EX-99.1 2 tm2322905d1_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

On May 23, 2023, Global Net lease, Inc. (“GNL” or the “Company”), Global Net Lease Operating Partnership, L.P. (the “OP”), The Necessity Retail REIT, Inc., a Maryland corporation (“RTL”), The Necessity Retail REIT Operating Partnership, L.P., a Delaware limited partnership (“RTL OP”), Osmosis Sub I, LLC, a Maryland limited liability company and wholly-owned subsidiary of GNL (“REIT Merger Sub”), and Osmosis Sub II, LLC, a Delaware limited liability company and wholly-owned subsidiary of the OP (“OP Merger Sub”), entered into an Agreement and Plan of Merger (the “REIT Merger Agreement”). Subject to the terms and conditions of the REIT Merger Agreement, at the effective time of the merger (the “REIT Merger Effective Time”), RTL will merge with and into REIT Merger Sub, with REIT Merger Sub continuing as the surviving entity and a wholly-owned subsidiary of the Company (the “REIT Merger”), and OP Merger Sub will merge with and into RTL OP, with RTL OP continuing as the surviving entity (the “OP Merger,” and, together with the REIT Merger, the “Merger”).

 

In addition, conditioned on the completion of the REIT Merger, GNL also entered into an agreement to internalize the advisory and property management functions of GNL and RTL through the acquisition by GNL of the GNL Advisor, the GNL Property Manager, the RTL Advisor and the RTL Property Manager (collectively, the “Internalization Parties”), all of which are wholly-owned subsidiaries of AR Global Investments, LLC (“Advisor Parent”), through the merger of wholly-owned subsidiaries of GNL into the Internalization Parties (the “Internalization Merger” and, together with the REIT Merger and the OP Merger, the “Proposed Transactions”). The Proposed Transactions are conditional upon one another and accordingly are considered “related” and treated as a single transaction for accounting and reporting purposes.

 

The following unaudited pro forma condensed combined financial information has been prepared to illustrate the estimated effects of the Proposed Transactions, and the related financing transactions. The unaudited pro forma condensed combined financial information has been prepared by GNL in accordance with Article 11 of SEC Regulation S-X. The unaudited pro forma condensed combined financial information gives effect to the Proposed Transactions as follows:

 

·The unaudited pro forma condensed combined balance sheet as of June 30, 2023 combines the historical consolidated balance sheets of GNL, RTL and the Internalization Parties, giving effect to the Proposed Transactions as if they had occurred on June 30, 2023.

 

·The unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2023 combine the historical operating results of GNL, RTL and the Internalization Parties, giving effect to the Proposed Transactions as if they had occurred on January 1, 2022.

 

·The unaudited pro forma condensed combined statements of operations for the year ended December 31, 2022 combine the historical operating results of GNL, RTL (as adjusted for the effects of RTL’s acquisition of the CIM Portfolio - see below) and the Internalization Parties, giving effect to these transactions as if they had occurred on January 1, 2022.

 

The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2022, described above, gives effect to the acquisition by RTL of 81 properties from certain subsidiaries of CIM Real Estate Finance Trust, Inc. (the “CIM Portfolio”), as if that acquisition had occurred on January 1, 2022. RTL acquired the CIM Portfolio in seven closings during the year ended December 31, 2022. See Note 2 — Basis of Presentation to the notes to the unaudited pro forma condensed combined financial information for additional information.

 

The pro forma condensed information is not necessarily indicative of what GNL’s financial position or results of operations actually would have been had the merger been completed as of the dates indicated. In addition, the unaudited pro forma condensed combined financial information does not purport to project the future financial position or operating results of GNL.

 

The Proposed Transactions are considered a single business combination and GNL will be treated as the acquirer for accounting purposes. The acquisition accounting is dependent upon certain valuations and other studies that have yet to commence or progress to a stage where there is sufficient information for a definitive measurement. Accordingly, the pro forma adjustments are preliminary and have been made solely for the purpose of providing unaudited pro forma condensed combined financial information. Differences between these preliminary estimates and the final acquisition accounting will occur, and these differences could have a material impact on the accompanying unaudited pro forma condensed combined financial statements and the company’s future results of operations and financial position.

 

Both GNL, RTL and certain of the Internalization Parties and their related parties were in litigation with Blackwells/Related Parties. On May 4, 2023, the various parties entered into a Cooperation and Release Agreement. In exchange for a release of all claims by the Blackwells/Related Parties, the Cooperation and Release Agreement, among other things, provides for (i) an expense reimbursement paid in cash to Blackwells of approximately $17.6 million (to be shared equally by GNL and RTL), (ii) the issuance of 495,000 shares of GNL Common Stock (which occurred on July 10, 2023), (iii) a Consulting Agreement with Blackwells whereby they may receive up to an additional 1.6 million shares of GNL Common Stock to be paid in monthly installments upon consummation of the Proposed Transactions and (iv) an indemnification of Blackwells not to exceed $10.0 million. The number of shares that would be issued under the Cooperation and Release Agreement would be reduced to 533,333 shares of GNL common stock (i.e., one-third of the maximum amount) in the event that the Proposed Transactions are terminated pursuant to the stockholders not approving the transactions, and to 1,066,667 shares of GNL common stock (i.e., two-thirds of the maximum amount) if the Proposed Transactions are terminated for any other reason. The financial impact of the Cooperation and Release Agreements is reflected in RTL’s quarterly period ended June 30, 2023 and in GNL’s quarterly period ended June 30, 2023 and will end when substantial services under the consulting arrangement are completed. As of June 30, 2023, RTL has expensed $8.8M related to (i) above, which consists of expense reimbursement of which there are no remaining future payments, within the Settlement Costs line item of the June 30, 2023 income statement. As of June 30, 2023, GNL has expensed the following within the Settlement Costs line item (1) $8.8 million related to (i) above, which consists of expense reimbursement of which there are no remaining future payments, (2) $4.9 million related to (ii) above, of which there are no anticipated future expenses and (3) $1.3 million related to (iii) above, the Consulting Agreement of which there are additional future costs expected to be incurred through the third quarter of 2023.

