Global Net Lease, Inc. · NYSE:GNL
Global Net Lease — Q1 2017 Earnings Presentation
32 slides from Global Net Lease's earnings presentation, May 2017
Slide 1: Investor Presentation May 2017
Investor Presentation May 2017
Slide 2: Table of Contents
Table of Contents Overview 3 Real Estate Portfolio 11 Results and Balance Sheet 16 Strategic Initiatives 23 Legal Notices 25 2
Slide 3: Overview
Overview 3
Slide 4: The GNL Advantage
The GNL Advantage Best in Class Portfolio • 312 properties with long duration leases to largely Investment Grade Rated(1) tenants • Mission critical assets that are strategically important to tenants’ core operating businesses Differentiated Strategy • Focus on well-established markets in U.S. and E
Slide 5: Real Estate Strategy – A Focus on Quality
Real Estate Strategy – A Focus on Quality GNL is focused on the continued development of its best-in-class portfolio of assets leased to largely investment grade tenants in well established markets in the U.S. and Europe, including: • Multinational corporations with long operating histories & succes
Slide 6: Company Highlights
Company Highlights High-Quality, • Diversified by asset type, geography, tenant and industry Diversified Net Lease • Focus on single tenant, net lease, income producing, mission critical assets in the U.S., U.K., Germany, The Portfolio Netherlands, France, Finland and Luxembourg Strong, • Investment
Slide 7: Q1 2017 Accomplishments
Q1 2017 Accomplishments GNL continues to build on its 2016 momentum Completed integration of ARC Global Trust II properties into current portfolio Paid off remaining €52.7 million balance of Mezzanine Facility Completed $30.3 million in acquisitions of U.S. distribution assets Closed sale of a U.S.
Slide 8: Global Net Lease U.S. Portfolio Europe Portfolio
Business Model Global Net Lease U.S. Portfolio Europe Portfolio Number of Assets: 243 Number of Assets: 69 Remaining Lease Term: 9.1 years(1) Remaining Lease Term: 10.0 years(1) % of GNL SLR: 50.6%(2) % of GNL SLR: 49.4%(2) (1) Refer to basis for metric calculation included in the footnotes to page
Slide 9: GNL Timeline
GNL Timeline December 22, 2016: GNL June 2, 2015: GNL acquires ARC Global Trust II, Inc. June 18, 2014: GNL lists on the NYSE completes targeted October 30, 2012: GNL makes equity raise its first acquisition – a McDonalds in the U.K. June 24, 2016: GNL is added to the Russell 2000® and Russell 3000®
Slide 10: GNL vs. Peers (as of March 31, 2017)
GNL vs. Peers (as of March 31, 2017) Geographic Breakdown(1) Average Remaining Lease Term (Years)(3) Peer Average: 9.6 years 100% 2% 12.0 11.4 10.6 9.9 9.7 9.6 9.5 33% 10.0 8.8 80% 49% 8.0 7.5 60% 98% 100% 100% 100% 100% 100% 6.0 40% 67% 4.0 51% 20% 2.0 0% 0.0 (2) GNL WPC GPT O SIR SRC NNN LXP NNN S
Slide 11: Real Estate Portfolio
Real Estate Portfolio 11
Slide 12: Portfolio Highlights
Portfolio Highlights Portfolio Overview Top Ten Tenants Properties 312 Investment Tenant Grade Country Property Type % of SLR (2) Square Feet (millions) 22.2 Rating(1) Tenants 94 Baa2** U.S. Distribution 5% Industries 40 Aaa** U.S. Office 5% Countries 7 Leased 100% Ba3** U.K. Office 4% Weighted Aver
Slide 13: First Quarter Portfolio Activity
First Quarter Portfolio Activity Acquisitions: Three distribution assets Two Pack Property Type: Distribution Property Type: Distribution Industry: Food/Beverage Distribution Industry: Freight Location: Sikeston, MO Location: Great Falls, MT and Morgantown, WV Lease Term: 9.8 years* Lease Term: 9.5
Slide 14: Portfolio Highlights (as of March 31, 2017)
Portfolio Highlights (as of March 31, 2017) Credit Rating (1) (2) Geography (1) Actual United Kingdom Not Rated Investment 21.8% 3.3% Grade 32.3% Non USA Investment 50.6% Actual and Implied Germany Grade Investment Grade: 8.2% 20.0% 76.7% Luxembourg 2.0% France Implied 5.0% Investment The Netherland
Slide 15: Retail Portfolio Management
