Please note that totals may not add due to rounding.
Forward-looking Statements:
This supplemental package of Global Net Lease, Inc. (the “Company”) includes “forward looking statements.” These forward-looking statements involve risks and uncertainties that could cause actual results or events to be materially different. The words “anticipates,” “believes,” "expects," “estimates,” “projects,” “plans,” “intends,” “may," "will," "would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside of the Company's control, which could cause actual results to differ materially from the results contemplated by the forward-looking statements. These risks and uncertainties include (a) the potential adverse effects of (i) the ongoing global COVID-19 pandemic, including actions taken to contain or treat COVID-19 and (ii) the geopolitical instability due to the ongoing military conflict between Russia and Ukraine, including related sanctions and other penalties imposed by the U.S., the European Union, and other countries, as well as other public and private actors and companies, on the Company, the Company's tenants and the global economy and financial markets, and (b) that any potential future acquisition is subject to market conditions and capital availability and may not be identified or completed on favorable terms, or at all, as well as those risk and uncertainties set forth in the Risk Factors section of the Company's Annual Report on Form 10-K for the year ended December 31, 2021 filed on February 24, 2022 and all other filings with the Securities and Exchange Commission (the “SEC”) after that date, as such risks, uncertainties and other important factors may be updated from time to time in the Company's subsequent reports. Further, forward looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise any forward-looking statement to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results, unless required to do so by law.
Accounting Treatment of Rent Deferrals
All of the concessions granted to the Company's tenants as a result of the COVID-19 pandemic are rent deferrals with the original lease term unchanged and collection of deferred rent deemed probable. The Company’s revenue recognition policy requires that it must be probable that the Company will collect virtually all of the lease payments due and does not provide for partial reserves, or the ability to assume partial recovery. In light of the COVID-19 pandemic, the FASB and SEC agreed that for leases where the total lease cash flows will remain substantially the same or less than those after the COVID-19 related effects, companies may choose to forgo the evaluation of the enforceable rights and obligations of the original lease contract as a practical expedient and account for rent concessions as if they were part of the enforceable rights and obligations of the parties under the existing lease contract. As a result, rental revenue used to calculate Net Income and NAREIT FFO (as defined below) has not been, and the Company does not expect it to be, significantly impacted by deferrals it has entered into. In addition, since the Company currently believes that these deferral amounts are collectable, it has excluded from the increase in straight-line rent for AFFO (as defined below) purposes the amounts recognized under generally accepted accounting principles (“GAAP”) relating to rent deferrals.
2
Global Net Lease, Inc.
Supplemental Information
Quarter ended March 31, 2022 (Unaudited)
Non-GAAP Financial Measures
This section includes non-GAAP financial measures, including Funds from Operations (“FFO”), Core Funds from Operations (“Core FFO”), Adjusted Funds from Operations (“AFFO”), Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”), Net Operating Income (“NOI”), and Cash Net Operating Income (“Cash NOI”). A description of these non-GAAP measures and reconciliations to the most directly comparable GAAP measure, which is net income, is provided below.
Caution on Use of Non-GAAP Measures
FFO, Core FFO, AFFO, Adjusted EBITDA, NOI, and Cash NOI should not be construed to be more relevant or accurate than the current GAAP methodology in calculating net income or in its applicability in evaluating our operating performance. The method utilized to evaluate the value and performance of real estate under GAAP should be construed as a more relevant measure of operational performance and considered more prominently than the non-GAAP measures.
Other REITs may not define FFO in accordance with the current National Association of Real Estate Investment Trusts (“NAREIT”) definition (as we do), or may interpret the current NAREIT definition differently than we do, or may calculate Core FFO or AFFO differently than we do. Consequently, our presentation of FFO, Core FFO and AFFO may not be comparable to other similarly-titled measures presented by other REITs.
We consider FFO, Core FFO and AFFO useful indicators of our performance. Because FFO, Core FFO and AFFO calculations exclude such factors as depreciation and amortization of real estate assets and gain or loss from sales of operating real estate assets (which can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates), FFO, Core FFO and AFFO presentations facilitate comparisons of operating performance between periods and between other REITs.
As a result, we believe that the use of FFO, Core FFO and AFFO, together with the required GAAP presentations, provide a more complete understanding of our operating performance including relative to our peers and a more informed and appropriate basis on which to make decisions involving operating, financing, and investing activities. However, FFO, Core FFO and AFFO are not indicative of cash available to fund ongoing cash needs, including the ability to make cash distributions. Investors are cautioned that FFO, Core FFO and AFFO should only be used to assess the sustainability of our operating performance excluding these activities, as they exclude certain costs that have a negative effect on our operating performance during the periods in which these costs are incurred. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect the proportionate share of adjustments for non-controlling interest to arrive at FFO, Core FFO and AFFO, as applicable.
Funds from Operations, Core Funds from Operations and Adjusted Funds from Operations
Funds From Operations
Due to certain unique operating characteristics of real estate companies, as discussed below, NAREIT, an industry trade group, has promulgated a measure known as FFO, which we believe to be an appropriate supplemental measure to reflect the operating performance of a REIT. FFO is not equivalent to net income or loss as determined under GAAP.
We calculate FFO, a non-GAAP measure, consistent with the standards established over time by the Board of Governors of NAREIT, as restated in a White Paper approved by the Board of Governors of NAREIT effective in December 2018 (the “White Paper”). The White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding depreciation and amortization related to real estate, gain and loss from the sale of certain real estate assets, gain and loss from change in control and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO. Our FFO calculation complies with NAREIT’s definition.
