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## DEAR FELLOW NNN SHAREHOLDERS 

I am delighted to report that National Retail Properties (NNN) completed another strong year of operational performance. With our fortress-like balance sheet and our well-occupied portfolio we are very well positioned for the future. Our excellent financial results in 2013 allowed us to raise our dividend for the 24th consecutive year.  This long-term dividend growth track record places us in an elite group of just over 100 U.S. public companies. 

Our strategy to build long-term shareholder value  has not wavered over the last several years. Our team continues to focus on the following three primary goals: 

• to generate consistent recurring annual FFO per share growth; 

• to annually increase our dividend per share; 

• to achieve these dual objectives while taking on below average balance sheet and portfolio risk. 

We have generated an average annual total return to NNN shareholders of 12.3% over the past 20 years outperforming virtually all of the major equity indices.  We are optimistic we will continue to generate shareholder returns that outperform the major indices. However, the headwinds that all companies are facing are likely to lead to lower multi-year total returns than achieved in the past 20 years. 

One of the challenges facing all companies like NNN is that interest rates will increase from the artificially low rates we are currently experiencing. We mitigate this risk by using long-term fixed rate debt and by maintaining a modest amount of leverage. 

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