Global Net Lease, Inc. · NYSE:GNL
Global Net Lease — Q3 2020 Earnings Presentation
32 slides from Global Net Lease's earnings presentation, Nov 5, 2020
Slide 1: Global Net Lease Third Quarter 2020 Investor Presentation
Global Net Lease Third Quarter 2020 Investor Presentation
Slide 2: Company Highlights
COMPANY HIGHLIGHTS High - Quality, Mission Critical, Net Lease Focused Portfolio : High portfolio occupancy of 99.6% coupled with robust third quarter Cash Rent collection of 97% (1) , highlighting strong overall operating performance 1 Strong Balance Sheet: Minimal near - term maturing debt with am
Slide 3: Portfolio Highlights
3 PORTFOLIO HIGHLIGHTS Properties 299 Square Feet (millions) 34.7 Tenants 127 Industries 47 Countries 10 Leased 99.6% Weighted - Average Remaining Lease Term (1) 8.7 years % of SLR derived from Investment Grade Tenants (2)(3) 65.1% % of leases with contractual rent increases (4) 93.4% Portfolio Over
Slide 4: Strong Cash Rent Collection
4 Approved … Other (4) 2% Total Paid 97% Total Paid 99% Approved Agreement 1% Approved Agreement 1% Total Paid 99% Approved … Agreement … Other 2% Total Paid 96% STRONG CASH RENT COLLECTION Mission critical industrial and distribution assets and high Investment Grade rated tenancy (1) continues to s
Slide 5: 99% Collected from Top Twenty Tenants
5 99% COLLECTED FROM TOP TWENTY TENANTS Collected 99% of third quarter original Cash Rent due from top twenty Tenants (1) , representing 49% of annual Cash Rent (2) Top Twenty Tenants Tenant Investment Grade Rating Country % of Q3’2020 Cash Rent Paid Annualized Cash Rent % Portfolio (2) Tenant Indus
Slide 6: Well Balanced Portfolio Supports Continued Growth
6 WELL BALANCED PORTFOLIO SUPPORTS CONTINUED GROWTH As of September 30, 2020. 1. Metric based on SLR . Refer to SLR definition included in the footnotes on page 3. 2. Refer to Investment Grade Rating definition included in the footnotes on page 2. Credit Rating (1) Tenant Industry (1) Geography (1)
Slide 7: Attractive Portfolio in Line with Investment Grade Rated Peers
7 ATTRACTIVE PORTFOLIO IN LINE WITH INVESTMENT GRADE RATED PEERS Well - positioned, diversified portfolio with quality tenants as compared to investment grade rated peers Weighted - average Remaining Lease Term Occupancy Percentage Investment Grade Tenants (1) Cash Rent Collection Q3'2020 (2) 10.7 8
Slide 8: Well Diversified Tenant Base
8 Tenant Rating Country Property Type % of SLR (1) Baa2** U.S. / Canada Distribution 4% Baa1* U.S. / Italy Industrial / Distribution 4% Aaa** U.S. Office 4% Baa3* U.K. Office 3% Aa3 NETH Office 3% Baa2 U.S. Distribution 3% Aa1** FIN Industrial 3% Ba1* U.S. Industrial 3% Aa3 U.K. Distribution 2% Aa3*
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 Spain Italy AA+ AAA AAA AAA AAA AA+ AA AA A BBB Moody’s: A1 Moody’s: Aaa Moody’s: Aa3 Moody’s: Aa3 Moo
Slide 10: Differentiated Investment Strategy
10 DIFFERENTIATED INVESTMENT STRATEGY Geography Asset Type Property Fundamentals Credit Quality Structure and Pricing • Focus on U.S. and strong sovereign debt rated countries in Continental Europe • Strategically located industrial and distribution facilities • Mission critical, single tenant net l
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: Global Geographic Balance
12 GLOBAL GEOGRAPHIC BALANCE Note: Metrics as of September 30, 2020 unless otherwise noted. 1. Refer to basis for metric calculation included in the footnotes on page 3. 2. Metric based on SLR. Refer to SLR definition included in the footnotes on page 3. U.S. and Canada Number of Assets: 231 Weighte
Slide 13: Portfolio Enhancement
