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 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. and European Union, and the related impact 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 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 Financial Accounting Standards Board (“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.
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Global Net Lease, Inc.
Supplemental Information
Quarter ended September 30, 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”). While NOI is a property-level measure, AFFO is based on total Company performance and therefore reflects the impact of other items not specifically associated with NOI such as, interest expense, general and administrative expenses and operating fees to related parties. Additionally, NOI as defined herein, does not reflect an adjustment for straight-line rent but AFFO does. 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 in our peer group.
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
3
Global Net Lease, Inc.
Supplemental Information
Quarter ended September 30, 2022 (Unaudited)
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.
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
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Global Net Lease, Inc.
Supplemental Information
Quarter ended September 30, 2022 (Unaudited)
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, 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 calculate and 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 September 30, 2022 (Unaudited)
Key Metrics
As of and for the three months ended September 30, 2022
Amounts in thousands, except per share data, ratios and percentages
Financial Results
Revenue from tenants
$
92,599
Revenue from tenants (quarter-over-quarter constant currency adjusted) [1]
$
93,807
Revenue from tenants (year-over-year constant currency adjusted) [1]
$
97,531
Net income attributable to common stockholders
$
9,739
Basic and diluted net loss per share attributable to common stockholders [2]
$
0.09
Cash NOI [1]
$
82,871
Adjusted EBITDA [1]
$
70,686
AFFO attributable to common stockholders [1]
$
41,312
Dividends per share - first quarter [3]
$
0.40
Dividend yield - annualized, based on quarter end share price
15.0
%
Balance Sheet and Capitalization
Equity market capitalization - based on quarter end share price of $10.65 for common shares, $21.58 for Series A preferred shares and $22.20 for Series B preferred shares
$
1,360,120
Net debt [4] [5]
2,248,942
Enterprise value
$
3,609,062
Total capitalization
$
3,737,076
Total consolidated debt [5]
$
2,376,956
Total assets
$
3,965,568
Liquidity [6]
$
206,914
Common shares outstanding as of September 30, 2022 (thousands)
104,144
Common share price, end of quarter
$
10.65
Net debt to enterprise value
62.3
%
Net debt to annualized adjusted EBITDA [7]
8.0
x
Weighted-average interest rate cost [8]
3.5
%
Weighted-average debt maturity (years) [9]
4.2
Interest Coverage Ratio [10]
3.3
x
Real Estate Portfolio
Number of properties
310
Number of tenants
141
Square footage (millions)
39.5
Leased
98.6
%
Weighted-average remaining lease term (years) [11]
8.1
Footnotes:
[1] This Non-GAAP metric is reconciled below.
[2] Adjusted for net income attributable to common stockholders for common share equivalents.
[3] Represents quarterly dividend per share rate based off the annualized dividend rate of $1.60.
[4] Represents total debt outstanding of $2.4 billion, less cash and cash equivalents of $128.0 million.
[5] Excludes the effect of mortgage discounts and deferred financing costs, net.
[6] Liquidity includes $78.9 million of availability under the credit facility and $128.0 million of cash and cash equivalents as of September 30, 2022.
[7] Annualized adjusted EBITDA annualized based on Adjusted EBITDA for the quarter ended September 30, 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.
6
Global Net Lease, Inc.
Supplemental Information
Quarter ended September 30, 2022 (Unaudited)
[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 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 September 30, 2022
Consolidated Balance Sheets
Amounts in thousands
September 30, 2022
December 31, 2021
(Unaudited)
ASSETS
Real estate investments, at cost:
Land
$
480,991
$
511,579
Buildings, fixtures and improvements
3,195,358
3,424,431
Construction in progress
16,601
6,975
Acquired intangible lease assets
670,337
748,363
Total real estate investments, at cost
4,363,287
4,691,348
Less accumulated depreciation and amortization
(828,682)
(810,686)
Total real estate investments, net
3,534,605
3,880,662
Assets held for sale
45,125
—
Cash and cash equivalents
128,014
89,668
Restricted cash
6,634
3,643
Derivative assets, at fair value
48,611
4,260
Unbilled straight-line rent
68,615
74,221
Operating lease right-of-use asset
45,493
52,851
Prepaid expenses and other assets
52,848
49,178
Due from related parties
244
—
Deferred tax assets
1,363
1,488
Goodwill and other intangible assets, net
20,355
22,060
Deferred financing costs, net
13,661
4,925
Total Assets
$
3,965,568
$
4,182,956
LIABILITIES AND EQUITY
Mortgage notes payable, net
$
1,258,179
$
1,430,915
Revolving credit facility
605,109
225,566
Term loan, net
—
278,554
Senior notes, net
492,773
491,735
Acquired intangible lease liabilities, net
24,759
29,345
Derivative liabilities, at fair value
—
4,259
Due to related parties
76
893
Accounts payable and accrued expenses
27,558
25,887
Operating lease liability
20,255
22,771
Prepaid rent
40,502
32,756
Deferred tax liability
6,423
8,254
Taxes payable
190
—
Dividends payable
5,170
5,386
Total Liabilities
2,480,994
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
47
45
Common stock
2,371
2,369
Additional paid-in capital
2,682,600
2,675,154
Accumulated other comprehensive (loss) income
(24,899)
15,546
Accumulated deficit
(1,188,266)
(1,072,462)
Total Stockholders’ Equity
1,471,921
1,620,720
Non-controlling interest
12,653
5,915
Total Equity
1,484,574
1,626,635
Total Liabilities and Equity
$
3,965,568
$
4,182,956
8
Global Net Lease, Inc.