The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, and straight-line amortization of intangibles, which implies that the value of a real estate asset diminishes predictably over time. We believe that, because real estate values historically rise and fall with market conditions, including inflation, interest rates, unemployment and consumer spending, presentations of operating results for a REIT using historical accounting for depreciation and certain other items may be less informative. Historical accounting for real estate involves the use of GAAP. Any other method of accounting for real estate such as the fair value method cannot be construed to be any more accurate or relevant than the comparable methodologies of real estate valuation found in GAAP. Nevertheless, we believe that the use of FFO, which excludes the impact of real estate related depreciation and amortization, among other things, provides a more complete understanding of our performance to investors and to management, and, when compared year over year, reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs, which may not be immediately apparent from net income.
3
Global Net Lease, Inc.
Supplemental Information
Quarter ended March 31, 2022 (Unaudited)
Core Funds From Operations
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 related to damages at our properties. The purchase of properties, and the corresponding expenses associated with that process, is a key operational feature of our core business plan to generate operational income and cash flows in order to make dividend payments to stockholders. In evaluating investments in real estate, we differentiate the costs to acquire the investment from the subsequent operations of the investment. We also add back non-cash write-offs of deferred financing costs and prepayment penalties incurred with the early extinguishment of debt which are included in net income but are considered financing cash flows when paid in the statement of cash flows. We consider these write-offs and prepayment penalties to be capital transactions and not indicative of operations. By excluding expensed acquisition, transaction and other costs as well as non-core costs, we believe Core FFO provides useful supplemental information that is comparable for each type of real estate investment and is consistent with management’s analysis of the investing and operating performance of our properties.
Adjusted Funds From Operations
In calculating AFFO, we start with Core FFO, then we exclude certain income or expense items from AFFO that we consider more reflective of investing activities, other non-cash income and expense items and the income and expense effects of other activities that are not a fundamental attribute of our business plan. These items include early extinguishment of debt and other items excluded in Core FFO as well as unrealized gain and loss, which may not ultimately be realized, such as gain or loss on derivative instruments, gain or loss on foreign currency transactions, and gain or loss on investments. In addition, by excluding non-cash income and expense items such as amortization of above-market and below-market leases intangibles, amortization of deferred financing costs, straight-line rent and equity-based compensation from AFFO, we believe we provide useful information regarding income and expense items which have a direct impact on our ongoing operating performance. We also exclude revenue attributable to the reimbursement by third parties of financing costs that we originally incurred because these revenues are not, in our view, related to operating performance. We also include the realized gain or loss on foreign currency exchange contracts for AFFO as such items are part of our ongoing operations and affect our current operating performance.
In calculating AFFO, we exclude certain expenses which under GAAP are characterized as operating expenses in determining operating net income. All paid and accrued acquisition, transaction and other costs (including prepayment penalties for debt extinguishments) and certain other expenses negatively impact our operating performance during the period in which expenses are incurred or properties are acquired will also have negative effects on returns to investors, but are not reflective of on-going performance. Further, under GAAP, certain contemplated non-cash fair value and other non-cash adjustments are considered operating non-cash adjustments to net income. In addition, as discussed above, we view gain and loss from fair value adjustments as items which are unrealized and may not ultimately be realized and not reflective of ongoing operations and are therefore typically adjusted for when assessing operating performance. Excluding income and expense items detailed above from our calculation of AFFO provides information consistent with management’s analysis of our operating performance. Additionally, fair value adjustments, which are based on the impact of current market fluctuations and underlying assessments of general market conditions, but can also result from operational factors such as rental and occupancy rates, may not be directly related or attributable to our current operating performance. By excluding such changes that may reflect anticipated and unrealized gain or loss, we believe AFFO provides useful supplemental information. By providing AFFO, we believe we are presenting useful information that can be used to, among other things, assess our performance without the impact of transactions or other items that are not related to our portfolio of properties. AFFO presented by us may not be comparable to AFFO reported by other REITs that define AFFO differently. Furthermore, we believe that in order to facilitate a clear understanding of our operating results, AFFO should be examined in conjunction with net income (loss) calculated in accordance with GAAP and presented in our consolidated financial statements. AFFO should not be considered as an alternative to net income (loss) as an indication of our performance or to cash flows as a measure of our liquidity or ability to make distributions.
Adjusted Earnings before Interest, Taxes, Depreciation and Amortization, Net Operating Income, and Cash Net Operating Income.
We believe that Adjusted EBITDA, which is defined as earnings before interest, taxes, depreciation and amortization adjusted for acquisition, transaction and other costs, other non-cash items and including our pro-rata share from unconsolidated joint ventures, is an appropriate measure of our ability to incur and service debt. We also exclude revenue attributable to the reimbursement by third parties of financing costs that we originally incurred because these revenues are not, in our view, related to operating performance. Adjusted EBITDA should not be considered as an alternative to cash flows from operating activities,
4
Global Net Lease, Inc.
Supplemental Information
Quarter ended March 31, 2022 (Unaudited)
as a measure of our liquidity or as an alternative to net income as an indicator of our operating activities. Other REITs may calculate Adjusted EBITDA differently and our calculation should not be compared to that of other REITs.
