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 the potential adverse effects of the ongoing global COVID-19 pandemic, including actions taken to contain or treat COVID-19, on the Company, the Company's tenants and the global economy and financial markets and 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, 2019 filed on February 28, 2020 and all other filings with 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
The majority of the concessions granted to its 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, we do not expect rental revenue used to calculate Net Income and NAREIT FFO to be significantly impacted by these types of deferrals. In addition, since we currently believe that these amounts are collectible, we have excluded from the increase in straight-line rent for AFFO purposes the amounts recognized under GAAP relating to these types of rent deferrals.
2
Global Net Lease, Inc.
Supplemental Information
Quarter ended September 30, 2020 (Unaudited)
Non-GAAP Financial Measures
This section includes non-GAAP financial measures, including Funds from Operations (“FFO”), Core Funds from Operations (“Core FFO”) and 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 September 30, 2020 (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 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. AFFO presented by us may not be comparable to AFFO reported by other REITs that define AFFO differently.
In calculating AFFO, we exclude certain expenses which under GAAP are characterized as operating expenses in determining operating net income. All paid and accrued merger, 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 better assess the sustainability of our ongoing operating performance without the impact of transactions or other items that are not related to the ongoing performance of our portfolio of properties. 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) as 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. Adjusted EBITDA should not be considered as an alternative to cash flows from operating activities, 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,
4
Global Net Lease, Inc.
Supplemental Information
Quarter ended September 30, 2020 (Unaudited)
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.
5
Global Net Lease, Inc.
Supplemental Information
Quarter ended September 30, 2020 (Unaudited)
Key Metrics
As of and for the three months ended September 30, 2020
Amounts in thousands, except per share data, ratios and percentages
Financial Results
Revenue from tenants
$
82,711
Net loss attributable to common stockholders
$
(502)
Basic and diluted net loss per share attributable to common stockholders [1]
$
(0.01)
Cash NOI [2]
$
73,505
Adjusted EBITDA [2]
$
63,606
AFFO attributable to common stockholders [2]
$
40,876
Dividends per share - second quarter [3]
$
0.40
Dividend yield - annualized, based on quarter end share price
10.1
%
Balance Sheet and Capitalization
Equity market capitalization - based on quarter end share price of $15.90 for common shares, $25.70 for Series A preferred shares and $25.19 for Series B preferred shares
$
1,691,187
Net debt [4] [5]
1,820,535
Enterprise value
$
3,511,722
Total capitalization
$
3,811,722
Total consolidated debt [5]
$
2,120,535
Total assets
$
3,824,471
Liquidity [6]
$
392,000
Common shares outstanding as of September 30, 2020 (thousands)
89,615
Share price, end of quarter
$
15.90
Net debt to enterprise value
51.8
%
Net debt to annualized adjusted EBITDA [7]
7.2
x
Weighted-average interest rate cost [8]
3.1
%
Weighted-average debt maturity (years) [9]
5.1
Interest Coverage Ratio [10]
3.8
x
Real Estate Portfolio
Number of properties
299
Number of tenants
127
Square footage (millions)
34.7
Leased
99.6
%
Weighted-average remaining lease term (years) [11]
8.7
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 new annualized dividend rate of $1.60.
[4] Represents total debt outstanding of $2.1 billion, less cash and cash equivalents of $300.0 million.
[5] Excludes the effect of deferred financing costs, net and mortgage (discount) premium, net.
[6] Liquidity includes $92.0 million of availability under the credit facility and $300.0 million of cash and cash equivalents.
[7] Annualized adjusted EBITDA annualized based on Adjusted EBITDA for the quarter ended September 30, 2020 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.
6
Global Net Lease, Inc.