Supplemental Information
Quarter ended September 30, 2022 (Unaudited)
Consolidated Statements of Operations
Amounts in thousands, except per share data
Three Months Ended
September 30, 2022
June 30, 2022
March 31, 2022
December 31, 2021
Revenue from tenants
$
92,599
$
95,177
$
97,133
$
106,516
Expenses:
Property operating
7,765
7,798
7,460
10,962
Operating fees to related parties
10,088
10,081
10,076
10,050
Impairment charges
796
16,031
230
9,619
Acquisition, transaction and other costs
103
133
8
42
General and administrative
4,060
3,675
3,894
4,991
Equity-based compensation
3,132
3,358
2,727
2,727
Depreciation and amortization
37,791
39,359
39,889
42,025
Total expenses
63,735
80,435
64,284
80,416
Operating income before loss on dispositions of real estate investments
28,864
14,742
32,849
26,100
Gain on dispositions of real estate investments
143
62
—
296
Operating income
29,007
14,804
32,849
26,396
Other income (expense):
Interest expense
(24,207)
(23,449)
(24,123)
(24,101)
Loss on extinguishment of debt
(41)
(342)
—
—
Gain on derivative instruments
13,121
7,798
4,615
941
Unrealized income on undesignated foreign currency advances and other hedge ineffectiveness
—
2,439
—
—
Other income
10
549
295
180
Total other expense, net
(11,117)
(13,005)
(19,213)
(22,980)
Net income before income taxes
17,890
1,799
13,636
3,416
Income tax expense
(3,052)
(2,515)
(3,095)
(6,212)
Net income (loss)
14,838
(716)
10,541
(2,796)
Preferred stock dividends
(5,099)
(5,131)
(5,058)
(5,016)
Net income (loss) attributable to common stockholders
$
9,739
$
(5,847)
$
5,483
$
(7,812)
Basic and Diluted Earnings (Loss) Per Share:
Net income (loss) per share attributable to common stockholders — Basic and Diluted
$
0.09
$
(0.06)
$
0.05
$
(0.08)
Weighted average shares outstanding — Basic and Diluted
103,715
103,649
103,596
103,581
9
Global Net Lease, Inc.
