EX-99.2 3 v460484_ex99-2.htm EXHIBIT 99.2

 

Exhibit 99.2

 

Global Net Lease, Inc.

 

 Supplemental Information


 

 

Quarter ended December 31, 2016 (unaudited)

 

 

 

 

Global Net Lease, Inc.    
Supplemental Information    
Quarter ended December 31, 2016 (unaudited)    

 

Table of Contents 

     
Item   Page
Non-GAAP Definitions   3
Key Metrics   7
Consolidated Balance Sheets   8
Consolidated Statements of Operations   9
Non-GAAP Measures   10
Debt Overview   12
Top Ten Tenants   13
Diversification by Property Type   14
Diversification by Tenant Industry   15
Diversification by Geography   16
Lease Expirations   17

 

Please note that totals may not add due to rounding.

 

Forward-looking Statements:

 

This supplemental package includes “forward looking statements”. Forward-looking statements may be identified by the use of words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “pro forma,” “estimates,” “contemplates,” “aims,” “continues,” “would” or “anticipates” or the negative of these words and phrases or similar words or phrases. The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: the factors included in (i) the Annual Report on Form 10-K for the year ended December 31, 2015 of Global Net Lease, Inc. (the “Company”) filed on February 29, 2016, including those set forth under the headings “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Business,” (ii) the Quarterly Reports on Form 10-Q for the quarters ended March 31, 2016, June 30, 2016, and September 30, 2016, filed on May 6, 2016, August 8, 2016, and November 9, 2016, respectively and (iii) in future periodic reports filed by the Company under the Securities Exchange Act of 1934, as amended. While forward-looking statements reflect the Company’s good faith beliefs, they are not guarantees of future performance. The Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes after the date of this press release, except as required by applicable law. For a further discussion of these and other factors that could impact the Company’s future results, performance or transactions, see the section entitled “Risk Factors” in the Annual Report on Form 10-K for the year ended December 31, 2015 filed on February 29, 2016, and other risks described in documents subsequently filed by the Company from time to time with the Securities and Exchange Commission. Prospective investors should not place undue reliance on any forward-looking statements, which are based only on information currently available to the Company (or to third parties making the forward-looking statements).

 

  2

 

 

Global Net Lease, Inc.
Supplemental Information
Quarter ended December 31, 2016 (unaudited)

 

Non-GAAP Definitions

 

This section includes non-GAAP financial measures, including Funds from Operations, Core Funds from Operations and Adjusted Funds from Operations. A description of these non-GAAP measures and reconciliations to the most directly comparable GAAP measure, which is net income, is provided below.

 

Funds from Operations, Core Funds from Operations and Adjusted Funds from Operations

Due to certain unique operating characteristics of real estate companies, as discussed below, the National Association of Real Estate Investment Trusts ("NAREIT"), an industry trade group, has promulgated a measure known as funds from operations ("FFO"), which we believe to be an appropriate supplemental measure to reflect the operating performance of a REIT. The use of FFO is recommended by the REIT industry as a supplemental performance measure. FFO is not equivalent to net income or loss as determined under GAAP.

 

We define FFO, a non-GAAP measure, consistent with the standards established by the White Paper on FFO approved by the Board of Governors of NAREIT, as revised in February 2004 (the "White Paper"). The White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding gains or losses from sales of property but including asset impairment write-downs, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. 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, especially if not adequately maintained or repaired and renovated as required by relevant circumstances or as requested or required by lessees for operational purposes in order to maintain the value disclosed. 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. However, FFO, core funds from operations ("Core FFO") and adjusted funds from operations (“AFFO”), as described below, 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 FFO, Core FFO and AFFO measures and the adjustments to GAAP in calculating FFO, Core FFO and AFFO. Other REITs may not define FFO in accordance with the current NAREIT definition (as we do) or may interpret the current NAREIT definition differently than we do or 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.