Supplemental Information
Quarter ended September 30, 2020 (Unaudited)
[10] The interest coverage ratio is calculated by dividing adjusted EBITDA by cash paid for interest (interest expense less non-cash portion of interest expense and amortization of mortgage (discount) premium, net) for the quarter ended September 30, 2020. 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 September 30, 2020
Consolidated Balance Sheets
Amounts in thousands
September 30, 2020
December 31, 2019
(Unaudited)
ASSETS
Real estate investments, at cost:
Land
$
443,555
$
414,446
Buildings, fixtures and improvements
2,832,166
2,685,325
Construction in progress
4,905
11,725
Acquired intangible lease assets
670,575
651,768
Total real estate investments, at cost
3,951,201
3,763,264
Less accumulated depreciation and amortization
(625,098)
(517,123)
Total real estate investments, net
3,326,103
3,246,141
Cash and cash equivalents
300,000
270,302
Restricted cash
808
3,985
Derivative assets, at fair value
1,898
4,151
Unbilled straight-line rent
58,029
51,795
Operating lease right-of-use asset
56,229
50,211
Prepaid expenses and other assets
45,422
37,370
Due from related parties
366
351
Deferred tax assets
4,472
4,441
Goodwill and other intangible assets, net
22,492
21,920
Deferred financing costs, net
8,652
10,938
Total Assets
$
3,824,471
$
3,701,605
LIABILITIES AND EQUITY
Mortgage notes payable, net
$
1,417,712
$
1,272,154
Revolving credit facility
264,009
199,071
Term loan, net
417,072
397,893
Acquired intangible lease liabilities, net
29,402
30,529
Derivative liabilities, at fair value
18,546
7,507
Due to related parties
24
342
Accounts payable and accrued expenses
28,776
22,903
Operating lease liability
24,458
23,985
Prepaid rent
22,413
17,236
Deferred tax liability
15,146
14,975
Taxes payable
—
1,046
Dividends payable
5,014
4,006
Total Liabilities
2,242,572
1,991,647
Commitments and contingencies
—
—
Stockholders’ Equity:
7.25% Series A cumulative redeemable preferred stock
68
68
6.875% Series B cumulative redeemable perpetual preferred stock
37
35
Common stock
2,227
2,225
Additional paid-in capital
2,413,117
2,408,353
Accumulated other comprehensive (loss) income
(5,630)
20,195
Accumulated deficit
(847,322)
(733,245)
Total Stockholders’ Equity
1,562,497
1,697,631
Non-controlling interest
19,402
12,327
Total Equity
1,581,899
1,709,958
Total Liabilities and Equity
$
3,824,471
$
3,701,605
8
Global Net Lease, Inc.
Supplemental Information
Quarter ended September 30, 2020 (Unaudited)
Consolidated Statements of Operations
Amounts in thousands, except per share data
Three Months Ended
September 30, 2020
June 30, 2020
March 31, 2020
December 31, 2019
Revenue from tenants
$
82,711
$
81,109
$
79,242
$
76,685
Expenses:
Property operating
7,525
7,835
7,377
5,701
Operating fees to related parties
8,939
8,874
8,794
8,867
Acquisition, transaction and other costs
75
33
280
19
General and administrative
2,641
3,412
2,961
1,334
Equity-based compensation
2,479
2,513
2,488
2,491
Depreciation and amortization
35,049
33,984
33,533
31,989
Total expenses
56,708
56,651
55,433
50,401
Operating income before loss on dispositions of real estate investments
26,003
24,458
23,809
26,284
Gain on dispositions of real estate investments
—
(153)
—
8,824
Operating income
26,003
24,305
23,809
35,108
Other income (expense):
Interest expense
(18,677)
(17,529)
(16,440)
(17,194)
(Loss) gain on extinguishment of debt
—
(309)
—
379
(Loss) gain on derivative instruments
(2,464)
(317)
3,143
(3,905)
Other income
142
71
48
195
Total other expense, net
(20,999)
(18,084)
(13,249)
(20,525)
Net income before income taxes
5,004
6,221
10,560
14,583
Income tax expense
(862)
(691)
(959)
(1,652)
Net income
4,142
5,530
9,601
12,931
Preferred stock dividends
(4,644)
(4,564)
(4,563)
(3,668)
Net (loss) income attributable to common stockholders
$
(502)
$
966
$
5,038
$
9,263
Basic and Diluted Earnings Per Share:
Net (loss) income per share attributable to common stockholders — Basic and Diluted
$
(0.01)
$
0.01
$
0.05
$
0.10
Weighted average shares outstanding — Basic
89,483
89,470
89,459
89,458
Weighted average shares outstanding — Diluted
89,483
90,103
89,499
90,777
9
Global Net Lease, Inc.