Supplemental Information
Quarter ended September 30, 2022 (Unaudited)
Non-GAAP Measures
Amounts in thousands, except per share data
Three Months Ended
September 30, 2022
June 30, 2022
March 31, 2022
December 31, 2021
EBITDA:
Net income (loss)
$
14,838
$
(716)
$
10,541
$
(2,796)
Depreciation and amortization
37,791
39,359
39,889
42,025
Interest expense
24,207
23,449
24,123
24,101
Income tax expense
3,052
2,515
3,095
6,212
EBITDA [1]
79,888
64,607
77,648
69,542
Impairment charges
796
16,031
230
9,619
Equity-based compensation
3,132
3,358
2,727
2,727
Acquisition, transaction and other costs
103
133
8
42
Gain on dispositions of real estate investments
(143)
(62)
—
(296)
Gain on derivative instruments
(13,121)
(7,798)
(4,615)
(941)
Unrealized income on undesignated foreign currency advances and other hedge ineffectiveness
—
(2,439)
—
—
Loss on extinguishment of debt
41
342
—
—
Other income
(10)
(549)
(295)
(180)
Adjusted EBITDA [1]
70,686
73,623
75,703
80,513
Operating fees to related parties
10,088
10,081
10,076
10,050
General and administrative
4,060
3,675
3,894
4,991
NOI [1]
84,834
87,379
89,673
95,554
Amortization related to above and below-market lease intangibles and right-of-use assets, net
351
273
330
(56)
Straight-line rent
(2,314)
(2,342)
(2,853)
(1,663)
Cash NOI [1]
$
82,871
$
85,310
$
87,150
$
93,835
Cash Paid for Interest:
Interest Expense
$
24,207
$
23,449
$
24,123
$
24,101
Non-cash portion of interest expense
(2,322)
(2,336)
(2,596)
(2,614)
Amortization of mortgage discounts
(225)
(238)
(251)
(258)
Total cash paid for interest
$
21,660
$
20,875
$
21,276
$
21,229
Footnote:
[1] For the three months ended March 31, 2022 and December 31, 2021, includes income from a lease termination fee of $0.3 million and $6.5 million, respectively, which is recorded in revenue from tenants in the consolidated statements of operations.
10
Global Net Lease, Inc.
Supplemental Information
Quarter ended September 30, 2022 (Unaudited)
Non-GAAP Measures
Amounts in thousands, except per share data
Three Months Ended
September 30, 2022
June 30, 2022
March 31, 2022
December 31, 2021
Funds from operations (FFO):
Net income (loss) attributable to common stockholders (in accordance with GAAP)
$
9,739
$
(5,847)
$
5,483
$
(7,812)
Impairment charges
796
16,031
230
9,619
Depreciation and amortization
37,791
39,359
39,889
42,025
Gain on dispositions of real estate investments
(143)
(62)
—
(296)
FFO (as defined by NAREIT) attributable to common stockholders [1]
48,183
49,481
45,602
43,536
Acquisition, transaction and other costs
103
133
8
42
Loss on extinguishment of debt
41
342
—
—
Core FFO attributable to common stockholders [1]
48,327
49,956
45,610
43,578
Non-cash equity-based compensation
3,132
3,358
2,727
2,727
Non-cash portion of interest expense
2,322
2,336
2,596
2,614
Amortization related to above and below-market lease intangibles and right-of-use assets, net
351
273
330
(56)
Straight-line rent
(2,314)
(2,342)
(2,853)
(1,663)
Straight-line rent (rent deferral agreements) [2]
—
(39)
(120)
(273)
Unrealized income on undesignated foreign currency advances and other hedge ineffectiveness
1
(2,440)
—
—
Eliminate unrealized gains on foreign currency transactions [3]
(10,732)
(6,321)
(4,210)
(1,201)
Amortization of mortgage discounts
225
238
251
258
Adjusted funds from operations (AFFO) attributable to common stockholders [1]
$
41,312
$
45,019
$
44,331
$
45,984
Weighted average common shares outstanding — Basic and Diluted
103,715
103,649
103,596
103,581
Net income (loss) per share attributable to common shareholders
$
0.09
$
(0.06)
$
0.05
$
(0.08)
FFO per diluted common share
$
0.46
$
0.48
$
0.44
$
0.42
Core FFO per diluted common share
$
0.47
$
0.48
$
0.44
$
0.42
AFFO per diluted common share
$
0.40
$
0.43
$
0.43
$
0.44
Dividends declared to common stockholders
$
41,707
$
41,606
$
41,566
$
41,564
Footnotes:
[1] FFO, Core FFO and AFFO for the three months ended March 31, 2022 and December 31, 2021 include income from a lease termination fee of $0.3 million and $6.5 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 September 30, 2022, the gain on derivative instruments was $13.1 million which consisted of unrealized gains of $10.7 million and realized gains of $2.4 million. For the three months ended June 30, 2022, the gain on derivative instruments was $7.8 million which consisted of unrealized gains of $6.3 million and realized gains of $1.5 million. 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.
Revenue from tenants (quarter-over-quarter constant currency adjusted)
$
93,807
Revenue from tenants (year-over-year constant currency adjusted)
$
97,531
Footnote:
Constant currency results exclude any benefit or loss caused by foreign exchange fluctuations between foreign currencies and the United States dollar which would not have occurred if there had been a constant exchange rate. Revenue from tenants on a Constant Currency basis is calculated by applying the average monthly currency rates from the prior comparable period to Revenues from tenants from the applicable period.
