Global Net Lease, Inc. · NYSE:GNL
Global Net Lease — Q1 2019 Earnings Presentation
28 slides from Global Net Lease's earnings presentation, May 9, 2019
Slide 1: Global Net Lease First Quarter Investor Presentation
Global Net Lease First Quarter Investor Presentation
Slide 2: Overview: Differentiated Strategy with International Exposure
2 OVERVIEW Differentiated Strategy with International Exposure 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 pa
Slide 3: Portfolio Highlights
3 PORTFOLIO HIGHLIGHTS Properties 343 Square Feet (millions) 27.4 Tenants 112 Industries 45 Countries 7 Leased 99.5% Weighted - Average Remaining Lease Term (1) 8.1 years % of SLR derived from Investment Grade Tenants (2)(3) 75.7% % of leases with contractual rent increases (4) 92% Portfolio Overvie
Slide 4: Well Balanced Portfolio
4 Non Investment Grade 21.9% Investment Grade 75.7% Not Rated 2.4% Industrial/Distribution 39% Retail 8% Office 53% WELL BALANCED PORTFOLIO As of March 31, 2019 1. Metric based on SLR. Refer to SLR definition included in the footnotes to page 3. 2. Refer to Investment Grade Rating definition include
Slide 5: Well Diversified Tenant Base: Top Ten Tenants
5 Tenant Rating Country Property Type % of SLR (1) Baa2** U.S. Distribution 5% Aaa** U.S. Office 4% Baa2* 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% A3 U.K. Distribution 2% WELL DIVERSIFIED TENA
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: Current Deployment Timing
8 $154.5 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 $200 Robust pipeline of acquisitions funded from equity proceeds raised in the first quarter CURRENT DEPLOYMENT TIMING 1. See page 9 for further details 2. Refer to Average Cap Rate definition incl
Slide 9: Current Acquisitions & Capital Deployment Timing
9 CURRENT ACQUISITIONS (1) & CAPITAL DEPLOYMENT TIMING *Represents Moody’s Implied Rating. ** Represents Tenant Parent Rating. 1. The Company has signed five definitive purchase and sale agreements (“PSAs”) to acquire a total of eight net lease properties , a ll of which are located in the United St
Slide 10: Geographic Balance
10 GEOGRAPHIC BALANCE (AS OF MARCH 31, 2019) 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: 274 Weighted - Average Remaining Lease Term: 8.2 years (1) % of GNL S
Slide 11: Portfolio Comparison: Q1 2019 vs Q1 2018
11 Office 53% Industrial/Distribution 39% Retail 8% PORTFOLIO COMPARISON: Q1 2019 VS Q1 2018 Continued Focus towards United States Industrial and Distribution Properties Office 58% Industrial/Distribution 33% Retail 9% United States 49% Europe 51% Property Type Concentration (1) Geographic Concentra
Slide 12: First Quarter Acquisition: Cummins, Inc.
12 FIRST QUARTER ACQUISITION: CUMMINS, INC. Property and Tenant Overview Tenant Cummins, Inc. Property Type Industrial Credit Rating (1) S&P: A+ Moody's: A2 Location Gillette, WY Square Feet 36,720 Lease Term (years) 9.7 Tenant • The Tenant is a Fortune 500 company that specializes in the design and
Slide 13: Acquisition: Stanley Convergent Security Solutions
13 • Stanley Black & Decker, the Parent, has an investment grade credit rating of “A” and “Baa1” from S&P and Moody’s respectively. (1) • The lease contains annual rent escalators of 0.5%. Transaction Overview Tenant Stanley Convergent Security Solutions, Inc. Property Type Office Credit Rating (1)
Slide 14: Fully Aligned Management Structure
14 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 15: GNL Capital Structure
15 GNL CAPITAL STRUCTURE GNL continued to improve its capital structure during the first quarter of 2019 by extending debt maturities, maintaining a low cost of debt and optimizing the debt structure for continued future growth Debt Maturity and Interest Expense by Quarter (1) GNL Capital Structure
Slide 16: Performance Metrics
16 PERFORMANCE METRICS 1. See page 9 for further details 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 AFFO to net income, the most directly comparable GAAP Financial measure. Q1 2019 Q1 2018
Slide 17: Debt Overview
17 0% 0.4% 1.2% 5.7% 9.2% 21.9% 12.0% 7.5% 2.7% 39.4% DEBT OVERVIEW Net Debt to Enterprise Value (1) 47.8% Net Debt to Adjusted EBITDA (annualized) (2) 6.9x Interest Coverage Ratio (3) 4.3x Weighted - Average Interest Rate (4) 3.0% Weighted - Average Debt Maturity 4.2 Years Floating Rate / Fixed Rat
Slide 18: Comprehensive Hedging Program
18 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 19: Forward-Looking Statements
19 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 20: Risk Factors
20 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 21: Risk Factors (Continued)
21 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 a
Slide 22: Projections
22 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 23: Definitions
23 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 24: Definitions (Continued)
24 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 25: Definitions (Continued)
25 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 26: Non-GAAP Reconciliations
26 NON – GAAP RECONCILIATIONS Three Months Ended March 31, 2019 December 31, 2018 September 30, 2018 June 30, 2018 EBITDA: Net income (loss) $ 8,276 $ (4,290) $ 2,632 $ 7,743 Depreciation and amortization 31,303 30,078 30,195 29,813 Interest expense 15,162 15,479 15,104 14,415 Income tax expense (be
Slide 27: FFO and AFFO Reconciliations
27 FFO AND AFFO RECONCILIATIONS Three Months Ended March 31, 2019 December 31, 2018 September 30, 2018 June 30, 2018 March 31, 2018 Funds from operations (FFO): Net income (loss) attributable to common stockholders (in accordance with GAAP) $ 5,791 $ (6,744) $ 177 $ 5,288 $ 2,361 Impairment charges
Slide 28: Investor Inquiries
INVESTOR INQUIRIES 1 - 866 - 902 - 0063 investorrelations@globalnetlease.com www.GlobalNetLease.com