			(60		)	160,085
Dividends declared and paid:
$1.65625 per depositary share of Series D preferred stock	—		—		—		—			(19,047		)	—			(19,047		)	—			(19,047		)
$0.77188 per depositary share of Series E preferred stock	—		—		—		—			(8,876		)	—			(8,876		)	—			(8,876		)
$1.60 per share of common stock	—		—		4		14,941			(189,107		)	—			(174,162		)	—			(174,162		)
Issuance of 11,500,000 depositary shares of Series E Preferred Stock	—		287,500		—		(9,856		)	—			—			277,644			—			277,644
Issuance of common stock:
29,013 shares	—		—		—		744			—			—			744			—			744
322,084 shares – stock purchase program	—		—		3		10,458			—			—			10,461			—			10,461
6,956,992 shares – ATM equity program	—		—		70		242,348			—			—			242,418			—			242,418
2,407,911 shares – conversion of 2028 Notes	—		—		24		85,200			—			—			85,224			—			85,224
Issuance of 290,181 shares of restricted common stock	—		—		3		(213		)	—			—			(210		)	—			(210		)
Equity component of convertible debt	—		—		—		(93,450		)	—			—			(93,450		)	—			(93,450		)
Stock issuance costs	—		—		—		(3,774		)	—			—			(3,774		)	—			(3,774		)
Amortization of deferred compensation	—		—		—		6,715			—			—			6,715			—			6,715
Amortization of interest rate hedges	—		—		—		—			—			438			438			—			438
Fair value forward starting swaps	—		—		—		—			—			(3,141		)	(3,141		)	—			(3,141		)
Unrealized loss – commercial mortgage residual interests	—		—		—		—			—			(438		)	(438		)	—			(438		)
Valuation adjustments – available-for-sale securities	—		—		—		—			—			69			69			—			69
Noncontrolling interests	—		—		—		(949		)	—			949			—			—			—
Balances at December 31, 2013	$	287,500	$	287,500	$	1,221	$	2,353,166		$	(147,837	)	$	(4,505	)	$	2,777,045		$	1,240		$	2,778,285

See accompanying notes to consolidated financial statements.

NATIONAL RETAIL PROPERTIES, INC.

and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

Years Ended December 31, 2015, 2014 and 2013

(dollars in thousands, except per share data)



	Series D Preferred Stock		Series E Preferred Stock		Common Stock		Capital in Excess of Par Value			Retained Earnings (Loss)			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity			Noncontrolling Interests			Total Equity
Balances at December 31, 2013	$	287,500	$	287,500	$	1,221	$	2,353,166		$	(147,837	)	$	(4,505	)	$	2,777,045		$	1,240		$	2,778,285
Net earnings	—		—		—		—			190,601			—			190,601			569			191,170
Dividends declared and paid:
$1.65625 per depositary share of Series D preferred stock	—		—		—		—			(19,047		)	—			(19,047		)	—			(19,047		)
$1.42500 per depositary share of Series E preferred stock	—		—		—		—			(16,387		)	—			(16,387		)	—			(16,387		)
$1.65 per share of common stock	—		—		3		11,443			(204,157		)	—			(192,711		)	—			(192,711		)
Issuance of common stock:
5,493,595 shares	—		—		55		209,185			—			—			209,240			—			209,240
100,161 shares – stock purchase program	—		—		1		3,370			—			—			3,371			—			3,371
3,758,362 shares – ATM equity program	—		—		38		137,077			—			—			137,115			—			137,115
Issuance of 360,080 shares of restricted common stock	—		—		4		(313		)	—			—			(309		)	—			(309		)
Stock issuance costs	—		—		—		(10,683		)	—			—			(10,683		)	—			(10,683		)
Amortization of deferred compensation	—		—		—		8,433			—			—			8,433			—			8,433
Amortization of interest rate hedges	—		—		—		—			—			1,129			1,129			—			1,129
Fair value forward starting swaps	—		—		—		—			—			(6,312		)	(6,312		)	—			(6,312		)
Unrealized gain – commercial mortgage residual interests	—		—		—		—			—			875			875			—			875
Realized gain – commercial mortgage residual interests	—		—		—		—			—			163			163			—			163
Valuation adjustments – available-for-sale securities	—		—		—		—			—			111			111			—			111
Realized gain – available-for-sale securities	—		—		—		—			—			(119		)	(119		)	—			(119		)
Distributions to noncontrolling interests	—		—		—		—			—			—			—			(1,232		)	(1,232		)
Balances at December 31, 2014	$	287,500	$	287,500	$	1,322	$	2,711,678		$	(196,827	)	$	(8,658	)	$	3,082,515		$	577		$	3,083,092

See accompanying notes to consolidated financial statements.

NATIONAL RETAIL PROPERTIES, INC.

and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

Years Ended December 31, 2015, 2014 and 2013

(dollars in thousands, except per share data)



	Series D Preferred Stock		Series E Preferred Stock		Common Stock		Capital in Excess of Par Value			Retained Earnings (Loss)			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity			Noncontrolling Interests			Total Equity
Balances at December 31, 2014	$	287,500	$	287,500	$	1,322	$	2,711,678		$	(196,827	)	$	(8,658	)	$	3,082,515		$	577		$	3,083,092
Net earnings	—		—		—		—			197,836			—			197,836			125			197,961
Dividends declared and paid:
$1.65625 per depositary share of Series D preferred stock	—		—		—		—			(19,047		)	—			(19,047		)	—			(19,047		)
$1.42500 per depositary share of Series E preferred stock	—		—		—		—			(16,387		)	—			(16,387		)	—			(16,387		)
$1.71 per share of common stock	—		—		2		6,886			(228,699		)	—			(221,811		)	—			(221,811		)
Issuance of common stock:
34,230 shares	—		—		—		991			—			—			991			—			991
12,065 shares – stock purchase program	—		—		—		455			—			—			455			—			455
8,573,533 shares – ATM equity program	—		—		86		324,998			—			—			325,084			—			325,084
Issuance of 209,284 shares of restricted common stock	—		—		2		(311		)	—			—			(309		)	—			(309		)
Stock issuance costs	—		—		—		(4,178		)	—			—			(4,178		)	—			(4,178		)
Amortization of deferred compensation	—		—		—		8,679			—			—			8,679			—			8,679
Amortization of interest rate hedges	—		—		—		—			—			1,902			1,902			—			1,902
Fair value forward starting swaps	—		—		—		—			—			(13,369		)	(13,369		)	—			(13,369		)
Unrealized loss – commercial mortgage residual interests	—		—		—		—			—			(585		)	(585		)	—			(585		)
Realized gain – commercial mortgage residual interests	—		—		—		—			—			246			246			—			246
Valuation adjustments – available-for-sale securities	—		—		—		—			—			112			112			—			112
Realized gain – available-for-sale securities	—		—		—		—			—			—			—			—			—
Contributions from noncontrolling interest	—		—		—		—			—			—			—			334			334
Distributions to noncontrolling interest	—		—		—		—			—			—			—			(362		)	(362		)
Sale of noncontrolling interest	—		—		—		—			—			—			—			(415		)	(415		)
Balances at December 31, 2015	$	287,500	$	287,500	$	1,412	$	3,049,198		$	(263,124	)	$	(20,352	)	$	3,342,134		$	259		$	3,342,393

See accompanying notes to consolidated financial statements.

NATIONAL RETAIL PROPERTIES, INC.

and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)



	Year Ended December 31,
	2015			2014			2013
Cash flows from operating activities:
Earnings including noncontrolling interests	$	197,961		$	191,170		$	160,085
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	134,798			116,165			99,617
Impairment losses and other charges	4,420			823			4,106
Impairment – commercial mortgage residual interests valuation	531			256			1,185
Amortization of notes payable discount	1,306			1,238			3,188
Amortization of debt costs	2,915			2,782			3,118
Amortization of mortgages payable premium	(207		)	(93		)	(57		)
Amortization of deferred interest rate hedges	1,902			1,129			438
Interest rate hedge payment	(13,369		)	(6,312		)	(3,141		)
Gain on disposition of real estate	(10,807		)	(11,742		)	(6,445		)
Deferred income taxes	10,488			58			800
Performance incentive plan expense	10,474			9,841			8,518
Performance incentive plan payment	(676		)	(2,808		)	(2,138		)
Change in operating assets and liabilities, net of assets acquired and liabilities assumed in business combinations:
Additions to held for sale real estate	—			—			(1,029		)
Decrease in real estate leased to others using the direct financing method	1,277			1,368			1,573
Decrease in mortgages, notes and accrued interest receivable	74			76			641
Decrease (increase) in receivables	(335		)	16			62
Decrease (increase) in accrued rental income	(368		)	(1,731		)	165
Decrease (increase) in other assets	4,996			(2,256		)	400
Increase (decrease) in accrued interest payable	2,717			254			(385		)
Increase (decrease) in other liabilities	(6,610		)	(4,746		)	3,841
Other	(392		)	1,245			(121		)
Net cash provided by operating activities	341,095			296,733			274,421
Cash flows from investing activities:
Proceeds from the disposition of real estate	38,502			58,853			60,626
Additions to real estate:
Accounted for using the operating method	(683,243		)	(602,780		)	(637,417		)
Increase in mortgages and notes receivable	—			(7,246		)	(3,857		)
Principal payments on mortgages and notes receivable	2,363			13,346			14,617
Other	(2,166		)	(3,731		)	(2,009		)
Net cash used in investing activities	(644,544		)	(541,558		)	(568,040		)

See accompanying notes to consolidated financial statements.

NATIONAL RETAIL PROPERTIES, INC.

and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)



	Year Ended December 31,
	2015			2014			2013
Cash flows from financing activities:
Proceeds from line of credit payable	$	1,262,400		$	678,500		$	601,800
Repayment of line of credit payable	(1,262,400		)	(724,900		)	(729,600		)
Repayment of mortgages payable	(2,035		)	(1,151		)	(1,070		)
Proceeds from notes payable	399,036			349,293			347,406
Repayment of notes payable	(150,000		)	(150,000		)	—
Repayment of notes payable – convertible	—			—			(246,797		)
Payment of debt costs	(3,654		)	(6,321		)	(3,265		)
Proceeds from issuance of common stock	332,117			360,072			267,613
Proceeds from issuance of Series E preferred stock	—			—			287,500
Payment of Series D Preferred Stock dividends	(19,047		)	(19,047		)	(19,047		)
Payment of Series E Preferred Stock dividends	(16,387		)	(16,387		)	(8,876		)
Stock issuance costs	(4,198		)	(10,726		)	(13,529		)
Payment of common stock dividends	(228,699		)	(204,157		)	(189,107		)
Noncontrolling interest contributions	334			—			—
Noncontrolling interest distributions	(362		)	(1,232		)	—
Net cash provided by financing activities	307,105			253,944			293,028
Net increase (decrease) in cash and cash equivalents	3,656			9,119			(591		)
Cash and cash equivalents at beginning of year	10,604			1,485			2,076
Cash and cash equivalents at end of year	$	14,260		$	10,604		$	1,485
Supplemental disclosure of cash flow information:
Interest paid, net of amount capitalized	$	83,758		$	81,829		$	80,930
Taxes paid	$	234		$	59		$	360
Supplemental disclosure of noncash investing and financing activities:
Issued 2,407,911 shares of common stock for conversion premium on 2028 Notes	$	—		$	—		$	85,224
Issued 285,263, 386,433 and 315,501 shares of restricted and unrestricted common stock in 2015, 2014 and 2013, respectively, pursuant to NNN’s performance incentive plan	$	8,990		$	10,884		$	8,800
Issued 16,010, 16,016 and 12,308 shares of common stock in 2015, 2014 and 2013, respectively, pursuant to NNN’s Deferred Director Fee Plan	$	287		$	263		$	162
Surrender of 241 shares of restricted common stock in 2013	$	—		$	—		$	7
Change in other comprehensive income	$	11,694		$	4,153		$	2,123
Change in lease classification (direct financing lease to operating lease)	$	1,179		$	—		$	1,156
Mortgages payable assumed in connection with real estate transactions	$	—		$	17,254		$	—
Mortgage receivable accepted in connection with real estate transactions	$	500		$	62		$	750
Note receivable accepted in connection with real estate transactions	$	—		$	70		$	—

See accompanying notes to consolidated financial statements.

NATIONAL RETAIL PROPERTIES, INC.

and SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2015, 2014 and 2013

Note 1 – Organization and Summary of Significant Accounting Policies:

Organization and Nature of Business – National Retail Properties, Inc., a Maryland corporation, is a fully integrated real estate investment trust ("REIT") formed in 1984. The term "NNN" or the "Company" refers to National Retail Properties, Inc. and all of its consolidated subsidiaries. NNN has elected to treat certain subsidiaries as taxable REIT subsidiaries. These taxable subsidiaries and their majority owned and controlled subsidiaries are collectively referred to as the "TRS."

NNN's assets include: real estate assets, mortgages and notes receivable, and commercial mortgage residual interests. NNN acquires, owns, invests in and develops properties that are leased primarily to retail tenants under long-term net leases and primarily held for investment ("Properties" or "Property Portfolio," or individually a "Property").



	December 31, 2015
Property Portfolio:
Total properties	2,257
Gross leasable area (square feet)	24,964,000
States	47
Weighted average remaining lease term (years)	11.4

NNN's operations are reported within one business segment in the financial statements and all properties are considered part of the Properties or Property Portfolio. As such, property counts and calculations involving property counts reflect all NNN properties.

Principles of Consolidation – NNN’s consolidated financial statements include the accounts of each of the respective majority owned and controlled affiliates, including transactions whereby NNN has been determined to be the primary beneficiary in accordance with the Financial Accounting Standards Board ("FASB") guidance included in Consolidation. All significant intercompany account balances and transactions have been eliminated. NNN applies the equity method of accounting to investments in partnerships and joint ventures that are not subject to control by NNN due to the significance of rights held by other parties.

NNN consolidates certain joint venture development entities based upon either NNN being the primary beneficiary of the respective variable interest entity or NNN having a controlling interest over the respective entity. NNN eliminates significant intercompany balances and transactions and records a noncontrolling interest for its other partners’ ownership percentage.

Real Estate Portfolio – NNN records the acquisition of real estate at cost, including acquisition and closing costs. The cost of properties developed by NNN includes direct and indirect costs of construction, property taxes, interest and other miscellaneous costs incurred during the development period until the project is substantially complete and available for occupancy. For the years ended December 31, 2015, 2014 and 2013, NNN recorded $2,383,000, $1,629,000 and $1,369,000, respectively, in capitalized interest during development.

Purchase Accounting for Acquisition of Real Estate Subject to a Lease – In accordance with the FASB guidance on business combinations, the fair value of the real estate acquired with in-place leases is allocated to the acquired tangible assets, consisting of land, building and tenant improvements, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases and the value of in-place leases, based in each case on their fair values. Acquisition and closing costs incurred on the acquisition of real estate with an in-place lease is expensed as incurred and recorded as real estate acquisition costs.

The fair value of the tangible assets of an acquired leased property is determined by valuing the property as if it were vacant, and the "as-if-vacant" value is then allocated to land, building and tenant improvements based on the determination of their fair values.

In allocating the fair value of the identified intangible assets and liabilities of an acquired property, above-market and below-market in-place lease values are recorded as other assets or liabilities based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases, and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured

over a period equal to the remaining term of the lease, including estimated probable renewal periods. The capitalized above-market lease values are amortized as a reduction of rental income over the remaining terms of the respective leases. The capitalized below-market lease values are amortized as an increase to rental income over the initial term unless the Company believes that it is likely that the tenant will renew the lease for an option term whereby the Company amortizes the value attributable to the renewal over the renewal period.

The aggregate value of other acquired intangible assets, consisting of in-place leases, is measured by the excess of (i) the purchase price paid for a property after adjusting existing in-place leases to market rental rates over (ii) the estimated fair value of the property as-if-vacant, determined as set forth above. The value of in-place leases exclusive of the value of above-market and below-market in-place leases is amortized to expense over the remaining non-cancelable periods of the respective leases. If a lease were to be terminated prior to its stated expiration, all unamortized amounts relating to that lease would be written off. The value of tenant relationships is reviewed on individual transactions to determine if future value was derived from the acquisition.

Intangible assets and liabilities consisted of the following as of December 31 (dollars in thousands):



	2015		2014
Intangible lease assets (included in Other assets):
Value of above market in-place leases, net	$	10,883	$	11,751
Value of in-place leases, net	61,359		65,770
Intangible lease liabilities (included in Other liabilities):
Value of below market in-place leases, net	25,767		29,162

NNN's real estate is generally leased to tenants on a net lease basis, whereby the tenant is responsible for all operating expenses relating to the Property, including property taxes, insurance, maintenance, repairs and capital expenditures. The leases are accounted for using either the operating or the direct financing method. Such methods are described below:

Operating method – Properties with leases accounted for using the operating method are recorded at the cost of the real estate. Revenue is recognized as rentals are earned and expenses (including depreciation) are charged to operations as incurred. Buildings are depreciated on the straight-line method over their estimated useful lives. Leasehold interests are amortized on the straight-line method over the terms of their respective leases. When scheduled rentals vary during the lease term, income is recognized on a straight-line basis so as to produce a constant periodic rent over the term of the lease. Accrued rental income is the aggregate difference between the scheduled rents which vary during the lease term and the income recognized on a straight-line basis.

Real Estate – Held For Sale – Real estate held for sale is not depreciated and is recorded at the lower of cost or fair value, less cost to sell.

Impairment – Real Estate – Based upon certain events or changes in circumstances, management periodically assesses its Properties for possible impairment whenever the carrying value of the asset, including accrued rental income, may not be recoverable through operations. Events or circumstances that may occur include significant changes in real estate market conditions and the ability of NNN to re-lease or sell properties that are currently vacant or become vacant in a reasonable period of time. Management evaluates whether an impairment in carrying value has occurred by comparing the estimated future cash flows (undiscounted and without interest charges), including the residual value of the real estate, with the carrying value of the individual asset. If an impairment is indicated, a loss will be recorded for the amount by which the carrying value of the asset exceeds its estimated fair value.

Real Estate Dispositions – When real estate is disposed of, the related cost, accumulated depreciation or amortization and any accrued rental income for operating leases and the net investment for direct financing leases are removed from the accounts, and gains and losses from the dispositions are reflected in income. Gains from the disposition of real estate are generally recognized using the full accrual method in accordance with the FASB guidance included in Real Estate Sales, provided that various criteria relating to the terms of the sale and any subsequent involvement by NNN with the real estate sold are met.

Valuation of Mortgages, Notes and Accrued Interest – The reserve allowance related to the mortgages, notes and accrued interest is NNN’s best estimate of the amount of probable credit losses. The reserve allowance is determined on an individual

note basis in reviewing any payment past due for over 90 days. Any outstanding amounts are written off against the reserve allowance when all possible means of collection have been exhausted.

Commercial Mortgage Residual Interests, at Fair Value – Commercial mortgage residual interests, classified as available for sale, are reported at their estimated market values with unrealized gains and losses reported as other comprehensive income in stockholders’ equity. NNN recognizes the excess of all cash flows attributable to the commercial mortgage residual interests estimated at the acquisition/transaction date over the initial investment (the accretable yield) as interest income over the life of the beneficial interest using the effective yield method. Losses are considered other than temporary valuation impairments if and when there has been a change in the timing or amount of estimated cash flows, exclusive of changes in interest rates, that leads to a loss in value.

Cash and Cash Equivalents – NNN considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents consist of cash and money market accounts. Cash equivalents are stated at cost plus accrued interest, which approximates fair value.

Cash accounts maintained on behalf of NNN in demand deposits at commercial banks and money market funds may exceed federally insured levels or may be held in accounts without any federal insurance or any other insurance or guarantee. However, NNN has not experienced any losses in such accounts.

Valuation of Receivables – NNN estimates the collectibility of its accounts receivable related to rents, expense reimbursements and other revenues. NNN analyzes accounts receivable and historical bad debt levels, tenant credit-worthiness and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. In addition, tenants in bankruptcy are analyzed and estimates are made in connection with the expected recovery of pre-petition and post-petition claims.

Debt Costs – In April 2015, the FASB issued Accounting Standards Update ("ASU") 2015-03, "Interest – Imputation of Interest (Subtopic 835-30)." To simplify presentation of debt issuance costs, the amendments in this update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. NNN has elected early adoption of ASU 2015-03.

As a result of the implementation of ASU 2015-03, on a retrospective basis, NNN reclassified debt costs on the Consolidated Balance Sheet for the year ended December 31, 2014, as follows (dollars in thousands):



Assets
Debt costs, net of accumulated amortization	$	(11,162	)
Liabilities
Mortgages payable	156
Notes payable	11,006

Debt Costs – Line of Credit Payable – Debt costs incurred in connection with NNN’s $650,000,000 line of credit have been deferred and are being amortized over the term of the loan commitment using the straight-line method, which approximates the effective interest method. In accordance with ASU 2015-15, “Presentation and Subsequent Measurement of Debt Issuance Costs Associated With Line-of-Credit Arrangements,” NNN has recorded debt costs associated with the line of credit as an asset, in Debt Costs on the Consolidated Balance Sheets.

Debt Costs – Mortgages Payable – Debt costs incurred in connection with NNN’s mortgages payable have been deferred and are being amortized over the term of the respective loan commitment using the straight-line method, which approximates the effective interest method and are recorded in Mortgages Payable on the Consolidated Balance Sheets. At December 31, 2015 and 2014, NNN had $226,000 and $226,000 of debt costs, net of accumulated amortization of $93,000 and $69,000, respectively.

Debt Costs – Notes Payable – Debt costs incurred in connection with the issuance of NNN’s notes payable have been deferred and are being amortized to interest expense over the term of the respective debt obligation using the effective interest method and are recorded in Notes Payable on the Consolidated Balance Sheets. At December 31, 2015 and 2014, NNN had $17,782,000 and $16,775,000 of debt costs, net of accumulated amortization of $4,704,000 and $5,769,000, respectively.

Revenue Recognition – Rental revenues for properties under construction commence upon completion of construction of the leased asset and delivery of the leased asset to the tenant. Rental revenues for non-development real estate assets are recognized when earned in accordance with the FASB guidance included in Leases, based on the terms of the lease of the leased asset.

Lease termination fees are recognized when the related leases are cancelled and NNN no longer has a continuing involvement with the former tenant with respect to that property.

Earnings Per Share – Earnings per share have been computed pursuant to the FASB guidance included in Earnings Per Share. The guidance requires classification of the Company’s unvested restricted share units which contain rights to receive nonforfeitable dividends, as participating securities requiring the two-class method of computing earnings per share. Under the two-class method, earnings per common share are computed by dividing the sum of distributed earnings to common stockholders and undistributed earnings allocated to common stockholders by the weighted average number of common shares outstanding for the period. In applying the two-class method, undistributed earnings are allocated to both common shares and participating securities based on the weighted average shares outstanding during the period. The following table is a reconciliation of the numerator and denominator used in the computation of basic and diluted earnings per common share using the two-class method for the years ended December 31 (dollars in thousands):



	2015			2014			2013
Basic and Diluted Earnings:
Net earnings attributable to NNN	$	197,836		$	190,601		$	160,145
Less: Series D preferred stock dividends	(19,047		)	(19,047		)	(19,047		)
Less: Series E preferred stock dividends	(16,387		)	(16,387		)	(8,876		)
Net earnings attributable to common stockholders	162,402			155,167			132,222
Less: Earnings attributable to unvested restricted shares	(706		)	(773		)	(718		)
Net earnings used in basic and diluted earnings per share	$	161,696		$	154,394		$	131,504

Basic and Diluted Weighted Average Shares Outstanding:
Weighted average number of shares outstanding	134,868,640			125,221,358			118,969,771
Less: Unvested restricted shares	(412,505		)	(467,968		)	(448,590		)
Less: Unvested contingent shares	(457,461		)	(495,832		)	(317,033		)
Weighted average number of shares outstanding used in basic earnings per share	133,998,674			124,257,558			118,204,148
Effects of dilutive securities:
Convertible debt	—			—			1,468,559
Other	490,742			452,668			192,117
Weighted average number of shares outstanding used in diluted earnings per share	134,489,416			124,710,226			119,864,824

Income Taxes – NNN has made an election to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code"), and related regulations. NNN generally will not be subject to federal income taxes on amounts distributed to stockholders, providing it distributes 100 percent of its REIT taxable income and meets certain other requirements for qualifying as a REIT. For each of the years in the three-year period ended December 31, 2015, NNN believes it has qualified as a REIT. Notwithstanding NNN’s qualification for taxation as a REIT, NNN is subject to certain state taxes on its income and real estate.

NNN and its taxable REIT subsidiaries have made timely TRS elections pursuant to the provisions of the REIT Modernization Act. A taxable REIT subsidiary is able to engage in activities resulting in income that previously would have been disqualified from being eligible REIT income under the federal income tax regulations. As a result, certain activities of NNN which occur within its TRS entities are subject to federal and state income taxes (See Note 13). All provisions for federal income taxes in the accompanying consolidated financial statements are attributable to NNN’s taxable REIT subsidiaries and to the Orange Avenue Mortgage Investments, Inc. ("OAMI"), a majority owned and controlled subsidiary, built-in-gain tax liability.

Income taxes are accounted for under the asset and liability method as required by the FASB guidance included in Income Taxes. Deferred tax assets and liabilities are recognized for the temporary differences based on estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using

enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Fair Value Measurement – NNN’s estimates of fair value of financial and non-financial assets and liabilities are based on the framework established in the fair value accounting guidance. The framework specifies a hierarchy of valuation inputs which was established to increase consistency, clarity and comparability in fair value measurements and related disclosures. The guidance describes a fair value hierarchy based upon three levels of inputs that may be used to measure fair value, two of which are considered observable and one that is considered unobservable. The following describes the three levels:


•	Level 1 – Valuation is based upon quoted prices in active markets for identical assets or liabilities.


•	Level 2 – Valuation is based upon inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.


•	Level 3 – Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include option pricing models, discounted cash flow models and similar techniques.

Accumulated Other Comprehensive Income (Loss) – The following table outlines the changes in accumulated other comprehensive income (dollars in thousands):



	Gain or Loss on Cash Flow Hedges ⁽¹⁾				Gains and Losses on Commercial Mortgage Residual Interests ⁽²⁾					Gains and Losses on Available-for-Sale Securities					Total
Beginning balance, December 31, 2013	$	(8,396	)		$	3,755				$	136				$	(4,505	)

Other comprehensive income (loss)	(6,312		)		875					111					(5,326		)
Reclassifications from accumulated other comprehensive income to net earnings	1,129			⁽³⁾	163			⁽⁴	⁾	(119		)	⁽⁵	⁾	1,173
Net current period other comprehensive income (loss)	(5,183		)		1,038					(8		)			(4,153		)
Ending balance, December 31, 2014	(13,579		)		4,793					128					(8,658		)

Other comprehensive income (loss)	(13,369		)		(585		)			112					(13,842		)
Reclassifications from accumulated other comprehensive income to net earnings	1,902			⁽³⁾	246			⁽⁴	⁾	—					2,148
Net current period other comprehensive income (loss)	(11,467		)		(339		)			112					(11,694		)
Ending balance, December 31, 2015	$	(25,046	)		$	4,454				$	240				$	(20,352	)

⁽¹⁾Additional disclosure is included in Note 13 – Derivatives.

⁽²⁾Additional disclosure is included in Note 18 – Fair Value Measurements.

⁽³⁾Reclassifications out of other comprehensive income are recorded in Interest Expense on the Consolidated Statements of Income and Comprehensive Income. There is no income tax expense (benefit) resulting from this reclassification.

⁽⁴⁾ Reclassifications out of other comprehensive income are recorded in Impairment on the Consolidated Statements of Income and Comprehensive Income. There is no income tax expense (benefit) resulting from this reclassification.

⁽⁵⁾ Reclassifications out of other comprehensive income are recorded in Other Income on the Consolidated Statements of Comprehensive Income. There is no income tax expense (benefit) resulting from this reclassification.

New Accounting Pronouncements – In April 2014, the FASB issued ASU 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposal of Components of an Entity.” NNN elected to adopt ASU 2014-08 effective January 1, 2014. Under ASU 2014-08, only disposals representing a strategic shift in operations are to be presented as discontinued operations. This requires the Company to continue to classify any Property disposal or Property classified as held for sale as of December 31, 2013 as discontinued operations prospectively. Therefore, the revenues and expenses related to these properties are presented as discontinued

operations as of December 31, 2014. The Company has not classified any additional properties as discontinued operations subsequent to December 31, 2013.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The core principle of ASU 2014-09, is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Certain contracts are excluded from ASU 2014-09, including lease contracts within the scope of the FASB guidance included in Leases. NNN is currently evaluating the potential impact, if any, the adoption of ASU 2014-09 will have on its financial position and results of operations.

In June 2014, the FASB issued ASU 2014-12, "Compensation – Stock Compensation (Topic 718)," effective for annual periods and interim periods within those periods beginning after December 15, 2015. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period should be treated as a performance condition. The adoption of ASU 2014-12 will not have a significant impact on NNN’s financial position or results of operations.

In August 2014, the FASB issued ASU 2014-15, "Presentation of Financial Statements – Going Concern (Subtopic 205-40), effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The amendments in this update provide guidance in GAAP about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. NNN is currently evaluating the potential impact, if any, the adoption of ASU 2014-15 will have on footnote disclosures.

In November 2014, the FASB issued ASU 2014-16, "Derivatives and Hedging (Topic 815)." Entities commonly raise capital by issuing different classes of shares, including preferred stock, that entitle the holders to certain preferences and rights over the other shareholders. The specific terms of those shares may include conversion rights, redemption rights, voting rights, and liquidation and dividend payment preferences, among other features. One or more of those features may meet the definition of a derivative under GAAP. Shares that include such embedded derivative features are referred to as hybrid financial instruments. The objective of this update is to eliminate the use of different methods in practice and thereby reduce existing diversity under GAAP in the accounting for hybrid financial instruments issued in the form of a share. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The adoption of ASU 2014-16 will not have a significant impact on NNN’s financial position or results of operations.

In January 2015, the FASB issued ASU 2015-01, "Income Statement – Extraordinary and Unusual Items (Subtopic 225-20)," effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. This update eliminates from GAAP the concept of extraordinary items. The adoption of ASU 2014-16 will not have a significant impact on NNN’s financial position or results of operations.

In February 2015, the FASB issued ASU 2015-02, "Consolidation (Topic 810)," effective for fiscal years, and for interim periods within those years, beginning after December 15, 2015. The amendments in this update affect reporting entities that are required to evaluate whether they should consolidate certain legal entities. All legal entities are subject to reevaluation under the revised consolidation model. The adoption of ASU 2015-02 will not have an impact on NNN's financial position and results of operations.

In September 2015, the FASB issued ASU 2015-16, “Business Combinations (Topic 805) - Simplifying the Accounting for Measurement-Period Adjustments,” effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The amendments in this update require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments in this update require that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The amendments require an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The adoption of ASU 2014-16 will not have a significant impact on NNN’s financial position or results of operations.

Use of Estimates – Additional critical accounting policies of NNN include management’s estimates and assumptions relating to the reporting of assets and liabilities, revenues and expenses and the disclosure of contingent assets and liabilities to prepare the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. Additional critical accounting policies include management’s estimates of the useful lives used in calculating depreciation

expense relating to real estate assets, purchase price allocation, the recoverability of the carrying value of long-lived assets, including the commercial mortgage residual interests, the recoverability of the deferred income taxes, and the collectibility of receivables from tenants, including accrued rental income. Actual results could differ from those estimates.

Reclassification – Certain items in the prior year’s consolidated financial statements and notes to consolidated financial statements have been reclassified to conform to the 2015 presentation.

Note 2 – Real Estate:

Real Estate – Portfolio

Leases – The following outlines key information for NNN’s leases at December 31, 2015:



Lease classification:
Operating	2,294
Direct financing	10
Building portion – direct financing/land portion – operating	2
Weighted average remaining lease term (years)	11.4

The leases generally provide for limited increases in rent as a result of fixed increases, increases in the consumer price index, and/or increases in the tenant’s sales volume. Generally, the tenant is also required to pay all property taxes and assessments, substantially maintain the Property and carry property and liability insurance coverage. Certain of the Properties are subject to leases under which NNN retains responsibility for specific costs and expenses of the Property. Generally, the leases provide the tenant with one or more multi-year renewal options, subject to generally the same terms and conditions of the base term of the lease, including rent increases.

Real Estate Portfolio – Accounted for Using the Operating Method – Real estate subject to operating leases consisted of the following as of December 31 (dollars in thousands):



	2015			2014
Land and improvements	$	1,922,579		$	1,776,222
Buildings and improvements	3,891,239			3,386,810
Leasehold interests	1,290			1,290
	5,815,108			5,164,322
Less accumulated depreciation and amortization	(620,188		)	(508,229		)
	5,194,920			4,656,093
Work in progress	61,354			28,908
	$	5,256,274		$	4,685,001

Some leases provide for scheduled rent increases throughout the lease term. Such amounts are recognized on a straight-line basis over the terms of the leases. For the years ended December 31, 2015, 2014 and 2013, NNN recognized collectively in continuing and discontinued operations, $153,000, $1,521,000 and ($338,000), respectively, of such income, net of reserves. At December 31, 2015 and 2014, the balance of accrued rental income, net of allowances of $3,078,000 and $3,086,000, respectively, was $25,529,000 and $25,659,000, respectively.

The following is a schedule of future minimum lease payments to be received on noncancellable operating leases at December 31, 2015 (dollars in thousands):



2016	$	478,512
2017	469,698
2018	445,099
2019	426,224
2020	408,372
Thereafter	3,267,955
	$	5,495,860

Since lease renewal periods are exercisable at the option of the tenant, the above table only presents future minimum lease payments due during the current lease terms. In addition, this table does not include amounts for potential variable rent increases that are based on the CPI or future contingent rents which may be received on the leases based on a percentage of the tenant’s gross sales.

Real Estate Portfolio – Accounted for Using the Direct Financing Method – The following lists the components of net investment in direct financing leases at December 31 (dollars in thousands):



	2015			2014
Minimum lease payments to be received	$	13,900		$	17,376
Estimated unguaranteed residual values	7,589			8,274
Less unearned income	(6,971		)	(8,676		)
Net investment in direct financing leases	$	14,518		$	16,974

The following is a schedule of future minimum lease payments to be received on direct financing leases held for investment at December 31, 2015 (dollars in thousands):



2016	$	2,700
2017	1,862
2018	1,834
2019	1,512
2020	1,043
Thereafter	4,949
	$	13,900

The above table does not include future minimum lease payments for renewal periods, potential variable CPI rent increases or contingent rental payments that may become due in future periods (see Real Estate Portfolio – Accounted for Using the Operating Method).

Real Estate – Held For Sale

On a quarterly basis, the Company evaluates its Properties for held for sale classification based on specific criteria as outlined in ASC 360, Property, Plant & Equipment, including management’s intent to commit to a plan to sell the asset. NNN anticipates the disposition of Properties classified as held for sale to occur within 12 months. As of December 31, 2015, NNN had six of its Properties categorized as held for sale. NNN's real estate held for sale at December 31, 2014, included 11 properties, five of which were sold in 2015. Real estate held for sale consisted of the following as of December 31 (dollars in thousands):



	2015			2014
Land and improvements	$	9,419		$	11,518
Building and improvements	27,881			32,525
	37,300			44,043
Less accumulated depreciation and amortization	(4,419		)	(4,947		)
Less impairment	(215		)	(1,022		)
	$	32,666		$	38,074

Real Estate – Dispositions

The following table summarizes the Properties sold and the corresponding gain recognized on the disposition of Properties for the years ended December 31 (dollars in thousands):



	2015					2014					2013
	# of Sold Properties	Gain				# of Sold Properties	Gain				# of Sold Properties	Gain
Gain on disposition of real estate	19	$	10,807		⁽¹⁾	25	$	11,587			—	$	173
Income tax expense		(357		)			(318		)			(66		)
		10,450					11,269					107
Gain on disposition of real estate included in discontinued operations	—	—				2	155			⁽¹⁾	35	6,272			⁽¹⁾
Income tax expense		—					—					(784		)
		$	10,450				$	11,424				$	5,595

⁽¹⁾ Amount includes the recognition of deferred gains on previously sold properties.

Real Estate – Commitments

NNN has committed to fund construction commitments on leased Properties. The improvements are estimated to be completed within 12 months. These construction commitments, at December 31, 2015, are outlined in the table below (dollars in thousands):



Number of properties	27
Total commitment⁽¹⁾	$	116,394
Amount funded	$	87,406
Remaining commitment	$	28,988


⁽¹⁾	Includes land, construction costs, tenant improvements and lease costs.

Real Estate – Impairments

Management periodically assesses its real estate for possible impairment whenever certain events or changes in circumstances indicate that the carrying amount of the asset, including accrued rental income, may not be recoverable through operations. Events or circumstances that may occur include significant changes in real estate market conditions and the ability of NNN to re-lease or sell properties that are vacant or become vacant in a reasonable period of time. Impairments are measured as the amount by which the current book value of the asset exceeds the estimated fair value of the asset. As a result of the Company’s review of long lived assets, including identifiable intangible assets, NNN recognized the following real estate impairments for the years ended December 31 (dollars in thousands):



	2015		2014		2013
Continuing operations	$	3,970	$	760	$	3,565
Discontinued operations	—		63		541
	$	3,970	$	823	$	4,106

The valuation of impaired assets is determined using widely accepted valuation techniques including discounted cash flow analysis, income capitalization, analysis of recent comparable sales transactions, actual sales negotiations and bona fide purchase offers received from third parties, which are Level 3 inputs. NNN may consider a single valuation technique or multiple valuation techniques, as appropriate, when estimating the fair value of its real estate.

Note 3 – Commercial Mortgage Residual Interests:

NNN holds the commercial mortgage residual interests (“Residuals”) from seven securitizations. Each of the Residuals is recorded at fair value. Unrealized gains and losses are reported as other comprehensive income in stockholders’ equity and other than temporary losses as a result of a change in the timing or amount of estimated cash flows are recorded as an other than temporary valuation impairment.



	2015			2014		2013
Unrealized gains (losses)	$	(585	)	$	875	$	511
Other than temporary valuation impairment	531			256		1,185



	2015		2014
Discount rate	20	%	20	%
Average life equivalent CPR⁽¹⁾ speeds range	0.87% to 21.73% CPR		0.87% to 26.30% CPR
Foreclosures:
Frequency curve default model	0.72% - 1.57% range		0.70% - 2.45% range
Loss severity of loans in foreclosure	20	%	20	%
Yield:
LIBOR	Forward 3-month curve		Forward 3-month curve
Prime	Forward curve		Forward curve


⁽¹⁾	Conditional prepayment rate

The following table shows the effects on the key assumptions affecting the fair value of the Residuals at December 31, 2015 (dollars in thousands):



	Residuals
Carrying amount of retained interests	$	11,115

Discount rate assumption:
Fair value at 25% discount rate	$	9,383
Fair value at 27% discount rate	$	8,777

Prepayment speed assumption:
Fair value of 1% increases above the CPR Index	$	11,114
Fair value of 2% increases above the CPR Index	$	11,113

Expected credit losses:
Fair value 2% adverse change	$	11,017
Fair value 3% adverse change	$	10,969

Yield Assumptions:
Fair value of Prime/LIBOR spread contracting 25 basis points	$	11,331
Fair value of Prime/LIBOR spread contracting 50 basis points	$	11,553

These sensitivities are hypothetical and should be used with caution. As the figures indicate, changes in fair value based on variations in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, in this table, the effect of a variation of a particular assumption on the fair value of the retained interest is calculated without changing any other assumptions; in reality, changes in one factor may result in changes in another, which might magnify or counteract the sensitivities.

Note 4 – Line of Credit Payable:

In October 2014, NNN amended and restated its credit agreement increasing the borrowing capacity under its unsecured revolving credit facility from $500,000,000 to $650,000,000 and amended certain other terms under the former revolving credit facility (as the context requires, the previous and new revolving credit facility, the “Credit Facility”). The Credit Facility had a weighted average outstanding balance of $78,682,000 and a weighted average interest rate of 1.1% for the year ended December 31, 2015. The Credit Facility matures January 2019, with an option to extend maturity to January 2020. As of December 31, 2015, the Credit Facility bears interest at LIBOR plus 92.5 basis points; however, such interest rate may change pursuant to a tiered interest rate structure based on NNN's debt rating. The Credit Facility also includes an accordion feature to increase the facility size up to $1,000,000,000. As of December 31, 2015, there was no outstanding balance and $650,000,000 was available for future borrowings under the Credit Facility.

In accordance with the terms of the Credit Facility, NNN is required to meet certain restrictive financial covenants which, among other things, require NNN to maintain certain (i) leverage ratios, (ii) debt service coverage, (iii) cash flow coverage and (iv) investment and dividend limitations. At December 31, 2015, NNN was in compliance with those covenants.

Note 5 – Mortgages Payable:

The following table outlines the mortgages payable included in NNN’s consolidated financial statements (dollars in thousands):



Entered⁽¹⁾	Initial Balance		Interest Rate	Maturity⁽²⁾	Carrying Value of Encumbered Asset(s)⁽³⁾		Outstanding Principal Balance at December 31,
Entered⁽¹⁾	Initial Balance		Interest Rate	Maturity⁽²⁾	Carrying Value of Encumbered Asset(s)⁽³⁾		2015			2014
December 2001	$	698	9.00%	April 2019	$	—	$	—		$	223
December 2001	485		9.00%	April 2019	—		—			116
February 2004	6,952		6.90%	January 2017	10,313		848			1,577
March 2005	1,015		8.14%	September 2016	—		—			222
June 2012⁽⁴⁾	6,850		5.75%	April 2016	8,341		5,890			6,180
September 2014⁽⁴⁾	2,957		6.40%	February 2017	3,691		2,804			2,922
November 2014⁽⁴⁾	15,151		5.23%	July 2023	21,889		14,555			15,099
					$	44,234	24,097			26,339

Debt costs							(226		)	(226		)
Accumulated amortization							93			69
Debt costs, net of accumulated amortization							(133		)	(157		)
Mortgages payable, including unamortized premium and net of unamortized debt costs							$	23,964		$	26,182


⁽¹⁾	Date entered represents the date that NNN acquired real estate subject to a mortgage securing a loan.


⁽²⁾	Monthly payments include interest and principal, if any; the balance is due at maturity.


⁽³⁾	Each loan is secured by a first mortgage lien on certain of the Properties. The carrying values of the assets at December 31, 2015.


⁽⁴⁾	Initial balance and outstanding principal balance includes unamortized premium.

The following is a schedule of the scheduled principal payments, including premium amortization of NNN’s mortgages payable at December 31, 2015 (dollars in thousands):



2016	$	7,344
2017	3,362
2018	623
2019	653
2020	681
Thereafter	11,434
	$	24,097

Note 6 – Notes Payable – Convertible:

On September 28, 2012, NNN announced that the market price condition on its 3.950% convertible senior notes due 2026 (the "2026 Notes") has been satisfied, and that the 2026 Notes would be convertible during the calendar quarter beginning October 1, 2012.

All note holders elected to exercise the conversion feature of the 2026 Notes prior to their redemption. Pursuant to the terms of the 2026 Notes, the Company elected to pay the full settlement value in cash. The settlement value of a note was based on an average of the daily closing price of the Company's common stock over an averaging period that commenced after the Company received a conversion notice from a note holder. The Company paid approximately $164,649,000 in aggregate settlement value for the $123,163,000 of settled 2026 Notes at the end of the applicable averaging periods. The difference between the amount paid and the principal amount of the settled 2026 Notes of $41,486,000 was recognized as a decrease to additional paid-in capital.

