Document
false0001568162 0001568162 2020-05-06 2020-05-06 0001568162 afin:PreferredStockPurchaseRightsMember 2020-05-06 2020-05-06 0001568162 us-gaap:CommonClassAMember 2020-05-06 2020-05-06 0001568162 afin:A7.50SeriesACumulativeRedeemablePerpetualPreferredStock0.01parvalueMember 2020-05-06 2020-05-06


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
Date of Report (Date of earliest event reported): May 6, 2020
 
American Finance Trust, Inc.
(Exact Name of Registrant as Specified in Charter)


Maryland
 
001-38597
 
90-0929989
(State or other jurisdiction
of incorporation)
 
(Commission File Number)
 
(I.R.S. Employer
Identification No.)

650 Fifth Avenue, 30th Floor
New York, New York 10019
___________________________________________________________________________________________________________________________________________________________________________
(Address, including zip code, of Principal Executive Offices)

Registrant’s telephone number, including area code: (212) 415-6500
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
Class A Common Stock, $0.01 par value
 
AFIN
 
The Nasdaq Global Select Market
7.50% Series A Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value
 
AFINP
 
The Nasdaq Global Select Market
Preferred Stock Purchase Rights
 
 
 
The Nasdaq Global Select Market
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.





Item 2.02. Results of Operations and Financial Condition.

On May 6, 2020, American Finance Trust, Inc. (the “Company”) issued a press release announcing its results of operations for the quarter ended March 31, 2020, and supplemental financial information for the quarter ended March 31, 2020, attached hereto as Exhibits 99.1 and 99.2, respectively.

Item 7.01. Regulation FD Disclosure.

Press Release and Supplemental Information

As disclosed in Item 2.02 above, on May 6, 2020, the Company issued a press release announcing its results of operations for the quarter ended March 31, 2020, and supplemental financial information for the quarter ended March 31, 2020, attached hereto as Exhibits 99.1 and 99.2, respectively. The information set forth in Item 7.01 of this Current Report on Form 8-K and in the attached Exhibits 99.1 and 99.2 is deemed to be “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information set forth in Items 2.02 and 7.01 of this Current Report on Form 8-K, including Exhibits 99.1 and 99.2, shall not be deemed incorporated by reference into any filing under the Exchange Act or the Securities Act of 1933, as amended, regardless of any general incorporation language in such filing.

The statements in this Current Report on Form 8-K that are not historical facts may be forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause the outcome to be materially different. In addition, words such as “may,” “will,” “seeks,” “anticipates,” “believes,” “estimates,” “expects,” “plans,” “intends,” “should” or similar expressions indicate a forward-looking statement, although not all forward-looking statements include these words. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of the Company’s control, which could cause actual results to differ materially from the results contemplated by the forward-looking statements. These risks and uncertainties include the potential adverse effects of the ongoing global COVID-19 pandemic, including actions taken to contain or treat COVID-19, on the Company, the Company’s tenants and the global economy and financial markets, as well as those set forth in the Risk Factors section of the Company’s most recent Annual Report on Form 10-K for the year ended December 31, 2019 filed February 27, 2020 and all other filings filed with the Securities and Exchange Commission after that date. Further, forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required by law.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.
 
 Description
 
Press release dated May 6, 2020
 
 
 
 
Quarterly supplemental information for the quarter ended March 31, 2020
 
 
 
104
 
Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL Document.








SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
AMERICAN FINANCE TRUST, INC.
 
 
 
 
By:
/s/ Edward M. Weil, Jr.
 
 
Edward M. Weil, Jr.
 
 
Chief Executive Officer and President
(Principal Executive Officer)

Dated: May 6, 2020



Exhibit

EXHIBIT 99.1

https://cdn.kscope.io/0366abd90227edeaefe7f9ed7332fc22-arct5logocolornotickera11.jpg                            


FOR IMMEDIATE RELEASE
 

AMERICAN FINANCE TRUST ANNOUNCES FIRST QUARTER 2020 RESULTS

  
New York, May 6, 2020 - American Finance Trust, Inc. (Nasdaq: AFIN) (“AFIN” or the “Company”), a real estate investment trust focused on acquiring and managing a diversified portfolio of primarily service-oriented1 and traditional retail and distribution related commercial real estate properties in the U.S., announced today its financial and operating results for the first quarter ended March 31, 2020.
 