Supplemental Information
Quarter ended September 30, 2020 (Unaudited)
Non-GAAP Measures
Amounts in thousands, except per share data
Three Months Ended
September 30, 2020
June 30, 2020
March 31, 2020
December 31, 2019
EBITDA:
Net income
$
4,142
$
5,530
$
9,601
$
12,931
Depreciation and amortization
35,049
33,984
33,533
31,989
Interest expense
18,677
17,529
16,440
17,194
Income tax expense
862
691
959
1,652
EBITDA
58,730
57,734
60,533
63,766
Equity-based compensation
2,479
2,513
2,488
2,491
Acquisition, transaction and other costs
75
33
280
19
Loss (gain) on dispositions of real estate investments
—
153
—
(8,824)
Loss (gain) on derivative instruments
2,464
317
(3,143)
3,905
Loss on extinguishment of debt
—
309
—
(379)
Other income
(142)
(71)
(48)
(195)
Adjusted EBITDA
63,606
60,988
60,110
60,783
Operating fees to related parties
8,939
8,874
8,794
8,867
General and administrative
2,641
3,412
2,961
1,334
NOI
75,186
73,274
71,865
70,984
Amortization of above- and below- market leases and ground lease assets and liabilities, net
198
204
232
633
Straight-line rent
(1,879)
(3,068)
(1,487)
(1,695)
Cash NOI
$
73,505
$
70,410
$
70,610
$
69,922
Cash Paid for Interest:
Interest Expense
$
18,677
$
17,529
$
16,440
$
17,194
Non-cash portion of interest expense
(2,075)
(1,847)
(1,810)
(1,789)
Amortization of mortgage (discount) premium, net
—
(3)
(10)
(28)
Total cash paid for interest
$
16,602
$
15,679
$
14,620
$
15,377
10
Global Net Lease, Inc.
Supplemental Information
Quarter ended September 30, 2020 (Unaudited)
Non-GAAP Measures
Amounts in thousands, except per share data
Three Months Ended
September 30, 2020
June 30, 2020
March 31, 2020
December 31, 2019
Funds from operations (FFO):
Net income attributable to common stockholders (in accordance with GAAP)
$
(502)
$
966
$
5,038
$
9,263
Depreciation and amortization
35,049
33,984
33,533
31,989
Loss (gain) on dispositions of real estate investments
—
153
—
(8,824)
FFO (as defined by NAREIT) attributable to common stockholders
34,547
35,103
38,571
32,428
Acquisition, transaction and other costs [1]
75
33
280
19
Loss on extinguishment of debt [2]
—
309
—
(379)
Core FFO attributable to common stockholders
34,622
35,445
38,851
32,068
Non-cash equity-based compensation
2,479
2,513
2,488
2,491
Non-cash portion of interest expense
2,075
1,847
1,810
1,789
Amortization of above and below-market leases and ground lease assets and liabilities, net
198
204
232
633
Straight-line rent
(1,879)
(3,068)
(1,487)
(1,695)
Straight-line rent (rent deferral agreements) [3]
320
1,508
—
—
Eliminate unrealized losses (gains) on foreign currency transactions [4]
3,061
1,325
(2,082)
4,592
Amortization of mortgage discounts and premiums, net
—
3
10
28
Adjusted funds from operations (AFFO) attributable to common stockholders
$
40,876
$
39,777
$
39,822
$
39,906
Weighted average common shares outstanding — Basic
89,483
89,470
89,459
89,458
Weighted average common shares outstanding — Diluted
89,483
90,103
89,499
90,777
Net income per share attributable to common shareholders
$
(0.01)
$
0.01
$
0.05
$
0.10
FFO per diluted common share
$
0.39
$
0.39
$
0.43
$
0.36
Core FFO per diluted common share
$
0.39
$
0.39
$
0.43
$
0.35
AFFO per diluted common share
$
0.46
$
0.44
$
0.44
$
0.44
Dividends declared [5]
$
35,794
$
35,810
$
47,638
$
47,659
Footnotes:
[1] Primarily includes litigation costs resulting from the termination of the Former Service Provider and fees associated with the exploration of a potential equity offering.
