Matthew Furbish - Director of Investor Relations and Public Relations Scott Bowman - President and Chief Executive Officer Timothy Salvemini - Chief Financial Officer, Treasurer and Secretary.

Analysts:.

Good morning and welcome to the Global Net Lease First Quarter 2016 Earnings Call. All participants will be in listen-only mode. After today’s presentation there will an opportunity to ask questions. Please note this call is being recorded. I would now like to turn the conference over to Mr.

Matthew Furbish, GNLs Director of Investor Relations and Public Relations. Please go ahead..

Thank you, operator. Good morning, everyone and thank you for joining us to review Global Net Lease’s earnings for the first quarter 2016. With me today is Scott Bowman, GNLs President and Chief Executive Officer; Timothy Salvemini, GNLs Chief Financial Officer, Treasurer and Secretary, and Paschal Ferreira, Chief Accounting Officer.

This morning’s call is being webcast on our website at globalnetlease.com in the investor relation section. There will be a replay of this call available approximately one hour after the call. The dial in for the replay is 1-877-344-7529, with the confirmation code 10085630.

Before I turn the call over to Scott, I would like to remind everyone that certain statements and assumptions in this earnings call which are not historical facts will be forward-looking and are being pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements are subject to certain assumptions and risk factors, which could cause GNLs actual results to differ materially from these forward-looking statements. The risk factors that could cause these differences are more fully discussed in our filings with the SEC.

In addition, the forward-looking statements included in this conference call are only made as of the date of this call and as stated in our SEC reports, GNL disclaims any intent or obligation to update or revise these forward-looking statements except as explicitly required by law.

Finally, all references, the per share earnings including funds from operations, core funds from operations and adjusted funds from operations are on a fully diluted basis. Now, I’d like to turn the call over to GNLs CEO, Scott Bowman.

Scott?.

Thank you, Matt. Good morning everyone and welcome to GNLs first quarter 2016 earnings call. I’ll begin today’s call by reviewing our operating results and providing a portfolio update for the first quarter 2016. Tim, will then review our financial performance and balance sheet, before we open it up for your questions.

Paschal Ferreira, our Chief Accounting Officer is also with us today and will participate in the Q&A session. We’re pleased to report another solid quarter of results and a great start to the year as we continue our efforts building GNL into a best in class net leased REIT.

This was GNLs third full quarter as a publicly traded company and we’ve made much progress in a relatively short time as we work diligently to execute against our stated objectives.

Since June of 2015, GNL is successfully listed on the New York Stock Exchange, completed acquisitions, adding assets generating approximately 9% of incremental income became SOX compliant, added to the management team of both the U.S. and Europe has been added to the RMZ and more.

GNLs total return for the first quarter 2106 was 10.2% versus the RMZ index total return of 6.3%. For the first quarter 2016, we generated core funds from operations or core FFO of $29.9 million or $0.18 per share and adjusted funds from operations or AFFO of $32.3 million or $0.19 per share.

Tim, will provide more detail on our results in just a few minutes. We are reiterating our 2016 AFFO guidance in the range of $0.78 to $0.83 per share. The midpoint of that range would represent a year-over-year AFFO increase of 12%. At March 31, GNL had approximately $46 million of cash and $37 million available on the credit facility.

At the end of the first quarter, our interest coverage ratio was 5.2 times, amongst the highest in our peer group. This reinforces the strength of our strategy to invest in the U.S. and Western Europe and continues to be a key differentiatorfor us versus our peers.

Our outsized coverage ratio is driven by the company’s flexibility to move between market cycles in the U.S. and Western Europe to source property acquisition and debt, which results in an accretive spreads between our cost of debt and acquisition cap rates on our best-in-class portfolio.

These wider spreads result in higher net returns at the property level enhancing our debt coverage ratio. We remain committed to our monthly distributions.

And earlier in the quarter announced we will maintain our dividend at an annualized rate of $0.71 per share, representing a payout ratio of 88.1% based on the midpoint of our 2016 AFFO guidance range.

Due to our investment grade quality balance sheet, and the predictability of forward cash flows from our best-in-class portfolio, we remain very comfortable with this payout level.

Turning to our portfolio, at the end of the quarter, our diversified real estate portfolio consisted of 329 assets, leased largely to investment grade tenants across the U.S. and Western Europe, the majority of which are mission critical assets, or in other words properties that are strategically important to our tenant’s core operation.