NOI is a non-GAAP financial measure equal to net income (loss), the most directly comparable GAAP financial measure, less discontinued operations, interest, other income and income from preferred equity investments and investment securities, plus corporate general and administrative expense, acquisition, transaction and other costs, depreciation and amortization, other non-cash expenses and interest expense. We use NOI internally as a performance measure and believe NOI provides useful information to investors regarding our financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level. Therefore, we believe NOI is a useful measure for evaluating the operating performance of our real estate assets and to make decisions about resource allocations. Further, we believe NOI is useful to investors as a performance measure because, when compared across periods, NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition activity on an unlevered basis, providing perspective not immediately apparent from net income. NOI excludes certain components from net income in order to provide results that are more closely related to a property’s results of operations. For example, interest expense is not necessarily linked to the operating performance of a real estate asset and is often incurred at the corporate level as opposed to the property level. In addition, depreciation and amortization, because of historical cost accounting and useful life estimates, may distort operating performance at the property level. NOI presented by us may not be comparable to NOI reported by other REITs that define NOI differently. We believe that in order to facilitate a clear understanding of our operating results, NOI should be examined in conjunction with net income (loss) as presented in our consolidated financial statements. NOI should not be considered as an alternative to net income (loss) as an indication of our performance or to cash flows as a measure of our liquidity.
Cash NOI, is a non-GAAP financial measure that is intended to reflect the performance of our properties. We define Cash NOI as net operating income (which is separately defined herein) excluding amortization of above/below market lease intangibles and straight-line adjustments that are included in GAAP lease revenues. We believe that Cash NOI is a helpful measure that both investors and management can use to evaluate the current financial performance of our properties and it allows for comparison of our operating performance between periods and to other REITs. Cash NOI should not be considered as an alternative to net income, as an indication of our financial performance, or to cash flows as a measure of liquidity or our ability to fund all needs. The method by which we calculate and present Cash NOI may not be directly comparable to the way other REITs present Cash NOI.
Cash Paid for Interest is calculated based on the interest expense less non-cash portion of interest expense and amortization of mortgage (discount) premium, net. Management believes that Cash Paid for Interest provides useful information to investors to assess our overall solvency and financial flexibility. Cash Paid for Interest should not be considered as an alternative to interest expense as determined in accordance with GAAP or any other GAAP financial measures and should only be considered together with and as a supplement to our financial information prepared in accordance with GAAP.
5
Global Net Lease, Inc.
Supplemental Information
Quarter ended March 31, 2022 (Unaudited)
Key Metrics
As of and for the three months ended March 31, 2022
Amounts in thousands, except per share data, ratios and percentages
Financial Results
Revenue from tenants
$
97,133
Net income attributable to common stockholders
$
5,483
Basic and diluted net income per share attributable to common stockholders [1]
$
0.05
Cash NOI [2]
$
87,150
Adjusted EBITDA [2]
$
75,703
AFFO attributable to common stockholders [2]
$
44,331
Dividends per share - first quarter [3]
$
0.40
Dividend yield - annualized, based on quarter end share price
10.2
%
Balance Sheet and Capitalization
Equity market capitalization - based on quarter end share price of $15.73 for common shares, $25.54 for Series A preferred shares and $25.05 for Series B preferred shares
$
1,923,420
Net debt [4] [5]
2,328,405
Enterprise value
$
4,251,825
Total capitalization
$
4,375,327
Total consolidated debt [5]
$
2,451,907
Total assets
$
4,152,740
Liquidity [6]
$
225,858
Common shares outstanding as of March 31, 2022 (thousands)
103,910
Common share price, end of quarter
$
15.73
Net debt to enterprise value
54.8
%
Net debt to annualized adjusted EBITDA [7]
7.7
x
Weighted-average interest rate cost [8]
3.4
%
Weighted-average debt maturity (years) [9]
4.0
Interest Coverage Ratio [10]
3.6
x
Real Estate Portfolio
Number of properties
309
Number of tenants
137
Square footage (millions)
39.3
Leased
98.7
%
Weighted-average remaining lease term (years) [11]
8.4
Footnotes:
[1] Adjusted for net income (loss) attributable to common stockholders for common share equivalents.
[2] This Non-GAAP metric is reconciled below.
[3] Represents quarterly dividend per share rate based off the annualized dividend rate of $1.60.
[4] Represents total debt outstanding of $2.5 billion, less cash and cash equivalents of $123.5 million.
[5] Excludes the effect of mortgage discounts and deferred financing costs, net.
[6] Liquidity includes $102.4 million of availability under the credit facility and $123.5 million of cash and cash equivalents.
[7] Annualized adjusted EBITDA annualized based on Adjusted EBITDA for the quarter ended March 31, 2022 multiplied by four.
[8] The weighted average interest rate cost is based on the outstanding principal balance of the debt.
[9] The weighted average debt maturity is based on the outstanding principal balance of the debt.
[10] The interest coverage ratio is calculated by dividing adjusted EBITDA for the applicable quarter by cash paid for interest (calculated based on the interest expense less non-cash portion of interest expense and amortization of mortgage (discount) premium, net). Management believes that
6
Global Net Lease, Inc.
Supplemental Information
Quarter ended March 31, 2022 (Unaudited)
Interest Coverage Ratio is a useful supplemental measure of our ability to service our debt obligations. Adjusted EBITDA and cash paid for interest are Non-GAAP metrics and are reconciled below.
[11] The weighted-average remaining lease term (years) is based on square feet.
7
Global Net Lease, Inc.
