Global Net Lease(US:GNL)2022-11-03 20:18Property Portfolio - As of September 30, 2022, the company owned 310 properties with a total of 39.5 million rentable square feet, which were 98.6% leased[248] - 66% of the company's properties were located in the U.S. and Canada, while 34% were in Europe, with 56% classified as industrial/distribution properties[248] - The average remaining lease term across the portfolio was 8.1 years as of September 30, 2022[248] - The portfolio includes properties leased to tenants such as McDonald's, FedEx, and AT&T, with varying average remaining lease terms[256] - The company's portfolio comprised 56% industrial/distribution properties, 41% office properties, and 3% retail properties as of September 30, 2022[248] Financial Performance - Net income attributable to common stockholders increased to $9.7 million for Q3 2022, compared to $2.4 million in Q3 2021, reflecting significant growth in profitability[261] - Revenue from tenants was $92.6 million for Q3 2022, down from $95.8 million in Q3 2021, primarily due to a $2.2 million termination fee recorded in the previous year[263] - For the three months ended September 30, 2022, revenues were $97.5 million, reflecting an increase of $4.9 million on a constant currency basis compared to the same period last year[264] - Net income attributable to common stockholders was $9.4 million for the nine months ended September 30, 2022, compared to a net loss of $0.9 million for the same period in 2021[284] - Revenue from tenants was $284.9 million for the nine months ended September 30, 2022, slightly up from $284.7 million in the prior year[286] Lease and Rental Income - 61.3% of the rental income on an annualized straight-line basis was derived from "Investment Grade" rated tenants, with 34.4% having actual investment grade ratings[250] - The company collected approximately 100% of the original cash rent due for Q3 2022, consistent with previous quarters in 2022 and 2021[251] - Approximately 94.3% of the company's leases contain rent escalation provisions, with an average cumulative increase of 1.2% per year[376] - The 12-month CPI increase for all items as of September 30, 2022, was 8.2%, impacting leases without indexed escalation provisions[376] Strategic Initiatives - The company focuses on acquiring and managing a globally diversified portfolio of commercial real estate properties, emphasizing sale-leaseback transactions[247] - The company continues to focus on expanding its leasing activities, as evidenced by the recent lease renewals and tenant expansions[260] - Property acquisitions since September 30, 2021, partially offset the revenue decline from tenants, highlighting the impact of strategic growth initiatives[263] - The company executed two lease renewals and one tenant expansion totaling approximately 0.8 million square feet, generating $14.8 million in net new straight-line rent[260] Expenses and Costs - Property operating expenses increased to $7.8 million for the three months ended September 30, 2022, up from $6.7 million in the same period last year[265] - Operating fees paid to related parties rose to $10.1 million for the three months ended September 30, 2022, compared to $9.9 million in the prior year[266] - General and administrative expenses were $4.1 million for the three months ended September 30, 2022, an increase from $3.9 million in the same period last year[271] - Equity-based compensation expense increased to $3.1 million for the three months ended September 30, 2022, compared to $2.7 million in the prior year[272] - Depreciation and amortization expense decreased to $37.8 million for the three months ended September 30, 2022, down from $41.7 million in the same period last year[274] Cash Flow and Financing - Net cash provided by operating activities was $159.6 million for the nine months ended September 30, 2022, reflecting net income of $24.7 million and adjustments for non-cash items of $122.0 million[305] - Net cash used in investing activities was $47.2 million for the nine months ended September 30, 2022, consisting of property acquisitions of $33.9 million and capital expenditures of $19.2 million[307] - Net cash used in financing activities was $58.9 million for the nine months ended September 30, 2022, resulting from net payments of mortgage notes payable and dividends paid to stockholders[309] - The company has secured mortgage notes payable of $1.3 billion as of September 30, 2022, with approximately $58.2 million in principal repaid during the first nine months of 2022[329] Debt and Equity - As of September 30, 2022, total debt outstanding was $2.4 billion, with a weighted-average interest rate of 3.5%[324] - The company's debt leverage ratio was 54.8% as of September 30, 2022[327] - The company has an "at the market" equity offering program for Common Stock with a potential to raise $500.0 million, having sold 70,218 shares for gross proceeds of $1.1 million during the three months ended September 30, 2022[319] - Outstanding borrowings under the Revolving Credit Facility were $605.1 million as of September 30, 2022, with $78.9 million available for future borrowings[330] Impairment and Taxation - An impairment charge of $17.1 million was recorded for the nine months ended September 30, 2022, compared to $7.9 million for the same period in 2021[291] - Income tax expense increased to $3.1 million for the three months ended September 30, 2022, compared to $1.9 million in the same period last year, driven by foreign acquisitions[282] - Income tax expense increased to $8.7 million for the nine months ended September 30, 2022, from $5.9 million in 2021, primarily due to European acquisitions[304] Currency and Foreign Exchange - The company is exposed to fluctuations in foreign currency exchange rates, particularly GBP-USD and EUR-USD[372] - The foreign exchange rate fluctuations contributed to the revenue changes, emphasizing the importance of currency management in financial performance[263] - The impact of foreign currency translation on revenue from tenants for the nine months ended September 30, 2022, was $9.928 million, indicating the significance of currency fluctuations on financial performance[364]