As of December 31, 2012, $15,537,000 of the principal amount of 2026 Notes were outstanding. In January 2013, the Company paid approximately $20,702,000 in aggregate settlement value for the remaining $15,537,000 of outstanding 2026 Notes. The difference between the amount paid and the principal amount of the settled 2026 Notes of $5,028,000 was recognized as a decrease to additional paid-in capital and $137,000 was recorded as interest expense.

As of December 31, 2012, $223,035,000 of the principal amount of the 5.125% convertible senior notes due 2028 (the "2028 Notes") were outstanding. In June 2013, NNN called all of the outstanding 2028 Notes for redemption on July 11, 2013. On July 11, 2013, $130,000 principal amount of the 2028 Notes was settled at par plus accrued interest. The holders of the remaining balance of $222,905,000 principal amount of 2028 Notes elected to convert into cash and shares of the Company's common stock in accordance with the conversion formula which is based on the average daily closing price of NNN's common stock price over a period of 20 days commencing after receipt of a note holder's conversion notice. In 2013, the Company issued 2,407,911 shares of common stock and paid approximately $226,427,000 in aggregate settlement value for the $223,035,000 aggregate principal amount of 2028 Notes outstanding. The difference between the amount paid and the principal amount of the settled notes of $3,197,000 was recognized as a decrease to additional paid-in capital and $195,000 was recorded as interest expense.

NNN recorded the following in interest expense relating to the 2028 Notes and the 2026 Notes for the year ended December 31 (dollars in thousands):



	2013
Noncash interest charges	$	2,072
Contractual interest expense	5,400
Amortization of debt costs	566
	$	8,038

There was no interest expense related to the 2028 Notes and the 2026 Notes for the years ended December 31, 2015 and 2014.

Note 7 – Notes Payable:

Each of NNN’s outstanding series of unsecured notes is summarized in the table below (dollars in thousands):



Notes	Issue Date	Principal	Discount⁽¹⁾	Net Price	Stated Rate	Effective Rate⁽²⁾	Maturity Date
2017⁽³⁾	September 2007	250,000	877	249,123	6.875%	6.924%	October 2017
2021⁽⁴⁾	July 2011	300,000	4,269	295,731	5.500%	5.689%	July 2021
2022	August 2012	325,000	4,989	320,011	3.800%	3.985%	October 2022
2023⁽⁵⁾	April 2013	350,000	2,594	347,406	3.300%	3.388%	April 2023
2024⁽⁶⁾	May 2014	350,000	707	349,293	3.900%	3.924%	June 2024
2025⁽⁷⁾	October 2015	400,000	964	399,036	4.000%	4.029%	November 2025


⁽¹⁾	The note discounts are amortized to interest expense over the respective term of each debt obligation using the effective interest method.


⁽²⁾	Includes the effects of the discount.

⁽³⁾


⁽⁴⁾	NNN entered into two interest rate hedges with a total notional amount of $150,000. Upon issuance of the 2021 Notes, NNN terminated the interest rate hedge agreements resulting in a liability of $5,300, of which $5,218 was deferred in other comprehensive income. The deferred liability is being amortized over the term of the note using the effective interest method.


⁽⁵⁾	NNN entered into four forward starting swaps with an aggregate notional amount of $240,000. Upon issuance of the 2023 Notes, NNN terminated the forward starting swaps resulting in a liability of $3,156, of which $3,141 was deferred in other comprehensive income. The deferred liability is being amortized over the term of the note using the effective interest method.


⁽⁶⁾	NNN entered into three forward starting swaps with an aggregate notional amount of $225,000. Upon issuance of the 2024 Notes, NNN terminated the forward starting swaps resulting in a liability of $6,312, which was deferred in other comprehensive income. The deferred liability is being amortized over the term of the note using the effective interest method.


⁽⁷⁾	NNN entered into four forward starting swaps with an aggregate notional amount of $300,000. Upon issuance of the 2025 Notes, NNN terminated the forward starting swaps resulting in a liability of $13,369, which was deferred in other comprehensive income. The deferred liability is being amortized over the term of the note using the effective interest method.

Each series of the notes represents senior, unsecured obligations of NNN and is subordinated to all secured indebtedness of NNN. Each of the notes is redeemable at the option of NNN, in whole or in part, at a redemption price equal to the sum of (i) the principal amount of the notes being redeemed plus accrued and unpaid interest thereon through the redemption date and (ii) the make-whole amount, if any, as defined in the applicable supplemental indenture relating to the notes.

In connection with the outstanding debt offerings, NNN incurred debt issuance costs totaling $17,782,000 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 are being amortized over the term of the respective notes using the effective interest method.

In June 2014, NNN repaid the $150,000,000 6.250% notes payable that were due in June 2014.

In December 2015, NNN repaid the $150,000,000 6.150% notes payable that were due in December 2015.

In accordance with the terms of the indenture, 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 December 31, 2015, NNN was in compliance with those covenants.

Note 8 – Preferred Stock:

NNN completed the following underwritten public offerings of cumulative redeemable preferred stock and are still outstanding ("Preferred Stock Shares") (dollars in thousands, except per share data):



Series	Dividend Rate⁽¹⁾		Issued	Depositary Shares Outstanding⁽²⁾	Gross Proceeds		Stock Issuance Costs⁽³⁾		Dividend Per Depositary Share		Earliest Redemption Date
Series D	6.625	%	February 2012	11,500,000	$	287,500	$	9,855	$	1.656250	February 2017
Series E	5.700	%	May 2013	11,500,000	287,500		9,856		1.425000		May 2018


⁽¹⁾	Holders are entitled to receive, when and as authorized by the Board of Directors, cumulative preferential cash dividends.


⁽²⁾	Representing 1/100th of a preferred share. Each issuance included 1,500,000 depositary shares in connection with the underwriters' over-allotment.


⁽³⁾	Consisting primarily of underwriting commissions and fees, rating agency fees, legal and accounting fees and printing expenses.

Note 9 – Common Stock:

In February 2015, NNN filed a shelf registration statement with the Commission which permits the issuance by NNN of an indeterminate amount of debt and equity securities.

Equity Offerings. In November 2014, NNN filed a prospectus supplement to the prospectus contained in its February 2012 shelf registration statement and issued 5,462,500 shares (including 712,500 shares in connection with the underwriters' over-allotment) of common stock at a price of $38.16 per share and received net proceeds of $199,961,000. In connection with this offering, NNN incurred stock issuance costs totaling approximately $8,488,000, consisting primarily of underwriters' fees and commissions, legal and accounting fees and printing expenses.

Dividend Reinvestment and Stock Purchase Plan. In February 2015, NNN filed a shelf registration statement with the Commission for its Dividend Reinvestment and Stock Purchase Plan ("DRIP") which permits the issuance by NNN of 16,000,000 shares of common stock. The following outlines the common stock issuances pursuant to the DRIP for the year ended December 31 (dollars in thousands):



	2015		2014		2013
Shares of common stock	196,584		422,406		764,891
Net proceeds	$	7,182	$	14,817	$	25,407

At The Market Offerings. NNN has established an at-the-market equity program ("ATM") which allows NNN to sell shares of common stock from time to time. The following outlines NNN's ATM programs:



	2015 ATM	2013 ATM	2012 ATM
Established date	February 2015	March 2013	May 2012
Termination date	February 2018	February 2015	February 2015
Total allowable shares	10,000,000	9,000,000	9,000,000
Total shares issued as of December 31, 2015	8,359,533	6,252,812	8,958,840

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



	Year Ended December 31,
	2015				2014		2013
	2015 ATM		2013 ATM		2013 ATM		2013 ATM		2012 ATM
Shares of common stock	8,359,533		214,000		3,758,362		2,280,450		4,676,542
Average price per share (net)	$	37.39	$	39.84	$	35.90	$	37.80	$	32.60
Net proceeds	$	312,542	$	8,525	$	134,919	$	86,208	$	152,435
Stock issuance costs⁽¹⁾	$	3,886	$	130	$	2,195	$	1,613	$	2,161

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

There were no common stock issuances pursuant to the 2012 ATM for the years ended December 31, 2015 and 2014.

Note 10 – Employee Benefit Plan:

Effective January 1, 1998, NNN adopted a defined contribution retirement plan (the “Retirement Plan”) covering substantially all of the employees of NNN. The Retirement Plan permits participants to defer a portion of their compensation, as defined in the Retirement Plan, subject to limits established by the Code. NNN generally matches 60 percent of the first eight percent of a participant’s contributions. Additionally, NNN may make discretionary contributions. NNN’s contributions to the Retirement Plan for the years ended December 31, 2015, 2014 and 2013 totaled $474,000, $453,000 and $342,000, respectively.

Note 11 – Dividends:

The following presents the characterization for tax purposes of common stock dividends per share paid to stockholders for the years ended December 31:



	2015		2014		2013
Ordinary dividends	$	1.363294	$	1.306992	$	1.224568
Qualified dividends	0.019005		0.006212		0.056784
Capital gain	0.007806		0.008603		—
Unrecaptured Section 1250 Gain	0.011055		0.015362		0.000650
Nontaxable distributions	0.308840		0.312831		0.317998
	$	1.710000	$	1.650000	$	1.600000

The following table outlines the dividends declared and paid for NNN's common stock for the years ended December 31 (in thousands, except per share data):



	2015		2014		2013
Dividends	$	228,699	$	204,157	$	189,107
Per share	1.710		1.650		1.600

On January 15, 2016, NNN declared a dividend of $0.435 per share, payable February 16, 2016 to its common stockholders of record as of January 29, 2016.

The following presents the characterization for tax purposes of Series D and E Preferred Stock dividends per share paid to stockholders for the year ended December 31:



	Series E						Series D
	2015		2014		2013		2015		2014		2013
Ordinary dividends	$	1.385670	$	1.393700	$	0.741150	$	1.610538	$	1.619870	$	1.590323
Qualified dividends	0.020141		0.005738		0.030332		0.023409		0.006670		0.065084
Capital gain	0.007937		0.009177		—		0.009225		0.010666		—
Unrecaptured Section 1250 Gain	0.011252		0.016385		0.000393		0.013078		0.019044		0.000843
	$	1.425000	$	1.425000	$	0.771875	$	1.656250	$	1.656250	$	1.656250

The following table outlines the dividends declared and paid for NNN's preferred stock for the years ended December 31 (in thousands, except per share data):



		2015		2014		2013
Series D Preferred Stock⁽¹⁾:
	Dividends	$	19,047	$	19,047	$	19,047
	Per share	1.656250		1.656250		1.656250

Series E Preferred Stock⁽²⁾:
	Dividends	16,387		16,387		8,876
	Per share	1.425000		1.425000		0.771875

⁽¹⁾The Series D Preferred Stock has no maturity date and will remain outstanding unless redeemed.

Note 12 – Income Taxes:

For income tax purposes, NNN has taxable REIT subsidiaries in which certain real estate activities are conducted.

NNN treats some depreciation expense and certain other items differently for tax than for financial reporting purposes. The principal differences between NNN’s effective tax rates for the years ended December 31, 2015, 2014 and 2013, and the statutory rates relate to state taxes and nondeductible expenses.

In 2010, NNN acquired the 21.1% non-controlling interest in its majority owned and controlled subsidiary, OAMI, pursuant to which OAMI became a wholly owned subsidiary of NNN. As of December 31, 2014, OAMI had no remaining tax liabilities relating to the built-in gain of its assets.

At the close of business on December 31, 2015, NNN elected to revoke its election to classify the TRS as taxable REIT subsidiaries. This TRS Revocation Election resulted in an additional tax expense of approximately $9,607,000 for 2015.

The significant components of the net deferred income tax asset consist of the following at December 31 (dollars in thousands):



	2015			2014
Deferred tax assets:
Cost basis	$	—		$	1,233
Deferred income	—			113
Reserves	—			2,756
Credits	—			434
Excess interest expense carryforward	—			1,689
Capital loss carryforward	880			914
Net operating loss carryforward	4,983			5,196
	5,863			12,335
Valuation allowance	(5,666		)	(619		)
Total deferred tax assets	197			11,716

Deferred tax liabilities:
Built-in gain	(197		)	—
Depreciation	—			(204		)
Other	—			(1,024		)
Total deferred tax liabilities	(197		)	(1,228		)

Net deferred tax asset	$	—		$	10,488

In assessing the ability to realize a deferred tax asset, management considers whether it is more likely than not that some portion or the entire deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. The net operating loss carryforwards were generated by NNN’s taxable REIT subsidiaries. The net operating loss carryforwards begin to expire in 2028. Due to the revocation of the TRS election management believes it is unlikely that NNN will realize all of the benefits of these deductible differences that existed as of December 31, 2015 and 2014.

The increase in the valuation allowance for the years ended December 31, 2015 and 2014 was $5,047,000 and $619,000, respectively. There was no valuation allowance as of December 31, 2013.

The income tax benefit (expense) consists of the following components for the years ended December 31, (as adjusted) (dollars in thousands):



	2015			2014			2013
Net earnings before income taxes	$	208,511		$	190,844		$	161,230
Provision for income tax benefit (expense):
Current:
Federal	(58		)	(190		)	(195		)
State and local	(129		)	5			(90		)
Deferred:
Federal	(8,935		)	(166		)	(790		)
State and local	(1,553		)	108			(10		)
Total expense for income taxes	(10,675		)	(243		)	(1,085		)
Net earnings attributable to NNN’s stockholders	$	197,836		$	190,601		$	160,145

The total income tax benefit (expense) differs from the amount computed by applying the statutory federal tax rate to net earnings before taxes as follows for the years ended December 31 (dollars in thousands):



	2015			2014			2013
Federal expense at statutory tax rate	$	(70,894	)	$	(64,887	)	$	(54,818	)
Nontaxable income of NNN	69,651			63,353			53,178
State taxes, net of federal benefit	(141		)	(196		)	(200		)
Amortization of built-in gain tax	—			372			761
Expiration of built-in gain tax	316			1,792			—
Other	—			(58		)	(6		)
Built-in gain tax liability ⁽¹⁾	(197		)	—			—
TRS Revocation Election ⁽¹⁾	(4,363		)	—			—
Valuation allowance increase ⁽¹⁾	(5,047		)	(619		)	—
Total tax expense	$	(10,675	)	$	(243	)	$	(1,085	)

⁽¹⁾ The change for the year ended December 31, 2015, is due to TRS Revocation Election.

In June 2006, the FASB issued additional guidance, which clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements included in Income Taxes. The interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

NNN, in accordance with FASB guidance included in Income Taxes, has analyzed its various federal and state filing positions. NNN believes that its income tax filing positions and deductions are well documented and supported. Additionally, NNN believes that its accruals for tax liabilities are adequate. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to the FASB guidance. In addition, NNN did not record a cumulative effect adjustment related to the adoption of the FASB guidance.

NNN has had no increases or decreases in unrecognized tax benefits for current or prior years since the date of adoption. Further, no interest or penalties have been included since no reserves were recorded and no significant increases or decreases are expected to occur within the next 12 months. When applicable, such interest and penalties will be recorded in non-operating expenses. The periods that remain open under federal statute are 2012 through 2015. NNN also files in many states with varying open years under statute.

Note 13 – Derivatives:

In accordance with the guidance on derivatives and hedging, NNN records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative and the resulting designation. Derivatives used to hedge the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives used to hedge the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges.

NNN’s objective in using derivatives is to add stability to interest expense and to manage its exposure to interest rate movements or other identified risks. To accomplish this objective, NNN primarily uses treasury locks, forward swaps and interest rate swaps as part of its cash flow hedging strategy. Treasury locks and forward starting swaps are used to hedge forecasted debt issuances. Treasury locks designated as cash flow hedges lock in the yield/price of a treasury security. Forward swaps also lock the associated swap spread. Interest rate swaps designated as cash flow hedges hedging the variable cash flows associated with floating rate debt involve the receipt of variable rate amounts in exchange for fixed-rate payments over the life of the agreements without exchange of the underlying principal amount.

For derivatives designated as cash flow hedges, the effective portion of changes in the fair value of the derivative is initially reported in other comprehensive income (outside of earnings) and subsequently reclassified to earnings when the hedged transaction affects earnings, and the ineffective portion of changes in the fair value of the derivative is recognized directly in earnings.

NNN discontinues hedge accounting prospectively when it is determined that the derivative is no longer effective in offsetting changes in the cash flows of the hedged item, the derivative expires or is sold, terminated, or exercised, the derivative is re-designated as a hedging instrument or management determines that designation of the derivative as a hedging instrument is no longer appropriate. When hedge accounting is discontinued, NNN continues to carry the derivative at its fair value on the balance sheet, and recognizes any changes in its fair value in earnings or may choose to cash settle the derivative at that time.

The following table outlines NNN's derivatives which were hedging the risk of changes in forecasted interest payments on forecasted issuance of long-term debt (dollars in thousands):



Terminated	Description	Aggregate Notional Amount		Liability Fair Value When Terminated		Fair Value Deferred In Other Comprehensive Income ⁽¹⁾
September 2007	Two interest rate hedges	$	100,000	$	3,260	$	3,228
June 2011	Two treasury locks	150,000		5,300		5,218
April 2013	Four forward starting swaps	240,000		3,156		3,141
May 2014	Three forward starting swaps	225,000		6,312		6,312
October 2015	Four forward starting swaps	300,000		13,369		13,369

⁽¹⁾ The amount reported in accumulated other comprehensive income will be reclassified to interest expense as interest payments are made on the related notes payable.

As of December 31, 2015, $25,046,000 remains in other comprehensive income related to the effective portion of NNN’s previous interest rate hedges. During the years ended December 31, 2015, 2014 and 2013, NNN reclassified $1,902,000, $1,129,000 and $438,000 out of other comprehensive income as an increase to interest expense. Over the next 12 months, NNN estimates that an additional $2,851,000 will be reclassified as an increase in interest expense. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on NNN’s long-term debt.

NNN does not use derivatives for trading or speculative purposes or currently have any derivatives that are not designated as hedges. NNN had no derivative financial instruments outstanding at December 31, 2015.

Note 14 – Performance Incentive Plan:

In June 2007, NNN filed a registration statement on Form S-8 with the Commission which permits the issuance of up to 5,900,000 shares of common stock pursuant to NNN’s 2007 Performance Incentive Plan (the “2007 Plan”). The 2007 Plan replaced NNN’s previous Performance Incentive Plan. The 2007 Plan allows NNN to award or grant to key employees, directors and persons performing consulting or advisory services for NNN or its affiliates, stock options, stock awards, stock appreciation rights, Phantom Stock Awards, Performance Awards and Leveraged Stock Purchase Awards, each as defined in the 2007 Plan.

There were no stock options outstanding or exercisable at December 31, 2015.

Pursuant to the 2007 Plan, NNN has granted and issued shares of restricted stock to certain officers and key associates of NNN. The following summarizes the restricted stock activity for the year ended December 31, 2015:



	Number of Shares		Weighted Average Share Price
Non-vested restricted shares, January 1	1,005,644		$	30.93
Restricted shares granted	267,133		41.00
Restricted shares vested	(318,261	)	27.83
Restricted shares forfeited	(46,478	)	26.85
Restricted shares repurchased	(11,371	)	27.20
Non-vested restricted shares, December 31	896,667		$	35.13

Compensation expense for the restricted stock which is not contingent upon NNN’s performance goals is determined based upon the fair value at the date of grant and is recognized as the greater of the amount amortized over a straight lined basis or the

amount vested over the vesting periods. Vesting periods for officers and key associates of NNN range from three to five years and generally vest yearly. NNN recognizes compensation expense on a straight-line basis for awards with only service conditions.

During the years ended December 31, 2015 and 2014, NNN granted 145,916 and 177,433, respectively, performance based shares subject to its total shareholder return growth after a three years period relative to its peers. The shares were granted to certain executive officers and had weighted average grant price of $41.00 and $33.42, respectively, per share. Once the performance criteria are met and the actual number of shares earned is determined, the shares vest immediately. For the 2015 and 2014 grants, the conditions are based on market conditions, and the fair value was determined at the grant date (for a fair value share price of $22.72 and $21.92, respectively). Compensation expense is recognized over the requisite service period for both grants.

The following summarizes other grants made during the year ended December 31, 2015, pursuant to the 2007 Plan.



	Shares	Weighted Average Share Price
Other share grants under the 2007 Plan:
Directors’ fees	18,130	$	38.96
Deferred directors’ fees	16,010	39.04
	34,140	$	39.00
Shares available under the 2007 Plan for grant, end of period	3,344,817

The total compensation cost for share-based payments for the years ended December 31, 2015, 2014 and 2013, totaled $9,671,000, $9,224,000 and $7,459,000, respectively, of such compensation expense. At December 31, 2015, NNN had $12,458,000 of unrecognized compensation cost related to non-vested share-based compensation arrangements under the 2007 Plan. This cost is expected to be recognized over a weighted average period of 2.3 years. In addition, NNN recognized performance based long-term incentive cash compensation expense of $729,000 for the year ended December 31, 2013. There was no long-term incentive cash compensation expense recognized in 2015 and 2014.

Note 15 – Fair Value of Financial Instruments:

NNN believes the carrying value of its Credit Facility approximates fair value based upon its nature, terms and variable interest rate. NNN believes that the carrying value of its cash and cash equivalents, mortgages, notes and other receivables, mortgages payable and other liabilities at December 31, 2015 and 2014, approximate fair value based upon current market prices of similar issues. At December 31, 2015 and 2014, the carrying value and fair value of NNN’s notes payable, collectively, was $2,007,242,000 and $1,813,439,000, respectively, based upon quoted market prices, which are a Level 1 input.

Note 16 – Quarterly Financial Data (unaudited):

The following table outlines NNN’s quarterly financial data (dollars in thousands, except per share data):



2015	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
Revenues as originally reported	$	116,187	$	117,208	$	123,143	$	126,377
Net earnings attributable to NNN’s stockholders	$	53,978	$	46,188	$	55,198	$	42,471
Net earnings per share ⁽¹⁾:
Basic	$	0.34	$	0.28	$	0.34	$	0.24
Diluted	0.34		0.28		0.34		0.24
2014
Revenues as originally reported	$	104,064	$	105,613	$	109,856	$	115,315
Net earnings attributable to NNN’s stockholders	$	43,333	$	45,571	$	47,940	$	53,757
Net earnings per share ⁽¹⁾:
Basic	$	0.28	$	0.30	$	0.31	$	0.35
Diluted	0.28		0.30		0.31		0.35


⁽¹⁾	Calculated independently for each period and consequently, the sum of the quarters may differ from the annual amount.

Note 17 – Segment Information:

For the years ended December 31, 2015, 2014 and 2013, NNN’s operations are reported within one business segment in the consolidated financial statements and all properties are part of the Properties or Property Portfolio.

Note 18 – Fair Value Measurements:

NNN currently values its Residuals based upon a valuation which provides a discounted cash flow analysis based upon estimated prepayment speeds, expected loan losses and yield curves. These valuation inputs are generally considered unobservable; therefore, the Residuals are considered Level 3 financial assets. The table below presents a rollforward of the Residuals during the year ended December 31, 2015 (dollars in thousands):



Balance at beginning of period	$	11,626
Total gains (losses) – realized/unrealized:
Included in earnings	(531		)
Included in other comprehensive income	(339		)
Interest income on Residuals	1,778
Cash received from Residuals	(1,419		)
Purchases, sales, issuances and settlements, net	—
Transfers in and/or out of Level 3	—
Balance at end of period	$	11,115
Changes in gains (losses) included in earnings attributable to a change in unrealized gains (losses) relating to assets still held at the end of period	$	246

Note 19 – Major Tenants:

As of December 31, 2015, NNN had no tenants that accounted for ten percent or more of its rental and earned income.

Note 20 – Commitments and Contingencies:

A summary of NNN's commitments are included in Note 2 – Real Estate.

In the ordinary course of its business, NNN is a party to various other legal actions which management believes are routine in nature and incidental to the operation of the business of NNN. Management does not believe that any of these proceedings are material.

Note 21 – Subsequent Events:

NNN reviewed all subsequent events and transactions that have occurred after December 31, 2015, the date of the consolidated balance sheet. There were no reportable subsequent events or transactions.


Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.


Item 9A.	Controls and Procedures

Process for Assessment and Evaluation of Disclosure Controls and Procedures and Internal Control over Financing Reporting.

NNN carried out an assessment as of December 31, 2015, of the effectiveness of the design and operation of its disclosure controls and procedures and its internal control over financial reporting. This assessment was done under the supervision and with the participation of management, including NNN’s Chief Executive Officer and Chief Financial Officer. Rules adopted by the Securities and Exchange Commission (the “Commission”) require NNN to present the conclusions of the Chief Executive Officer and Chief Financial Officer about the effectiveness of NNN’s disclosure controls and procedures and the conclusions of NNN’s management about the effectiveness of NNN’s internal control over financial reporting as of the end of the period covered by this annual report.

CEO and CFO Certifications. Included as Exhibits 31.1 and 31.2 to this Annual Report on Form 10-K are forms of “Certification” of NNN’s Chief Executive Officer and Chief Financial Officer. The forms of Certification are required in accordance with Section 302 of the Sarbanes-Oxley Act of 2002. This section of the Annual Report on Form 10-K that stockholders are currently reading is the information concerning the assessment referred to in the Section 302 certifications and this information should be read in conjunction with the Section 302 certifications for a more complete understanding of the topics presented.

Disclosure Controls and Procedures and Internal Control over Financial Reporting. Disclosure controls and procedures are designed with the objective of providing reasonable assurance that information required to be disclosed in NNN’s reports filed or submitted under the Exchange Act, such as this Annual Report on Form 10-K, is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures are also designed with the objective of providing reasonable assurance that such information is accumulated and communicated to NNN’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Internal control over financial reporting is a process designed by, or under the supervision of, NNN’s Chief Executive Officer and Chief Financial Officer, and affected by NNN’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles (“GAAP”) and includes those policies and procedures that:


•	pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of NNN’s assets;


•	provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that NNN’s receipts and expenditures are being made in accordance with authorizations of management or the Board of Directors; and


•	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of NNN’s assets that could have a material adverse effect on NNN’s financial statements.

Scope of the Assessments. The assessment by NNN’s Chief Executive Officer and Chief Financial Officer of NNN’s disclosure controls and procedures and the assessment by NNN’s management, including NNN’s Chief Executive Officer and Chief Financial Officer, of NNN’s internal control over financial reporting included a review of procedures and discussions with NNN’s management and others at NNN. In the course of the assessments, NNN sought to identify data errors, control problems or acts of fraud and to confirm that appropriate corrective action, including process improvements, were being undertaken.

NNN’s internal control over financial reporting is also assessed on an ongoing basis by personnel in NNN’s Accounting department and by NNN’s internal auditors in connection with their internal audit activities. The overall goals of these various assessment activities are to monitor NNN’s disclosure controls and procedures and NNN’s internal control over financial reporting and to make modifications as necessary. NNN’s intent in this regard is that the disclosure controls and procedures and the internal control over financial reporting will be maintained and updated (including with improvements and corrections) as conditions warrant. Management also sought to deal with other control matters in the assessment, and in each case if a problem was identified, management considered what revision, improvement and/or correction was necessary to be made in accordance with NNN’s on-going procedures. The assessments of NNN’s disclosure controls and procedures and NNN’s internal control

over financial reporting is done on a quarterly basis so that the conclusions concerning effectiveness of those controls can be reported in NNN’s Quarterly Reports on Form 10-Q and Annual Report on Form 10-K.

Assessment of Effectiveness of Disclosure Controls and Procedures.

Based upon the assessments, NNN’s Chief Executive Officer and Chief Financial Officer have concluded that, as of December 31, 2015, NNN’s disclosure controls and procedures were effective.

Management’s Report on Internal Control over Financial Reporting.

Management, including NNN’s Chief Executive Officer and Chief Financial Officer, are responsible for establishing and maintaining adequate internal control over financial reporting for NNN. Management used the criteria issued by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control – 2013 Integrated Framework to assess the effectiveness of NNN’s internal control over financial reporting. Based upon the assessments, NNN’s Chief Executive Officer and Chief Financial Officer have concluded that, as of December 31, 2015, NNN’s internal control over financial reporting was effective.

Attestation Report of the Registered Public Accounting Firm.

Ernst & Young LLP, NNN’s independent registered public accounting firm, audited the financial statements included in this Annual Report on Form 10-K and in connection therewith has issued an attestation report on NNN’s effectiveness of internal control over financial reporting, which appears in this Annual Report on Form 10-K.

Changes in Internal Control over Financial Reporting.

During the three months ended December 31, 2015, there were no changes in NNN’s internal control over financial reporting that materially affected, or are reasonably likely to materially affect, NNN’s internal control over financial reporting.

Limitations on the Effectiveness of Controls.

Management, including NNN’s Chief Executive Officer and Chief Financial Officer, do not expect that NNN’s disclosure controls and procedures or NNN’s internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within NNN have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management’s override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.


Item 9B.	Other Information

None.

PART III


Item 10.	Directors, Executive Officers and Corporate Governance

Reference is made to the Registrant’s definitive proxy statement to be filed with the Commission pursuant to Regulation 14(a); information responsive to this Item is included in the Registrant's proxy statement including the information, without limitation, contained in the sections thereof captioned “Proposal I: Election of Directors – Nominees,” “Proposal I: Election of Directors – Executive Officers,” “Proposal I: Election of Directors – Code of Business Conduct and Insider Trading Policy” and “Security Ownership ”, and such information in such sections is incorporated herein by reference.


Item 11.	Executive Compensation

Reference is made to the Registrant’s definitive proxy statement to be filed with the Commission pursuant to Regulation 14(a); information responsive to this Item is included in the Registrant's proxy statement including the information, without limitation, contained in the sections thereof captioned “Proposal I: Election of Directors – Compensation of Directors,” “Executive Compensation” and “Compensation Committee Report”, and such information is incorporated herein by reference.


Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Reference is made to the Registrant’s definitive proxy statement to be filed with the Commission pursuant to Regulation 14(a); information responsive to this Item is included in the Registrant's proxy statement including the information, without limitation, contained in the section thereof captioned “Executive Compensation – Equity Compensation Plan Information,” and “Security Ownership”, and such information is incorporated herein by reference.


Item 13.	Certain Relationships and Related Transactions, and Director Independence


Item 14.	Principal Accountant Fees and Services

Reference is made to the Registrant’s definitive proxy statement to be filed with the Commission pursuant to Regulation 14(a); information responsive to this Item is included in the Registrant's proxy statement including the information, without limitation, contained in the section thereof captioned “Audit Committee Report” and “Proposal II: Proposal to Ratify Independent Registered Public Accounting Firm”, and such information is incorporated herein by reference.

PART IV


Item 15.	Exhibits and Financial Statement Schedules



(a)		The following documents are filed as part of this report

	(1)	Financial Statements

		Reports of Independent Registered Public Accounting Firm	37

		Consolidated Balance Sheets as of December 31, 2015 and 2014	39

		Consolidated Statements of Comprehensive Income for the years ended December 31, 2015, 2014 and 2013	40

		Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2015, 2014 and 2013	42

		Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2014 and 2013	45

		Notes to Consolidated Financial Statements	47

	(2)	Financial Statement Schedules

		Schedule III – Real Estate and Accumulated Depreciation and Amortization and Notes as of December 31, 2015

		Schedule IV – Mortgage Loans on Real Estate and Notes as of December 31, 2015

		All other schedules are omitted because they are not applicable or because the required information is shown in the financial statements or the notes thereto.

	(3)	Exhibits

The following exhibits are filed as a part of this report.



3.	Articles of Incorporation and Bylaws
		3.1	First Amended and Restated Articles of Incorporation of the Registrant, as amended (filed as Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 3, 2012, and incorporated herein by reference).

		3.2	Articles Supplementary Establishing and Fixing the Rights and Preferences of 6.625% Series D Cumulative Preferred Stock, par value $0.01 per share, dated February 21, 2012 (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K dated February 23, 2012, incorporated herein by reference).

		3.3	Articles Supplementary Establishing and Fixing the Rights and Preferences of 5.700% Series E Cumulative Preferred Stock, par value $0.01 per share, dated May 29, 2013 (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K dated May 30, 2013, incorporated herein by reference).

		3.4	Third Amended and Restated Bylaws of the Registrant, dated May 1, 2006, as amended (filed as Exhibit 3.4 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 19, 2014, and incorporated herein by reference).

		3.5	Second Amendment to the Third Amended and Restated Bylaws of the Registrant, dated December 13, 2007 (filed as Exhibit 3.5 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 19, 2014, and incorporated herein by reference).

		3.6	Third Amendment to the Third Amended and Restated Bylaws of the Registrant, dated February 13, 2014 (filed as Exhibit 3.6 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 19, 2014, and incorporated herein by reference).

4.	Instruments Defining the Rights of Security Holders, Including Indentures

		4.1	Specimen Certificate of Common Stock, par value $0.01 per share, of the Registrant (filed as Exhibit 3.4 to the Registrant’s Registration Statement No. 1-11290 on Form 8-B filed with the Securities and Exchange Commission and incorporated herein by reference).



			4.2	Indenture, dated as of March 25, 1998, between the Registrant and First Union National Bank, as trustee (filed as Exhibit 4.4 to the Registrant’s Registration Statement on Form S-3 (Registration No. 333-132095) filed with the Securities and Exchange Commission on February 28, 2006, and incorporated herein by reference).

			4.3	Form of Supplemental Indenture No. 6 dated as of November 17, 2005, by and among Registrant and Wachovia Bank, National Association, Trustee, relating to $150,000,000 of 6.15% Notes due 2015 (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated November 14, 2005 and filed with the Securities and Exchange Commission on November 17, 2005, and incorporated herein by reference).

			4.4	Form of 6.15% Notes due 2015 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated November 14, 2005 and filed with the Securities and Exchange Commission on November 17, 2005, and incorporated herein by reference).

			4.5	Specimen certificate representing the 6.625% Series D Cumulative Redeemable Preferred Stock, par value $.01 per share, of the Registrant (filed as Exhibit 4.4 to the Registrant’s Registration Statement on Form 8-A dated February 22, 2012 and filed with the Securities and Exchange Commission on February 22, 2012, and incorporated herein by reference).

			4.6	Deposit Agreement, among the Registrant, American Stock Transfer & Trust Company, as Depositary, and the holders of depositary receipts (filed as Exhibit 4.20 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 4, 2012, and incorporated herein by reference).

			4.7	Form of Supplemental Indenture No. 8 between National Retail Properties, Inc. and U.S. Bank National Association relating to 6.875% Notes due 2017 (filed as Exhibit 4.1 to Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on September 4, 2007, and incorporated herein by reference).

			4.8	Form of 6.875% Notes due 2017 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on September 4, 2007, and incorporated herein by reference).

			4.9	Form of Tenth Supplemental Indenture between National Retail Properties, Inc. and U.S. Bank National Association relating to 5.500% Notes due 2021 (filed as Exhibit 4.1 to Registrant's Current Report on Form 8-K dated July 6, 2011 and filed with the Securities and Exchange Commission on July 6, 2011, and incorporated herein by reference).

			4.10	Form of 5.500% Notes due 2021 (filed as Exhibit 4.2 to the Registrant's Current Report on Form 8-K dated July 6, 2011 and filed with the Securities and Exchange Commission on July 6, 2011, and incorporated herein by reference).

			4.11	Form of Eleventh Supplemental Indenture between National Retail Properties, Inc. and U.S. Bank National Association relating to 3.80% Notes due 2022 (filed as Exhibit 4.1 to Registrant's Current Report on Form 8-K dated August 14, 2012, filed with the Securities and Exchange Commission on August 14, 2012 and incorporated herein by reference).

			4.12	Form of 3.800% Notes due 2022 (filed as Exhibit 4.2 to Registrant's Current Report on Form 8-K dated August 14, 2012, filed with the Securities and Exchange Commission on August 14, 2012 and incorporated herein by reference).

			4.13	Form of Twelfth Supplemental Indenture between National Retail Properties, Inc. and U.S. Bank National Association relating to 3.300% Notes due 2023 (filed as Exhibit 4.1 to Registrant's Current Report on Form 8-K dated April 9, 2013, filed with the Securities and Exchange Commission on April 15, 2013 and incorporated herein by reference).

			4.14	Form of 3.300% Notes due 2023 (filed as Exhibit 4.2 to Registrant's Current Report on Form 8-K dated April 9, 2013, filed with the Securities and Exchange Commission on April 15, 2013 and incorporated herein by reference).

			4.15	Specimen certificate representing the 5.700% Series E Cumulative Redeemable Preferred Stock, par value $.01 per share, of the Registrant (filed as Exhibit 4.3 to the Registrant’s Registration Statement on Form 8-A filed with the Securities and Exchange Commission on May 30, 2013 and incorporated herein by reference).

			4.16	Deposit Agreement, among the Registrant, American Stock Transfer & Trust Company, as Depositary, and the holders of depositary receipts (filed as Exhibit 4.1 to the Registrant’s Registration Statement on Form 8-A filed with the Securities and Exchange Commission on May 30, 2013 and incorporated herein by reference).



		4.17	Form of Thirteenth Supplemental Indenture between National Retail Properties, Inc. and U.S. Bank National Association relating to 3.900% Notes due 2024 (filed as Exhibit 4.1 to Registrant's Current Report on Form 8-K and filed with the Securities and Exchange Commission on May 14, 2014, and incorporated herein by reference).

		4.18	Form of 3.900% Notes due 2024 (filed as Exhibit 4.2 to Registrant's Current Report on Form 8-K and filed with the Securities and Exchange Commission on May 14, 2014, and incorporated herein by reference).

		4.19	Form of Fourteenth Supplemental Indenture between National Retail Properties, Inc. and U.S. Bank National Association relating to 4.000% Notes due 2025 (filed as Exhibit 4.1 to Registrant's Current Report on Form 8-K and filed with the Securities and Exchange Commission on October 26, 2015, and incorporated herein by reference).

		4.20	Form of 4.000% Notes due 2025 (filed as Exhibit 4.2 to Registrant's Current Report on Form 8-K and filed with the Securities and Exchange Commission on October 26, 2015, and incorporated herein by reference).

10.	Material Contracts

		10.1	2007 Performance Incentive Plan (filed as Annex A to the Registrant’s 2007 Annual Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on April 3, 2007, and incorporated herein by reference).

		10.2	Form of Restricted Stock Agreement between NNN and the Participant of NNN (filed as Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 15, 2005, and incorporated herein by reference).

		10.3	Employment Agreement dated as of December 1, 2008, between the Registrant and Craig Macnab (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).

		10.4	Employment Agreement dated as of December 1, 2008, between the Registrant and Julian E. Whitehurst (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).

		10.5	Employment Agreement dated as of December 1, 2008, between the Registrant and Kevin B. Habicht (filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).

		10.6	Employment Agreement dated as of December 1, 2008, between the Registrant and Paul E. Bayer (filed as Exhibit 10.5 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).

		10.7	Employment Agreement dated as of December 1, 2008, between the Registrant and Christopher P. Tessitore (filed as Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).

		10.8	Form of Indemnification Agreement (as entered into between the Registrant and each of its directors and executive officers) (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on June 12, 2009, and incorporated herein by reference).

		10.9	Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Craig Macnab (filed as Exhibit 10.10 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference).

		10.10	Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Julian E. Whitehurst (filed as Exhibit 10.11 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference).

		10.11	Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Kevin B. Habicht (filed as Exhibit 10.12 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference).

		10.12	Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Paul E. Bayer (filed as Exhibit 10.13 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference).



		10.13	Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Christopher P. Tessitore (filed as Exhibit 10.14 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference).

		10.14	Amended and Restated Credit Agreement, dated as of May 25, 2011, by and among the Registrant, certain lenders and Wells Fargo Bank, National Association, as the Administrative Agent (filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on June 6, 2011, and incorporated herein by reference).

		10.15	Form of Restricted Award Agreement - Performance between NNN and the Participant of NNN (filed as Exhibit 10.15 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 4, 2012, and incorporated herein by reference).

		10.16	Form of Restricted Award Agreement - Service between NNN and the Participant of NNN (filed as Exhibit 10.16 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 4, 2012, and incorporated herein by reference).

		10.17	Form of Restricted Award Agreement - Special Grant between NNN and the Participant of NNN (filed as Exhibit 10.17 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 4, 2012, and incorporated herein by reference).

		10.18	First Amendment to Amended and Restated Credit Agreement, dated as of October 31, 2012, by and among the Registrant, certain lenders and Wells Fargo Bank, National Association, as the Administrative Agent (filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on November 1, 2012, and incorporated herein by reference).

		10.19	Employment Agreement dated as of January 2, 2014, between the Registrant and Stephen A. Horn, Jr. (filed as Exhibit 10.19 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 19, 2014, and incorporated herein by reference).

		10.20	Second Amendment to Amended and Restated Credit Agreement, dated as of October 27, 2014, by and among the Registrant, certain lenders and Wells Fargo Bank, National Association, as the Administrative Agent (filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on October 28, 2014, and incorporated herein by reference).

12.	Statement of Computation of Ratios of Earnings to Fixed Charges (filed herewith).

21.	Subsidiaries of the Registrant (filed herewith).

23.	Consent of Independent Registered Public Accounting Firm

		23.1	Ernst & Young LLP dated February 12, 2016 (filed herewith).

24.	Power of Attorney (included on signature page).

31.	Section 302 Certifications

		31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

		31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

32.	Section 906 Certifications

		32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

		32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

99.	Additional Exhibits

		99.1	Certification of Chief Executive Officer pursuant to Section 303A.12(a) of the New York Stock Exchange Listed Company Manual (filed herewith).



101.	Interactive Data File

		101.1	The following materials from National Retail Properties, Inc. Annual Report on Form 10-K for the period ended December 31, 2015, are formatted in Extensible Business Reporting Language: (i) consolidated balance sheets, (ii) consolidated statements of comprehensive income, (iii) consolidated statements of stockholders' equity (iv) consolidated statements of cash flows, and (v) notes to consolidated financial statements.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 12th day of February, 2016.



		NATIONAL RETAIL PROPERTIES, INC.

	By:	/s/ Craig Macnab
		Craig Macnab
		Chairman of the Board and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

POWER OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints each of Craig Macnab and Kevin B. Habicht as his attorney-in-fact and agent, with full power of substitution and resubstitution for him in any and all capacities, to sign any or all amendments to this report and to file same, with exhibits thereto and other documents in connection therewith, granting unto such attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary in connection with such matters and hereby ratifying and confirming all that such attorney-in-fact and agent or his substitutes may do or cause to be done by virtue hereof.



Signature	Title	Date

/s/ Craig Macnab	Chairman of the Board and Chief Executive Officer (Principal Executive Officer)	February 12, 2016
Craig Macnab

/s/ Ted B. Lanier	Lead Director	February 12, 2016
Ted B. Lanier	Lead Director

/s/ Don DeFosset	Director	February 12, 2016
Don DeFosset	Director

/s/ David M. Fick	Director	February 12, 2016
David M. Fick	Director

/s/ Edward J. Fritsch	Director	February 12, 2016
Edward J. Fritsch	Director

/s/ Richard B. Jennings	Director	February 12, 2016
Richard B. Jennings	Director

/s/ Robert C. Legler	Director	February 12, 2016
Robert C. Legler	Director

/s/ Robert Martinez	Director	February 12, 2016
Robert Martinez	Director

/s/ Sam L. Susser	Director	February 12, 2016
Sam L. Susser	Director

/s/ Kevin B. Habicht	Director, Chief Financial Officer (Principal Financial and Accounting Officer), Executive Vice President, Assistant Secretary and Treasurer	February 12, 2016
Kevin B. Habicht

Exhibit Index



3.	Articles of Incorporation and Bylaws

	3.1	First Amended and Restated Articles of Incorporation of the Registrant, as amended (filed as Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 3, 2012, and incorporated herein by reference).

	3.2	Articles Supplementary Establishing and Fixing the Rights and Preferences of 6.625% Series D Cumulative Preferred Stock, par value $0.01 per share, dated February 21, 2012 (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K dated February 23, 2012, incorporated herein by reference).