Supplemental Information
Quarter ended March 31, 2022
Consolidated Balance Sheets
Amounts in thousands
March 31, 2022
December 31, 2021
(Unaudited)
ASSETS
Real estate investments, at cost:
Land
$
505,823
$
511,579
Buildings, fixtures and improvements
3,394,391
3,424,431
Construction in progress
6,377
6,975
Acquired intangible lease assets
710,418
748,363
Total real estate investments, at cost
4,617,009
4,691,348
Less accumulated depreciation and amortization
(810,182)
(810,686)
Total real estate investments, net
3,806,827
3,880,662
Assets held for sale
3,360
—
Cash and cash equivalents
123,502
89,668
Restricted cash
4,572
3,643
Derivative assets, at fair value
15,262
4,260
Unbilled straight-line rent
67,672
74,221
Operating lease right-of-use asset
52,465
52,851
Prepaid expenses and other assets
51,184
49,178
Due from related parties
447
—
Deferred tax assets
1,470
1,488
Goodwill and other intangible assets, net
21,808
22,060
Deferred financing costs, net
4,171
4,925
Total Assets
$
4,152,740
$
4,182,956
LIABILITIES AND EQUITY
Mortgage notes payable, net
$
1,399,713
$
1,430,915
Revolving credit facility
260,270
225,566
Term loan, net
273,197
278,554
Senior notes, net
492,077
491,735
Acquired intangible lease liabilities, net
28,158
29,345
Derivative liabilities, at fair value
991
4,259
Due to related parties
892
893
Accounts payable and accrued expenses
29,218
25,887
Operating lease liability
23,247
22,771
Prepaid rent
36,228
32,756
Deferred tax liability
7,983
8,254
Taxes payable
—
—
Dividends payable
5,428
5,386
Total Liabilities
2,557,402
2,556,321
Commitments and contingencies
—
—
Stockholders’ Equity:
7.25% Series A cumulative redeemable preferred stock
68
68
6.875% Series B cumulative redeemable perpetual preferred stock
46
45
Common stock
2,369
2,369
Additional paid-in capital
2,678,030
2,675,154
Accumulated other comprehensive income
15,309
15,546
Accumulated deficit
(1,108,645)
(1,072,462)
Total Stockholders’ Equity
1,587,177
1,620,720
Non-controlling interest
8,161
5,915
Total Equity
1,595,338
1,626,635
Total Liabilities and Equity
$
4,152,740
$
4,182,956
8
Global Net Lease, Inc.
Supplemental Information
Quarter ended March 31, 2022 (Unaudited)
Consolidated Statements of Operations
Amounts in thousands, except per share data
Three Months Ended
March 31, 2022
December 31, 2021
September 30, 2021
June 30, 2021
Revenue from tenants
$
97,133
$
106,516
$
95,758
$
99,564
Expenses:
Property operating
7,460
10,962
6,747
7,467
Operating fees to related parties
10,076
10,050
9,880
9,479
Impairment charges
230
9,619
1,199
6,707
Acquisition, transaction and other costs
8
42
54
28
General and administrative
3,894
4,991
3,911
4,201
Equity-based compensation
2,727
2,727
2,721
3,007
Depreciation and amortization
39,889
42,025
41,665
39,702
Total expenses
64,284
80,416
66,177
70,591
Operating income before loss on dispositions of real estate investments
32,849
26,100
29,581
28,973
Gain (loss) on dispositions of real estate investments
—
296
1,195
(7)
Operating income
32,849
26,396
30,776
28,966
Other income (expense):
Interest expense
(24,123)
(24,101)
(24,858)
(24,018)
Gain (loss) on derivative instruments
4,615
941
3,560
(514)
Other income (expense)
295
180
(158)
84
Total other expense, net
(19,213)
(22,980)
(21,456)
(24,448)
Net income before income taxes
13,636
3,416
9,320
4,518
Income tax expense
(3,095)
(6,212)
(1,930)
(1,930)
Net income (loss)
10,541
(2,796)
7,390
2,588
Preferred stock dividends
(5,058)
(5,016)
(5,016)
(5,016)
Net income (loss) attributable to common stockholders
$
5,483
$
(7,812)
$
2,374
$
(2,428)
Basic and Diluted Earnings (Loss) Per Share:
Net income (loss ) per share attributable to common stockholders — Basic and Diluted
$
0.05
$
(0.08)
$
0.02
$
(0.14)
Weighted average shares outstanding — Basic and Diluted
103,596
103,581
101,478
96,386
9
Global Net Lease, Inc.
Supplemental Information
Quarter ended March 31, 2022 (Unaudited)
Non-GAAP Measures
Amounts in thousands, except per share data
Three Months Ended
March 31, 2022
December 31, 2021
September 30, 2021
June 30, 2021
EBITDA:
Net income (loss)
$
10,541
$
(2,796)
$
7,390
$
2,588
Depreciation and amortization
39,889
42,025
41,665
39,702
Interest expense
24,123
24,101
24,858
24,018
Income tax expense
3,095
6,212
1,930
1,930
EBITDA [1]
77,648
69,542
75,843
68,238
Impairment charges
230
9,619
1,199
6,707
Equity-based compensation
2,727
2,727
2,721
3,007
Acquisition, transaction and other costs
8
42
54
28
(Gain) loss on dispositions of real estate investments
—
(296)
(1,195)
7
(Gain) loss on derivative instruments
(4,615)
(941)
(3,560)
514
Other (income) expense
(295)
(180)
158
(84)
Reimbursement of financing costs from McLaren loan [2]
—
—
—
(5,234)
Adjusted EBITDA [1]
75,703
80,513
75,220
73,183
Operating fees to related parties
10,076
10,050
9,880
9,479
General and administrative
3,894
4,991
3,911
4,201
NOI [1]
89,673
95,554
89,011
86,863
Amortization related to above and below-market lease intangibles and right-of-use assets, net
330
(56)
81
158
Straight-line rent
(2,853)
(1,663)
(1,658)
(1,483)
Cash NOI [1]
$
87,150
$
93,835
$
87,434
$
85,538
Cash Paid for Interest:
Interest Expense
$
24,123
$
24,101
$
24,858
$
24,018
Non-cash portion of interest expense
(2,596)
(2,614)
(2,590)
(2,395)
Amortization of mortgage discounts
(251)
(258)
(263)
(187)
Total cash paid for interest
$
21,276
$
21,229
$
22,005
$
21,436
Footnote:
[1] For the three months ended March 31, 2022, December 31, 2021 and September 30, 2021, includes income from a lease termination fee of $0.3 million, $6.5 million and $2.2 million, respectively, which is recorded in revenue from tenants in the consolidated statements of operations.
