Global Net Lease, Inc. (NYSE:GNL) Q3 2018 Earnings Conference Call Transcript

Nov 07, 2018 • 11:00 am ET

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Global Net Lease, Inc. (NYSE:GNL) Q3 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good morning, and welcome to the Global Net Lease Third Quarter Earnings Call. All participants will be in listen only mode. (Operator Instructions) After today's presentation there will be an opportunity to ask questions. (Operator Instructions) Please note this event is being recorded.

I would now like to turn the conference over to Louisa Quarto, EVP. Please go ahead.

Executive
Louisa Quarto

Thank you, operator. Good morning, everyone, and thank you for joining us for GNL's third quarter 2018 earnings call. This call is being webcast in the Investor Relations section of GNL's website at www.globalnetlease.com. Joining me today on the call to discuss the quarter's results are James Nelson, GNL's CEO; and Chris Masterson, GNL's CFO.

(Forward-Looking Cautionary Statements)

Also during today's call, we will discuss non-GAAP financial measures, which we believe can be useful in evaluating the company's financial performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most recent directly comparable GAAP measure is available in our earnings release.

I'll now turn the call over to our CEO, Jim Nelson.

Executive
James Nelson

Thank you, Louisa, and thanks again to everyone for joining us on today's call. I will start by providing a brief recap of our results and some color on acquisitions, and then Chris will go into more detail regarding our debt refinancing and our quarterly financial performance. Our third quarter results reflect continued execution of our long-range strategic plan to build a diversified Global Net Lease portfolio and delivered an attractive return to our investors.

We had another solid quarter with continued momentum across the portfolio. Third quarter revenue, core FFO and AFFO all increased on a year-over-year basis. For the quarter, revenue increased 11% to $72 million, which is inclusive of a $3 million lease termination fee. Our core FFO increased 16% to $38 million and our adjusted funds from operations, or AFFO is up 14% to $39.6 million, inclusive of a $3 million lease termination fee, which exceeded our distributions paid to common stockholders this quarter of $36.7 million.

Through the first nine months of the year, we acquired 17 assets for $266 million, which we previously announced. And as of today, our remaining 2018 pipeline stands at $127 million. In their first full year within the portfolio, these 17 closed assets will contribute approximately $20 million in additional annualized straight-line rental revenue. To reach our growth and rental income goals, we expect to strategically utilize the Capital Markets. This can include debt as well as common and preferred stock.

During the quarter, we raised $95 million gross proceeds in common stock and refinanced all of our UK mortgage loans with a new credit facility at what we believe are favorable terms. Chris will provide more details in his section of the call. A quick comment on our view towards dispositions. While we do not have any properties that were classified as assets held for sale, we are opportunistic