 

  3

 

  

Global Net Lease, Inc.
Supplemental Information
Quarter ended December 31, 2016 (unaudited)

 

Non-GAAP Definitions

 

We consider FFO, Core FFO and AFFO useful indicators of our performance. Because FFO calculations exclude such factors as depreciation and amortization of real estate assets and gains or losses 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 facilitates comparisons of operating performance between periods and between other REITs in our peer group.

 

Changes in the accounting and reporting promulgations under GAAP (for acquisition fees and expenses from a capitalization/depreciation model to an expensed-as-incurred model) that were put into effect in 2009 and other changes to GAAP accounting for real estate subsequent to the establishment of NAREIT's definition of FFO have prompted an increase in cash-settled expenses, specifically acquisition fees and expenses for all industries as items that are expensed under GAAP.

 

Core FFO is FFO, excluding acquisition and transaction related costs as well as certain other costs that are considered to be non-core, such as charges relating to the Listing Note and listing related fees. The purchase of properties, and the corresponding expenses associated with that process, is a key operational feature of our 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 operations derived from the investment. By excluding expensed acquisition and transaction related 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.

 

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 unrealized gains and losses, which may not ultimately be realized, such as gains or losses on derivative investments, gains and losses on foreign currency transactions, and gains and losses 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 gains or losses on foreign currency exchange contracts for AFFO as such items are part of our ongoing operations and affect the current operating performance of the Company. By providing AFFO, we believe we are presenting useful information that assists investors and analysts to better assess the sustainability of our ongoing operating performance without the impacts of transactions that are not related to the ongoing performance of our portfolio of properties. We also believe that AFFO is a recognized measure of sustainable operating performance by the REIT industry. Further, we believe AFFO is useful in comparing the sustainability of our operating performance with the sustainability of the operating performance of other real estate companies. However, AFFO is not indicative of cash available to fund ongoing cash needs, including the ability to make cash distributions. Investors are cautioned that AFFO should only be used to assess the sustainability of our operating performance excluding these activities, as it excludes certain costs that have a negative effect on our operating performance during the periods in which these costs are incurred.

 

  4

 

 

Global Net Lease, Inc.
Supplemental Information
Quarter ended December 31, 2016 (unaudited)

 

Non-GAAP Definitions

 

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 and transaction related fees 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 our on-going performance. AFFO that excludes such costs and expenses would only be comparable to companies that did not have such activities. 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 gains and losses 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 the operating performance of the Company. 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 gains or losses, we believe AFFO provides useful supplemental information.

 

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 performance including relative to our peers and a more informed and appropriate basis on which to make decisions involving operating, financing, and investing activities.

 

  5

 

  

Global Net Lease, Inc.
Supplemental Information
Quarter ended December 31, 2016 (unaudited)

 

Non-GAAP Definitions

 

Adjusted Earnings before Interest, Taxes, Depreciation and Amortization, Net Operating Income, Cash Net Operating Income and Adjusted Cash Net Operating Income.

 

We believe that earnings before interest, taxes, depreciation and amortization adjusted for acquisition and transaction-related expenses, other non-cash items and including our pro-rata share from unconsolidated joint ventures ("Adjusted EBITDA") 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.

 

Net operating income ("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 and transaction-related expenses, depreciation and amortization, other non-cash expenses and interest expense. NOI is adjusted to include our pro rata share of NOI from unconsolidated joint ventures. 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 net operating income, or 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.

 

  6

 

  

Global Net Lease, Inc.  
Supplemental Information  
Quarter ended December 31, 2016 (unaudited)  

 

Key Metrics

As of and for the three months ended December 31, 2016

Amounts in thousands, except per share data, ratios and percentages

 

Financial Results    
Rental income  $50,046 
Net income attributable to stockholders   15,946 
Basic and diluted net income per share attributable to stockholders  $0.09 
Cash NOI   44,599 
Adjusted EBITDA   40,202 
AFFO attributable to stockholders   29,272 
Dividends paid per share - fourth quarter   0.18 
Dividend yield - annualized, based on quarter end share price of $7.83   9.1%
Dividend payout ratio - fourth quarter   105.1%
      
