Global Net Lease, Inc. · NYSE:GNL
Global Net Lease — Q4 2020 Earnings Presentation
36 slides from Global Net Lease's earnings presentation, Feb 24, 2021
Slide 1: Global Net Lease Fourth Quarter 2020 Investor Presentation
Global Net Lease Fourth Quarter 2020 Investor Presentation
Slide 2: Company Highlights
COMPANY HIGHLIGHTS High - Quality, Mission Critical, Net Lease Focused Portfolio : High portfolio occupancy of 99.7% coupled with robust fourth quarter Cash Rent collection of 99% (1) , highlighting strong overall operating performance 1 Strong Balance Sheet: Completed an inaugural $500 million seni
Slide 3: Portfolio Highlights
3 PORTFOLIO HIGHLIGHTS Portfolio Overview Q4’20 Q4’19 Properties 306 278 Square Feet (millions) 37.2 31.6 Tenants 130 124 Industries 48 45 Countries 10 8 Leased 99.7% 99.6% Weighted - Average Remaining Lease Term (1) 8.5 years 8.3 years % of SLR derived from Investment Grade Tenants (2)(3) 67.0% 68.
Slide 4: Strong Cash Rent Collection
4 Total Paid 100% Other (3) 1% Total Paid 99% Total Paid 99% Other 1% Other 2% Total Paid 98% STRONG CASH RENT COLLECTION Mission critical industrial and distribution assets and high Investment Grade rated tenancy (1) continued to support GNL’s strong fourth quarter Cash Rent (2) collection rate of
Slide 5: 100% Collected From Top Twenty Tenants
5 100% COLLECTED FROM TOP TWENTY TENANTS Collected 100% of fourth quarter original Cash Rent due from top twenty Tenants (1) , representing 49% of annual Cash Rent (2) Top Twenty Tenants Tenant Investment Grade Rating Country % of Q4’2020 Cash Rent Paid % of Portfolio Annualized Cash Rent (2) Tenant
Slide 6: Inaugural $500 Million Notes Offering
6 Transaction Highlights • On December 16, 2020, GNL completed an inaugural $500 million senior unsecured notes offering. The notes are rated investment gr ade by S&P and BB+ rated by Fitch. The notes issuance represents a significant milestone as GNL focuses on issuing more unsecured debt on at tra
Slide 7: Well Balanced Portfolio Supports Continued Growth
7 Investment Grade 67% Non - Investment Grade 33% WELL BALANCED PORTFOLIO SUPPORTS CONTINUED GROWTH As of December 31, 2020. 1. Metric based on SLR . Refer to SLR definition included in the footnotes on page 3. 2. Refer to Investment Grade Rating definition included in the footnotes on page 2. Credi
Slide 8: Attractive Portfolio in Line with Investment Grade Rated Peers
8 ATTRACTIVE PORTFOLIO IN LINE WITH INVESTMENT GRADE RATED PEERS Well - positioned, diversified portfolio with large concentration of investment grade tenants as compared to investment grade rated peers Weighted - Average Remaining Lease Term (1) Occupancy Percentage Investment Grade Tenants (2) Cas
Slide 9: Well Diversified Tenant Base
9 Tenant Rating Country Property Type % of SLR (1) Baa2** U.S. / Canada Distribution 4% Baa1 U.S. / Italy Industrial / Distribution 4% Aaa** U.S. Office 4% Baa3* U.K. Office 3% Aa3 NETH Office 3% Baa3* U.S. Industrial / Distribution 3% Baa1 U.S. Industrial 3% Aa1** FIN Industrial 3% Baa2 U.S. Distri
Slide 10: Focus on High-Quality Tenants
10 Office Distribution Industrial FOCUS ON HIGH - QUALITY TENANTS Only Focused on Markets with Quality Sovereign Debt Ratings (S&P) U.S. Luxembourg Germany The Netherlands Canada Finland U.K. France Spain Italy AA+ AAA AAA AAA AAA AA+ AA AA A BBB Moody’s: A1 Moody’s: Aaa Moody’s: Aa3 Moody’s: Aa3 Mo
Slide 11: Differentiated Investment Strategy
11 DIFFERENTIATED INVESTMENT STRATEGY Geography Asset Type Property Fundamentals Credit Quality Structure and Pricing • Focus on U.S. and strong sovereign debt rated countries in Continental Europe • Strategically located industrial and distribution facilities • Mission critical, single tenant net l
Slide 12: 2020 Acquisitions
12 *Represents Moody’s Implied Rating’ ** Represents Tenant or Guarantor Parent Rating even if not a guarantor on the lease. 1. Represents the contract purchase price and excludes acquisitions costs which are capitalized per GAAP. 2. Average capitalization rate is a rate of return on a real estate i
