Global Net Lease, Inc. · NYSE:GNL
Global Net Lease — Q2 2020 Earnings Presentation
28 slides from Global Net Lease's earnings presentation, Aug 5, 2020
Slide 1: Global Net Lease Second Quarter 2020 Investor Presentation
Global Net Lease Second Quarter 2020 Investor Presentation
Slide 2: Overview
2 OVERVIEW 1. As used herein, investment grade includes both actual investment grade ratings of the tenant or guarantor, if available, or i mpl ied investment grade. Implied investment grade may include actual ratings of tenant parent, guarantor parent (regardless of whether or not the parent has gu
Slide 3: Portfolio Highlights
3 PORTFOLIO HIGHLIGHTS Properties 296 Square Feet (millions) 34.6 Tenants 126 Industries 46 Countries 9 Leased 99.6% Weighted - Average Remaining Lease Term (1) 8.9 years % of SLR derived from Investment Grade Tenants (2)(3) 65.0% % of leases with contractual rent increases (4) 93.4% Portfolio Overv
Slide 4: Second Quarter Cash Rent Collection
4 Approved Agreement (3) 2% Total Paid 98% Total Paid 99% Approved Agreement 1% Total Paid 100% Approved Agreement 2% Other (4) 1% Agreement Negotiation (5) 1% Total Paid 96% SECOND QUARTER CASH RENT COLLECTION GNL’s proactive and focused effort in response to the COVID - 19 pandemic resulted in 98%
Slide 5: Top Twenty Tenants
5 TOP TWENTY TENANTS GNL received 99% of second quarter Cash Rent due from the Company’s top twenty Tenants (1) , representing 49% of the Company’s annual Cash Rent (2) Top Twenty Tenants Tenant Investment Grade Rating Country % of Q2’2020 Cash Rent Paid Annualized Cash Rent % Portfolio (2) Tenant I
Slide 6: Well Balanced Portfolio
6 WELL BALANCED PORTFOLIO As of June 30, 2020. 1. Metric based on SLR . Refer to SLR definition included in the footnotes on page 5. 2. Refer to Investment Grade Rating definition included in the footnotes on page 4. Credit Rating (1) Tenant Industry (1) Geography (1) Asset Type (1) (2) United State
Slide 7: Well Diversified Tenant Base
7 Tenant Rating Country Property Type % of SLR (1) Baa2** U.S. / Canada Distribution 5% Baa1* U.S. / Italy Industrial / Distribution 4% Aaa** U.S. Office 4% Baa3* U.K. Office 3% Aa3 NETH Office 3% Aa1** FIN Industrial 3% Baa2 U.S. Distribution 3% Ba1* U.S. Industrial 3% Aa3 U.S. Office 2% Aa3 U.K. D
Slide 8: Focus on High-Quality Tenants
8 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 Italy AA+ AAA AAA AAA AAA AA+ AA AA BBB Best - in - class portfolio leased to largely Investment Grade
Slide 9: Differentiated Investment Strategy
9 DIFFERENTIATED INVESTMENT STRATEGY Geography Asset Type Property Fundamentals Credit Quality Structure and Pricing Focused on primarily single - tenant commercial properties to generate superior risk - adjusted returns • Focus on the U.S. and strong sovereign debt rated countries in Continental Eu
Slide 10: Acquisitions
10 *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 11: Geographic Balance (as of June 30, 2020)
11 GEOGRAPHIC BALANCE (AS OF JUNE 30, 2020) 1. Refer to basis for metric calculation included in the footnotes on page 5. 2. Metric based on SLR. Refer to SLR definition included in the footnotes on page 5. U.S. and Canada Number of Assets: 231 Weighted - Average Remaining Lease Term: 9.4 years (1)
Slide 12: Portfolio Comparison: Q2 2020 vs Q2 2019
12 Office 48% Industrial/Distribution 47% Retail 5% PORTFOLIO COMPARISON: Q2 2020 VS Q2 2019 Continued Focus towards United States Industrial and Distribution Properties Office 53% Industrial/Distribution 41% Retail 6% United States 58% Europe 42% Property Type Concentration (1) Geographic Concentra