Balance Sheet and Capitalization    
Equity market capitalization - based on quarter end share price of $7.83  $1,556,414 
Net debt   1,357,170 
Enterprise value   2,913,584 
      
Total capitalization   2,983,415 
      
Total consolidated debt   1,427,001 
Total assets   2,891,467 
Liquidity   182,818 
      
Common shares outstanding as of Dec 31, 2016 (thousands)   198,776 
Share price, end of quarter  $7.83 
      
Net debt to enterprise value   46.6%
Net debt to adjusted EBITDA (annualized) [1]   8.4x
      
Weighted-average interest rate cost   2.8%
Weighted-average debt maturity (years) [2]   1.8 
Interest Coverage Ratio [3]   4.9x
      
Real Estate Portfolio    
Number of properties   310 
Number of tenants   95 
      
Square footage (millions)   22.0 
Occupied   100.0%
Weighted-average remaining lease term (years) [4]   9.8 

 

Footnotes:

 

[1] Includes all debt assumed in the ARC Global II merger, as well as Adjusted EBITDA recognized on the acquired assets beginning 12/22/2016.

 

[2] On July 25, 2016, the company extended the credit facility maturity date to July 25, 2017, with an additional one-year extension option remaining, subject to certain conditions.

 

[3] The interest coverage ratio is calculated by dividing Adjusted EBITDA by cash paid for interest (interest expense less non-cash portion of interest expense including amortization of mortgage (discount) premium, net and mezzanine discount) as of the quarter ended December, 31, 2016.

 

[4] The weighted-average remaining lease term (years) is based on square feet.

 

  7

 

  

Global Net Lease, Inc.
Supplemental Information
Quarter ended December 31, 2016 (unaudited)

 

Consolidated Balance Sheets

Amounts in thousands

 

   Dec 31, 2016   Dec 31, 2015 
Assets          
Real estate investments, at cost:          
Land  $376,704   $341,911 
Buildings, fixtures and improvements   1,967,930    1,685,919 
Construction in progress   -    180 
Acquired intangible lease assets   587,061    518,294 
Total real estate investments, at cost   2,931,695    2,546,304 
Less accumulated depreciation and amortization   (216,055)   (133,329)
Total real estate investments, net   2,715,640    2,412,975 
Cash and cash equivalents   69,831    69,938 
Restricted cash   7,497    3,319 
Derivatives, at fair value   28,700    5,812 
Unbilled straight line rent   30,459    23,048 
Prepaid expenses and other assets   17,577    15,345 
Due from related parties   5,154    136 
Deferred tax assets   1,586    2,552 
Goodwill and other intangible assets, net   13,931    2,988 
Deferred financing costs, net   1,092    4,409 
Assets held for sale, net   -    - 
Total assets  $2,891,467   $2,540,522 
           
Liabilities and Equity          
Mortgage notes payable, net of deferred financing costs  $749,884   $524,262 
Mortgage premium, net   (2,503)   676 
Credit facility   616,614    717,286 
Mezzanine credit facility   55,400    - 
Mezzanine loan premium (discount)   (17)   - 
Below-market lease liabilities, net   33,041    27,978 
Derivatives, at fair value   15,457    6,028 
Due to related parties   2,162    399 
Accounts payable and accrued expenses   22,861    18,659 
Prepaid rent   18,429    15,491 
Deferred tax liability   15,065    4,016 
Taxes payable   9,059    5,201 
Dividends payable   34    407 
Total liabilities   1,535,486    1,320,403 
           
Common stock   1,990    1,692 
Additional paid in capital   1,708,541    1,480,162 
Accumulated other comprehensive loss   (16,689)   (3,649)
Accumulated deficit   (346,058)   (272,812)
Total stockholders' equity   1,347,784    1,205,393 
Non-controlling interest   8,197    14,726 
Total equity   1,355,981    1,220,119 
Total liabilities and equity  $2,891,467   $2,540,522 

 

  8

 

  

Global Net Lease, Inc.
Supplemental Information
Quarter ended December 31, 2016 (unaudited)

 