Slide 13: Global Geographic Balance
13 GLOBAL GEOGRAPHIC BALANCE Note: Metrics as of December 31, 2020 unless otherwise noted. 1. Refer to basis for metric calculation included in the footnotes on page 3. 2. Metric based on SLR. Refer to SLR definition included in the footnotes on page 3. U.S. and Canada Number of Assets: 237 Weighted
Slide 14: Portfolio Enhancement
14 Office 49% Industrial/Distribution 46% Retail 5% United States & Canada 64% Europe 36% Office 46% Industrial/Distribution 49% Retail 5% PORTFOLIO ENHANCEMENT Continued Focus Towards Industrial and Distribution Properties and Geographic Diversification United States 63% Europe 37% Property Type Co
Slide 15: Strategic Lease Extensions
15 GNL completed 12 strategic lease extensions, encompassing 1.6 million square feet in 2020 and Q1‘21, creating long - term value with top GNL tenants Summary of 2020 and Q1’21 Lease Extensions (1) Finnair Early Lease Extension Lease Expiration Schedule (2) (Q4’19 vs. Q4’20) GSA Long - Term Lease E
Slide 16: Transaction Overview
16 Transaction Overview Tenant DST Output, LLC (3) SKF USA Inc. (1) Property Type Industrial Credit Rating Broadridge Financial Solutions, Inc. (Guarantor) – Moody’s: Baa1 SKF USA, Inc – Moody’s: Parent: Baa1 Locations CA (1), CT (1), MO (1), NY (1) Square Feet 1,259,650 Weighted Average Annual Rent
Slide 17: Management and Board
17 • Joined GNL as an Independent Board Member on March 2017 • Currently serves as an independent director and chairman of the audit committee for Roman DBDR Tech Acquisition Corp. • Previously served in various roles on the Boards of Herbalife Nutrition Ltd., Caesars Entertainment Inc., Icahn Enter
Slide 18: Fourth Quarter 2020 Key Highlights
18 $35.8 $40.0 Net Loss Common Stock Dividends AFFO ($13.3) Net Loss Common Stock Dividends AFFO Q4’20 Net Loss and AFFO and Q1’21 Common Stock Dividends ($mm) Fourth Quarter 2020 Key Highlights • Closed on over $461 million of acquisitions in 2020 at a weighted average cap rate of 7.9% plus an addi
Slide 19: Q4 2020 Acquisitions
19 Acquisition ($000s) Property Type Closing Date Purchase Price Number of Properties Annualized Straight - Line Rent (1) Acquisitions (2) Industrial 4 - Pack Industrial 11/5/2020 $153,000 4 $10,630 ZF Active Safety Industrial 12/17/2020 $24,750 1 $1,791 Johnson Controls Office 12/21/2020 $5,075 1 $
Slide 20: Continued Focus on Driving Earnings Growth
20 CONTINUED FOCUS ON DRIVING EARNINGS GROWTH Historical Revenue Growth Core Funds From Operations (1) Real Estate Assets at Cost Adjusted Funds From Operations (1) $2,546 $2,932 $3,173 $3,421 $3,763 $4,319 1/1/2015 $205 $214 $259 $282 $306 $330 2015 2016 2017 2018 2019 2020 $ in millions $114 $127
Slide 21: Key Metrics
21 1% 4% 6% 12% 9% 6% 2% 11% 49% KEY METRICS Metric Q4’2020 Net Debt to Enterprise Value (1) 54.5% Net Debt to Adjusted EBITDA (annualized) (2) 8.5x Interest Coverage Ratio (3) 3.7x Weighted - Average Interest Rate (4) 3.3% Weighted - Average Debt Maturity (5) 5.4 Years Floating Rate / Fixed Rate (6
Slide 22: Enhanced Capital Structure
22 5.4 5.2 5.1 5.4 3.1% 3.2% 3.1% 3.3% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 0.0 1.0 2.0 3.0 4.0 5.0 6.0 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Weighted-Average Maturity Weighted-Average Interest Rate ENHANCED CAPITAL STRUCTURE GNL’s inaugural $500 million notes offering enhanced the Company’s capit
Slide 23: Comprehensive Hedging Program
23 COMPREHENSIVE HEDGING PROGRAM Hedging Foreign Currency Exchange Risk • Provides protection against a weakening in the value of EUR and GBP versus the U.S. Dollar associated with the Company’s foreign property operations Interest Rate Swaps: Fixing Interest on Floating Rate Debt • Cost effective t
Slide 24: Forward-Looking Statements