Retail Portfolio Management The GNL portfolio is actively managed to reduce risk and curated to enhance shareholder value over the long term. GNL completed an asset recycling program in Q1 2017 that, coupled with ARC Global Trust II and other recent property acquisitions, has reduced GNL’s retail ex
Slide 16: Results & Balance Sheet
Results & Balance Sheet 16
Slide 17: Q1 2017 Results
Q1 2017 Results Earnings Metrics Future Minimum Lease Rents(3) $805.7 Q1 2017 Q1 2016 % Change $800 $700 Net Income Attributable to $7.4 million $6.5 million +13.8% $600 $876 million due in rent Stockholders through 2020 $500 Net Operating Income $400 $55.6 million $49.3 million +12.7% (NOI) $300 $2
Slide 18: Q1 2017 Debt Overview
Q1 2017 Debt Overview Debt by Currency(4) Debt Metrics as of March 31, 2017 Floating rate Net Debt-to-Enterprise Value(1) 46.5% 24% USD GBP 19% Net Debt to Adjusted EBITDA 34% 7.2 x (annualized)(1)(2) Interest Coverage Ratio(3) 4.6 x Fixed Rate EUR 76% 47% Weighted Average Interest Rate 2.7% $800 Ca
Slide 19: Comprehensive Hedging Program
Comprehensive Hedging Program GNL continues to employ a comprehensive hedging program, with a number of components designed to limit the impact of currency and interest rate movements to its European portfolio Hedging Foreign Currency Exchange Risk (“Cash Flow Hedging Instruments”) Provides prot
Slide 20: Balance Sheet
Balance Sheet As of March 31, 2017 (in Millions) Assets Total real estate investments, net $ 2,723.2 Cash and cash equivalents 72.4 Other Assets 102.0 Total Assets $ 2,897.6 Liabilities & Equity Mortgage notes payable, net(1) (Weighted-average interest rate of 2.8%) $ 758.6 Credit facility (Effectiv
Slide 21: Non – GAAP Reconciliations
Non – GAAP Reconciliations Three Months Ended (In thousands) Mar 31, 2017 Mar 31, 2016 EBITDA: Net income $ 7,450 $ 6,558 Depreciation and amortization 27,114 23,756 Interest expense 11,531 10,569 Income tax expense 906 550 EBITDA $ 47,001 $ 41,433 Adjusted EBITDA: Equity based compensation $ 16 $ 1
Slide 22: Non – GAAP Reconciliations
Non – GAAP Reconciliations Three Months Ended (In thousands, except per share data) Mar 31, 2017 Mar 31, 2016 Funds from operations (FFO): Net income attributable to stockholders (in accordance with GAAP) $ 7,429 $ 6,488 Depreciation and amortization 27,114 23,756 Gains on dispositions of real estat
Slide 23: 2017 Strategic Initiatives
2017 Strategic Initiatives 23
Slide 24: 2017 Priorities
2017 Priorities Restructure debt stack to extend maturities & enhance flexibility Position GNL to secure an investment-grade credit rating Asset purchases of $150 - $200 million Asset dispositions of $50 - $75 million Increase institutional shareholders and research analyst coverage 24
Slide 25: Legal Notices
Legal Notices 25
Slide 26: Forward Looking Statements
Forward Looking Statements Certain statements made in this presentation are “forward-looking statements” (as defined in Section 21E of the Exchange Act), which reflect the expectations of GNL regarding future events. The forward-looking statements involve a number of risks, uncertainties and other
Slide 27: Risk Factors
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. See the section entitled “Item 1A. Risk Factors” in GNL’s Annual Report on
Slide 28: Risk Factors (Continued)
Risk Factors (Continued) We may not generate cash flows sufficient to pay dividends to our stockholders, as such, we may be forced to borrow at unfavorable rates or depend on the Advisor to waive reimbursement of certain expense and fees to fund our operations. There is no assurance that the Advis
Slide 29: Projections
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 presentation
Slide 30: Definitions
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 appro
Slide 31: Definitions (Continued)
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 subsequent t
Slide 32: Definitions (Continued)
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 fluctua