Global Net Lease, Inc. · NYSE:GNL
Global Net Lease — Q1 2020 Earnings Presentation
30 slides from Global Net Lease's earnings presentation, May 6, 2020
Slide 1: Global Net Lease First Quarter 2020 Investor Presentation
Global Net Lease First Quarter 2020 Investor Presentation
Slide 2: Corporate Update
2 CORPORATE UPDATE □ Resilient Portfolio Built for Success: We believe the financial strength, creditworthiness of our tenants and diversity within our portfolio will offset the potential effects of this crisis in the short and long - term. Although we are likely still in the early stages of this ec
Slide 3: April Cash Rent Collection
3 Approved Deferral Agreement 1% Total Paid … Other (2) < 1% Deferral in … Approved Deferral Agreement (4) 1% Total … Other < 1% Deferral in … Approved Deferral Agreement 2% Total … APRIL CASH RENT COLLECTION GNL collected 98% of April Cash Rent helped by our balance of mission critical industrial a
Slide 4: Top Twenty Tenants
4 TOP TWENTY TENANTS GNL received 100% of April Cash Rent due from the Company’s top twenty Tenants (1) , representing 48% of the Company’s annual base rent (2) Top Twenty Tenants Tenant Investment Grade Rating Country % of April Cash Rent Paid Annual Base Rent % Portfolio (2) Tenant Industry FedEx
Slide 5: Overview
5 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 6: Portfolio Highlights
6 PORTFOLIO HIGHLIGHTS Properties 288 Square Feet (millions) 34.2 Tenants 126 Industries 46 Countries 9 Leased 99.6% Weighted - Average Remaining Lease Term (1) 9.0 years % of SLR derived from Investment Grade Tenants (2)(3) 66.7% % of leases with contractual rent increases (4) 93.7% Portfolio Overv
Slide 7: Well Balanced Portfolio
7 Non Investment Grade 33% Investment Grade 67% WELL BALANCED PORTFOLIO As of March 31, 2020. 1. Metric based on SLR . Refer to SLR definition included in the footnotes on page 6. 2. Refer to Investment Grade Rating definition included in the footnotes on page 5. Credit Rating (1) Tenant Industry (1
Slide 8: Well Diversified Tenant Base
8 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% Baa2 U.K. Office 3% Aa3 NETH Office 3% Baa2 U.S. Distribution 3% Ba1* U.S. Industrial 3% Aa1** FIN Industrial 3% Aa3 U.S. Office 2% Aa3 U.K. Di
Slide 9: Focus on High-Quality Tenants
9 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 10: Differentiated Investment Strategy
10 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 • Mi
Slide 11: Acquisitions
11 *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 12: Geographic Balance
12 GEOGRAPHIC BALANCE (AS OF MARCH 31, 2020) 1. Refer to basis for metric calculation included in the footnotes on page 6. 2. Metric based on SLR. Refer to SLR definition included in the footnotes on page 6. U.S. and Canada Number of Assets: 223 Weighted - Average Remaining Lease Term: 9.5 years (1)
Slide 13: Portfolio Comparison: Q1 2020 vs Q1 2019
13 Office 48% Industrial/Distribution 47% Retail 5% PORTFOLIO COMPARISON: Q1 2020 VS Q1 2019 Continued Focus towards United States Industrial and Distribution Properties Office 53% Industrial/Distribution 39% Retail 8% United States 56% Europe 44% Property Type Concentration (1) Geographic Concentra
Slide 14: First Quarter Acquisition: Central States Thermo King
14 Transaction Overview FIRST QUARTER ACQUISITION: CENTRAL STATES THERMO KING, INC. Property and Tenant Overview Tenant Central States Thermo King of St. Louis, LLC Property Type Distribution/Industrial Credit Rating (1) S&P: Not Rated Moody’s: Implied: B2 Location MO Square Feet 56,029 Lease Term (
Slide 15: Transaction Overview: FedEx Ground
15 Transaction Overview (1) Tenant FedEx Ground Package Systems, Inc. Property Type Distribution Credit Rating S&P: Parent: BBB Moody’s: Parent: Baa2 Location New Brunswick, CA (3) Square Feet 48,798 Lease Term (years) 18.2 Tenant • The Tenant, FedEx Ground Package Systems, Inc., is a wholly owned s
Slide 16: Fully Aligned Management Structure
16 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 17: GNL Capital Structure
17 $1,645 $1,744 $1,814 $1,814 $152 $171 $268 $268 $1,300 $1,382 $1,287 $1,249 $540 $494 $602 $790 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Common Equity Preferred Equity Mortgage Debt Credit Facility GNL CAPITAL STRUCTURE GNL increased the Comp
Slide 18: Q1 2020 Key Highlights
18 Q1 2020 Key Highlights • First quarter acquisitions of $113.9 million plus Q2’2020 pipeline of $56.8 million to be acquired at a weighted average cap rat e of 8.8% (1) • Collected 98% of April Cash Rent due including 100% of April Cash Rent due from the Company’s top twenty tenants (2) , represen
Slide 19: Debt Overview
19 0% 2% 8% 8% 15% 12% 7% 3% 45% DEBT OVERVIEW Metric Q1’20 Net Debt to Enterprise Value (1) 55.0% Net Debt to Adjusted EBITDA (annualized) (2) 7.1x Interest Coverage Ratio (3) 4.1x Weighted - Average Interest Rate (4) 3.1% Weighted - Average Debt Maturity (5) 5.4 Years Floating Rate / Fixed Rate (6
Slide 20: Comprehensive Hedging Program
20 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 21: Forward-Looking Statements
21 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 22: Risk Factors
22 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 23: Risk Factors (Continued)
23 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 24: Projections
24 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 25: Definitions
25 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 26: Definitions (Continued)
26 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 27: Definitions (Continued)
27 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 28: Non-GAAP Reconciliations
28 NON – GAAP RECONCILIATIONS Three Months Ended March 31, 2020 March 31, 2019 EBITDA: Net income (loss) $ 9,601 $ (8,276) Depreciation and amortization 33,533 31,303 Interest expense 16,440 15,162 Income tax expense 959 960 EBITDA 60,533 55,701 Equity based compensation 2,488 2,109 Acquisition, tra
Slide 29: FFO and AFFO Reconciliations
29 FFO AND AFFO RECONCILIATIONS Three Months Ended March 31, 2020 March 31, 2019 Funds from operations (FFO): Net income (loss) attributable to common stockholders (in accordance with GAAP) $ 5,038 $ 5,791 Depreciation and amortization 33,533 31,303 Gain (loss) on dispositions of real estate investm
Slide 30: Investor Inquiries
INVESTOR INQUIRIES 1 - 866 - 902 - 0063 investorrelations@globalnetlease.com www.GlobalNetLease.com