[2] Amount represents a receivable recorded for financing costs we incurred in connection with the mortgage loan that financed the acquisition of the global headquarters of the McLaren Group that the McLaren Group is required to reimburse us for. For accounting purposes, the receivable for these reimbursable costs is included in prepaid expenses and other assets on the consolidated balance sheet and in revenue from tenants in the consolidated statements of operations since the receivable is considered to be earned revenue attributed to the current period.
10
Global Net Lease, Inc.
Supplemental Information
Quarter ended March 31, 2022 (Unaudited)
Non-GAAP Measures
Amounts in thousands, except per share data
Three Months Ended
March 31, 2022
December 31, 2021
September 30, 2021
June 30, 2021
Funds from operations (FFO):
Net income (loss) attributable to common stockholders (in accordance with GAAP)
$
5,483
$
(7,812)
$
2,374
$
(2,428)
Impairment charges
230
9,619
1,199
6,707
Depreciation and amortization
39,889
42,025
41,665
39,702
(Gain) loss on dispositions of real estate investments
—
(296)
(1,195)
7
FFO (as defined by NAREIT) attributable to common stockholders [1]
45,602
43,536
44,043
43,988
Acquisition, transaction and other costs
8
42
54
28
Loss on extinguishment of debt
—
—
—
—
Core FFO attributable to common stockholders [1]
45,610
43,578
44,097
44,016
Non-cash equity-based compensation
2,727
2,727
2,721
3,007
Non-cash portion of interest expense
2,596
2,614
2,590
2,395
Amortization related to above and below-market lease intangibles and right-of-use assets, net
330
(56)
81
158
Straight-line rent
(2,853)
(1,663)
(1,658)
(1,483)
Straight-line rent (rent deferral agreements) [2]
(120)
(273)
(246)
(521)
Eliminate unrealized (gains) losses on foreign currency transactions [3]
(4,210)
(1,201)
(3,591)
302
Amortization of mortgage discounts
251
258
263
187
Reimbursement of financing costs from McLaren [4]
—
—
—
(5,234)
Adjusted funds from operations (AFFO) attributable to common stockholders [1]
$
44,331
$
45,984
$
44,257
$
42,827
Weighted average common shares outstanding — Basic and Diluted
103,596
103,581
101,478
96,386
Net income (loss) per share attributable to common shareholders
$
0.05
$
(0.08)
$
0.02
$
(0.14)
FFO per diluted common share
$
0.44
$
0.42
$
0.43
$
0.46
Core FFO per diluted common share
$
0.44
$
0.42
$
0.43
$
0.46
AFFO per diluted common share
$
0.43
$
0.44
$
0.44
$
0.44
Dividends declared to common stockholders
$
41,566
$
41,564
$
40,302
$
38,139
Footnotes:
[1] FFO, Core FFO and AFFO for the three months ended March 31, 2022, December 31, 2021 and September 30, 2021 include income from a lease termination fee of $0.3 million, $6.5 million and $2.2 million, respectively, which is recorded in revenue from tenants in the consolidated statements of operations. While such termination payments occur infrequently, they represent cash income for accounting and tax purposes and as such management believes they should be included in FFO, Core FFO and AFFO. The termination fee of approximately $9.0 million which was paid by the tenant at the end of the lease term on January 4, 2022 was earned and recorded as income evenly over the period from September 3, 2021 through January 4, 2022.
[2] Represents amounts related to deferred rent pursuant to lease negotiations which qualify for FASB relief for which rent was deferred but not reduced. These amounts are included in the straight-line rent receivable on our balance sheet but are considered to be earned revenue attributed to the current period for rent that was deferred, for purposes of AFFO, as they are expected to be collected. Accordingly, when the deferred amounts are collected, the amounts reduce AFFO.
[3] For AFFO purposes, we add back unrealized (gain) loss. For the three months ended March 31, 2022, the gain on derivative instruments was $4.6 million which consisted of unrealized gains of $4.2 million and realized gains of $0.4 million. For the three months ended December 31, 2021, the gain on derivative instruments was $0.9 million, which consisted of unrealized gains of $1.2 million and realized losses of $0.3 million. For the three months ended September 30, 2021, the gain on derivative instruments was $3.6 million which consisted of unrealized gains of $3.6 million. For the three months ended June 30, 2021, the loss on derivative instruments was $0.5 million, which consisted of unrealized losses of $0.3 million and realized losses of $0.2 million.