Key metrics for the portfolio at quarter end were our occupancy remained at 100%. Our highly diversified portfolio of properties are at least 86 tenants across 36 industries in five countries, and our top 10 tenants comprised 36% of our NOI. The property mix based on NOI, 54% office, 30% industrial and distribution, and 15% retail.

And our geographic mix based on NOI is 58% U.S. and 42% Europe. The quality of our tenant base is a key element of GNLs strategy to realize long term growth and provide transparent and durable cash flows.

As of March 31, 72.3% of our portfolio’s NOI was derived from investment grade or implied investment grade rated tenants, amongst the highest and our net lease peer groups. Further, our weighted average remaining lease term is 11 years and 89.3% of our portfolio by NOI has embedded contractual rent growth tied to both fixed and indexed escalators.

Our differentiated global strategy is unique and provides GNL with several significant advantages. Advantages we believe will result in long term value in the portfolio and ultimately for our shareholder. These advantages are GNL is a pure play real estate company, focused exclusively on equity investments and properties.

Our investment strategy affords us the flexibility to invest in the U.S. and in Western Europe. Our portfolio is built on long duration leases to predominantly investment grade tenants. We have the ability to access public markets in both the U.S. and Europe. Our strong management teams are resonant on both sides of the Atlantic.

GNLs strategy remains straightforward and we will continue to be pragmatic in our approach to the business. Over the course of 2016 and beyond we will continue to position GNL as a best in class net leased REITs through executing our recycling plan for $100 million to $150 million in assets in both the U.S.

and Western Europe resulting in our ability to fine tune our best in class portfolio, while reducing debt and adding accretive high quality new assets.

These properties will meet our high underwriting standards, and will be evaluated based upon asset quality, tenant strength, lease duration, the mission critical nature of the asset, portfolio concentrations and regional market comparisons.

We are also focused on restructuring our debt and strengthening our balance sheet, reducing our reliance on our corporate facility, adding unsecured debt and laddering out on maturities. Finally, we are pleased with the progress to start the year and believe GNL is well positioned for growth.

While we continue to be pragmatic in our approach, including achieving our stated objectives, we are focused on building GNL as a top tier net leased REIT.

As always we remain committed to realizing long term per share growth driven by our flexibility to take advantage of market cycles and the opportunities available in the multiple markets where we operate. Now let me ask Tim to take us through our financial performance for the first quarter 2016.

Tim?.

Thank you, Scott, and good morning everyone. The first quarter of 2016 marked our third full quarter as a publicly traded REIT, and our portfolio continues to generate strong underlying cash flows.

Our financial results for the first quarter include adjusted funds from operations or AFFO of $32.3 million or $0.19 per share, mainly defined funds from operations of $30 million or $0.18 per share, net operating income of 49.3 million, core funds from operations of 29.9 million or $0.18 per share, and net income of 6.5 million or $0.04 per share.

A reconciliation of GAAP net income to the non-GAAP measures can be found starting on page 9 of our earnings release, as well as other GAAP financial information. We expect our strong portfolio to generate the operating results needed to support our annualized dividend distribution rate of $0.71 per share.

As Scott mentioned earlier, this equates to a payout ratio based on our midpoint AFFO guidance range of 88.1%. Based on the March 31 GNL closing share price of $8.56 our net debt to enterprise value was 45.1%, with an enterprise value of 2.6 billion.

At the end of the first quarter, we had total combined debt of approximately 1.2 billion, including 532 million of outstanding mortgage debt. As of March 31, $916 million or 74% of our outstanding debt is denominated both in Euro or Pound sterling. This is based on a combination of local mortgage loans and a company level revolving facility.

Our low U.S. dollar denominated loan exposure makes us less exposed to raise in exchange rates in the U.S. As of March 31, we had 703 million of outstanding draws on our credit facility and in January we utilized excess cash to repay $20 million on our credit facility.

This repayment was partially offset by currency fluctuations, which increased the balance due on our credit facility by 6 million. Additionally, we have provided formal notice to our credit facility lenders to begin the process of exercising the first of our two one-year extensions on our credit facility.

We plan to continue our preliminary dialog with rating agencies and remained focused on formally engaging with the goal of securing an investment grade rating over the next 9 to 12 months. As previously noted, a formal credit rating will potentially provide us with enhanced cost effective opportunities to streamline our debt and capital structure.

