Global Net Lease, Inc. · NYSE:GNL
Global Net Lease — Investor Presentation (May 2017)
32 slides from Global Net Lease's investor presentation, May 18, 2017
Slide 1: May 2017 Investor Presentation
May 2017 Investor Presentation
Slide 2: Table of Contents
Table of Contents 2 Overview 3 Real Estate Portfolio 11 Results and Balance Sheet 16 Strategic Initiatives 23 Legal Notices 25
Slide 3: Overview
Overview 3
Slide 4: The GNL Advantage
The GNL Advantage 4 • 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 Best in Class Portfolio • Focus on well - established markets in U . S . and Europe defined
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 & su
Slide 6: Company Highlights
Company Highlights 6 High - Quality, Diversified Net Lease Portfolio Strong, Creditworthy Tenant Base with Attractive Lease Term Global Investment Strategy Experienced Management Team Flexible Balance Sheet • Diversified by asset type, geography, tenant and industry • Focus on single tenant, net lea
Slide 7: Q1 2017 Accomplishments
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. suburban office building for $13.0 million Added Jim Nelson as the
Slide 8: Business Model
Business Model 8 Global Net Lease U.S. Portfolio Number of Assets: 243 Remaining Lease Term: 9.1 years (1) % of GNL SLR: 50.6% (2) Europe Portfolio Number of Assets: 69 Remaining Lease Term: 10.0 years (1) % of GNL SLR: 49.4% (2) (1) Refer to basis for metric calculation included in the footnotes to
Slide 9: GNL Timeline
GNL Timeline October 30, 2012: GNL makes its first acquisition – a McDonalds in the U.K. 2013 June 18, 2014: GNL completes targeted equity raise 2014 2015 2016 2017 December 31 2014: GNL fully deploys offering proceeds November 30, 2015: GNL is added to the MSCI US REIT equity index December 22, 201
Slide 10: GNL vs. Peers
GNL vs. Peers (as of March 31, 2017) 51% 67% 98% 100% 100% 100% 100% 100% 0% 20% 40% 60% 80% 100% GNL WPC GPT O SIR SRC NNN LXP U.S. Europe 49% Geographic Breakdown (1) 11.4 10.6 9.9 9.7 9.6 9.5 8.8 7.5 0.0 2.0 4.0 6.0 8.0 10.0 12.0 NNN SRC SIR O WPC GNL LXP GPT Average Remaining Lease Term (Years)
Slide 11: Real Estate Portfolio
Real Estate Portfolio 11
Slide 12: Portfolio Highlights
2% 2% 7% 11% 26% 14% 38% 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026-2039 Portfolio Highlights 12 Portfolio Overview As of March 31, 2017. *Represents Moody’s Implied Rating. ** Represents Tenant Parent Rating. 1. Refer to Investment Grade Rating definition included in the footnotes to page 4.
Slide 13: First Quarter Portfolio Activity
First Quarter Portfolio Activity 13 Dispositions: One suburban office asset Acquisitions: Three distribution assets *As of 3/31/2017 **As of 12/31/2016 Two Pack Property Type: Distribution Industry: Freight Location: Great Falls, MT and Morgantown, WV Lease Term: 9.5 years* Credit Rating: Parent - B
Slide 14: Portfolio Highlights (as of March 31, 2017)
Portfolio Highlights (as of March 31, 2017) 14 1. Metric based on SLR. Refer to SLR definition included in the footnotes to page 6. 2. Refer to Investment Grade Rating definition included in the footnotes to page 4. Credit Rating (1) (2) Tenant Industry (1) USA 50.6% United Kingdom 21.8% Germany 8.2
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 Q1 2017 Q1 2016 % Change Net Income Attributable to Stockholders $7.4 million $6.5 million +13.8% Net Operating Income (NOI) $55.6 million $49.3 million +12.7% AFFO (1) $34.5 million $32.3 million +6.8% Weighted Average Shares Outstanding 66.3 million 56.3 million (2
Slide 18: Q1 2017 Debt Overview
Q1 2017 Debt Overview Debt Metrics as of March 31, 2017 Net Debt - to - Enterprise Value (1) 46.5% Net Debt to Adjusted EBITDA (annualized) (1)(2) 7.2 x Interest Coverage Ratio (3) 4.6 x Weighted Average Interest Rate 2.7% Debt by Currency (4) 1. Enterprise value is calculated based on $24.08 per sh
Slide 19: Comprehensive Hedging Program
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
Slide 20: Balance Sheet
Balance Sheet 20 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 (Ef
Slide 21: Non-GAAP Reconciliations
Non – GAAP Reconciliations 21 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
Slide 22: Non-GAAP Reconciliations
Non – GAAP Reconciliations 22 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 es
Slide 23: 2017 Strategic Initiatives
2017 Strategic Initiatives 23
Slide 24: 2017 Priorities
2017 Priorities 24 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
Slide 25: Legal Notices
Legal Notices 25
Slide 26: Forward Looking Statements
Forward Looking Statements 26 Certain statements made in this presentation are “forward - looking statements” (as defined in Section 21 E of the Exchange Act), which reflect the expectations of GNL regarding future events . The forward - looking statements involve a number of risks, uncertainties
Slide 27: Risk Factors
Risk Factors 27 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 1 A . Risk Factors” in GNL’s Annual Re
Slide 28: Risk Factors (Continued)
Risk Factors (Continued) 28 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 A
Slide 29: Projections
Projections 29 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 30: Definitions
Definitions 30 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 31: Definitions (Continued)
Definitions (Continued) 31 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 32: Definitions (Continued)
Definitions (Continued) 32 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 flu