 

 

 

 

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

The unaudited pro forma condensed combined financial information is qualified in its entirety and should be read in conjunction with the accompanying notes to the unaudited pro forma condensed combined financial statements as well as the following documents:

 

·The separate historical financial statements of GNL as of and for the year ended December 31, 2022 and the related notes included in GNL’s Annual Report on Form 10-K for the year ended December 31, 2022.
·The separate historical financial statements of RTL as of and for the year ended December 31, 2022 and the related notes included in RTL’s Annual Report on Form 10-K for the year ended December 31, 2022.
·RTL’s unaudited pro forma consolidated statement of operations for the year ended December 31, 2022 contained in RTL’s Current Report on Form 8-K filed February 27, 2023.
·The separate historical financial statements of GNL as of and for the six months ended June 30, 2023 and the related notes included in GNL’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023.
·The separate historical financial statements of RTL as of and for the six months ended June 30, 2023 and the related notes included in RTL’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023.
·The separate historical financial statements of the Internalization Parties as of and for the six months ended June 30, 2023, which is included in this filing.
·The separate historical financial statements of the Internalization Parties as of and for the years ended December 31, 2022 and 2021, which is included in the joint prospectus/proxy statement relating to the REIT Merger and Internalization Merger filed with on Form S-4/A on July 17, 2023.
·The Combined Statements of Revenues and Certain Expenses of the Acquired CIM Portfolio for the three months ended March 31, 2022, and for the year ended December 31, 2021, included in RTL’s Current Report on Form 8-K/A filed on June 24, 2022.

 

 

 

 

GLOBAL NET LEASE, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

AS OF JUNE 30, 2023

(In thousands, except share and per share amounts)

 

   HISTORICAL
GNL		   HISTORICAL
RTL (as adjusted)		   HISTORICAL
INTERNALIZATION
PARTIES		   TRANSACTION
ACCOUNTING
ADJUSTMENTS		     PRO FORMA
GNL
COMBINED		 
        (Note 2)        (Note 4)        
ASSETS                           
Real estate investments, at cost:                           
Land  $505,202   $956,506   $—   $34,732  (a)  $1,496,440 
Buildings, fixtures and improvements   3,347,831    3,378,560    —    (996,206 )(b)   5,730,185 
Construction in progress   37,262    —    —    —      37,262 
Acquired intangible lease assets   727,678    567,722    —    69,392  (c)   1,364,792 
Total real estate investments, at cost   4,617,973    4,902,788    —    (892,082 )   8,628,679 
Less accumulated depreciation and amortization   (963,745)   (810,727)   —    810,727  (d)   (963,745)
Total real estate investments, net   3,654,228    4,092,061    —    (81,355 )    7,664,934 
Cash and cash equivalents   100,918    59,172    —    (94,525 )(e)   65,565 
Restricted cash   4,268    23,373    —    —      27,641 
Derivative assets, at fair value   27,649    —    —    —      27,649 
Unbilled straight-line rent   77,444    59,890    —    (59,890 )(f)   77,444 
Operating lease right-of-use asset   51,240    17,587    —    (4,726 )(g)   64,101 
Prepaid expenses and other assets   50,453    55,476    36    —      105,965 
Due from related parties   436    2,651    2,274    (3,201 )(h)   2,160 
Deferred tax assets   2,584    —    —    —      2,584 
Goodwill   21,556    —    —    80,614  (i)   102,170 
Deferred financing costs and leasing commissions, net   11,100    25,050    —    (25,050 )(j)   11,100 
Total Assets  $4,001,876   $4,335,260   $2,310   $(188,133 )  $8,151,313 
                            
LIABILITIES AND EQUITY                      
Mortgage notes payable, net  $995,184   $1,553,688   $—   $(135,422 )(k)  $2,413,450 
Revolving credit facility   1,038,502    604,000    —    —  (l)   1,642,502 
Senior notes, net   493,810    492,987    —    (107,987 )(m)   878,810 
Acquired intangible lease liabilities, net   23,091    123,900    —    (79,835 )(n)   67,156 
Derivative liabilities, at fair value   1,798    —    —    —      1,798 
Due to related parties   350    901    1,950    (3,201 )(h)   — 
Accounts payable and accrued expenses   31,265    53,903    6,134    —      91,302 
Operating lease liabilities   22,329    19,088    —    (187 )(o)   41,230 
Prepaid rent   28,844    16,531    —    —      45,375 
Deferred tax liability   6,395    —    —    —      6,395 
Dividends payable   5,139    5,837    —    —      10,976 
Total Liabilities   2,646,707    2,870,835    8,084    (326,632 )   5,198,994 
Commitments and contingencies   —    —    —    —      — 
Stockholders’ Equity:                           
Preferred stock, at par   115    125    —    —  (p)   240 
Common stock, at par   2,374    1,345    —    (119 )(q)   3,600 
Additional paid-in capital   2,690,375    2,999,565    —    (1,358,664 )(r)   4,331,276 
Accumulated other comprehensive income   11,593    —    —    —      11,593 
Accumulated deficit   (1,368,678)   (1,565,425)   (5,774)   1,544,199  (s)   (1,395,678)
Total Stockholders’ Equity   1,335,779    1,435,610    (5,774)   185,416      2,951,031 
Non-controlling interest   19,390    28,815    —    (46,917 )(t)   1,288 
Total Equity   1,355,169    1,464,425    (5,774)   138,499      2,952,319 
Total Liabilities and Equity  $4,001,876   $4,335,260   $2,310   $(188,133 )   $8,151,313 

 

 

 

 

GLOBAL NET LEASE, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30, 2023

(In thousands, except share and per share amounts)

 

   HISTORICAL
GNL		   HISTORICAL
RTL		   HISTORICAL
INTERNALIZATION
PARTIES		   TRANSACTION
ACCOUNTING
ADJUSTMENTS		      PRO FORMA
GNL
COMBINED		 
                  (Note 5)         
Revenue  $190,176   $220,294   $53,455   $(58,888)  (a), (b)  $405,037 
                             
