FFO totaled $24.5 million or 42 cents per common share versus $20.4 million or 38 cents per share last year. For the six-month period, FFO totaled $48.1 million or 84 cents per share compared to $40 million or 75 cents per share in the same 2005 period.

Craig Macnab, CEO of National Retail Properties, says FFO is "generally considered by industry analysts to be the most appropriate measure of performance of real estate companies." However, he adds, FFO "does not necessarily represent cash provided by operating activities in accordance with GAAP and should not be considered an alternative to net earnings as an indication of the company's performance or to cash flow as a measure of liquidity or ability to make distributions."

In a prepared statement, Macnab says the company "remains very comfortable with our increased 2006 earnings guidance announced in June." He says the sale of the firm's Washington, DC office properties in May "provides an opportunity to increase returns on a meaningful amount of capital and leaves our portfolio focused on retail properties."

Macnab says National Retail Properties invest primarily in high-quality properties that have long-term, net leases with major national retailers. As of June 30, the company owned 607 investment properties in 41 states with a gross leasable area of about 8.9 million sf. The properties are leased to 180 corporations in 63 industry classifications.

Macnab says the properties were 98.4% leased at June 30 compared to 98.6% on March 31 of this year. In capital transactions during the second quarter, National Retail converted 10,000 shares of 6.70% Series B convertible preferred stock into 1.29 million shares of common. The company issued 328,696 shares of common stock, generating $7 million of net proceeds from its Dividend Reinvestment and Stock Purchase Plan. The buyer of National Retail's office assets in Washington, DC assumed a $95 million mortgage at a fixed interest rate of 5.42%.