24 The statements in this presentation that are not historical facts may be forward - looking statements . These forward - looking statements involve risks and uncertainties that could cause actual results or events to be materially different . In addition, words such as “may,” “will,” “seeks,” “ant
Slide 25: Risk Factors
25 RISK FACTORS The following are some of the risks and uncertainties, although not all risks and uncertainties, that could cause our actual results to differ materially from those presented in our forward - looking statements . • We may be unable to acquire properties on advantageous terms or our p
Slide 26: Risk Factors (Continued)
26 RISK FACTORS (CONTINUED) • In owning properties we may experience, among other things, unforeseen costs associated with complying with laws and regulations and other costs, potential difficulties selling properties and potential damages or losses resulting from climate change . • We depend on our
Slide 27: Disclaimers
27 DISCLAIMERS • This presentation includes estimated projections of future operating results . These projections were not prepared in accordance with published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentat
Slide 28: Definitions
28 DEFINITIONS • Due to certain unique operating characteristics of real estate companies, as discussed below, the National Association of Real Estate Investment Trusts ("NAREIT"), an industry trade group, has promulgated a measure known as funds from operations ("FFO"), which we believe to be an ap
Slide 29: Definitions (Continued)
29 DEFINITIONS (CONTINUED) • In calculating Core FFO, we start with FFO, then we exclude certain non - core items such as acquisition, transaction and other costs, as well as certain other costs that are considered to be non - core, such as debt extinguishment costs, fire loss and other costs relate
Slide 30: Definitions (Continued)
30 DEFINITIONS (CONTINUED) • Excluding income and expense items detailed above from our calculation of AFFO provides information consistent with management's analysis of the operating performance of the Company . Additionally, fair value adjustments, which are based on the impact of current market f
Slide 31: Non-GAAP Reconciliations
31 NON – GAAP RECONCILIATIONS Three Months Ended December 31, 2020 December 31, 2019 EBITDA: Net income (loss) $ (8,495) $ 12,931 Depreciation and amortization 35,977 31,989 Interest expense 19,158 17,194 Income tax expense 2,457 1,652 EBITDA 49,097 63,766 Equity based compensation 2,585 2,491 Acqui
Slide 32: FFO and AFFO Reconciliations
32 FFO AND AFFO RECONCILIATIONS Three Months Ended December 31, 2020 December 31, 2019 Funds from operations (FFO): Net (loss) income attributable to common stockholders (in accordance with GAAP) $ (13,277) $ 9,263 Depreciation and amortization 35,977 31,989 Gain (loss) on dispositions of real estat
Slide 33: FFO and AFFO Reconciliations
33 FFO AND AFFO RECONCILIATIONS Three Months Ended March 31, 2020 June 30, 2020 September 30, 2020 Funds from operations (FFO): Net income attributable to common stockholders (in accordance with GAAP) $ 5,038 966 (502) Impairment charges — — — Depreciation and amortization 33,533 33,984 35,049 Gain
Slide 34: Annual FFO and AFFO Reconciliations
34 ANNUAL FFO AND AFFO RECONCILIATIONS Twelve Months Ended December 31, 2015 December 31, 2016 December 31, 2017 December 31, 2018 December 31, 2019 December 31, 2020 Funds from operations (FFO): Net income (loss) attributable to common stockholders (in accordance with GAAP) $ (2,065) 47,140 20,731
Slide 35: Contributed to Expected NOI – Q4'20 Acquisition Reconciliation
35 CONTRIBUTED TO EXPECTED NOI – Q4’20 ACQUISITION RECONCILIATION Three Months Ended December 31, 2020 Total GNL Excluding Q4’20 Acquisitions (1) Impact of Q4’20 Acquisitions (2) Total GNL (3) EBITDA: Net income (loss) $ (9,151) 656 (8,495) Depreciation and amortization 35,250 727 35,977 Interest ex
Slide 36: Investor Inquiries
INVESTOR INQUIRIES 1 - 866 - 902 - 0063 investorrelations@globalnetlease.com www.GlobalNetLease.com