Expenses:                            
Property operating expenses   17,179    51,995    —    (6,018)  (b)   63,156 
Operating fees to related parties   20,211    15,928    —    (36,139)  (b)   — 
Impairment charges   —    —    —    —       — 
Merger, transaction and other costs   6,378    5,496    —    —   (b), (c)   11,874 
Settlement costs   15,084    8,800    —    —       23,884 
General and administrative   16,343    25,236    14,238    (8,407)  (b), (d)   47,410 
Equity-based compensation   5,795    7,086    —    (6,352)  (e)   6,529 
Depreciation and amortization   74,326    113,648    —    (34,344)  (f)   153,630 
Total expenses   155,316    228,189    14,238    (91,260)      306,483 
Operating income before gain (loss) on dispositions of real estate investments   34,860    (7,895)   39,217    32,372       98,554 
Gain on dispositions of real estate investments   —    17,263    —    —       17,263 
Operating income   34,860    9,368    39,217    32,372       115,817 
Other income (expense):                            
Interest expense   (54,675)   (70,620)   —    (24,216)  (g)   (149,511)
Loss on extinguishment of debt   (404)   —    —    —       (404)
(Loss) gain on derivative instruments   (2,430)   —    —    —       (2,430)
Unrealized income on undesignated foreign currency advances and other hedge ineffectiveness   —    —    —    —       — 
Other income   1,716    623    562    (562)  (h)   2,339 
Total other expense, net   (55,793)   (69,997)   562    (24,778)      (150,006)
Net income before income tax   (20,933)   (60,629)   39,779    7,594       (34,189)
Income tax expense   (6,215)   —    —    —       (6,215)
Net (loss) income   (27,148)   (60,629)   39,779    7,594       (40,404)
Net loss attributable to non-controlling interest   —    78    —    (57)  (i)   21 
Preferred stock dividends   (10,198)   (11,674)   —    —       (21,872)
Net (loss) income attributable to common stockholders  $(37,346)  $(72,225)  $39,779   $7,537      $(62,255)
                             
Basic and Diluted (Loss) Income Per Share:                            
Net (loss) income per share attributable to common stockholders — Basic and Diluted  $(0.36)                    $(0.28)
Weighted average common shares outstanding:                            
Weighted average common shares outstanding — Basic and Diluted (j)   103,966,910                      226,577,523 

 

 

 

 

 

GLOBAL NET LEASE, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2022

(In thousands, except share and per share amounts)

 

           CIM TRANSACTION AND FINANCING (see Note 2)                
   HISTORICAL
GNL		   HISTORICAL
RTL		   HISTORICAL
CIM PORTFOLIO		   PRO FORMA
ADJUSTMENTS		   CREDIT
FACILITY
DRAW		   HISTORICAL
INTERNALIZATION
PARTIES		   PRO FORMA
ADJUSTMENTS		      PRO
FORMA
GNL
COMBINED		 
                           (Note 5)        
Revenue  $378,857   $446,438   $32,015   $97   $—   $105,785   $(111,236)  (a), (b)  $851,956 
                                            
Expenses:                                           
Property operating expenses   32,877    101,558    11,174    —    —    —    (10,369)  (b)   135,240 
Operating fees to related parties   40,122    32,026    —    —    —    —    (72,148)  (b)   — 
Impairment charges   21,561    97,265    —    —    —    —    —       118,826 
Acquisition, transaction and other costs   244    1,221    —    —    —    —    26,613   (b), (c)   28,078 
General and administrative expenses   17,737    32,365    —    —    —    30,729    (16,231)  (b), (d)   64,600 
Equity-based compensation   12,072    14,433    —    —    —    —    (12,704)  (e)   13,801 
Depreciation and amortization   154,026    195,854    —    15,533    —    —    (45,230)  (f)   320,183 
Total expenses   278,639    474,722    11,174    15,533    —    30,729    (130,069)      680,728 
Operating income before gain (loss) on dispositions of real estate investments   100,218    (28,284)   20,841    (15,436)   —    75,056    18,833       171,228 
Gain on dispositions of real estate investments   325    61,368    —    —    —    —    —       61,693 
Operating income   100,543    33,084    20,841    (15,436)   —    75,056    18,833       232,921 
Other (expenses) income:                                           
Interest expense   (97,510)   (118,925)   —    (7,899)   (4,749)   —    (64,365)  (g)   (293,448)
Loss on extinguishment of debt   (2,040)   —    —    —    —    —    —       (2,040)
(Loss) gain on derivative instruments   18,642    2,250    —    —    —    —    —       20,892 
Unrealized income on undesignated foreign currency advances and other hedge ineffectiveness   2,439    —    —    —    —    —    —       2,439 
Other income   981    988    112    —    —    1,126    (1,126)  (h)   2,081 
Total other expense, net   (77,488)   (115,687)   112    (7,899)   (4,749)   1,126    (65,491)      (270,076)
Net income before income tax   23,055    (82,603)   20,953    (23,335)   (4,749)   76,182    (46,658)      (37,155)
Income tax expense   (11,032)   —    —    —    —    —    —       (11,032)
Net income (loss)   12,023    (82,603)   20,953    (23,335)   (4,749)   76,182    (46,658)      (48,187)
Net loss attributable to non-controlling interest   —    97    —    —    —    —    (72)  (i)   25 
Allocation for preferred stock   (20,386)   (23,348)   —    —    —    —    —       (43,734)
Net (loss) income attributable to common stockholders  $(8,363)  $(105,854)  $20,953   $(23,335)  $(4,749)  $76,182   $(46,730)     $(91,896)
                                            
Basic and Diluted (Loss) Income Per Share:                                           
Net (loss) income per share attributable to common stockholders — Basic and Diluted  $(0.09)                                   $(0.42)
Weighted average common shares outstanding:                                           
Weighted average common shares outstanding — Basic and Diluted (j)   103,686,395                                     226,297,008 

 

 

 

 

NOTES TO THE UNAUDITED PRO FORMA CONDENSED

COMBINED FINANCIAL STATEMENTS

 

Note 1 — Description of Transaction

 

On May 23, 2023, GNL, RTL and REIT Merger Sub entered into a merger agreement that provides for the acquisition of RTL by GNL. Subject to approval of GNL and RTL shareholders and the satisfaction or (to the extent permitted by law) waiver of certain other closing conditions, GNL will acquire RTL through the merger of RTL with and into Merger Sub, and become a wholly-owned subsidiary of GNL. Under the REIT Merger Agreement, the RTL stockholders will receive 0.670 shares of GNL Common Stock, par value $0.01 (the “GNL Common Stock”) for each share of RTL’s Class A Common Stock, par value $0.01. Also under the REIT Merger Agreement, the RTL preferred stockholders will receive equivalent classes of GNL preferred stock equal in all respects to the terms of the respective RTL preferred share classes.