First Quarter 2020 Highlights    

Revenue increased 4% to $74.6 million as compared to $71.5 million for the first quarter 2019
Net loss attributable to common stockholders was $9.2 million, or $0.08 per diluted share, compared to a net loss of $3.2 million, or $0.03 per diluted share, for the first quarter 2019
Cash net operating income (“NOI”) grew by 6% to $59.0 million compared to $55.7 million for the first quarter 2019
Funds from Operations (“FFO”) was $23.7 million, or $0.22 per diluted share compared to $26.8 million, or $0.25 per diluted share, for the first quarter 2019
Adjusted Funds from Operations (“AFFO”) was $25.2 million, or $0.23 per diluted share, compared to $26.3 million or $0.25 per diluted share in the prior year first quarter
Announced a dividend change to be paid beginning in April for the second quarter to $0.21 per share per quarter, or $0.85 per share on an annualized basis, expected to strengthen AFIN's cash flow by $6.8 million per quarter
Closed on the acquisition of 31 properties for an aggregate contract purchase price of $90.0 million2 at a 7.4% weighted average cash capitalization rate3 and a weighted-average capitalization rate4 of 8.4%
Total multi-tenant occupancy increased to 87.3% from 85.0% year-over-year
High quality portfolio with 66% of tenants in single-tenant portfolio and 44% of the top 10 tenants5 in multi-tenant portfolio rated as investment grade or implied investment grade6  
Annual rent escalators7 averaging 1.3% per year in 80.9% of leases provide contractually embedded rent growth
Ample Liquidity8 of $215.0 million after borrowing an additional $153 million under credit facilities in March to enhance financial flexibility in response to COVID-19
Collected over 79% of cash rent due in April, including 92% in single tenant portfolio, with rent deferral amendments approved for 4% of the unpaid cash rent, while 16% of lease deferrals are in negotiation (see additional details in April Rents section below)


CEO Comments    

Michael Weil, Chief Executive Officer, commented, “Our first quarter results highlight the strong momentum we had coming into this year. Going forward, we continue to have a high degree of confidence in our long-term outlook, reflecting the resilience and capabilities of our team and the financial strength of our portfolio. I am proud of the focused effort and proactive communications we took in early March to create direct dialog with our tenants in response to the unprecedented COVID-19 pandemic. This led to tremendous success, as we collected over 79% of the rents due in April during the month, including 97% of the rent payable from the top 20 tenants in our portfolio.”



1


Financial Results    
 
 
Three Months Ended March 31,
(In thousands, except per share data)
 
2020
 
2019
Revenue from tenants
 
$
74,564

 
$
71,541

 
 
 
 
 
Net loss attributable to common stockholders
 
$
(9,153
)
 
$
(3,227
)
Net loss per common share (a)
 
$
(0.08
)
 
$
(0.03
)
 
 
 
 
 
FFO attributable to common stockholders
 
$
23,690

 
$
26,760

FFO per common share (a)
 
$
0.22

 
$
0.25

 
 
 
 
 
AFFO attributable to common stockholders
 
$
25,237

 
$
26,303

AFFO per common share (a)
 
$
0.23

 
$
0.25

(a) All per share data based on 108,364,082 and 106,076,588 diluted weighted-average shares outstanding for the three months ended March 31, 2020 and 2019, respectively.

Real Estate Portfolio

The Company’s portfolio consisted of 848 net lease properties located in 46 states and the District of Columbia and comprised 18.9 million rentable square feet as of March 31, 2020. Portfolio metrics include:

94.7% leased, up from 94.0% at the end of first quarter 2019, with 8.9 years remaining weighted-average lease term9 
80.9% of leases have contractual rent increases of 1.3% on average based on annualized straight-line rent10 
66% of single-tenant portfolio and 30% of multi-tenant anchor tenants annualized straight-line rent derived from investment grade or implied investment grade tenants
80% retail properties, 11% distribution properties and 9% office properties (based on an annualized straight-line rent)
69% of the retail portfolio focused on either service or experiential retail11 giving the company strong alignment with “e-commerce resistant” real estate
Since 2017, dispositions averaged six years of remaining lease term while new acquisitions on average have 16 years remaining on their lease term as we continue to cycle out assets with short remaining lease terms and acquire long-term service-oriented retail assets
2.3% increase in multi-tenant occupancy, year over year

Property Acquisitions

During the three months ended March 31, 2020, the Company acquired 31 properties for an aggregate contract purchase price of $90.0 million at a weighted average capitalization rate of 8.4%. Since 2017, 78% of all acquisitions have been properties leased to service retail tenants12.

Subsequent to March 31, 2020, the Company completed one property acquisition for a contract purchase price of $6.9 million. The Company’s acquisition pipeline as of April 15, 2020 includes 34 properties for an aggregate contract purchase price of $37.8 million. There can be no assurance that these acquisitions will be completed on current terms, or at all.

Property Dispositions

The Company sold two properties during the first quarter of 2020 for $3.8 million, of which approximately $1.3 million was used to repay related mortgage debt.

Capital Structure and Liquidity Resources

As of March 31, 2020, the Company had a total borrowing capacity under its credit facility of $522.4 million. Of this amount, $483.1 million was outstanding under this facility as of March 31, 2020 and $39.3 million remained available for future borrowing13. As of March 31, 2020, the Company had $175.7 million of cash and cash equivalents. The Company’s net debt14 to gross asset value15 was 38.8%, with net debt of $1.6 billion.

The Company’s percentage of fixed rate debt was 73.2% as of March 31, 2020. The Company’s total combined debt had a weighted-average interest rate cost of 4.2%16, resulting in an interest coverage ratio of 2.8 times17.



2


Dividend

On March 30, 2020, the Company announced that its Board of Directors approved an annualized dividend of $0.85 per share. The Company pays dividends monthly, and the change went into effect for the dividend which the Company declared in April 2020.