	3.3	Articles Supplementary Establishing and Fixing the Rights and Preferences of 5.700% Series E Cumulative Preferred Stock, par value $0.01 per share, dated May 29, 2013 (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K dated May 30, 2013, incorporated herein by reference).

	3.4	Third Amended and Restated Bylaws of the Registrant, dated May 1, 2006, as amended (filed as Exhibit 3.4 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 19, 2014, and incorporated herein by reference).

	3.5	Second Amendment to the Third Amended and Restated Bylaws of the Registrant, dated December 13, 2007 (filed as Exhibit 3.5 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 19, 2014, and incorporated herein by reference).

	3.6	Third Amendment to the Third Amended and Restated Bylaws of the Registrant, dated February 13, 2014 (filed as Exhibit 3.6 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 19, 2014, and incorporated herein by reference).

4.	Instruments Defining the Rights of Security Holders, Including Indentures

	4.1	Specimen Certificate of Common Stock, par value $0.01 per share, of the Registrant (filed as Exhibit 3.4 to the Registrant’s Registration Statement No. 1-11290 on Form 8-B filed with the Securities and Exchange Commission and incorporated herein by reference).

	4.2	Indenture, dated as of March 25, 1998, between the Registrant and First Union National Bank, as trustee (filed as Exhibit 4.4 to the Registrant’s Registration Statement on Form S-3 (Registration No. 333-132095) filed with the Securities and Exchange Commission on February 28, 2006, and incorporated herein by reference).

	4.3	Form of Supplemental Indenture No. 6 dated as of November 17, 2005, by and among Registrant and Wachovia Bank, National Association, Trustee, relating to $150,000,000 of 6.15% Notes due 2015 (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated November 14, 2005 and filed with the Securities and Exchange Commission on November 17, 2005, and incorporated herein by reference).

	4.4	Form of 6.15% Notes due 2015 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated November 14, 2005 and filed with the Securities and Exchange Commission on November 17, 2005, and incorporated herein by reference).

	4.5	Specimen certificate representing the 6.625% Series D Cumulative Redeemable Preferred Stock, par value $.01 per share, of the Registrant (filed as Exhibit 4.4 to the Registrant’s Registration Statement on Form 8-A dated February 22, 2012 and filed with the Securities and Exchange Commission on February 22, 2012, and incorporated herein by reference).

	4.6	Deposit Agreement, among the Registrant, American Stock Transfer & Trust Company, as Depositary, and the holders of depositary receipts (filed as Exhibit 4.20 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 4, 2012, and incorporated herein by reference).

	4.7	Form of Supplemental Indenture No. 8 between National Retail Properties, Inc. and U.S. Bank National Association relating to 6.875% Notes due 2017 (filed as Exhibit 4.1 to Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on September 4, 2007, and incorporated herein by reference).

	4.8	Form of 6.875% Notes due 2017 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on September 4, 2007, and incorporated herein by reference).



	4.9	Form of Tenth Supplemental Indenture between National Retail Properties, Inc. and U.S. Bank National Association relating to 5.500% Notes due 2021 (filed as Exhibit 4.1 to Registrant's Current Report on Form 8-K dated July 6, 2011 and filed with the Securities and Exchange Commission on July 6, 2011, and incorporated herein by reference).

	4.1	Form of 5.500% Notes due 2021 (filed as Exhibit 4.2 to the Registrant's Current Report on Form 8-K dated July 6, 2011 and filed with the Securities and Exchange Commission on July 6, 2011, and incorporated herein by reference).

	4.11	Form of Eleventh Supplemental Indenture between National Retail Properties, Inc. and U.S. Bank National Association relating to 3.80% Notes due 2022 (filed as Exhibit 4.1 to Registrant's Current Report on Form 8-K dated August 14, 2012, filed with the Securities and Exchange Commission on August 14, 2012 and incorporated herein by reference).

	4.12	Form of 3.800% Notes due 2022 (filed as Exhibit 4.2 to Registrant's Current Report on Form 8-K dated August 14, 2012, filed with the Securities and Exchange Commission on August 14, 2012 and incorporated herein by reference).

	4.13	Form of Twelfth Supplemental Indenture between National Retail Properties, Inc. and U.S. Bank National Association relating to 3.300% Notes due 2023 (filed as Exhibit 4.1 to Registrant's Current Report on Form 8-K dated April 9, 2013, filed with the Securities and Exchange Commission on April 15, 2013 and incorporated herein by reference).

	4.14	Form of 3.300% Notes due 2023 (filed as Exhibit 4.2 to Registrant's Current Report on Form 8-K dated April 9, 2013, filed with the Securities and Exchange Commission on April 15, 2013 and incorporated herein by reference).

	4.15	Specimen certificate representing the 5.700% Series E Cumulative Redeemable Preferred Stock, par value $.01 per share, of the Registrant (filed as Exhibit 4.3 to the Registrant’s Registration Statement on Form 8-A filed with the Securities and Exchange Commission on May 30, 2013 and incorporated herein by reference).

	4.16	Deposit Agreement, among the Registrant, American Stock Transfer & Trust Company, as Depositary, and the holders of depositary receipts (filed as Exhibit 4.1 to the Registrant’s Registration Statement on Form 8-A filed with the Securities and Exchange Commission on May 30, 2013 and incorporated herein by reference).

	4.17	Form of Thirteenth Supplemental Indenture between National Retail Properties, Inc. and U.S. Bank National Association relating to 3.900% Notes due 2024 (filed as Exhibit 4.1 to Registrant's Current Report on Form 8-K and filed with the Securities and Exchange Commission on May 14, 2014, and incorporated herein by reference).

	4.18	Form of 3.900% Notes due 2024 (filed as Exhibit 4.2 to Registrant's Current Report on Form 8-K and filed with the Securities and Exchange Commission on May 14, 2014, and incorporated herein by reference).
	4.19	Form of Fourteenth Supplemental Indenture between National Retail Properties, Inc. and U.S. Bank National Association relating to 4.000% Notes due 2025 (filed as Exhibit 4.1 to Registrant's Current Report on Form 8-K and filed with the Securities and Exchange Commission on October 26, 2015, and incorporated herein by reference).

	4.20	Form of 4.000% Notes due 2025 (filed as Exhibit 4.2 to Registrant's Current Report on Form 8-K and filed with the Securities and Exchange Commission on October 26, 2015, and incorporated herein by reference).

10.	Material Contracts

	10.1	2007 Performance Incentive Plan (filed as Annex A to the Registrant’s 2007 Annual Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on April 3, 2007, and incorporated herein by reference).

	10.2	Form of Restricted Stock Agreement between NNN and the Participant of NNN (filed as Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 15, 2005, and incorporated herein by reference).

	10.3	Employment Agreement dated as of December 1, 2008, between the Registrant and Craig Macnab (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).



	10.4		Employment Agreement dated as of December 1, 2008, between the Registrant and Julian E. Whitehurst (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).

	10.5		Employment Agreement dated as of December 1, 2008, between the Registrant and Kevin B. Habicht (filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).

	10.6		Employment Agreement dated as of December 1, 2008, between the Registrant and Paul E. Bayer (filed as Exhibit 10.5 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).

	10.7		Employment Agreement dated as of December 1, 2008, between the Registrant and Christopher P. Tessitore (filed as Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).

	10.8		Form of Indemnification Agreement (as entered into between the Registrant and each of its directors and executive officers) (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on June 12, 2009, and incorporated herein by reference).

	10.9		Amendment to Employment Agreement, dated as of November 8, 2010, between the Registrant and Craig Macnab (filed as Exhibit 10.10 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference).

	10.10		Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Julian E. Whitehurst (filed as Exhibit 10.11 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference).

	10.11		Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Kevin B. Habicht (filed as Exhibit 10.12 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference).

	10.12		Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Paul E. Bayer (filed as Exhibit 10.13 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference).

	10.13		Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Christopher P. Tessitore (filed as Exhibit 10.14 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference).

	10.14		Amended and Restated Credit Agreement, dated as of May 25, 2011, by and among the Registrant, certain lenders and Wells Fargo Bank, National Association, as the Administrative Agent (filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on June 6, 2011, and incorporated herein by reference).

	10.15		Form of Restricted Award Agreement - Performance between NNN and the Participant of NNN (filed as Exhibit 10.15 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 4, 2012, and incorporated herein by reference).

	10.16		Form of Restricted Award Agreement - Service between NNN and the Participant of NNN (filed as Exhibit 10.16 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 4, 2012, and incorporated herein by reference).

	10.17		Form of Restricted Award Agreement - Service between NNN and the Participant of NNN (filed as Exhibit 10.17 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 4, 2012, and incorporated herein by reference).

	10.18		First Amendment to Amended and Restated Credit Agreement, dated as of October 31, 2012, by and among the Registrant, certain lenders and Wells Fargo Bank, National Association, as the Administrative Agent (filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on November 1, 2012, and incorporated herein by reference).

	10.19		Employment Agreement dated as of January 2, 2014, between the Registrant and Stephen A. Horn, Jr. (filed as Exhibit 10.19 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 19, 2014, and incorporated herein by reference).



	10.20	Second Amendment to Amended and Restated Credit Agreement, dated as of October 27, 2014, by and among the Registrant, certain lenders and Wells Fargo Bank, National Association, as the Administrative Agent (filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on October 28, 2014, and incorporated herein by reference).

12.	Statement of Computation of Ratios of Earnings to Fixed Charges (filed herewith).

21.	Subsidiaries of the Registrant (filed herewith).

23.	Consent of Independent Registered Public Accounting Firm

	23.1	Ernst & Young LLP dated February 12, 2016 (filed herewith).

24.	Power of Attorney (included on signature page).


31.	Section 302 Certifications

	31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

	31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

32.	Section 906 Certifications

	32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

	32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

99.	Additional Exhibits

	99.1	Certification of Chief Executive Officer pursuant to Section 303A.12(a) of the New York Stock Exchange Listed Company Manual (filed herewith).

101.	Interactive Data File

	101.1	The following materials from National Retail Properties, Inc. Annual Report on Form 10-K for the period ended December 31, 2015, are formatted in Extensible Business Reporting Language: (i) consolidated balance sheets, (ii) consolidated statements of comprehensive income, (iii) consolidated statements of stockholders' equity (iv) consolidated statements of cash flows, and (v) notes to consolidated financial statements.

Table of Contents

NATIONAL RETAIL PROPERTIES, INC. AND SUBSIDIARIES

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION AND AMORTIZATION

December 31, 2015

(Dollars in thousands)



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
7-Eleven:
Tampa, FL	—	1,081	917	—	—	1,070	917	1,987	385	1999	12/98	(g)	40
Austin, TX	—	259	1,361	—	—	259	1,361	1,620	225	1985	11/11		25
Austin, TX	—	900	3,571	—	—	900	3,571	4,471	421	2004	11/11		35
Austin, TX	—	1,101	2,987	—	—	1,101	2,987	4,088	352	2006	11/11		35
Beaumont, TX	—	115	1,543	—	—	115	1,543	1,658	212	1996	11/11		30
Beaumont, TX	—	239	2,031	—	—	239	2,031	2,270	239	2002	11/11		35
Beaumont, TX	—	124	2,968	—	—	124	2,968	3,092	408	1996	11/11		30
Bloomington, TX	—	38	3,093	—	—	38	3,093	3,131	510	1985	11/11		25
Bryan, TX	—	479	3,561	—	—	479	3,561	4,040	490	2000	11/11		30
Canyon Lake, TX	—	144	1,830	—	—	144	1,830	1,974	302	1977	11/11		25
Cedar Park, TX	—	833	1,705	—	—	833	1,705	2,538	201	2002	11/11		35
College Station, TX	—	393	3,342	—	—	393	3,342	3,735	459	2000	11/11		30
Corpus Christi, TX	—	412	2,356	—	—	412	2,356	2,768	324	1999	11/11		30
Corpus Christi, TX	—	450	1,370	—	—	450	1,370	1,820	188	1996	11/11		30
Corpus Christi, TX	—	383	3,093	—	—	383	3,093	3,476	365	2006	11/11		35
Corpus Christi, TX	—	661	2,624	—	—	661	2,624	3,285	361	1999	11/11		30
Edinburg, TX	—	431	2,193	—	—	431	2,193	2,624	302	1999	11/11		30
Edna, TX	—	67	1,897	—	—	67	1,897	1,964	313	1976	11/11		25
Harlingen, TX	—	230	2,356	—	—	230	2,356	2,586	324	2000	11/11		30
Kingsland, TX	—	153	2,691	—	—	153	2,691	2,844	444	1972	11/11		25
Kingsville, TX	—	163	1,485	—	—	163	1,485	1,648	245	1990	11/11		25
Laredo, TX	—	938	5,829	—	—	938	5,829	6,767	801	1995	11/11		30
Laredo, TX	—	441	1,935	—	—	441	1,935	2,376	228	2002	11/11		35
Laredo, TX	—	412	1,476	—	—	412	1,476	1,888	203	2001	11/11		30
Laredo, TX	—	421	3,016	—	—	421	3,016	3,437	415	1998	11/11		30
Laredo, TX	—	335	2,509	—	—	335	2,509	2,844	345	1999	11/11		30
Mercedes, TX	—	556	1,523	—	—	556	1,523	2,079	209	1998	11/11		30
Palacios, TX	—	29	1,667	—	—	29	1,667	1,696	275	1984	11/11		25
Pflugerville, TX	—	996	2,336	—	—	996	2,336	3,332	275	2002	11/11		35
Portland, TX	—	488	4,710	—	—	488	4,710	5,198	648	1999	11/11		30
Rio Bravo, TX	—	355	1,351	—	—	355	1,351	1,706	159	2002	11/11		35
Rockport, TX	—	660	4,269	—	—	660	4,269	4,929	503	2008	11/11		35
Round Rock, TX	—	661	1,140	—	—	661	1,140	1,801	157	2000	11/11		30
San Antonio, TX	—	441	1,313	—	—	441	1,313	1,754	181	1999	11/11		30
San Juan, TX	—	565	1,179	—	—	565	1,179	1,744	162	1999	11/11		30
Victoria, TX	—	431	2,298	—	—	431	2,298	2,729	316	1986	11/11		30
Victoria, TX	—	259	2,346	—	—	259	2,346	2,605	323	1984	11/11		30
West Orange, TX	—	220	2,088	—	—	220	2,088	2,308	287	1993	11/11		30
Winnie, TX	—	115	4,566	—	—	115	4,566	4,681	538	2002	11/11		35
Austin, TX	—	861	3,004	—	—	861	3,004	3,865	405	2001	12/11		30
Austin, TX	—	612	3,061	—	—	612	3,061	3,673	412	1999	12/11		30
Austin, TX	—	689	1,732	—	—	689	1,732	2,421	233	1999	12/11		30
Austin, TX	—	612	2,775	—	—	612	2,775	3,387	374	1999	12/11		30
Austin, TX	—	1,215	4,524	—	—	1,215	4,524	5,739	522	2004	12/11		35
Austin, TX	—	488	2,163	—	—	488	2,163	2,651	291	2000	12/11		30
Austin, TX	—	938	1,436	—	—	938	1,436	2,374	193	1998	12/11		30
Austin, TX	—	880	1,790	—	—	880	1,790	2,670	241	1998	12/11		30
Austin, TX	—	775	4,677	—	—	775	4,677	5,452	630	1996	12/11		30
Austin, TX	—	679	1,905	—	—	679	1,905	2,584	257	1999	12/11		30
Austin, TX	—	756	2,870	—	—	756	2,870	3,626	387	1999	12/11		30
Cedar Park, TX	—	536	1,914	—	—	536	1,914	2,450	258	1999	12/11		30
San Antonio, TX	—	631	2,851	—	—	631	2,851	3,482	384	1999	12/11		30
San Antonio, TX	—	517	2,670	—	—	517	2,670	3,187	360	1999	12/11		30
San Antonio, TX	—	985	3,253	—	—	985	3,253	4,238	438	1999	12/11		30
San Antonio, TX	—	899	2,593	—	—	899	2,593	3,492	299	2002	12/11		35
San Antonio, TX	—	947	2,535	—	—	947	2,535	3,482	342	1999	12/11		30
San Antonio, TX	—	469	2,727	—	—	469	2,727	3,196	367	1998	12/11		30
San Antonio, TX	—	632	1,991	—	—	632	1,991	2,623	268	2001	12/11		30
San Antonio, TX	—	603	2,048	—	—	603	2,048	2,651	276	1999	12/11		30
San Antonio, TX	—	679	2,937	—	—	679	2,937	3,616	396	1999	12/11		30
San Antonio, TX	—	909	1,359	—	—	909	1,359	2,268	183	1999	12/11		30
San Antonio, TX	—	766	1,474	—	—	766	1,474	2,240	199	1999	12/11		30
San Antonio, TX	—	411	2,555	—	—	411	2,555	2,966	344	1999	12/11		30
San Antonio, TX	—	545	3,148	—	—	545	3,148	3,693	424	1999	12/11		30
San Antonio, TX	—	412	2,010	—	—	412	2,010	2,422	271	1999	12/11		30
San Antonio, TX	—	919	2,344	—	—	919	2,344	3,263	271	2002	12/11		35
Universal City, TX	—	699	1,675	—	—	699	1,675	2,374	226	2001	12/11		30
Belpre, OH	—	408	759	—	—	408	759	1,167	44	1990	07/14		25
Charleston, WV	—	689	974	—	—	689	974	1,663	47	1970	07/14		30
Charleston, WV	—	549	729	—	—	549	729	1,278	35	1995	07/14		30
Clarksburg, WV	—	390	613	—	—	390	613	1,003	36	1978	07/14		25
Mannington, WV	—	218	745	—	—	218	745	963	36	1996	07/14		30
N. Belle Vernon, PA	—	438	1,165	—	—	438	1,165	1,603	68	1996	07/14		25
New Castle, PA	—	292	617	—	—	292	617	909	30	1983	07/14		30
Parkersburg, WV	—	298	782	—	—	298	782	1,080	46	1988	07/14		25
Parkersburg, WV	—	422	739	—	—	422	739	1,161	36	1985	07/14		30
Weston, WV	—	114	583	—	—	114	583	697	28	1995	07/14		30

Academy:
Franklin, TN	—	1,807	2,108	—	—	1,589	2,108	3,697	741	1999	06/05		30

Ace Hardware and Lighting:
Bourbonnais, IL	—	298	1,329	—	—	298	1,329	1,627	513	1997	11/98		37

Advance Auto Parts:
Miami, FL	—	867	—	1,035	—	867	1,035	1,902	273	2005	12/04	(g)	40
Richmond, VA	—	193	1,268	—	—	193	1,268	1,461	79	2008	02/14		30

See accompanying report of independent registered public accounting firm.

F-1

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)						Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Adventure Landing:
Jacksonville Beach, FL	—	3,615	5,636	—	—	3,615	5,636	9,251	1,537	1995	04/11	30
Jacksonville, FL	—	721	861	—	—	721	861	1,582	336	1983	04/11	25
Raleigh, NC	—	1,841	3,124	—	—	1,841	3,124	4,965	818	1989	04/11	25
St. Augustine, FL	—	797	289	—	—	797	289	1,086	165	1999	04/11	30
Tonawanda, NY	—	205	927	—	—	205	927	1,132	354	1991	04/11	25

Affordable Care:
Asheville, NC	—	467	576	—	—	467	576	1,043	28	2005	07/14	30
Conover, NC	—	187	623	—	—	187	623	810	30	2002	07/14	30
Poland, OH	—	231	650	—	—	231	650	881	38	2001	07/14	25
Wilmington, NC	—	398	565	—	—	398	565	963	27	2002	07/14	30

Ajuua Mexican Restaurant:
Aurora, CO	—	1,168	1,105	—	—	1,168	1,105	2,273	388	2000	06/05	30

Aldi:
Cutler Bay, FL	—	989	1,479	205	—	989	1,684	2,673	754	1995	06/96	40

All Star Sports:
Wichita, KS	—	3,275	1,631	167	—	3,275	1,798	5,073	368	1988	05/07	40
Wichita, KS	—	1,551	965	152	—	1,551	1,117	2,668	223	1987	05/07	40

Amazing Jake's:
Plano, TX	—	5,705	17,049	18	—	5,705	17,067	22,772	3,635	1982	07/08	35

AMC Theatre:
Bloomington, IN	—	2,338	4,000	—	—	2,338	4,000	6,338	1,327	1987	09/07	25
Brighton, CO	—	1,070	5,491	—	—	1,070	5,491	6,561	1,138	2005	09/07	40
Castle Rock, CO	—	2,905	5,002	—	—	2,905	5,002	7,907	1,037	2005	09/07	40
Evansville, IN	—	1,300	4,269	—	—	1,300	4,269	5,569	1,011	1999	09/07	35
Galesburg, IL	—	1,205	2,441	—	—	1,205	2,441	3,646	506	2003	09/07	40
Machesney Park, IL	—	3,018	8,770	—	—	3,018	8,770	11,788	1,818	2005	09/07	40
Michigan City, IN	—	1,996	8,422	—	—	1,996	8,422	10,418	1,746	2005	09/07	40

See accompanying report of independent registered public accounting firm.

F-2

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:

Muncie, IN	—	1,243	5,512	—	—	1,243	5,512	6,755	1,143	2005	09/07		40
Naperville, IL	—	6,141	11,624	—	—	6,141	11,624	17,765	2,410	2006	09/07		40
New Lenox, IL	—	6,778	10,980	—	—	6,778	10,980	17,758	2,276	2004	09/07		40
Chicago, IL	—	7,257	10,955	—	—	7,257	10,955	18,212	2,180	2007	01/08		40
Johnson Creek, WI	—	1,433	3,932	—	—	1,433	3,932	5,365	894	1997	01/08		35
Lake Delton, WI	—	2,063	8,366	—	—	2,063	8,366	10,429	1,902	1999	01/08		35
Quincy, IL	—	1,297	2,850	—	—	1,297	2,850	4,147	648	1982	01/08		35
Schererville, IN	—	6,619	14,225	—	—	6,619	14,225	20,844	3,774	1996	01/08		30
West Jordan, UT	—	3,302	245	3,109	—	3,302	3,354	6,656	8	2015	05/15	(m)	40

American Family Care:
Mobile, AL	—	843	562	348	—	843	910	1,753	243	1997	12/01		40
Alcoa, TN	—	1,221	—	1,730	—	1,221	1,730	2,951	99	2013	12/12	(m)	40
Cullman, AL	—	541	—	1,517	—	541	1,517	2,058	84	2013	12/12	(m)	40
Decatur, AL	—	460	1,283	—	—	460	1,283	1,743	111	2010	12/12		35
Nashville, TN	—	377	—	1,403	—	377	1,403	1,780	72	2013	12/12	(m)	40
Pace, FL	—	738	—	1,459	—	738	1,459	2,197	81	2013	12/12	(m)	40
Woodstock, GA	—	563	—	1,653	—	563	1,653	2,216	77	2014	12/12	(m)	40
Fairhope, AL	—	(l)	1,929	—	—	(l)	1,929	1,929	139	2012	02/13		40
Dothan, AL	—	667	—	1,400	—	667	1,400	2,067	80	2013	02/13	(m)	40
Auburn, AL	—	663	—	1,835	—	663	1,835	2,498	94	2013	03/13	(m)	40
Milton, GA	—	577	1,526	—	—	577	1,526	2,103	107	2012	03/13		40
Roswell, GA	—	814	—	1,851	—	816	1,851	2,667	64	2014	04/13	(m)	40
Marietta, GA	—	432	—	1,846	—	432	1,846	2,278	87	2014	04/13	(m)	40
Mt. Juliet, TN	—	875	1,566	—	—	875	1,566	2,441	96	2013	07/13		40
Chattanooga, TN	—	469	—	1,626	—	469	1,626	2,095	76	2014	07/13	(m)	40
Columbus, GA	—	550	—	1,520	—	550	1,520	2,070	71	2014	07/13	(m)	40
Birmingham, AL	—	445	—	1,640	—	445	1,640	2,085	80	2005	08/13	(o)	40
Hendersonville, TN	—	660	1,640	—	—	660	1,640	2,300	87	2013	11/13		40
Calera, AL	—	606	—	1,673	—	606	1,673	2,279	61	2014	12/13	(m)	40
Spring Hill, TN	—	589	—	1,718	—	589	1,718	2,307	52	2014	02/14	(m)	40
Athens, AL	—	497	—	1,834	—	497	1,834	2,331	48	2014	03/14	(m)	40

See accompanying report of independent registered public accounting firm.

F-3

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:

Panama City Beach, FL	—	995	—	1,745	—	995	1,745	2,740	49	2014	04/14	(m)	40
Gadsden, AL	—	527	—	1,565	—	527	1,565	2,092	41	2014	05/14		40

Knoxville, TN	—	2,021	—	2,118	—	2,021	2,118	4,139	20	2015	08/14	(m)	40
Fort Oglethorpe, GA	—	736	—	1,832	—	736	1,832	2,568	29	2015	08/14	(m)	40
Enterprise, AL	—	570	—	1,634	—	570	1,634	2,204	9	2015	01/15	(m)	(q)

American Freight:
Glen Allen, VA	—	889	1,948	—	—	889	1,948	2,837	954	1996	05/96		40

American Retail Service:
Lincoln City, OR	—	1,099	1,560	—	—	1,099	1,560	2,659	190	1973	12/12		25
Salem, OR	—	433	1,627	735	—	433	2,362	2,795	204	1999	12/12	(o)	40
Yuma, AZ	—	1,118	1,878	—	—	1,118	1,878	2,996	229	1987	12/12		25

Amoco:
Miami, FL	—	969	—	—	—	969	(i)	969	(i)	(i)	05/03		(i)
Sunrise, FL	—	949	—	—	—	949	(i)	949	(i)	(i)	06/03		(i)
Deerfield Beach, FL	—	770	274	26	—	770	300	1,070	71	1980	12/05		40

Amscot:
Tampa, FL	—	1,160	352	—	—	1,160	352	1,512	90	1981	10/05		40
Orlando, FL	—	764	—	891	—	764	891	1,655	211	2006	12/05		40
Orlando, FL	—	664	1,011	—	—	664	983	1,647	230	2006	12/05	(g)	40
Orlando, FL	—	358	—	900	—	358	900	1,258	216	2006	02/06	(g)	40
Orlando, FL	—	546	—	872	—	546	872	1,418	212	2006	02/06	(g)	40
Clearwater, FL	—	456	332	—	—	456	332	788	77	1967	09/06		40

See accompanying report of independent registered public accounting firm.

F-4

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)						Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Applebee's:
Ballwin, MO	—	1,496	1,404	—	—	1,496	1,404	2,900	493	1995	12/01	40
Cincinnati, OH	—	312	898	—	—	312	898	1,210	161	2,002	08/10	30
Crestview Hills, KY	—	1,069	1,367	—	—	1,069	1,367	2,436	294	1993	08/10	25
Danville, KY	—	641	1,645	—	—	641	1,645	2,286	295	2003	08/10	30
Florence, KY	—	1,075	1,488	—	—	1,075	1,488	2,563	320	1988	08/10	25
Frankfort, KY	—	862	1,610	—	—	862	1,610	2,472	289	1,993	08/10	30
Georgetown, KY	—	809	1,437	—	—	809	1,437	2,246	257	2001	08/10	30
Hilliard, OH	—	808	1,846	—	—	808	1,846	2,654	331	1998	08/10	30
Mason, OH	—	545	941	—	—	545	941	1,486	169	1997	08/10	30
Maysville, KY	—	513	1,387	—	—	513	1,387	1,900	213	2005	08/10	35
Nicholasville, KY	—	454	1,077	—	—	454	1,077	1,531	193	2000	08/10	30
Troy, OH	—	645	862	—	—	645	862	1,507	185	1996	08/10	25
Grove City, OH	—	511	1,415	—	—	511	1,415	1,926	246	1990	10/10	30
Kettering, OH	—	359	1,043	—	—	359	1,043	1,402	155	2005	10/10	35
Mesa, AZ	—	748	1,734	—	—	748	1,734	2,482	301	1998	10/10	30
Mesa, AZ	—	974	1,514	—	—	974	1,514	2,488	263	1992	10/10	30
Mt. Sterling, KY	—	510	1,392	—	—	510	1,392	1,902	207	2000	10/10	35
Phoenix, AZ	—	458	1,099	—	—	458	1,099	1,557	164	2004	10/10	35
Phoenix, AZ	—	781	1,456	—	—	781	1,456	2,237	253	1995	10/10	30
Angola, IN	—	478	1,533	—	—	478	1,533	2,011	64	2002	07/14	35

Arby's:
Colorado Springs, CO	—	206	534	—	—	206	534	740	187	1998	12/01	40
Thomson, GA	—	268	504	—	—	268	504	772	177	1997	12/01	40
Washington Courthouse, OH	—	157	546	—	—	157	546	703	192	1998	12/01	40
Whitmore Lake, MI	—	171	469	—	—	171	469	640	165	1993	12/01	40
Indianapolis, IN	—	456	830	—	—	456	830	1,286	35	2005	07/14	35
Indianapolis, IN	—	285	686	—	—	285	686	971	33	1998	07/14	30
Madison, GA	—	242	697	—	—	242	697	939	24	1985	02/15	25
Muncie, IN	—	400	876	—	—	400	876	1,276	23	1995	03/15	30
Gordonsville, TN	—	408	1,077	—	—	408	1,077	1,485	1	2009	12/15	30

See accompanying report of independent registered public accounting firm.

F-5

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
ARCO ampm:
Casa Grande, AZ	—	2,340	1,894	83	—	2,340	1,905	4,245	422	1993	05/08		35
Gilbert, AZ	—	1,317	1,304	85	—	1,166	1,325	2,491	301	1996	05/08		35
Globe, AZ	—	762	2,148	114	—	762	2,180	2,942	494	1998	05/08		35
Mesa, AZ	—	1,332	1,367	92	—	1,156	1,385	2,541	363	1986	05/08		30
Mesa, AZ	—	2,219	2,140	89	—	2,219	2,170	4,389	432	2000	05/08		40
Prescott, AZ	—	1,266	1,261	118	—	1,266	1,294	2,560	302	1997	05/08		35
Scottsdale, AZ	—	1,529	1,373	240	—	1,529	1,451	2,980	364	1999	05/08		35
Sedona, AZ	—	1,281	1,324	107	—	1,281	1,345	2,626	270	2000	05/08		40
Tucson, AZ	—	1,457	1,619	125	—	1,457	1,651	3,108	379	1995	05/08		35
Tucson, AZ	—	1,083	1,599	86	—	1,083	1,620	2,703	366	1992	05/08		35
Tucson, AZ	—	1,105	1,336	111	—	1,105	1,358	2,463	309	1992	05/08		35
Tucson, AZ	—	1,223	1,911	102	—	1,223	1,932	3,155	434	1996	05/08		35
Soldotna, AK	—	180	891	—	—	180	891	1,071	52	1985	07/14		25

Ashley Furniture:
Altamonte Springs, FL	—	2,906	4,877	315	—	2,906	5,192	8,098	2,350	1997	09/97		40
Florissant, MO	—	896	1,057	3,058	—	899	4,113	5,012	635	1996	04/03	(g)	40
Louisville, KY	—	1,667	4,989	—	—	1,667	4,989	6,656	1,346	2005	03/05		40

At Home:
Douglasville, GA	—	1,588	3,916	—	—	1,588	3,916	5,504	693	1987	06/12		20
Humble, TX	—	3,559	5,046	—	—	3,559	5,046	8,605	715	2001	06/12		25
Noblesville, IN	—	1,870	4,241	—	—	1,870	4,241	6,111	751	1995	06/12		20
Sandston, VA	—	1,972	6,599	—	—	1,972	6,599	8,571	935	1996	06/12		25
Greensboro, NC	—	2,121	6,460	—	—	2,121	6,460	8,581	655	1998	12/12		30
Greenville, SC	—	1,892	5,404	—	—	1,892	5,404	7,296	297	1996	08/14		25
Hilliard, OH	—	1,747	4,642	—	—	1,836	4,514	6,350	218	1994	10/14		25
San Antonio, TX	—	3,818	5,922	—	—	3,818	5,922	9,740	107	1999	06/15		30

AT&T:
Cincinnati, OH	—	297	443	347	—	312	775	1,087	249	1999	06/98		40

See accompanying report of independent registered public accounting firm.

F-6

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Auto Solution:
Albuquerque, NM	—	1,113	—	1,443	—	1,113	1,443	2,556	374	2005	04/04	(f)	40

Babies R Us:
Arlington, TX	—	831	2,612	—	—	831	2,612	3,443	1,274	1996	06/96		40
Independence, MO	—	1,679	2,302	115	—	1,679	2,417	4,096	837	1996	12/01		40

Bandana's BBQ:
St. Peters, MO	—	318	640	—	—	318	640	958	22	1981	02/15		25

BankUnited:
Orlando, FL	—	257	287	—	—	257	72	329	11	1988	07/92		30

Bar Louie:
Rochester, NY	—	792	1,535	104	—	792	1,639	2,431	328	1995	06/07		40

Barnes & Noble:
Brandon, FL	—	1,476	1,527	—	—	1,476	1,527	3,003	801	1995	08/94	(f)	40
Glendale, CO	—	3,245	2,722	—	—	3,245	2,722	5,967	1,446	1994	09/94		40
Houston, TX	—	3,308	2,396	—	—	3,308	2,396	5,704	1,213	1995	10/94	(f)	40
Plantation, FL	—	3,616	3,498	—	—	3,616	960	4,576	71	1996	05/95	(f)	30
Freehold, NJ (n)	—	2,917	2,261	—	—	2,917	2,261	5,178	1,126	1995	01/96		40
Dayton, OH	—	1,413	3,325	—	—	1,413	3,325	4,738	1,530	1996	05/97		40
Redding, CA	—	497	1,626	—	—	497	1,626	2,123	754	1997	06/97		40
Memphis, TN	—	1,574	2,242	—	—	1,574	2,242	3,816	668	1997	09/97		40
Marlton, NJ	—	2,831	4,319	—	—	2,709	4,319	7,028	1,849	1995	11/98		40

Batteries Plus Bulbs:
Sunrise, FL	—	287	424	41	—	287	465	752	124	1979	05/04		40

Bealls:
Sarasota, FL	—	1,078	1,795	—	—	1,078	1,795	2,873	560	1996	09/97		40

See accompanying report of independent registered public accounting firm.

F-7

Table of Contents



			Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances		Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Beautiful America Dry Cleaners:
Orlando, FL	10	(h)	40	111	—	—	40	111	151	33	2001	02/04		40

Bed Bath & Beyond:
Glen Allen, VA	—		1,184	2,843	179	—	1,184	3,021	4,205	997	1997	06/98		40
Glendale, AZ	—		1,082	—	2,758	—	1,082	2,758	3,840	1,135	1999	12/98	(g)	40
Midland, MI	—		231	—	2,705	—	231	2,705	2,936	617	2006	07/03		40
Colonie, NY	—		3,119	4,130	—	—	3,119	4,130	7,249	189	1967	08/14		30

Bell Carolina (Taco Bell):
Fayetteville, NC	—		149	1,652	—	—	149	1,652	1,801	102	1988	06/14		25
Fayetteville, NC	—		289	1,205	—	—	289	1,205	1,494	62	1998	06/14		30
Fayetteville, NC	—		298	1,989	—	—	298	1,989	2,287	102	2005	06/14		30
Fayetteville, NC	—		607	1,135	—	—	607	1,135	1,742	70	1982	06/14		25
Fayetteville, NC	—		686	1,631	—	—	686	1,631	2,317	101	1992	06/14		25
Fayetteville, NC	—		388	1,552	—	—	388	1,552	1,940	80	1996	06/14		30
Fayetteville, NC	—		497	1,691	—	—	497	1,691	2,188	87	2008	06/14		30
Fayetteville, NC	—		269	1,771	—	—	269	1,771	2,040	109	1993	06/14		25
Fayetteville, NC	—		448	1,334	—	—	448	1,334	1,782	69	1998	06/14		30
Holly Ridge, NC	—		189	1,791	—	—	189	1,791	1,980	79	2012	06/14		35
Hope Mills, NC	—		438	2,138	—	—	438	2,138	2,576	132	1990	06/14		25
Jacksonville, NC	—		577	1,304	—	—	577	1,304	1,881	57	2013	06/14		35
Jacksonville, NC	—		388	2,347	—	—	388	2,347	2,735	103	2007	06/14		35
Jacksonville, NC	—		398	2,069	—	—	398	2,069	2,467	106	1994	06/14		30
Jacksonville, NC	—		428	2,327	—	—	428	2,327	2,755	143	1993	06/14		25
Leland, NC	—		289	1,205	—	—	289	1,205	1,494	53	2008	06/14		35
Lumberton, NC	—		368	2,208	—	—	368	2,208	2,576	113	2003	06/14		30
Midway Park, NC	—		467	2,069	—	—	467	2,069	2,536	128	1993	06/14		25
Pembroke, NC	—		438	1,095	—	—	438	1,095	1,533	56	2008	06/14		30
Saint Pauls, NC	—		419	767	—	—	419	767	1,186	39	2008	06/14		30
Shallotte, NC	—		329	827	—	—	329	827	1,156	36	2011	06/14		35
Spring Lake, NC	—		408	2,009	—	—	408	2,009	2,417	88	2009	06/14		35
Whiteville, NC	—		179	1,315	—	—	179	1,315	1,494	58	2010	06/14		35
Wilmington, NC	—		547	1,423	—	—	547	1,423	1,970	63	2013	06/14		35
Wilmington, NC	—		587	2,277	—	—	587	2,277	2,864	100	2006	06/14		35
Wilmington, NC	—		239	1,463	—	—	239	1,463	1,702	64	2013	06/14		35
Swansboro, NC	—		430	1,359	—	—	430	1,359	1,789	24	2015	04/15		40

Best Buy:
Brandon, FL	—		2,985	2,772	—	—	2,985	2,772	5,757	1,308	1996	02/97		40
Cuyahoga Falls, OH	—		3,709	2,359	—	—	3,709	2,359	6,068	1,094	1970	06/97		40
Rockville, MD	—		6,233	3,419	—	—	6,233	3,419	9,652	1,578	1995	07/97		40
Fairfax, VA	—		3,052	3,218	—	—	3,052	3,218	6,270	1,478	1995	08/97		40
St. Petersburg, FL	—		4,032	2,611	—	—	4,032	2,611	6,643	1,013	1997	09/97		35
North Fayette, PA	—		2,331	2,293	—	—	2,331	2,293	4,624	1,006	1997	06/98		40
Denver, CO	—		8,882	4,373	—	—	8,882	4,373	13,255	1,590	1991	06/01		40
Albuquerque, NM	—		2,157	3,132	—	—	2,157	3,132	5,289	538	1992	09/11		25
Arlington, TX	—		1,372	3,890	—	—	1,372	3,890	5,262	668	1991	09/11		25
Beaumont, TX	—		614	2,177	—	—	614	2,177	2,791	467	1992	09/11		20
Dallas, TX (n)	—		906	—	—	—	906	—	906	(e)	(e)	09/11		(e)
Fort Collins, CO	—		2,054	3,346	—	—	2,054	3,346	5,400	574	1992	09/11		25
Fort Worth, TX	—		687	2,177	—	—	687	2,177	2,864	311	1992	09/11		30
Houston, TX	—		1,409	3,095	—	—	1,409	3,095	4,504	443	1992	09/11		30
Matteson, IL	—		384	2,089	—	—	384	2,089	2,473	448	1992	09/11		20
Nashua, NH	—		1,028	7,052	—	—	1,028	7,052	8,080	1,009	1999	09/11		30
North Attleborough, MA	—		2,761	4,165	—	—	2,761	4,165	6,926	596	1999	09/11		30
Schaumburg, IL	—		3,170	4,784	—	—	3,170	4,784	7,954	1,027	1965	09/11		20
Virginia Beach, VA	—		3,140	4,276	—	—	3,140	4,276	7,416	612	1999	09/11		30

Big Lots:
Dover, NJ	—		1,138	3,238	732	—	1,138	3,970	5,108	1,485	1995	11/98		40

BJ's Wholesale Club:
Orlando, FL	788	(h)	3,270	8,608	365	—	3,274	8,969	12,244	2,673	2001	02/04		40
Fairfax, VA	—		6,792	14,941	—	—	6,792	14,941	21,733	2,137	1992	09/11		30
Hamilton, NJ	—		3,166	29,373	—	—	3,166	29,373	32,539	3,602	2002	09/11		35
Hialeah, FL	—		4,792	14,067	—	—	4,792	14,067	18,859	2,012	2000	09/11		30
Roxbury, NJ	—		3,040	16,168	—	—	3,040	16,168	19,208	2,775	1993	09/11		25
W. Hartford, CT	—		2,846	14,299	—	—	2,846	14,299	17,145	2,046	1996	09/11		30

Blend Frozen Yogurt:
Lapeer, MI	—		63	457	—	—	63	436	499	94	2007	10/05		40

BMW:
Duluth, GA	—		4,434	4,080	6,559	—	4,504	10,639	15,143	2,765	1984	12/01		40

Bob's Discount Furniture:
Merrillville, IN	—		981	—	—	—	981	(e)	981	(e)	(e)	09/15	(m)	(e)

Bombones Sports Bar:
Dallas, TX	—		1,138	1,025	370	—	1,138	1,395	2,533	369	1994	12/01		40

Bonefish:
Mobile, AL	—		801	2,137	—	—	801	2,137	2,938	231	2006	03/12		35
Pensacola, FL	—		734	2,003	—	—	734	2,003	2,737	217	2004	03/12		35

Books-A-Million:
Newark, DE	—		2,394	4,789	—	—	2,366	4,789	7,155	2,517	1994	12/94		40
Bangor, ME	—		1,547	2,487	—	—	1,547	2,487	4,034	1,214	1996	06/96		40

Borough of Abbottstown:
Abbottstown, PA	—		55	200	—	—	55	200	255	50	2000	01/06		40

Boston Market:
Geneva, IL	—		653	601	—	—	669	518	1,187	188	1996	12/01		40
N. Olmsted, OH	—		602	461	—	—	602	389	991	137	1996	12/01		40
Novi, MI	—		836	651	—	—	836	298	1,134	108	1995	12/01		40

BP:
Jeannette, PA	—		79	235	—	—	79	235	314	14	1995	07/14		25

See accompanying report of independent registered public accounting firm.

F-8

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Buck's:
St. Louis, MO	—	776	—	3,822	—	776	3,822	4,598	641	2009	12/07	(o)	40
Glendale Heights, IL	—	1,662	—	—	—	1,662	(e)	1,662	(e)	(e)	03/14	(m)	(e)
Omaha, NE	—	2,662	—	—	—	2,662	(e)	2,662	(e)	(e)	05/15	(m)	(e)
Council Bluffs, IA	—	374	2,187	351	—	374	2,538	2,912	40	2015	06/15	(m)	40

Buffalo Wild Wings:
Michigan City, IN	—	163	492	—	—	163	492	655	173	1996	12/01		40

Burger King:
Colonial Heights, VA	—	662	610	—	—	662	610	1,272	214	1997	12/01		40
Clifton Park, NY	—	199	1,639	—	—	199	1,639	1,838	41	2004	02/15		35
Colorado Springs, CO	—	638	1,047	—	—	638	1,047	1,685	37	1978	02/15		25
Durham, NC (n)	—	604	581	—	—	604	581	1,185	17	2005	02/15		30
Durham, NC (n)	—	566	555	—	—	566	555	1,121	16	1998	02/15		30
Farmington, ME	—	461	708	—	—	461	708	1,169	21	1980	02/15		30
Yakima, WA	—	596	1,110	—	—	596	1,110	1,706	32	1979	02/15		30
Fairfield, OH	—	382	1,146	—	—	382	1,146	1,528	26	1984	03/15		35

Burlington Coat Factory:
Lacey, WA	—	2,777	7,082	3,291	—	2,777	10,373	13,150	3,534	1992	02/97		40
Chesterfield, MO	—	2,742	6,469	—	—	2,742	6,469	9,211	74	2015	04/15		40

Buybacks Entertainment:
Lafayette, LA	—	603	1,149	30	—	603	1,179	1,782	292	1999	12/05		40

C&C Gymnastics:
Augusta, GA	—	177	674	—	—	177	674	851	237	1998	12/01		40

Caliber Collision:
Alvin, TX	—	400	712	—	—	400	712	1,112	174	1984	02/11		20
Galveston, TX	—	361	789	—	—	361	789	1,150	192	1965	02/11		20
Houston, TX	—	348	1,731	—	—	348	1,731	2,079	338	1987	02/11		25
Copperas Cove, TX	—	269	1,436	—	—	269	1,436	1,705	162	1972	01/12		35

See accompanying report of independent registered public accounting firm.