Consolidated Statements of Operations

Amounts in thousands, except per share data

 

   Three Months Ended 
   Dec 31, 2016   Sep 30, 2016   Jun 30, 2016   Mar 31, 2016 
                 
Revenues:                    
Rental income  $50,046   $50,756   $51,736   $51,511 
Operating expense reimbursements   2,727    2,495    1,460    3,443 
Total revenues   52,773    53,251    53,196    54,954 
                     
Expenses:                    
Property operating   5,648    4,201    3,542    5,647 
Operating fees to related parties   5,113    4,862    4,959    4,817 
Acquisition and transaction related   7,415    2,479    27    (129)
General and administrative   1,810    1,714    1,880    1,704 
Equity based compensation   1,341    1,293    70    1,044 
Depreciation and amortization   23,405    23,482    23,812    23,756 
Total expenses   44,732    38,031    34,290    36,839 
Operating income   8,041    15,220    18,906    18,115 
                     
Other income (expense):                    
Interest expense   (9,004)   (8,914)   (10,634)   (10,569)
Gains on dispositions of real estate investments   12,021    1,320    -    - 
Gains (losses) on derivative instruments   3,512    375    3,830    (349)
Unrealized gains (losses) on undesignated foreign currency advances and other hedge ineffectiveness   4,496    1,459    4,252    (98)
Other income (expense)   (1)   4    8    9 
Total other expense, net   11,024    (5,756)   (2,544)   (11,007)
Net income before income taxes   19,065    9,464    16,362    7,108 
Income tax expense   (2,994)   (448)   (430)   (550)
Net income   16,071    9,016    15,932    6,558 
Non-controlling interest   (125)   (73)   (169)   (70)
Net income attributable to stockholders  $15,946   $8,943   $15,763   $6,488 
                     
Basic and Diluted Earnings Per Share:                    
Basic and diluted net income per share attributable to stockholders  $0.09   $0.05   $0.09   $0.04 
Basic and diluted weighted average shares outstanding (thousands)   173,344    169,390    168,948    168,937 

 

  9

 

  

Global Net Lease, Inc.
Supplemental Information
Quarter ended December 31, 2016 (unaudited)

 

Non-GAAP Measures

Amounts in thousands

 

   Three Months Ended 
   Dec 31, 2016   Sep 30, 2016   Jun 30, 2016   Mar 31, 2016 
                 
EBITDA:                    
Net income  $16,071   $9,016   $15,932   $6,558 
Depreciation and amortization   23,405    23,482    23,812    23,756 
Interest expense   9,004    8,914    10,634    10,569 
Income tax expense   2,994    448    430    550 
EBITDA  $51,474   $41,860   $50,808   $41,433 
                     
Adjusted EBITDA:                    
Equity based compension  $1,341   $1,293   $70   $1,044 
Acquisition and transaction related   7,415    2,479    27    (129)
Gains on dispositions of real estate investments   (12,021)   (1,320)   -    - 
(Gains) losses on derivative instruments   (3,512)   (375)   (3,830)   349 
Unrealized (gains) losses on undesignated foreign currency advances and other hedge ineffectiveness   (4,496)   (1,459)   (4,252)   98 
Other (income) expense   1    (4)   (8)   (9)
Adjusted EBITDA  $40,202   $42,474   $42,815   $42,786 
                     
Net Operating Income (NOI):                    
Operating fees to related parties  $5,113   $4,862   $4,959   $4,817 
General and administrative   1,810    1,714    1,880    1,704 
NOI  $47,125   $49,050   $49,654   $49,307 
                     
Cash Net Operating Income (Cash NOI):                    
Amortization of above- and below- market leases and ground lease assets and liabilities, net  $28   $(58)  $(27)  $16 
Straight-line rent   (2,554)   (2,536)   (2,722)   (2,801)
Cash NOI  $44,599   $46,456   $46,905   $46,522 

 

  10

 

  

Global Net Lease, Inc.
Supplemental Information
Quarter ended December 31, 2016 (unaudited)

 

