EX-99.2

EX-99.2 3 bnl-ex99_2.htm EX-99.2 EX-99.2

Exhibit 99.2

Q2 2022 QUARTERLY SUPPLEMENTAL INFORMATION Broadstone Net Lease, Inc. (NYSE: BNL) is a Real Estate Investment Trust (REIT) that acquires, owns, and manages single-tenant commercial real estate properties that are net leased on a long-term basis to a diversified group of tenants. www.broadstone.com

Table of Contents


Section	Page
About the Data	3
Company Overview	4
Quarterly Financial Summary	5
Balance Sheet	6
Income Statement Summary	7
Funds From Operations (FFO), Core Funds From Operations (Core FFO), and Adjusted Funds From Operations (AFFO)	8
EBITDA, EBITDAre, and Other Non-GAAP Operating Measures	9
Lease Revenues Detail	10
Capital Structure	11
Equity Rollforward	12
Debt Outstanding	13
Net Debt Metrics	14
Covenants	14
Debt Maturities	15
Acquisitions	16
Dispositions	17
Portfolio at a Glance: Key Metrics	18
Diversification: Tenants and Brands	19-20
Diversification: Property Type	21-22
Key Statistics by Property Type	23
Diversification: Tenant Industry	24
Diversification: Geography	25
Lease Expirations	26
Portfolio Occupancy	27
Definitions and Explanations	28-29

About the Data

This data and other information described herein are as of and for the three months ended June 30, 2022 unless otherwise indicated. Future performance may not be consistent with past performance and is subject to change and inherent risks and uncertainties. This information should be read in conjunction with Broadstone Net Lease, Inc.'s Quarterly Report on Form 10-Q for the three months ended June 30, 2022, including the financial statements and the management's discussion and analysis of financial condition and results of operations sections.

Forward Looking Statements

Information set forth herein contains forward-looking statements, which reflect our current views regarding our business, financial performance, growth prospects and strategies, market opportunities, and market trends. Forward-looking statements include all statements that are not historical facts. In some cases, you can identify these forward-looking statements by the use of words such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "should," "could," "seeks," "approximately," "projects," "predicts," "intends," "plans," "estimates," "anticipates," or the negative version of these words or other comparable words. All of the forward-looking statements herein are subject to various risks and uncertainties. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions, and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results, performance, and achievements could differ materially from those expressed in or by the forward-looking statements and may be affected by a variety of risks and other factors. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from such forward-looking statements. These factors include, but are not limited to, risks and uncertainties related to the COVID-19 pandemic and its related impacts on us and our tenants, general economic conditions, including but not limited to increases in the rate of inflation and/or interest rates, local real estate conditions, tenant financial health, and property acquisitions and the timing of these acquisitions. These and other risks, assumptions, and uncertainties are described in our filings with the SEC, which are available on the SEC's website at www.sec.gov.

You are cautioned not to place undue reliance on any forward-looking statements included herein. All forward-looking statements are made as of the date of this document and the risk that actual results, performance, and achievements will differ materially from the expectations expressed or referenced herein will increase with the passage of time. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as required by law.

Company Overview

Broadstone Net Lease, Inc. (NYSE:BNL) (the "Company," "BNL," "us," "our" and "we") is a real estate investment trust ("REIT") that acquires, owns, and manages primarily single-tenant commercial real estate properties that are net leased on a long-term basis to a diversified group of tenants. Since our inception, we have selectively invested in real estate across the industrial, healthcare, restaurant, retail, and office property types. We target properties with credit worthy tenants in industries characterized by positive business drivers and trends, where the properties are an integral part of the tenants' businesses and there are opportunities to secure long-term net leases. Through long-term net leases, our tenants are able to retain operational control of their strategically important locations, while allocating their debt and equity capital to fund core business operations rather than real estate ownership.

Executive Team
Christopher J. Czarnecki
Chief Executive Officer, President, and Director
Ryan M. Albano
Executive Vice President and Chief Financial Officer
John D. Moragne
Executive Vice President and Chief Operating Officer
John D. Callan, Jr.
Senior Vice President, General Counsel, and Secretary
Michael B. Caruso
Senior Vice President, Corporate Finance & Investor Relations
Timothy D. Dieffenbacher 
Senior Vice President, Chief Accounting Officer, and Treasurer
Kevin M. Fennell
Senior Vice President, Capital Markets & Credit Risk
Laurier James Lessard, Jr.
Senior Vice President, Asset Management
Roderick A. Pickney
Senior Vice President, Acquisitions
Molly Kelly Wiegel
Senior Vice President, Human Resources
Andrea T. Wright
Senior Vice President, Property Management

Board of Directors
Laurie A. Hawkes
Chairman of the Board
Christopher J. Czarnecki
Chief Executive Officer and President 
Denise Brooks-Williams
Michael A. Coke
David M. Jacobstein
Shekar Narasimhan
Geoffrey H. Rosenberger
James H. Waters
 

Company Contact Information
Michael Caruso
SVP, Corporate Finance & Investor Relations
michael.caruso@broadstone.com
585-402-7842
 
  
Transfer Agent
Computershare Trust Company, N.A.
150 Royall Street
Canton, Massachusetts 02021
800-736-3001

Quarterly Financial Summary

(unaudited, dollars in thousands, except per share data)


	Q2 2022			Q1 2022			Q4 2021			Q3 2021			Q2 2021
Financial Summary
Investment in rental property	$	4,594,776		$	4,431,929		$	4,234,544		$	4,110,958		$	3,954,597
Less accumulated depreciation		(479,952	)		(454,122	)		(430,141	)		(407,354	)		(390,236	)
Investment in rental property, net		4,114,824			3,977,807			3,804,403			3,703,604			3,564,361
Cash and cash equivalents		16,813			54,103			21,669			16,182			78,987
Restricted cash		12,163			11,444			6,100			3,895			8,021
Total assets		4,979,442			4,852,520			4,618,648			4,501,972			4,423,611
Unsecured revolving credit facility		320,657			266,118			102,000			—			—
Mortgage, net		95,453			96,141			96,846			97,530			105,748
Unsecured term loans, net		587,098			586,884			646,671			646,458			910,994
Senior unsecured notes, net		844,178			843,990			843,801			843,665			472,637
Total liabilities		2,012,800			1,961,200			1,877,510			1,785,847			1,700,103
Total Broadstone Net Lease, Inc. stockholders' equity		2,798,690			2,724,641			2,577,292			2,552,004			2,554,653
Total equity (book value)		2,966,642			2,891,320			2,741,138			2,716,125			2,723,508