F-9

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Killeen, TX	—	408	2,171	—	—	408	2,171	2,579	344	1986	01/12		25
Austin, TX	—	1,071	3,412	—	—	1,071	3,412	4,483	529	1975	02/12		25
Gilbert, AZ	—	474	1,543	—	—	474	1,543	2,017	186	2003	05/12		30
Spring, TX	—	913	2,307	—	—	913	2,307	3,220	272	2006	06/12		30
Tomball, TX	—	414	1,281	—	—	414	1,281	1,695	130	2009	06/12		35
Edmond, OK	—	472	1,437	—	—	472	1,437	1,909	134	1964	03/13		30

Camping World:
Vacaville, CA	—	2,467	6,575	—	—	2,467	6,575	9,042	1,025	2008	07/10		35
North Little Rock, AR	—	1,198	3,348	2,237	—	1,280	5,513	6,793	630	2007	09/10	(o)	35
Strafford, MO	—	1,278	3,694	2,099	—	1,846	5,225	7,071	608	2007	09/10	(o)	35
Avondale, AZ	—	1,976	3,040	3,200	—	1,976	6,239	8,215	649	2009	05/11	(o)	35
Mesa, AZ	—	3,972	2,046	981	—	3,975	3,027	7,002	470	1983	05/11		25
Bowling Green, KY	—	584	2,481	—	—	584	2,481	3,065	316	2007	07/11		35
Council Bluffs, IA	—	2,013	2,806	945	—	2,955	2,806	5,761	357	2008	07/11	(o)	35
Roanoke, VA	—	2,046	5,050	1,517	—	3,563	5,050	8,613	643	2008	07/11	(o)	35
Golden, CO	—	5,516	—	6,544	—	6,446	6,544	12,990	607	2012	10/11	(m)	40
Belleville, MI	—	1,156	2,071	—	—	1,156	2,071	3,227	335	1986	12/11		25
Kissimmee, FL	—	1,578	2,783	—	—	1,578	2,783	4,361	450	1979	12/11		25
La Mirada, CA	—	3,593	911	—	—	3,577	907	4,484	122	1996	12/11		30
Myrtle Beach, SC	—	540	61	—	—	540	61	601	10	1976	12/11		25
Nashville, TN	—	1,155	1,034	5,665	—	3,626	4,235	7,861	431	1985	12/11	(o)	40
Valencia, CA	—	4,788	4,191	—	—	4,766	4,179	8,945	676	1980	12/11		25
Calera, AL	—	1,204	3,075	—	—	1,204	3,075	4,279	333	2008	03/12		35
Jacksonville, FL	—	2,343	2,679	—	—	1,289	2,679	3,968	406	1973	03/12		25
Louisville, TN	—	990	554	1,194	—	990	1,748	2,738	131	1977	03/12	(o)	40
Winter Garden, FL	—	1,173	3,178	—	—	1,173	3,178	4,351	402	1973	03/12		30
Cocoa, FL	—	1,194	1,876	—	—	1,194	1,876	3,070	216	1981	07/12		30
Dover, FL	—	2,431	9,658	3,047	—	5,478	9,658	15,136	726	2013	01/13		35
Grain Valley, MO	—	1,210	2,908	1,709	—	2,533	3,294	5,827	192	2003	09/13	(o)	35
Lubbock, TX	—	775	3,998	—	—	775	3,998	4,773	305	1997	09/13		30
Olive Branch, MS	—	3,163	—	3,836	—	3,163	3,836	6,999	140	2014	11/13	(m)	40
Cedar Falls, IA	—	1,924	3,810	1,426	—	1,924	5,235	7,159	250	2015	03/14	(o)	30
Akron, OH	—	1,221	7,868	—	—	1,221	7,868	9,089	249	1991	03/15		25

See accompanying report of independent registered public accounting firm.

F-10

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Anniston, AL	—	3,206	5,328	1,284	—	3,206	6,612	9,818	150	2015	03/15	(o)	30
Richmond, IN	—	1,096	1,424	—	—	1,096	1,424	2,520	38	1998	03/15		30
Marion, NC	—	1,712	5,317	—	—	1,712	5,317	7,029	115	2003	06/15		25
Syracuse, NY	—	1,070	8,573	—	—	1,070	8,573	9,643	155	2001	06/15		30
North Charleston, SC	—	2,444	681	—	—	2,444	681	3,125	12	1985	07/15	(o)	25
Jackson, MS	—	1,690	4,241	—	—	1,690	4,241	5,931	40	2015	08/15		40

Captain D's:
Tupelo, MS	—	360	517	—	—	360	517	877	15	1999	02/15		30
Ft. Worth, TX	—	254	563	—	—	254	563	817	22	1982	03/15		20
Kingsland, GA	—	570	—	843	—	570	843	1,413	(q)	2015	09/15	(q)	(q)
Dothan, AL	—	159	1,075	—	—	159	1,075	1,234	1	1985	12/15		30

Carl's Jr.:
Spokane, WA (n)	—	471	530	—	—	471	530	1,001	186	1996	12/01		40
Chandler, AZ	—	729	644	—	—	729	644	1,373	340	1984	06/05		20
Tucson, AZ	—	681	536	103	—	681	639	1,320	639	1988	06/05		10

Carmike Cinemas:
Fayetteville, NC	—	2,409	—	13,750	—	2,409	13,750	16,159	387	2014	11/13		40
Montgomery, AL	—	1,686	11,156	—	—	1,686	11,156	12,842	360	2014	09/14		40
Albuquerque, NM	—	1,474	—	10,301	—	1,474	10,301	11,775	54	2015	11/14	(m)	40

See accompanying report of independent registered public accounting firm.

F-11

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)						Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
CarQuest:
Abbeville, LA	—	23	148	—	—	23	148	171	37	1970	12/10	20
Abbotsford, WI	—	56	163	—	—	56	163	219	33	1984	12/10	25
Aberdeen, SD (n)	—	71	329	—	—	71	329	400	83	1961	12/10	20
Addison, IL	—	76	314	—	—	76	314	390	63	1971	12/10	25
Alsip, IL	—	57	323	—	—	57	323	380	81	1972	12/10	20
Anaconda, MT	—	35	307	—	—	35	307	342	77	1965	12/10	20
Ann Arbor, MI	—	25	241	—	—	25	241	266	61	1970	12/10	20
Antigo, WI	—	96	294	—	—	96	294	390	49	1998	12/10	30
Appleton, WI (n)	—	85	438	—	—	85	438	523	74	1995	12/10	30
Arden, NC	—	42	281	—	—	42	281	323	57	1989	12/10	25
Baker, MT	—	12	140	—	—	12	140	152	35	1965	12/10	20
Bakersfield, CA	—	77	484	—	—	77	484	561	122	1945	12/10	20
Bangor, ME (n)	—	53	356	—	—	53	356	409	120	1945	12/10	15
Bangor, ME	—	51	339	—	—	51	339	390	68	1985	12/10	25
Bartlett, TN	—	40	293	—	—	40	293	333	59	1989	12/10	25
Bay City, MI	—	14	100	—	—	14	100	114	34	1942	12/10	15
Bay City, MI	—	106	521	—	—	106	521	627	175	1920	12/10	15
Bay City, MI	—	41	282	—	—	41	282	323	57	1989	12/10	25
Bellevue, NE	—	29	142	—	—	29	142	171	36	1965	12/10	20
Bend, OR	—	125	245	—	—	125	245	370	83	1935	12/10	15
Biddeford, ME	—	60	320	—	—	60	320	380	81	1968	12/10	20
Billings, MT	—	31	188	—	—	31	188	219	38	1970	12/10	25
Bismarck, ND	—	25	136	—	—	25	136	161	27	1985	12/10	25
Bozeman, MT	—	28	257	—	—	28	257	285	65	1964	12/10	20
Brunswick, ME	—	41	254	—	—	41	254	295	51	1985	12/10	25
Bucksport, ME	—	19	114	—	—	19	114	133	29	1976	12/10	20
Burlington, NC	—	47	229	—	—	47	229	276	38	1994	12/10	30
Carol Stream, IL	—	103	515	—	—	103	515	618	130	1960	12/10	20
Chicago, IL	—	83	383	—	—	83	383	466	77	1987	12/10	25
Chippewa Falls, WI	—	33	328	—	—	33	328	361	55	1996	12/10	30
Cody, WY (n)	—	146	253	—	—	96	253	349	43	1999	12/10	30
Colstrip, MT	—	39	275	—	—	39	275	314	55	1981	12/10	25
Connersville, IN	—	28	171	—	—	28	171	199	58	1920	12/10	15
Corapolis, PA (n)	—	74	316	—	—	74	316	390	80	1980	12/10	20
Cut Bank, MT	—	9	115	—	—	9	115	124	29	1937	12/10	20
Devils Lake, ND	—	38	276	—	—	38	276	314	46	1999	12/10	30
Dillon, MT	—	24	204	—	—	24	204	228	51	1973	12/10	20
Dodge City, KS (n)	—	43	166	—	—	43	166	209	56	1948	12/10	15
Eau Claire, WI	—	33	204	—	—	33	204	237	51	1956	12/10	20
Elgin, IL	—	88	311	—	—	88	311	399	78	1965	12/10	20
Enterprise, AL	—	25	184	—	—	25	184	209	37	1988	12/10	25
Escanaba, MI	—	40	283	—	—	40	283	323	57	1982	12/10	25
Evansville, IN	—	60	301	—	—	60	301	361	61	1980	12/10	25
Fairbanks, AK	—	292	545	—	—	292	545	837	78	2003	12/10	35
Gainesville, FL (n)	—	47	362	—	—	47	362	409	122	1957	12/10	15
Glasgow, MT	—	48	275	—	—	48	275	323	69	1972	12/10	20
Great Falls, MT	—	17	173	—	—	17	173	190	44	1967	12/10	20
Greenville, OH	—	63	193	—	—	63	193	256	65	1910	12/10	15
Hamilton, MT	—	24	242	—	—	24	242	266	49	1991	12/10	25
Harlem, MT	—	17	116	—	—	17	116	133	23	1983	12/10	25
Hayward, WI	—	57	333	—	—	57	333	390	67	1980	12/10	25
Helena, MT	—	31	282	—	—	31	282	313	57	1987	12/10	25
Houlton, ME	—	38	219	—	—	38	219	257	110	1915	12/10	10
Irving, TX	—	182	208	—	—	182	208	390	52	1984	12/10	20
Kalispell, MT (n)	—	59	645	—	—	59	645	704	108	1998	12/10	30
Kennedale, TX	—	88	283	—	—	88	283	371	71	1959	12/10	20
Lafayette, LA	—	51	357	—	—	51	357	408	60	1996	12/10	30
Laurel, MS	—	74	202	—	—	74	202	276	68	1959	12/10	15
Lewistown, MT	—	19	180	—	—	19	180	199	36	1964	12/10	25
Livingston, MT	—	34	261	—	—	34	261	295	66	1976	12/10	20
Lufkin, TX	—	94	229	—	—	94	229	323	58	1986	12/10	20
Madison, TN	—	78	179	—	—	78	179	257	36	1988	12/10	25
Madison, WI	—	57	409	—	—	57	409	466	82	1973	12/10	25
Malta, MT	—	19	181	—	—	19	181	200	36	1976	12/10	25
Marshfield, WI	—	60	282	—	—	60	282	342	71	1940	12/10	20
Medford, WI	—	37	229	—	—	37	229	266	46	1988	12/10	25
Memphis, TN	—	38	199	—	—	38	199	237	40	1987	12/10	25
Metamora, IL	—	69	292	—	—	69	292	361	49	1996	12/10	30
Midland, MI	—	44	336	—	—	44	336	380	56	1986	12/10	30
Midland, TX	—	36	212	—	—	36	212	248	71	1960	12/10	15
Montello, WI	—	26	173	—	—	26	173	199	29	1997	12/10	30
Muskegon, MI	—	38	257	—	—	38	257	295	43	1990	12/10	30
Neillsville, WI	—	26	145	—	—	26	145	171	29	1979	12/10	25
Nicholasville, KY	—	54	241	—	—	54	241	295	49	1988	12/10	25
Ocala, FL	—	78	416	—	—	78	416	494	140	1971	12/10	15
Olathe, KS	—	78	235	—	—	78	235	313	79	1950	12/10	15
Oshkosh, WI	—	99	224	—	—	99	224	323	38	1999	12/10	30
Overland, MO	—	68	370	—	—	68	370	438	93	1961	12/10	20
Owosso, MI	—	50	264	—	—	50	264	314	53	1986	12/10	25
Pearl, MS	—	43	195	—	—	43	195	238	33	1989	12/10	30
Phillips, WI	—	23	177	—	—	23	177	200	30	1992	12/10	30
Powell, WY	—	37	182	—	—	37	182	219	37	1978	12/10	25
Rhinelander, WI	—	28	115	—	—	28	115	143	29	1958	12/10	20
River Falls, WI	—	42	234	—	—	42	234	276	59	1976	12/10	20
Riverton, WY	—	99	300	—	—	99	300	399	61	1978	12/10	25
Rockford, IL	—	61	376	—	—	61	376	437	76	1962	12/10	25
Roundup, MT	—	23	205	—	—	23	205	228	52	1972	12/10	20
Schofield, WI	—	41	425	—	—	41	425	466	107	1968	12/10	20
Sheboygan, WI	—	77	370	—	—	77	370	447	53	2007	12/10	35
Shelby, MT	—	20	208	—	—	20	208	228	52	1976	12/10	20
Shelbyville, KY	—	52	224	—	—	52	224	276	45	1982	12/10	25
Sidney, MT (n)	—	42	395	—	—	42	395	437	100	1962	12/10	20
Spartanburg, SC	—	53	252	—	—	53	252	305	51	1972	12/10	25
Spokane, WA	—	66	201	—	—	66	201	267	51	1965	12/10	20
Spokane, WA	—	93	373	—	—	93	373	466	94	1972	12/10	20
St. Peter, MN	—	17	259	—	—	17	259	276	43	1999	12/10	30
Stayton, OR	—	88	312	—	—	88	312	400	52	1994	12/10	30
Stevens Point, WI (n)	—	61	405	—	—	61	405	466	82	1975	12/10	25
Sulphur, LA	—	31	216	—	—	31	216	247	55	1984	12/10	20
Thornton, CO	—	414	536	—	—	414	536	950	90	1996	12/10	30
Troy, AL	—	15	52	—	—	15	52	67	17	1966	12/10	15

See accompanying report of independent registered public accounting firm.

F-12

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)						Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Wasilla, AK	—	227	504	—	—	227	504	731	73	2002	12/10	35
Wausau, WI	—	52	300	—	—	52	300	352	60	1989	12/10	25
Wautoma, WI	—	18	106	—	—	18	106	124	27	1959	12/10	20
Waynesboro, MS	—	15	71	—	—	15	71	86	24	1962	12/10	15
West Columbia, SC	—	41	159	—	—	41	159	200	40	1962	12/10	20
West Memphis, AR	—	58	294	—	—	58	294	352	59	1987	12/10	25
Whitefish, MT	—	30	227	—	—	30	227	257	38	1993	12/10	30
Williston, ND	—	35	297	—	—	35	297	332	50	1999	12/10	30
Windom, MN	—	5	137	—	—	5	137	142	35	1950	12/10	20
Wisconsin Rapids, WI	—	41	215	—	—	41	215	256	54	1975	12/10	20
Yakima, WA	—	50	321	—	—	50	321	371	81	1965	12/10	20
Aurora, IL	—	641	226	—	—	641	226	867	55	1971	02/11	20
Benton Harbor, MI	—	207	160	—	—	207	160	367	39	1978	02/11	20
Caro, MI	—	85	132	—	—	85	132	217	64	1941	02/11	10
Eagle River, WI	—	99	52	—	—	99	52	151	13	1978	02/11	20
Essexville, MI	—	113	113	—	—	113	113	226	28	1974	02/11	20
Lexington, KY	—	85	226	—	—	85	226	311	37	1991	02/11	30
Mt. Pleasant, MI	—	85	207	—	—	85	207	292	40	1984	02/11	25
Saginaw, MI	—	179	75	—	—	179	75	254	37	1955	02/11	10
Warrenton, VA	—	123	66	—	—	123	66	189	32	1939	02/11	10
Billings, MT	—	66	291	—	—	66	291	357	52	1994	07/11	25
Mobile, AL	—	75	197	—	—	75	197	272	44	1975	07/11	20
New Castle, IN	—	113	19	—	—	113	19	132	3	1991	07/11	25
Spokane, WA	—	75	56	—	—	75	56	131	13	1955	07/11	20
Chicago, IL	—	90	239	—	—	90	239	329	66	1949	11/11	15
Missoula, MT	—	99	367	—	—	99	367	466	76	1965	11/11	20
Sheridan, WY	—	198	385	—	—	198	385	583	79	1980	11/11	20
Sauk Centre, MN	—	64	85	—	—	64	85	149	14	1958	11/11	25
Watford City, ND	—	31	124	—	—	31	124	155	20	1974	11/11	25
Fairmont, MN	—	98	166	—	—	98	166	264	33	1978	01/12	20
Sycamore, IL	—	49	476	—	—	49	476	525	94	1924	01/12	20
Worland, WY	—	48	193	—	—	48	193	241	36	1949	04/12	20
Anchorage, AK	—	315	92	—	—	315	92	407	16	1971	06/12	20
Havre, MT	—	29	305	—	—	29	305	334	54	1964	06/12	20

See accompanying report of independent registered public accounting firm.

F-13

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Orchard Park, NY	—	353	—	725	—	267	725	992	40	2013	05/13	(m)	40
Morrisville, NC	—	127	332	—	—	127	332	459	35	1992	05/13		25
Salt Lake City, UT	—	571	697	—	—	571	697	1,268	92	1951	05/13		20
San Antonio, TX	—	137	361	—	—	137	361	498	47	1980	05/13		20
San Antonio, TX	—	87	719	—	—	87	719	806	75	1973	05/13		25
Jackson, MS	—	253	—	604	—	253	604	857	31	2013	06/13	(m)	40
Crestview, FL	—	158	463	—	—	158	463	621	35	2003	09/13		30
Depew, NY	—	309	—	821	—	309	821	1,130	33	2014	10/13	(m)	40
Sherman, TX	—	183	—	657	—	183	657	840	31	2005	01/14	(o)	35

Carrabba's:
Canton, MI	—	685	1,687	—	—	685	1,687	2,372	213	2002	03/12		30
Cape Coral, FL	—	645	2,965	—	—	645	2,965	3,610	321	2005	03/12		35
Dallas, TX	—	672	1,078	—	—	672	1,078	1,750	136	2000	03/12		30
Gainesville, FL	—	922	1,944	—	—	922	1,944	2,866	246	2001	03/12		30
Jacksonville, FL	—	1,140	1,428	—	—	1,140	1,428	2,568	180	2001	03/12		30
Mason, OH	—	653	2,267	—	—	653	2,267	2,920	287	2000	03/12		30
Maumee, OH	—	525	2,684	—	—	525	2,684	3,209	339	2002	03/12		30
Mobile, AL	—	633	1,909	—	—	633	1,909	2,542	241	2001	03/12		30
Pensacola, FL	—	734	1,854	—	—	734	1,854	2,588	201	2003	03/12		35
Waldorf, MD	—	1,473	2,199	—	—	1,473	2,199	3,672	238	2007	03/12		35

Carvers:
Centerville, OH	—	851	1,059	—	—	851	1,059	1,910	372	1986	12/01		40

Chair King:
Grapevine, TX	—	1,018	2,067	273	—	1,018	2,340	3,358	936	1998	06/98		40

Champps:
Irving, TX	—	1,760	1,724	—	—	1,760	1,724	3,484	605	2000	12/01		40

Charleston Auto Auction:
Moncks Corner, SC	—	1,628	5,911	—	—	1,628	5,911	7,539	57	2000	09/15	(o)	30

See accompanying report of independent registered public accounting firm.

F-14

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Cheddar's Cafe:
Baytown, TX	—	858	2,251	—	—	858	2,251	3,109	284	2010	12/10		40
West Monroe, LA	—	907	2,301	—	—	907	2,301	3,208	285	2010	01/11		40
Selma, TX	—	1,446	—	2,439	—	1,446	2,439	3,885	262	2011	03/11	(m)	40
Jonesboro, AR	—	1,206	—	2,459	—	1,206	2,459	3,665	254	2011	05/11	(m)	40
Hattiesburg, MS	—	1,203	—	—	—	1,196	(i)	1,196	(i)	(i)	11/11		(i)
Pleasant Prairie, WI	—	1,310	—	2,779	—	1,310	2,779	4,089	153	2013	04/13	(m)	40
Liberty, MO	—	1,313	—	3,140	—	1,313	3,140	4,453	154	2014	07/13	(m)	40

Chick-Fil-A:
Ankeny, IA	—	662	—	—	—	662	(i)	662	(i)	(i)	06/05		(i)

Chili's:
Camden, SC	—	627	1,888	—	—	627	1,888	2,515	486	2005	09/05		40
Milledgeville, GA	—	516	1,997	—	—	516	1,997	2,513	514	2005	09/05		40
Sumter, SC	—	800	1,717	—	—	800	1,717	2,517	431	2004	12/05		40
Hinesville, GA	—	921	1,898	—	—	921	1,898	2,819	421	2006	02/07		40
Albany, GA	—	615	—	1,984	—	615	1,984	2,599	407	2007	06/07	(m)	40
Statesboro, GA	—	703	—	1,888	—	703	1,888	2,591	383	2007	06/07	(m)	40
Florence, SC	—	889	1,715	—	—	889	1,715	2,604	366	2007	06/07		40
Valdosta, GA	—	716	—	1,871	—	716	1,871	2,587	376	2007	07/07	(m)	40
Tifton, GA	—	454	1,550	—	—	454	1,550	2,004	279	2008	06/08		40
Evans, GA	—	700	—	1,511	—	685	1,511	2,196	260	2009	10/08	(m)	40
Jefferson City, MO	—	305	898	—	—	305	898	1,203	155	2003	12/09		35
Merriam, KS	—	853	981	—	—	853	981	1,834	198	1998	12/09		30
Wichita, KS	—	420	623	—	—	420	623	1,043	126	1995	12/09		30
Hutchinson, KS	—	456	1,794	—	—	456	1,794	2,250	172	2004	02/13		30
Lexington, SC	—	630	1,620	—	—	630	1,620	2,250	133	2008	02/13		35

China 1:
Cohoes, NY	—	16	87	6	—	16	93	109	28	1994	09/04		40

China Wok:
Carlisle, PA	—	90	107	—	—	90	107	197	25	1988	01/06		40

See accompanying report of independent registered public accounting firm.

F-15

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Chipotle:
Florissant, MO	—	50	59	170	—	50	228	278	35	2013	04/03	(g)	40

Chuck E. Cheese's:
Mobile, AL	—	340	951	—	—	340	951	1,291	196	1981	11/11		20
Antioch, TN	—	459	1,738	—	—	459	1,738	2,197	169	1982	07/14		15
Huntsville, AL	—	382	1,182	—	—	382	1,182	1,564	86	1960	07/14		20
Saginaw, MI	—	489	1,203	—	—	489	1,203	1,692	88	1981	07/14		20
Albuquerque, NM	—	794	2,126	—	—	794	2,126	2,920	84	2003	08/14		35
Alexandria, LA	—	872	3,291	—	—	872	3,291	4,163	181	1983	08/14		25
Alpharetta, GA	—	2,027	1,743	—	—	2,027	1,743	3,770	80	2001	08/14		30
Atlanta, GA	—	1,313	1,656	—	—	1,313	1,656	2,969	91	1982	08/14		25
Austin, TX	—	852	4,024	—	—	852	4,024	4,876	184	2001	08/14		30
Batavia, IL	—	1,214	2,664	—	—	1,214	2,664	3,878	122	1999	08/14		30
Birmingham, AL	—	627	3,662	—	—	627	3,662	4,289	201	1982	08/14		25
Columbia, SC	—	509	2,655	—	—	509	2,655	3,164	122	1983	08/14		30
Conroe, TX	—	793	3,388	—	—	793	3,388	4,181	155	2001	08/14		30
Cordova, TN	—	1,195	3,055	—	—	1,195	3,055	4,250	140	2002	08/14		30
Denton, TX	—	833	1,245	—	—	833	1,245	2,078	49	2003	08/14		35
El Centro, CA	—	470	2,811	—	—	470	2,811	3,281	110	2005	08/14		35
Englewood, CO	—	911	3,056	—	—	911	3,056	3,967	140	1970	08/14		30
Foothill Ranch, CA	—	1,088	1,391	—	—	1,088	1,391	2,479	64	2003	08/14		30
Ft. Wayne, IN	—	686	3,232	—	—	686	3,232	3,918	148	1985	08/14		30
Garland, TX	—	1,224	2,302	—	—	1,224	2,302	3,526	90	2006	08/14		35
Grand Prairie, TX	—	1,380	4,983	—	—	1,380	4,983	6,363	228	2001	08/14		30
Grapevine, TX	—	1,303	2,135	—	—	1,303	2,135	3,438	98	2002	08/14		30
Greenville, SC	—	764	3,554	—	—	764	3,554	4,318	195	1983	08/14		25
Hickory, NC	—	647	1,686	—	—	647	1,686	2,333	66	2002	08/14		35
Hickory, NC	—	960	3,388	—	—	960	3,388	4,348	133	2002	08/14		35
Jacksonville, FL	—	1,038	4,220	—	—	1,038	4,220	5,258	232	1981	08/14		25
Katy, TX	—	960	4,171	—	—	960	4,171	5,131	191	2002	08/14		30
Kennesaw, GA	—	1,332	3,818	—	—	1,332	3,818	5,150	175	1999	08/14		30
Killeen, TX	—	832	4,876	—	—	832	4,876	5,708	192	2004	08/14		35
Lake Charles, LA	—	853	1,539	—	—	853	1,539	2,392	71	2001	08/14		30

See accompanying report of independent registered public accounting firm.

F-16

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Littleton, CO	—	1,234	4,288	—	—	1,234	4,288	5,522	197	1994	08/14		30
Longview, TX	—	314	1,931	—	—	314	1,931	2,245	76	2004	08/14		35
Madison, WI	—	999	1,989	—	—	999	1,989	2,988	109	1982	08/14		25
Miamisburg, OH	—	607	4,416	—	—	607	4,416	5,023	243	1986	08/14		25
Midland, TX	—	588	2,537	—	—	588	2,537	3,125	116	2000	08/14		30
N. Richland Hills, TX	—	588	4,064	—	—	588	4,064	4,652	223	1982	08/14		25
Norcross, GA	—	1,077	2,703	—	—	1,077	2,703	3,780	149	1982	08/14		25
North Charleston, SC	—	1,449	3,319	—	—	1,449	3,319	4,768	152	2003	08/14		30
Oklahoma City, OK	—	499	3,203	—	—	499	3,203	3,702	176	1982	08/14		25
Olathe, KS	—	843	736	—	—	843	736	1,579	34	2002	08/14		30
Racine, WI	—	765	834	—	—	765	834	1,599	38	2000	08/14		30
Roanoke, TX	—	617	4,787	—	—	617	4,787	5,404	263	1983	08/14		25
San Antonio, TX	—	793	4,670	—	—	793	4,670	5,463	257	1990	08/14		25
San Antonio, TX	—	1,371	2,703	—	—	1,371	2,703	4,074	124	2001	08/14		30
Savannah, GA	—	1,469	2,634	—	—	1,469	2,634	4,103	145	1982	08/14		25
Sharonville, OH	—	696	1,597	—	—	696	1,597	2,293	88	1982	08/14		25
Sterling Heights, MI	—	725	2,322	—	—	725	2,322	3,047	106	1994	08/14		30
Sugarland, TX	—	1,107	3,134	—	—	1,107	3,134	4,241	144	2002	08/14		30
Topeka, KS	—	373	619	—	—	373	619	992	28	1990	08/14		30
Virginia Beach, VA	—	1,018	3,848	—	—	1,018	3,848	4,866	212	1984	08/14		25
Wichita Falls, TX	—	323	3,105	—	—	323	3,105	3,428	171	1982	08/14		25
Wichita, KS	—	862	2,850	—	—	862	2,850	3,712	131	1991	08/14		30
Yuma, AZ	—	471	668	—	—	471	668	1,139	26	2004	08/14		35

Chuy's:
Cincinnati, OH	—	1,165	1,322	—	—	1,165	1,322	2,487	105	1996	05/13		30

Cinemark:
Draper, UT	—	1,523	—	4,487	—	1,523	4,487	6,010	519	2011	08/10	(m)	40
Fort Worth, TX	—	2,140	—	7,660	—	2,140	7,660	9,800	678	2012	08/11	(o)	40
Cincinnati, OH	—	1,334	—	10,206	—	1,334	10,206	11,540	606	2013	09/12	(m)	40
McCandless, PA	—	3,094	—	6,389	—	3,094	6,389	9,483	206	2014	09/13	(m)	40
Marina, CA	—	15	—	5,614	—	15	5,614	5,629	29	2015	08/14	(m)	40
Altoona, IA	—	1,161	—	—	—	1,161	(e)	1,161	(e)	(e)	01/15	(m)	(e)

See accompanying report of independent registered public accounting firm.

F-17

Table of Contents



			Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances		Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:

Claim Jumper:
Roseville, CA	—		1,557	2,014	—	—	1,557	2,014	3,571	707	2000	12/01		40
Tempe, AZ	—		2,531	2,921	—	—	2,531	2,921	5,452	1,025	2000	12/01		40

Clairton Mini Mart:
Clairton, PA	—		215	701	—	—	215	701	916	279	1986	01/06		25

Coastal Bend Skates:
Aransas Pass, TX	—		90	1,241	245	—	89	1,485	1,574	541	1983	03/99		40

Continental Rental:
Lapeer, MI	—		88	633	—	—	88	603	691	130	2007	10/05		40

Cool Crest:
Independence, MO	—		1,838	1,534	75	—	1,838	1,609	3,447	338	1988	05/07		40

CORA Rehabilitation Clinics:
Orlando, FL	21	(h)	80	221	—	—	80	221	301	66	2001	02/04		40

CTD Outdoor Adventures:
Fort Worth, TX	—		1,652	2,018	—	—	1,652	2,018	3,670	549	2000	02/05		40

CVS:
Lafayette, LA	—		968	—	—	—	968	(c)	968	(c)	1995	01/96		(c)
Fort Lauderdale, FL	—		3,165	3,319	190	—	3,165	3,509	6,674	1,384	1995	02/96		33
Midwest City, OK	—		673	1,103	—	—	673	1,103	1,776	547	1996	03/96		40
Pantego, TX	—		1,016	1,449	—	—	1,016	1,449	2,465	672	1997	06/97		40
Arlington, TX	—		2,079	—	1,397	—	2,079	1,397	3,476	607	1998	11/97	(g)	40
Leavenworth, KS	—		726	—	1,331	—	726	1,331	2,057	584	1998	11/97	(g)	40
Lewisville, TX	—		789	—	1,335	—	789	1,335	2,124	577	1998	04/98	(g)	40
Forest Hill, TX	—		692	—	1,175	—	692	1,175	1,867	510	1998	04/98	(g)	40
Garland, TX	—		1,477	—	1,400	—	1,477	1,400	2,877	599	1998	06/98	(g)	40
Oklahoma City, OK	—		1,581	—	1,471	—	1,581	1,471	3,052	624	1999	08/98	(g)	40

See accompanying report of independent registered public accounting firm.

F-18

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Dallas, TX	—	2,618	—	2,571	—	2,618	2,571	5,189	785	2003	06/99	(g)	40
Gladstone, MO	—	1,851	—	1,740	—	1,851	1,740	3,591	669	2000	12/99	(g)	40

Dairy Queen:
Lubbock, TX	—	313	450	—	—	313	450	763	26	1981	02/15		15

Dave & Buster's:
Hilliard, OH	—	934	4,689	—	—	934	4,689	5,623	1,070	1998	11/06		40
Tulsa, OK	—	1,862	—	2,105	—	1,862	2,105	3,967	366	2009	04/08	(m)	40
Wauwatosa, WI	—	5,694	—	5,638	—	5,694	5,638	11,332	816	2010	12/08	(m)	40
Orlando, FL	—	8,114	—	4,224	—	8,114	4,224	12,338	471	2011	06/10	(m)	40
Oklahoma City, OK	—	3,156	—	4,870	—	3,156	4,870	8,026	482	2012	02/11	(m)	40
Dallas, TX	—	5,052	—	8,808	—	5,052	8,808	13,860	670	2012	03/12	(m)	40
Livonia, MI	—	2,116	—	7,758	—	2,116	7,758	9,874	396	2013	04/13	(m)	40
Euless, TX	—	2,592	—	7,463	—	2,592	7,463	10,055	117	2015	08/14	(m)	40

DaVita Dialysis:
Columbus, OH	—	527	1,426	—	—	527	1,426	1,953	69	2000	07/14		30

Del Frisco's:
Fort Worth, TX	—	351	5,874	—	—	351	5,874	6,225	1,456	1890	01/11		20
Greenwood Village, CO	—	1,863	5,649	—	—	1,863	5,649	7,512	1,401	1979	01/11		20

See accompanying report of independent registered public accounting firm.

F-19

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Denny's:
Clifton, CO	—	245	732	375	—	245	1,107	1,352	309	1998	12/01		40
Columbus, TX	—	428	817	—	—	428	817	1,245	287	1997	12/01		40
Alexandria, VA	—	604	196	—	—	604	196	800	91	1981	09/06		20
Amarillo, TX	—	590	632	—	—	590	632	1,222	294	1982	09/06		20
Arlington Heights, IL	—	470	228	—	—	470	228	698	106	1977	09/06		20
Austintown, OH	—	466	397	—	—	466	397	863	185	1980	09/06		20
Boardman Township, OH	—	497	258	—	—	497	258	755	120	1977	09/06		20
Campbell, CA	—	460	238	—	—	460	238	698	111	1976	09/06		20
Carson, CA	—	1,246	157	—	—	1,246	157	1,403	73	1975	09/06		20
Chehalis, WA	—	415	287	—	—	415	287	702	133	1977	09/06		20
Chubbuck, ID	—	350	394	—	—	344	394	738	183	1983	09/06		20
Clackamas, OR	—	468	407	—	—	468	407	875	189	1993	09/06		20
Collinsville, IL	—	676	283	—	—	676	283	959	131	1979	09/06		20
Colorado Springs, CO	—	321	377	—	—	321	377	698	175	1984	09/06		20
Colorado Springs, CO	—	585	390	—	—	585	390	975	181	1978	09/06		20
Corpus Christi, TX (n)	—	345	776	300	—	345	1,076	1,421	473	1980	09/06		20
Dallas, TX	—	497	150	—	—	497	150	647	70	1979	09/06		20
Enfield, CT	—	684	229	—	—	684	229	913	106	1976	09/06		20
Fairfax, VA	—	768	683	—	—	768	683	1,451	317	1979	09/06		20
Federal Way, WA	—	543	193	—	—	543	193	736	90	1977	09/06		20
Florissant, MO	—	443	238	—	—	443	238	681	111	1977	09/06		20
Fort Worth, TX	—	392	314	—	—	392	314	706	146	1974	09/06		20
Hermitage, PA	—	321	420	—	—	321	420	741	195	1980	09/06		20
Houston, TX	—	504	348	—	—	504	348	852	162	1976	09/06		20
Indianapolis, IN	—	231	511	—	—	231	511	742	237	1974	09/06		20
Indianapolis, IN	—	310	590	—	—	310	590	900	274	1981	09/06		20
Indianapolis, IN	—	358	767	—	—	358	767	1,125	356	1978	09/06		20
Indianapolis, IN	—	326	511	—	—	326	511	837	238	1978	09/06		20
Kernersville, NC	—	407	557	—	—	407	557	964	259	2000	09/06		20
Lafayette, IN	—	424	773	—	—	416	773	1,189	359	1978	09/06		20
Laurel, MD	—	528	379	—	—	528	379	907	176	1976	09/06		20
Little Rock, AR	—	703	180	—	—	703	180	883	83	1979	09/06		20
Maplewood, MN	—	630	271	—	—	630	271	901	126	1983	09/06		20
Merriville, IN	—	368	813	—	—	368	813	1,181	378	1976	09/06		20
N. Miami, FL	—	855	151	—	—	855	151	1,006	70	1977	09/06		20
Nampa, ID	—	357	729	—	—	357	729	1,086	339	1979	09/06		20
North Richland Hills, TX	—	500	130	—	—	500	130	630	60	1970	09/06		20
Omaha, NE	—	496	314	—	—	496	314	810	146	1994	09/06		20
Pompano Beach, FL	—	436	394	—	—	436	394	830	183	1976	09/06		20
Portland, OR	—	764	161	—	—	764	161	925	75	1977	09/06		20
Provo, UT	—	519	216	—	—	519	216	735	100	1978	09/06		20
Pueblo, CO	—	475	302	—	—	475	302	777	140	1980	09/06		20
Raleigh, NC	—	1,094	482	—	—	1,094	482	1,576	224	1984	09/06		20
St. Louis, MO	—	520	266	—	—	520	266	786	123	1973	09/06		20
Sugarland, TX	—	315	334	—	—	315	334	649	155	1997	09/06		20
Tacoma, WA	—	580	201	—	—	575	201	776	93	1984	09/06		20
Tucson, AZ	—	922	290	—	—	922	290	1,212	135	1979	09/06		20
Wethersfield, CT	—	884	176	—	—	884	176	1,060	82	1978	09/06		20
Worcester, MA	—	383	493	—	—	383	493	876	229	1978	09/06		20
Boise, ID	—	514	477	—	—	514	477	991	216	1983	12/06		20
St. Louis, MO	—	635	303	—	—	635	303	938	136	1980	01/07		20
Virginia Gardens, FL	—	793	133	—	—	793	133	926	59	1977	01/07		20
Akron, OH	—	308	1,062	—	—	308	1,062	1,370	90	1992	06/13		30
Moab, UT	—	395	1,432	—	—	395	1,432	1,827	42	2000	02/15		30

Diamond Communication:
Lapeer, MI	—	37	264	—	—	37	251	288	54	2007	10/05		40

Dickey's Barbeque Pit:
Medina, OH	—	405	464	104	—	405	568	973	176	1996	12/01		40

Dick's Sporting Goods:
Taylor, MI	—	1,920	3,527	—	—	1,920	3,527	5,447	1,701	1996	08/96		40
White Marsh, MD	—	2,681	3,917	—	—	2,681	3,917	6,598	1,889	1996	08/96		40

Dollar General:
San Antonio, TX	—	441	784	—	—	441	196	637	13	1993	12/93		30
Memphis, TN	—	266	1,136	46	—	266	1,182	1,448	479	1998	12/97		40
High Springs, FL	—	409	—	1,072	—	432	1,072	1,504	137	2010	07/10	(m)	40
Inverness, FL	—	459	—	1,046	—	471	1,046	1,517	130	2011	08/10	(m)	40
Cocoa, FL	—	385	—	935	—	406	935	1,341	120	2010	08/10	(m)	40
Palm Bay, FL	—	355	—	1,011	—	365	1,011	1,376	127	2010	08/10	(m)	40
Deland, FL	—	585	—	958	—	585	958	1,543	117	2010	11/10	(m)	40
Seffner, FL	—	673	—	1,223	—	655	1,223	1,878	149	2011	12/10	(m)	40
Hernando, FL	—	372	—	970	—	372	970	1,342	114	2011	01/11	(m)	40
Titusville, FL	—	512	—	1,002	—	512	1,002	1,514	110	2011	04/11	(m)	40
Bunnlevel, NC	—	106	—	737	—	106	737	843	77	2011	08/11	(m)	40
Disputanta, VA	—	170	—	720	—	170	720	890	77	2011	09/11	(o)	40
Lumberton, NC	—	115	—	902	—	115	902	1,017	89	2012	10/11	(m)	40
Newport News, VA	—	363	—	967	—	363	967	1,330	100	2011	10/11	(m)	40
Cumberland, VA	—	317	—	1,147	—	317	1,147	1,464	109	2012	12/11	(m)	40
Aberdeen, NC	—	156	—	821	—	156	821	977	76	2012	01/12	(m)	40
Richmond, VA	—	144	—	863	—	144	863	1,007	75	2012	02/12	(m)	40
Danville, VA	—	155	—	864	—	155	864	1,019	78	2012	03/12	(m)	40
Cascade, VA	—	139	—	806	—	139	806	945	71	2012	03/12	(m)	40
Sanford, NC	—	147	—	834	—	147	834	981	70	2012	04/12	(m)	40
Leland, NC	—	245	—	892	—	245	892	1,137	72	2012	06/12	(m)	40
Sanford, NC	—	206	—	829	—	206	829	1,035	66	2012	07/12	(m)	40
Richmond, VA	—	305	—	902	—	305	902	1,207	70	2012	08/12	(m)	40
Stead, NV	—	234	—	1,464	—	234	1,464	1,698	111	2012	08/12	(m)	40
Martinsville, VA	—	165	—	831	—	165	831	996	63	2012	09/12	(m)	40
Yerington, NV	—	313	—	1,170	—	313	1,170	1,483	87	2013	09/12	(m)	40
Ridgeway, VA	—	271	—	935	—	271	935	1,206	65	2013	11/12	(m)	40
Hawthorne, NV	—	210	1,069	—	—	210	1,069	1,279	81	2012	12/12		40
Sun Valley, NV	—	439	—	1,438	—	439	1,438	1,877	94	2013	01/13	(m)	40
Norfolk, VA	—	455	—	929	—	455	929	1,384	59	2013	03/13	(m)	40
Suffolk, VA	—	186	—	958	—	186	958	1,144	61	2013	03/13	(m)	40
Suffolk, VA	—	128	—	1,010	—	128	1,010	1,138	60	2013	04/13	(m)	40
Irving, NY	—	210	—	961	—	210	961	1,171	53	2013	06/13	(m)	40
Oakfield, NY	—	257	—	1,108	—	271	1,108	1,379	47	2014	10/13	(m)	40
Holland, NY	—	176	—	1,103	—	176	1,103	1,279	40	2014	12/13	(m)	40
Jeffersonville, IN	—	115	960	—	—	115	960	1,075	51	2010	02/14		35
LaFayette, LA	—	157	378	—	—	157	378	535	22	2002	07/14		25
Youngsville, LA	—	98	370	—	—	98	370	468	22	2002	07/14		25

Dollar Tree:
Garland, TX	—	239	626	—	—	239	626	865	227	1994	02/94		40
Homestead, PA	—	1,139	—	240	—	1,379	(e)	1,379	(e)	(e)	02/97	(g)	(e)
Copperas Cove, TX	—	242	512	194	—	242	706	948	290	1972	11/98		40
Marietta, GA	—	525	—	787	—	524	787	1,311	23	1997	12/14	(o)	30

Don Tello's Tex-Mex Grill:
Lithonia, GA	—	923	1,276	27	—	923	1,303	2,226	274	2002	06/07		40

Dr. Clean Dry Cleaners:
Monticello, NY	—	20	72	—	—	20	72	92	19	1996	03/05		40

Eagle Tax Center:
Hollywood, FL	—	203	46	19	—	124	—	124	—	1960	12/05		15

See accompanying report of independent registered public accounting firm.

