Global Net Lease, Inc. · NYSE:GNL
Global Net Lease — Q4 2018 Earnings Presentation
31 slides from Global Net Lease's earnings presentation, Feb 27, 2019
Slide 1: Global Net Lease Fourth Quarter Investor Presentation
Global Net Lease Fourth Quarter Investor Presentation
Slide 2: Overview: High-Quality, Mission Critical, Diversified Portfolio
2 OVERVIEW High - Quality, Mission Critical, Diversified Portfolio 1. As used herein, “Investment Grade Rating” includes both actual investment grade ratings of the tenant or Implied Investment G rad e. Implied Investment Grade includes ratings of tenant parent (regardless of whether or not the pare
Slide 3: Portfolio Highlights
3 PORTFOLIO HIGHLIGHTS Properties 342 Square Feet (millions) 27.5 Tenants 111 Industries 44 Countries 7 Leased 99.2% Weighted - Average Remaining Lease Term (1) 8.3 years % of SLR derived from Investment Grade Tenants (2)(3) 78.3% % of leases with contractual rent increases (4) 92% Portfolio Overvie
Slide 4: Well Balanced Portfolio
4 Non Investment Grade 19.3% Investment Grade 78.3% Not Rated 2.4% Industrial/Distribution 39% Retail 8% Office 53% WELL BALANCED PORTFOLIO As of December 31, 2018 1. Metric based on SLR. Refer to SLR definition included in the footnotes to page 3. 2. Refer to Investment Grade Rating definition incl
Slide 5: Well Diversified Tenant Base
5 Tenant Rating Country Property Type % of SLR (1) Baa2** U.S. Distribution 5% Aaa** U.S. Office 4% Baa3* U.K. Office 4% Baa3* GER Office 4% Aa3 NETH Office 3% Aa1** FIN Industrial 3% Baa3 U.S. Retail 3% Baa2 U.S. Distribution 3% Baa3* U.S. Industrial 2% Aa3 U.S. Office 2% WELL DIVERSIFIED TENANT BA
Slide 6: Focus on High-Quality Tenants
6 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 Finland U.K. France AA+ AAA AAA AAA AA+ AA AA Best - in - class portfolio leased to largely Investment Grade Rated Tenants (1) in
Slide 7: Differentiated Investment Strategy
7 DIFFERENTIATED INVESTMENT STRATEGY Geography Asset Type Property Fundamentals Credit Quality Structure and Pricing Focused on single - tenant commercial properties to generate superior risk - adjusted returns • Focus on the U.S. and strong sovereign debt rated countries in Continental Europe • Cri
Slide 8: 2018 Investment Activity
8 1. Refer to definitions included in the footnotes to page 16 . 2018 INVESTMENT ACTIVITY Acquisitions 23 properties for $478 million Weighted - Average Going In Cap Rate (1) 7.21% Weighted - Average Cap Rate (1) 7.70% Weighted - Average Lease Term 11.6 years $63 $98 $105 $212 $0 $100 $200 $300 $400
Slide 9: 2018 Investment Activity (Continued)
9 *Represents Moody’s Implied Rating. ** Represents Tenant Parent Rating. 1. Refer to Average Cap Rate definition included in the footnotes to page 16. 2. Refer to Investment Grade Rating definition included in the footnotes to page 2 and page 3. 3. Represents remaining lease term as of acquisition
Slide 10: Current Deals
10 CURRENT DEALS *Represents Moody’s Implied Rating. ** Represents Tenant Parent Rating. 1. The acquisition of $53.3 million in contract purchase price are currently under either executed letters of intent or definiti ve purchase and sale agreements. These acquisitions are subject to conditions and
Slide 11: Geographic Balance
11 GEOGRAPHIC BALANCE (AS OF DECEMBER 31, 2018) 1. Refer to basis for metric calculation included in the footnotes to page 3. 2. Metric based on SLR. Refer to SLR definition included in the footnotes to page 3. U.S. Number of Assets: 273 Weighted - Average Remaining Lease Term: 8.3 years (1) % of GN
Slide 12: Portfolio Comparison: 2018 vs 2017
12 Office 53% Industrial/Distribution 39% Retail 8% PORTFOLIO COMPARISON: 2018 VS 2017 Continued Focus towards United States Industrial and Distribution Properties Office 59% Industrial/Distribution 32% Retail 9% United States 49% Europe 51% Property Type Concentration (1) Geographic Concentration (
Slide 13: Fourth Quarter Acquisition: Grupo Antolin
13 FOURTH QUARTER ACQUISITION: GRUPO ANTOLIN Property and Tenant Overview Tenant Grupo Antolin Property Type Industrial Credit Rating (1) S&P: Guarantor: B+ Moody's: Guarantor: Ba3 Location Michigan Square Feet 359,807 Lease Term (years) 13.8 Tenant/Guarantor • The Tenant is a wholly owned subsidiar
Slide 14: Acquisition: Walgreens