Non-GAAP Measures

Amounts in thousands, except per share data

 

   Three Months Ended 
   Dec 31, 2016   Sep 30, 2016   Jun 30, 2016   Mar 31, 2016 
                 
Funds from operations (FFO):                    
Net income attributable to stockholders (in accordance with GAAP)  $15,946   $8,943   $15,763   $6,488 
Depreciation and amortization   23,405    23,482    23,812    23,756 
Gains on dispositions of real estate investments [1]   (10,521)   (1,320)   -    - 
Proportionate share of adjustments for non-controlling interest to arrive at FFO   17    (182)   (252)   (252)
FFO (as defined by NAREIT) attributable to stockholders  $28,847   $30,923   $39,323   $29,992 
Acquisition and transaction fees [2]   7,415    2,479    27    (129)
Proportionate share of adjustments for non-controlling interest to arrive at Core FFO   (60)   (20)   -    1 
Core FFO attributable to stockholders  $36,202   $33,382   $39,350   $29,864 
Non-cash equity based compensation   1,341    1,293    70    1,044 
Non-cash portion of interest expense   929    951    2,400    2,418 
Amortization of above and below-market leases and ground lease assets and liabilities, net   28    (58)   (27)   16 
Straight-line rent   (2,554)   (2,536)   (2,722)   (2,801)
Unrealized (gains) losses on undesignated foreign currency advances and other hedge ineffectiveness   (4,496)   (1,459)   (4,252)   98 
Eliminate unrealized losses (gains) on foreign currency transactions [3]   (2,140)   1,606    (2,347)   1,809 
Amortization of mortgage (discount) premium, net and mezzanine discount   (76)   (121)   (119)   (121)
Proportionate share of adjustments for non-controlling interest to arrive at AFFO   38    3    74    (26)
Adjusted funds from operations (AFFO) attributable to stockholders  $29,272   $33,061   $32,427   $32,301 
                     
Weighted average common shares outstanding (thousands)   173,344    169,390    168,948    168,937 
                     
FFO per share  $0.17   $0.18   $0.23   $0.18 
                     
Core FFO per share   0.21    0.20    0.23    0.18 
                     
Dividends declared [4]  $30,250   $30,097   $30,019   $30,020 

 

Footnotes:

 

[1] For the three months ended December 31, 2016, the gains on dispositions of real estate investments is net of $1.5 million of tax recognized (presented within income tax expense) on the sale of Hotel Winston, The Netherlands property.

 

[2] Reflects merger related costs.

 

[3] For the three months ended December 31, 2016, gains on foreign currency transactions were $3.5 million which were comprised of unrealized gains of $2.2 million and realized gains of $1.3 million. For the three months ended September 30, 2016, gains on foreign currency transactions were $0.4 million, which were compromised of unrealized losses of $1.6 million offset by realized gains of $2.0 million. For the three months ended June 30, 2016, gains on foreign currency transactions were $3.8 million which were comprised of unrealized gains of $2.3 million and realized gains of $1.5 million. For the three months ended March 31, 2016, losses on foreign currency transactions were $0.3 million, which were compromised of unrealized losses of $1.8 million offset by realized gains of $1.5 million. For AFFO purposes, we add back unrealized losses (gains).

 

[4] Dividends declared related to common stockholders only, and do not include distributions to non-controlling interest holders.

 

  11

 

  

Global Net Lease, Inc.
Supplemental Information
Quarter ended December 31, 2016 (unaudited)

 

Debt Overview

As of December 31, 2016

Amounts in thousands, except per share data, ratios and percentages

 

Year of Maturity  Number of
Properties		   Weighted-
Average Debt
Maturity (Years)		   Weighted-
Average Interest
Rate[2]		   Total
Outstanding
Balance		   Percent 
Non-Recourse Debt                         
2017   19    0.4    6.3%  $22,537      
2018   9    1.7    2.9%   126,904      
2019   14    2.7    2.5%   261,170      
2020   40    3.6    2.5%   301,165      
2021   6    4.5    3.7%   43,211      
2022   -    -    -    -      
2023   -    -    -    -      
Total Non-Recourse Debt   88    2.9    2.7%  $754,987    53%
                          