F-20

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Ecotech Institute:
Aurora, CO	—	5,076	13,874	5,663	—	5,041	19,537	24,578	3,790	1986	04/07		40
Austin, TX	—	2,291	1,770	4,999	—	2,291	6,769	9,060	655	1996	12/11		35

El Jalapeno:
Indianapolis, IN	—	223	483	79	—	223	562	785	243	1979	09/06		20

Empire Buffet:
Las Cruces, NM	—	947	—	2,303	—	947	2,303	3,250	519	2006	01/06	(m)	40

Encore at Crosswoods:
Columbus, OH	—	1,032	1,107	—	—	1,032	1,107	2,139	389	1998	12/01		40

Express Mart:
Thomasville, NC	—	140	228	—	—	140	228	368	17	1962	07/14		20

Express Oil Change:
Birmingham, AL	—	470	695	—	—	470	695	1,165	135	2008	02/08	(f)	40
Florence, AL	—	110	381	—	—	110	381	491	100	1987	02/08		30
Helena, AL	—	363	628	—	—	363	628	991	124	1998	02/08		40
Muscle Shoals, AL	—	168	624	—	—	168	624	792	164	1985	02/08		30
Opelika, AL	—	547	680	—	—	547	680	1,227	134	2006	02/08		40
Cordova, TN	—	639	785	—	—	639	785	1,424	138	2000	12/08		40
Horn Lake, MS	—	326	611	—	—	326	611	937	123	1998	12/08		35
Lakeland, TN	—	186	489	—	—	186	489	675	86	2000	12/08		40
Memphis, TN	—	402	721	—	—	402	721	1,123	127	2001	12/08		40
Houston, TX	—	651	—	648	—	543	648	1,191	56	2012	02/12	(m)	40
Katy, TX	—	539	—	830	—	539	829	1,368	63	2012	07/12	(m)	40
Chattanooga, TN	—	224	173	—	—	224	173	397	19	2001	10/12		30
Chattanooga, TN	—	239	1,214	—	—	239	1,214	1,453	130	1998	10/12		30
Chattanooga, TN	—	238	1,756	—	—	238	1,756	1,994	188	1998	10/12		30
Cleveland, TN	—	318	1,064	—	—	318	1,064	1,382	98	2004	10/12		35
Fort Oglethorpe, GA	—	241	331	—	—	241	331	572	30	2003	10/12		35
Marietta, GA	—	618	30	—	—	618	30	648	3	1988	12/12		30

See accompanying report of independent registered public accounting firm.

F-21

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Smyrna, GA	—	295	1,092	—	—	295	1,092	1,387	133	1984	12/12		25
Missouri City, TX	—	606	—	860	—	606	860	1,466	33	2014	01/14	(m)	40
Houston, TX	—	550	—	983	—	550	983	1,533	22	2014	05/14		40
Boaz, AL	—	205	368	—	—	205	368	573	13	1995	01/15		25
Gadsden, AL	—	116	690	—	—	116	690	806	21	1999	01/15		30
Rainbow City, AL	—	164	653	—	—	164	653	817	24	1992	01/15		25
Seffner, FL	—	155	593	—	—	155	593	748	14	2008	02/15		35
Fayetteville, TN	—	117	860	—	—	117	860	977	20	1998	04/15		30
Huntsville, AL	—	292	526	—	—	292	526	818	12	1995	04/15		30
Huntsville, AL	—	214	710	—	—	214	710	924	20	1995	04/15		25
Madison, AL	—	319	1,006	—	—	319	1,006	1,325	24	1992	04/15		30

Fallas Paredes:
Arlington, TX	—	318	1,680	242	—	318	1,923	2,241	880	1996	06/96		38

Family Dollar:
Albany, NY	—	34	824	—	—	34	824	858	233	1992	09/04		40
Cohoes, NY	—	140	753	49	—	140	802	942	242	1994	09/04		40
Hudson Falls, NY	—	51	380	625	—	187	869	1,056	138	1993	09/04		40
Monticello, NY	—	96	352	—	—	96	352	448	95	1996	03/05		40
Richmond, TX	—	366	1,059	—	—	366	1,059	1,425	57	2012	02/14		35
Spring, TX	—	199	1,152	—	—	199	1,152	1,351	62	2012	02/14		35
Bartlesville, OK	—	110	445	—	—	110	445	555	26	2001	07/14		25
Huntsville, AL	—	141	596	—	—	141	596	737	29	2005	07/14		30
Tulsa, OK	—	70	519	—	—	70	519	589	30	2001	07/14		25

Famous Footwear:
Lapeer, MI	—	163	835	—	—	163	812	975	170	2007	10/05		40

Famsa:
Harlingen, TX	—	317	756	170	—	317	926	1,243	326	1999	11/98	(f)	40

Fantastic Sams:
Eden Prairie, MN	—	65	181	81	—	65	261	326	89	1997	12/01		40

See accompanying report of independent registered public accounting firm.

F-22

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)						Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:

Ferguson:
Destin, FL	—	554	1,012	253	—	554	1,265	1,819	270	2006	03/07	40
Union City, GA	—	144	1,260	—	—	144	1,260	1,404	167	2010	05/11	35

Fikes Wholesale:
Belton, TX	—	722	1,814	—	—	722	1,814	2,536	227	2007	08/11	35
Godley, TX	—	1,453	2,084	—	—	1,453	2,084	3,537	260	2008	08/11	35
Killeen, TX	—	1,302	2,514	—	—	1,302	2,514	3,816	314	2008	08/11	35
Killeen, TX	—	1,053	833	—	—	1,053	833	1,886	104	2007	08/11	35
McGregor, TX	—	511	1,484	—	—	511	1,484	1,995	186	2006	08/11	35
Thorndale, TX	—	331	984	—	—	331	984	1,315	123	2007	08/11	35
Valley Mills, TX	—	711	2,114	—	—	711	2,114	2,825	264	2006	08/11	35
West, TX	—	402	864	—	—	402	864	1,266	126	1999	08/11	30
Gladewater, TX	—	145	2,107	—	—	145	2,107	2,252	78	2007	09/14	35
Hearne, TX	—	68	2,184	—	—	68	2,184	2,252	94	1996	09/14	30
Jarrell, TX	—	541	2,965	—	—	541	2,965	3,506	109	2009	09/14	35
Killeen, TX	—	628	2,878	—	—	628	2,878	3,506	106	2013	09/14	35
Liberty Hill, TX	—	203	3,303	—	—	203	3,303	3,506	122	2013	09/14	35
Rosebud, TX	—	58	1,847	—	—	58	1,847	1,905	68	2012	09/14	35
Temple, TX (n)	—	1,052	3,302	—	—	1,052	3,302	4,354	122	2012	09/14	35
Waco, TX	—	1,400	2,106	—	—	1,400	2,106	3,506	91	1997	09/14	30
Claude, TX	—	193	3,728	—	—	193	3,728	3,921	4	2013	12/15	35
Covington, TX	—	164	2,512	—	—	164	2,512	2,676	3	2001	12/15	30
Hamilton, TX	—	97	2,175	—	—	97	2,175	2,272	4	1987	12/15	25
Lott, TX	—	135	3,236	—	—	135	3,236	3,371	4	2013	12/15	35
Salado, TX	—	715	3,206	—	—	715	3,206	3,921	4	2014	12/15	35
Temple, TX	—	77	2,291	—	—	77	2,291	2,368	3	2012	12/15	35
Vernon, TX	—	154	5,850	—	—	154	5,850	6,004	6	2015	12/15	40

First Cash Pawn:
Alice, TX	—	318	578	—	—	318	578	896	203	1995	12/01	40

See accompanying report of independent registered public accounting firm.

F-23

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Five Below:
Florissant, MO	—	249	294	849	—	250	1,142	1,392	176	1996	04/03	(g)	40

Five Guys Burgers and Fries:
Middleburg Heights, OH	—	497	260	250	—	497	510	1,007	169	1976	09/06		20

Flash Markets:
Lebanon, TN	—	582	—	2,063	—	582	2,063	2,645	406	2007	03/07	(m)	40

Fleming's:
Akron, OH	—	475	3,140	—	—	475	3,140	3,615	340	2005	03/12		35

Floor & Decor:
Knoxville, TN	—	2,364	—	—	—	2,364	(e)	2,364	(e)	(e)	09/15	(m)	(e)

Food 4 Less:
Chula Vista, CA	—	3,569	—	—	—	3,569	(c)	3,569	(c)	1995	11/98		(c)

Food Fast:
Bossier City, LA	—	883	658	—	—	883	658	1,541	375	1975	06/07		15
Brownsboro, TX	—	328	385	—	—	328	385	713	110	1990	06/07		30
Flint, TX	—	272	411	—	—	272	411	683	140	1985	06/07		25
Forney, TX	—	473	654	—	—	473	654	1,127	186	1990	06/07		30
Forney, TX	—	545	707	—	—	545	707	1,252	201	1989	06/07		30
Gun Barrel City, TX	—	242	467	—	—	242	467	709	160	1988	06/07		25
Gun Barrel City, TX	—	270	386	—	—	270	386	656	132	1986	06/07		25
Jacksonville, TX	—	660	632	—	—	660	632	1,292	360	1976	06/07		15
Kemp, TX	—	581	505	—	—	581	505	1,086	173	1986	06/07		25
Longview, TX	—	426	382	—	—	426	382	808	130	1984	06/07		25
Longview, TX	—	271	431	—	—	271	431	702	123	1990	06/07		30
Longview, TX	—	252	304	—	—	252	304	556	104	1983	06/07		25
Longview, TX	—	403	572	—	—	403	572	975	195	1985	06/07		25
Longview, TX	—	360	535	—	—	360	535	895	183	1983	06/07		25
Mabank, TX	—	229	494	—	—	229	494	723	169	1986	06/07		25

See accompanying report of independent registered public accounting firm.

F-24

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Mt. Vernon, TX	—	292	666	2,800	—	292	2,800	3,092	190	2013	06/07	(m)	40
Tyler, TX	—	488	831	—	—	488	831	1,319	355	1980	06/07		20
Tyler, TX	—	742	546	—	—	742	546	1,288	187	1985	06/07		25
Tyler, TX	—	542	403	—	—	481	403	884	138	1984	06/07		25
Tyler, TX	—	316	545	—	—	316	545	861	155	1989	06/07		30
Tyler, TX	—	188	329	—	—	188	329	517	112	1984	06/07		25
Tyler, TX	—	323	283	—	—	323	283	606	121	1978	06/07		20

Fort Ticonderoga:
Ticonderoga, NY	—	89	689	60	—	89	749	838	202	1993	09/04		40

Fresenius Medical Care:
Houston, TX	—	422	1,915	518	—	422	2,434	2,856	566	1995	08/06		40
Rockford, MI	—	226	1,404	—	—	226	1,404	1,630	68	2002	07/14		30

Fresh Market:
Gainesville, FL	—	317	1,248	656	—	317	1,904	2,221	525	1982	03/99		40

Frisch's Big Boy:
Batavia, OH	—	319	2,637	—	—	319	2,637	2,956	33	1995	08/15		30
Bethel, OH	—	242	2,512	—	—	242	2,512	2,754	38	1982	08/15		25
Burlington, KY	—	589	2,357	—	—	589	2,357	2,946	29	1995	08/15		30
Cincinnati, OH	—	319	2,753	—	—	319	2,753	3,072	34	2007	08/15		30
Cincinnati, OH	—	290	3,100	—	—	290	3,100	3,390	47	1985	08/15		25
Cincinnati, OH	—	300	1,952	—	—	300	1,952	2,252	29	1990	08/15		25
Cincinnati, OH	—	782	1,961	—	—	782	1,961	2,743	29	1973	08/15		25
Cincinnati, OH	—	754	1,044	—	—	754	1,044	1,798	13	1997	08/15		30
Cincinnati, OH	—	541	1,981	—	—	541	1,981	2,522	30	1964	08/15		25
Cincinnati, OH	—	657	1,874	—	—	657	1,874	2,531	28	1986	08/15		25
Cincinnati, OH	—	734	1,768	—	—	734	1,768	2,502	27	1991	08/15		25
Cincinnati, OH	—	445	929	—	—	445	929	1,374	12	2005	08/15		30
Cincinnati, OH	—	387	1,865	—	—	387	1,865	2,252	23	1996	08/15		30
Cincinnati, OH	—	183	3,283	—	—	183	3,283	3,466	49	1980	08/15		25

See accompanying report of independent registered public accounting firm.

F-25

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)						Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Cincinnati, OH	—	329	1,672	—	—	329	1,672	2,001	25	1988	08/15	25
Cincinnati, OH	—	271	939	—	—	271	939	1,210	14	1994	08/15	25
Cincinnati, OH	—	638	1,845	—	—	638	1,845	2,483	28	1993	08/15	25
Cincinnati, OH	—	976	1,806	—	—	976	1,806	2,782	19	2011	08/15	35
Cincinnati, OH	—	695	2,173	—	—	695	2,173	2,868	27	1982	08/15	30
Cincinnati, OH	—	435	3,457	—	—	435	3,457	3,892	52	1970	08/15	25
Cold Spring, KY	—	763	2,144	—	—	763	2,144	2,907	27	1993	08/15	30
Covington, KY	—	522	2,444	—	—	522	2,444	2,966	31	1991	08/15	30
Dayton, OH	—	464	2,029	—	—	464	2,029	2,493	25	1988	08/15	30
Dayton, OH	—	589	1,662	—	—	589	1,662	2,251	21	2006	08/15	30
Dayton, OH	—	407	349	—	—	407	349	756	4	2010	08/15	35
Dayton, OH	—	445	1,276	—	—	445	1,276	1,721	14	2008	08/15	35
Dayton, OH	—	261	1,392	—	—	261	1,392	1,653	21	1985	08/15	25
Dayton, OH	—	348	1,633	—	—	348	1,633	1,981	25	1990	08/15	25
Eaton, OH	—	319	1,267	—	—	319	1,267	1,586	19	1992	08/15	25
Englewood, OH	—	348	1,846	—	—	348	1,846	2,194	28	1976	08/15	25
Erlanger, KY	—	425	1,740	—	—	425	1,740	2,165	26	1991	08/15	25
Fairborn, OH	—	348	1,305	—	—	348	1,305	1,653	16	1989	08/15	30
Fairfield, OH	—	580	1,556	—	—	580	1,556	2,136	23	1976	08/15	25
Florence, KY	—	850	1,971	—	—	850	1,971	2,821	25	2001	08/15	30
Florence, KY	—	860	1,903	—	—	860	1,903	2,763	29	1986	08/15	25
Fort Mitchell, KY	—	792	3,051	—	—	792	3,051	3,843	38	1988	08/15	30
Franklin, OH	—	406	1,749	—	—	406	1,749	2,155	26	1977	08/15	25
Franklin, OH	—	415	2,425	—	—	415	2,425	2,840	30	1987	08/15	30
Gahanna, OH	—	389	165	—	—	389	165	554	2	1994	08/15	30
Greensburg, IN	—	464	1,575	—	—	464	1,575	2,039	20	1990	08/15	30
Grove City, OH	—	406	1,846	—	—	406	1,846	2,252	23	1993	08/15	30
Groveport, OH	—	145	1,084	—	—	145	1,084	1,229	14	1992	08/15	30
Hamilton, OH	—	310	1,045	—	—	310	1,045	1,355	16	1968	08/15	25
Hamilton, OH	—	560	1,894	—	—	560	1,894	2,454	24	2009	08/15	30
Harrison, OH	—	338	2,685	—	—	338	2,685	3,023	34	1989	08/15	30
Heath, OH	—	939	348	—	—	939	348	1,287	4	2011	08/15	35
Hillsboro, OH	—	502	2,926	—	—	502	2,926	3,428	44	1980	08/15	25

See accompanying report of independent registered public accounting firm.

F-26

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)						Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Independence, KY	—	657	1,816	—	—	657	1,816	2,473	23	2009	08/15	30
Lancaster, OH	—	570	1,604	—	—	570	1,604	2,174	20	1992	08/15	30
Lawrenceburg, IN	—	550	3,071	—	—	550	3,071	3,621	33	2010	08/15	35
Lebanon, OH	—	560	2,550	—	—	560	2,550	3,110	32	2006	08/15	30
Lexington, KY	—	734	1,382	—	—	734	1,382	2,116	15	2013	08/15	35
Lexington, KY	—	647	2,289	—	—	647	2,289	2,936	34	1976	08/15	25
Louisville, KY	—	628	1,691	—	—	628	1,691	2,319	21	1990	08/15	30
Louisville, KY	—	891	97	—	—	891	97	988	1	1994	08/15	30
Loveland, OH	—	184	1,740	—	—	184	1,740	1,924	22	1990	08/15	30
Loveland, OH	—	241	2,666	—	—	241	2,666	2,907	40	1980	08/15	25
Marysville, OH	—	281	823	—	—	281	823	1,104	10	1993	08/15	30
Mason, OH	—	531	1,981	—	—	531	1,981	2,512	30	1987	08/15	25
Maysville, KY	—	454	3,119	—	—	454	3,119	3,573	47	1992	08/15	25
Miamisburg, OH	—	551	1,701	—	—	551	1,701	2,252	26	1970	08/15	25
Middletown, OH	—	823	310	—	—	823	310	1,133	3	2013	08/15	35
Middletown, OH	—	155	1,952	—	—	155	1,952	2,107	29	1966	08/15	25
Milford, OH	—	309	1,942	—	—	309	1,942	2,251	29	1960	08/15	25
New Albany, IN	—	493	1,238	—	—	493	1,238	1,731	15	1995	08/15	30
Shepherdsville, KY	—	793	1,092	—	—	793	1,092	1,885	14	2009	08/15	30
Springfield, OH	—	560	1,691	—	—	560	1,691	2,251	21	2007	08/15	30
Tipp City, OH	—	503	919	—	—	503	919	1,422	11	1996	08/15	30
Troy, OH	—	445	1,807	—	—	445	1,807	2,252	23	1987	08/15	30
Urbana, OH	—	252	1,142	—	—	252	1,142	1,394	17	1991	08/15	25
Washington, OH	—	300	1,672	—	—	300	1,672	1,972	21	1990	08/15	30
Wilmington, OH	—	377	2,502	—	—	377	2,502	2,879	38	1973	08/15	25
Winchester, KY	—	348	1,325	—	—	348	1,325	1,673	17	2008	08/15	30
Xenia, OH	—	261	2,299	—	—	261	2,299	2,560	29	1986	08/15	30

Fuel Up:
Chambersburg, PA	—	76	197	—	—	76	197	273	102	1990	08/05	20

Fuel-On:
Bloomsburg, PA	—	541	146	—	—	541	146	687	76	1967	08/05	20

See accompanying report of independent registered public accounting firm.

F-27

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Dallas, PA	—	677	1,091	—	—	677	1,091	1,768	566	1995	08/05		20
Emporium, PA	—	380	569	—	—	380	569	949	295	1996	08/05		20
Johnsonburg, PA	—	781	504	—	—	781	504	1,285	261	1978	08/05		20
Kane, PA	—	478	592	—	—	356	—	356	—	1984	08/05		20
Luzerne, PA	—	171	415	—	—	171	415	586	215	1989	08/05		20
Ridgway, PA	—	382	259	—	—	382	259	641	134	1975	08/05		20
St. Mary's, PA	—	274	261	—	—	274	261	535	135	1979	08/05		20
White Haven, PA (n)	—	486	867	—	—	486	867	1,353	450	1990	08/05		20
Carlisle, PA	—	170	202	—	—	170	202	372	53	1988	01/06		40
Danville, PA	—	180	359	—	—	180	359	539	89	1988	01/06		40
Houtzdale, PA	—	541	500	—	—	356	—	356	—	1977	01/06		15
Minersville, PA	—	680	582	—	—	680	582	1,262	145	1974	01/06		40
Pittsburgh, PA	—	905	1,346	—	—	905	1,346	2,251	335	1967	01/06		40
Zelienople, PA	—	160	437	—	—	160	437	597	109	1988	01/06		40

Fuji Japanese Steakhouse:
Farmington, NM	—	2,757	—	730	—	2,757	730	3,487	139	2003	12/07	(o)	40

Furniture Bank:
Columbus, OH	—	1,596	934	23	—	1,605	949	2,554	261	1970	11/04	(o)	40

Furr's Family Dining:
Moore, OK	—	939	—	2,429	—	939	2,429	3,368	499	2007	03/07	(m)	40
Arlington, TX	—	1,061	—	1,594	—	1,061	1,594	2,655	208	2010	04/10	(m)	40
McAllen, TX	—	520	1,700	—	—	520	1,700	2,220	229	2004	12/11		30

Gander Mountain:
Florence, AL	—	1,034	—	4,315	—	851	4,315	5,166	355	2012	06/04	(m)	40
Amarillo, TX	—	1,514	5,781	—	—	1,514	5,781	7,295	1,608	2004	11/04		40
DeForest, WI	—	2,798	10,953	2,500	—	2,787	13,413	16,200	1,921	2008	09/10		35
Springfield, IL	—	1,717	7,622	—	—	1,717	7,622	9,339	1,152	2009	09/10		35
Onalaska, WI	—	1,963	—	6,817	—	1,733	6,817	8,550	802	2011	10/10	(m)	40
Ocala, FL	—	3,315	8,908	—	—	3,315	8,908	12,223	1,326	2008	10/10		35

See accompanying report of independent registered public accounting firm.

F-28

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Bowling Green, KY	—	1,777	7,319	—	—	1,777	7,319	9,096	932	2007	07/11		35
Eau Claire, WI	—	2,263	8,418	—	—	2,263	8,418	10,681	1,072	2008	07/11		35
Roanoke, VA	—	1,769	8,120	—	—	1,769	8,120	9,889	1,034	2008	07/11		35
Greenfield, IN	—	878	—	6,166	—	878	6,166	7,044	251	2014	12/13	(m)	40
Lakeville, MN	—	3,243	11,191	—	—	3,243	11,191	14,434	295	2003	03/15		30
Chesterfield, MO	—	3,424	—	7,537	—	3,424	7,537	10,961	24	2015	06/15	(m)	40

Gate Petroleum:
Concord, NC	—	852	1,201	—	—	852	1,201	2,053	316	2001	06/05		40
Rocky Mount, NC	—	259	1,164	—	—	259	1,164	1,423	307	2000	06/05		40

Gerber Collision:
Garner, NC	—	352	1,056	—	—	352	1,056	1,408	147	1972	03/13		20
Estero, FL	—	839	—	2,135	—	839	2,135	2,974	7	2015	10/14	(m)	40
Woodstock, GA	—	328	1,291	—	—	328	1,291	1,619	48	1990	11/14		30
Roswell, GA	—	958	—	1,919	—	961	1,919	2,880	64	2015	12/14	(m)	35
Tucson, AZ	—	330	1,746	—	—	330	1,746	2,076	48	2008	01/15		35
Tucson, AZ	—	242	1,518	—	—	242	1,518	1,760	49	2002	01/15		30

Golden Corral:
Lake Placid, FL	—	115	305	54	—	115	359	474	309	1985	05/85		35
Tampa, FL	—	1,188	1,339	—	—	1,188	1,339	2,527	470	1998	12/01		40
Temple Terrace, FL	—	1,330	1,391	—	—	1,330	1,391	2,721	488	1997	12/01		40
Davenport, IA	—	923	2,122	—	—	923	2,122	3,045	53	1998	02/15		35
Orange Park, FL	—	1,074	1,794	—	—	1,074	1,794	2,868	52	1995	02/15		30
Pensacola, FL	—	1,344	3,212	—	—	1,344	3,212	4,556	80	1999	02/15		35

See accompanying report of independent registered public accounting firm.

F-29

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Goodwill:
Sealy, TX	—	612	675	644	—	612	1,319	1,931	354	1982	03/99		40
Fort Worth, TX	—	988	2,368	32	—	988	2,401	3,389	645	1997	02/05		40

Goodyear Truck & Tire:
Anthony, TX	—	(l)	1,242	6	—	(l)	1,248	1,248	263	2007	02/07		40
Beaverdam, OH	—	(l)	1,521	—	—	(l)	1,521	1,521	328	2004	05/07		40
Benton, AR	—	(l)	309	—	—	(l)	309	309	65	2001	05/07		40
Bowman, SC	—	(l)	969	—	—	(l)	969	969	239	1998	05/07		35
Dalton, GA	—	(l)	1,541	—	—	(l)	1,541	1,541	332	2004	05/07		40
Dandridge, TN	—	(l)	1,030	—	—	(l)	1,030	1,030	254	1989	05/07		35
Franklin, OH	—	(l)	563	—	—	(l)	563	563	139	1998	05/07		35
Gary, IN	—	(l)	1,486	—	—	(l)	1,486	1,486	320	2004	05/07		40
Georgetown, KY	—	(l)	679	—	—	(l)	679	679	195	1997	05/07		30
Mebane, NC	—	(l)	561	—	—	(l)	561	561	138	1998	05/07		35
Piedmont, SC	—	(l)	567	—	—	(l)	567	567	140	1999	05/07		35
Port Wentworth, GA	—	(l)	552	—	—	(l)	552	552	136	1998	05/07		35
Valdosta, GA	—	(l)	1,477	—	—	(l)	1,477	1,477	318	2004	05/07		40
Temple, GA	—	(l)	1,065	—	—	(l)	1,065	1,065	216	2007	06/07		40
Whiteland, IN	—	(l)	1,471	—	—	(l)	1,471	1,471	311	2004	07/07		40
Des Moines, IA	—	(l)	816	—	—	(l)	816	816	173	1987	07/07		40
Robinson, TX	—	(l)	1,183	—	—	(l)	1,183	1,183	240	2007	07/07		40
Kearney, MO	—	(l)	1,269	—	—	(l)	1,269	1,269	268	2003	07/07		40
Oklahoma City, OK	—	(l)	1,247	—	—	(l)	1,247	1,247	245	2008	08/07		40
Amarillo, TX	—	(l)	1,158	—	—	(l)	1,158	1,158	218	2008	02/08		40
Jackson, MS	—	(l)	1,281	—	—	(l)	1,281	1,281	239	2008	03/08		40
Glendale, KY	—	(l)	1,066	—	—	(l)	1,066	1,066	192	2008	07/08		40
Lebanon, TN	—	(l)	1,331	—	—	(l)	1,331	1,331	234	2008	08/08		40
Laredo, TX	—	(l)	1,238	—	—	(l)	1,238	1,238	210	2009	11/08	(j)	40
Midland, TX	—	(l)	1,148	—	—	(l)	1,148	1,148	157	2010	04/10	(j)	40
Tuscaloosa, AL	—	(l)	1,002	—	—	(l)	1,002	1,002	126	2010	08/10	(j)	40
Kenly, NC	—	(l)	1,066	—	—	(l)	1,066	1,066	130	2011	11/10	(j)	40
Matthews, MO	—	(l)	1,042	50	—	(l)	1,092	1,092	123	2011	01/11	(j)	40
Baytown, TX	—	(l)	—	1,375	—	(l)	1,375	1,375	150	2011	05/11	(j)	40
Sunbury, OH	—	(l)	—	1,424	—	(l)	1,424	1,424	144	2011	06/11	(j)	40
Greenwood, LA	—	(l)	—	1,291	—	(l)	1,291	1,291	133	2011	06/11	(j)	40
Joplin, MO	—	(l)	—	1,168	—	(l)	1,168	1,168	120	2011	06/11	(j)	40
Winslow, AZ	—	(l)	—	1,613	—	(l)	1,613	1,613	156	2012	09/11	(j)	40
Gulfport, MS	—	(l)	—	1,377	—	(l)	1,377	1,377	128	2012	11/11	(j)	40
Sulphur Springs, TX	—	(l)	—	1,283	—	(l)	1,283	1,283	116	2012	12/11	(j)	40
Walcott, IA	—	(l)	—	1,632	—	(l)	1,632	1,632	5	2015	07/15	(j)	40

Gordmans:
Avon, IN	—	1,302	—	4,178	—	1,302	4,178	5,480	361	2012	12/11	(m)	40
Wyoming, MI	—	1,322	—	4,447	—	1,322	4,447	5,769	162	2014	10/13	(m)	40
Saginaw, MI	—	763	—	4,088	—	763	4,088	4,851	149	2014	02/14	(m)	40

Great Clips:
Swansea, IL	—	46	132	157	—	46	290	336	37	1997	12/01	(g)	40
Lapeer, MI	—	27	194	—	—	27	184	211	40	2007	10/05		40

Green Light Convenience:
Moosic, PA	—	323	309	—	—	323	309	632	160	1980	08/05		20

Guitar Center:
Roseville, MN	—	1,599	1,419	23	—	1,599	1,442	3,041	358	1994	08/06		40

H&R Block:
Swansea, IL	—	46	132	69	—	46	201	247	93	1997	12/01		40
Bristol, VA	—	63	184	—	—	63	184	247	11	2000	07/14		25

Hancock Fabrics:
Buford, GA	—	751	1,979	336	—	751	2,315	3,066	592	2003	07/04	(g)	40

Harbor Freight Tools:
Federal Way, WA	—	2,037	1,662	438	—	2,037	2,100	4,137	833	1994	06/98		40
Gastonia, NC	—	994	1,513	146	—	994	1,659	2,653	436	2004	12/04		40
Plainfield, IN	—	503	—	1,633	—	503	1,633	2,136	48	1972	12/14	(o)	30

Hardee's:
Savannah, TN (n)	—	151	713	—	—	151	713	864	31	1988	02/15		20
Warrenton, NC (n)	—	143	633	—	—	143	633	776	18	1960	02/15		30

Harvey's Bar & Grill:
Bay City, MI	—	647	634	—	—	647	634	1,281	223	1997	12/01		40

Hastings:
Nacogdoches, TX	—	397	1,257	—	—	397	1,257	1,654	538	1997	11/98		40

Havertys Furniture:
Pensacola, FL	—	633	1,595	66	—	603	1,661	2,264	784	1994	06/96		40
Bowie, MD	—	1,966	4,221	—	—	1,966	4,221	6,187	1,804	1997	12/97		39

Health Source Chiropractic:
Houston, TX	—	112	509	302	—	112	811	923	152	1995	08/06		40

Healthy Pet:
Suwanee, GA	—	175	1,038	—	—	175	1,038	1,213	235	1997	12/06		40
Colonial Heights, VA	—	160	746	—	—	160	746	906	167	1996	01/07		40

Hear USA:
Lapeer, MI	—	29	211	—	—	29	201	230	43	2007	10/05		40

Hibbett Sports:
Sealy, TX	—	208	230	278	—	208	508	716	102	1982	03/99	(g)	40

Hobby Lobby:
Beavercreek, OH	—	1,837	—	3,000	—	1,837	3,000	4,837	3	2015	08/15	(m)	40

Hollywood Feed:
Ridgeland, MS	—	343	411	362	—	343	773	1,116	155	1997	08/06		40

Home Decor:
Memphis, TN	—	549	540	364	—	549	904	1,453	365	1998	12/97		40

Home Depot:
Sunrise, FL	—	5,149	—	—	—	5,149	(i)	5,149	(i)	(i)	05/03		(i)

HomeGoods:
Fairfax, VA	—	523	756	1,585	—	971	2,341	3,312	876	1995	12/95		40

Hometown Urgent Care:
Warren, OH	—	562	468	100	—	562	568	1,130	177	1997	12/01		40

Hooters:
Tampa, FL	—	784	505	450	—	784	955	1,739	179	1993	12/01		40

Humana:
Sunrise, FL	—	800	253	—	—	800	253	1,053	73	1984	05/04		40

Hurricane Grill and Wings:
Chandler, AZ	—	655	791	57	—	655	849	1,504	276	1997	12/01		40

Hy-Vee:
St. Joseph, MO	—	1,580	2,849	—	—	1,580	2,849	4,429	947	1991	09/02		40

Insurance Auto Auctions:
New Orleans, LA	—	1,445	—	4,123	—	1,445	3,987	5,432	305	1993	06/13	(o)	30
E Dundee, IL	—	2,772	—	8,320	—	2,772	8,320	11,092	208	2014	01/14	(m)	40
Bergen, NY	—	762	—	—	—	762	(e)	762	(e)	(e)	08/15	(m)	(e)

Int'l House of Pancakes:
Midwest City, OK	—	407	—	—	—	407	(i)	407	(i)	(i)	11/00		(i)
Ankeny, IA	—	693	515	—	—	693	515	1,208	181	2002	06/05		30


ISD Renal:
Corpus Christi, TX	—	406	4,036	—	—	406	4,036	4,442	544	1978	12/11		30
Kendallville, IN	—	66	2,748	—	—	66	2,748	2,814	317	2007	12/11		35
Memphis, TN	—	180	3,223	—	—	180	3,223	3,403	434	2002	12/11		30
Memphis, TN	—	283	4,146	—	—	283	4,146	4,429	558	2001	12/11		30

J & J Insurance:
Hollywood, FL	—	195	44	18	—	119	—	119	—	1960	12/05		15

Jack in the Box:
Plano, TX	—	1,055	1,237	—	—	1,055	1,237	2,292	326	2001	06/05		40

Jack's:
Blounstville, AL	—	435	1,543	—	—	435	1,543	1,978	11	1997	10/15		30
Centre, AL	—	128	2,648	—	—	128	2,648	2,776	16	2006	10/15		35
Collinsville, AL	—	119	1,968	—	—	119	1,968	2,087	16	1994	10/15		25
Demopolis, AL	—	208	1,514	—	—	208	1,514	1,722	9	2007	10/15		35
Geraldine, AL	—	119	2,125	—	—	119	2,125	2,244	15	1998	10/15		30
Guin, AL	—	89	1,652	—	—	89	1,652	1,741	11	1999	10/15		30
Hanceville, AL	—	544	1,779	—	—	544	1,779	2,323	12	2002	10/15		30
Holly Pond, AL	—	119	2,056	—	—	119	2,056	2,175	14	2000	10/15		30
Jasper, AL	—	247	2,549	—	—	247	2,549	2,796	21	1983	10/15		25
Ohatchee, AL	—	119	1,938	—	—	119	1,938	2,057	13	1995	10/15		30
Scottsboro, AL	—	247	1,494	—	—	247	1,494	1,741	9	2006	10/15		35

Jared Jewelers:
Phoenix, AZ	—	(l)	1,242	—	—	(l)	310	310	10	1998	12/01		30
Richmond, VA	—	955	1,336	—	—	955	1,336	2,291	469	1998	12/01		40
Brandon, FL	—	1,197	1,182	—	—	1,197	1,182	2,379	403	2001	05/02		40
Lithonia, GA	—	1,271	1,216	—	—	1,271	1,216	2,487	415	2001	05/02		40
Houston, TX	—	1,676	1,440	—	—	1,676	1,440	3,116	469	1999	12/02		40
Oviedo, FL	—	1,328	1,500	—	—	1,328	868	2,196	8	1998	12/01		30

See accompanying report of independent registered public accounting firm.

F-30

Table of Contents



			Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances		Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Jazzercise Fitness Center:
Orlando, FL	9	(h)	37	101	—	—	37	101	138	30	2001	02/04		40

Jiffy Lube:
Auburn, MA	—		455	856	—	—	455	856	1,311	36	1988	07/14		35
Ayer, MA	—		326	792	—	—	326	792	1,118	39	1989	07/14		30
Barrington, IL	—		371	612	—	—	371	612	983	30	1986	07/14		30
Berwyn, IL	—		359	709	—	—	359	709	1,068	30	1985	07/14		35
Bolingbrook, IL	—		185	562	—	—	185	562	747	27	1986	07/14		30
Burbank, IL	—		156	418	—	—	156	418	574	30	1986	07/14		20
Plattsburgh, NY	—		127	421	—	—	127	421	548	25	1993	07/14		25
Romeoville, IL	—		158	557	—	—	158	557	715	27	1988	07/14		30
Worcester, MA	—		287	827	—	—	287	827	1,114	34	1988	07/14		35

Jin's Asian Cafe:
Sealy, TX	—		67	74	—	—	67	74	141	32	1982	03/99		40

Jo-Ann etc:
Corpus Christi, TX	—		818	896	71	—	818	967	1,785	505	1967	11/93		40
St. Peters, MO	—		1,741	5,406	1,233	—	1,741	6,639	8,380	1,588	2005	06/05	(g)	40

Johnny Carino's:
Lubbock, TX	—		1,007	1,206	—	—	1,007	1,206	2,213	423	1995	12/01		40

Kangaroo Express:
Carthage, NC	—		485	354	—	—	485	354	839	83	1989	08/06		40
Sanford, NC	—		666	661	—	—	666	661	1,327	155	2000	08/06		40
Sanford, NC	—		1,638	1,371	—	—	1,638	1,371	3,009	321	2003	08/06		40
Siler City, NC	—		586	645	—	—	586	645	1,231	151	1998	08/06		40
West End, NC	—		426	516	—	—	397	516	913	121	1999	08/06		40
Belleview, FL	—		471	1,451	—	—	471	1,451	1,922	340	2006	08/06		40
Jacksonville, FL	—		683	1,362	—	—	683	1,362	2,045	319	1969	08/06		40
Jacksonville, FL	—		807	1,239	—	—	807	1,239	2,046	290	1975	08/06		40
Destin, FL	—		1,366	1,192	—	—	1,366	1,192	2,558	277	2000	09/06		40

See accompanying report of independent registered public accounting firm.

F-31

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Niceville, FL (n)	—	1,434	1,124	—	—	1,434	1,124	2,558	261	2000	09/06		40
Kill Devil Hills, NC	—	490	741	—	—	490	741	1,231	171	1995	10/06		40
Kill Devil Hills, NC	—	679	552	—	—	679	552	1,231	127	1990	10/06		40
Interlachen, FL	—	519	1,500	—	—	519	1,500	2,019	292	2007	10/06		40
Clarksville, TN	—	521	710	—	—	521	710	1,231	160	1999	12/06		40
Clarksville, TN	—	276	955	—	—	276	955	1,231	216	1999	12/06		40
Gallatin, TN	—	474	757	—	—	474	757	1,231	171	1999	12/06		40
Midland City, AL	—	729	2,538	—	—	729	2,538	3,267	574	2006	12/06		40
Naples, FL	—	3,195	1,403	—	—	2,985	1,403	4,388	317	2001	12/06		40
Oxford, MS	—	440	1,097	—	—	440	1,097	1,537	248	1998	12/06		40
Columbiana, AL	—	771	989	—	—	771	989	1,760	221	1982	01/07		40
Naples, FL	—	3,162	1,597	—	—	3,162	1,597	4,759	354	1995	02/07		40
Longs, SC	—	745	758	—	—	745	758	1,503	167	2001	03/07		40
Kentwood, LA	—	985	891	—	—	985	891	1,876	196	2001	03/07		40
Dothan, AL	—	774	1,886	—	—	774	1,886	2,660	415	2007	03/07		40
Naples, FL	—	2,412	1,589	—	—	2,412	1,589	4,001	343	2000	05/07		40
Cary, NC	—	1,314	2,125	—	—	1,314	2,125	3,439	445	2007	08/07		40
Havelock, NC	—	170	681	—	—	170	681	851	33	1962	07/14		30
Statesville, NC	—	249	653	—	—	249	653	902	27	1960	07/14		35

KARM Home Store:
Knoxville, TN	—	467	735	—	—	467	735	1,202	312	1999	01/98	(f)	40

Kash n' Karry:
Seffner, FL	—	322	1,222	—	—	322	1,222	1,544	373	1983	03/99		40

Keg Steakhouse:
Lynnwood, WA	—	1,256	649	—	—	1,256	649	1,905	228	1992	12/01		40

KFC:
Fenton, MO	—	307	496	—	—	307	496	803	354	1985	07/92		33
Erie, PA	—	517	496	—	—	517	496	1,013	174	1996	12/01		40
Marysville, WA	—	647	546	—	—	647	546	1,193	192	1996	12/01		40
Evansville, IN	—	370	767	—	—	370	767	1,137	184	2004	05/06		40

See accompanying report of independent registered public accounting firm.

F-32

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)						Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Hampton, VA	—	251	1,173	—	—	251	1,173	1,424	122	2001	11/12	30
Mechanicsville, VA	—	482	422	—	—	482	422	904	53	1989	11/12	25
Newport News, VA	—	582	392	—	—	582	392	974	49	1985	11/12	25
Newport News, VA	—	572	442	—	—	572	442	1,014	55	1986	11/12	25
Newport News, VA	—	461	883	—	—	461	883	1,344	92	2001	11/12	30
Richmond, VA	—	481	1,253	—	—	481	1,253	1,734	157	1990	11/12	25
Richmond, VA	—	452	452	—	—	452	452	904	56	1984	11/12	25
Richmond, VA	—	532	472	—	—	532	472	1,004	59	1986	11/12	25
Richmond, VA	—	552	532	—	—	552	532	1,084	66	1984	11/12	25
Richmond, VA	—	492	452	—	—	492	452	944	40	2003	11/12	35
Virginia Beach, VA	—	402	482	—	—	402	482	884	60	1984	11/12	25
Ahoskie, NC	—	393	1,012	—	—	393	1,012	1,405	83	1988	12/13	25
Elizabeth City, NC	—	197	1,209	—	—	197	1,209	1,406	99	1988	12/13	25
Brownsville, TX	—	404	374	—	—	404	374	778	21	2003	01/14	35
Brownsville, TX	—	334	865	—	—	334	865	1,199	68	1990	01/14	25
Copperas Cove, TX	—	256	747	—	—	256	747	1,003	49	2001	01/14	30
Del Rio, TX	—	453	246	—	—	453	246	699	16	1995	01/14	30
Eagle Pass, TX	—	226	1,071	—	—	226	1,071	1,297	84	1992	01/14	25
Edinburg, TX	—	452	1,237	—	—	452	1,237	1,689	81	1996	01/14	30
Harker Heights, TX	—	275	1,218	—	—	275	1,218	1,493	68	2008	01/14	35
Harlingen, TX	—	128	1,708	—	—	128	1,708	1,836	134	1992	01/14	25
Jacksonville, TX	—	69	562	—	—	69	562	631	44	1985	01/14	25
Killeen, TX	—	226	1,228	—	—	226	1,228	1,454	80	1993	01/14	30
Laredo, TX	—	265	1,580	—	—	265	1,580	1,845	103	1996	01/14	30
Marshall, TX	—	89	709	—	—	89	709	798	56	1985	01/14	25
McAllen, TX	—	491	1,051	—	—	491	1,051	1,542	82	1987	01/14	25
Mission, TX	—	137	1,404	—	—	137	1,404	1,541	92	1993	01/14	30
Palestine, TX	—	89	484	—	—	89	484	573	38	1996	01/14	25
Pharr, TX	—	167	581	—	—	167	581	748	38	1999	01/14	30
Rio Grande City, TX	—	256	394	—	—	256	394	650	22	2004	01/14	35
S Padre Island, TX	—	856	30	—	—	856	30	886	2	1994	01/14	30
San Benito, TX	—	177	503	—	—	177	503	680	33	1994	01/14	30
Temple, TX	—	246	1,188	—	—	246	1,188	1,434	93	1985	01/14	25
Tyler, TX	—	709	30	—	—	709	30	739	2	1994	01/14	30

See accompanying report of independent registered public accounting firm.