[2] For the three months ended September 30, 2019, primarily includes non-cash write-off of deferred financing costs.
[3] Represents the amount of 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 balances but are considered to be cash that is expected to be collected.
[4] For AFFO purposes, we add back unrealized (gain) loss. For the three months ended September 30, 2020, loss on derivative instruments were $2.5 million which consisted of unrealized losses of $3.1 million and realized gains of $0.6 million. For the three months ended June 30, 2020, loss on derivative instruments were $0.3 million which consisted of unrealized losses of $1.3 million and realized gains of $1.0 million. For the three months ended March 31, 2020, gains on derivative instruments were $3.1 million which consisted of unrealized gains of $2.1 million and realized gains of $1.0 million. For the three months ended December 31, 2019, losses on derivative instruments were $3.9 million, which were comprised of unrealized losses of $4.6 million and realized gains of $0.7 million.
[5] Dividends declared to common stockholders only, and do not include distributions to non-controlling interest holders or holders of Series
A Preferred Stock or Series B Preferred Stock.
11
Global Net Lease, Inc.
Supplemental Information
Quarter ended September 30, 2020 (Unaudited)
Debt Overview
As of September 30, 2020
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
2020 (remainder)
—
—
—
%
$
2,609
2021
—
—
—
%
12,772
2022
—
—
—
%
19,779
2023
47
2.8
2.8
%
319,537
2024
8
3.6
1.5
%
227,458
2025
7
4.6
2.5
%
82,072
Thereafter
62
8
4.2
%
770,739
Total Non-Recourse Debt
124
5.9
3.4
%
1,434,966
68
%
Recourse Debt
Revolving Credit Facility
2.8
3.6
%
264,009
Term Loan
3.8
1.9
%
421,560
Total Recourse Debt
3.5
2.5
%
685,569
32
%
Total Debt
5.1
3.1
%
$
2,120,535
100
%
Total Debt by Currency
Percent
USD
45
%
EUR
39
%
GBP
16
%
Total
100
%
Footnotes:
[1] For non-recourse debt, amounts are shown within the year that the loan fully matures.
[2] As of September 30, 2020, the Company’s total combined debt was 90.5% fixed rate or swapped to a fixed rate and 9.5% floating rate.
[3] Excludes the effect of deferred financing costs, net and mortgage (discount) premium, net. Current balances as of September 30, 2020 are shown in the year the debt matures.
12
Global Net Lease, Inc.
Supplemental Information
Quarter ended September 30, 2020 (Unaudited)
Future Minimum Lease Rents
As of September 30, 2020
Amounts in thousands
Future Minimum Base Rent Payments [1]
2020 (remainder)
$
76,946
2021
310,105
2022
300,536
2023
277,978
2024
241,111
2025
200,030
Thereafter
954,382
Total
$
2,361,088
Footnotes:
[1] Base rent assumes exchange rates of £1.00 to $1.29 for GBP, €1.00 to $1.17 for EUR and C$1.00 to $0.75 as of September 30, 2020 for illustrative purposes, as applicable.
13
Global Net Lease, Inc.