 

Also on May 23, 2023, GNL, RTL and certain merger subsidiaries also entered into an agreement pursuant to which, and subject to the REIT Merger being completed, GNL will acquire the GNL Advisor, the GNL Property Manager, the RTL Advisor and the RTL Property Manager (the “Internalization Parties”). GNL will acquire the Internalization Parties from Advisor Parent, with (i) cash consideration of $50.0 million and (ii) the issuance of 29,614,825 shares of GNL Common Stock (based on a considered value of $325.0 million divided by the five-day volume-weighted average price of GNL’s Common Stock as of market close on May 11, 2023). As a result of acquiring the Internalization Parties, GNL will no longer be externally managed.

 

The Internalization Parties will merge with wholly-owned subsidiaries of GNL. Certain of the existing advisory and property management agreements with Advisor Parent will be terminated and GNL will hire its own workforce to perform these functions. GNL is obligated to hire certain of the persons currently employed by the Internalization Parties or their affiliates and must also assume certain employment agreements. GNL will also acquire other assets from the Internalization Parties necessary for its business, such as various licensing agreements, office space, equipment and software. GNL will assume all outstanding debts of RTL other than the RTL Credit Facility, subject to certain lender consents. GNL expects to exercise the accordion feature in its Second Amended and Restated Credit Agreement, dated as of April 8, 2022, by and among GNL OP, as borrower, GNL and the other guarantors party thereto, KeyBank National Association, as agent, and the other lender parties thereto (as amended to date, the “GNL Credit Facility”) to increase the commitments under the GNL Credit Facility by $500.0 million to facilitate the repayment of the RTL Credit Facility and to create additional availability after the Proposed Transactions are completed.

 

The REIT Merger and the Internalization Merger are conditional upon one another and, accordingly, are considered “related” and treated as a single transaction for accounting and reporting purposes.

 

 

 

 

NOTES TO THE UNAUDITED PRO FORMA CONDENSED

COMBINED FINANCIAL STATEMENTS

 

Note 2 — Basis of Presentation

 

The unaudited pro forma condensed combined financial information was prepared using the acquisition method of accounting in accordance with Accounting Standards Codification (ASC) 805, Business Combinations, which requires the determination of the acquiror, the merger date, the fair value of assets and liabilities of the acquiree and the measurement of goodwill. GNL’s management has determined that GNL represents the accounting acquiror in the Proposed Transactions based on an analysis of the criteria outlined in ASC 805 and the facts and circumstances specific to these transactions. As a result, GNL will record the business combination in its financial statements and will apply the acquisition method to account for the acquired assets and liabilities of RTL and the Internalization Parties upon completion of the Proposed Transactions. Applying the acquisition method includes recording the identifiable assets acquired and liabilities assumed at their fair values, and recording goodwill for the excess of the purchase price over the aggregate fair value of the identifiable assets acquired and liabilities assumed in the Proposed Transactions. Additionally, the accompanying unaudited pro forma condensed combined financial information was prepared in accordance with Article 11 of SEC Regulation S-X.

 

To prepare the unaudited pro forma condensed combined financial information, GNL adjusted RTL’s and the Internalization Parties’ assets and liabilities to their estimated combined fair values based on preliminary valuation work. As of the date of this Form 8-K filing, GNL has not completed the detailed valuation work necessary to finalize the required estimated fair values and estimated lives of RTL’s and the Internalization Parties’ assets to be acquired and liabilities to be assumed and the related allocation of the purchase price. The final allocation of the purchase price will be determined after the transaction is completed and after completion of an analysis to determine the estimated fair value of RTL’s and Internalization Parties’ assets and liabilities, and associated tax adjustments. Accordingly, the final acquisition accounting adjustments may be materially different from the unaudited pro forma adjustments.

 

Transactions among and between GNL, RTL and the Internalization Parties, reflecting historical normal course of business during the periods presented in the unaudited pro forma condensed combined financial information, have been eliminated. Also, as of the date of this Form 8-K filing, GNL has not identified all adjustments necessary to conform RTL’s and the Internalization Parties’ accounting policies to GNL’s accounting policies. GNL will conduct a final review of RTL’s and the Internalization Parties’ accounting policies as of the date of the completion of the Proposed Transactions in an effort to determine if differences in accounting policies require adjustment or reclassification of RTL’s and the Internalization Parties’ results of operations or reclassification of assets or liabilities to conform to GNL’s accounting policies and classifications.

 

The CIM Portfolio Acquisition

 

RTL acquired 81 properties from certain subsidiaries of CIM Real Estate Finance Trust, Inc. (the “CIM Portfolio”), in seven closings during the year ended December 31, 2022. As a result, the values presented as Historical RTL, in the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2022 do not include the results of operations of the CIM Portfolio from January 1, 2022 through their respective acquisition dates in 2022, prior to the acquisition of the CIM Portfolio by RTL.

 

Values presented as Historical CIM Portfolio in the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2022 were derived from the historical records of the CIM Portfolio. The unaudited pro forma condensed combined statements of operations for the year ended December 31, 2022 give effect to RTL’s acquisition of the CIM Portfolio as if that acquisition had occurred on January 1, 2022.

 

The details of the pro forma effects of RTL’s acquisition of the CIM Portfolio are contained in RTL’s Current Report on Form 8-K filed February 27, 2023.

 

Adjustments to Historical RTL Balance Sheet

 

To conform the presentation of RTL’s historical balance sheet as of June 30, 2023 to GNL’s balance sheet presentation, the following adjustments to RTL’s historical balance sheet were made:

 

·Reclassification of $9.4 million of RTL’s construction in progress from RTL’s presentation within prepaid expenses and other assets to GNL’s presentation within real estate, at cost.
·Reclassification of $2.7 million of RTL’s amounts prepaid to related parties from RTL’s presentation within prepaid expenses and other assets to GNL’s presentation within due from related parties.
·Reclassification of $0.9 million of RTL’s amounts payable to related parties from RTL’s presentation within accounts payable and accrued expenses to GNL’s presentation within due to related parties.