F-33

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)						Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Waco, TX	—	463	246	—	—	463	246	709	16	1993	01/14	30
Waco, TX	—	276	620	—	—	276	620	896	49	1984	01/14	25
Weslaco, TX	—	236	1,561	—	—	236	1,561	1,797	102	1995	01/14	30
Belton, MO	—	267	744	—	—	267	744	1,011	12	1987	06/15	35
Cameron, MO	—	229	1,143	—	—	229	1,143	1,372	21	1999	06/15	30
Columbia, MO	—	343	839	—	—	343	839	1,182	15	1987	06/15	30
Excelsior Springs, MO	—	286	1,219	—	—	286	1,219	1,505	26	1988	06/15	25
Ft Pierce, FL	—	591	695	—	—	591	695	1,286	13	2004	06/15	30
Ft Pierce, FL	—	363	487	—	—	363	487	850	9	1992	06/15	30
Lake Wales, FL	—	162	1,561	—	—	162	1,561	1,723	34	1986	06/15	25
Oak Grove, MO	—	209	1,323	—	—	209	1,323	1,532	24	2003	06/15	30
Port St Lucie, FL	—	723	1,740	—	—	723	1,740	2,463	27	2006	06/15	35
Port St Lucie, FL	—	695	857	—	—	695	857	1,552	15	1998	06/15	30
Sebastian, FL	—	409	1,123	—	—	409	1,123	1,532	20	2000	06/15	30
Vero Beach, FL	—	428	1,218	—	—	428	1,218	1,646	22	2004	06/15	30
Lisle, IL	—	499	1,314	—	—	499	1,314	1,813	13	2000	09/15	30
Lockport, IL	—	499	1,085	—	—	499	1,085	1,584	11	2007	09/15	30
Sandwich, IL	—	86	1,143	—	—	86	1,143	1,229	11	1999	09/15	30
Yorkville, IL	—	413	960	—	—	413	960	1,373	11	1972	09/15	25

Kohl's:
Florence, AL	—	818	1,047	—	—	818	698	1,516	202	2006	06/04	40

Kroger:
Elkhart, IN	—	541	1,550	—	—	541	1,550	2,091	151	1979	07/14	15

Kum & Go:
Omaha, NE	—	393	214	—	—	393	214	607	113	1979	06/05	20

Kwik Pik:
Bear Creek, PA	—	191	230	—	—	191	230	421	119	1980	08/05	20
Bradford, PA	—	184	762	—	—	184	762	946	395	1983	08/05	20
Coraopolis, PA (n)	—	476	347	—	—	476	347	823	180	1983	08/05	20
St Clair, PA	—	212	475	—	—	212	475	687	246	1984	08/05	20

See accompanying report of independent registered public accounting firm.

F-34

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			Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances		Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Bear Creek Township, PA (n)	—		689	275	—	—	689	275	964	141	1980	09/05		20
Beech Creek, PA	—		477	613	—	—	477	613	1,090	153	1988	01/06		40
Canisteo, NY	—		142	485	—	—	142	485	627	121	1983	01/06		40
Curwensville, PA	—		226	608	—	—	226	608	834	151	1983	01/06		40
Ellwood City, PA	—		196	526	—	—	196	526	722	131	1987	01/06		40
Hastings, PA	—		199	455	—	—	199	455	654	113	1989	01/06		40
Jersey Shore, PA	—		515	381	—	—	515	381	896	95	1960	01/06		40
Leeper, PA	—		286	644	—	—	286	644	930	160	1987	01/06		40
Lewisberry, PA	—		412	534	—	—	412	534	946	133	1988	01/06		40
Mercersburg, PA	—		672	746	—	—	672	746	1,418	186	1988	01/06		40
New Florence, PA	—		298	812	—	—	298	812	1,110	202	1989	01/06		40
Newstead, NY	—		255	835	—	—	255	835	1,090	208	1990	01/06		40
Philipsburg, PA	—		428	269	—	—	428	269	697	67	1978	01/06		40
Plainfield, PA	—		244	383	—	—	244	383	627	95	1988	01/06		40
Reynoldsville, PA	—		113	328	—	—	113	328	441	82	1983	01/06		40
Port Royal, PA	—		238	635	—	—	238	635	873	300	1989	07/06		20

LA Fitness:
Little Rock, AR	—		3,113	2,660	4,125	—	3,113	6,785	9,898	1,373	1997	09/98		40
Sarasota, FL	—		471	1,344	4,450	—	471	5,794	6,265	897	1983	03/99	(g)	40
Centerville, OH	—		2,700	—	8,572	—	2,700	8,572	11,272	1,402	2009	06/08	(m)	40
Warren, MI	—		2,360	—	6,674	—	2,360	6,674	9,034	1,133	2009	07/08	(m)	40
Cincinnati, OH	—		5,145	—	9,011	—	5,145	9,011	14,156	1,474	2009	08/08	(m)	40
Lawrence, IN	—		1,599	—	5,867	—	1,762	5,870	7,632	789	2010	01/10	(m)	40
Laveen, AZ	—		1,665	—	5,749	—	1,665	5,749	7,414	749	2010	02/10	(m)	40
Kennesaw, GA	—		3,653	—	3,325	—	3,653	3,325	6,978	412	2011	07/10	(m)	40
Arlington, TX	—		1,166	6,214	—	—	1,166	6,214	7,380	880	2007	01/11		35
Hurst, TX	—		1,494	6,187	—	—	1,494	6,187	7,681	788	2008	07/11		35
South Plainfield, NJ	5,890	(k)	2,415	6,592	—	—	2,415	6,592	9,007	667	2006	06/12		35
McDonough, GA	—		1,503	6,727	—	—	1,503	6,727	8,230	633	2008	09/12		35
Greensburg, PA	—		1,791	7,015	—	—	1,791	7,015	8,806	533	2012	12/12		40
Indianapolis, IN	—		1,651	6,585	—	—	1,651	6,585	8,236	501	2012	12/12		40
Phoenix, AZ	—		1,601	6,540	—	—	1,601	6,540	8,141	497	2012	12/12		40
Tampa, FL	—		4,492	10,894	—	—	4,492	10,894	15,386	828	2012	12/12		40

See accompanying report of independent registered public accounting firm.

F-35

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
West Dundee, IL	—	1,961	6,525	—	—	1,961	6,525	8,486	496	2012	12/12		40
Irving, TX	—	3,636	7,326	—	—	3,636	7,326	10,962	549	2006	05/13		35
Royal Oak, MI	—	3,238	8,998	—	—	3,238	8,998	12,236	589	2010	09/13		35
St. Louis Park, MN	—	3,436	8,665	—	—	3,436	8,665	12,101	505	2009	12/13		35
Pompano Beach, FL	—	7,009	—	8,672	—	7,009	8,672	15,681	9	2015	12/14	(m)	40
San Antonio, TX	—	2,084	—	—	—	2,084	(e)	2,084	(e)	(e)	02/15	(m)	(e)
Antioch, CA	—	2,521	—	—	—	2,521	(e)	2,521	(e)	(e)	06/15	(m)	(e)
Plymouth, MI	—	1,646	—	6,184	—	1,646	6,184	7,830	6	2015	06/15	(m)	40
Spanaway, WA	—	846	—	—	—	846	(e)	846	(e)	(e)	07/15	(m)	(e)

LaPetite Academy:
Albuquerque, NM	—	332	1,166	—	—	332	1,166	1,498	57	1989	07/14		30
Ft. Worth, TX	—	140	383	—	—	140	383	523	37	1981	07/14		15
Moore, OK	—	119	412	—	—	119	412	531	40	1982	07/14		15
Oklahoma City, OK	—	100	391	—	—	100	391	491	38	1982	07/14		15

Last Stop West:
Azle, TX	—	648	859	—	—	648	859	1,507	184	1970	06/07		40

Lil' Champ:
Gainesville, FL	—	900	—	1,800	—	900	1,800	2,700	396	2006	07/05	(m)	40
Jacksonville, FL	—	2,225	3,265	—	—	2,225	3,265	5,490	620	2006	08/05		40
Ocala, FL	—	846	—	1,564	—	846	1,564	2,410	334	2006	02/06	(m)	40

LoanMax:
Bridgeview, IL	—	673	744	—	—	673	744	1,417	261	1997	12/01		40

Logan's Roadhouse:
Alexandria, LA	—	1,218	3,049	—	—	1,218	3,049	4,267	695	1998	11/06		40
Beckley, WV	—	1,396	2,405	—	—	1,396	2,405	3,801	549	2006	11/06		40
Cookeville, TN	—	1,262	2,271	—	—	1,262	2,271	3,533	518	1997	11/06		40
Greenwood, IN	—	1,341	2,105	—	—	1,341	2,105	3,446	480	2000	11/06		40
Hurst, TX	—	1,858	1,916	—	—	1,858	1,916	3,774	437	1999	11/06		40
Jackson, TN	—	1,200	2,246	—	—	1,200	2,246	3,446	512	1994	11/06		40

See accompanying report of independent registered public accounting firm.

F-36

Table of Contents



			Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances		Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Lake Charles, LA	—		1,285	2,202	—	—	1,285	2,202	3,487	502	1998	11/06		40
McAllen, TX	—		1,608	2,178	—	—	1,608	2,178	3,786	497	2005	11/06		40
Roanoke, VA	—		2,302	1,947	—	—	2,302	1,947	4,249	444	1998	11/06		40
San Marcos, TX	—		837	1,453	—	—	837	1,453	2,290	332	2000	11/06		40
Smyrna, TN	—		1,335	2,047	—	—	1,335	2,047	3,382	467	2002	11/06		40
Franklin, TN	—		2,519	1,705	—	—	2,519	1,705	4,224	385	1995	12/06		40
Southhaven, MS	—		1,298	1,338	—	—	1,298	1,338	2,636	302	2005	12/06		40
Columbus, MS	—		707	—	1,681	—	707	1,681	2,388	184	2011	11/10	(m)	40
Overland Park, KS	—		1,166	—	1,741	—	1,166	1,741	2,907	180	2011	04/11	(m)	40
Nashville, TN	—		844	—	1,592	—	844	1,592	2,436	164	2011	06/11	(m)	40
Marion, IL	—		1,016	—	1,674	—	1,016	1,674	2,690	138	2012	03/12	(m)	40
Pooler, GA	—		1,159	—	1,720	—	1,159	1,720	2,879	124	2013	03/12	(m)	40
Cullman, AL	—		889	—	1,585	—	889	1,585	2,474	127	2012	04/12	(m)	40
Lebanon, TN	—		789	—	1,725	—	789	1,725	2,514	131	2012	06/12	(m)	40
Chester, VA	—		871	—	1,697	—	871	1,697	2,568	125	2013	07/12	(m)	40
Gonzales, LA	—		975	—	1,696	—	975	1,696	2,671	118	2013	10/12	(m)	40
Madison, AL	—		689	—	1,657	—	689	1,657	2,346	109	2013	11/12	(m)	40
Hopkinsville, KY	—		644	—	1,788	—	644	1,788	2,432	76	2014	09/13	(m)	40
Muscle Shoals, AL	—		907	—	1,506	—	907	1,506	2,413	39	2014	06/14	(m)	40

Lowe's:
Memphis, TN	—		3,215	9,170	24	—	3,215	9,194	12,409	3,112	2001	06/02		40

Magic China Café:
Orlando, FL	10	(h)	40	111	—	—	40	111	151	33	2001	02/04		40

Magic Mountain:
Columbus, OH	—		2,076	1,906	124	—	2,076	2,030	4,106	419	1990	06/07		40
Columbus, OH	—		5,380	2,693	25	—	5,380	2,718	8,098	578	1990	06/07		40

See accompanying report of independent registered public accounting firm.

F-37

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Main Event:
Oklahoma City, OK	—	2,004	8,711	—	—	2,004	8,711	10,715	118	2014	06/15		40
San Antonio, TX	—	2,115	10,080	—	—	2,115	10,080	12,195	156	2014	06/15		35
Tulsa, OK	—	1,542	7,748	—	—	1,542	7,748	9,290	105	2015	06/15		40
Fort Worth, TX	—	2,538	—	—	—	2,538	(e)	2,538	(e)	(e)	12/15	(m)	(e)
Louisville, KY	—	2,504	—	—	—	2,504	(e)	2,504	(e)	(e)	12/15	(m)	(e)
Independence, MO	—	1,794	7,650	—	—	1,794	7,650	9,444	8	2015	12/15		40
Memphis, TN	—	1,263	6,825	—	—	1,263	6,825	8,088	7	2015	12/15		40

Manny's Barber Shop:
Mesa, AZ	—	43	113	367	—	43	480	523	117	1997	12/01		40

Mariscos Morales Mexican Restaurant:
Gresham, OR	—	817	108	28	—	817	136	953	41	1993	12/01		40

Mattress Firm:
Baton Rouge, LA	—	609	914	—	—	609	914	1,523	457	1995	12/95	(m)	40
Buford, GA	—	635	1,635	465	—	635	2,100	2,735	513	2003	07/04	(g)	40
Lancaster, OH	—	600	—	793	—	600	671	1,271	60	2012	01/08	(g)	40
Plainfield, IN	—	379	—	1,267	—	379	1,267	1,646	44	2014	01/14	(m)	40
Fayetteville, AR	—	891	2,229	—	—	891	2,229	3,120	139	1998	02/14		30
Pocatello, ID	—	268	—	1,505	—	268	1,505	1,773	39	2014	09/14	(m)	40
South Jordan, UT	—	719	—	1,572	—	719	1,572	2,291	31	2015	11/14	(m)	40
Helena, MT	—	658	1,568	—	—	658	1,568	2,226	18	2015	03/15		40
Kentwood, MI	—	593	1,531	—	—	593	1,531	2,124	27	2015	04/15		40
Muncie, IN	—	288	1,537	—	—	288	1,537	1,825	31	2015	04/15		35
Sandusky, OH	—	518	1,409	—	—	518	1,409	1,927	19	2015	06/15		40
Fort Collins, CO	—	757	—	1,168	—	757	1,168	1,925	4	2015	07/15	(m)	40

MC Sports:
Lapeer, MI	—	408	2,086	—	—	408	2,031	2,439	426	2007	10/05		40

MedExpress Urgent Care:
Fairmont, WV	—	245	1,859	—	—	245	1,859	2,104	193	2011	05/12		35
Hanover, PA	—	533	1,521	—	—	533	1,521	2,054	158	2011	05/12		35
Hermitage, PA	—	445	2,108	—	—	445	2,108	2,553	218	2011	05/12		35
Latrobe, PA	—	681	1,511	—	—	681	1,511	2,192	156	2011	05/12		35
Mt. Pleasant, PA	—	593	1,482	—	—	593	1,482	2,075	153	2011	05/12		35
Pittsburgh, PA	—	227	1,936	—	—	227	1,936	2,163	234	1970	05/12		30
Martinsburg, WV	—	917	—	650	—	917	650	1,567	37	2013	12/12	(m)	40
Wheeling, WV	—	485	1,232	—	—	485	1,232	1,717	115	1989	03/13		30
Huntington, WV	—	990	—	735	—	1,017	735	1,752	41	2013	08/13	(m)	40
Anderson, IN	—	777	—	661	—	777	661	1,438	34	2013	08/13	(m)	40
Terre Haute, IN	—	144	1,616	—	—	144	1,616	1,760	128	1991	08/13		30
Benton, AR	—	376	1,125	—	—	376	1,125	1,501	13	2015	07/15		40
Connellsville, PA	—	162	1,172	—	—	162	1,172	1,334	13	2015	07/15		40
Rogers, AR	—	435	1,168	—	—	435	1,168	1,603	13	2015	07/15		40
Russellville, AR	—	247	1,098	—	—	247	1,098	1,345	14	2015	07/15		35
Hot Springs, AR	—	440	1,155	—	—	440	1,155	1,595	11	2015	08/15		40
Salina, KS	—	321	1,315	—	—	321	1,315	1,636	11	1999	09/15		35
Lehigh Acres, FL	—	459	—	—	—	459	(e)	459	(e)	(e)	10/15	(m)	(e)

Merchant's Tires:
Hampton, VA	—	180	427	—	—	180	427	607	115	1986	03/05		40
Newport News, VA	—	234	259	—	—	234	259	493	70	1986	03/05		40
Norfolk, VA	—	398	508	—	—	398	508	906	137	1986	03/05		40
Rockville, MD	—	1,030	306	—	—	1,030	306	1,336	83	1974	03/05		40
Washington, DC	—	624	578	—	—	624	578	1,202	156	1983	03/05		40

Mi Pueblo Foods:
Palo Alto, CA	—	2,272	3,405	28	—	2,272	3,433	5,705	1,435	1998	12/98	(f)	40

Michaels:
Fairfax, VA	—	534	773	1,369	—	992	2,141	3,133	819	1995	12/95		40
Altamonte Springs, FL	—	1,947	3,267	1,198	—	1,947	3,370	5,317	545	1997	09/97		26
Plymouth Meeting, PA	—	2,911	2,595	—	—	2,911	2,595	5,506	1,032	1999	10/98	(g)	40
Florissant, MO	—	523	617	1,784	—	524	2,399	2,923	370	1996	04/03	(g)	40

Miller's Ale House:
Pensacola, FL	—	1,363	1,842	—	—	1,363	1,842	3,205	248	2008	04/11		35
Oviedo, FL	—	113	—	3,785	—	113	3,785	3,898	304	2012	10/11		40

Mimi's:
Tampa, FL	—	688	2,357	—	—	688	2,357	3,045	147	2003	02/14		30

Mister Car Wash:
Anoka, MN	—	212	214	—	—	212	214	426	125	1968	04/07		15
Brooklyn Park, MN	—	438	778	—	—	438	778	1,216	271	1985	04/07		25
Cedar Rapids, IA	—	391	816	—	—	391	816	1,207	284	1989	04/07		25
Clive, IA	—	1,141	935	—	—	1,141	935	2,076	407	1983	04/07		20
Cottage Grove, MN	—	274	485	—	—	274	485	759	169	1992	04/07		25
Des Moines, IA	—	213	476	—	—	213	476	689	207	1964	04/07		20
Des Moines, IA	—	249	596	—	—	249	596	845	173	1990	04/07		30
Eden Prairie, MN	—	865	751	—	—	865	751	1,616	327	1984	04/07		20
Edina, MN	—	894	687	—	—	894	687	1,581	299	1985	04/07		20
Houston, TX	—	1,347	1,702	—	—	1,347	1,702	3,049	494	1984	04/07		30
Houston, TX	—	2,260	1,806	—	—	2,260	1,806	4,066	629	1975	04/07		25
Houston, TX	—	796	678	—	—	796	678	1,474	236	1986	04/07		25
Houston, TX	—	624	1,108	—	—	624	1,108	1,732	322	1988	04/07		30
Houston, TX	—	5,126	1,267	—	—	5,126	1,267	6,393	315	1995	04/07		35
Houston, TX	—	3,193	1,305	—	—	3,193	1,305	4,498	325	1995	04/07		35
Houston, TX	—	1,846	1,592	—	—	1,846	1,592	3,438	555	1983	04/07		25
Houston, TX	—	1,960	1,145	—	—	1,960	1,145	3,105	399	1983	04/07		25
Houston, TX	—	288	466	—	—	288	466	754	270	1970	04/07		15
Humble, TX	—	1,204	1,517	—	—	1,204	1,517	2,721	377	1993	04/07		35
Plymouth, MN	—	827	182	—	—	827	182	1,009	158	1955	04/07		10
Roseville, MN	—	861	564	—	—	861	564	1,425	245	1963	04/07		20
Spokane, WA	—	214	580	—	—	214	580	794	168	1990	04/07		30
Spokane, WA	—	1,253	1,146	—	—	1,253	1,146	2,399	285	1997	04/07		35
St. Cloud, MN (n)	—	243	391	—	—	242	391	633	170	1986	04/07		20
Stillwater, MN	—	289	214	—	—	289	214	503	124	1971	04/07		15
Sugarland, TX	—	3,789	1,972	—	—	3,789	1,972	5,761	491	1995	04/07		35
West St Paul, MN	—	836	236	—	—	836	236	1,072	103	1972	04/07		20
Rochester, MN	—	1,055	2,327	—	—	1,055	2,327	3,382	478	2003	10/07		40
Birmingham, AL	—	2,378	2,145	—	—	2,378	2,145	4,523	581	1985	11/07		30
Clearwater, FL	—	825	765	—	—	825	765	1,590	249	1969	11/07		25
Mesquite, TX	—	1,596	2,201	—	—	1,596	2,201	3,797	715	1987	11/07		25
Seminole, FL	—	2,166	1,496	—	—	2,166	1,496	3,662	405	1985	11/07		30
Tampa, FL	—	2,993	1,669	—	—	2,993	1,669	4,662	542	1969	11/07		25
Vestavia Hills, AL	—	1,009	956	—	—	1,009	956	1,965	311	1967	11/07		25
El Paso, TX	—	1,424	1,306	—	—	1,424	1,306	2,730	350	1986	12/07		30
El Paso, TX	—	664	824	—	—	664	824	1,488	166	1991	12/07		40
El Paso, TX	—	988	1,046	—	—	988	1,046	2,034	211	1998	12/07		40
El Paso, TX	—	1,399	1,468	—	—	1,399	1,468	2,867	295	1991	12/07		40
El Paso, TX	—	1,807	2,287	—	—	1,807	2,287	4,094	461	1983	12/07		40
Tampa, FL	—	541	829	—	—	541	829	1,370	189	1978	04/10		25
Springfield, MO	—	642	1,767	—	—	642	1,767	2,409	262	1979	07/11		30
Springfield, MO	—	1,188	2,817	—	—	1,188	2,817	4,005	359	2000	07/11		35
Springfield, MO	—	1,064	2,109	—	—	1,064	2,109	3,173	313	1990	07/11		30
Missouri City, TX	—	549	1,553	—	—	549	1,553	2,102	183	2004	11/11		35
Bountiful, UT	—	484	292	—	—	484	292	776	39	1995	01/12		30
Salt Lake City, UT	—	522	1,806	—	—	522	1,806	2,328	238	1993	01/12		30
Tucson, AZ	—	946	2,566	—	—	946	2,566	3,512	339	2003	01/12		30
Tucson, AZ	—	742	2,226	—	—	742	2,226	2,968	294	2000	01/12		30
Tucson, AZ	—	108	778	—	—	108	778	886	103	2004	01/12		30
Tucson, AZ	—	493	345	—	—	493	345	838	39	2007	01/12		35
Cedar Park, TX	—	794	1,316	—	—	794	1,316	2,110	139	2009	04/12		35
Spokane Valley, WA	—	454	857	—	—	454	857	1,311	91	2005	04/12		35
Salt Lake City, UT	—	781	2,303	—	—	781	2,303	3,084	228	2009	07/12		35
Charlotte, NC	—	693	1,315	—	—	693	1,315	2,008	173	1981	09/12		25
College Park, GA	—	322	1,056	—	—	322	1,056	1,378	99	2008	09/12		35
Griffin, GA	—	401	2,897	—	—	401	2,897	3,298	272	2007	09/12		35
Hampton, GA	—	421	1,996	—	—	421	1,996	2,417	188	2006	09/12		35
Lilburn, GA	—	381	2,426	—	—	381	2,426	2,807	228	2007	09/12		35
Matthews, NC	—	664	664	—	—	664	664	1,328	73	1990	09/12		30
Oxford, AL	—	301	3,607	—	—	301	3,607	3,908	339	2008	09/12		35
Pineville, NC	—	723	1,195	—	—	723	1,195	1,918	131	1990	09/12		30
Clermont, FL	—	783	2,328	—	—	783	2,328	3,111	213	2006	10/12		35
Springfield, MO	—	474	736	—	—	474	736	1,210	80	2006	10/12		30
Abilene, TX	—	641	3,093	—	—	641	3,093	3,734	276	2006	11/12		35
Abilene, TX	—	101	426	—	—	101	426	527	38	2009	11/12		35
Lubbock, TX	—	350	2,984	—	—	350	2,984	3,334	266	2007	11/12		35
Lubbock, TX	—	411	2,534	—	—	411	2,534	2,945	264	2003	11/12		30
Lubbock, TX	—	400	3,403	—	—	400	3,403	3,803	304	2004	11/12		35
Ephrata, PA	—	241	2,797	—	—	241	2,797	3,038	340	1987	12/12		25
Lancaster, PA	—	920	7,894	—	—	920	7,894	8,814	800	1999	12/12		30
Sinking Spring, PA	—	1,251	4,735	—	—	1,251	4,735	5,986	480	2005	12/12		30
York, PA	—	591	4,605	—	—	591	4,605	5,196	467	1995	12/12		30
Atlanta, GA	—	1,773	4,528	—	—	1,773	4,528	6,301	393	2003	12/12		35
Atlanta, GA	—	1,633	5,378	—	—	1,633	5,378	7,011	545	1998	12/12		30
Urbandale, IA	—	485	374	—	—	485	374	859	34	1990	04/13		30
Houston, TX	—	551	2,967	—	—	551	2,967	3,518	302	1980	06/13		25
Houston, TX	—	713	964	—	—	713	964	1,677	70	2005	06/13		35
Houston, TX	—	752	1,736	—	—	752	1,736	2,488	126	2005	06/13		35
Houston, TX	—	1,573	2,315	—	—	1,573	2,315	3,888	168	2006	06/13		35
Houston, TX	—	542	1,876	—	—	542	1,876	2,418	136	2012	06/13		35
Humble, TX	—	611	3,327	—	—	611	3,327	3,938	242	2006	06/13		35
Katy, TX	—	421	2,157	—	—	421	2,157	2,578	183	2002	06/13		30
Spring, TX	—	652	2,627	—	—	652	2,627	3,279	191	2006	06/13		35
Tucson, AZ	—	654	1,357	—	—	654	1,357	2,011	104	1986	09/13		30
Rochester, MN	—	396	264	—	—	396	264	660	16	1987	02/14		30
Tucson, AZ	—	988	272	—	—	988	272	1,260	17	1987	02/14		30
Brooklyn Park, MN	—	287	394	—	—	287	394	681	3	2011	09/15		35
Lake Mary, FL	—	692	3,518	—	—	692	3,518	4,210	24	1997	10/15		30
Melbourne, FL	—	1,262	4,348	—	—	1,262	4,348	5,610	26	2009	10/15		35
Sanford, FL	—	1,322	3,887	—	—	1,322	3,887	5,209	23	2008	10/15		35

See accompanying report of independent registered public accounting firm.

F-38

Table of Contents



			Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances		Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Movie Tavern Theatre:
Covington, LA	—		1,081	6,779	—	—	1,081	6,779	7,860	292	1993	09/14		30
Baton Rouge, LA	—		1,497	—	10,888	—	1,497	10,888	12,385	136	1993	11/14		40

Mr. Hero:
Parma, OH	—		36	291	—	—	36	291	327	6	1980	06/15		25

Muchas Gracias Mexican Restaurant:
Salem, OR	—		556	736	—	—	556	736	1,292	258	1996	12/01		40

National Karate Academy:
Eden Prairie, MN	—		76	211	110	—	76	321	397	106	1997	12/01		40

Natural Grocers:
Lincoln, NE	—		1,482	2,811	—	—	1,482	2,811	4,293	218	2012	04/13		35
Coeur D'Alene, ID	—		2,172	—	2,778	—	2,172	2,778	4,950	124	2014	08/13		40
Flagstaff, AZ	3,136	(p)	831	4,079	—	—	831	4,079	4,910	131	2012	11/14		35
Helena, MT	2,751	(p)	1,079	3,062	—	—	1,079	3,062	4,141	98	2012	11/14		35
Missoula, MT	2,450	(p)	929	3,222	—	—	929	3,222	4,151	104	2012	11/14		35
Sedona, AZ	2,882	(p)	1,064	3,211	—	—	1,064	3,211	4,275	103	2012	11/14		35
Steamboat Springs, CO	3,336	(p)	1,512	3,447	—	—	1,512	3,447	4,959	111	2012	11/14		35
Independence, MO	—		912	5,002	—	—	912	5,002	5,914	174	2002	12/14		30
Conifer, CO	—		1,432	—	4,076	—	1,432	4,076	5,508	21	2015	06/15	(m)	40
Oklahoma City, OK	—		955	3,975	—	—	955	3,975	4,930	24	2014	10/15		35

Nebraskaland Tire:
Park City, KS	—		214	687	—	—	214	687	901	362	1989	06/05		20

Nitlantika:
Hollywood, FL	—		383	88	37	—	234	—	234	—	1960	12/05		15

Northern Tool:
Asheville, NC	—		519	2,998	—	—	519	2,998	3,517	310	2007	05/12		35
Spartanburg, SC	2,804	(k)	654	3,174	—	—	654	3,174	3,828	137	2007	09/14		30

See accompanying report of independent registered public accounting firm.

F-39

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:

Office Depot:
Gastonia, NC	—	1,554	2,367	946	—	1,554	3,313	4,867	769	2004	12/04		40

OfficeMax:
Cincinnati, OH	—	543	1,575	—	—	543	1,575	2,118	846	1994	07/94		40
Evanston, IL	—	1,868	1,758	—	—	1,868	1,758	3,626	903	1995	06/95		40
Sacramento, CA	—	1,144	2,961	—	—	1,144	2,961	4,105	1,407	1996	12/96		40
Salinas, CA	—	1,353	1,829	—	—	1,353	1,829	3,182	863	1995	02/97		40
Redding, CA	—	667	2,182	—	—	667	2,182	2,849	1,011	1997	06/97		40
Kelso, WA	—	868	—	1,806	—	868	1,806	2,674	811	1998	09/97	(g)	40
Lynchburg, VA	—	562	—	1,851	—	562	1,851	2,413	800	1998	02/98	(m)	40
Tigard, OR	—	1,540	2,247	—	—	1,540	2,247	3,787	962	1995	11/98		40
Griffin, GA	—	685	—	1,802	—	685	1,802	2,487	753	1999	11/98	(g)	40
Omaha, NE	—	664	1,778	—	—	664	1,778	2,442	130	1995	07/14		20
Weatherford, TX	—	548	2,436	—	—	548	2,436	2,984	105	1999	09/14		30

Orchard Supply Hardware:
Pismo Beach, CA	—	2,436	1,997	2,339	—	2,436	4,336	6,772	619	1989	12/11	(o)	25
San Jose, CA	—	6,406	2,457	3,374	—	6,406	5,831	12,237	825	1982	12/11	(o)	25
San Jose, CA	—	4,092	4,279	3,307	—	4,092	7,586	11,678	1,111	1982	12/11	(o)	25
Chico, CA	—	1,782	4,563	746	—	1,782	5,308	7,090	585	2002	07/12	(o)	30
Clovis, CA	—	1,226	1,426	151	—	1,226	1,577	2,803	214	1982	07/12	(o)	25
Pinole, CA	—	2,784	5,195	—	—	2,784	5,195	7,979	719	1987	07/12	(o)	25
San Jose, CA	—	5,850	4,129	—	—	5,850	4,129	9,979	571	1946	07/12	(o)	25
San Jose, CA	—	3,370	2,517	—	—	3,370	2,517	5,887	348	1965	07/12		25

Orlando Metro Gymnastics:
Orlando, FL	—	428	1,345	—	—	428	1,345	1,773	368	2003	01/05		40

Outback:
Cheyenne, WY	—	672	2,502	—	—	672	2,502	3,174	316	2001	03/12		30
Conroe, TX	—	524	583	—	—	524	583	1,107	88	1992	03/12		25
Copley Township, OH	—	753	2,407	—	—	753	2,407	3,160	365	1993	03/12		25

See accompanying report of independent registered public accounting firm.

F-40

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Coraopolis, PA	—	487	2,326	—	—	487	2,326	2,813	294	1998	03/12		30
Denver, CO	—	850	1,305	—	—	850	1,305	2,155	141	2003	03/12		35
Knoxville, TN	—	753	1,852	—	—	753	1,852	2,605	201	2004	03/12		35
Largo, MD	—	1,738	2,227	—	—	1,738	2,227	3,965	281	2001	03/12		30
Lufkin, TX	—	850	1,147	—	—	850	1,147	1,997	145	1999	03/12		30
Marrero, LA	—	781	3,144	—	—	781	3,144	3,925	477	1995	03/12		25
Mechanicsville, VA	—	674	2,328	—	—	674	2,328	3,002	294	2002	03/12		30
Mt. Pleasant, SC	—	713	1,466	—	—	713	1,466	2,179	185	1999	03/12		30
Phoenix, AZ	—	821	2,284	—	—	821	2,284	3,105	289	2002	03/12		30
Shreveport, LA	—	633	3,105	—	—	633	3,105	3,738	471	1994	03/12		25
Smithfield, NC	—	772	2,345	—	—	772	2,345	3,117	254	2004	03/12		35
Stockbridge, GA	—	910	1,988	—	—	910	1,988	2,898	251	2001	03/12		30
Troy, OH	—	456	1,575	—	—	456	1,575	2,031	171	2004	03/12		35
Venice, FL	—	833	2,529	—	—	833	2,529	3,362	320	2001	03/12		30
Warrenton, VA	—	1,833	2,021	—	—	1,833	2,021	3,854	255	2001	03/12		30
Wheaton, IL	—	901	654	—	—	901	654	1,555	99	1994	03/12		25
Fultondale, AL	—	765	2,097	—	—	765	2,097	2,862	79	1998	11/14		30

Palais Royale:
Sealy, TX	—	457	504	1,769	—	462	2,273	2,735	537	1982	03/99		40

Panda Express:
Florissant, MO	—	50	59	170	—	50	228	278	35	2012	04/03	(g)	40

Panera Bread:
Lewisville, TX	—	815	—	59	—	874	(i)	874	(i)	(i)	04/01	(q)	(i)

Patient First:
Richmond, VA	—	270	1,545	—	—	270	1,545	1,815	238	1988	05/11		30
York, PA	—	772	2,995	—	—	772	2,995	3,767	334	2011	07/11		40
Mechanicsburg, PA	—	933	3,401	—	—	933	3,401	4,334	329	2011	02/12		40

Patriot Fuels:
Vinita, OK	—	72	368	—	—	72	368	440	117	1972	07/09		20

See accompanying report of independent registered public accounting firm.

F-41

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Pawn America:
Fargo, ND	—	335	2,747	—	—	335	2,747	3,082	239	2008	12/12		35
Fridley, MN	—	1,013	4,465	—	—	1,013	4,465	5,478	453	1978	12/12		30
Sioux Falls, SD	—	207	1,490	—	—	207	1,490	1,697	151	1985	12/12		30
Mankato, MN	—	449	—	1,705	—	449	1,705	2,154	91	2013	03/13	(m)	40

Pep Boys:
Chicago, IL	—	1,077	3,756	—	—	1,077	3,756	4,833	872	1993	11/07		35
Cicero, IL	—	1,341	3,760	—	—	1,341	3,760	5,101	873	1993	11/07		35
Cornwell Heights, PA	—	2,058	3,102	—	—	2,058	3,102	5,160	1,008	1972	11/07		25
East Brunswick, NJ	—	2,449	5,026	—	—	2,449	5,026	7,475	1,361	1987	11/07		30
Guayama, PR	—	1,729	2,732	—	—	1,729	2,131	3,860	394	1998	11/07		33
Jacksonville, FL	—	810	2,331	—	—	810	2,331	3,141	541	1989	11/07		35
Joliet, IL	—	1,506	3,727	—	—	1,506	3,727	5,233	865	1993	11/07		35
Lansing, IL	—	869	3,440	—	—	869	3,440	4,309	799	1993	11/07		35
Marietta, GA	—	1,311	3,556	—	—	1,311	3,556	4,867	963	1987	11/07		30
Marlton, NJ	—	1,608	4,142	—	—	1,608	4,142	5,750	1,122	1983	11/07		30
Philadelphia, PA	—	1,300	3,830	—	—	1,300	3,830	5,130	889	1995	11/07		35
Quakertown, PA	—	1,129	3,252	—	—	1,129	3,252	4,381	755	1995	11/07		35
Reading, PA	—	1,189	3,367	—	—	1,189	2,819	4,008	614	1989	11/07		28
Roswell, GA	—	931	2,732	—	—	931	2,732	3,663	740	2007	11/07		30
Turnersville, NJ	—	990	3,494	—	—	990	3,494	4,484	946	1986	11/07		30
Houston, TX	—	734	3,028	—	—	734	3,028	3,762	576	1994	04/10		30

Perkins Restaurant:
Des Moines, IA	—	256	136	—	—	256	136	392	136	1976	06/05		10
Des Moines, IA	—	226	203	—	—	226	203	429	203	1976	06/05		10
Des Moines, IA	—	270	218	—	—	270	218	488	218	1977	06/05		10
Newton, IA	—	354	402	—	—	354	402	756	402	1979	06/05		10
Urbandale, IA	—	377	581	—	—	377	581	958	306	1979	06/05		20

Pet Paradise:
Houston, TX	—	417	2,306	—	—	417	2,306	2,723	449	2008	03/08		40
Bunnell, FL	—	316	881	—	—	316	881	1,197	170	1997	04/08		40

See accompanying report of independent registered public accounting firm.

F-42

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Charlotte, NC	—	825	—	3,231	—	825	3,231	4,056	522	2009	11/08	(m)	40
Davie, FL	—	1,138	1,069	—	—	1,138	1,069	2,207	215	2003	12/08		35

Petco:
Grand Forks, ND	—	307	910	—	—	307	910	1,217	410	1996	12/97		40
Florissant, MO	—	299	352	1,019	—	300	1,371	1,671	212	2012	04/03	(g)	40

Petro Express:
Belmont, NC	—	1,508	1,622	—	—	1,508	1,622	3,130	404	2001	04/07		35
Charlotte, NC	—	1,030	1,725	—	—	1,030	1,725	2,755	501	1983	04/07		30
Charlotte, NC	—	429	425	—	—	429	425	854	124	1983	04/07		30
Charlotte, NC	—	2,316	2,064	—	—	2,316	2,064	4,380	514	1996	04/07		35
Charlotte, NC	—	2,165	1,965	—	—	2,165	1,965	4,130	489	1997	04/07		35
Charlotte, NC	—	1,340	1,790	—	—	1,340	1,790	3,130	445	1998	04/07		35
Charlotte, NC	—	2,784	3,720	—	—	2,784	3,720	6,504	926	1998	04/07		35
Charlotte, NC	—	1,532	1,973	—	—	1,532	1,973	3,505	491	1998	04/07		35
Charlotte, NC	—	1,697	2,419	—	—	1,697	2,419	4,116	527	2005	04/07		40
Charlotte, NC	—	629	876	—	—	623	876	1,499	254	1986	04/07		30
Charlotte, NC	—	1,458	2,047	—	—	1,458	2,047	3,505	594	1987	04/07		30
Charlotte, NC	—	1,291	1,839	—	—	1,291	1,839	3,130	534	1988	04/07		30
Charlotte, NC	—	1,778	1,977	—	—	1,778	1,977	3,755	574	1992	04/07		30
Charlotte, NC	—	507	698	—	—	507	698	1,205	304	1967	04/07		20
Charlotte, NC	—	1,810	2,570	—	—	1,810	2,570	4,380	559	2004	04/07		40
Concord, NC	—	2,144	1,986	—	—	2,144	1,986	4,130	494	2000	04/07		35
Concord, NC	—	1,828	1,677	—	—	1,828	1,677	3,505	417	2002	04/07		35
Denver, NC	—	2,317	1,750	—	—	2,317	1,750	4,067	435	1999	04/07		35
Fort Mill, SC	—	3,825	2,554	—	—	3,825	2,554	6,379	636	1998	04/07		35
Gastonia, NC	—	965	1,228	—	—	965	1,228	2,193	305	2001	04/07		35
Gastonia, NC	—	745	760	—	—	745	760	1,505	166	2003	04/07		40
Gastonia, NC	—	335	545	—	—	335	545	880	119	2000	04/07		40
Gastonia, NC	—	1,070	1,185	—	—	1,070	1,185	2,255	295	1990	04/07		35
Hickory, NC	—	1,975	1,530	—	—	1,975	1,530	3,505	381	2002	04/07		35
Kings Mountain, NC	—	1,210	982	—	—	1,210	982	2,192	244	1988	04/07		35

See accompanying report of independent registered public accounting firm.

F-43

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		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Lake Wylie, SC	—	1,972	1,283	—	—	1,972	1,283	3,255	319	2003	04/07		35
Lake Wylie, SC	—	1,381	2,061	—	—	1,381	2,061	3,442	513	1998	04/07		35
Lincolnton, NC	—	723	532	—	—	723	532	1,255	154	1989	04/07		30
Mineral Springs, NC	—	678	577	—	—	678	577	1,255	126	2002	04/07		40
Monroe, NC	—	857	1,023	—	—	857	1,023	1,880	223	2004	04/07		40
Monroe, NC	—	709	796	—	—	709	796	1,505	198	1999	04/07		35
Monroe, NC	—	421	834	—	—	421	834	1,255	208	1997	04/07		35
Rock Hill, SC	—	778	727	—	—	778	727	1,505	211	1990	04/07		30
Rock Hill, SC	—	2,119	1,886	—	—	2,119	1,886	4,005	469	1998	04/07		35
Rock Hill, SC	—	3,095	1,910	—	—	3,095	1,910	5,005	475	1999	04/07		35
Statesville, NC	—	1,886	2,182	—	—	1,864	2,182	4,046	543	1999	04/07		35
Waxhaw, NC	—	508	747	—	—	508	747	1,255	163	2002	04/07		40
York, SC	—	2,306	1,449	—	—	2,306	1,449	3,755	360	1999	04/07		35
Charlotte, NC	—	1,834	1,214	—	—	1,834	1,214	3,048	262	1997	05/07		40
Charlotte, NC	—	1,849	2,280	—	—	1,849	2,280	4,129	492	2005	05/07		40
Rock Hill, SC	—	3,108	2,146	—	—	3,108	2,146	5,254	463	1999	05/07		40

PetSense:
Kingsville, TX	—	499	458	224	—	499	682	1,181	188	1995	12/01		40

PetSmart:
Chicago, IL	—	2,724	3,566	—	—	2,724	3,566	6,290	1,541	1998	09/98		40

Pier I Imports:
Anchorage, AK	—	928	1,663	—	—	928	1,663	2,591	825	1995	02/96		40
Memphis, TN	—	713	822	—	—	713	822	1,535	381	1997	09/96	(f)	40
Sanford, FL	—	738	803	—	—	738	803	1,541	357	1998	06/97	(f)	40
Valdosta, GA	—	391	806	—	—	391	806	1,197	325	1999	01/99	(f)	40

Pizza Hut:
Monroeville, AL	—	547	44	—	—	547	44	591	16	1976	12/01		40
Amherst, NY	—	230	175	—	—	230	175	405	8	1977	02/15		20
Bowie, TX	—	111	346	—	—	111	346	457	12	1976	02/15		25
Greeneville, TN	—	111	717	—	—	111	717	828	25	1972	02/15		25

See accompanying report of independent registered public accounting firm.

F-44

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:

Popeye's:
Snellville, GA	—	642	437	—	—	642	437	1,079	153	1995	12/01		40
Randallstown, MD	—	483	609	—	—	483	609	1,092	46	1958	02/14		25

Power Center:
Midland, MI	—	1,085	1,635	220	—	1,085	1,598	2,683	416	2005	05/05	(g)	40
Big Flats, NY	—	2,248	7,159	1,258	—	2,248	5,075	7,323	1,328	2006	08/05	(g)	40
Harlingen, TX	—	247	807	—	—	247	583	830	142	2008	09/06	(g)	40
Harlingen, TX	—	749	1,238	195	—	749	1,043	1,792	263	2008	09/06	(g)	40
Woodstock, GA	—	261	701	—	—	261	516	777	108	1997	07/08		40

Premium Spas & Billiards:
Fairfax, VA	—	105	151	413	—	194	564	758	121	1995	12/95		40

Pull-A-Part:
Augusta, GA	—	1,414	—	1,449	—	1,414	1,449	2,863	310	2007	08/06	(m)	40
Birmingham, AL	—	1,165	2,090	—	—	1,165	2,090	3,255	490	1964	08/06		40
Charlotte, NC	—	2,913	1,724	—	—	2,908	1,724	4,632	404	2006	08/06		40
Conley, GA	—	1,686	1,387	—	—	1,686	1,387	3,073	325	1999	08/06		40
Harvey, LA	—	1,887	—	4,326	—	1,887	4,326	6,213	807	2008	08/06	(m)	40
Knoxville, TN	—	961	—	2,384	—	961	2,384	3,345	504	2007	08/06	(m)	40
Louisville, KY	—	3,206	1,532	—	—	3,206	1,532	4,738	359	2006	08/06		40
Nashville, TN	—	2,164	1,414	—	—	2,164	1,414	3,578	331	2006	08/06		40
Norcross, GA	—	1,831	1,040	—	—	1,831	1,040	2,871	244	1998	08/06		40
Cleveland, OH	—	4,556	—	2,096	—	4,556	2,096	6,652	426	2007	08/06	(m)	40
Lafayette, LA	—	1,036	—	2,226	—	1,036	2,226	3,262	447	2007	08/06	(m)	40
Montgomery, AL	—	934	—	2,013	—	934	2,013	2,947	409	2007	11/06	(m)	40
Jackson, MS	—	1,315	—	2,471	—	1,315	2,318	3,633	463	2008	12/06	(m)	40
Baton Rouge, LA	—	893	—	3,256	—	893	3,256	4,149	553	2009	01/07	(m)	40
Memphis, TN	—	1,779	—	2,964	—	1,779	2,964	4,743	565	2008	05/07	(m)	40
Mobile, AL	—	550	—	2,772	—	550	2,772	3,322	482	2009	06/07	(m)	40
Winston-Salem, NC	—	846	—	2,449	—	836	2,449	3,285	431	2009	08/07	(m)	40
Lithonia, GA	—	2,410	—	2,345	—	2,410	2,345	4,755	408	2009	08/07	(m)	40

See accompanying report of independent registered public accounting firm.