Supplemental Information
Quarter ended September 30, 2020 (Unaudited)
Top Ten Tenants
As of September 30, 2020
Amounts in thousands, except percentages
Tenant / Lease Guarantor
Property Type
Tenant Industry
Annualized SL Rent [1]
SL Rent Percent
FedEx
Distribution
Freight
$
14,010
4
%
Whirlpool
Industrial/Distribution/Office
Consumer Goods
13,215
4
%
Government Services Administration (GSA)
Office
Government
12,041
4
%
Foster Wheeler
Office
Engineering
10,935
3
%
ING Bank
Office
Financial Services
9,748
3
%
Penske
Distribution
Logistics
8,500
3
%
Finnair
Industrial
Aerospace
8,436
3
%
Contractors Steel
Industrial
Metal Processing
7,958
3
%
Harper Collins
Distribution
Publishing
6,606
2
%
Trinity Health
Office
Healthcare
6,592
2
%
Subtotal
98,041
31
%
Remaining portfolio
216,530
69
%
Total Portfolio
$
314,571
100
%
Footnotes:
[1] SL Rent (Straight-line rent) is on an annualized basis and assumes exchange rates of £1.00 to $1.29 for GBP, €1.00 to $1.17 for EUR and C$1.00 to $0.75 as of September 30, 2020 for illustrative purposes, as applicable.
14
Global Net Lease, Inc.
Supplemental Information
Quarter ended September 30, 2020 (Unaudited)
Diversification by Property Type
As of September 30, 2020
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
$
151,957
48
%
8,725
25
%
$
39,529
36
%
2,385
18
%
Industrial
86,931
28
%
14,200
41
%
54,941
50
%
8,810
67
%
Distribution
59,827
19
%
10,433
30
%
10,744
10
%
1,661
13
%
Retail
15,856
5
%
1,324
4
%
5,063
4
%
266
2
%
Total
$
314,571
100
%
34,682
100
%
$
110,277
100
%
13,122
100
%
Footnotes:
[1] SL Rent (Straight-line rent) is on an annualized basis and assumes exchange rates of £1.00 to $1.29 for GBP, €1.00 to $1.17 for EUR and
C$1.00 to $0.75 as of September 30, 2020 for illustrative purposes, as applicable.
[2] Includes properties on the credit facility borrowing base.
15
Global Net Lease, Inc.
Supplemental Information
Quarter ended September 30, 2020 (Unaudited)
Diversification by Tenant Industry
As of September 30, 2020
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
$
31,888
10
%
2,126
6
%
$
—
—
%
—
—
%
Healthcare
23,191
7
%
1,049
3
%
11,598
11
%
626
5
%
Technology
21,004
7
%
1,084
3
%
2,486
2
%
178
1
%
Consumer Goods
16,957
5
%
4,061
12
%
3,289
3
%
293
2
%
Aerospace
16,205
5
%
1,416
4
%
4,606
4
%
293
2
%
Freight
14,949
5
%
1,494
4
%
7,020
6
%
774
6
%
Government
14,455
5
%
536
2
%
11,645
11
%
424
3
%
Metal Processing
14,331
5
%
2,472
7
%
10,906
10
%
1,852
14
%
Logistics
14,273
5
%
2,269
7
%
1,132
1
%
170
1
%
Telecommunications
13,977
4
%
865
2
%
—
—
%
—
—
%
Auto Manufacturing
12,903
4
%
2,400
7
%
7,492
7
%
1,102
8
%
Energy
12,553
4
%
1,043
3
%
8,693
8
%
675
5
%
Engineering
10,935
3
%
366
1
%
—
—
%
—
—
%
Pharmaceuticals
10,805
3
%
476
1
%
1,020
1
%
86
1
%
Metal Fabrication
8,346
3
%
1,208
3
%
3,646
3
%
496
4
%
Discount Retail
7,890
3
%
1,001
3
%
1,851
2
%
200
2
%
Automotive Parts Supplier
7,662
2
%
747
2
%
5,340
5
%
427
3
%
Retail Food Distribution
7,436
2
%
1,128
3
%
825
1
%
170
1
%
Publishing
6,606
2
%
873
3
%
—
—
%
—
—
%
Home Furnishings
5,977
2
%
2,456
7
%
5,977
5
%
2,456
19
%
Specialty Retail
5,378
2
%
486
1
%
2,431
2
%
206
2
%
Food Manufacturing
3,979
1
%
598
2
%
3,979
4
%
598
5
%
Restaurant - Quick Service
3,392
1
%
74
—
%
3,212
3
%
65
1
%
Other
29,479
10
%
4,454
14
%
13,129
11
%
2,031
16
%
Total
$
314,571
100
%
34,682
100
%
$
110,277
100
%
13,122
100
%
Footnotes:
[1] SL Rent (Straight-line rent) is on an annualized basis and assumes exchange rates of £1.00 to $1.29 for GBP, €1.00 to $1.17 for EUR and
C$1.00 to $0.75 as of September 30, 2020 for illustrative purposes, as applicable.