Slide 13: Transaction Overview
13 Transaction Overview Tenant Talecris Plasma Resources, Inc. (2) Biomat USA, Inc. (3) KEDPlasma, LLC (1) Property Type Specialty Office Credit Rating Talecris Plasma Resources, Inc. – Moody’s: Implied Ba1 Biomat USA, Inc. – Moody’s: Implied B2 Locations OH (2), PA (1), VA (1), IA (1), NV (1) Squar
Slide 14: Fully Aligned Management Structure
14 James L. Nelson Chris Masterson Chief Financial Officer, Treasurer and Secretary FULLY ALIGNED MANAGEMENT STRUCTURE No transactional fees allows for low general and administrative costs, which allows AR Global to provide greater resources at a lower cost (1) Lower Overhead Costs AR Global has spo
Slide 15: GNL Capital Structure
15 5.7 5.8 5.4 5.2 3.0% 3.0% 3.1% 3.2% 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 7.0 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Weighted-Average Maturity Weighted-Average Interest Rate $1,744 $1,814 $1,814 $1,497 $171 $268 $268 $244 $1,382 $1,287 $1,249 $1,303 $494 $602 $790 $744
Slide 16: Q2 2020 Key Highlights
16 Q2 2020 Key Highlights • Closed on over $145 million of acquisitions through the second quarter plus Q3’2020 pipeline of $31 million to be acquired at a weighted average cap rate of 7.4% (1) • Collected over 98% of second quarter Cash Rent due including 99% of Cash Rent due from the Company’s top
Slide 17: Debt Overview
17 $0 $0 $0 $333 $218 $768 $345 $404 $0 $200 $400 $600 $800 $1,000 2020 2021 2022 2023 2024 Thereafter Mortgages Credit Facility 0% 1% 5% 7% 13% 9% 6% 2% 57% DEBT OVERVIEW Metric Q2’2020 Net Debt to Enterprise Value (1) 50.1% Net Debt to Adjusted EBITDA (annualized) (2) 7.2x Interest Coverage Ratio
Slide 18: Comprehensive Hedging Program
18 COMPREHENSIVE HEDGING PROGRAM Hedging Foreign Currency Exchange Risk • Provides protection against unfavorable movements in 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 tool
Slide 19: Forward-Looking Statements
19 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 20: Risk Factors
20 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 . • All of our executive officers are also officers, managers, employees
Slide 21: Risk Factors (Continued)
21 RISK FACTORS (CONTINUED) • If we are not able to increase the amount of cash we have available to pay dividends, including through additional cash flows we expect to generate from completing acquisitions, we may have to reduce dividend payments or identify other financing sources to fund the paym
Slide 22: Projections
22 PROJECTIONS • 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 23: Definitions
23 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 24: Definitions (Continued)
24 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 25: Definitions (Continued)
25 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 26: Non-GAAP Reconciliations
26 NON – GAAP RECONCILIATIONS Three Months Ended June 30, 2020 June 30, 2019 EBITDA: Net income (loss) $ 5,530 $ 15,328 Depreciation and amortization 33,984 31,084 Interest expense 17,529 15,689 Income tax expense 691 780 EBITDA 57,734 62,881 Equity based compensation 2,513 2,429 Acquisition, transa
Slide 27: FFO and AFFO Reconciliations
27 FFO AND AFFO RECONCILIATIONS Three Months Ended June 30, 2020 June 30, 2019 Funds from operations (FFO): Net income (loss) attributable to common stockholders (in accordance with GAAP) $ 966 $ 12,621 Depreciation and amortization 33,984 31,084 Gain (loss) on dispositions of real estate investment
Slide 28: Investor Inquiries
INVESTOR INQUIRIES 1 - 866 - 902 - 0063 investorrelations@globalnetlease.com www.GlobalNetLease.com