[4] Amount represents a receivable recorded for financing costs we incurred in connection with the mortgage loan that financed the acquisition of the global headquarters of the McLaren Group that the McLaren Group is required to reimburse us for. For accounting purposes, the receivable for these reimbursable costs is included in prepaid expenses and other assets on the consolidated balance sheet and in revenue from tenants in the consolidated statements of operations since the receivable is considered to be earned revenue attributed to the current period.
11
Global Net Lease, Inc.
Supplemental Information
Quarter ended March 31, 2022 (Unaudited)
Debt Overview
As of March 31, 2022
Year of Maturity
Number of Encumbered Properties [1]
Weighted-Average Debt Maturity (Years) [1]
Weighted-Average Interest Rate [2]
Total Outstanding Balance [3] (In thousands)
Percent
Non-Recourse Debt
2022 (remainder)
1
0.5
2.0
%
$
55,161
2023
47
1.3
2.8
%
270,441
2024
11
2.1
3.2
%
348,278
2025
7
3.1
2.5
%
77,804
2026
—
—
—
%
—
2027
10
5.6
4.4
%
162,580
Thereafter
44
7
4.3
%
502,752
Total Non-Recourse Debt
120
4.1
3.6
%
1,417,016
58
%
Recourse Debt
Revolving Credit Facility
1.8
3.7
%
260,270
Term Loan
2.3
1.9
%
274,621
Senior Notes
5.7
3.8
%
500,000
Total Recourse Debt
3.8
3.3
%
1,034,891
42
%
Total Debt
4.0
3.4
%
$
2,451,907
100
%
Total Debt by Currency
Percent
USD
56
%
EUR
26
%
GBP
17
%
CAD
1
%
Total
100
%
Footnotes:
[1] For non-recourse debt, amounts are shown within the year that the loan fully matures.
[2] As of March 31, 2022, the Company’s total combined debt was 87.6% fixed rate or swapped to a fixed rate and 12.4% floating rate.
[3] Excludes the effect of mortgage discounts and deferred financing costs, net. Current balances as of March 31, 2022 are shown in the year the debt matures.
12
Global Net Lease, Inc.
Supplemental Information
Quarter ended March 31, 2022 (Unaudited)
Future Minimum Lease Rents
As of March 31, 2022
Amounts in thousands
Future Minimum Base Rent Payments [1]
2022 (remainder)
$
259,827
2023
337,509
2024
307,758
2025
270,239
2026
243,133
2027
228,313
Thereafter
1,187,997
Total
$
2,834,776
Footnotes:
[1] Base rent assumes exchange rates of £1.00 to $1.31 for GBP, €1.00 to $1.11 for EUR and C$1.00 to $0.80 as of March 31, 2022 for illustrative purposes, as applicable.
13
Global Net Lease, Inc.
Supplemental Information
Quarter ended March 31, 2022 (Unaudited)
Top Ten Tenants
As of March 31, 2022
Amounts in thousands, except percentages
Tenant / Lease Guarantor
Property Type
Tenant Industry
Annualized SL Rent [1]
SL Rent Percent
The McLaren Group
Industrial
Auto Manufacturing
$
20,002
6
%
FedEx
Distribution
Freight
14,040
4
%
Whirlpool
Industrial/Distribution
Consumer Goods
13,215
4
%
Government Services Administration (GSA)
Office
Government
12,313
3
%
Foster Wheeler
Office
Engineering
11,157
3
%
FCA USA
Industrial/Distribution
Auto Manufacturing
10,147
3
%
ING Bank
Office
Financial Services
9,417
3
%
Broadridge Finanical Solutions
Industrial
Financial Services
9,332
3
%
Penske
Distribution
Logistics
8,500
2
%
Finnair
Industrial
Aerospace
8,038
2
%
Subtotal
116,161
33
%
Remaining portfolio
244,145
67
%
Total Portfolio
$
360,306
100
%
Footnotes:
[1] SL Rent (Straight-line rent) is on an annualized basis and assumes exchange rates of £1.00 to $1.31 for GBP, €1.00 to $1.11 for EUR and C$1.00 to $0.80 as of March 31, 2022 for illustrative purposes, as applicable.
14
Global Net Lease, Inc.
Supplemental Information
Quarter ended March 31, 2022 (Unaudited)
Diversification by Property Type
As of March 31, 2022
Amounts in thousands, except percentages
Total Portfolio
Unencumbered Portfolio [2]
Property Type
Annualized SL Rent [1]
SL Rent Percent
Square Feet
Sq. ft. Percent
Annualized SL Rent [1]
SL Rent Percent
Square Feet
Sq. ft. Percent
Office
$
150,325
42
%
8,911
23
%
$
40,822
28
%
2,582
13
%
Industrial
127,740
36
%
17,740
45
%
78,613
52
%
12,135
61
%
Distribution
69,751
19
%
11,430
29
%
28,798
19
%
5,053
25
%
Retail
12,490
3
%
1,259
3
%
1,850
1
%
200
1
%
Total
$
360,306
100
%
39,340
100
%
$
150,083
100
%
19,970
100
%
Footnotes:
[1] SL Rent (Straight-line rent) is on an annualized basis and assumes exchange rates of £1.00 to $1.31 for GBP, €1.00 to $1.11 for EUR and
C$1.00 to $0.80 as of March 31, 2022 for illustrative purposes, as applicable.
[2] Includes properties on the credit facility borrowing base.
15
Global Net Lease, Inc.