Recourse Debt                         
Mezzanine Debt        0.6    8.4%   55,400      
Senior Unsecured Credit Facility[1]        0.6    2.4%  $616,614      
Total Recourse Debt        0.6    2.9%  $672,014    47%
                          
Total Debt        1.8    2.8%  $1,427,001    100%

 

Total Debt by Currency              Percent 
USD              18%
EUR                  47%
GBP                  35%
Total                  100%

 

Footnotes:

 

[1] On July 25, 2016, the Company extended the credit facility maturity date to July 25, 2017, with an additional one-year extension option remaining, subject to certain conditions.

 

[2] As of December 31, 2016, the Company’s total combined debt had a weighted average interest rate cost of 2.8%, of which 81.1% was fixed rate or swapped to a fixed rate and 18.9% at floating rate.

 

  12

 

  

Global Net Lease, Inc.
Supplemental Information
Quarter ended December 31, 2016 (unaudited)

 

Top Ten Tenants
As of December 31, 2016
Amounts in thousands, except percentages

 

Tenant / Lease Guarantor  Property Type  Tenant Industry  SL Rent[1]   Percent 
Government Services Administration (GSA)  Office  Government  $11,620    5%
Foster Wheeler  Office  Engineering   10,484    4%
FedEx Ground Package System, Inc.  Distribution  Freight   10,378    4%
RWE AG  Office  Utilities   10,027    4%
Finnair  Industrial  Aerospace   8,243    4%
ING Bank  Office  Financial Services   8,222    4%
Family Dollar  Retail  Discount Retail   8,050    3%
Trinity Health  Office  Healthcare   6,584    3%
Harper Collins  Distribution  Publishing   6,334    3%
Quest Diagnostics, Inc.  Office  Healthcare   6,308    3%
Subtotal        $86,250    37%
                 
Remaining portfolio         147,202    63%
                 
Total Portfolio        $233,452    100%

 

Footnotes:

 

[1] SL Rent (Straight-line rent) is on an annualized basis and is based on foreign currency exchange rates as of December 31, 2016.

 

  13

 

  

Global Net Lease, Inc.
Supplemental Information
Quarter ended December 31, 2016 (unaudited)
 
Diversification by Property Type
As of December 31, 2016
Amounts in thousands, except percentages

 

   Total Portfolio   Unencumbered Portfolio 
Property Type  SL Rent[1]   SL Rent
Percent		   Square
Footage		   Sq. ft. Percent   SL Rent[1]   SL Rent
Percent		   Square
Footage		   Sq. ft. Percent 
Office  $139,461    60%   8,770    40%      $56,361    52%   3,427    32%
Industrial   41,853    18%   6,408    29%   25,966    24%   3,671    34%
Distribution   28,973    12%   4,716    21%   16,024    15%   2,793    26%
Retail   23,165    10%   2,110    10%   9,901    9%   985    9%
Total  $233,452    100%   22,005    100%  $108,252    100%   10,876    100%

 

Footnotes:

 

[1] SL Rent (Straight-line rent) is on an annualized basis and is based on foreign currency exchange rates as of December 31, 2016.

 

  14

 

  

Global Net Lease, Inc.
Supplemental Information
Quarter ended December 31, 2016 (unaudited)
 
Diversification by Tenant Industry
As of December 31, 2016
Amounts in thousands, except percentages

 