 

 

 

 

NOTES TO THE UNAUDITED PRO FORMA CONDENSED

COMBINED FINANCIAL STATEMENTS

 

Note 3 — Consideration Transferred and Purchase Price Allocation

 

Consideration to be Transferred

 

The following table presents a preliminary estimate of consideration expected to be transferred to affect the acquisition. The equity compensation portion of the consideration to be transferred was based on the outstanding share or unit count as of June 30, 2023 and the closing price of the relative equity instruments issued as of August 7, 2023. A change of 10% in the closing price per share of GNL’s common stock, RTL’s Series A preferred stock and RTL’s Series C preferred stock would increase or decrease the estimated fair value of share consideration transferred by approximately $162.4 million.

 

(in thousands)  Notes  Amount   Consideration Type
Fair value of GNL common stock to be issued to holders of RTL common stock (excluding RTL’s restricted shares)  3a  $997,106   GNL common stock
Fair value of GNL common stock to be issued to holders of RTL restricted shares  3b   5,237   GNL common stock
Fair value of GNL common stock to be issued for RTL LTIP Units  3c   31,770   GNL common stock
Fair value of GNL common stock to be issued to Advisor Parent  3d   329,317   GNL common stock
Fair value of GNL Class A Units issued to holder of RTL Class A Units  3a   1,288    GNL Class A Units
Fair value of GNL preferred stock to be issued  3e   259,432   GNL Series D and Series E preferred stock
Total equity consideration      1,624,150    
Cash consideration to be paid to Advisor Parent      50,000    
Less: cash acquired (including restricted cash), net of RTL’s transaction costs still to be paid as of June 30, 2023 of $11,000 and RTL LTIP catch-up distributions to be paid of $6,525 (see Note 4 (e))      (65,020)   
Total consideration expected to be transferred     $1,609,130    

 

(3a)The following table presents the fair value of GNL Common Stock and GNL Class A Units expected to be issued to holders of RTL common stock and Class A Units:

 

   RTL
Common
Stock (1)		   RTL
Class A
Units		   Total 
Outstanding shares of RTL common stock and Class A Units as of June 30, 2023   133,832,554    172,921    134,005,475 
Conversion ratio per REIT Merger Agreement   0.67    0.67    0.67 
Total number of shares of GNL common stock and GNL Class A Units expected to be issued   89,667,811    115,857    89,783,668 
Closing price of GNL common stock as of August 7, 2023  $11.12   $11.12   $11.12 
Fair value of GNL common shares and GNL Class A Units to be issued to holders of RTL common stock and RTL Class A Units (in thousands)  $997,106   $1,288   $998,394 

 

 

 

 

(1)Excludes RTL’s restricted shares, which are separately included in (3b) below.

 

 

 

 

NOTES TO THE UNAUDITED PRO FORMA CONDENSED  

COMBINED FINANCIAL STATEMENTS

 

(3b)The following table presents the fair value of GNL Common Stock expected to be issued to holders of RTL restricted shares:

 

   RTL
Restricted
Shares		 
RTL’s unvested restricted shares as of June 30, 2023   702,888 
Conversion ratio per REIT Merger Agreement   0.67 
Total number of shares of GNL common stock expected to be issued   470,935 
Closing price of GNL common stock as of August 7, 2023  $11.12 
Fair value of GNL common stock expected to be issued to holders of RTL restricted shares (in thousands)  $5,237 

  

(3c)The following table presents the fair value of GNL Common Stock expected to be issued for outstanding RTL LTIP units:

  

   RTL LTIP Units 
RTL earned LTIP Units as of June 30, 2023   4,264,242 
Conversion ratio per REIT Merger Agreement   0.67 
Total number of shares of GNL Common Stock expected to be issued   2,857,042 
Closing price of GNL Common Stock as of August 7, 2023  $11.12 
Fair value of GNL Common Stock expected to be issued for LTIP Units (in thousands)  $31,770 

  

(3d)The following table presents the fair value of GNL Common Stock expected to be issued to Advisor Parent in connection with the Internalization Merger:

  

   Amount 
Considered value per agreement (in thousands)  $325,000 
Five-day trailing volume-weighted average price of GNL Common Stock as of May 11, 2023 (rounded)  $10.97 
Total number of shares of GNL Common Stock to be issued to Advisor Parent per agreement   29,614,825 
Closing price of GNL Common Stock as of August 7, 2023  $11.12 
Fair value of GNL Common Stock expected to be issued to Advisor Parent (in thousands)  $329,317 

  

(3e)The following table presents the fair value of GNL Series D and Series E preferred stock expected to be issued to holders of RTL Series A and Series C preferred stock:

  

(in thousands, except share counts)  RTL Series A
Preferred Stock		   RTL Series C
Preferred Stock		   Total 
Outstanding shares as of June 30, 2023   7,933,711    4,595,175    12,528,886 
Closing price of RTL preferred stock as of August 7, 2023  $20.78   $20.58      
Fair value of GNL preferred stock expected to be issued (in thousands)  $164,863   $94,569   $259,432 

  

 

 

  

NOTES TO THE UNAUDITED PRO FORMA CONDENSED 

COMBINED FINANCIAL STATEMENTS

 

The following table presents the total number of shares of GNL Common Stock expected to be issued to RTL stockholders and the resulting par value:

 

   Total 
Total number of shares of GNL Common Stock expected to be issued to RTL common stockholders   89,667,811 
Total number of shares of GNL Common Stock expected to be issued to holders of RTL restricted shares   470,935 
Total number of shares of GNL Common Stock expected to be issued to holder of RTL LTIP Units   2,857,042 
Total number of shares of GNL Common Stock expected to be issued to Advisor Parent   29,614,825 
Subtotal   122,610,613 
Par value per share of GNL Common Stock  $0.01 
Par value of shares of GNL Common Stock to be issued in the Proposed Transactions (in thousands)  $1,226 

  

Preliminary Purchase Price Allocation

 

The following table presents a preliminary allocation of the total estimated consideration expected to be transferred, as if the merger had occurred on June 30, 2023:

  

(in thousands)  As of June 30, 2023 
Assets Acquired:     
Land  $991,238 
Buildings, fixtures and improvements   2,382,354 
Total tangible assets   3,373,592 
Acquired intangible assets:     
In-place leases   590,689 
Above-market lease assets   46,425 
Total acquired intangible lease assets   637,114 
Operating lease right-of-use assets   12,861 
Prepaid expenses and other assets   60,437 
Goodwill   80,614 
Total assets acquired   4,164,618 
      