Supplemental Information
Quarter ended March 31, 2022 (Unaudited)
Diversification by Tenant Industry
As of March 31, 2022
Amounts in thousands, except percentages
Total Portfolio
Unencumbered Portfolio [3]
Industry Type
Annualized SL Rent [1]
SL Rent Percent
Square Feet
Sq. ft. Percent
Annualized SL Rent [1]
SL Rent Percent
Square Feet
Sq. ft. Percent
Financial Services
$
44,696
12
%
3,285
8
%
$
9,332
6
%
1,166
6
%
Auto Manufacturing
42,268
12
%
4,237
11
%
16,550
11
%
2,099
11
%
Consumer Goods
20,560
6
%
4,544
12
%
17,838
12
%
3,700
19
%
Healthcare
19,653
5
%
1,000
3
%
8,059
5
%
576
3
%
Technology
17,327
5
%
987
3
%
3,428
2
%
246
1
%
Freight
14,978
4
%
1,494
4
%
6,966
5
%
774
4
%
Government
14,762
4
%
536
1
%
11,921
8
%
424
2
%
Aerospace
14,590
4
%
1,416
4
%
3,390
2
%
293
2
%
Metal Processing
14,331
4
%
2,472
6
%
10,906
7
%
1,852
9
%
Logistics
14,117
4
%
2,269
6
%
1,132
1
%
170
1
%
Telecommunications
13,871
4
%
865
2
%
—
—
%
—
—
%
Energy
11,446
3
%
964
2
%
10,179
7
%
817
4
%
Engineering
11,157
3
%
366
1
%
—
—
%
—
—
%
Pharmaceuticals
10,809
3
%
476
1
%
1,020
1
%
86
—
%
Metal Fabrication
10,136
3
%
1,466
4
%
5,367
4
%
755
4
%
Automotive Parts Supplier
9,435
3
%
964
2
%
7,131
5
%
643
3
%
Retail Food Distribution
8,283
2
%
1,128
3
%
825
1
%
170
1
%
Discount Retail
7,576
2
%
1,001
3
%
1,851
1
%
200
1
%
Publishing
6,740
2
%
873
2
%
—
—
%
—
—
%
Home Furnishings
5,977
2
%
2,456
6
%
5,977
4
%
2,456
12
%
Specialty Retail
5,378
1
%
486
1
%
2,370
2
%
206
1
%
Food Manufacturing
3,979
1
%
598
2
%
3,979
3
%
598
3
%
Building Products
3,945
1
%
604
2
%
3,945
3
%
604
3
%
Other [2]
34,292
10
%
4,853
11
%
17,917
10
%
2,135
11
%
Total
$
360,306
100
%
39,340
100
%
$
150,083
100
%
19,970
100
%
Footnotes:
[1] SL Rent (Straight-line rent) is on an annualized basis and assumes exchange rates of £1.00 to $1.31 for GBP, €1.00 to $1.11 for EUR and
C$1.00 to $0.80 as of March 31, 2022 for illustrative purposes, as applicable.
[2] Other includes 27 industry types as of March 31, 2022.
[3] Includes properties on the credit facility borrowing base.
16
Global Net Lease, Inc.
Supplemental Information
Quarter ended March 31, 2022 (Unaudited)
Diversification by Geography
As of March 31, 2022
Amounts in thousands, except percentages
Total Portfolio
Unencumbered Portfolio [2]
Region
Annualized SL Rent [1]
SL Rent Percent
Square Feet
Sq. ft. Percent
Annualized SL Rent [1]
SL Rent Percent
Square Feet
Sq. ft. Percent
United States
$
216,447
60.1
%
27,795
70.8
%
$
138,524
92.3
%
18,882
94.4
%
Michigan
53,100
14.7
%
6,263
16.0
%
35,065
23.4
%
4,124
20.7
%
Texas
24,339
6.8
%
1,914
4.9
%
13,798
9.2
%
1,179
5.9
%
Ohio
19,715
5.5
%
4,405
11.2
%
15,577
10.2
%
3,366
16.8
%
California
14,006
3.9
%
1,226
3.1
%
7,699
5.1
%
838
4.2
%
Tennessee
8,402
2.3
%
1,125
2.9
%
6,668
4.4
%
662
3.3
%
New Jersey
8,327
2.3
%
349
0.9
%
—
—
%
—
—
%
North Carolina
8,273
2.3
%
2,657
6.8
%
7,528
5.0
%
2,628
13.2
%
Indiana
6,896
1.9
%
1,556
4.0
%
3,427
2.3
%
700
3.5
%
Missouri
6,790
1.9
%
656
1.7
%
4,820
3.2
%
566
2.8
%
Alabama
5,606
1.6
%
257
0.7
%
320
0.2
%
58
0.3
%
New York
5,369
1.5
%
963
2.5
%
4,793
3.2
%
887
4.4
%
Illinois
5,254
1.5
%
760
1.9
%
1,747
1.2
%
145
0.7
%
South Carolina
4,996
1.4
%
801
2.0
%
4,996
3.3
%
801
4.0
%
Pennsylvania
4,240
1.2
%
459
1.2
%
1,931
1.3
%
122
0.6
%
Kentucky
4,223
1.2
%
523
1.3
%
3,314
2.2
%
446
2.2
%