F-45

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Columbia, SC	—	935	—	2,178	—	935	2,178	3,113	379	2009	09/07	(m)	40
Akron, OH	—	1,065	—	1,869	—	1,065	1,869	2,934	286	2009	10/08	(m)	40

Quaker Steak & Lube:
Mentor, OH	—	841	2,452	—	—	841	2,452	3,293	120	2009	04/14		35

QuikTrip:
Alpharetta, GA	—	1,048	607	—	—	1,048	607	1,655	160	1996	06/05		40
Clive, IA	—	623	557	—	—	623	557	1,180	196	1994	06/05		30
Des Moines, IA	—	259	792	—	—	259	792	1,051	278	1996	06/05		30
Des Moines, IA	—	379	455	—	—	379	455	834	160	1990	06/05		30
Gainesville, GA	—	592	913	—	—	592	913	1,505	321	1989	06/05		30
Herculaneum, MO	—	856	1,613	—	—	856	1,613	2,469	567	1991	06/05		30
Johnston, IA	—	394	385	—	—	394	385	779	135	1991	06/05		30
Lee's Summit, MO	—	374	1,224	—	—	374	1,224	1,598	323	1999	06/05		40
Norcross, GA	—	948	294	—	—	948	294	1,242	103	1989	06/05		30
Norcross, GA	—	966	202	—	—	966	202	1,168	71	1993	06/05		30
Norcross, GA	—	844	297	—	—	839	297	1,136	104	1994	06/05		30
Olathe, KS	—	793	1,392	—	—	793	1,392	2,185	367	1999	06/05		40
Tulsa, OK	—	1,225	650	—	—	1,225	650	1,875	228	1990	06/05		30
Urbandale, IA	—	340	764	—	—	340	764	1,104	201	1993	06/05		40
Wichita, KS	—	127	543	—	—	127	543	670	191	1990	06/05		30
Woodstock , GA	—	488	1,042	—	—	488	1,042	1,530	275	1997	06/05		40

Qwest Corporation Service Center:
Cedar Rapids, IA	—	184	629	—	—	184	629	813	332	1976	06/05		20
Decorah, IA	—	72	272	—	—	72	272	344	272	1974	06/05		10

Rabobank:
Chico, CA	—	346	—	—	—	346	—	346	(e)	(i)(e)	07/12		30

Raising Cane's:
Lancaster, OH	—	600	—	1,075	—	600	1,075	1,675	84	2012	01/08	(g)	40
Sulphur, LA	—	326	1,268	—	—	326	1,268	1,594	171	2009	04/11		35

See accompanying report of independent registered public accounting firm.

F-46

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Hurst, TX	—	763	—	1,309	—	763	1,309	2,072	138	2011	05/11	(m)	40
Fort Worth, TX	—	792	—	1,144	—	792	1,144	1,936	120	2011	06/11	(m)	40
Plano, TX	—	1,316	—	1,349	—	1,316	1,349	2,665	142	2011	06/11	(m)	40
Pearland, TX	—	774	—	1,255	—	774	1,255	2,029	129	2011	07/11	(m)	40
Addison, TX	—	869	—	1,343	—	869	1,343	2,212	127	2012	10/11	(m)	40
Houston, TX	—	737	—	1,163	—	737	1,163	1,900	113	2012	10/11	(m)	40
Euless, TX	—	1,222	—	1,376	—	1,226	1,376	2,602	139	2011	12/11	(m)	40
Moore, OK	—	762	—	1,153	—	762	1,153	1,915	106	2012	01/12	(m)	40
Rowlett, TX	—	814	—	1,398	—	814	1,398	2,212	121	2012	02/12	(m)	40
Keller, TX	—	833	—	1,265	—	833	1,265	2,098	101	2012	06/12	(m)	40
Omaha, NE	—	1,181	—	1,676	—	1,181	1,676	2,857	124	2013	08/12	(m)	40
McKinney, TX	—	1,443	—	1,255	—	1,443	1,255	2,698	85	2013	11/12	(m)	40
Tulsa, OK	—	1,006	—	1,508	—	1,006	1,508	2,514	102	2013	12/12	(m)	40
Broken Arrow, OK	—	1,267	1,285	—	—	1,267	1,285	2,552	76	2013	04/13		40
Oklahoma City, OK	—	1,217	—	1,312	—	1,217	1,312	2,529	67	2013	06/13	(m)	40
Oklahoma City, OK	—	988	—	1,268	—	988	1,268	2,256	70	2013	06/13	(m)	40
Owasso, OK	—	641	—	1,313	—	641	1,313	1,954	64	2014	09/13	(m)	40
Longview, TX	—	1,020	—	1,488	—	1,020	1,488	2,508	54	2014	02/14	(m)	40
Georgetown, TX	—	1,101	—	1,830	—	1,101	1,830	2,931	59	2014	05/14	(m)	40

Rallys:
Toledo, OH	—	126	320	—	—	126	320	446	194	1989	07/92		39

RBC Bank:
Altamonte Springs, FL	—	1,316	2,014	—	—	1,316	2,014	3,330	324	2007	05/10		35

Regal Theatre:
Bolingbrook, IL	—	2,937	3,032	1,500	—	2,937	4,532	7,469	917	1994	09/07		30

Reliable Life Insurance:
St. Louis, MO	—	1,519	10,074	1,466	—	1,519	11,540	13,059	2,925	1975	05/04		40

Rent-A-Center:
Cohoes, NY	—	64	348	242	—	64	590	654	112	1994	09/04		40

See accompanying report of independent registered public accounting firm.

F-47

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Rite Aid:
Douglasville, GA	—	413	995	—	—	413	995	1,408	496	1996	01/96		40
Conyers, GA	—	575	999	—	—	575	999	1,574	463	1997	06/97		40
Riverdale, GA	—	1,089	1,707	—	—	1,089	1,707	2,796	770	1997	12/97		40
Warner Robins, GA	—	707	—	1,227	—	707	1,227	1,934	520	1999	03/98	(g)	40
Mobile, AL (n)	—	1,137	1,694	—	—	1,137	1,694	2,831	595	2000	12/01		40
Orange Beach, AL	—	1,410	1,996	—	—	1,410	1,996	3,406	701	2000	12/01		40
Norfolk, VA	—	2,742	1,797	—	—	2,742	1,797	4,539	623	2001	02/02		40
Thorndale, PA	—	2,261	2,472	—	—	2,261	2,472	4,733	857	2001	02/02		40
West Mifflin, PA	—	1,402	2,044	—	—	1,402	2,044	3,446	709	1999	02/02		40
Albany, NY	—	25	867	—	—	25	867	892	245	1994	09/04		40
Saratoga Springs, NY	—	762	591	39	—	771	621	1,392	171	1993	09/04	(o)	40
Monticello, NY	—	664	769	—	—	664	769	1,433	207	1996	03/05		40
Clinton Twp, MI	—	977	1,664	—	—	977	1,664	2,641	99	1998	03/14		30
Dowagiac, MI	—	409	1,609	—	—	409	1,609	2,018	96	1998	03/14		30
Durham, NC	—	1,553	2,621	—	—	1,553	2,621	4,174	25	1999	09/15		30

Rite Care Pharmacy:
Dallas, TX	—	2,407	2,299	320	—	2,407	2,618	5,025	621	1971	06/05		40

RNR Wheels / RNR Tire Express:
Anderson, SC (n)	—	140	815	—	—	140	815	955	34	1996	07/14		35

Road Ranger:
Springfield, IL	—	705	1,500	—	—	705	1,500	2,205	358	1997	06/06		40
Belvidere, IL	—	1,098	1,256	1,257	—	1,098	2,513	3,611	439	1997	06/06		40
Brazil, IN	—	2,199	907	—	—	2,199	907	3,106	216	1990	06/06		40
Cherry Valley, IL	—	1,409	1,897	—	—	1,409	1,897	3,306	453	1991	06/06		40
Cottage Grove, WI	—	2,175	1,733	—	—	2,175	1,733	3,908	413	1990	06/06		40
Decatur, IL	—	815	1,314	—	—	815	1,314	2,129	314	2002	06/06		40
Dekalb, IL	—	747	1,658	—	—	747	1,658	2,405	395	2000	06/06		40
Elk Run Heights, IA	—	1,538	2,470	—	—	1,538	2,470	4,008	589	1989	06/06		40
Lake Station, IN	—	3,172	1,112	—	—	3,172	1,112	4,284	265	1987	06/06		40
Mendota, IL	—	1,218	3,295	—	—	1,218	3,295	4,513	552	1996	06/06		40
Oakdale, WI	—	1,844	1,663	—	—	1,844	1,663	3,507	397	1998	06/06		40
Rockford, IL	—	623	1,331	7	—	596	803	1,399	192	2000	06/06		40
Rockford, IL	—	1,094	1,662	—	—	1,093	1,662	2,755	396	1996	06/06		40
Springfield, IL	—	1,795	1,863	—	—	2,211	1,863	4,074	511	1978	06/06		40
Champaign, IL	—	3,241	2,008	—	—	3,241	2,008	5,249	445	2006	02/07		40
DeKalb, IL	—	505	1,503	—	—	505	1,503	2,008	333	2004	02/07		40
Fenton, MO	—	2,584	2,622	—	—	2,584	2,622	5,206	582	2007	02/07		40
Hampshire, IL	—	1,307	1,501	1,629	—	1,307	3,130	4,437	667	1988	02/07	(f)	40
Princeton, IL (n)	—	1,141	3,066	—	—	1,141	3,066	4,207	680	2003	02/07		40
South Beloit, IL	—	3,824	2,309	—	—	3,824	2,309	6,133	512	2002	02/07		40
Cedar Rapids, IA	—	1,025	984	—	—	1,025	984	2,009	216	1990	03/07		40
Marion, IA	—	737	1,071	—	—	737	1,071	1,808	235	1974	03/07		40
Okawville, IL	—	1,530	1,147	1,034	—	1,536	2,181	3,717	333	1997	08/07		40
Dubuque, IA	—	561	1,941	—	—	561	1,941	2,502	402	2000	09/07		40
Belvidere, IL	—	521	1,053	—	—	521	1,053	1,574	214	2008	09/07	(f)	40
South Beloit, IL	—	1,182	1,324	—	—	1,182	1,324	2,506	269	2008	09/07	(f)	40
Chicago, IL	—	1,350	6,450	—	—	1,350	6,450	7,800	892	1970	07/12		25
Bensenville, IL	—	842	3,164	—	—	842	3,164	4,006	84	2002	03/15		30
Loves Park, IL	—	911	2,283	—	—	911	2,283	3,194	52	2010	03/15		35

Robbins Diamonds:
Newark, DE	—	636	1,273	29	—	629	1,302	1,931	674	1994	12/94		40

Ross Dress for Less:
Coral Gables, FL	—	1,782	1,661	19	—	1,782	1,680	3,462	777	1994	06/96		38
Lodi, CA	—	614	1,415	—	—	614	1,415	2,029	432	1984	03/99		40

Rue 21:
Lapeer, MI	—	126	645	—	—	126	629	755	132	2007	10/05		40

Sally Beauty Supply:
Lapeer, MI	—	33	167	—	—	33	163	196	34	2007	10/05		40


Salons by JC:
Buford, GA	—	539	1,421	373	—	539	1,798	2,337	407	2003	07/04	(g)	40

Saltgrass Steakhouse:
Beaumont, TX	—	558	—	2,336	—	901	1,819	2,720	226	1975	09/10	(o)	30
San Antonio, TX	—	1,280	—	853	—	1,280	853	2,133	88	2011	08/11	(m)	40
Cypress, TX	—	1,071	—	1,886	—	1,071	1,886	2,957	163	2012	03/12	(m)	40
Midland, TX	—	837	2,073	—	—	837	2,073	2,910	151	1998	01/13		35
Port Arthur, TX	—	890	—	2,049	—	890	2,049	2,939	100	2014	08/13	(m)	40
McAllen, TX	—	1,390	—	1,148	—	1,393	1,146	2,539	53	2007	12/13	(o)	35
College Station, TX	—	934	—	2,076	—	934	2,076	3,010	67	2014	04/14	(m)	40
Lewisville, TX	—	1,268	—	2,456	—	1,268	2,456	3,724	5	2015	11/14	(m)	40
Waco, TX	—	730	—	2,321	—	730	2,321	3,051	17	2015	12/14	(m)	40
Odessa, TX	—	1,000	—	2,300	—	1,000	2,300	3,300	2	2015	01/15	(m)	40
Lubbock, TX	—	1,025	—	—	—	1,025	(e)	1,025	(e)	(e)	10/15	(m)	(e)

Savers Thrift Superstore:
Fairview Heights, IL	—	1,258	2,623	246	—	1,258	2,869	4,127	688	1980	10/05	(g)	40

Sawyer Jax:
Tacoma, WA	—	527	795	44	—	527	839	1,366	279	1981	12/01		40

Schlotzsky's Deli:
Phoenix, AZ	—	706	315	—	—	706	315	1,021	111	1995	12/01		40
Scottsdale, AZ	—	717	311	—	—	717	311	1,028	109	1995	12/01		40

Season's 52:
Schaumburg, IL	—	2,065	1,311	—	—	2,065	(i)	2,065	(i)	(i)	12/01		(i)

Select Comfort:
Tucson, AZ	—	906	—	1,271	—	906	1,271	2,177	28	2015	11/14	(m)	40

Shek's Chinese Express:
Eden Prairie, MN	—	65	261	—	—	65	261	326	89	1997	12/01		40
Shell:
Glendale, AZ	—	1,817	2,415	126	—	1,817	2,541	4,358	565	2001	05/08		40
Peoria, AZ	—	860	1,117	114	—	860	1,231	2,091	379	1987	05/08		30

Shop-a-Snak:
Bessemer, AL	—	564	742	—	—	564	742	1,306	179	2002	05/06		40
Chelsea, AL	—	391	628	—	—	391	628	1,019	151	1981	05/06		40
Jasper, AL (n)	—	551	747	—	—	551	747	1,298	180	1998	05/06		40
Birmingham, AL	—	361	744	—	—	361	744	1,105	179	1989	05/06		40
Birmingham, AL	—	446	672	—	—	446	672	1,118	162	1989	05/06		40
Birmingham, AL	—	439	704	—	—	439	704	1,143	169	1989	05/06		40
Homewood, AL	—	468	657	—	—	468	657	1,125	158	1990	05/06		40
Hoover, AL	—	713	865	—	—	713	865	1,578	208	1998	05/06		40
Hoover, AL	—	490	769	—	—	490	769	1,259	185	1992	05/06		40
Hoover, AL	—	764	1,157	—	—	663	1,157	1,820	278	2005	05/06		40
Trussville, AL	—	272	542	—	—	272	542	814	130	1992	05/06		40
Tuscaloosa, AL	—	386	733	—	—	386	733	1,119	176	1991	05/06		40
Tuscaloosa, AL	—	525	463	—	—	525	463	988	111	1991	05/06		40
Tuscaloosa, AL	—	432	559	—	—	432	559	991	135	1991	05/06		40

Shopko:
Riverdale, UT	—	2,294	5,396	—	—	2,294	5,396	7,690	189	1991	02/15		25
Spanish Fork, UT	—	1,526	4,458	—	—	1,526	4,458	5,984	156	1991	02/15		25
Spokane, WA	—	2,270	7,975	—	—	2,270	7,975	10,245	279	1986	02/15		25
West Bend, WI	—	1,435	7,654	—	—	1,435	7,654	9,089	268	1987	02/15		25

Sonic Automotive:
Charlotte, NC	—	3,619	4,854	—	—	3,619	4,854	8,473	1,047	1996	05/07		40

Sparkling Image:
Bakersfield, CA	—	3,664	3,709	11	—	3,664	3,721	7,385	827	1994	03/08		35
Bakersfield, CA	—	3,363	3,288	—	—	3,363	3,288	6,651	641	2002	03/08		40
Bakersfield, CA	—	3,346	6,016	—	—	3,346	6,016	9,362	1,336	1998	03/08		35
Bakersfield, CA	—	2,564	4,465	2,178	—	2,564	6,643	9,207	1,559	1988	03/08		30
Bakersfield, CA	—	2,798	5,260	22	—	1,781	284	2,065	266	1997	03/08		35
Bakersfield, CA	—	2,043	3,520	40	—	2,043	719	2,762	305	1988	03/08		30
San Fernando, CA	—	6,630	2,706	47	—	6,630	2,753	9,383	717	1988	03/08		30
Ventura, CA	—	5,590	4,431	94	—	5,590	4,526	10,116	878	2001	03/08		40
Ventura, CA	—	6,253	4,560	207	—	6,253	4,767	11,020	1,050	1994	03/08		35

Spec's Liquor and Fine Foods:
Corpus Christi, TX	—	768	841	601	—	768	1,442	2,210	613	1967	11/93		40
Coffee City, TX	—	1,330	3,858	—	—	1,330	3,858	5,188	1,049	1996	02/05		40

Speedy Cash:
Knoxville, TN	—	324	779	—	—	324	779	1,103	16	2014	04/15		35

Spencer’s Air Conditioning & Appliance:
Glendale, AZ	—	342	982	—	—	342	982	1,324	404	1999	12/98	(g)	40

Sports Authority:
Tampa, FL	—	2,128	1,522	—	—	2,128	1,522	3,650	742	1994	06/96		40
Sarasota, FL	—	1,428	1,703	—	—	1,428	1,703	3,131	507	1988	09/97		40
Memphis, TN	—	820	—	2,598	—	820	2,598	3,418	1,112	1998	12/97	(g)	40
Woodbridge, NJ (n)	—	3,750	5,983	—	—	3,750	5,983	9,733	1,938	1994	01/03		40

Sprint PCS:
Lewisville, TX	—	555	—	43	—	598	(e)	598	(e)	(e)	12/01	(m)	(e)

Staples:
Memphis, TN	—	931	2,210	—	—	931	2,210	3,141	118	2011	02/14		35

Starplex Theatre:
Southington, CT	—	1,346	—	4,263	—	1,346	4,263	5,609	218	1993	05/14	(o)	30

Steak N Shake:
Munhall, PA	—	688	727	—	—	688	727	1,415	42	2002	07/14		25
South Bend, IN	—	447	1,238	—	—	447	1,238	1,685	60	2004	07/14		30

Sterling Collision:
Lombard, IL	—	622	1,714	—	—	622	1,714	2,336	209	1997	12/12		25

Stone Mountain Chevrolet:
Lilburn, GA	—	3,027	4,685	—	—	3,027	4,685	7,712	1,332	2004	08/04		40

Stop N Go:
Grand Prairie, TX	—	421	685	—	—	421	685	1,106	240	1986	12/01		40

Stripes:
Laredo, TX	—	841	739	—	—	841	739	1,580	185	2001	12/05		40
Brownsville, TX	—	1,182	1,105	—	—	1,182	1,105	2,287	277	2000	12/05		40
Brownsville, TX	—	933	699	—	—	933	699	1,632	175	1999	12/05		40
Brownsville, TX	—	2,417	1,828	—	—	2,417	1,828	4,245	459	2000	12/05		40
Brownsville, TX	—	1,279	1,015	—	—	1,279	1,015	2,294	255	1990	12/05		40
Brownsville, TX	—	2,915	1,800	—	—	2,915	1,800	4,715	452	2000	12/05		40
Brownsville, TX	—	1,843	1,419	—	—	1,843	1,419	3,262	356	2000	12/05		40
Brownsville, TX	—	1,015	1,308	—	—	1,015	1,308	2,323	328	2003	12/05		40
Brownsville, TX	—	2,530	1,125	—	—	2,530	1,125	3,655	282	1990	12/05		40
Brownsville, TX	—	1,392	1,444	—	—	1,392	1,444	2,836	362	2005	12/05		40
Brownsville, TX	—	1,039	1,145	—	—	1,039	1,145	2,184	287	2004	12/05		40
Brownsville, TX	—	2,033	1,288	—	—	2,033	1,288	3,321	323	1995	12/05		40
Corpus Christi, TX	—	1,385	1,419	—	—	1,385	1,419	2,804	356	1982	12/05		40
Corpus Christi, TX	—	1,400	1,531	—	—	1,400	1,531	2,931	384	1984	12/05		40
Corpus Christi, TX	—	703	1,037	—	—	703	1,037	1,740	260	1986	12/05		40
Corpus Christi, TX	—	1,308	2,151	—	—	1,308	2,151	3,459	540	1995	12/05		40
Corpus Christi, TX	—	853	1,416	—	—	853	1,416	2,269	356	2005	12/05		40
Donna, TX	—	1,004	1,127	—	—	1,004	1,127	2,131	283	1995	12/05		40
Edinburg, TX	—	970	1,286	—	—	970	1,286	2,256	323	2003	12/05		40
Edinburg, TX	—	1,317	1,624	—	—	1,317	1,624	2,941	408	1999	12/05		40
Falfurias, TX	—	4,244	4,458	—	—	4,213	4,458	8,671	1,119	2002	12/05		40
Freer, TX	—	1,151	1,158	—	—	1,151	1,158	2,309	291	1984	12/05		40

See accompanying report of independent registered public accounting firm.

F-48

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		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)						Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
George West, TX	—	1,243	695	—	—	1,243	695	1,938	174	1996	12/05	40
Harlingen, TX	—	755	601	—	—	755	601	1,356	151	1987	12/05	40
Harlingen, TX	—	754	1,152	—	—	754	1,152	1,906	289	1999	12/05	40
Harlingen, TX	—	906	953	—	—	906	953	1,859	239	1991	12/05	40
La Feria, TX	—	900	1,347	—	—	900	1,347	2,247	338	1988	12/05	40
Laredo, TX	—	675	533	—	—	675	533	1,208	134	1993	12/05	40
Laredo, TX	—	736	670	—	—	736	670	1,406	168	1984	12/05	40
Laredo, TX	—	459	460	—	—	459	460	919	115	1983	12/05	40
Laredo, TX	—	1,553	1,775	—	—	1,553	1,775	3,328	446	2000	12/05	40
Laredo, TX	—	1,495	1,400	—	—	1,495	1,400	2,895	352	1993	12/05	40
Lawton, OK	—	697	964	—	—	649	964	1,613	242	1984	12/05	40
Los Indios, TX	—	1,387	1,457	—	—	1,387	1,457	2,844	366	2005	12/05	40
McAllen, TX	—	987	893	—	—	987	893	1,880	224	1999	12/05	40
McAllen, TX	—	975	1,030	—	—	975	1,030	2,005	259	2003	12/05	40
Mission, TX	—	1,125	1,213	—	—	1,125	1,213	2,338	305	2003	12/05	40
Mission, TX	—	880	1,101	—	—	880	1,101	1,981	276	1999	12/05	40
Olmito, TX	—	3,688	2,880	—	—	3,688	2,880	6,568	723	2002	12/05	40
Pharr, TX	—	784	805	—	—	784	805	1,589	202	2000	12/05	40
Pharr, TX	—	982	1,178	—	—	982	1,178	2,160	296	1988	12/05	40
Pharr, TX	—	2,426	1,881	—	—	2,426	1,881	4,307	472	2003	12/05	40
Port Isabel, TX	—	2,062	1,299	—	—	2,062	1,299	3,361	326	1994	12/05	40
Portland, TX	—	656	915	—	—	656	915	1,571	230	1983	12/05	40
Progreso, TX	—	1,769	1,811	—	—	1,769	1,811	3,580	455	1999	12/05	40
Riviera, TX	—	2,351	2,158	—	—	2,351	2,158	4,509	542	2005	12/05	40
San Benito, TX	—	1,103	1,586	—	—	1,103	1,586	2,689	398	2005	12/05	40
San Benito, TX	—	791	1,857	—	—	791	1,857	2,648	466	1994	12/05	40
San Juan, TX	—	1,124	1,172	—	—	1,124	1,172	2,296	294	1996	12/05	40
San Juan, TX	—	1,424	1,546	—	—	1,424	1,546	2,970	388	2004	12/05	40
South Padre Island, TX	—	1,367	1,389	—	—	1,367	1,389	2,756	349	1988	12/05	40
Wichita Falls, TX	—	440	751	—	—	440	751	1,191	189	1984	12/05	40
Wichita Falls, TX	—	484	828	—	—	484	828	1,312	208	1983	12/05	40
Wichita Falls, TX	—	905	1,351	—	—	905	1,351	2,256	339	2000	12/05	40
Palmview, TX	—	835	1,372	—	—	835	1,372	2,207	316	2005	10/06	40
Harlingen, TX	—	638	1,807	—	—	638	1,807	2,445	408	2006	12/06	40

See accompanying report of independent registered public accounting firm.

F-49

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)						Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Rio Grande City, TX	—	1,871	1,612	—	—	1,871	1,612	3,483	364	2006	12/06	40
San Juan, TX	—	816	1,434	—	—	816	1,434	2,250	324	2006	12/06	40
Zapata, TX	—	1,333	1,773	—	—	1,333	1,773	3,106	401	2006	12/06	40
Orange Grove, TX	—	1,767	1,838	—	—	1,767	1,838	3,605	400	2007	04/07	40
Harlingen, TX	—	408	826	—	—	408	826	1,234	224	1982	11/07	30
Laredo, TX	—	448	734	—	—	448	734	1,182	199	1981	11/07	30
Laredo, TX	—	468	728	—	—	468	728	1,196	197	1973	11/07	30
Laredo, TX	—	584	958	—	—	584	958	1,542	260	1981	11/07	30
Laredo, TX	—	348	1,168	—	—	348	1,168	1,516	316	1983	11/07	30
Laredo, TX	—	698	1,169	—	—	698	1,169	1,867	316	1981	11/07	30
San Benito, TX	—	420	1,135	—	—	420	1,135	1,555	307	1985	11/07	30
Del Rio, TX	—	1,565	758	—	—	1,565	758	2,323	154	1996	11/07	40
Kerrville, TX	—	640	1,616	—	—	640	1,616	2,256	328	1996	11/07	40
Monahans, TX	—	2,628	2,973	—	—	2,628	2,973	5,601	604	1996	11/07	40
Odessa, TX	—	2,633	3,199	—	—	2,633	3,199	5,832	650	2006	11/07	40
San Angelo, TX	—	194	471	—	—	194	471	665	96	1998	11/07	40
Pharr, TX	—	573	1,229	—	—	573	1,229	1,802	247	2000	12/07	40
Harlingen, TX	—	277	808	—	—	277	808	1,085	214	1983	01/08	30
Harlingen, TX	—	329	935	—	—	329	935	1,264	248	1980	01/08	30
Laredo, TX	—	325	816	—	—	325	816	1,141	216	1983	01/08	30
McAllen, TX	—	643	1,776	—	—	643	1,776	2,419	471	1980	01/08	30
Port Isabel, TX	—	299	855	—	—	299	855	1,154	227	1983	01/08	30
Brownsville, TX	—	843	1,429	—	—	843	1,429	2,272	272	2007	05/08	40
Edinburg, TX	—	834	1,787	—	—	834	1,787	2,621	341	2007	05/08	40
La Villa, TX	—	710	2,166	—	—	710	2,166	2,876	413	2007	05/08	40
Laredo, TX	—	1,183	1,934	—	—	1,183	1,934	3,117	369	2007	05/08	40
Laredo, TX	—	879	1,593	—	—	879	1,593	2,472	304	2007	05/08	40
McAllen, TX	—	1,270	2,383	—	—	1,270	2,383	3,653	606	1986	05/08	30
Houston, TX (n)	—	696	1,458	—	—	696	1,458	2,154	257	2008	12/08	40
Lubbock, TX	—	671	1,612	—	—	671	1,612	2,283	284	2007	12/08	40

Studio Nail and Spa:
Cohoes, NY	—	27	145	59	—	27	204	231	50	1994	09/04	40

See accompanying report of independent registered public accounting firm.

F-50

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)						Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Subway:
Eden Prairie, MN	—	54	150	67	—	54	218	272	75	1997	12/01	40
Albany, NY	—	3	67	—	—	3	67	70	19	1992	09/04	40
Cohoes, NY	—	21	116	8	—	21	123	144	37	1994	09/04	40

Sullivan's Steakhouse:
Lincolnshire, IL	—	862	1,574	—	—	862	1,574	2,436	249	1999	01/12	25

Sunbelt Rentals:
Dayton, OH	—	391	1,223	—	—	391	1,223	1,614	130	2008	04/12	35
Shepherdsville, KY	—	516	1,577	—	—	516	1,577	2,093	167	2009	04/12	35

Sunoco:
Arnold, MD	—	417	581	—	—	417	581	998	52	1993	04/13	30
Baltimore, MD	—	455	2,122	—	—	455	2,122	2,577	230	1980	04/13	25
Baltimore, MD	—	523	2,809	—	—	523	2,809	3,332	304	1982	04/13	25
Baltimore, MD	—	271	1,482	—	—	271	1,482	1,753	161	1968	04/13	25
Baltimore, MD	—	620	1,279	—	—	620	1,279	1,899	115	1989	04/13	30
Baltimore, MD	—	310	1,686	—	—	310	1,686	1,996	130	2004	04/13	35
Baltimore, MD	—	542	2,054	—	—	542	2,054	2,596	185	1998	04/13	30
Baltimore, MD	—	368	1,647	—	—	368	1,647	2,015	149	1996	04/13	30
Bel Air, MD	—	1,376	620	—	—	1,376	620	1,996	56	1994	04/13	30
Bethesda, MD	—	1,414	1,347	—	—	1,414	1,347	2,761	146	1971	04/13	25
Centreville, VA	—	1,753	697	—	—	1,753	697	2,450	63	1994	04/13	30
Chantilly, VA	—	1,472	1,831	—	—	1,472	1,831	3,303	198	1966	04/13	25
Dale City, VA	—	639	2,461	—	—	639	2,461	3,100	222	1992	04/13	30
Dumfries, VA	—	387	2,364	—	—	387	2,364	2,751	213	1999	04/13	30
Edgewood, MD	—	823	2,073	—	—	823	2,073	2,896	225	1985	04/13	25
Frederick, MD	—	940	1,860	—	—	940	1,860	2,800	168	1996	04/13	30
Gaithersburg, MD	—	1,027	2,073	—	—	1,027	2,073	3,100	225	1982	04/13	25
Glen Burnie, MD	—	804	1,647	—	—	804	1,647	2,451	149	1994	04/13	30
Herndon, VA	—	707	1,792	—	—	707	1,792	2,499	162	1989	04/13	30
Joppa, MD	—	862	174	—	—	862	174	1,036	19	1987	04/13	25
Manassas, VA	—	1,230	1,521	—	—	1,230	1,521	2,751	137	1991	04/13	30
Manassas, VA	—	746	1,434	—	—	746	1,434	2,180	129	1993	04/13	30

See accompanying report of independent registered public accounting firm.

F-51

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)						Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Odenton, MD	—	668	2,780	—	—	668	2,780	3,448	251	2000	04/13	30
Owings Mills, MD	—	1,337	911	—	—	1,337	911	2,248	82	1994	04/13	30
Parkton, MD	—	397	2,151	—	—	397	2,151	2,548	194	1993	04/13	30
Pasadena, MD	—	407	1,492	—	—	407	1,492	1,899	135	1989	04/13	30
Pasadena, MD	—	591	2,509	—	—	591	2,509	3,100	227	1997	04/13	30
Perryville, MD	—	601	3,778	—	—	601	3,778	4,379	341	1990	04/13	30
Randallstown, MD	—	746	1,715	—	—	746	1,715	2,461	155	1995	04/13	30
Reisterstown, MD	—	649	2,354	—	—	649	2,354	3,003	213	1995	04/13	30
Rockville, MD	—	1,996	2,054	—	—	1,996	2,054	4,050	222	1971	04/13	25
Severn, MD	—	765	3,139	—	—	765	3,139	3,904	283	1987	04/13	30
Sterling, VA	—	1,356	1,095	—	—	1,356	1,095	2,451	99	1997	04/13	30
Sterling, VA	—	1,540	2,461	—	—	1,540	2,461	4,001	222	1998	04/13	30
Timonium, MD	—	1,356	1,598	—	—	1,356	1,598	2,954	173	1981	04/13	25
Towson, MD	—	630	2,771	—	—	630	2,771	3,401	300	1988	04/13	25
Warrenton, VA	—	1,802	2,703	—	—	1,802	2,703	4,505	244	1994	04/13	30
Woodbridge, VA	—	678	2,664	—	—	678	2,664	3,342	289	1988	04/13	25

Sunshine Energy:
Kansas City, MO	—	517	720	—	—	517	720	1,237	186	1993	07/09	25
Neosho, MO	—	352	775	—	—	352	754	1,106	189	1992	07/09	18

SunTrust:
Albany, GA	—	287	890	—	—	287	890	1,177	151	1990	06/13	15
Alexandria, VA	—	2,735	732	—	—	2,735	732	3,467	124	1969	06/13	15
Alpharetta, GA	—	1,625	1,366	—	—	1,625	1,366	2,991	174	1991	06/13	20
Alpharetta, GA	—	1,056	1,425	—	—	1,056	1,425	2,481	121	2005	06/13	30
Arlington, VA	—	1,998	638	—	—	1,998	638	2,636	81	1993	06/13	20
Atlanta, GA	—	2,130	1,623	—	—	2,130	1,623	3,753	206	1976	06/13	20
Atlanta, GA	—	296	748	—	—	296	748	1,044	127	1964	06/13	15
Augusta, GA	—	865	872	—	—	865	872	1,737	222	1972	06/13	10
Augusta, GA	—	472	443	—	—	472	443	915	225	1970	06/13	5
Augusta, GA	—	352	397	—	—	352	397	749	202	1949	06/13	5
Avon Park, FL	—	360	1,564	—	—	360	1,564	1,924	133	1983	06/13	30
Bartow, FL	—	218	769	—	—	218	769	987	78	1980	06/13	25

See accompanying report of independent registered public accounting firm.

F-52

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)						Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Beaverdam, VA	—	230	309	—	—	230	309	539	157	1964	06/13	5
Belleview, FL	—	226	1,085	—	—	226	1,085	1,311	92	1979	06/13	30
Beverly Hills, FL	—	376	1,414	—	—	376	1,414	1,790	120	1989	06/13	30
Black Mountain, NC	—	780	655	—	—	780	655	1,435	333	1943	06/13	5
Bladensburg, MD	—	1,528	1,538	—	—	1,528	1,538	3,066	130	1946	06/13	30
Boca Raton, FL	—	1,663	654	—	—	1,663	654	2,317	166	1977	06/13	10
Bradenton, FL	—	437	1,251	—	—	429	1,251	1,680	106	1980	06/13	30
Brunswick, GA	—	158	2,169	—	—	158	2,169	2,327	1,103	1957	06/13	5
Butner, NC	—	344	606	—	—	344	606	950	77	1957	06/13	20
Cape Coral, FL	—	1,065	1,032	—	—	1,065	1,032	2,097	131	1980	06/13	20
Cary, NC	—	616	826	—	—	616	826	1,442	105	1987	06/13	20
Chapel Hill, NC	—	323	541	—	—	323	541	864	92	1963	06/13	15
Chattanooga, TN	—	308	652	—	—	308	652	960	331	1972	06/13	5
Chattanooga, TN	—	336	341	—	—	336	341	677	173	1974	06/13	5
Chattanooga, TN	—	496	824	—	—	496	824	1,320	419	1948	06/13	5
Chattanooga, TN	—	260	374	—	—	260	374	634	190	1981	06/13	5
Chestertown, MD	—	856	290	—	—	856	290	1,146	148	1974	06/13	5
Clearwater, FL	—	433	530	—	—	433	530	963	90	1983	06/13	15
Conyers, GA	—	366	501	—	—	366	501	867	127	1986	06/13	10
Crystal River, FL	—	430	2,971	—	—	430	2,971	3,401	216	1983	06/13	35
Daytona Beach Shores, FL	—	318	720	—	—	318	720	1,038	73	1982	06/13	25
Deland, FL	—	270	1,296	—	—	270	1,296	1,566	110	1993	06/13	30
Denton, NC	—	472	783	—	—	472	783	1,255	133	1969	06/13	15
Doral, FL	—	1,912	1,100	—	—	1,912	1,100	3,012	140	1988	06/13	20
Douglas, GA	—	354	168	—	—	354	168	522	85	1972	06/13	5
Duluth, GA	—	851	845	—	—	851	845	1,696	107	1992	06/13	20
Edgewater, FL	—	419	1,417	—	—	419	1,417	1,836	120	1986	06/13	30
Erwin, NC	—	380	89	—	—	380	89	469	45	1955	06/13	5
Flagler Beach, FL	—	366	1,313	—	—	366	1,313	1,679	95	1993	06/13	35
Fort Myers, FL	—	543	758	—	—	543	758	1,301	77	1986	06/13	25
Fort Myers, FL	—	814	684	—	—	814	684	1,498	116	1986	06/13	15
Franklin, VA	—	103	911	—	—	103	911	1,014	154	1967	06/13	15
Gainesville, GA	—	406	1,830	—	—	406	1,830	2,236	930	1966	06/13	5
Greenacres City, FL	—	1,395	1,533	—	—	1,395	1,533	2,928	130	1988	06/13	30

See accompanying report of independent registered public accounting firm.

F-53

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)						Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Greensboro, NC	—	516	394	—	—	516	394	910	200	1980	06/13	5
Gulf Breeze, FL	—	1,021	1,382	—	—	1,021	1,382	2,403	351	1960	06/13	10
Haines City, FL	—	405	1,241	—	—	405	1,241	1,646	105	1989	06/13	30
Hallandale Beach, FL	—	1,735	2,343	—	—	1,735	2,343	4,078	298	1971	06/13	20
Harrisonburg, VA	—	245	438	—	—	245	438	683	222	1968	06/13	5
Hialeah, FL	—	2,578	1,149	—	—	2,578	1,149	3,727	292	1978	06/13	10
Holly Hill, FL	—	509	699	—	—	509	699	1,208	355	1963	06/13	5
Homosassa, FL	—	344	825	—	—	344	825	1,169	84	1985	06/13	25
Hudson, NC	—	220	207	—	—	220	207	427	26	1994	06/13	20
Huntersville, NC	—	177	830	—	—	177	830	1,007	84	1998	06/13	25
Inverness, FL	—	471	755	—	—	471	755	1,226	128	1984	06/13	15
Jacksonville, FL	—	938	926	—	—	938	926	1,864	118	1979	06/13	20
Jacksonville, FL	—	674	821	—	—	674	821	1,495	83	1987	06/13	25
Jonesboro, GA	—	591	1,185	—	—	591	1,185	1,776	602	1965	06/13	5
Jonesborough, TN	—	95	285	—	—	95	285	380	145	1974	06/13	5
Jupiter, FL	—	1,035	1,327	—	—	1,035	1,327	2,362	96	1998	06/13	35
Kannapolis, NC	—	850	834	—	—	850	834	1,684	424	1906	06/13	5
Kernersville, NC	—	284	708	—	—	284	708	992	120	1990	06/13	15
Lady Lake, FL	—	388	1,537	—	—	388	1,537	1,925	130	1996	06/13	30
Lady Lake, FL	—	340	1,355	—	—	340	1,355	1,695	115	1996	06/13	30
Lake City, TN	—	326	514	—	—	326	514	840	261	1958	06/13	5
Lake Placid, FL	—	289	1,402	—	—	289	1,402	1,691	119	1988	06/13	30
Largo, FL	—	258	643	—	—	258	643	901	82	1979	06/13	20
Lawrenceburg, TN	—	205	413	—	—	205	413	618	210	1975	06/13	5
Lawrenceville, GA	—	657	1,764	—	—	657	1,764	2,421	448	1985	06/13	10
Lightfoot, VA	—	177	512	—	—	177	512	689	130	1973	06/13	10
Lynn Haven, FL	—	797	865	—	—	797	865	1,662	220	1974	06/13	10
Macon, GA	—	207	392	—	—	207	392	599	66	1980	06/13	15
Madison Heights, VA	—	215	379	—	—	215	379	594	192	1973	06/13	5
Manassas, VA	—	1,765	1,714	—	—	1,765	1,714	3,479	218	1967	06/13	20
Marietta, GA	—	617	714	—	—	617	714	1,331	181	1974	06/13	10
Mechanicsville, VA	—	343	493	—	—	343	493	836	250	1965	06/13	5
Mocksville, NC	—	189	434	—	—	189	434	623	220	1967	06/13	5
Monroe, NC	—	586	353	—	—	586	353	939	180	1981	06/13	5

See accompanying report of independent registered public accounting firm.

F-54

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)						Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Murfreesboro, TN	—	276	554	—	—	276	554	830	94	1989	06/13	15
N Miami Beach, FL	—	915	497	—	—	915	497	1,412	84	1986	06/13	15
Nashville, TN	—	679	394	—	—	679	394	1,073	200	1949	06/13	5
Nashville, TN	—	438	1,295	—	—	438	1,295	1,733	110	1994	06/13	30
Nashville, TN	—	627	639	—	—	627	639	1,266	162	1972	06/13	10
New Port Richey, FL	—	463	1,178	—	—	463	1,178	1,641	120	1998	06/13	25
Norcross, GA	—	789	663	—	—	789	663	1,452	112	1986	06/13	15
Norwood, NC	—	519	410	—	—	519	410	929	208	1946	06/13	5
Orlando, FL	—	637	1,415	—	—	637	1,415	2,052	144	1999	06/13	25
Orlando, FL	—	801	1,135	—	—	801	1,135	1,936	144	1993	06/13	20
Palm Harbor, FL	—	836	1,139	—	—	836	1,139	1,975	145	1984	06/13	20
Palm Harbor, FL	—	532	384	—	—	532	384	916	98	1983	06/13	10
Punta Gorda, FL (n)	—	1,483	1,330	—	—	1,483	1,330	2,813	169	1972	06/13	20
Radford, VA	—	221	326	—	—	221	326	547	165	1964	06/13	5
Raleigh, NC	—	798	1,286	—	—	798	1,286	2,084	163	1974	06/13	20
Richmond, VA	—	283	245	—	—	283	245	528	124	1973	06/13	5
Richmond, VA	—	398	673	—	—	398	673	1,071	342	1972	06/13	5
Richmond, VA	—	263	563	—	—	263	563	826	143	1981	06/13	10
Roanoke, VA	—	264	256	—	—	264	256	520	130	1973	06/13	5
Roanoke, VA	—	103	360	—	—	103	360	463	92	1957	06/13	10
Roxboro, NC	—	452	918	—	—	452	918	1,370	156	1983	06/13	15
Sebastian, FL	—	438	856	—	—	438	856	1,294	109	1987	06/13	20
Sebring, FL	—	326	920	—	—	326	920	1,246	94	1985	06/13	25
South Boston, VA	—	221	1,441	—	—	221	1,441	1,662	183	1975	06/13	20
Spartanburg, SC	—	435	372	—	—	435	372	807	95	1921	06/13	10
Spotsylvania, VA	—	1,398	1,158	—	—	1,398	1,158	2,556	84	1964	06/13	35
Spring Hill, FL	—	460	1,102	—	—	460	1,102	1,562	560	1973	06/13	5
Spring Hill, FL	—	631	1,950	—	—	631	1,950	2,581	165	1988	06/13	30
St. Petersburg, FL	—	207	1,150	—	—	207	1,150	1,357	97	1974	06/13	30
Stuart, FL (n)	—	1,143	2,570	—	—	1,143	2,570	3,713	218	1985	06/13	30
Sun City Center, FL (n)	—	568	3,671	—	—	568	3,671	4,239	267	1971	06/13	35
Tamarac, FL	—	966	1,115	—	—	966	1,115	2,081	283	1972	06/13	10
Tucker, GA	—	395	1,208	—	—	395	1,208	1,603	153	1971	06/13	20
Valrico, FL	—	178	870	—	—	178	870	1,048	74	1981	06/13	30

See accompanying report of independent registered public accounting firm.

