Global Net Lease(GNL) - 2019 Q2 - Quarterly Report

Property Portfolio - As of June 30, 2019, the company owned 288 properties with a total of 28.3 million rentable square feet, achieving a leasing rate of 99.6%[268] - The weighted-average remaining lease term for the properties is 8.0 years, with 57.6% located in the U.S. and 42.4% in Europe[268] - The company has a diversified portfolio primarily focused on single tenant net-leased commercial properties[267] - Total square feet of properties acquired since June 30, 2018, amounted to 28,332 thousand square feet across 288 properties[278] - The average remaining lease term for properties in the portfolio was approximately 8.0 years as of June 30, 2019[278] - The company completed multiple acquisitions, including significant properties like Contractors Steel Company with 1,392 thousand square feet[276] Financial Performance - Net income attributable to common stockholders increased to $12.6 million for Q2 2019, up from $5.3 million in Q2 2018, reflecting a significant improvement in profitability[280] - Revenue from tenants rose to $76.1 million in Q2 2019, compared to $71.0 million in Q2 2018, driven by 21 property acquisitions since June 30, 2018[281] - Property operating expenses decreased to $7.0 million in Q2 2019 from $8.2 million in Q2 2018, primarily due to lower insurance costs and real estate taxes[282] - The company recognized a bad debt expense of $0.1 million in Q2 2019, which is now recorded as a reduction to revenue from tenants[281] - Rental income rose to $141.4 million for the six months ended June 30, 2019, compared to $129.4 million in 2018, primarily due to the acquisition of 21 properties since June 30, 2018[304] - The company recognized a net income attributable to common stockholders of $18.4 million for the six months ended June 30, 2019, compared to $7.6 million in 2018[303] Expenses and Costs - Interest expense rose to $15.7 million for the three months ended June 30, 2019, compared to $14.4 million in 2018, attributed to an increase in total debt from $1.7 billion to $1.8 billion[295] - Depreciation and amortization expense increased to $31.1 million for the three months ended June 30, 2019, up from $29.8 million in 2018, mainly due to the acquisition of additional properties[294] - General and administrative expenses decreased to $2.3 million for the three months ended June 30, 2019, down from $2.6 million in 2018[287] - General and administrative expenses increased to $5.5 million for the six months ended June 30, 2019, compared to $4.6 million in the same period of 2018, primarily due to higher professional fees[310] - The company incurred acquisition, transaction, and other costs of $847,000 for the three months ended June 30, 2019, down from $1.114 million in 2018, a decrease of 24%[376] Cash Flow and Financing - Net cash provided by operating activities was $71.2 million for the six months ended June 30, 2019, compared to $71.0 million in the same period of 2018, reflecting net income of $23.6 million adjusted for non-cash items[325][326] - Net cash used in investing activities was $135.5 million for the six months ended June 30, 2019, driven by property acquisitions of $211.0 million, partially offset by net proceeds from asset dispositions of $89.9 million[327][328] - Net cash provided by financing activities was $153.1 million during the six months ended June 30, 2019, primarily from mortgage notes payable of $375.4 million and net proceeds from the issuance of Common Stock of $150.6 million[329] - The company raised $152.8 million from the sale of 7.8 million shares of Common Stock through the ATM Program in January 2019, and has a new equity distribution agreement to raise up to $250.0 million[340] Debt and Leverage - As of June 30, 2019, the company had total debt outstanding of $1.8 billion with a weighted-average interest rate of 3.0%[343] - The company’s debt leverage ratio was 49.4% as of June 30, 2019, with a weighted-average maturity of 4.6 years[347] - The company entered into a Credit Facility Amendment on August 1, 2019, increasing total commitments to $1.235 billion and lowering the interest rate[355] - Following the Credit Facility Amendment, the weighted-average effective interest rate of the Credit Facility was reduced to 2.30%[357] - The company has future scheduled principal payments on mortgage notes of $180.7 million for the year ending December 31, 2019[354] Dividends and Distributions - The company historically paid dividends at an annualized rate of $2.13 per share, changing to quarterly payments starting April 2019[378] - Dividends on Series A Preferred Stock are $0.453125 per share per quarter, equating to 7.25% of the $25.00 liquidation preference per share annually[379] - Total dividends and distributions for the three months ended March 31, 2019, amounted to $45,859,000, with cash flows from operations covering 48.6% of the dividends after preferred stock payments[384] - For the six months ended June 30, 2019, total dividends and distributions were $63,363,000, with cash flows from operations covering 62.8% of the dividends after preferred stock payments[384] Risk Factors - The company may face challenges in raising additional debt or equity financing on attractive terms, impacting future acquisitions[264] - The company is subject to risks associated with international investments, including foreign currency exchange rate fluctuations and compliance with foreign laws[264] - The company may not generate sufficient cash flows to pay dividends or fund operations, potentially leading to unfavorable borrowing[264] - The company is exposed to foreign currency fluctuations and uses derivatives to manage this risk[385] - There has been no material change in market risk exposure during the six months ended June 30, 2019[392]