Global Net Lease(US:GNL)2022-05-05 20:21PART I - FINANCIAL INFORMATION Financial Statements This section presents the unaudited consolidated financial statements for Global Net Lease, Inc. as of March 31, 2022, and for the three months ended March 31, 2022 and 2021, including Balance Sheets, Statements of Operations, Comprehensive Income, Changes in Equity, and Cash Flows, along with detailed notes explaining accounting policies and financial details Consolidated Balance Sheets Total assets slightly decreased to $4.15 billion as of March 31, 2022, from $4.18 billion at year-end 2021, primarily due to reduced net real estate investments, while total liabilities remained stable at approximately $2.56 billion and total equity decreased from $1.63 billion to $1.60 billion Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Total Assets | $4,152,740 | $4,182,956 | | Total real estate investments, net | $3,806,827 | $3,880,662 | | Cash and cash equivalents | $123,502 | $89,668 | | Total Liabilities | $2,557,402 | $2,556,321 | | Mortgage notes payable, net | $1,399,713 | $1,430,915 | | Revolving credit facility | $260,270 | $225,566 | | Total Equity | $1,595,338 | $1,626,635 | Consolidated Statements of Operations Net income significantly increased to $10.5 million in Q1 2022 from $4.2 million in Q1 2021, resulting in $5.5 million net income attributable to common stockholders, or $0.05 per share, driven by higher tenant revenue and derivative gains Statement of Operations Highlights (in thousands) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Revenue from tenants | $97,133 | $89,390 | | Total expenses | $64,284 | $63,615 | | Operating income | $32,849 | $25,775 | | Net income | $10,541 | $4,184 | | Net income (loss) attributable to common stockholders | $5,483 | $(832) | | EPS - Basic and Diluted | $0.05 | $(0.01) | Consolidated Statements of Cash Flows Net cash from operating activities increased to $61.8 million in Q1 2022 from $53.2 million in Q1 2021, while investing activities used $1.8 million and financing activities used $23.4 million, primarily for dividends Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $61,819 | $53,220 | | Net cash used in investing activities | $(1,782) | $(4,447) | | Net cash (used in) provided by financing activities | $(23,351) | $92,752 | | Net change in cash, cash equivalents and restricted cash | $36,686 | $141,525 | - A key contributor to operating cash flow in Q1 2022 was a $9.0 million termination fee received from a tenant2037 Notes to Consolidated Financial Statements This section details the company's accounting policies and financial data, covering organization, revenue recognition, real estate, debt, derivatives, equity, related-party transactions, and subsequent events like the credit facility amendment Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial condition and results of operations for Q1 2022, highlighting 309 properties with 98.7% lease rate, strong ~100% rent collections, significant net income improvement driven by acquisition-driven revenue growth, and detailing operational performance, liquidity, capital resources, debt management, non-GAAP measures, and the April 2022 credit facility amendment increasing capacity to $1.45 billion - As of March 31, 2022, the company owned 309 properties totaling 39.3 million rentable square feet, with a 98.7% lease rate and a weighted-average remaining lease term of 8.4 years242 - Rent collections were approximately 100% of original cash rent due for Q1 2022, consistent with collections throughout 2021, demonstrating resilience amid the COVID-19 pandemic246 Q1 2022 vs Q1 2021 Results of Operations (in millions) | Metric | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Revenue from tenants | $97.1 | $89.4 | | Operating Income | $32.8 | $25.8 | | Net Income (Loss) to Common Stockholders | $5.5 | $(0.8) | | AFFO attributable to common stockholders | $44.3 | $40.4 | - Subsequent to the quarter, in April 2022, the company amended and restated its Credit Facility, increasing total commitments from $1.17 billion to $1.45 billion and extending the maturity to April 2026225303 Quantitative and Qualitative Disclosures About Market Risk The company reports no material changes in market risk exposure during Q1 2022, referring to the 2021 Annual Report for detailed discussion - There was no material change in the company's market risk exposure in Q1 2022348 Controls and Procedures Management concluded the company's disclosure controls and procedures were effective as of March 31, 2022, with no material changes in internal control over financial reporting during the quarter - The company's disclosure controls and procedures were deemed effective as of the end of Q1 2022350 - No material changes to internal control over financial reporting occurred during Q1 2022351 PART II - OTHER INFORMATION Legal Proceedings The company reports no material legal proceedings pending or contemplated against it - The company has no material legal proceedings353 Risk Factors No material changes to risk factors from the 2021 Annual Report, except for a new risk concerning geopolitical instability from the Russia-Ukraine conflict, potentially impacting global economies, inflation, supply chains, and tenant financial conditions - A new risk factor has been added concerning the geopolitical instability from the Russia-Ukraine conflict355 - Potential impacts include exacerbated inflation, supply chain disruptions, increased energy prices, and a weakening of tenant financial conditions, especially in Europe356 - The conflict could also negatively impact liquidity in capital markets, making future financing more difficult, and raises the risk of Russian cyberattacks357358 Unregistered Sales of Equity Securities and Use of Proceeds The company reported no sales of unregistered securities or repurchases of common stock during Q1 2022 - There were no unregistered sales of equity securities in Q1 2022359 - The company did not repurchase any of its common stock during Q1 2022359 Other Information On May 5, 2022, CEO James L. Nelson was awarded 35,100 shares of common stock under the 2021 Omnibus Incentive Compensation Plan, with no vesting requirements - On May 5, 2022, CEO James L. Nelson was awarded 35,100 shares of common stock with no vesting requirements362 Exhibits This section lists exhibits filed with the Quarterly Report on Form 10-Q, including amendments to the Equity Distribution Agreement, the Second Amended and Restated Credit Agreement from April 2022, and officer certifications - Key filed exhibits include the Second Amended and Restated Credit Agreement dated April 8, 2022, and a Stock Award Agreement for James Nelson dated May 5, 2022368