12
Global Net Lease, Inc.
Supplemental Information
Quarter ended September 30, 2022 (Unaudited)
Debt Overview
As of September 30, 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)
—
—
—
%
$
4,176
2023
46
0.8
2.7
%
231,213
2024
11
1.6
3.2
%
302,542
2025
7
2.6
2.5
%
68,586
2026
—
—
—
%
—
2027
10
5.1
4.4
%
162,580
Thereafter
44
6.5
4.3
%
502,750
Total Non-Recourse Debt
118
3.9
3.6
%
1,271,847
54
%
Recourse Debt
Revolving Credit Facility
4.0
3.0
%
605,109
Senior Notes
5.2
3.8
%
500,000
Total Recourse Debt
4.6
3.3
%
1,105,109
46
%
Total Debt
4.2
3.5
%
$
2,376,956
100
%
Total Debt by Currency
Percent
USD
60
%
EUR
24
%
GBP
15
%
CAD
1
%
Total
100
%
Footnotes:
[1] For non-recourse debt, amounts are shown within the year that the loan fully matures.
[2] As of September 30, 2022, the Company’s total combined debt was 74.8% fixed rate or swapped to a fixed rate and 25.2% floating rate.
[3] Excludes the effect of mortgage discounts and deferred financing costs, net. Current balances as of September 30, 2022 are shown in the year the debt matures.
13
Global Net Lease, Inc.
Supplemental Information
Quarter ended September 30, 2022 (Unaudited)
Future Minimum Lease Rents
As of September 30, 2022
Amounts in thousands
Future Minimum Base Rent Payments [1]
2022 (remainder)
$
82,551
2023
327,741
2024
301,775
2025
271,767
2026
250,272
2027
230,537
Thereafter
1,140,670
Total
$
2,605,313
Footnotes:
[1] Base rent assumes exchange rates of £1.00 to $1.11 for GBP, €1.00 to $0.98 for EUR and C$1.00 to $0.73 as of September 30, 2022 for illustrative purposes, as applicable.
14
Global Net Lease, Inc.
Supplemental Information
Quarter ended September 30, 2022 (Unaudited)
Top Ten Tenants
As of September 30, 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
$
16,958
5
%
FedEx
Distribution
Freight
14,108
4
%
Whirlpool
Industrial/Distribution
Consumer Goods
13,215
4
%
Government Services Administration (GSA)
Office
Government
11,207
3
%
FCA USA
Industrial/Distribution
Auto Manufacturing
10,147
3
%
Foster Wheeler
Office
Engineering
9,459
3
%
Broadridge Finanical Solutions
Industrial
Financial Services
9,332
3
%
ING Bank
Office
Financial Services
8,851
3
%
Penske
Distribution
Logistics
8,500
3
%
Contractors Steel
Industrial
Metal Processing
7,958
2
%
Subtotal
109,735
33
%
Remaining portfolio
224,708
67
%
Total Portfolio
$
334,443
100
%
Footnotes:
[1] SL Rent (Straight-line rent) is on an annualized basis and assumes exchange rates of £1.00 to $1.11 for GBP, €1.00 to $0.98 for EUR and C$1.00 to $0.73 as of September 30, 2022 for illustrative purposes, as applicable.
15
Global Net Lease, Inc.
Supplemental Information
Quarter ended September 30, 2022 (Unaudited)
Diversification by Property Type
As of September 30, 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
$
137,607
41
%
8,831
22
%
$
45,947
29
%
2,736
13
%
Industrial
124,055
37
%
17,972
46
%
79,851
52
%
12,367
61
%
Distribution
62,957
19
%
11,430
29
%
28,681
18
%
5,053
25
%
Retail
9,824
3
%
1,259
3
%
1,851
1
%
200
1
%
Total
$
334,443
100
%
39,492
100
%
$
156,330
100
%
20,356
100
%
Footnotes:
[1] SL Rent (Straight-line rent) is on an annualized basis and assumes exchange rates of £1.00 to $1.11 for GBP, €1.00 to $0.98 for EUR and
C$1.00 to $0.73 as of September 30, 2022 for illustrative purposes, as applicable.
[2] Includes properties on the credit facility borrowing base.
16
Global Net Lease, Inc.