These benefits will enable us to ladder out debt maturities, reduce outstanding draws on our credit facility and optimize borrowing cost over long term maturities. We maintain a comprehensive hedging program to mitigate certain key financial risks for our investors.

Our hedging program mitigates the impact of currency exposure from both an earnings and in portfolio value perspective. In addition, we utilized interest swaps to hedge against movements and fluctuations of interest rates. In the first quarter of 2016, there were significant current fluctuations in the Euros and Pounds sterling against the U.S. dollar.

These fluctuations had a direct effect on our reported GAAP earnings. Over the quarter, the average conversion rate of Pound sterling decreased by 9.0 pence or 5.6% against the U.S. dollar, which was the primary driver of the decrease in our rental income over the prior quarter.

A core element of our strategy is to utilize foreign exchange contracts to hedge currency exposure, related to our net cash flows from earnings related to our European portfolio.

Our current hedges related to net cash flows on earnings produced incremental revised gains of approximately 500,000 as a result of the currency fluctuations to substantially offset the effect of foreign currency exposure in our Q1 GAAP earnings. This is a clear sign that our hedging strategy with regards to currency exposure is effective.

Another key component of our hedging strategies demands risk of currency exposure related to the value of the portfolio. And this is how we apply asset liability matching in an effort to offset the foreign currency exposure of underlying assets against borrowings in the local currencies.

Again 916 million or 74.1% of our total outstanding debt is in either Euros or Pound sterling. The combined use of foreign currency asset liability matching along with in-place currency hedges, positions the European portfolio as highly hedged.

This illustrates our strategy to manage risk with regard to foreign currency exposure and these strategies have enabled us to maintain a strong and flexible capital structure to support the growth of the portfolio.

The final component of our hedging strategy is use of interest-rate swaps, as a means to mitigate the effective interest rate volatility in connection with our floating REIT debt. As of March 31, 64.1% of our debt is rate hedged allowing it to effectively act as fixed rate debt. In aggregate our debt had a weighted average interest rate of 2.5%.

This concludes our financial review. I’ll now turn the call back over to Scott..

Thank you, Tim. As you heard our core strategy is simple, focused on quality and remove risk wherever possible. This provides for the predictable results.

As a management team, we remain committed to the continued pressure growth of GNL in the public markets and are focused on working intelligently to enhance shareholder value, driving accretive growth, taking advantage of public markets on appropriate and ensuring a strong corporate governance framework.

In summary our strategy to focus on mission-critical assets leased to largely investment grade tenants, our long duration leases in the U.S and strong markets in Western Europe is a differentiator for us in the market and we believe provide us with a strong competitive advantage.

This coupled with our highly experienced teams on both sides of the Atlantic and our investment grade quality balance sheet give us a unique market opportunity and we will continue to make incremental steps to position the company for a long-term per share growth. That concludes our prepared remarks.

And we’re now happy to open up the call for your questions.

Operator?.

We will now begin the question-and-answer session. [Operator Instruction] Showing no questions, this concludes our question-and-answer session. I would like to turn the conference back over to Mr. Scott Bowman for any closing remarks. Pardon me we do have one question, this came in from Jeff Shade [ph] with Summit Brokerage. Please go head..

Hey, Scott.

How you doing?.

I’m well Jeff, How are you?.

Good.

Hey, I might have missed some of the call little, but are we looking any inclination on the Russell 2000 inclusion?.

Hey, Jeff thanks for that question. We do expect based on the fact that we meet the criteria to be included in the Russell 2000 June. The inclusion we expect will be about 9.5% of our free flow, which equates based upon our current share distribution of about 16 million shares..

All right thank you. I appreciative Scott..

Sure. Have a good day..

This concludes our question-and-answer session. I’d like to turn the conference back over to Mr. Scott Bowman, for any closing remarks..

Thank you, Gary. I want to take this opportunity to thank everyone for joining us today. We look forward to updating you again at next earnings call. Please have a great day.

Matt?.

Thanks Scott, Kim and Paschal and thank you again everyone for joining us today. As always our management team is available to speak with you should have any follow-up questions. So please don’t hesitate to contact me directly at 917-475-2153. Operator, could you please provide the conference call replay instructions again. Have a great day..

Thank you, Mr. Furbish. As a reminder, this conference call will be available for replay beginning approximately one hour after this call. Dial-in for replay is 1-877-344-7529 with the confirmation code of 10085630. The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect..