Global Net Lease, Inc. · NYSE:GNL
Global Net Lease — Q2 2019 Earnings Presentation
27 slides from Global Net Lease's earnings presentation, Aug 7, 2019
Slide 1: Global Net Lease Second Quarter Investor Presentation
Global Net Lease Second 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 288 Square Feet (millions) 28.3 Tenants 119 Industries 48 Countries 7 Leased 99.6% Weighted - Average Remaining Lease Term (1) 8.0 years % of SLR derived from Investment Grade Tenants (2)(3) 72.2% % of leases with contractual rent increases (4) 92.2% Portfolio Overv
Slide 4: Well Balanced Portfolio
4 Non Investment Grade 25.6% Investment Grade 72.2% Not Rated 2.2% WELL BALANCED PORTFOLIO As of June 30, 2019 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) Te
Slide 5: Well Diversified Tenant Base
5 Tenant Rating Country Property Type % of SLR (1) Baa2** U.S. Distribution 5% Aaa** U.S. Office 4% Baa3* GER Office 4% Baa2* U.K. Office 4% Aa3 NETH Office 3% Aa1** FIN Industrial 3% Baa2 U.S. Distribution 3% Ba1* U.S. Industrial 3% Aa3 U.S. Office 2% A3 U.K. Distribution 2% WELL DIVERSIFIED TENANT
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: Acquisitions Overview
8 *Represents Moody’s Implied Rating. ** Represents Tenant Parent Rating even if not a guarantor on the lease . 1. Subsequent to June 30, 2019, the Company has closed on six properties all located in the United States for $48.7 million. As of August 7, 2019, the Company has signed two definitive pur
Slide 9: Geographic Balance (As of June 30, 2019)
9 GEOGRAPHIC BALANCE (AS OF JUNE 30, 2019) 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. Number of Assets: 220 Weighted - Average Remaining Lease Term: 8.1 years (1) % of GNL SLR
Slide 10: Portfolio Comparison: Q2 2019 vs Q2 2018
10 Office 53% Industrial/Distribution 41% Retail 6% PORTFOLIO COMPARISON: Q2 2019 VS Q2 2018 Continued Focus towards United States Industrial and Distribution Properties Office 56% Industrial/Distribution 35% Retail 9% United States 51% Europe 49% Property Type Concentration (1) Geographic Concentra
Slide 11: Second Quarter Acquisition: Encompass Health
11 1. Tenant’s actual credit rating. Refer to Investment Grade Rating definition included in the footnotes on page 2 and page 3. Transaction Overview Tenant Encompass Health Corporation Property Type Office Credit Rating (1) S&P: BB - Moody’s: Ba3 Location Birmingham, AL Square Feet 199,305 Lease Te
Slide 12: Second Quarter Acquisition: ComDoc, Inc.
12 Transaction Overview SECOND QUARTER ACQUISITION: COMDOC, INC. Property and Tenant Overview Tenant ComDoc, Inc. Property Type Distribution Credit Rating (1) S&P: Guarantor: N/A Moody’s: Parent/Guarantor Implied : Ba3 Location North Canton, OH Square Feet 107,500 Lease Term (years) 10.0 Tenant • Th
Slide 13: Fully Aligned Management Structure
13 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 14: GNL Capital Structure
14 GNL CAPITAL STRUCTURE GNL continued to improve its capital structure during the second 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 15: Performance Metrics
15 PERFORMANCE METRICS 1. See page 8 for further details. 2. Adjusted Funds from Operations (“AFFO”). See “Non - GAAP measures” on pages 26 for a description of AFFO and pages 27 for a reconc iliation of AFFO to net income, the most directly comparable GAAP Financial measure. 3. On April 5, 2019, th
Slide 16: Debt Overview
16 $181 $50 $12 $351 $706 $260 $280 $- $100 $200 $300 $400 $500 $600 $700 $800 2019 2020 2021 2022 2023 Thereafter Mortgages Line of Credit 0% 0.4% 1.1% 5.5% 8.9% 21.2% 11.5% 7.2% 2.6% 41.6% DEBT OVERVIEW Net Debt to Enterprise Value (1) 48.0% Net Debt to Adjusted EBITDA (annualized) (2) 7.1x Intere
Slide 17: Comprehensive Hedging Program
17 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 18: Forward-looking statements
18 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 19: Risk Factors
19 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 20: Risk Factors (Continued)
20 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 21: Projections
21 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 22: Definitions
22 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 23: Definitions (Continued)
23 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 24: Definitions (Continued)
24 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 25: Non-GAAP Reconciliations
25 NON – GAAP RECONCILIATIONS Three Months Ended June 30, 2019 March 31, 2019 December 31, 2018 September 30, 2018 EBITDA: Net income (loss) $ 15,328 $ 8,276 $ (4,290) $ 2,632 Depreciation and amortization 31,084 31,303 30,078 30,195 Interest expense 15,689 15,162 15,479 15,104 Income tax expense 78
Slide 26: FFO and AFFO Reconciliations
26 FFO AND AFFO RECONCILIATIONS Three Months Ended June 30, 2019 March 31, 2019 December 31, 2018 September 30, 2018 June 30, 2018 Funds from operations (FFO): Net income (loss) attributable to common stockholders (in accordance with GAAP) $ 12,621 $ 5,791 $ (6,744) $ 177 $ 5,288 Impairment charges
Slide 27: Investor Inquiries
INVESTOR INQUIRIES 1 - 866 - 902 - 0063 investorrelations@globalnetlease.com www.GlobalNetLease.com