Liabilities Assumed:     
Mortgage notes payable, net   1,418,266 
Revolving credit facility   604,000 
Senior notes, net   385,000 
Acquired intangible lease liabilities   44,065 
Accounts payable and accrued expenses   62,888 
Operating lease liabilities   18,901 
Prepaid rent   16,531 
Dividends payable   5,837 
Total liabilities assumed   2,555,488 
      
Estimate of consideration expected to be transferred  $1,609,130 

  

The purchase price allocation presented above has not been finalized. The final determination of the allocation of the purchase price will be based on the fair value of the assets acquired and liabilities assumed as of the actual closing date of the Proposed Transactions and will be completed after the Proposed Transactions are consummated. The final determination of these estimated fair values, the assets’ useful lives and the depreciation and amortization methods are dependent upon certain valuations and other analyses that have not yet been completed, and as previously stated could differ materially from the amounts presented in the unaudited pro forma condensed combined financial statements. The final determination will be completed as soon as practicable but no later than one year after the consummation of the Proposed Transactions. Any increase or decrease in the fair value of the net assets acquired, as compared to the information shown herein, could change the portion of the purchase consideration allocable to goodwill and could impact the operating results of the pro forma GNL Combined Company following the Proposed Transactions due to differences in the allocation of the purchase consideration, as well as changes in the depreciation and amortization related to some of the acquired assets.

  

 

 

 

NOTES TO THE UNAUDITED PRO FORMA CONDENSED 

COMBINED FINANCIAL STATEMENTS

  

Note 4 — Pro Forma Adjustments - Unaudited Condensed Combined Balance Sheet

 

(a)To adjust acquired land to an estimate of their fair values, as follows:

  

   As of 
(in thousands)  June 30, 2023 
Eliminate RTL’s historical land  $(956,506)
Estimated fair value of land acquired   991,238 
Total  $34,732 

  

(b)To adjust acquired buildings, fixtures and improvements to an estimate of their fair values, as follows:

 

   As of 
(in thousands)  June 30, 2023 
Eliminate RTL’s historical buildings, fixtures and improvements  $(3,378,560)
Estimated fair value of buildings fixtures and improvements acquired   2,382,354 
Total  $(996,206)

  

 

Depreciation will be computed using the straight-line method over the estimated useful lives of up to 40 years for buildings, 15 years for land and building improvements, five years for fixtures and improvements and the shorter of the useful life or the remaining lease term for tenant improvements and leasehold interests. The estimated fair values and estimated useful lives are preliminary and subject to change until GNL finalizes its valuations.

  

(c)To adjust acquired intangible lease assets to an estimate of their fair values, as follows:

 

   As of 
(in thousands)  June 30, 2023 
Eliminate RTL’s historical acquired intangible lease assets  $(567,722)
Estimated fair value of intangible lease assets acquired   637,114 
Total  $69,392 

  

 

The value of in-place leases, exclusive of the value of above-market and below-market in-place leases, will be amortized to expense over the remaining periods of the respective leases. The estimated fair values and estimated useful lives are preliminary and subject to change once GNL finalizes its valuations.

  

(d)To eliminate historical accumulated depreciation and amortization.

 

 

 

   

NOTES TO THE UNAUDITED PRO FORMA CONDENSED 

COMBINED FINANCIAL STATEMENTS

 

(e)To record pro forma cash transactions. Both GNL and RTL have accrued/expensed transaction costs associated with the Proposed Transactions as of and for the six month period ended June 30, 2023. The transaction costs adjustments below reflect the accrual of the remaining costs expected to be incurred in the Proposed Transactions.

 

   As of 
(in thousands)  June 30, 2023 
Cash to be received from draws on GNL Credit Facility  $604,000 
Cash to be used to fully repay RTL Credit Facility   (604,000)
Cash to be paid to the Advisor Parent   (50,000)
Total estimated GNL transaction costs to complete the Proposed Transactions   (33,278)
Cash paid by GNL for transaction costs through June 30, 2023   6,278 
Total estimated RTL transaction costs to complete the Proposed Transactions   (13,700)
Cash paid by RTL for transaction costs through June 30, 2023   2,700 
Cash to be paid for RTL LTIP catch-up distributions   (6,525)
Total  $(94,525)

  

(f)To eliminate RTL’s unbilled straight-line rent.

  

(g)To adjust operating lease right of use assets to their estimated fair values, as follows:

 

   As of 
(in thousands)  June 30, 2023 
Eliminate RTL’s historical operating right of use assets  $(17,587)
Estimated fair value of RTL’s operating right of use assets   12,861 
Total  $(4,726)

  

(h)To net related party payables against related party receivables for the participants in the transaction.

  

(i)To record goodwill based on the preliminary estimated fair values RTL’s and the Internalization Parties’ assets to be acquired and liabilities to be assumed and the related allocation of the purchase price, as described in Note 2 — Basis of Presentation. Goodwill is calculated as the difference between the acquisition date fair value of the consideration expected to be transferred and the values assigned to the assets acquired and liabilities assumed. Goodwill is not amortized.

  

(j)To eliminate RTL’s deferred financing costs and leasing commissions, net, as follows:

  

   As of 
(in thousands)  June 30, 2023 
Eliminate RTL’s deferred financing costs, net, related to its Credit Facility  $(7,452)
Eliminate RTL’s leasing commissions, net   (17,598)
Total  $(25,050)

  

(k)To adjust assumed mortgage notes payable, net, to their fair values, as follows:

  

   As of 
(in thousands)  June 30, 2023 
Eliminate RTL’s historical mortgage notes payable (net of $26,685 of deferred financing costs and net discounts of $524)  $(1,553,688)
Gross principal amount of mortgage notes payable assumed from RTL   1,580,897 
Estimated market discount on assumed mortgage notes payable   (162,631)
Total  $(135,422)

 

 

 

  

NOTES TO THE UNAUDITED PRO FORMA CONDENSED 

COMBINED FINANCIAL STATEMENTS

 

(l)To record pro forma Credit Facility activity, as follows:

  

   As of 
(in thousands)  June 30, 2023 
Draws on GNL Credit Facility  $604,000 
Repayment of RTL Credit Facility   (604,000)
Total  $— 

  

(m)To adjust assumed senior notes, net to their estimated fair value, as follows:

  