Supplemental Information
Quarter ended September 30, 2022 (Unaudited)
Diversification by Tenant Industry
As of September 30, 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
Auto Manufacturing
$
39,180
12
%
4,237
11
%
$
16,622
11
%
2,099
10
%
Financial Services
37,714
11
%
3,285
8
%
14,312
9
%
1,279
6
%
Consumer Goods
20,263
6
%
4,544
12
%
17,676
11
%
3,700
18
%
Healthcare
19,653
6
%
1,000
3
%
8,059
5
%
576
3
%
Technology
16,204
5
%
987
2
%
3,428
2
%
246
1
%
Freight
15,047
4
%
1,494
4
%
6,897
4
%
774
4
%
Government
14,353
4
%
536
1
%
11,623
7
%
424
2
%
Metal Processing
14,331
4
%
2,472
6
%
10,906
7
%
1,852
9
%
Aerospace
13,860
4
%
1,416
4
%
3,390
2
%
293
1
%
Logistics
13,775
4
%
2,269
6
%
1,132
1
%
170
1
%
Telecommunications
12,725
4
%
865
2
%
—
—
%
—
—
%
Energy
11,446
3
%
964
2
%
10,179
7
%
817
4
%
Pharmaceuticals
10,809
3
%
476
1
%
1,020
1
%
86
—
%
Metal Fabrication
10,726
3
%
1,524
4
%
5,957
4
%
812
4
%
Engineering
9,459
3
%
366
1
%
—
—
%
—
—
%
Automotive Parts Supplier
9,365
3
%
964
2
%
7,239
5
%
643
3
%
Discount Retail
6,897
2
%
1,001
3
%
1,851
1
%
200
1
%
Home Furnishings
5,977
2
%
2,456
6
%
5,977
4
%
2,456
12
%
Building Products
5,657
2
%
760
2
%
5,657
4
%
760
4
%
Retail Food Distribution
4,390
1
%
1,128
3
%
825
1
%
170
1
%
Food Manufacturing
3,979
1
%
598
2
%
3,979
3
%
598
3
%
Publishing
3,746
1
%
873
2
%
—
—
%
—
—
%
Specialty Retail
3,522
1
%
486
1
%
2,089
1
%
206
1
%
Other [2]
31,365
11
%
4,791
12
%
17,512
10
%
2,195
12
%
Total
$
334,443
100
%
39,492
100
%
$
156,330
100
%
20,356
100
%
Footnotes:
[1] SL Rent (Straight-line rent) is on an annualized basis and assumes exchange rates of £1.00 to $1.11 for GBP, €1.00 to $0.98 for EUR and
C$1.00 to $0.73 as of September 30, 2022 for illustrative purposes, as applicable.
[2] Other includes 28 industry types as of September 30, 2022.
[3] Includes properties on the credit facility borrowing base.
17
Global Net Lease, Inc.
Supplemental Information
Quarter ended September 30, 2022 (Unaudited)
Diversification by Geography
As of September 30, 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
$
218,051
65.2
%
28,001
71
%
$
139,964
89.2
%
19,089
93.9
%
Michigan
53,100
15.9
%
6,263
16.0
%
35,065
22.4
%
4,124
20.4
%
Texas
24,336
7.3
%
1,887
4.8
%
13,795
8.8
%
1,153
5.7
%
Ohio
19,715
5.9
%
4,405
11.2
%
15,577
9.8
%
3,366
16.5
%
California
14,006
4.2
%
1,226
3.1
%
7,699
4.9
%
838
4.1
%
New Jersey
8,327
2.5
%
349
0.9
%
—
—
%
—
—
%
North Carolina
8,273
2.5
%
2,657
6.7
%
7,528
4.8
%
2,628
12.9
%
Tennessee
8,213
2.5
%
1,125
2.9
%
6,480
4.1
%
662
3.3
%
Indiana
7,031
2.1
%
1,556
3.9
%
3,562
2.3
%
700
3.4
%
Missouri
6,790
2.0
%
656
1.7
%
4,820
3.1
%
566
2.8
%
Illinois
6,337
1.9
%
1,138
2.9
%
5,761
3.7
%
1,062
5.2
%
Alabama
5,606
1.7
%
257
0.7
%
320
0.2
%
58
0.3
%
New York
5,391
1.6
%
760
1.9
%
1,747
1.1
%
145
0.7
%
South Carolina
5,104
1.5
%
801
2.0
%
5,104
3.3
%
801
3.9
%
Pennsylvania
4,240
1.3
%
459
1.2
%
1,931
1.2
%
122