Arkansas
2,973
0.8
%
90
0.2
%
2,973
2.0
%
90
0.5
%
Minnesota
2,762
0.8
%
266
0.7
%
1,286
0.9
%
219
1.1
%
Connecticut
2,742
0.8
%
305
0.8
%
2,742
1.8
%
305
1.5
%
Colorado
2,694
0.8
%
87
0.2
%
2,694
1.8
%
87
0.4
%
Massachusetts
2,232
0.6
%
192
0.5
%
2,232
1.5
%
192
1.0
%
Kansas
2,118
0.6
%
292
0.7
%
1,922
1.3
%
277
1.4
%
New Hampshire
2,076
0.6
%
339
0.9
%
1,676
1.1
%
256
1.3
%
Maine
1,932
0.5
%
50
0.1
%
1,932
1.3
%
50
0.2
%
Florida
1,878
0.5
%
179
0.5
%
1,878
1.3
%
179
0.9
%
Mississippi
1,580
0.4
%
314
0.8
%
283
0.2
%
14
0.1
%
Georgia
1,557
0.4
%
492
1.3
%
—
—
%
—
—
%
South Dakota
1,303
0.4
%
54
0.1
%
1,303
0.9
%
54
0.3
%
Vermont
1,236
0.3
%
213
0.5
%
—
—
%
—
—
%
Nebraska
1,150
0.3
%
101
0.3
%
278
0.2
%
27
0.1
%
Iowa
1,117
0.3
%
236
0.6
%
1,117
0.7
%
236
1.2
%
Louisiana
1,111
0.3
%
112
0.3
%
434
0.3
%
36
0.2
%
West Virginia
980
0.3
%
104
0.3
%
—
—
%
—
—
%
North Dakota
884
0.3
%
47
0.1
%
884
0.6
%
47
0.2
%
Oklahoma
699
0.2
%
79
0.2
%
699
0.5
%
79
0.4
%
Maryland
690
0.2
%
120
0.3
%
690
0.5
%
120
0.6
%
New Mexico
556
0.2
%
46
0.1
%
556
0.4
%
46
0.2
%
Wyoming
498
0.1
%
37
0.1
%
—
—
%
—
—
%
Montana
441
0.1
%
58
0.2
%
—
—
%
—
—
%
Idaho
441
0.1
%
22
0.1
%
—
—
%
—
—
%
Delaware
368
0.1
%
10
—
%
368
0.2
%
10
—
%
Nevada
344
0.1
%
14
—
%
344
0.2
%
14
0.1
%
Utah
315
0.1
%
12
—
%
315
0.2
%
12
0.1
%
Virginia
235
0.1
%
10
—
%
235
0.2
%
10
—
%
United Kingdom
73,917
20.6
%
4,967
12.5
%
1,488
1.0
%
95
0.6
%
The Netherlands
15,587
4.3
%
1,007
2.6
%
3,739
2.5
%
364
1.8
%
Finland
13,763
3.8
%
1,457
3.7
%
—
—
%
—
—
%
France
13,695
3.8
%
1,663
4.2
%
380
0.3
%
32
0.2
%
Germany
9,850
2.7
%
1,584
4.0
%
—
—
%
—
—
%
Channel Islands
5,873
1.6
%
114
0.3
%
—
—
%
—
—
%
Luxembourg
5,222
1.5
%
156
0.4
%
—
—
%
—
—
%
Canada
3,319
0.9
%
372
1
%
3,319
2.2
%
372
1.9
%
Italy
2,240
0.6
%
196
0.5
%
2,240
1.5
%
196
1
%
Spain
393
—
%
29
0.1
%
393
0.3
%
29
0.1
%
Total
$
360,306
100
%
39,340
100
%
$
150,083
100
%
19,970
100
%
Footnotes:
[1] SL Rent (Straight-line rent) is on an annualized basis and assumes exchange rates of £1.00 to $1.31 for GBP, €1.00 to $1.11 for EUR and
C$1.00 to $0.80 as of March 31, 2022 for illustrative purposes, as applicable.
[2] Includes properties on the credit facility borrowing base.
17
Global Net Lease, Inc.
Supplemental Information
Quarter ended March 31, 2022 (Unaudited)
Lease Expirations
As of March 31, 2022
Year of Expiration
Number of Leases Expiring
Annualized SL Rent [1]
Annualized SL Rent Percent
Leased Rentable Square Feet
Percent of Rentable Square Feet Expiring
(In thousands)
(In thousands)
2022 (Remaining)
8
$
10,225
2.8
%
644
1.6
%
2023
24
20,059
5.6
%
1,860
4.7
%
2024
34
45,767
12.7
%
4,394
11.2
%
2025
21
36,104
10.0
%
3,250
8.3
%
2026
16
19,793
5.5
%
1,490
3.8
%
2027
21
8,912
2.5
%
971
2.5
%
2028
42
32,880
9.1
%
4,104
10.4
%
2029
23
33,592
9.3
%
3,983
10.1
%
2030
20
25,706
7.1
%
2,040
5.2
%
2031
15
27,369
7.6
%
3,971
10.1
%
2032
29
23,819
6.6
%
2,189
5.6
%
2033
7
16,318
4.5
%
1,484
3.8
%
2034
1
922
0.3
%
228
0.6
%
2035
5
7,263
2.0
%
750
1.9
%
2036
9
5,653
1.6
%
716
1.8
%
Thereafter (>2036)
30
45,762
12.8
%
6,736
18.4
%
Total
305
$
360,144
100
%
38,810
100
%
[1] Annualized rental income converted from local currency into USD as of March 31, 2022 for the in-place lease in the property on a straight-line basis, which includes tenant concessions such as free rent, as applicable.