13 Office 52% Industrial/Distribution 43% Retail 5% United States & Canada 63% Europe 37% Office 48% Industrial/Distribution 47% Retail 5% PORTFOLIO ENHANCEMENT Continued Focus towards United States Industrial and Distribution Properties United States 59% Europe 41% Property Type Concentration (1) G
Slide 14: Transaction Overview: Johnson Controls
14 Transaction Overview Tenant Johnson Controls, Inc. Property Type Office(87%)/Distribution(13%) Credit Rating S&P: BBB+ Moody’s: Baa2 Locations Manchester, UK (2), Paris, France (1), Madrid, Spain (1) Lease Term (years) 12.0 Closed Q3’2020 Square Feet 128,759 Purchase Price ($ mm) $23.4 Expected t
Slide 15: Management and AR Global Alignment
15 James L. Nelson Chief Executive Officer and President Chief Financial Officer, Treasurer and Secretary 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 sponsored or co
Slide 16: Third Quarter 2020 Key Highlights
16 Third Quarter 2020 Key Highlights • Closed on over $168 million of acquisitions through the third quarter plus an additional pipeline of $158 million to be acqui red at a weighted average cap rate of 7.0% (1) • Year - to - date acquisitions reflect managements ability to generate high - quality g
Slide 17: Continued Focus on Driving Earnings Growth
17 CONTINUED FOCUS ON DRIVING EARNINGS GROWTH Historical Revenue Growth Core Funds From Operations (2) Real Estate Assets at Cost Adjusted Funds From Operations (2) $2,546 $2,932 $3,173 $3,421 $3,763 $3,951 1/1/2015 $205 $214 $259 $282 $306 $324 2015 2016 2017 2018 2019 YTD 2020 annualized $ in mill
Slide 18: Key Metrics
18 0% 1% 5% 7% 13% 9% 6% 2% 57% KEY METRICS Metric Q3’2020 Net Debt to Enterprise Value (1) 51.8% Net Debt to Adjusted EBITDA (annualized) (2) 7.2x Interest Coverage Ratio (3) 3.8x Weighted - Average Interest Rate (4) 3.1% Weighted - Average Debt Maturity (5) 5.1 Years Floating Rate / Fixed Rate (6)
Slide 19: Enhanced Capital Structure
19 5.8 5.4 5.2 5.1 3.0% 3.1% 3.2% 3.1% 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 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Weighted-Average Maturity Weighted-Average Interest Rate $1,814 $1,814 $1,497 $1,425 $268 $268 $244 $267 $1,287 $1,249 $1,303 $1,418 $602 $790 $744 $681
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 September 30, 2020 September 30, 2019 EBITDA: Net income (loss) $ 4,142 $ 9,941 Depreciation and amortization 35,049 31,620 Interest expense 18,677 16,154 Income tax expense 862 940 EBITDA 58,730 58,655 Impairment charges and relates lease intangible
Slide 29: FFO and AFFO Reconciliations
29 FFO AND AFFO RECONCILIATIONS Three Months Ended September 30, 2020 September 30, 2019 Funds from operations (FFO): Net (loss) income attributable to common stockholders (in accordance with GAAP) $ (502) $ 6,860 Impairment charges — 6,375 Depreciation and amortization 35,049 31,620 Gain (loss) on
Slide 30: FFO and AFFO Reconciliations
30 FFO AND AFFO RECONCILIATIONS Three Months Ended March 31, 2020 June 30, 2020 Funds from operations (FFO): Net income attributable to common stockholders (in accordance with GAAP) $ 5,038 966 Impairment charges — — Depreciation and amortization 33,533 33,394 Gain (loss) on dispositions of real est
Slide 31: Annual FFO and AFFO Reconciliations
31 ANNUAL FFO AND AFFO RECONCILIATIONS Twelve Months Ended December 31, 2015 December 31, 2016 December 31, 2017 December 31, 2018 December 31, 2019 Funds from operations (FFO): Net income (loss) attributable to common stockholders (in accordance with GAAP) $ (2,065) 47,140 20,731 1,082 34,535 Impai
Slide 32: Investor Inquiries
INVESTOR INQUIRIES 1 - 866 - 902 - 0063 investorrelations@globalnetlease.com www.GlobalNetLease.com