14 Transaction Overview Tenant Walgreens Property Type Distribution Credit Rating (1) S&P: Guarantor: BBB Moody’s: Guarantor Parent: Baa2 Location Pennsylvania Square Feet 85,646 Lease Term (years) 6.9 Tenant/Guarantor • The Tenant is a wholly owned subsidiary of the Guarantor Property • The subject
Slide 15: Fully Aligned Management Structure
15 Chris Masterson Chief Financial Officer, Treasurer and Secretary FULLY ALIGNED MANAGEMENT STRUCTURE Fully integrated external management team creates highly scalable platform with an acquisition pipeline generated by a proven, country - focused origination network No transactional fees allows for
Slide 16: Footnotes and definitions
16 1. GNL used all the proceeds from the increased borrowings under the term loan facility to repay amounts outstanding under the revolving credit facility . 2. Average capitalization rate is a rate of return on a real estate investment property based on the expected, annualized SLR that the propert
Slide 17: 2019 Company Initiatives
17 2019 COMPANY INITIATIVES Q1 2019 ATM Facility • In January 2019 GNL issued and sold $153 million of common stock through the ATM Facility at a weighted - average price of $19.69 Finland Refinancing • In February 2019 GNL entered into a syndicated investment facility loan agreement in the amount o
Slide 18: GNL Capital Structure
18 $1,136 $1,375 $1,503 $1,341 $1,496 $135 $139 $136 $134 $136 $1,047 $983 $984 $1,140 $1,140 $582 $686 $742 $646 $646 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 Q1 2018 Q2 2018 Q3 2018 Q4 2018 PF Q4 2018 Equity Preferred Equity Mortgage Debt Line of Credit GNL CAPITAL STRUCTURE GNL co
Slide 19: Performance Metrics
19 PERFORMANCE METRICS 1. Includes a one - time $7.4 million reserve for an anticipated resolution with our former European service provider. 2. Adjusted Funds from Operations (“AFFO”). See “Non - GAAP measures” on pages 26 - 28 for a description of AFFO and pages 29 - 30 for a reconciliation of AFF
Slide 20: Debt Overview
20 0% 0.4% 1.3% 6.2% 9.7% 24.3% 13.2% 8.2% 2.9% 31.1% DEBT OVERVIEW Net Debt to Enterprise Value (1) 53.3% Net Debt to Enterprise Value (As of February 22, 2019) (2) 50.8% Net Debt to Adjusted EBITDA (annualized) (3) 7.9x Interest Coverage Ratio (4) 3.8x Weighted - Average Interest Rate (5) 3.1% Wei
Slide 21: Comprehensive Hedging Program
21 COMPREHENSIVE HEDGING PROGRAM Hedging Foreign Currency Exchange Risk (“Cash Flow Hedging Instruments”) • Provides protection against unfavorable movements in EUR and GBP versus the U.S. Dollar (“USD”) associated with the Company’s foreign property operations Interest Rate Swaps: Fixing Interest o
Slide 22: Forward-looking statements
22 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 23: Risk Factors
23 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 or
Slide 24: Risk Factors (Continued)
24 RISK FACTORS (CONTINUED) • Provisions in in our credit facility, may limit our ability to pay dividends on our common stock, $ 0 . 01 par value per share ("“Common Stock"”), our 7 . 25 % Series A Cumulative Redeemable Preferred Stock, $ 0 . 01 par value per share ("“Series A Preferred Stock"”) or
Slide 25: Projections
25 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 26: Definitions
26 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 27: Definitions (Continued)
27 DEFINITIONS (CONTINUED) • Changes in the accounting and reporting promulgations under GAAP (for acquisition fees and expenses from a capitalization/depreciation model to an expensed - as - incurred model) that were put into effect in 2009 and other changes to GAAP accounting for real estate subse
Slide 28: Definitions (Continued)
28 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 29: Non-GAAP Reconciliations
29 NON – GAAP RECONCILIATIONS Three Months Ended December 31, 2018 September 30, 2018 June 30, 2018 March 31, 2018 EBITDA: Net income $ (4,290) $ 2,632 $ 7,743 $ 4,812 Depreciation and amortization 30,078 30,195 29,813 29,496 Interest expense 15,479 15,104 14,415 12,975 Income tax (benefit) expense
Slide 30: FFO and AFFO Reconciliations
30 FFO AND AFFO RECONCILIATIONS Three Months Ended December 31, 2018 September 30, 2018 June 30, 2018 March 31, 2018 December 31, 2017 Funds from operations (FFO): Net (loss) income attributable to common stockholders (in accordance with GAAP) $ (6,744) $ 177 $ 5,288 $ 2,361 $ 5,998 Impairment charg
Slide 31: Investor Inquiries
INVESTOR INQUIRIES 1 - 866 - 902 - 0063 investorrelations@globalnetlease.com www.GlobalNetLease.com