Global Net Lease(US:GNL)2025-08-07 20:19PART I - FINANCIAL INFORMATION Financial Statements The unaudited financial statements reflect a strategic shift from the Multi-Tenant Retail Disposition, resulting in decreased assets and a higher net loss Consolidated Balance Sheet Summary (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total real estate investments, net | $4,366,367 | $4,622,033 | | Assets related to discontinued operations | $2,337 | $1,816,131 | | Total Assets | $4,984,916 | $6,955,764 | | Total Liabilities | $3,152,537 | $4,768,806 | | Total Stockholders' Equity | $1,832,379 | $2,186,958 | Consolidated Statement of Operations Summary (in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Revenue from tenants | $257,320 | $293,344 | | Total expenses | $242,756 | $214,336 | | Loss from continuing operations | $(127,026) | $(29,108) | | (Loss) from discontinued operations | $(86,496) | $(30,307) | | Net loss | $(213,522) | $(59,415) | | Net loss attributable to common stockholders | $(235,394) | $(81,287) | | Net loss per share (Basic and Diluted) | $(1.04) | $(0.35) | - The sale of the Multi-Tenant Retail Portfolio is treated as a discontinued operation, significantly impacting the comparability of financial statements3440 Note 3 — Multi-Tenant Retail Disposition The company sold its 100-property Multi-Tenant Retail Portfolio for approximately $1.78 billion, resulting in a $52.0 million loss from discontinued operations - The sale of 100 multi-tenant retail properties was completed in multiple closings during Q1 and Q2 2025 for a contract price of approximately $1.78 billion3347 Gain (Loss) on Multi-Tenant Retail Disposition (in thousands) | Period | Gain / (Loss) on Sale | | :--- | :--- | | Three Months Ended June 30, 2025 | $33,232 | | Six Months Ended June 30, 2025 | $(51,955) | - A multi-tenant disposition receivable of $90.2 million was recorded at fair value as of June 30, 2025, representing potential proceeds from leases not yet commenced at the time of closing5960 - The disposition was considered a triggering event, leading to a goodwill impairment charge of $7.1 million in Q1 2025, writing off the entire segment's goodwill62 Note 5 — Mortgage Notes Payable, Net Net mortgage notes payable decreased significantly to $1.31 billion due to assumptions by the buyer in the Multi-Tenant Retail Disposition Mortgage Notes Payable, Net (in thousands) | Date | Outstanding Loan Amount | Effective Interest Rate | | :--- | :--- | :--- | | June 30, 2025 | $1,312,718 | 4.4% | | December 31, 2024 | $1,768,608 | N/A | - As part of the Multi-Tenant Retail Disposition, mortgages with principal amounts of $256.3 million and $210.0 million were assumed by the buyer, RCG4780 Note 6 — Revolving Credit Facility The Revolving Credit Facility balance was reduced to $740.7 million using disposition proceeds and was subsequently replaced with a new facility Revolving Credit Facility Balance (in thousands) | Date | Outstanding Balance | | :--- | :--- | | June 30, 2025 | $740,682 | | December 31, 2024 | $1,390,292 | - Subsequent to the quarter end, on August 6, 2025, the company entered into a new $1.8 billion credit agreement to replace and terminate the existing facility90227231 Note 10 — Stockholders' Equity The company executed a $75.9 million share repurchase program and reduced its quarterly common stock dividend to increase cash retention - On February 20, 2025, the Board authorized a $300 million share repurchase program, and during the first six months, the company repurchased 10.1 million shares for $75.9 million144147 - The quarterly common stock dividend was reduced to $0.190 per share, effective with the dividend declared in April 2025157 - No shares of Common Stock or Series B Preferred Stock were sold through the respective ATM programs during the first six months of 2025149152 Management's Discussion and Analysis of Financial Condition and Results of Operations The $1.78 billion retail disposition transformed the company's focus, enabling significant debt reduction and improved capital structure - As of June 30, 2025, the portfolio consisted of 911 properties, 98% leased, with a weighted-average remaining lease term of 6.2 years242 - The company's strategic disposition initiative led to a significant reduction in total gross debt to $3.1 billion at June 30, 2025, from $5.1 billion a year prior273304 FFO and AFFO Reconciliation Summary (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net loss attributable to common stockholders | $(35,079) | $(46,600) | $(235,394) | $(81,287) | | FFO attributable to common stockholders | $(14,400) | $36,193 | $18,561 | $91,966 | | Core FFO attributable to common stockholders | $7,122 | $50,855 | $42,089 | $107,447 | | AFFO attributable to common stockholders | $53,108 | $76,692 | $119,328 | $151,656 | Results of Operations Revenue from tenants decreased due to property sales, while the net loss widened significantly from increased impairment and derivative losses Revenue from Tenants by Segment - Six Months Ended June 30 (in thousands) | Segment | 2025 | 2024 | | :--- | :--- | :--- | | Industrial & Distribution | $113,008 | $123,432 | | Retail | $72,314 | $83,281 | | Office | $71,998 | $69,767 | | Total | $257,320 | $293,344 | - Impairment charges for the six months ended June 30, 2025, totaled $70.1 million, a significant increase from $31.7 million in the same period of 2024294296 - Interest expense decreased to $106.8 million for the first six months of 2025 from $136.6 million in 2024, driven by lower average debt balances304 Liquidity and Capital Resources The company's liquidity was reshaped by dispositions, using proceeds for over $1.2 billion in net debt repayments and share repurchases - Net cash provided by operating activities was $111.2 million for the six months ended June 30, 2025, compared to $162.5 million in the prior year period314315316 - Net cash used in financing activities was $1.4 billion for the six months ended June 30, 2025, including $722.2 million in net paydowns on the revolving credit facility320 - The company's debt leverage ratio improved to 58.9% as of June 30, 2025, from 63.8% at December 31, 2024333 Quantitative and Qualitative Disclosures About Market Risk The company reports no material change in its market risk exposure during the first half of 2025 - There has been no material change in the company's exposure to market risk during the first six months of 2025373 Controls and Procedures Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of the end of the period374 - No material changes to the internal control over financial reporting were identified during the quarter ended June 30, 2025375 PART II - OTHER INFORMATION Legal Proceedings The company is not currently subject to any material legal or regulatory proceedings - The company is not subject to any material legal proceedings164377 Risk Factors No material changes to the company's risk factors have been identified since its 2024 Annual Report - No material changes to risk factors were reported since the company's 2024 Form 10-K and Q1 2025 Form 10-Q378 Unregistered Sales of Equity Securities and Use of Proceeds The company repurchased 7.7 million shares for $56.5 million in Q2 2025, with $224.3 million remaining under its repurchase program Common Stock Repurchases for Q2 2025 | Period | Total Shares Purchased | Average Price Paid per Share | Maximum Value Remaining (in thousands) | | :--- | :--- | :--- | :--- | | April 2025 | 4,924,685 | $7.25 | $244,907 | | May 2025 | 2,425,943 | $7.58 | $226,522 | | June 2025 | 303,992 | $7.47 | $224,252 | | Total | 7,654,620 | $7.37 | $224,252 |