[2] Other includes 24 industry types as of September 30, 2020.
[3] Includes properties on the credit facility borrowing base.
16
Global Net Lease, Inc.
Supplemental Information
Quarter ended September 30, 2020 (Unaudited)
Diversification by Geography
As of September 30, 2020
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
$
195,330
62.1
%
24,538
70.6
%
$
100,100
90.8
%
12,482
95.1
%
Michigan
43,866
14.0
%
4,882
14.1
%
25,832
23.4
%
2,744
20.6
%
Texas
24,244
7.7
%
1,926
5.6
%
11,188
10.1
%
970
7.4
%
Ohio
17,776
5.7
%
4,099
11.8
%
4,469
4.0
%
537
4.1
%
California
14,253
4.5
%
673
1.9
%
3,775
3.4
%
284
2.2
%
New Jersey
8,322
2.7
%
349
1.0
%
—
—
%
—
—
%
Tennessee
8,247
2.6
%
1,125
3.2
%
4,726
4.3
%
262
2.0
%
North Carolina
8,210
2.6
%
2,657
7.7
%
7,465
6.8
%
2,628
20.0
%
Indiana
6,935
2.2
%
1,521
4.4
%
3,700
3.4
%
665
5.1
%
Alabama
5,606
1.8
%
257
0.7
%
320
0.3
%
58
0.4
%
Illinois
5,369
1.7
%
963
2.8
%
4,793
4.3
%
887
6.8
%
South Carolina
4,912
1.6
%
801
2.3
%
4,912
4.5
%
801
6.1
%
Kentucky
4,288
1.4
%
523
1.5
%
3,379
3.1
%
446
3.4
%
Pennsylvania
4,223
1.3
%
459
1.3
%
1,915
1.7
%
122
0.9
%
Missouri
4,143
1.3
%
348
1.0
%
2,173
2.0
%
258
2.0
%
New York
3,956
1.3
%
677
2.0
%
450
0.4
%
63
0.5
%
Florida
2,775
0.9
%
179
0.5
%
2,775
2.5
%
179
1.4
%
Colorado
2,703
0.9
%
87
0.3
%
2,703
2.5
%
87
0.7
%
Massachusetts
2,384
0.8
%
192
0.6
%
2,384
2.2
%
192
1.5
%
Minnesota
2,143
0.7
%
150
0.4
%
691
0.6
%
103
0.8
%
Kansas
2,118
0.7
%
292
0.8
%
1,922
1.7
%
277
2.1
%
Maine
1,889
0.6
%
50
0.1
%
1,889
1.7
%
50
0.4
%
Mississippi
1,580
0.5
%
314
0.9
%
283
0.3
%
14
0.1
%
Georgia
1,557
0.5
%
492
1.4
%
—
—
%
—
—
%
New Hampshire
1,457
0.5
%
247
0.7
%
1,058
1.0
%
164
1.2
%
South Dakota
1,289
0.4
%
54
0.2
%
1,289
1.2
%
54
0.4
%
Vermont
1,166
0.4
%
213
0.6
%
—
—
%
—
—
%
Nebraska
1,150
0.4
%
101
0.3
%
278
0.3
%
27
0.2
%
Iowa
1,117
0.4
%
236
0.7
%
1,117
1.0
%
236
1.8
%
Louisiana
1,111
0.4
%
112
0.3
%
434
0.4
%
36
0.3
%
West Virginia
980
0.3
%
104
0.3
%
—
—
%
—
—
%
North Dakota
884
0.3
%
47
0.1
%
884
0.8
%
47
0.4
%
Maryland
785
0.3
%
120
0.4
%
785
0.7
%
120
0.9
%
Oklahoma
699
0.2
%
79
0.2
%
699
0.6
%
79
0.6
%
New Mexico
556
0.2
%
46
0.1
%
556
0.5
%
46
0.4
%