   Total Portfolio   Unencumbered Portfolio 
Industry Type  SL Rent[1]   SL Rent 
Percent		   Square 
Footage		   Sq. ft. Percent   SL Rent[1]   SL Rent
Percent		   Square
Footage		   Sq. ft. Percent 
Financial Services  $31,273    13%   2,316    11%       $4,959    5%   559    5%
Technology   17,087    7%   1,135    5%   5,517    5%   253    2%
Discount Retail   15,320    7%   1,786    8%   9,901    9%   985    9%
Aerospace   14,020    6%   1,258    6%   5,777    5%   602    6%
Healthcare   13,680    6%   647    3%   7,372    7%   423    4%
Telecommunications   13,620    6%   913    4%   2,089    2%   133    1%
Government   12,974    6%   510    2%   12,513    12%   432    4%
Energy   12,863    6%   1,043    5%   12,863    12%   1,043    10%
Freight   11,845    5%   1,233    6%   11,086    10%   1,164    11%
Utilities   11,605    5%   673    3%   -    -    -    - 
Engineering   10,484    4%   366    2%   -    -    -    - 
Pharmaceuticals   9,789    4%   390    2%   9,789    9%   390    4%
Auto Manufacturing   6,611    3%   1,940    9%   6,611    6%   1,940    18%
Publishing   6,334    3%   873    4%   -    -    -    - 
Retail Food Distribution   6,179    3%   958    4%   -    -    -    - 
Restaurant - Quick Service   3,385    1%   74    0%   -    -    -    - 
Automotive Parts Supplier   3,307    1%   411    2%   1,311    1%   91    1%
Logistics   2,942    1%   1,273    6%   -    -    -    - 
Metal Processing   2,862    1%   448    2%   2,862    3%   448    4%
Specialty Retail   2,826    1%   280    1%   -    -    -    - 
Other   24,448    10%   3,476    16%   15,603    14%   2,413    22%
                                         
Total  $233,452    100%   22,005    100%  $108,252    100%   10,876    100%

 

Footnotes:

 

[1] SL Rent (Straight-line rent) is on an annualized basis and is based on foreign currency exchange rates as of December 31, 2016.

 

[2] Other includes 20 industry types as of December 31, 2016.

 

  15

 

  

Global Net Lease, Inc.
Supplemental Information
Quarter ended December 31, 2016 (unaudited)
 
Diversification by Geography
As of December 31, 2016
Amounts in thousands, except percentages

 