   As of 
(in thousands)  June 30, 2023 
Eliminate RTL’s historical senior notes (net of $7,013 of deferred financing costs)  $(492,987)
Outstanding principal amount of senior notes assumed from RTL   500,000 
Estimated market discount of assumed senior notes   (115,000)
Total  $(107,987)

 

(n)To adjust acquired intangible lease liabilities, net, as follows:

  

   As of 
(in thousands)  June 30, 2023 
Eliminate RTL’s historical acquired intangible lease liabilities, net  $(123,900)
Estimated fair value of RTL’s acquired intangible lease liabilities   44,065 
Total  $(79,835)

  

(o)To adjust operating lease liabilities as follows:

  

   As of 
(in thousands)  June 30, 2023 
Remove RTL’s historical operating lease liabilities  $(19,088)
Estimated fair value of RTL’s operating lease liabilities   18,901 
Total  $(187)

  

(p)To eliminate RTL’s Series A and Series C preferred stock, at par and record the expected issuance of GNL Series D and Series E preferred stock, at par, as follows:

  

   As of 
(in thousands)  June 30, 2023 
Eliminate RTL’s historical preferred stock, at par  $(125)
Issuance of GNL preferred stock, at par, expected to be issued to RTL preferred stockholders (see Note 3)   125 
Total  $— 

  

(q)To eliminate RTL’s Common Stock, at par and record the expected issuance of GNL Common Stock, at par, as follows:

  

   As of 
(in thousands)  June 30, 2023 
Eliminate RTL’s historical Common Stock, at par  $(1,345)
Issuance of GNL Common Stock, at par, expected to be issued in the Proposed Transactions (see Note 3)   1,226 
Total  $(119)

 

 

 

  

NOTES TO THE UNAUDITED PRO FORMA CONDENSED 

COMBINED FINANCIAL STATEMENTS

  

(r)To record the additional paid in capital portion of the expected merger consideration, at fair value less pars, eliminate RTL’s additional paid-in capital and make other adjustments, as follows:

 

   As of 
(in thousands)  June 30, 2023 
Eliminate RTL’s historical paid-in capital  $(2,999,565)
Fair value of GNL Common Stock expected to be issued to RTL stockholders and Advisor Parent (see Note 3)   1,363,430 
Fair value of GNL preferred stock expected to be issued to RTL preferred stockholders (see Note 3)   259,432 
Less: par value of GNL Common Stock expected to be issued in the Proposed Transactions (see Note 3)   (1,226)
Less: par value of GNL preferred stock expected to be issued in the Proposed Transactions (see Note 3)   (125)
Eliminate historical non-controlling interest related to GNL LTIP Units   19,390 
Total  $(1,358,664)

  

(s)To adjust accumulated deficit, as follows:

 

   As of 
(in thousands)  June 30, 2023 
Eliminate RTL’s historical accumulated deficit  $1,565,425 
Eliminate Internalization Parties’ historical retained earnings   5,774 
Estimated GNL’s transaction costs to complete the Proposed Transactions   (27,000)
Total  $1,544,199 

  

(t)To adjust non-controlling interest, as follows:

 

   As of 
(in thousands)  June 30, 2023 
Eliminate RTL’s non-controlling interest attributable to LTIP Units  $(27,424)
Eliminate RTL’s non-controlling interest attributable to Class A common units   (1,391)
Eliminate GNL’s non-controlling interest attributable to LTIP Units   (19,390)
Estimated fair value of non-controlling interest attributable to Class A common units   1,288 
Total  $(46,917)

 

 

 

  

NOTES TO THE UNAUDITED PRO FORMA CONDENSED 

COMBINED FINANCIAL STATEMENTS

 

Note 5 — Pro Forma Adjustments - Statements of Operations

 

(a)The following table represents revenue adjustments to straight-line rent, below-market lease accretion and above-market lease amortization using the most recent data for lease terms, assuming an acquisition date of January 1, 2022. For the purposes of these pro forma financial statements, no assumptions were made for potential lease renewals.

 

   Six Months Ended   Year Ended 
(in thousands)  June 30, 2023   December 31, 2022 
Adjustments to straight-line rent  $705   $2,828 
Adjustments to below-market lease accretion   (3,690)   (2,424)
Adjustments to above-market lease amortization   (2,448)   (5,855)
Total (decrease)/increase to revenue  $(5,433)  $(5,451)

 

(b)The Internalization Parties’ revenue is derived from GNL and RTL. The following information is used to eliminate revenues recognized by the Internalized Parties and the related expenses in the historical periods of each GNL and RTL, as follows:

  

   Six Months Ended   Year Ended 
   June 30, 2023   December 31, 2022 
(in thousands)  GNL   RTL   Total   GNL   RTL   Total 
Property operating expenses  $—   $(6,018)  $(6,018)  $—   $(10,369)  $(10,369)
Operating fees to related parties   (20,211)   (15,928)   (36,139)   (40,122)   (32,026)   (72,148)
Acquisition, transaction and other costs   —    —    —    —    (387)   (387)
General administrative expenses   —    (8,407)   (8,407)   —    (16,231)   (16,231)
Expenses to be eliminated from GNL and RTL   (20,211)   (30,353)   (50,564)   (40,122)   (59,013)   (99,135)
Capitalized leasing commissions   (846)   (2,045)   (2,891)   (3,809)   (2,841)   (6,650)
Total revenue to be eliminated from the Internalized Parties  $(21,057)  $(32,398)  $(53,455)  $(43,931)  $(61,854)  $(105,785)

  

 

Leasing commissions are recognized as revenue by the Internalized Parties upon commissioned leases executions, and are expensed over the respective terms of commissioned leases through depreciation and amortization expense by each GNL and RTL.

  

(c)Transaction costs borne by GNL would be expensed in the period of acquisition and are reflected for pro forma purposes as if the transaction occurred on January 1, 2022. Transaction costs borne by RTL and the Internalization Parties would be reflected in the period prior to their acquisition and are excluded from the pro forma condensed combined statement of operations. Some of the GNL expenses have already been reflected in the historical financial information in the six month period ended June 30, 2023. The amounts incurred by RTL and the Internalization Parties in the historical financial statements are not eliminated for pro forma purposes even though they will not be included in the financial statements of the combined company. The adjustment below reflects the accrual of the remaining costs expected to be incurred by GNL in the Proposed transactions as well as certain intercompany expenses. These costs will not affect the Company's income statement beyond 12 months after the acquisition date.

  

   Six Months Ended   Year Ended 
(in thousands)  June 30, 2023   December 31, 2022 
Total estimated GNL transaction costs to complete the Proposed Transactions  $—   $33,278 
Amounts already recorded in June 30, 2023 historical financial statements   —    (6,278)
Remaining amounts   —    27,000 
Elimination of reimbursement of historical acquisition transaction and other costs (see (b) above) - between RTL and the Internalized Parties   —    (387)
Total  $—   $26,613 

 

 

 

  

NOTES TO THE UNAUDITED PRO FORMA CONDENSED 

COMBINED FINANCIAL STATEMENTS

  

(d)To adjust general and administrative expenses, as follows:

  

   Six Months Ended   Year Ended 
(in thousands)  June 30, 2023   December 31, 2022 
Elimination of internalized general and administrative expenses (see (a) above)  $(8,407)  $(16,231)
Total  $(8,407)  $(16,231)

  

(e)To adjust equity-based compensation, as follows:

  

   Six Months Ended   Year Ended 
(in thousands)  June 30, 2023   December 31, 2022 
Removal of historical RTL Out Performance Plan charges  $(6,352)  $(12,704)
Total  $(6,352)  $(12,704)

  

 

Elimination of historical equity-based compensation expense for the RTL Out Performance Plan charges, which was granted to the Advisor Parent and is part of the overall compensation paid to the Advisor Parent by RTL. These charges will be fully recognized in RTL's financial statements prior to acquisition and will be non-recurring. The GNL Out Performance Plan is not eliminated for pro forma purposes, however, due to the effective termination of the Advisor Parent as a result of the Internalization Merger, the remaining charge will be accelerated but will not be recurring subsequent to the Proposed Transactions. Historical charges for the GNL Out Performance plan were $4.5 million and $9.0 million in the six months ended June 30, 2023 and December 31, 2022, respectively. Equity-based compensation expense attributable to restricted stock awards to officers and directors of GNL and RTL are also not eliminated, as such personnel will continue to be employed and the directors retained. For GNL, historical charges for restricted stock equity-based compensation expenses were $1.6 million and $3.1 million in the six months ended June 30, 2023 and December 31, 2022, respectively. For RTL, historical restricted stock equity-based compensation expenses were $0.7 million and $1.7 million in the six months ended June 30, 2023 and December 31, 2022, respectively.

  

(f)To adjust depreciation and amortization expense, as follows:

  

   Six Months Ended   Year Ended 
(in thousands)  June 30, 2023   December 31, 2022 
Removal of historical RTL depreciation and amortization expense  $(113,648)  $(195,854)
Removal of CIM Transaction Pro Forma Adjustment (1)   —    (15,533)
Additional depreciation for disposed properties   2,044    11,635 
Estimated depreciation expense of acquired tangible real estate assets   36,366    72,733 
Estimated amortization of acquired in-place lease assets   40,894    81,789 
Total  $(34,344)  $(45,230)

  

 

(1)Represents the removal of the pro forma adjustment for depreciation and amortization expense which was presented in RTL’s Current Report on Form 8-K filed February 27, 2023. See Note 2 — Basis of Presentation for additional information.

 

 

 

 

 

NOTES TO THE UNAUDITED PRO FORMA CONDENSED 

COMBINED FINANCIAL STATEMENTS

  

(g)To adjust interest expense, as follows:

 

   Six Months Ended   Year Ended 
(in thousands)  June 30, 2023   December 31, 2022 
Removal of historical RTL deferred financing cost amortization  $7,367   $13,101 
Removal of historical RTL interest expense attributable to RTL Credit Facility   18,171    16,987 
Removal of CIM Financing Credit Facility Draw   —    4,749 
Removal of historical RTL premium/discount amortization (net)   800    1,092 
Removal of historical RTL interest expense attributable to mortgages repaid with draws from RTL Credit Facility (1)   2,296    4,600 
Additional interest expense attributable to GNL Credit Facility draws (including accordion draws) (2)   (21,110)   (42,220)
Amortization of discounts on assumed mortgage notes payable and senior notes from RTL (3)   (31,740)   (62,674)
Total increase to interest expense  $(24,216)  $(64,365)

 

 

(1)Represents the removal of historical partial-period RTL interest expense from mortgage notes repaid with draws from the RTL Credit Facility during the six months ended June 30, 2023. Such mortgages totaled $190.4 million and bore a weighted average annual interest rate of 3.85%.
(2)Assumes a draw on the GNL Credit Facility of $604.0 million at a weighted-average effective interest rate of 6.99% (as of June 30, 2023). A change to the effective interest rate of 0.125% would increase or decrease the additional interest expense attributable to the GNL Credit Facility draws (including accordion draws) by $0.4 million for the six months ended June 30, 2023, or $0.8 million for the year ended December 31, 2022.
(3)Additional interest expense as a result of the amortization of market discount on the assumed mortgages and senior notes calculated for the period using the effective interest method over the remaining term as of June 30, 2023.

 

(h)To eliminate dividends paid by GNL and RTL to the Internalization Parties, which were recorded as income by the Internalization Parties.

 

(i)To adjust net loss attributable to non-controlling interests, as follows:

  

   Six Months Ended   Year Ended 
(in thousands)  June 30, 2023   December 31, 2022 
Removal of Historical RTL net loss attributable to non-controlling interests  $(78)  $(97)
Add non-controlling interest adjustment for Class A Units   21    25 
Total  $(57)  $(72)

  

(j)To adjust the weighted-average GNL common shares outstanding for the periods presented reflecting the shares issued in the total consideration, as follows:

  

   Six Months Ended   Year Ended 
   June 30, 2023   December 31, 2022 
Historical weighted-average shares of GNL Common Stock outstanding   103,966,910    103,686,395 
Shares of GNL Common Stock expected to be issued to RTL stockholders   89,667,811    89,667,811 
Shares of GNL Common Stock expected to be issued to RTL restricted stockholders   470,935    470,935 
Shares of GNL Common Stock expected to be issued for earned RTL LTIP Units   2,857,042    2,857,042 
Shares of GNL Common Stock expected to be issued to Advisor Parent   29,614,825    29,614,825 
Pro forma weighted-average shares of GNL Common Stock outstanding   226,577,523    226,297,008