Wyoming
498
0.2
%
37
0.1
%
—
—
%
—
—
%
Montana
441
0.1
%
58
0.2
%
—
—
%
—
—
%
Idaho
441
0.1
%
22
0.1
%
—
—
%
—
—
%
Delaware
362
0.1
%
10
—
%
362
0.3
%
10
0.1
%
Nevada
344
0.1
%
14
—
%
344
0.3
%
14
0.1
%
Utah
315
0.1
%
12
—
%
315
0.3
%
12
0.1
%
Virginia
235
0.1
%
10
—
%
235
0.2
%
10
0.1
%
United Kingdom
54,443
17.4
%
4,127
11.9
%
1,223
1.1
%
95
0.7
%
The Netherlands
14,616
4.8
%
849
2.5
%
2,431
2.2
%
206
1.6
%
Finland
14,475
4.6
%
1,457
4.2
%
—
—
%
—
—
%
France
13,349
4.2
%
1,632
4.7
%
—
—
%
—
—
%
Germany
10,121
3.2
%
1,584
4.6
%
—
—
%
—
—
%
Luxembourg
5,714
1.8
%
156
0.5
%
—
—
%
—
—
%
Puerto Rico
3,212
1.0
%
65
0.2
%
3,212
2.9
%
65
0.5
%
Italy
2,240
0.7
%
196
0.6
%
2,240
2
%
196
1.5
%
Canada
718
0.2
%
49
0.1
%
718
0.7
%
49
0.4
%
Spain
353
0.1
%
29
0.1
%
353
0.3
%
29
0.2
%
Total
$
314,571
100
%
34,682
100
%
$
110,277
100
%
13,122
100
%
Footnotes:
[1] SL Rent (Straight-line rent) is on an annualized basis and assumes exchange rates of £1.00 to $1.29 for GBP, €1.00 to $1.17 for EUR and
C$1.00 to $0.75 as of September 30, 2020 for illustrative purposes, as applicable.
[2] Includes properties on the credit facility borrowing base.
17
Global Net Lease, Inc.
Supplemental Information
Quarter ended September 30, 2020 (Unaudited)
Lease Expirations
As of September 30, 2020
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)
2020 (Remaining)
—
$
—
—
%
—
—
%
2021
2
4,944
1.6
%
323
0.9
%
2022
17
24,628
7.8
%
1,653
4.8
%
2023
29
26,388
8.4
%
2,319
6.7
%
2024
38
47,611
15.1
%
4,598
13.2
%
2025
38
38,211
12.1
%
3,237
9.4
%
2026
18
21,446
6.8
%
2,079
6.0
%
2027
19
7,824
2.5
%
788
2.3
%
2028
39
28,593
9.1
%
4,084
11.8
%
2029
20
25,094
8.0
%
2,910
8.4
%
2030
19
17,671
5.6
%
1,152
3.3
%
2031
12
19,907
6.3
%
3,655
10.6
%
2032
19
13,078
4.2
%
1,175
3.4
%
2033
4
12,335
3.9
%
1,045
3.0
%
2034
1
922
0.3
%
228
0.7
%
2035
4
5,332
1.7
%
559
1.6
%
Thereafter (>2035)
19
20,587
6.6
%
4,751
13.9
%
Total
298
$
314,571
100
%
34,556
100
%
[1] Annualized rental income converted from local currency into USD as of September 30, 2020 for the in-place lease in the property on a straight-line basis, which includes tenant concessions such as free rent, as applicable.