   Total Portfolio   Unencumbered Portfolio 
Region  SL Rent[1]   SL Rent
Percent		   Square 
Footage		   Sq. ft. Percent   SL Rent[1]   SL Rent
Percent		   Square
Footage		   Sq. ft. Percent 
United States  $115,736    49.6%   11,397    51.8%      $101,198    93.5%   10,347    95.1%
Texas   21,595    9.3%   1,870    8.5%   17,107    15.8%   1,468    13.5%
Michigan   17,904    7.7%   2,296    10.4%   17,904    16.5%   2,296    21.1%
California   12,890    5.5%   675    3.1%   4,170    3.9%   165    1.5%
New Jersey   8,505    3.6%   349    1.6%   8,505    7.9%   349    3.2%
Tennessee   7,076    3.0%   789    3.6%   7,076    6.5%   789    7.3%
Indiana   4,490    1.9%   1,114    5.1%   4,490    4.1%   1,114    10.2%
Ohio   4,216    1.8%   521    2.4%   3,646    3.4%   451    4.1%
Pennsylvania   3,299    1.4%   322    1.5%   3,299    3.0%   322    3.0%
South Carolina   3,274    1.4%   414    1.9%   3,274    3.0%   414    3.8%
Kentucky   2,753    1.2%   355    1.6%   2,753    2.5%   355    3.3%
Florida   2,646    1.1%   180    0.8%   2,646    2.4%   180    1.7%
Illinois   2,629    1.1%   571    2.6%   2,629    2.4%   571    5.2%
Missouri   2,604    1.1%   139    0.6%   2,604    2.4%   139    1.3%
New York   2,398    1.0%   221    1.0%   2,398    2.2%   221    2.0%
Minnesota   2,135    0.9%   150    0.7%   2,135    2.0%   150    1.4%
Maine   1,877    0.8%   50    0.2%   1,877    1.7%   50    0.5%
Massachusetts   1,772    0.8%   127    0.6%   1,772    1.6%   127    1.2%
North Carolina   1,539    0.7%   192    0.9%   779    0.7%   123    1.1%
South Dakota   1,284    0.6%   54    0.2%   1,284    1.2%   54    0.5%
Kansas   1,275    0.5%   179    0.8%   1,275    1.2%   179    1.6%
Louisiana   1,260    0.5%   137    0.6%   1,260    1.2%   137    1.3%
Colorado   1,088    0.5%   27    0.1%   1,088    1.0%   27    0.2%
North Dakota   884    0.4%   47    0.2%   884    0.8%   47    0.4%
Oklahoma   825    0.4%   89    0.4%   825    0.8%   89    0.8%
Mississippi   800    0.3%   81    0.4%   800    0.7%   81    0.7%
Alabama   791    0.3%   74    0.3%   791    0.7%   74    0.7%
Maryland   785    0.3%   120    0.5%   785    0.7%   120    1.1%
Nebraska   564    0.2%   58    0.3%   564    0.5%   58    0.5%
New Mexico   556    0.2%   46    0.2%   556    0.5%   46    0.4%
Georgia   449    0.2%   41    0.2%   449    0.4%   41    0.4%
Utah   395    0.2%   20    0.1%   395    0.4%   20    0.2%
Delaware   360    0.2%   10    0.0%   360    0.3%   10    0.1%
Iowa   296    0.1%   32    0.1%   296    0.3%   32    0.3%
Idaho   201    0.1%   16    0.1%   201    0.2%   16    0.1%
Arizona   156    0.1%   16    0.1%   156    0.1%   16    0.1%
Arkansas   89    0.0%   8    0.0%   89    0.1%   8    0.1%
Virginia   76    0.0%   8    0.0%   76    0.1%   8    0.1%
United Kingdom   51,107    21.9%   4,080    18.5%   -    -    -    - 
Germany   19,005    8.1%   2,178    9.9%   -    -    -    - 
The Netherlands   15,276    6.5%   1,039    4.7%   7,054    6.5%   530    4.9%
Finland   13,661    5.9%   1,457    6.6%   -    -    -    - 
France   10,784    4.6%   1,632    7.4%   -    -    -    - 
Luxembourg   4,671    2.0%   156    0.7%   -    -    -    - 
US Province   3,212    1.4%   65    0.3%   -    -    -    - 
Total  $233,452    100%   22,005    100%  $108,252    100%   10,876    100%

 

Footnotes:

 

[1] SL Rent (Straight-line rent) is on an annualized basis and is based on foreign currency exchange rates as of December 31, 2016.

 

  16

 

  

Global Net Lease, Inc.
Supplemental Information
Quarter ended December 31, 2016 (unaudited)
 
Lease Expirations
As of December 31, 2016
Amounts in thousands, except percentages, and leases

 

Year of Expiration  Number of Leases
Expiring		   SL Rent[1]   SL Rent Percent   Leased Rentable
Square Feet		   Percent of
Rentable Square
Feet Expiring		 
2017   -   $-    -    -    - 
2018   -    -    -    -    - 
2019   -    -    -    -    - 
2020   2    3,482    1.5%   386    1.8%
2021   2    5,003    2.1%   323    1.5%
2022   16    23,594    10.1%   1,553    7.1%
2023   32    27,678    11.9%   2,642    12.0%
2024   45    64,638    27.7%   5,869    26.7%
2025   38    35,389    15.2%   3,211    14.6%
2026   13    18,864    8.1%   1,783    8.1%
2027   9    2,095    0.9%   154    0.7%
2028   29    7,129    3.1%   885    4.0%
2029   105    20,808    8.9%   2,079    9.4%
2030   10    7,250    3.1%   458    2.1%
2031   -    -    -    -    - 
2032   -    -    -    -    - 
Thereafter (>2032)   9    17,521    7.5%   2,661    12.0%
Total   310   $233,452    100%   22,005    100%

 

Straight-Line Rent by Year of Lease Expiration as a Percentage of Total Straight-Line Rent

 

 

Footnotes:

 

[1] SL Rent (Straight-line rent) is on an annualized basis and is based on foreign currency exchange rates as of December 31, 2016.

 

  17