0.6
%
Kentucky
4,223
1.3
%
523
1.3
%
3,314
2.1
%
446
2.2
%
Arkansas
2,973
0.9
%
90
0.2
%
2,973
1.9
%
90
0.4
%
Massachusetts
2,822
0.8
%
250
0.6
%
2,822
1.8
%
250
1.2
%
Minnesota
2,789
0.8
%
266
0.7
%
1,286
0.8
%
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
1.7
%
87
0.4
%
Kansas
2,118
0.6
%
292
0.7
%
1,922
1.2
%
277
1.4
%
New Hampshire
2,076
0.6
%
339
0.9
%
1,676
1.1
%
256
1.3
%
Maine
1,949
0.6
%
50
0.1
%
1,949
1.2
%
50
0.2
%
Florida
1,878
0.6
%
179
0.5
%
1,878
1.2
%
179
0.9
%
Mississippi
1,580
0.5
%
314
0.8
%
283
0.2
%
14
0.1
%
Georgia
1,557
0.5
%
492
1.2
%
—
—
%
—
—
%
Vermont
1,236
0.4
%
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
%
South Dakota
1,110
0.3
%
54
0.1
%
1,110
0.7
%
54
0.3
%
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
0.4
%
79
0.4
%
Maryland
690
0.2
%
120
0.3
%
690
0.4
%
120
0.6
%
New Mexico
556
0.2
%
46
0.1
%
556
0.4
%
46
0.2
%
Wyoming
498
0.2
%
37
0.1
%
—
—
%
—
—
%
Montana
441
0.1
%
58
0.2
%
—
—
%
—
—
%
Idaho
441
0.1
%
22
0.1
%
—
—
%
—
—
%
Delaware
374
0.1
%
10
—
%
374
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
53,273
16.0
%
4,913
12.3
%
2,148
1.4
%
161
0.6
%
The Netherlands
14,290
4.3
%
1,007
2.6
%
3,296
2.1
%
364
1.8
%
Finland
12,354
3.7
%
1,457
3.7
%
—
—
%
—
—
%
France
12,147
3.6
%
1,663
4.2
%
335
0.2
%
32
0.2
%
Germany
9,098
2.7
%
1,584
4.0
%
—
—
%
—
—
%
Channel Islands
4,980
1.5
%
114
0.3
%
4,980
3.2
%
114
0.6
%
Luxembourg
4,643
1.4
%
156
0.4
%
—
—
%
—
—
%
Canada
3,021
0.9
%
372
0.9
%
3,021
1.9
%
372
1.8
%
Italy
2,240
0.7
%
196
0.5
%
2,240
1.4
%
196
1
%
Spain
346
—
%
29
0.1
%
346
0.2
%
28
0.1
%
Total
$
334,443
100
%
39,492
100
%
$
156,330
100
%
20,356
100
%
Footnotes:
[1] SL Rent (Straight-line rent) is on an annualized basis and assumes exchange rates of £1.00 to $1.11 for GBP, €1.00 to $0.98 for EUR and
C$1.00 to $0.73 as of September 30, 2022 for illustrative purposes, as applicable.
[2] Includes properties on the credit facility borrowing base.
18
Global Net Lease, Inc.
Supplemental Information
Quarter ended September 30, 2022 (Unaudited)
Lease Expirations
As of September 30, 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)
3
$
2,028
0.6
%
275
0.7
%
2023
22
16,042
4.8
%
1,301
3.3
%
2024
33
40,413
12.1
%
4,235
10.7
%
2025
20
23,351
7.0
%
2,829
7.2
%
2026
17
20,304
6.1
%
1,581
4.0
%
2027
24
18,792
5.6
%
1,567
4.0
%
2028
41
32,547
9.7
%
4,486
11.4
%
2029
24
33,028
9.9
%
4,141
10.5
%
2030
20
23,797
7.1
%
2,040
5.2
%
2031
15
25,745
7.7
%
3,971
10.1
%
2032
31
25,077
7.5
%
2,316
5.9
%
2033
8
16,318
4.9
%
1,551
3.9
%
2034
1
922
0.3
%
228
0.6
%
2035
5
5,133
1.5
%
750
1.9
%
2036
9
5,491
1.6
%
716
1.8
%
Thereafter (>2036)
33
45,455
13.6
%
6,970
18.8
%
Total
306
$
334,443
100
%
38,957
100
%
[1] Annualized rental income converted from local currency into USD as of September 30, 2022 for the in-place lease in the property on a straight-line basis, which includes tenant concessions such as free rent, as applicable.