F-55

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)						Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Virginia Beach, VA	—	326	366	—	—	326	366	692	93	1985	06/13	10
Warner Robins, GA	—	905	1,276	—	—	905	1,276	2,181	324	1973	06/13	10
Washington, DC	—	2,095	945	—	—	2,095	945	3,040	80	1950	06/13	30
Wildwood, FL	—	308	953	—	—	308	953	1,261	97	1978	06/13	25
Youngsville, NC	—	237	165	—	—	237	165	402	84	1946	06/13	5
Zephyrhills, FL	—	267	1,301	—	—	267	1,301	1,568	110	1984	06/13	30
Zephyrhills, FL	—	345	3,112	—	—	345	3,112	3,457	527	1972	06/13	15

Superior Petroleum:
Midway, PA	—	311	708	—	—	311	708	1,019	235	1990	01/06	30

Supervalu:
Huntington, WV	—	1,254	761	—	—	1,254	761	2,015	359	1971	02/97	40
Maple Heights, OH	—	1,035	2,874	—	—	1,035	2,874	3,909	1,356	1985	02/97	40

Susser HQ:
Corpus Christi, TX	—	630	3,131	—	—	630	3,131	3,761	1,315	1982	03/99	40

Swansea Quick Cash:
Swansea, IL	—	46	132	—	—	46	132	178	70	1997	12/01	40

Sweet Berries Cafe:
Sherman, TX	—	233	126	24	—	233	150	383	67	1969	09/06	20

Taco Bell:
Ocala, FL	—	275	755	—	—	275	755	1,030	265	2001	12/01	40
Phoenix, AZ	—	594	283	—	—	594	283	877	99	1995	12/01	40
Bedford, IN	—	797	937	—	—	797	937	1,734	225	1989	05/06	40
Columbus, IN	—	1,257	2,055	—	—	1,257	2,055	3,312	494	1990	05/06	40
Columbus, IN	—	690	1,213	—	—	690	1,213	1,903	292	2005	05/06	40
Evansville, IN	—	308	1,301	—	—	308	1,301	1,609	313	2000	05/06	40
Evansville, IN	—	221	828	—	—	221	828	1,049	199	2003	05/06	40
Evansville, IN	—	524	1,815	—	—	524	1,815	2,339	437	2005	05/06	40
Fishers, IN	—	990	486	—	—	990	486	1,476	117	1998	05/06	40
Greensburg, IN	—	648	1,079	—	—	648	1,079	1,727	260	1998	05/06	40
Indianapolis, IN	—	1,032	1,650	—	—	1,032	1,650	2,682	397	2004	05/06	40
Indianapolis, IN	—	547	703	—	—	547	703	1,250	169	2004	05/06	40
Madisonville, KY	—	682	1,193	—	—	682	1,193	1,875	287	1999	05/06	40
Ownesboro, KY	—	639	1,326	—	—	639	1,326	1,965	319	2005	05/06	40
Shelbyville, IN	—	670	1,756	—	—	670	1,756	2,426	423	1998	05/06	40
Speedway, IN	—	408	1,426	—	—	408	1,426	1,834	343	2003	05/06	40
Terre Haute, IN	—	1,037	1,656	—	—	1,037	1,656	2,693	398	2003	05/06	40
Terre Haute, IN	—	1,314	2,249	—	—	1,314	2,249	3,563	541	2003	05/06	40
Vincennes, IN	—	502	880	—	—	502	880	1,382	212	2004	05/06	40
Hialeah, FL	—	432	—	—	—	432	(e)	432	(e)	(e)	09/06	(e)
Anderson, SC	—	176	436	—	—	176	436	612	73	2000	12/10	30
Anderson, SC	—	273	820	—	—	273	820	1,093	165	1989	12/10	25
Asheville, NC	—	408	732	—	—	408	732	1,140	148	1992	12/10	25
Asheville, NC	—	252	483	—	—	252	483	735	97	1993	12/10	25
Black Mountain, NC	—	149	313	—	—	149	313	462	63	1992	12/10	25
Blue Ridge, GA	—	276	553	—	—	276	553	829	112	1992	12/10	25
Cedartown, GA	—	353	890	—	—	353	890	1,243	180	1990	12/10	25
Duncan, SC	—	280	483	—	—	280	483	763	81	1999	12/10	30
Easley, SC (n)	—	444	818	—	—	444	818	1,262	165	1991	12/10	25
Fort Payne, AL	—	362	533	—	—	362	533	895	107	1989	12/10	25
Franklin, NC	—	472	687	—	—	472	687	1,159	139	1992	12/10	25
Gaffney, SC	—	388	940	—	—	388	940	1,328	158	1998	12/10	30
Greenville, SC	—	414	810	—	—	414	810	1,224	136	1995	12/10	30
Greenville, SC	—	169	330	—	—	169	330	499	67	1990	12/10	25
Hendersonville, NC	—	569	1,163	—	—	569	1,163	1,732	235	1988	12/10	25
Inman, SC	—	223	502	—	—	223	502	725	84	1999	12/10	30
Lavonia, GA	—	122	359	—	—	122	359	481	60	1999	12/10	30
Madison, AL	—	498	886	—	—	498	886	1,384	179	1985	12/10	25
Oneonta, AL	—	362	881	—	—	362	881	1,243	178	1992	12/10	25
Piedmont, SC	—	249	702	—	—	249	702	951	118	2000	12/10	30
Pisgah Forest, NC	—	260	672	—	—	260	672	932	113	1998	12/10	30
Rainsville, AL	—	411	1,077	—	—	411	1,077	1,488	181	1998	12/10	30
Seneca, SC	—	304	807	—	—	304	807	1,111	163	1993	12/10	25
Simpsonville, SC	—	635	1,022	—	—	635	1,022	1,657	206	1991	12/10	25
Spartanburg, SC	—	239	496	—	—	239	496	735	83	1992	12/10	30
Spartanburg, SC	—	492	949	—	—	492	949	1,441	160	1993	12/10	30
Sylva, NC	—	580	786	—	—	580	786	1,366	132	1994	12/10	30
Toccoa, GA	—	201	600	—	—	201	600	801	101	1993	12/10	30
Anderson, IN	—	313	1,338	—	—	313	1,338	1,651	116	2008	12/12	35
Bloomington, IN	—	275	1,026	—	—	275	1,026	1,301	125	1988	12/12	25
Bloomington, IN	—	332	1,234	—	—	332	1,234	1,566	107	2009	12/12	35
Carmel, IN	—	360	1,546	—	—	360	1,546	1,906	157	1994	12/12	30
Daleville, IN	—	209	893	—	—	209	893	1,102	91	1995	12/12	30
Edinburgh, IN	—	313	1,338	—	—	313	1,338	1,651	116	2007	12/12	35
Evansville, IN	—	209	1,092	—	—	209	1,092	1,301	95	2008	12/12	35
Indianapolis, IN	—	351	1,452	—	—	351	1,452	1,803	147	2005	12/12	30
Indianapolis, IN	—	209	799	—	—	209	799	1,008	81	1994	12/12	30
Indianapolis, IN	—	247	931	—	—	247	931	1,178	94	1995	12/12	30
Indianapolis, IN	—	304	1,206	—	—	304	1,206	1,510	105	2010	12/12	35
Indianapolis, IN	—	285	1,225	—	—	285	1,225	1,510	106	2008	12/12	35
Indianapolis, IN	—	256	1,102	—	—	256	1,102	1,358	96	2008	12/12	35
Jasper, IN	—	200	960	—	—	200	960	1,160	97	1992	12/12	30
New Castle, IN	—	427	1,830	—	—	427	1,830	2,257	186	2006	12/12	30
Owensboro, KY	—	436	1,119	—	—	436	1,119	1,555	97	2010	12/12	35
Connersville, IN	—	136	1,280	—	—	136	1,280	1,416	105	1991	07/13	30
Linton, IN	—	155	1,203	—	—	155	1,203	1,358	99	1996	07/13	30
Owensboro, KY	—	136	1,549	—	—	136	1,549	1,685	127	1998	07/13	30
Arnold, MO	—	436	698	—	—	436	698	1,134	66	1991	08/13	25
Collinsville, IL	—	368	1,713	—	—	368	1,713	2,081	163	1993	08/13	25
East Alton, IL	—	271	1,008	—	—	271	1,008	1,279	80	1991	08/13	30
Edwardsville, IL	—	310	1,549	—	—	310	1,549	1,859	123	1987	08/13	30
Eureka, MO	—	466	466	—	—	466	466	932	44	1984	08/13	25
Granite City, IL	—	707	852	—	—	707	852	1,559	58	2006	08/13	35
Hazelwood, MO	—	513	1,470	—	—	513	1,470	1,983	116	1991	08/13	30
Maryland Heights, MO	—	407	862	—	—	407	862	1,269	68	1991	08/13	30
O'Fallon, MO	—	580	1,403	—	—	580	1,403	1,983	95	2003	08/13	35
O'Fallon, MO	—	445	1,770	—	—	445	1,770	2,215	140	1985	08/13	30

See accompanying report of independent registered public accounting firm.

F-56

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
St. Charles, MO	—	581	872	—	—	581	872	1,453	69	2000	08/13		30
St. Louis, MO	—	252	785	—	—	252	785	1,037	62	1990	08/13		30
St. Louis, MO	—	465	1,171	—	—	465	1,171	1,636	79	2009	08/13		35
St. Louis, MO	—	252	1,047	—	—	252	1,047	1,299	99	1981	08/13		25

Taco Bueno:
Moore, OK	—	624	507	—	—	624	507	1,131	9	2015	01/15		40
Mansfield, TX	—	808	—	508	—	808	508	1,316	4	2015	06/15	(m)	40

Taco Cabana:
Austin, TX	—	561	1,227	—	—	561	1,227	1,788	31	1994	02/15		35
Houston, TX	—	1,070	978	—	—	1,070	978	2,048	34	1998	02/15		25
Houston, TX	—	590	1,284	—	—	590	1,284	1,874	37	1987	02/15		30
Houston, TX	—	667	852	—	—	667	852	1,519	25	2000	02/15		30
San Antonio, TX	—	492	1,283	—	—	492	1,283	1,775	32	1995	02/15		35

Tapestry Solutions:
St. Louis, MO	—	556	3,688	—	—	925	3,688	4,613	1,071	1975	05/04	(g)	40

Texas Roadhouse:
Grand Junction, CO	—	584	920	—	—	584	920	1,504	323	1997	12/01		40
Thornton, CO	—	599	1,019	—	—	599	1,019	1,618	358	1998	12/01		40
Palm Bay, FL	—	1,035	1,512	—	—	1,035	1,512	2,547	229	2004	06/11		30

TGI Friday's:
Corpus Christi, TX	—	1,210	1,532	—	—	1,157	1,532	2,689	538	1995	12/01		40

The Beach:
Mason, OH	—	1,707	1,303	—	—	1,707	1,303	3,010	145	1985	03/13		25

The Containter Store:
Plano, TX	—	1,758	5,115	—	—	1,758	5,115	6,873	384	2009	05/13		35

See accompanying report of independent registered public accounting firm.

F-57

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)						Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
The Snooty Fox:
Cincinnati, OH	—	282	521	403	—	543	662	1,205	204	1998	12/01	40

The Tile Shop:
Scarsdale, NY	—	4,509	2,454	352	—	4,509	2,807	7,316	748	1996	09/97	40
Buford, GA	—	1,267	2,406	25	—	1,267	2,430	3,697	693	2003	07/04	40

Third Federal Savings:
Parma, OH	—	370	238	1,100	—	370	1,338	1,708	518	1977	09/06	20

This Is Wings of Wingdom:
Montgomery, AL	—	1,418	1,140	—	—	1,418	1,044	2,462	373	1999	12/01	40

Tile Outlets of America:
Sarasota, FL	—	1,168	1,904	735	—	1,170	2,639	3,809	690	1988	09/97	40

TitleMax:
Geneva, IL	—	473	436	—	—	484	375	859	136	1996	12/01	40
Mobile, AL	—	491	498	—	—	491	498	989	175	1997	12/01	40
Dallas, TX	—	1,554	1,229	46	—	1,554	1,275	2,829	330	1982	06/05	40
Aiken, SC	—	442	646	—	—	442	646	1,088	159	1989	08/08	30
Anniston, AL	—	160	453	—	—	160	453	613	84	2008	08/08	40
Berkeley, MO	—	237	282	—	—	237	282	519	104	1961	08/08	20
Cheraw, SC	—	88	330	—	—	88	330	418	97	1976	08/08	25
Columbia, SC	—	212	319	—	—	212	319	531	78	1987	08/08	30
Dalton, GA	—	178	347	—	—	178	347	525	102	1972	08/08	25
Darlington, SC	—	47	267	—	—	47	267	314	79	1973	08/08	25
Fairfield, AL	—	133	178	—	—	133	178	311	52	1974	08/08	25
Gadsden, AL	—	250	389	—	—	250	389	639	72	2007	08/08	40
Hueytown, AL	—	135	93	—	—	135	93	228	69	1948	08/08	10
Jonesboro, GA	—	675	292	—	—	675	292	967	86	1970	08/08	25
Lawrenceville, GA	—	370	332	—	—	370	332	702	82	1986	08/08	30
Lewisburg, TN	—	70	298	—	—	70	298	368	63	1998	08/08	35
Macon, GA	—	103	290	—	—	103	290	393	107	1967	08/08	20

See accompanying report of independent registered public accounting firm.

F-58

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)						Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Marietta, GA	—	285	278	—	—	285	278	563	102	1967	08/08	20
Memphis, TN	—	226	444	—	—	226	444	670	109	1986	08/08	30
Memphis, TN	—	111	237	—	—	111	237	348	58	1981	08/08	30
Montgomery, AL	—	96	233	—	—	96	233	329	69	1970	08/08	25
Nashville, TN	—	268	276	—	—	268	276	544	81	1978	08/08	25
Nashville, TN	—	256	301	—	—	256	301	557	74	1982	08/08	30
Norcross, GA	—	599	350	—	—	599	350	949	103	1975	08/08	25
Pulaski, TN	—	109	361	—	—	109	361	470	89	1986	08/08	30
Riverdale, GA	—	877	400	—	—	877	400	1,277	118	1978	08/08	25
Snellville, GA	—	565	396	—	—	565	396	961	117	1977	08/08	25
Springfield, MO	—	220	400	—	—	220	400	620	118	1979	08/08	25
Springfield, MO	—	125	230	—	—	125	230	355	68	1979	08/08	25
St. Louis, MO	—	244	288	—	—	244	288	532	85	1971	08/08	25
St. Louis, MO	—	134	398	—	—	134	398	532	84	1993	08/08	35
Sylacauga, AL	—	94	191	—	—	94	191	285	47	1986	08/08	30
Taylors, SC	—	299	372	—	—	299	372	671	78	1999	08/08	35
Bay Minette, AL	—	51	113	—	—	51	113	164	22	1980	01/11	25
N. Richland Hills, TX	—	132	132	—	—	132	132	264	33	1976	01/11	20
Petersburg, VA	—	139	366	—	—	139	366	505	89	1979	02/11	20
Savannah, GA	—	231	361	—	—	231	361	592	87	1972	03/11	20
Fort Worth, TX	—	131	312	—	—	119	312	431	60	1985	03/11	25
Hoover, AL	—	378	546	—	—	378	546	924	105	1970	03/11	25
Eufaula, AL	—	61	360	—	—	61	360	421	63	1980	08/11	25
Kansas City, MO	—	69	129	—	—	69	129	198	28	1920	08/11	20
Arnold, MO	—	321	120	—	—	321	120	441	25	1960	10/11	20
Bristol, VA	—	199	517	—	—	199	517	716	73	2001	10/11	30
Fairview Heights, IL	—	93	185	—	—	93	185	278	31	1979	10/11	25
Florissant, MO	—	143	153	—	—	143	153	296	26	1974	10/11	25
Greenville, SC (n)	—	602	612	—	—	602	612	1,214	103	2008	10/11	25
Jonesboro, GA	—	301	683	—	—	301	683	984	82	2007	10/11	35
Olive Branch, MS	—	121	312	—	—	121	312	433	52	1978	10/11	25
Sugar Creek, MO	—	202	181	—	—	202	181	383	31	1978	10/11	25
Roanoke, VA	—	158	207	—	—	158	207	365	35	1950	08/12	20
Fredericksburg, VA	—	228	555	—	—	228	555	783	73	1989	09/12	25

See accompanying report of independent registered public accounting firm.

F-59

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Florissant, MO	—	119	288	—	—	119	288	407	35	1970	12/12		25
Savannah, GA	—	259	359	—	—	259	359	618	27	2012	05/13		35
South Boston, VA	—	163	133	—	—	163	133	296	17	1980	05/13		20
O'Fallon, MO	—	75	261	—	—	75	261	336	23	1981	11/13		25
Crest Hill, IL	—	92	323	—	—	92	323	415	13	1963	03/15		20
St. Louis, MO	—	76	237	—	—	76	237	313	9	1953	03/15		20

Tony's Tires:
Montgomery, AL	—	593	1,187	43	—	593	1,229	1,822	304	1998	08/06		40

Toys R Us:
Gastonia, NC	—	1,825	—	6,101	—	1,825	6,101	7,926	646	1998	10/11	(m)	35
Parma, OH	—	688	2,767	—	—	688	2,767	3,455	75	1980	06/15		25

Tractor Supply Co.:
Aransas Pass, TX	—	101	1,399	353	—	100	1,753	1,853	651	1983	03/99		40

Tutor Time:
Elk Grove, CA	—	1,216	2,786	9	—	1,216	2,750	3,966	451	2009	09/08		40

Twenty Seven Truck Stop:
Lake Placid, FL	—	2,532	1,157	491	—	2,532	1,648	4,180	452	1990	12/05		40

Twin Peaks:
Beaumont, TX	—	439	1,363	238	—	864	1,363	2,227	479	2000	12/01	(g)	40
Olathe, KS	—	525	731	—	—	525	731	1,256	111	2005	09/10		35

ULTA Salon, Cosmetics and Fragrance:
Florissant, MO	—	423	499	1,444	—	425	1,942	2,367	300	1996	04/03	(g)	40

Ultra Car Wash:
Mobile, AL	—	1,071	1,086	—	—	1,071	1,086	2,157	227	2005	08/07		40
Lilburn, GA	—	1,396	1,119	—	—	1,396	1,119	2,515	213	2004	05/08		40

See accompanying report of independent registered public accounting firm.

F-60

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)						Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Uni-Mart:
East Brady, PA	—	269	583	—	—	269	583	852	303	1987	08/05	20
Pleasant Gap, PA	—	332	593	—	—	332	593	925	308	1996	08/05	20
Port Vue, PA	—	824	118	—	—	824	118	942	61	1953	08/05	20
Punxsutawney, PA	—	253	542	—	—	253	542	795	281	1983	08/05	20
Shamokin, PA	—	324	506	—	—	324	506	830	263	1956	08/05	20
Shippensburg, PA	—	204	330	—	—	204	330	534	171	1989	08/05	20
Wilkes-Barre, PA	—	171	422	—	—	171	422	593	219	1999	08/05	20
Wilkes-Barre, PA	—	178	471	—	—	178	471	649	245	1989	08/05	20
Wilkes-Barre, PA	—	876	1,957	—	—	876	1,957	2,833	1,015	1998	08/05	20
Williamsport, PA	—	909	122	—	—	909	122	1,031	63	1950	08/05	20
Ashland, PA	—	355	545	—	—	355	545	900	281	1977	09/05	20
Mountaintop, PA	—	423	616	—	—	423	616	1,039	317	1987	09/05	20
Effort, PA	—	1,297	1,202	—	—	1,297	1,202	2,499	299	2000	01/06	40
McSherrystown, PA	—	135	365	—	—	135	365	500	91	1988	01/06	40
Milesburg, PA	—	134	373	—	—	134	373	507	93	1987	01/06	40
Nanticoke, PA	—	175	482	—	—	175	482	657	120	1988	01/06	40
Nuangola, PA	—	1,062	1,203	—	—	1,062	1,203	2,265	299	2000	01/06	40
Punxsutawney, PA	—	294	650	—	—	294	650	944	162	1983	01/06	40
Williamsport, PA	—	295	379	—	—	295	379	674	94	1988	01/06	40
Burnham, PA	—	265	510	—	—	340	435	775	206	1978	07/06	20

United Rentals:
Carrollton, TX	—	478	535	—	—	478	535	1,013	148	1981	12/04	40
Cedar Park, TX (n)	—	535	829	—	—	535	829	1,364	229	1990	12/04	40
Clearwater, FL (n)	—	1,173	1,811	—	—	1,173	1,811	2,984	500	2001	12/04	40
Fort Collins, CO (n)	—	2,057	978	—	—	2,057	978	3,035	270	1975	12/04	40
Irving, TX	—	708	911	—	—	708	911	1,619	251	1984	12/04	40
La Porte, TX	—	1,115	2,125	—	—	1,115	2,125	3,240	587	2000	12/04	40
Littleton, CO	—	1,743	1,944	—	—	1,743	1,944	3,687	537	2002	12/04	40
Oklahoma City, OK	—	744	1,265	—	—	744	1,265	2,009	349	1997	12/04	40
Perrysberg, OH (n)	—	642	1,119	—	—	642	1,119	1,761	309	1979	12/04	40
Plano, TX	—	1,030	1,148	—	—	1,030	1,148	2,178	317	1996	12/04	40
Temple, TX (n)	—	1,160	1,360	—	—	1,160	1,360	2,520	376	1998	12/04	40

See accompanying report of independent registered public accounting firm.

F-61

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Fort Worth, TX	—	510	1,128	—	—	510	1,128	1,638	309	1997	01/05		40
Fort Worth, TX	—	1,428	—	—	—	1,428	(i)	1,428	(i)	(i)	01/05		(i)
Melbourne, FL	—	747	607	—	—	747	607	1,354	161	1970	05/05		40

University of Phoenix:
Glen Allen, VA	—	2,177	2,600	670	—	2,177	3,270	5,447	1,405	1995	06/95		40

Vacant Land:
Indianapolis, IN	—	640	—	—	—	700	(e)	700	(e)	(e)	12/01		(e)
Southfield, MI	—	405	644	—	—	459	(e)	459	(e)	(e)	12/01		(e)
Bonita Springs, FL	—	112	—	—	—	25	(e)	25	(e)	(e)	09/06		(e)
Lancaster, OH	—	1,035	—	—	—	218	(e)	218	(e)	(e)	01/08		(e)
Bakersfield, CA	—	3,303	3,845	—	—	1,826	(e)	1,826	(e)	(e)	03/08		(e)

Vacant Property:
Orlando, FL	—	820	2,441	40	—	820	2,481	3,301	1,326	1992	05/93		40
Corpus Christi, TX	—	125	137	195	—	125	332	457	126	1967	11/93		40
Altamonte Springs, FL	—	1,690	3,050	—	—	1,690	3,050	4,740	1,516	1995	01/96		40
Arlington, TX	—	435	2,300	334	—	435	2,634	3,069	1,197	1996	06/96		38
Kenosha, WI	—	1,918	3,431	—	—	1,918	3,431	5,349	1,614	1992	02/97		40
Copperas Cove, TX	—	204	432	171	—	204	603	807	248	1972	11/98		40
Beaumont, TX	—	1,424	2,449	—	—	1,424	2,449	3,873	1,028	1992	03/99		40
Houston, TX	—	2,311	1,628	270	—	2,583	1,628	4,211	683	1976	03/99	(g)	40
Alpharetta, GA	—	3,033	1,642	—	—	3,033	1,642	4,675	576	1999	12/01		40
Burton, MI	—	620	707	—	—	620	707	1,327	248	1997	12/01		40
Hammond, LA	—	248	814	62	—	248	627	875	232	1997	12/01		40
Kennedale, TX	—	400	692	—	—	391	692	1,083	243	1985	12/01		40
Mesa, AZ	—	153	400	—	—	153	400	553	141	1997	12/01		40
Swansea, IL	—	46	133	57	—	46	190	236	28	1997	12/01	(g)	40
Tucson, AZ	—	827	305	18	—	845	305	1,150	122	1974	12/01		40
Woodstock, GA	—	1,937	1,285	—	—	1,297	277	1,574	277	1997	05/03		40
Hudson Falls, NY	—	57	780	39	—	57	819	876	229	1990	09/04		40
Fort Worth, TX	—	2,505	2,138	—	—	2,505	2,138	4,643	581	1988	02/05		40
Wichita, KS	—	118	454	—	—	113	454	567	159	1989	06/05		30

See accompanying report of independent registered public accounting firm.

F-62

Table of Contents



			Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)							Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances		Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Dallas, PA	—		214	345	—	—	214	345	559	179	1995	08/05		20
Abbottstown, PA	—		55	200	—	—	55	200	255	50	2000	01/06		40
Carlisle, PA	—		87	103	—	—	87	103	190	25	1988	01/06		40
Hughesville, PA	—		290	566	—	—	290	566	856	141	1977	01/06		40
Tucson, AZ	—		996	—	2,742	—	996	2,742	3,738	568	2007	12/06	(m)	40
Fort Collins, CO	—		390	895	—	—	390	895	1,285	145	1995	02/11		30

Value City Furniture:
White Marsh, MD	—		3,762	—	3,006	—	3,762	3,006	6,768	1,337	1998	10/97	(g)	40

VCA Animal Hospital:
Mission, KS	—		891	3,758	—	—	852	3,758	4,610	475	2000	03/12		30

Verizon Wireless:
Anderson, SC (n)	—		38	—	—	—	38	—	38	(e)	(i)	07/14		(e)
Bristol, VA	—		175	512	—	—	175	512	687	30	2000	07/14		25

Virginia College:
Knoxville, TN	—		1,500	5,571	—	—	1,500	5,571	7,071	611	1996	09/12		30

Vitamin Shoppe, The:
Cincinnati, OH	—		297	443	385	—	312	813	1,125	256	1999	06/98		40

Walgreens:
Sunrise, FL	—		1,958	1,401	—	—	1,958	1,401	3,359	442	1994	05/03		40
Tulsa, OK	—		1,193	3,056	—	—	1,193	3,056	4,249	805	2003	06/05		40
Boise, ID	—		792	1,875	—	—	792	1,875	2,667	362	2000	03/10		30
Nampa, ID	—		1,062	2,253	—	—	1,062	2,253	3,315	435	2000	03/10		30
Pueblo, CO	—		899	3,313	—	—	899	3,313	4,212	446	2000	12/11		30
Rapid City, SD	—		1,387	2,957	—	—	1,387	2,957	4,344	334	2000	01/12		35
Hamilton, OH	—		731	2,879	—	—	731	2,879	3,610	380	2000	01/12		30

Waterford Nails & Spa:
Orlando, FL	10	(h)	40	111	—	—	40	111	151	33	2001	02/04		40

See accompanying report of independent registered public accounting firm.

F-63

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)						Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:

Wawa:
Clearwater, FL	—	1,184	2,526	44	—	1,476	(i)	1,476	(i)	(i)	05/93	(i)

Wehrenberg Theater:
Cedar Rapids, IA	—	1,567	8,433	—	—	1,567	8,433	10,000	940	2011	07/11	40

Wendy's:
Sacramento, CA	—	586	—	—	—	586	(i)	586	(i)	(i)	02/98	(i)
New Kensington, PA	—	501	333	—	—	501	333	834	117	1980	12/01	40
Orland Park, IL	—	562	556	—	—	562	377	939	134	1995	12/01	40
Boerne, TX	—	456	679	—	—	456	679	1,135	83	1986	12/12	25
Brownsburg, IN	—	242	1,483	—	—	242	1,483	1,725	180	1984	12/12	25
Converse, TX	—	301	554	—	—	301	554	855	48	2007	12/12	35
Everett, WA	—	339	1,018	—	—	339	1,018	1,357	103	2000	12/12	30
Everett, WA	—	486	437	—	—	486	437	923	53	1979	12/12	25
Fishers, IN	—	544	514	—	—	544	514	1,058	52	2000	12/12	30
Fishers, IN	—	766	717	—	—	766	717	1,483	73	1990	12/12	30
Henderson, NV	—	398	1,028	—	—	398	1,028	1,426	104	1991	12/12	30
Henderson, NV	—	370	311	—	—	370	311	681	38	1988	12/12	25
Indianapolis, IN	—	417	1,318	—	—	417	1,318	1,735	134	1991	12/12	30
Indianapolis, IN	—	252	1,454	—	—	252	1,454	1,706	147	1999	12/12	30
Indianapolis, IN	—	271	1,221	—	—	271	1,221	1,492	149	1974	12/12	25
Indianapolis, IN	—	320	1,086	—	—	320	1,086	1,406	110	1993	12/12	30
Indianapolis, IN	—	281	1,018	—	—	281	1,018	1,299	103	1996	12/12	30
Indianapolis, IN	—	87	1,009	—	—	87	1,009	1,096	123	1973	12/12	25
Indianapolis, IN	—	320	602	—	—	320	602	922	61	1998	12/12	30
Indianapolis, IN	—	213	1,444	—	—	213	1,444	1,657	125	2003	12/12	35
Las Vegas, NV	—	368	1,095	—	—	368	1,095	1,463	111	1999	12/12	30
Las Vegas, NV	—	475	1,202	—	—	475	1,202	1,677	146	1986	12/12	25
Las Vegas, NV	—	368	1,018	—	—	368	1,018	1,386	103	2001	12/12	30
Las Vegas, NV	—	360	253	—	—	360	253	613	31	1980	12/12	25
Las Vegas, NV	—	475	1,182	—	—	475	1,182	1,657	120	1996	12/12	30
Las Vegas, NV	—	533	1,424	—	—	533	1,424	1,957	144	2001	12/12	30

See accompanying report of independent registered public accounting firm.

F-64

Table of Contents



		Initial Cost to Company		Costs Capitalized Subsequent to Acquisition		Gross Amount at Which Carried at Close of Period (a) (b)						Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances	Land	Building, Improvements & Leasehold Interests	Improvements	Carrying Costs	Land	Building, Improvements & Leasehold Interests	Total	Accumulated Depreciation and Amortization	Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Lynnwood, WA	—	571	1,695	—	—	571	1,695	2,266	206	1978	12/12	25
N. Las Vegas, NV	—	310	1,463	—	—	310	1,463	1,773	127	2001	12/12	35
Noblesville, IN	—	582	979	—	—	582	979	1,561	99	1998	12/12	30
Port Orchard, WA	—	784	1,540	—	—	784	1,540	2,324	156	1996	12/12	30
Poulsbo, WA	—	620	901	—	—	620	901	1,521	69	2012	12/12	40
San Antonio, TX	—	688	727	—	—	688	727	1,415	74	1993	12/12	30
San Antonio, TX	—	242	1,067	—	—	242	1,067	1,309	130	1977	12/12	25
San Antonio, TX	—	931	223	—	—	931	223	1,154	23	1993	12/12	30
San Antonio, TX	—	553	892	—	—	303	892	1,195	109	1986	12/12	25
San Antonio, TX	—	370	272	—	—	370	272	642	28	1993	12/12	30
Lexington Park, MD	—	327	773	—	—	327	773	1,100	38	1982	07/14	30
Alcoa, TN	—	587	547	—	—	587	547	1,134	24	1977	02/15	20
Lincoln Park, MI	—	326	435	—	—	326	435	761	15	1988	02/15	25
North Canton, OH	—	121	852	—	—	121	852	973	25	1986	02/15	30
Roanoke, VA	—	172	672	—	—	172	672	844	29	1983	02/15	20

What the Hair Beauty Supply:
Conyers, GA	—	320	556	29	—	320	585	905	259	1997	06/97	40

Whataburger:
Albuquerque, NM	—	624	419	—	—	624	419	1,043	147	1995	12/01	40
San Antonio, TX	—	275	801	—	—	275	801	1,076	20	1988	02/15	35

Wherehouse Music:
Homewood, AL	—	1,032	697	—	—	1,032	697	1,729	245	1997	12/01	40
Independence, MO	—	503	1,209	—	—	503	1,209	1,712	304	1994	12/05	40

Winn-Dixie:
Columbus, GA	—	1,023	1,875	—	—	1,023	1,875	2,898	584	1984	07/03	40

Wireless Wizard:
Ridgeland, MS	—	436	523	133	—	436	656	1,092	151	1997	08/06	40

See accompanying report of independent registered public accounting firm.

F-65

Table of Contents



			Initial Cost to Company				Costs Capitalized Subsequent to Acquisition			Gross Amount at Which Carried at Close of Period (a) (b)										Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances		Land		Building, Improvements & Leasehold Interests		Improvements		Carrying Costs	Land		Building, Improvements & Leasehold Interests		Total		Accumulated Depreciation and Amortization		Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Operating Leases:
Your Choice:
Hazleton, PA	—		670		377		—		—	670		377		1,047		196		1974	08/05	20
Montoursville, PA	—		158		415		13		—	158		428		586		105		1988	01/06	40

Ziebart:
Maplewood, MN	—		308		311		—		—	308		311		619		85		1990	02/05	40
Middleburg Heights, OH	—		199		148		—		—	199		148		347		40		1961	02/05	40

Leasehold Interests:
Lima, OH	—		1,290		—		—		—	1,290		(e)		1,290		1,265		(e)	08/01	(e)
	$	24,097	$	1,916,575	$	3,288,081	$	649,634		$	1,923,872	$	3,891,235	$	5,815,108	$	620,188

See accompanying report of independent registered public accounting firm.

F-66

Table of Contents



			Initial Cost to Company				Costs Capitalized Subsequent to Acquisition				Gross Amount at Which Carried at Close of Period (a) (b)										Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances		Land		Building, Improvements & Leasehold Interests		Improvements		Carrying Costs		Land		Building, Improvements & Leasehold Interests		Total		Accumulated Depreciation and Amortization		Date of Construction	Date Acquired

Real Estate Held for Investment the Company has Invested in Under Direct Financing Leases:
CVS:
Lafayette, LA	$	—	$	—	$	949	$	—	$	—	$	—	(c)		(c)		(c)		1995	01/96	(c)
Oklahoma City, OK	—		(l)		1,365		—		—		(l)		(c)		(c)		(c)		1997	06/97	(c)
Oklahoma City, OK	—		(l)		1,419		—		—		(l)		(c)		(c)		(c)		1997	06/97	(c)

Denny's:
Stockton, CA	—		940		509		—		—		(d)		(d)		(d)		(d)		1982	09/06	(d)

Food 4 Less:
Chula Vista, CA	—		—		4,266		—		—		—		(c)		(c)		(c)		1995	11/98	(c)

Jared Jewelers:
Toledo, OH	—		(l)		1,458		—		—		(l)		(c)		(c)		(c)		1998	12/01	(c)
Lewisville, TX	—		(l)		1,503		—		—		(l)		(c)		(c)		(c)		1998	12/01	(c)
Glendale, AZ	—		(l)		1,599		—		—		(l)		(c)		(c)		(c)		1998	12/01	(c)

Kash n' Karry:
Valrico, FL	—		1,235		3,255		—		—		(d)		(d)		(d)		(d)		1997	06/02	(d)

Rite Aid:
Kennett Square, PA	—		(l)		—		1,984		—		(l)		(c)		(c)		(c)		2000	12/00	(c)
Arlington, VA	—		(l)		3,201		—		—		(l)		(c)		(c)		(c)		2000	02/02	(c)

Sunshine Energy:
Altamont, KS	—		124		142		—		—		(d)		(d)		(d)		(d)		1979	07/09	(d)
SUBTOTAL	$	—	$	2,299	$	19,666	$	1,984	$	—	$	—	$	—	$	—	$	—

See accompanying report of independent registered public accounting firm.

F-67

Table of Contents



			Initial Cost to Company				Costs Capitalized Subsequent to Acquisition				Gross Amount at Which Carried at Close of Period (a) (b)										Life on Which Depreciation & Amortization in Latest Income Statement is Computed (Years)
	Encumbrances		Land		Building, Improvements & Leasehold Interests		Improvements		Carrying Costs		Land		Building, Improvements & Leasehold Interests		Total		Accumulated Depreciation and Amortization		Date of Construction	Date Acquired

Real Estate Held for Sale the Company has Invested in:
BJ's Wholesale Club:
Attleboro, MA	$	—	$	4,988	$	26,364	$	—	$	—	$	4,987	$	26,364	$	31,351	$	3,771	1993	09/11	30

CarQuest:
Portland, ME	—		123		264		—		—		123		264		387		86		1951	02/11	15

Chipotle:
Hadley, MA	—		45		—		—		—		497		—		497		(e)		(e)	02/08	—

Fuel-On:
Hazleton, PA	—		2,529		728		—		—		2,529		512		3,041		377		2001	08/05	20

Taco Bell:
Ormond Beach, FL	—		632		526		—		—		632		526		1,158		185		2001	12/01	40

Vacant Land:
Rockwall, TX	—		900		$	—	—		—		545		—		545		(e)		(e)	02/06	—
Hadley, MA	—		2,824		$	—	—		—		106		—		106		(e)		(e)	02/08	—
SUBTOTAL	$	—	$	12,041	$	27,882	$	—	$	—	$	9,419	$	27,666	$	37,085	$	4,419

See accompanying report of independent registered public accounting firm.

F-68

NATIONAL RETAIL PROPERTIES, INC. AND SUBSIDIARIES

NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION AND AMORTIZATION

December 31, 2015

(dollars in thousands)


(a)	Transactions in real estate and accumulated depreciation during 2015, 2014, and 2013 are summarized as follows:



	2015			2014			2013
Land, buildings, and leasehold interests:
Balance at the beginning of year	$	5,236,251		$	4,686,844		$	4,145,368
Acquisitions, completed construction and tenant improvements	717,899			601,168			602,836
Disposition of land, buildings, and leasehold interests	(36,633		)	(50,938		)	(57,254		)
Provision for loss on impairment of real estate	(3,970		)	(823		)	(4,106		)
Balance at the close of year	$	5,913,547		$	5,236,251		$	4,686,844
Accumulated depreciation and amortization:
Balance at the beginning of year	$	513,175		$	418,136		$	333,778
Disposition of land, buildings, and leasehold interests	(7,377		)	(9,153		)	(6,778		)
Depreciation and amortization expense	118,809			104,192			91,136
Balance at the close of year	$	624,607		$	513,175		$	418,136

As of December 31, 2015, 2014, and 2013, the detailed real estate schedule excludes work in progress of $61,354, $28,908 and $60,720, respectively, which is included in the above reconciliation.


(b)	As of December 31, 2015, the leases are treated as either operating or financing leases for federal income tax purposes. As of December 31, 2015, the aggregate cost of the properties owned by NNN that are under operating leases were $5,801,797 and financing leases were $2,703.


(c)	For financial reporting purposes, the portion of the lease relating to the building has been recorded as a direct financing lease; therefore, depreciation is not applicable.


(d)	For financial reporting purposes, the lease for the land and building has been recorded as a direct financing lease; therefore, depreciation is not applicable.


(e)	NNN owns only the land for this property.


(f)	Date acquired represents acquisition date of land. Pursuant to lease agreement, NNN purchased the buildings from the tenants upon completion of construction, generally within 12 months from the acquisition of the land.


(g)	Date acquired represents acquisition date of land. NNN developed the buildings, generally completing construction within 12 months from the acquisition date of the land.


(h)	Property is encumbered as a part of NNN's $6,952 long-term, fixed rate mortgage and security agreement.


(i)	NNN owns only the land for this property, which is subject to a ground lease between NNN and the tenant. The tenant funded the improvements on the property.


(j)	The land is subject to a ground lease between NNN and an unrelated third party. Pursuant to the lease agreement, NNN funds the tenant’s construction draws, final funding occurs generally within 12 months from the execution of the ground lease.


(k)	NNN owns only the building for this property, which is encumbered by a fixed rate mortgage and security agreement.


(l)	NNN owns only the building for this property. The land is subject to a ground lease between NNN and an unrelated third party.


(m)	Date acquired represents acquisition date of land. Pursuant to lease agreement, NNN funds the tenant’s construction draws, final funding occurs generally within 12 months from the acquisition of the land.

See accompanying report of independent registered public accounting firm.

F-69


(n)	The tenant of this property has subleased the property. The tenant continues to be responsible for complying with all the terms of the lease agreement and is continuing to pay rent on this property to NNN.


(o)	Date acquired represents acquisition date of land and building. Pursuant to lease agreement, NNN funds additional tenant construction draws. Final funding generally occurs within 12 months from acquisition.


(p)	Property is encumbered as a part of NNN's $15,151 long-term, fixed rate mortgage and security agreement, net of premium.


(q)	Building improvements are pending completion which is anticipated to occur within six months. Depreciation will commence upon completion.


(r)	As of December 31, 2015, this property has been classified as held for sale. Accumulated depreciation and amortization were recorded prior to this reclassification.

See accompanying report of independent registered public accounting firm.

F-70

NATIONAL RETAIL PROPERTIES, INC. AND SUBSIDIARIES

SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE

December 31, 2015

(dollars in thousands)



Description	Interest Rate		Maturity Date	Periodic Payment Terms	Prior Liens	Face Amount of Mortgages		Carrying Amount of Mortgages (e)			Principal Amount of Loans Subject to Delinquent Principal or Interest
First mortgages on properties:
Paramus, NJ	9.000	%	2/1/2022	(b)	—	$	6,000	$	3,338		$	—
Marlow Heights, MD	7.000	%	5/14/2016	(c)	—	750		750			—
4 properties in FL and GA	6.250	%	6/30/2015	(d)	—	5,500		4,073			—
Corpus Christi, TX	4.500	%	3/1/2018	(c)	—	500		500			—
						$	12,750	$	8,661	(a)	$	—


(a)	The following shows the changes in the carrying amounts of mortgage loans during the years:



	2015				2014				2013
Balance at beginning of year	$	10,930			$	14,430			$	17,482
New mortgage loans	500			(f)	7,307			(f)	3,547			(f)
Deductions during the year:
Collections of principal	(2,319		)		(10,807		)		(6,599		)
Cost of mortgages sold	(450		)		—				—
Balance at the close of year	$	8,661			$	10,930			$	14,430


(b)	Principal and interest is payable at level amounts over the life of the loan.


(c)	Interest only payments are due monthly. Principal is due at maturity.


(d)	Interest only payments are due monthly. Periodic principal payments are due over the course of the loan based on specific terms outlined in the loan agreement, with the remaining principal balance due at maturity.


(e)	Mortgages held by NNN and its subsidiaries for federal income tax purposes for the years ended December 31, 2015, 2014 and 2013 were $8,661, $10,930, and $14,430, respectively.


(f)	Mortgages totaling $500, $7,307, and $3,547, were accepted in connection with real estate transactions for the year ended December 31, 2015, 2014 and 2013, respectively.

See accompanying report of independent registered public accounting firm.

NNN REIT - 10-K annual report 2015

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