Revenues		98,013			93,841			92,642			122,777			84,759
General and administrative - other		7,907			7,899			7,501			7,628			7,704
Stock based compensation		1,381			929			1,025			924			951
General and administrative		9,288			8,828			8,526			8,552			8,655
Total operating expenses		50,875			48,162			46,649			76,065			44,452
Interest expense		17,888			16,896			16,997			15,611			15,430
Net income		35,552			28,441			32,226			30,522			22,820
Net earnings per common share, diluted	$	0.20		$	0.16		$	0.19		$	0.18		$	0.14

FFO		68,340			61,504			62,152			91,947			50,184
FFO per share, diluted	$	0.38		$	0.35		$	0.36		$	0.54		$	0.32
Core FFO		65,986			64,076			62,232			59,769			55,816
Core FFO per share, diluted	$	0.37		$	0.37		$	0.36		$	0.35		$	0.35
AFFO		62,804			60,401			58,692			55,836			52,024
AFFO per share, diluted	$	0.35		$	0.35		$	0.34		$	0.33		$	0.33

Net cash provided by operating activities		58,855			59,104			57,619			88,303			47,235
Net cash used in investing activities		(172,293	)		(207,678	)		(133,925	)		(205,667	)		(175,051	)
Net cash provided by financing activities		76,867			186,352			83,998			50,433			196,474
Distributions declared		49,507			48,115			45,857			43,423			43,484
Distributions declared per diluted share	$	0.270		$	0.265		$	0.265		$	0.255		$	0.255

Portfolio Metrics
Properties		764			752			726			696			684
Rentable square feet	34.4M			32.8M			32.2M			31.4M			30.2M
Occupancy		99.8	%		99.8	%		99.8	%		99.8	%		99.7	%
Weighted average remaining lease term (years)		10.6			10.5			10.5			10.6			10.4

Balance Sheet

(unaudited, in thousands)


	June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021
Assets
Accounted for using the operating method:
Land	$	731,208		$	709,962		$	655,374		$	616,917		$	597,779
Land improvements		320,513			300,300			295,329			291,045			291,981
Buildings and improvements		3,503,478			3,381,990			3,242,618			3,161,728			3,023,490
Equipment		10,422			10,422			11,870			11,870			11,870
Total accounted for using the operating method		4,565,621			4,402,674			4,205,191			4,081,560			3,925,120
Less accumulated depreciation		(479,952	)		(454,122	)		(430,141	)		(407,354	)		(390,236	)
Accounted for using the operating method, net		4,085,669			3,948,552			3,775,050			3,674,206			3,534,884
Accounted for using the direct financing method		28,584			28,684			28,782			28,830			28,911
Accounted for using the sales-type method		571			571			571			568			566
Investment in rental property, net		4,114,824			3,977,807			3,804,403			3,703,604			3,564,361
Cash and cash equivalents		16,813			54,103			21,669			16,182			78,987
Accrued rental income		124,297			120,117			116,874			112,163			109,278
Tenant and other receivables, net		2,069			1,160			1,310			940			618
Prepaid expenses and other assets		22,916			22,525			17,275			13,819			18,846
Interest rate swap, assets		26,562			8,944			—			—			—
Goodwill		339,769			339,769			339,769			339,769			339,769
Intangible lease assets, net		316,119			311,277			303,642			301,046			296,134
Debt issuance costs – unsecured revolving credit facility, net		6,956			7,427			4,065			4,658			5,250
Leasing fees, net		9,117			9,391			9,641			9,791			10,368
Total assets	$	4,979,442		$	4,852,520		$	4,618,648		$	4,501,972		$	4,423,611
Liabilities and equity
Unsecured revolving credit facility	$	320,657		$	266,118		$	102,000		$	—		$	—
Mortgages, net		95,453			96,141			96,846			97,530			105,748
Unsecured term loans, net		587,098			586,884			646,671			646,458			910,994
Senior unsecured notes, net		844,178			843,990			843,801			843,665			472,637
Interest rate swap, liabilities		—			1,154			27,171			36,196			46,335
Earnout liability		—			—			—			—			10,063
Accounts payable and other liabilities		42,923			40,611			38,038			35,732			32,279
Dividends payable		49,541			47,682			45,914			43,874			43,184
Accrued interest payable		6,086			9,845			6,473			9,895			3,885
Intangible lease liabilities, net		66,864			68,775			70,596			72,497			74,978
Total liabilities		2,012,800			1,961,200			1,877,510			1,785,847			1,700,103
Equity
Broadstone Net Lease, Inc. stockholders' equity:
Preferred stock, $0.001 par value		—			—			—			—			—
Common stock, $0.00025 par value		43			42			41			40			40
Additional paid-in capital		3,125,377			3,056,560			2,924,168			2,895,219			2,890,131
Cumulative distributions in excess of retained earnings		(350,127	)		(336,988	)		(318,476	)		(305,665	)		(293,622	)
Accumulated other comprehensive loss		23,397			5,027			(28,441	)		(37,590	)		(41,896	)
Total Broadstone Net Lease, Inc. stockholders’ equity		2,798,690			2,724,641			2,577,292			2,552,004			2,554,653
Non-controlling interests		167,952			166,679			163,846			164,121			168,855
Total equity		2,966,642			2,891,320			2,741,138			2,716,125			2,723,508
Total liabilities and equity	$	4,979,442		$	4,852,520		$	4,618,648		$	4,501,972		$	4,423,611

Income Statement Summary

(unaudited, in thousands, except per share data)


	Three Months Ended
	June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021
Revenues
Lease revenues, net	$	98,013		$	93,841		$	92,642		$	122,777		$	84,759
Operating expenses
Depreciation and amortization		35,511			34,290			33,476			36,682			31,225
Property and operating expense		4,696			5,044			4,440			4,842			4,572
General and administrative		9,288			8,828			8,526			8,552			8,655
Provision for impairment of investment in rental properties		1,380			—			207			25,989			—
Total operating expenses		50,875			48,162			46,649			76,065			44,452
Other income (expenses)
Interest income		—			—			6			—			6
Interest expense		(17,888	)		(16,896	)		(16,997	)		(15,611	)		(15,430	)
Cost of debt extinguishment		—			—			—			(242	)		—
Gain on sale of real estate		4,071			1,196			3,732			1,220			3,838
Income taxes		(401	)		(412	)		(457	)		(473	)		(301	)
Change in fair value of earnout liability		—			—			—			(1,059	)		(5,604	)
Other income (expenses)		2,632			(1,126	)		(51	)		(25	)		4
Net income		35,552			28,441			32,226			30,522			22,820
Net income attributable to non-controlling interests		(2,036	)		(1,683	)		(1,935	)		(1,824	)		(1,606	)
Net income attributable to Broadstone Net Lease, Inc.	$	33,516		$	26,758		$	30,291		$	28,698		$	21,214

Weighted average number of common shares outstanding
Basic1		169,555			163,809			161,545			159,226			146,119
Diluted1		180,256			174,288			172,094			169,587			157,430
Net earnings per common share2
Basic and diluted	$	0.20		$	0.16		$	0.19		$	0.18		$	0.14

1 Excludes 377,407, 370,539, 373,678, 378,244, and 386,772, weighted average shares of unvested restricted common stock for the three months ended June 30, 2022, March 31, 2022, December 31, 2021, September 30, 2021, and June 30, 2021, respectively.

2 Excludes $0.1 million from the numerator for the three months ended June 30, 2022, March 31, 2022, December 31, 2021, September 30, 2021, and June 30, 2021, related to dividends declared on shares of unvested restricted common stock.

Funds From Operations (FFO), Core Funds From Operations (Core FFO), and Adjusted Funds From Operations (AFFO)

(unaudited, in thousands, except per share data)


	Three Months Ended
	June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021
Net income	$	35,552		$	28,441		$	32,226		$	30,522		$	22,820
Real property depreciation and amortization		35,479			34,259			33,451			36,656			31,202
Gain on sale of real estate		(4,071	)		(1,196	)		(3,732	)		(1,220	)		(3,838	)
Provision for impairment of investment in rental properties		1,380			—			207			25,989			—
FFO	$	68,340		$	61,504		$	62,152		$	91,947		$	50,184
Net write-offs of accrued rental income		—			1,326			—			1,496			—
Lease termination fee		—			—			—			(35,000	)		—
Cost of debt extinguishment		—			—			—			242			—
Severance		278			120			29			—			32
Change in fair value of earnout liability		—			—			—			1,059			5,604
Other (income) expenses1		(2,632	)		1,126			51			25			(4	)
Core FFO	$	65,986		$	64,076		$	62,232		$	59,769		$	55,816
Straight-line rent adjustment		(4,965	)		(4,934	)		(5,321	)		(4,930	)		(4,979	)
Adjustment to provision for credit losses		(1	)		—			(37	)		—			—
Amortization of debt issuance costs		900			856			1,022			962			956
Amortization of net mortgage premiums		(25	)		(27	)		(26	)		(34	)		(37	)
Loss (gain) on interest rate swaps and other non-cash interest expense		695			659			696			85			(42	)
Amortization of lease intangibles		(1,167	)		(1,158	)		(899	)		(940	)		(641	)
Stock-based compensation		1,381			929			1,025			924			951
AFFO	$	62,804		$	60,401		$	58,692		$	55,836		$	52,024

Diluted weighted average shares outstanding2		180,256			174,288			172,094			169,587			157,430
Net earnings per diluted share3	$	0.20		$	0.16		$	0.19		$	0.18		$	0.14
FFO per diluted share3		0.38			0.35			0.36			0.54			0.32
Core FFO per diluted share3		0.37			0.37			0.36			0.35			0.35
AFFO per diluted share3		0.35			0.35			0.34			0.33			0.33

1 Amount includes ($2.6) million and $1.1 million of unrealized and realized foreign exchange (gain) loss, primarily associated with our Canadian dollar denominated revolving borrowings for the three months ended June 30, 2022 and March 31, 2022.

2 Excludes 377,407, 370,539, 373,678, 378,244, and 386,772, weighted average shares of unvested restricted common stock for the three months ended June 30, 2022, March 31, 2022, December 31, 2021, September 30, 2021, and June 30, 2021, respectively.

3 Excludes $0.1 million from the numerator for the three months ended June 30, 2022, March 31, 2022, December 31, 2021, September 30, 2021, and June 30, 2021, related to dividends declared on shares of unvested restricted common stock.

EBITDA, EBITDAre, and Other-Non GAAP Operating Measures

(unaudited, in thousands)


	Three Months Ended
	June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021
Net income	$	35,552		$	28,441		$	32,226		$	30,522		$	22,820
Depreciation and amortization		35,511			34,290			33,476			36,682			31,225
Interest expense		17,888			16,896			16,997			15,611			15,430
Income taxes		401			412			457			473			301
EBITDA	$	89,352		$	80,039		$	83,156		$	83,288		$	69,776
Provision for impairment of investment in rental properties		1,380			—			207			25,989			—
Gain on sale of real estate		(4,071	)		(1,196	)		(3,732	)		(1,220	)		(3,838	)
EBITDAre	$	86,661		$	78,843		$	79,631		$	108,057		$	65,938
Adjustment for current quarter acquisition activity 1		2,780			3,225			2,002			3,534			2,761
Adjustment for current quarter disposition activity 2		(141	)		(79	)		(180	)		(1,387	)		(353	)
Adjustment to exclude change in fair value of earnout liability		—			—			—			1,059			5,604
Adjustment to exclude net write-offs of accrued rental income		—			1,326			—			1,496			—
Adjustment to exclude realized / unrealized foreign exchange (gain) loss		(2,632	)		1,125			—			—			—
Adjustment to exclude cost of debt extinguishments		—			—			—			242			—
Adjustment to exclude lease termination fees		—			—			—			(35,000	)		—
Adjusted EBITDAre	$	86,668		$	84,440		$	81,453		$	78,001		$	73,950
General and administrative		9,288			8,825			8,523			8,537			8,650
Adjusted Net Operating Income ("NOI")	$	95,956		$	93,265		$	89,976		$	86,538		$	82,600
Straight-line rental revenue, net		(5,616	)		(5,456	)		(5,611	)		(5,789	)		(5,245	)
Other amortization and non-cash charges		(1,167	)		(1,157	)		(847	)		(616	)		(642	)
Adjusted Cash NOI	$	89,173		$	86,652		$	83,518		$	80,133		$	76,713
Annualized EBITDAre	$	346,642		$	315,375		$	318,526		$	432,221		$	263,761
Annualized Adjusted EBITDAre		346,672			337,759			325,812			311,998			295,808
Annualized Adjusted NOI		383,830			373,060			359,904			346,145			330,410
Annualized Adjusted Cash NOI		356,701			346,606			334,072			320,524			306,863

1 Reflects an adjustment to give effect to all acquisition during the quarter as if they had been acquired as of the beginning of the quarter.

2 Reflects an adjustment to give effect to all dispositions during the quarter as if they had been sold as of the beginning of the quarter.

Lease Revenues Detail

(unaudited, in thousands)


	Three Months Ended
	June 30, 2022			March 31, 2022			December 31, 2021		September 30, 2021		June 30, 2021
Contractual rental amounts billed for operating leases	$	87,505		$	84,396		$	81,482	$	78,886	$	75,011
Adjustment to recognize contractual operating lease billings on a straight- line basis		5,090			5,021			5,372		4,942		4,724
Net write-offs of accrued rental income		—			(1,326	)		—		—		—
Variable rental amounts earned		291			186			433		130		114
Earned income from direct financing leases		721			723			725		726		728
Interest income from sales-type leases		15			14			15		14		15
Operating expenses billed to tenants		4,263			4,735			4,464		4,414		4,196
Other income from real estate transactions		134			42			1		33,515		28
Adjustment to revenue recognized for uncollectible rental amounts billed, net		(6	)		50			150		150		(57	)
Total Lease revenues, net	$	98,013		$	93,841		$	92,642	$	122,777	$	84,759

Capital Structure

(unaudited, in thousands, except per share data)


EQUITY
Shares of Common Stock		172,023
OP Units		10,323
Common Stock & OP Units		182,346
Price Per Share / Unit at June 30, 2022	$	20.51
IMPLIED EQUITY MARKET CAPITALIZATION	$	3,739,920
% of Total Capitalization		66.8	%
DEBT
Unsecured Revolving Credit Facility - 2026	$	320,657
Unsecured Term Loan Facilities		590,000
Unsecured Term Loan - 2024		190,000
Unsecured Term Loan - 2026		400,000
Senior Unsecured Notes		850,000
Senior Unsecured Notes - 2027		150,000
Senior Unsecured Notes - 2028		225,000
Senior Unsecured Notes - 2030		100,000
Senior Unsecured Notes - 2031		375,000
Mortgage Debt - Various		95,720
TOTAL DEBT	$	1,856,377
% of Total Capitalization		33.2	%
% of Total Debt Floating Rate Debt		10.8	%
% of Total Debt Fixed Rate Debt		89.2	%
% of Total Debt Secured Debt		5.2	%
% of Total Debt Unsecured Debt		94.8	%

Total Capitalization	$	5,596,297
Less: Cash and Cash Equivalents		(16,813	)
Enterprise Value	$	5,579,484

Equity Rollforward

(unaudited, in thousands)


	Shares of Common Stock			OP Units			Total Diluted Shares
Balance, January 1, 2022		162,383			10,323			172,706
ATM offerings		6,273			—			6,273
Board of directors fees		12			—			12
Grants of restricted stock awards		142			—			142
Retirement of restricted stock awards		(59	)		—			(59	)
Forfeiture of restricted stock awards		(1	)		—			(1	)
Balance, March 31, 2022		168,750			10,323			179,073
ATM offerings		3,236			—			3,236
Board of directors fees 1		13			—			13
Grants of restricted stock awards		32			—			32
Retirement of restricted stock awards		—			—			—
Forfeiture of restricted stock awards		(8	)		—			(8	)
Balance, June 30, 2022		172,023			10,323			182,346
Percentage ownership of OP at June 30, 2022		94.3	%		5.7	%		100	%

1 Beginning in May 2022, directors receive a portion of their fees in the form of restricted stock awards.

Debt Outstanding

(unaudited, in thousands)


	Outstanding Balance
	June 30,			December 31,
	2022			2021			Interest Rate	Maturity Date
Unsecured revolving credit facility	$	320,657		$	102,000		Applicable reference rate + 0.85%	Mar. 2026
Unsecured term loans:
2022 Unsecured Term Loan		—			60,000		one-month LIBOR + 1.00%	Feb. 2022
2024 Unsecured Term Loan		190,000			190,000		one-month LIBOR + 1.00%	Jun. 2024
2026 Unsecured Term Loan		400,000			400,000		one-month LIBOR + 1.00%	Feb. 2026
Total unsecured term loans		590,000			650,000
Unamortized debt issuance costs, net		(2,902	)		(3,329	)
Total unsecured term loans, net		587,098			646,671
Senior unsecured notes:
2027 Senior Unsecured Notes - Series A		150,000			150,000		4.84%	Apr. 2027
2028 Senior Unsecured Notes - Series B		225,000			225,000		5.09%	Jul. 2028
2030 Senior Unsecured Notes - Series C		100,000			100,000		5.19%	Jul. 2030
2031 Senior Unsecured Public Notes		375,000			375,000		2.60%	Sep. 2031
Total senior unsecured notes		850,000			850,000
Unamortized debt issuance costs and original issuance discount, net		(5,822	)		(6,199	)
Total senior unsecured notes, net		844,178			843,801
Total unsecured debt, net	$	1,751,933		$	1,592,472


	Origination	Maturity
	Date	Date	Interest	June 30,			December 31,
Lender	(Month/Year)	(Month/Year)	Rate	2022			2021
Wilmington Trust National Association	Apr-19	Feb-28	4.92%	$	46,142		$	46,760
Wilmington Trust National Association	Jun-18	Aug-25	4.36%		19,355			19,557
PNC Bank	Oct-16	Nov-26	3.62%		16,886			17,094
T2 Durham I, LLC	Jul - 21	Jul -24	Greater of Prime + 1.25% or 5.00%		7,500			7,500
Aegon	Apr-12	Oct-23	6.38%		5,837			6,249
Total mortgages					95,720			97,160
Debt issuance costs, net					(267	)		(314	)
Mortgages, net				$	95,453		$	96,846


Year of Maturity	Revolving Credit Facility		Term Loans		Senior Notes		Mortgages		Total
2022	$	—	$	—	$	—	$	1,466	$	1,466
2023		—		—		—		7,582		7,582
2024		—		190,000		—		9,760		199,760
2025		—		—		—		20,195		20,195
2026		320,657		400,000		—		16,843		737,500
Thereafter		—		—		850,000		39,874		889,874
Total	$	320,657	$	590,000	$	850,000	$	95,720	$	1,856,377

Net Debt Metrics

(unaudited, in thousands)



	June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021
Debt
Unsecured revolving credit facility	$	320,657		$	266,118		$	102,000		$	—		$	—
Unsecured term loans, net		587,098			586,884			646,671			646,458			910,994
Senior unsecured notes, net		844,178			843,990			843,801			843,665			472,637
Mortgages, net		95,453			96,141			96,846			97,530			105,748
Debt issuance costs		8,991			9,419			9,842			10,215			6,625
Gross Debt		1,856,377			1,802,552			1,699,160			1,597,868			1,496,004
Cash and cash equivalents		(16,813	)		(54,103	)		(21,669	)		(16,182	)		(78,987	)
Restricted cash		(12,163	)		(11,444	)		(6,100	)		(3,895	)		(8,021	)
Net Debt	$	1,827,401		$	1,737,005		$	1,671,391		$	1,577,791		$	1,408,996
Net Debt to Annualized EBITDAre	5.3x			5.5x			5.3x			3.7x			5.3x
Net Debt to Annualized Adjusted EBITDAre	5.3x			5.1x			5.1x			5.1x			4.8x

Covenants

(unaudited)

The following is a summary of key financial covenants for the Company's unsecured credit facility and unsecured term loans and senior notes. The covenants associated with the Revolving Credit Facility, Unsecured Term Loans with commercial banks, and the Series A-C Senior Unsecured Notes, are reported to the lenders via quarterly covenant reporting packages. The covenants associated with the 2031 Senior Unsecured Public Notes are not required to be reported externally to third parties, and are instead calculated in connection with borrowing activity and for financial reporting purposes only. These calculations, which are not based on U.S. GAAP measurements, are presented to investors to show that as of June 30, 2022, the Company believes it is in compliance with the covenants.

Covenants

Required

Revolving Credit Facility and Unsecured Term Loans

Senior Unsecured 
Notes Series 
A, B, & C

2031 Senior Unsecured Public Notes

Leverage ratio

≤ 0.60 to 1.00

0.34

0.35

Not Applicable

Secured indebtedness ratio

≤ 0.40 to 1.00

0.02

0.02

Not Applicable

Unencumbered coverage ratio

≥ 1.75 to 1.00

6.50

Not Applicable

Not Applicable

Fixed charge coverage ratio

≥ 1.50 to 1.00

4.19

4.19

Not Applicable

Total unsecured indebtedness to 
   total unencumbered eligible 
   property value

≤ 0.60 to 1.00

0.35

0.37

Not Applicable

Dividends and other restricted 
   payments

Only applicable 
in case of default

Not Applicable

Not Applicable

Not Applicable

Aggregate debt ratio

≤ 0.60 to 1.00

Not Applicable

Not Applicable

0.37

Consolidated income available for 
   debt to annual debt service 
   charge

≥ 1.50 to 1.00

Not Applicable

Not Applicable

5.04

Total unencumbered assets to 
   total unsecured debt

≥ 1.50 to 1.00

Not Applicable

Not Applicable

2.73

Secured debt ratio

≤ 0.40 to 1.00

Not Applicable

Not Applicable

0.02

Debt Maturities

(unaudited, dollars in millions)

The Company utilizes diversified sources of debt capital including unsecured bank debt, unsecured notes, and secured mortgages (where appropriate).

Portfolio Activity

Acquisitions

(unaudited, square feet and dollars in thousands)

The following table summarizes the Company's property acquisition activity during 2022.


QTD Q1 2022
Property Type	Number of Properties		Square Feet		Weighted Average Lease Term (years)		Weighted Average Annual Rent Increase			Acquisition Price
Restaurant		16		131		19.5		1.1	%	$	99,587
Retail		9		224		19.4		1.9	%		82,975
Industrial		2		264		18.5		2.1	%		27,411
Total Properties		27		619		19.3		1.5	%	$	209,973
Weighted average initial cash cap rate											5.7	%
Weighted average initial GAAP cap rate											6.4	%

QTD Q2 2022
Property Type	Number of Properties		Square Feet		Weighted Average Lease Term (years)		Weighted Average Annual Rent Increase			Acquisition Price
Industrial 1		8		1,395		22.1		2.2	%	$	149,160
Retail		6		169		9.8		1.1	%		20,755
Healthcare		1		41		9.9		3.0	%		12,467
Total Properties		15		1,605		19.9		2.1	%	$	182,382
Weighted average initial cash cap rate											6.4	%
Weighted average initial GAAP cap rate											8.0	%

FY 2022
Property Type	Number of Properties		Square Feet		Weighted Average Lease Term (years)		Weighted Average Annual Rent Increase			Acquisition Price
Industrial 1		10		1,659		21.6		2.2	%	$	176,571
Retail		15		393		17.3		1.7	%		103,730
Restaurant		16		131		19.5		1.1	%		99,587
Healthcare		1		41		9.9		3.0	%		12,467
Total Properties		42		2,224		19.6		1.8	%		392,355
Weighted average initial cash cap rate											6.1	%
Weighted average initial GAAP cap rate											7.2	%

1 Includes a $17.4 million building expansion agreed to as a forward commitment in connection with a prior acquisition.

Dispositions

(unaudited, square feet and dollars in thousands)

The following table summarizes the Company's property disposition activity during 2022.


QTD Q1 2022
Property Type	Number of Properties		Square Feet		Acquisition Price		Disposition Price		Net Book Value
Restaurant		1		8	$	3,891		5,212	$	3,824
Total Properties		1		8	$	3,891	$	5,212	$	3,824
Weighted average cash cap rate										5.7	%

QTD Q2 2022
Property Type	Number of Properties		Square Feet		Acquisition Price		Disposition Price		Net Book Value
Restaurant		3		13	$	7,792	$	11,889	$	7,311
Total Properties		3		13	$	7,792	$	11,889	$	7,311
Weighted average cash cap rate										5.1	%

FY 2022
Property Type	Number of Properties		Square Feet		Acquisition Price		Disposition Price		Net Book Value
Restaurant		4		21	$	11,683	$	17,101	$	11,135
Total Properties		4		21	$	11,683	$	17,101	$	11,135
Weighted Average cash cap rate										5.3	%

Portfolio at a Glance: Key Metrics


Properties	764
U.S. States	44
Canadian Provinces	4
Total Rentable Sq. Footage	34.4M
Tenants	213
Brands	203
Industries	57
Occupancy (based on SF)	99.8%
Top Ten Tenant Concentration	16.5%
Top Twenty Tenant Concentration	29.4%
Investment Grade (tenant/guarantor)	16.4%
Financial Reporting Coverage1	94.0%
Rent Coverage Ratio2	3.3x
Weighted Average Annual Rent Increases	2.0%
Weighted Average Remaining Lease Term	10.6 years
Master Leases (based on ABR)
Total Portfolio	36.1%
Retail Portfolio	42.5%
Restaurant Portfolio	76.4%

1 Includes 9.0% related to tenants not required to provide financial information under the terms of our lease, but whose financial statements are available publicly.

2 Represents rent coverage ratio for Restaurant property type only.

Diversification: Tenants & Brands

(unaudited)

Top 20 Tenants


Tenant	Property Type	# Properties		ABR ($'000s)		ABR as a % of Total Portfolio			Square Feet ('000s)		SF as a % of Total Portfolio
Jack's Family Restaurants LP	Quick Service Restaurants		43	$	7,166		2.0	%		147		0.4	%
Joseph T. Ryerson & Son, Inc	Distribution & Warehouse		11		6,395		1.8	%		1,537		4.5	%
Red Lobster Hospitality & Red Lobster Restaurants LLC	Casual Dining		20		6,361		1.8	%		166		0.5	%
J. Alexander's, LLC	Casual Dining		16		6,025		1.7	%		131		0.4	%
Axcelis Technologies, Inc.	Flex and R&D		1		5,991		1.6	%		417		1.2	%
Hensley & Company	Distribution & Warehouse		3		5,871		1.6	%		577		1.7	%
Dollar General Corporation	General Merchandise		57		5,636		1.5	%		531		1.5	%
BluePearl Holdings, LLC	Animal Health Services		13		5,451		1.5	%		165		0.5	%
Tractor Supply Company	General Merchandise		21		5,279		1.5	%		417		1.2	%
Outback Steakhouse of Florida LLC	Casual Dining		22		5,278		1.5	%		140		0.4	%
Total Top 10 Tenants			207	$	59,453		16.5	%		4,228		12.3	%

AHF, LLC	Distribution & Warehouse/ Manufacturing		5	$	5,142		1.4	%		982		2.8	%
Krispy Kreme Doughnut Corporation	Quick Service Restaurants/ Food Processing		27		5,034		1.4	%		156		0.4	%
Big Tex Trailer Manufacturing, Inc.	Automotive/Distribution & Warehouse/Manufacturing/ Corporate Headquarters		17		4,957		1.4	%		1,302		3.8	%
Siemens Medical Solutions USA, Inc. & Siemens Corporation	Manufacturing/Flex and R&D		2		4,936		1.4	%		545		1.6	%
Carvana, LLC	Industrial Services		2		4,510		1.3	%		230		0.7	%
Santa Cruz Valley Hospital	Healthcare Facilities		1		4,500		1.2	%		148		0.4	%
Nestle' Dreyer's Ice Cream Company	Cold Storage		1		4,476		1.2	%		310		0.9	%
Arkansas Surgical Hospital	Surgical		1		4,366		1.2	%		129		0.4	%
American Signature, Inc.	Home Furnishings		6		4,224		1.2	%		474		1.4	%
Fresh Express Incorporated	Food Processing		1		4,144		1.2	%		335		1.0	%
Total Top 20 Tenants			270	$	105,742		29.4	%		8,839		25.7	%

Top 20 Brands

(unaudited)


Brand	Property Type	# Properties		ABR ($'000s)		ABR as a % of Total Portfolio			Square Feet ('000s)		SF as a % of Total Portfolio
Jack's Family Restaurants	Quick Service Restaurants		43	$	7,166		2.0	%		147		0.4	%
Ryerson	Distribution & Warehouse		11		6,395		1.8	%		1,537		4.5	%
Red Lobster	Casual Dining		20		6,361		1.8	%		166		0.5	%
Axcelis	Flex and R&D		1		5,991		1.6	%		417		1.2	%
Hensley	Distribution & Warehouse		3		5,871		1.6	%		577		1.7	%
Dollar General	General Merchandise		57		5,636		1.5	%		531		1.5	%
BluePearl Veterinary Partners	Animal Health Services		13		5,451		1.5	%		165		0.5	%
Bob Evans Farms	Casual Dining/Food Processing		21		5,352		1.5	%		281		0.9	%
Tractor Supply Co.	General Merchandise		21		5,279		1.5	%		417		1.2	%
AHF Products	Distribution & Warehouse/ Manufacturing		5		5,142		1.4	%		982		2.8	%
Total Top 10 Brands			195	$	58,644		16.2	%		5,220		15.2	%

Krispy Kreme	Quick Service Restaurants/ Food Processing		27	$	5,034		1.4	%		156		0.4	%
Big Tex Trailers	Automotive/Distribution & Warehouse/Manufacturing/ Corporate Headquarters		17		4,957		1.4	%		1,302		3.8	%
Siemens	Manufacturing/Flex and R&D		2		4,936		1.4	%		545		1.6	%
Outback Steakhouse	Casual Dining		20		4,566		1.3	%		126		0.4	%
Carvana	Industrial Services		2		4,510		1.3	%		230		0.7	%
Santa Cruz Valley Hospital	Healthcare Facilities		1		4,500		1.2	%		148		0.4	%
Nestle'	Cold Storage		1		4,476		1.2	%		310		0.9	%
Arkansas Surgical Hospital	Surgical		1		4,366		1.2	%		129		0.4	%
Wendy's	Quick Service Restaurants		29		4,320		1.2	%		83		0.2	%
Value City Furniture	Home Furnishings		6		4,224		1.2	%		474		1.4	%
Total Top 20 Brands			301	$	104,533		29.0	%		8,723		25.4	%

Diversification: Property Type

(unaudited, rent percentages based on ABR)

Diversification: Property Type (continued)

(unaudited)


Property Type	# Properties		ABR ($'000s)		ABR as a % of Total Portfolio			Square Feet ('000s)		SF as a % of Total Portfolio
Industrial
Manufacturing		69	$	55,116		15.3	%		10,046		29.2	%
Distribution & Warehouse		47		51,375		14.3	%		9,526		27.7	%
Food Processing		17		24,200		6.7	%		2,730		7.9	%
Flex and R&D		7		17,296		4.8	%		1,457		4.3	%
Cold Storage		4		12,724		3.5	%		933		2.7	%
Industrial Services		22		10,765		3.0	%		587		1.7	%
Industrial Total		166		171,476		47.6	%		25,279		73.5	%
Healthcare
Clinical		52		26,770		7.4	%		1,091		3.2	%
Healthcare Services		28		12,528		3.5	%		463		1.3	%
Animal Health Services		27		10,437		2.9	%		405		1.2	%
Surgical		12		10,274		2.9	%		329		0.9	%
Life Science		9		7,722		2.1	%		549		1.6	%
Untenanted		1		—		—			18		0.1	%
Healthcare Total		129		67,731		18.8	%		2,855		8.3	%
Restaurant
Casual Dining		101		26,738		7.4	%		675		2.0	%
Quick Service Restaurants		146		24,787		6.9	%		499		1.4	%
Restaurant Total		247		51,525		14.3	%		1,174		3.4	%
Retail
General Merchandise		126		23,924		6.6	%		1,802		5.2	%
Automotive		66		12,196		3.4	%		771		2.3	%
Home Furnishings		13		7,030		2.0	%		797		2.3	%
Untenanted		1		—		—			34		0.1	%
Retail Total		206		43,150		12.0	%		3,404		9.9	%
Office
Corporate Headquarters		7		10,429		2.9	%		679		2.0	%
Strategic Operations		5		9,806		2.7	%		615		1.8	%
Call Center		4		5,902		1.7	%		391		1.1	%
Office Total		16		26,137		7.3	%		1,685		4.9	%
Total		764	$	360,019		100.0	%		34,397		100.0	%

Key Statistics by Property Type


Industrial
Number of properties	166
Square feet (000s)	25,279
Weighted average lease term (years)	10.8
Weighted average annual rent escalation	2.0	%

Healthcare
Number of properties	129
Square feet (000s)	2,855
Weighted average lease term (years)	8.4
Weighted average annual rent escalation	2.2	%

Restaurant
Number of properties	247
Square feet (000s)	1,174
Weighted average lease term (years)	15.0
Weighted average annual rent escalation	1.8	%

Retail
Number of properties	206
Square feet (000s)	3,404
Weighted average lease term (years)	10.9
Weighted average annual rent escalation	1.6	%

Office
Number of properties	16
Square feet (000s)	1,685
Weighted average lease term (years)	6.0
Weighted average annual rent escalation	2.4	%

Diversification: Tenant Industry
(unaudited)


Industry	# Properties		ABR ($'000s)		ABR as a % of Total Portfolio			Square Feet ('000s)		SF as a % of Total Portfolio
Healthcare Facilities		102	$	53,633		14.9	%		2,029		5.9	%
Restaurant		250		52,296		14.5	%		1,217		3.5	%
Packaged Foods & Meats		11		17,698		4.9	%		1,914		5.6	%
Distributors		27		15,699		4.4	%		2,695		7.8	%
Food Distributors		8		14,678		4.1	%		1,786		5.2	%
Specialty Stores		31		13,930		3.9	%		1,338		3.9	%
Auto Parts & Equipment		39		12,672		3.5	%		2,387		6.9	%
Home Furnishings Retail		18		12,459		3.5	%		1,858		5.4	%
Specialized Consumer Services		47		12,218		3.4	%		722		2.1	%
Metal & Glass Containers		8		9,898		2.7	%		2,206		6.4	%
Healthcare Services		18		9,213		2.6	%		515		1.5	%
General Merchandise Stores		90		9,011		2.5	%		817		2.4	%
Aerospace & Defense		7		8,694		2.4	%		952		2.8	%
Internet & Direct Marketing Retail		3		6,881		1.9	%		447		1.3	%
Electronic Components		2		6,806		1.9	%		466		1.4	%
Other (42 industries)		101		104,233		28.9	%		12,996		37.7	%
Untenanted properties		2		—		—			52		0.2	%
Total		764	$	360,019		100.0	%		34,397		100.0	%

Diversification: Geography

(unaudited, rent percentages based on ABR)


State / Province	# Properties		ABR ($'000s)		ABR as a % of Total Portfolio			Square Feet ('000s)		SF as a % of Total Portfolio			State / Province	# Properties		ABR ($'000s)		ABR as a % of Total Portfolio			Square Feet ('000s)		SF as a % of Total Portfolio
TX		70	$	37,549		10.4	%		3,636		10.6	%	LA		4		3,401		0.9	%		194		0.6	%
IL		27		21,566		6.0	%		2,002		5.8	%	NE		6		3,037		0.8	%		509		1.5	%
WI		35		20,744		5.8	%		2,163		6.3	%	MD		4		2,987		0.8	%		293		0.9	%
MI		49		17,130		4.8	%		1,633		4.7	%	NM		8		2,815		0.8	%		96		0.3	%
FL		42		16,122		4.5	%		844		2.5	%	MS		8		2,774		0.8	%		334		1.0	%
OH		38		15,786		4.4	%		1,416		4.1	%	IA		4		2,754		0.8	%		622		1.8	%
CA		10		15,622		4.3	%		1,493		4.3	%	SC		13		2,494		0.7	%		308		0.9	%
IN		30		15,035		4.2	%		1,858		5.4	%	WV		16		2,486		0.7	%		109		0.3	%
MN		21		14,600		4.0	%		2,285		6.6	%	CO		4		2,459		0.7	%		126		0.4	%
TN		49		13,995		3.9	%		866		2.5	%	UT		3		2,379		0.7	%		280		0.8	%
NC		36		13,742		3.8	%		1,425		4.1	%	CT		2		1,758		0.5	%		55		0.2	%
AZ		9		13,213		3.7	%		909		2.6	%	MT		7		1,563		0.4	%		43		0.1	%
AL		53		11,950		3.3	%		873		2.5	%	NV		2		1,336		0.4	%		81		0.2	%
GA		33		11,356		3.1	%		1,576		4.6	%	DE		4		1,154		0.3	%		133		0.4	%
NY		26		10,718		3.0	%		680		2.0	%	ND		2		943		0.3	%		28		0.1	%
MA		5		10,456		2.9	%		1,026		3.0	%	VT		2		420		0.1	%		24		0.1	%
AR		12		8,767		2.4	%		544		1.6	%	WY		1		307		0.1	%		21		0.1	%
OK		21		7,597		2.1	%		977		2.8	%	OR		1		136		0.0	%		9		0.1	%
KY		24		7,486		2.1	%		946		2.7	%	SD		1		81		0.0	%		9		0.0	%
PA		17		7,080		2.0	%		1,037		3.0	%	Total US		757	$	351,970		97.8	%		33,967		98.8	%
MO		12		6,064		1.7	%		1,136		3.3	%	BC		2	$	4,633		1.3	%		253		0.7	%
KS		11		5,489		1.5	%		648		1.9	%	ON		3		2,085		0.6	%		101		0.3	%
VA		17		5,451		1.5	%		204		0.6	%	AB		1		981		0.2	%		51		0.1	%
NJ		3		4,904		1.4	%		366		1.1	%	MB		1		350		0.1	%		25		0.1	%
WA		15		4,264		1.2	%		150		0.4	%	Total Canada		7	$	8,049		2.2	%		430		1.2	%
													Grand Total		764	$	360,019		100.0	%		34,397		100.0	%

Lease Expirations

(unaudited, rent percentages based on ABR)


Expiration Year	# Properties		# Leases		ABR ($'000s)		ABR as a % of Total Portfolio			Square Feet ('000s)		SF as a % of Total Portfolio
2022		1		2	$	1,566		0.4	%		46		0.1	%
2023		7		8		5,412		1.5	%		538		1.6	%
2024		11		11		14,036		3.9	%		1,689		4.9	%
2025		20		23		8,527		2.4	%		698		2.0	%
2026		35		32		19,235		5.4	%		1,413		4.1	%
2027		29		28		23,531		6.5	%		2,019		5.9	%
2028		33		31		23,061		6.4	%		2,291		6.7	%
2029		71		39		22,061		6.1	%		2,711		7.9	%
2030		101		57		53,636		14.9	%		5,110		14.8	%
2031		33		28		8,547		2.4	%		805		2.3	%
2032		59		44		30,701		8.5	%		3,437		10.0	%
2033		49		23		18,360		5.1	%		1,575		4.6	%
2034		33		22		6,240		1.7	%		409		1.2	%
2035		17		13		12,494		3.5	%		1,927		5.6	%
2036		86		21		25,732		7.2	%		2,854		8.3	%
2037		24		9		17,762		4.9	%		1,369		4.0	%
2038		33		29		6,842		1.9	%		306		0.9	%
2039		11		6		6,860		1.9	%		803		2.3	%
2040		31		5		5,744		1.6	%		312		0.9	%
2041		40		8		19,850		5.5	%		1,731		5.0	%
Thereafter		38		9		29,822		8.3	%		2,302		6.7	%
Untenanted properties		2		—		—		—			52		0.2	%
Total		764		448	$	360,019		100.0	%		34,397		100.0	%

Portfolio Occupancy

(unaudited, based on square feet)

Definitions and Explanations

Adjusted NOI, Annualized Adjusted NOI, Adjusted Cash NOI and Annualized Adjusted Cash NOI: Our reported results and net earnings per diluted share are presented in accordance with accounting principles generally accepted in the United States of America (GAAP). Adjusted NOI and Adjusted Cash NOI are non-GAAP financial measures that we believe are useful to assess property-level performance. We compute Adjusted NOI by adjusting Adjusted EBITDAre (defined below) to exclude general and administrative expenses incurred at the corporate level. Given the net lease nature of our portfolio, we do not incur general and administrative expenses at the property level. To compute Adjusted Cash NOI, we adjust Adjusted NOI to exclude non-cash items included in total revenues and property expenses, such as straight-line rental revenue and other amortization and non-cash items, based on an estimate calculated as if all investment and disposition activity that took place during the quarter had occurred on the first day of the quarter. We then annualize quarterly Adjusted NOI and Adjusted Cash NOI by multiplying each amount by four to compute Annualized Adjusted NOI and Annualized Adjusted Cash NOI, respectively, which are also non-GAAP financial measures. We believe Adjusted NOI and Adjusted Cash NOI provide useful and relevant information because they reflect only those income and expense items that are incurred at the property level and present such items on an unlevered basis. We believe that the exclusion of certain non-cash revenues and expenses from Adjusted Cash NOI is a useful supplemental measure for investors to consider because it will help them to better assess our operating performance without the distortions created by non-cash revenues or expenses. You should not unduly rely on Annualized Adjusted NOI and Annualized Adjusted Cash NOI as they are based on assumptions and estimates that may prove to be inaccurate. Our actual reported Adjusted NOI and Adjusted Cash NOI for future periods may be significantly different from our Annualized Adjusted NOI and Annualized Adjusted Cash NOI. Additionally, our computation of Adjusted NOI and Adjusted Cash NOI may differ from the methodology for calculating these metrics used by companies in our industry, and, therefore, may not be comparable to similarly titled measures reported by other companies.

Annualized Base Rent (ABR): We define ABR as the annualized contractual cash rent due for the last month of the reporting period, excluding the impacts of the short-term rent deferrals and abatements agreed to as a result of tenant requests for rent relief related to the COVID-19 pandemic, and adjusted to remove rent from properties sold during the month and to include a full month of contractual cash rent for properties acquired during the last month.

Cash Cap Rate: Cash Cap Rate represents the estimated first year cash yield to be generated on a real estate investment property, which was estimated at the time of investment based on the contractually specified cash base rent for the first full year after the date of the investment, divided by the purchase price for the property.

EBITDA, EBITDAre, Adjusted EBITDAre, and Annualized Adjusted EBITDAre: EBITDA, EBITDAre, Adjusted EBITDAre, and Annualized Adjusted EBITDAre are non-GAAP financial measures. We compute EBITDA as earnings before interest, income taxes and depreciation and amortization. EBITDA is a measure commonly used in our industry. We believe that this ratio provides investors and analysts with a measure of our performance that includes our operating results unaffected by the differences in capital structures, capital investment cycles and useful life of related assets compared to other companies in our industry. We compute EBITDAre in accordance with the definition adopted by Nareit. Nareit defines EBITDAre as EBITDA excluding gains (loss) from the sales of depreciable property and provisions for impairment on investment in real estate. We believe EBITDA and EBITDAre are useful to investors and analysts because they provide important supplemental information about our operating performance exclusive of certain non-cash and other costs. Adjusted EBITDAre represents EBITDAre, adjusted to reflect revenue producing acquisitions and dispositions for the quarter as if such acquisitions and dispositions had occurred as of the beginning of the quarter, and to exclude certain GAAP income and expense amounts that are either non-cash, such as cost of debt extinguishments, realized and unrealized gains and losses on foreign currency transactions, or the change in fair value of our earnout liability, or that we believe are one time, or unusual in nature because they relate to unique circumstances or transactions that had not previously occurred and which we do not anticipate occurring in the future, and to eliminate the impact of lease termination fees, and other items that are not a result of normal operations. We then annualize quarterly Adjusted EBITDAre by multiplying it by four to compute Annualized Adjusted EBITDAre. Our reported EBITDA, EBITDAre, Adjusted EBITDAre, and Annualized Adjusted EBITDAre may not be comparable to similarly titled measures of other companies. You should not consider these measures as alternatives to net income or cash flows from operating activities determined in accordance with GAAP.

Funds From Operations (FFO), Core Funds From Operations (Core FFO), and Adjusted Funds From Operations (AFFO): FFO, Core FFO, and AFFO are non-GAAP measures. We believe the use of FFO, Core FFO and AFFO are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the operating performance of REITs. FFO, Core FFO, and AFFO should not be considered alternatives to net income as a performance measure or to cash flows from operations, as reported on our statement of cash flows, or as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures. We compute Core FFO by adjusting FFO to exclude certain GAAP income and expense amounts that we believe are infrequently recurring, unusual in nature, or not related to its core real estate operations, including write-offs or recoveries of accrued rental income, lease termination fees, the change in fair value of our earnout liability, cost of debt extinguishments, unrealized and realized gains or losses on foreign currency transactions, severance, and other extraordinary items. We compute AFFO by adjusting Core FFO for certain non-cash revenues and expenses, including straight-line rents, amortization of lease intangibles, amortization of debt issuance costs, amortization of net mortgage premiums, (gain) loss on interest rate swaps and other non-cash interest expense, stock-based compensation, and other specified non-cash items.

Definitions and Explanations (continued)

GAAP Cap Rate: GAAP Cap Rate represents the estimated first year GAAP yield to be generated on a real estate investment property, which was computed at the time of investment based on the first full year of rental income computed in accordance with GAAP, divided by the purchase price including capitalized acquisition costs for the property.

Gross Debt: We define Gross Debt as total debt plus debt issuance costs and original issuance discount.

Net Debt: Net Debt is a non-GAAP financial measure. We define Net Debt as our Gross Debt less cash and cash equivalents and restricted cash.

Occupancy: Occupancy or a specified percentage of our portfolio that is "occupied" or "leased" means as of a specified date the quotient of (1) the total rentable square footage of our properties minus the square footage of our properties that are vacant and from which we are not receiving any rental payment, and (2) the total square footage of our properties.

Rent Coverage Ratio: Rent Coverage Ratio means the ratio of tenant-reported or, when available, management's estimate, based on tenant-reported financial information, of annual earnings before interest, taxes, depreciation, amortization, and cash rent attributable to the leased property (or properties, in the case of a master lease) to the annualized base rental obligation as of a specified date.