Global Net Lease(GNL) - 2019 Q1 - Quarterly Report

Property Portfolio - As of March 31, 2019, the company owned 343 properties with a total of 27.4 million rentable square feet, which were 99.5% leased[270] - The weighted-average remaining lease term for the properties was 8.1 years[270] - 55.8% of the properties were located in the U.S. and 44.2% in Europe[270] - Total square footage of the portfolio reached 27,389 thousand square feet as of March 31, 2019[280] - The average remaining lease term across the portfolio was 8.1 years as of March 31, 2019[280] Financial Performance - Revenue from tenants increased to $75.5 million for Q1 2019, up from $68.1 million in Q1 2018, driven by net acquisitions of 16 properties[282] - Property operating expenses decreased slightly to $7.4 million in Q1 2019 from $7.5 million in Q1 2018, primarily related to insurance costs and real estate taxes[283] - Operating fees to related parties rose to $8.0 million in Q1 2019, compared to $6.8 million in Q1 2018, partly due to a $1.0 million increase in Variable Base Management Fee[285] - The company recognized a bad debt expense of $0.1 million in Q1 2019, which is now recorded as a reduction to revenue from tenants[282] - For the three months ended March 31, 2019, net income attributable to common stockholders was $5,791,000, compared to $2,361,000 for the same period in 2018[352] - FFO attributable to common stockholders for Q1 2019 was $36,202,000, an increase from $31,857,000 in Q1 2018, representing a growth of approximately 10.6%[352] - Core FFO attributable to common stockholders for Q1 2019 was $36,464,000, up from $33,103,000 in Q1 2018, indicating a year-over-year increase of about 7.1%[352] - AFFO attributable to common stockholders for Q1 2019 was $39,504,000, compared to $35,081,000 in Q1 2018, reflecting a growth of approximately 12.9%[352] Cash Flow and Dividends - Net cash provided by operating activities was $24.8 million in Q1 2019, down from $40.7 million in Q1 2018, reflecting a decrease in working capital items[302][303] - Dividends paid to common stockholders for Q1 2019 totaled $43,270,000, with cash flows from operations covering 48.6% of this amount after preferred stock dividends[359] - The company anticipates paying future dividends on a quarterly basis, maintaining an annualized rate of $2.13 per share[354] - Cash flows provided by operations for Q1 2019 were $24,751,000, with available cash on hand contributing $23,563,000 to total dividend coverage[359] - The company’s board of directors may alter or suspend dividend payments based on financial conditions and capital expenditure requirements[356] - The company utilized an exception to pay dividends between 95% and 100% of Adjusted FFO during the quarter ended March 31, 2019[357] Debt and Financing - As of March 31, 2019, the company had total debt outstanding of $1.7 billion, with a weighted-average interest rate of 3.0% per annum[319] - The company's debt leverage ratio was 45.8% as of March 31, 2019, based on total debt as a percentage of the total purchase price of real estate investments[322] - The company raised $152.8 million from the sale of 7,759,322 shares of Common Stock through the ATM Program during the three months ended March 31, 2019[316] - The company sold 68,104 shares of Series A Preferred Stock for gross proceeds of $1.7 million during the same period[317] - As of March 31, 2019, 83.7% of the company's total debt bore interest at fixed rates or was swapped to fixed rates[321] - The company has future scheduled principal payments on mortgage notes of $214.5 million for the year ending December 31, 2019, with a weighted average interest rate of 2.4% per year[326] - The company expects to borrow an aggregate of €51.5 million under a loan agreement, with proceeds used to repay outstanding mortgage indebtedness[327] - The Credit Facility had a weighted-average effective interest rate of 2.6% as of March 31, 2019, after considering interest rate swaps[333] - The company had approximately $149.2 million available for future borrowings under the Revolving Credit Facility as of March 31, 2019[335] International Operations and Risks - The company is subject to risks associated with international investments, including foreign laws and currency fluctuations[266] - The company experienced a 6.4% decrease in the average exchange rate for British Pounds Sterling to USD and a 7.6% decrease for Euros to USD compared to the same period last year[282] - The company is exposed to fluctuations in foreign currency exchange rates, particularly with GBP-USD and EUR-USD, and uses derivatives to manage this exposure[360] - International assets and operations are subject to taxation in the foreign jurisdictions where they are held or conducted[363] Advisory and Management Fees - The company may face conflicts of interest due to its executive officers being affiliated with the Advisor and AR Global Investments[266] - The company is obligated to pay substantial fees to the Advisor and its affiliates[266] - The company’s advisory agreement includes a Base Management Fee of $18.0 million per annum, with additional variable fees based on performance[286] - Property management fees increased to $1.4 million for the three months ended March 31, 2019, up from $1.2 million in the same period of 2018, primarily due to the acquisition of 16 properties[287] - General and administrative expenses rose to $3.2 million in Q1 2019 from $2.1 million in Q1 2018, mainly due to higher professional fees[289] Market and Economic Risks - Increases in interest rates could raise the company's debt payments[266] - The company may be unable to maintain or increase cash dividends over time[266] - The company may not be able to identify sufficient property acquisitions that meet its investment objectives[266] - The company may be adversely impacted by inflation on leases without indexed escalation provisions, potentially increasing operating expenses[365] - There has been no material change in the company's exposure to market risk during the three months ended March 31, 2019[368] - There are no off-balance sheet arrangements that materially affect the company's financial condition or results[367] - There were no material changes in the company's contractual obligations as of March 31, 2019, compared to the previous year[361] - The company has elected to be taxed as a REIT and must distribute at least 90% of its REIT taxable income annually to maintain this status[362]