Subsequent Events

Short-term Stockholder Rights Plan

On April 13, 2020 the Company announced that its Board of Directors had approved a short-term stockholder rights plan to protect the long-term interests of the Company due to the substantial volatility in the trading of the Company’s Class A common stock that has resulted from the ongoing COVID-19 pandemic.

April Rents18 
For the month of April, AFIN collected over 79% of the cash rents that were due across the portfolio, including 97% of the cash rent payable from the top 20 tenants19 in the portfolio and 92% of the cash rent payable in the single tenant portfolio.

Of the April cash rent remaining, rent deferral amendments have been approved for 4% of the unpaid cash rent, while another 16% of rent deferrals are currently in negotiation. The remaining 1% generally represents tenants that have paid partial April cash rent but where the Company has not agreed to, or commenced negotiations regarding, any formal deferral arrangements.

The typical deferral amendment defers payment of approximately 30% of the rent due for 3 months and is repaid within the first half of 2021.





3



Footnotes/Definitions

1 Service retail is defined as single-tenant retail properties leased to tenants in the retail banking, restaurant, grocery, pharmacy, gas/convenience, healthcare, and auto services sectors
2 Represents the contract purchase price and excludes acquisition costs which are capitalized per GAAP.
3 Cash capitalization rate is a rate of return on a real estate investment property based on the expected, annualized cash rental income during the first year of ownership that the property will generate under its existing lease. Cash capitalization rate is calculated by dividing the annualized cash rental income the property will generate (before debt service and depreciation and after fixed costs and variable costs) and the purchase price of the property. The weighted-average cash capitalization rate is based upon square feet.
4 Capitalization rate is a rate of return on a real estate investment property based on the expected, annualized straight-line rental income that the property will generate under its existing lease. Capitalization rate is calculated by dividing the annualized straight-lined rental income the property will generate (before debt service and depreciation and after fixed costs and variable costs) and the purchase price of the property. The weighted-average capitalization rate is based upon square feet.
5 Percentage of single-tenant portfolio tenants and top 10 tenants based on annualized straight-line rent as of March 31, 2020.
6 As used herein, investment grade includes both actual investment grade ratings of the tenant or guarantor, if available, or implied investment grade. Implied investment grade may include actual ratings of tenant parent, guarantor parent (regardless of whether or not the parent has guaranteed the tenant’s obligation under the lease) or by using a proprietary Moody’s analytical tool, which generates an implied rating by measuring a company’s probability of default. Ratings information is as of March 31, 2020. Single-tenant portfolio tenants are 44.3% actual investment grade rated and 21.5% implied investment grade rate. Anchor tenants in the multi-tenant portfolio are 19.7% actual investment grade rated and 10.6% implied investment grade rated.
7 Based on annualized straight-line rent as of March 31, 2020. Contractual rent increases include fixed percent or actual increases, or CPI-indexed increases.
8 Liquidity includes the amount available for future borrowings under the Company’s credit facility of $39.3 million and cash and cash equivalents. In accordance with the Company's credit facility, the Company is permitted to pay distributions in an aggregate amount not exceeding 105% of MFFO (as defined in the Company’s credit facility) for any applicable period (commencing with the period of two consecutive fiscal quarters ended on September 30, 2019) if, as of the last day of the period, the Company is able to satisfy a maximum leverage ratio after giving effect to the payments and also has a combination of cash, cash equivalents and amounts available for future borrowings under the credit facility of not less than $60.0 million. The Company satisfied these requirements and relied on this exception for all applicable periods (including the period ended March 31, 2020). The Company also expects it will rely on this exception in future periods.
9 The weighted-average remaining lease term (years) is based on annualized straight-line rent as of March 31, 2020.
10 Annualized straight-line rent is calculated using the most recent available lease terms as of March 31, 2020.
11 Experiential retail is defined as multi-tenant properties leased to tenants in the restaurant, discount retail, entertainment, salon/beauty, and grocery sectors, among others.
12 Based on acquisitions during the period from January 1, 2017 through March 31, 2020 excluding the multi-tenant properties acquired in the American Realty Capital Retail Centers of America, Inc. (“RCA”) merger in February 2017. Weighted by annualized straight-line rent as of March 31, 2020.
13 The borrowing capacity and availability for future borrowings under the Company’s credit facility is based on the borrowing base thereunder, which is the pool of eligible otherwise unencumbered real estate assets as March 31, 2020.
14 Total debt of $1.8 billion less cash and cash equivalents of $175.7 million as of March 31, 2020. Excludes the effect of deferred financing costs, net, mortgage premiums, net and includes the effect of cash and cash equivalents.
15 Defined as the carrying value of total assets plus accumulated depreciation and amortization as of March 31, 2020.
16 Weighted based on the outstanding principal balance of the debt.
17 The interest coverage ratio is calculated by dividing adjusted EBITDA by cash paid for interest (interest expense less amortization of deferred financing costs, net, and change in accrued interest and amortization of mortgage premiums on borrowings) for the quarter ended March 31, 2020.
18 This information may not be indicative of any future period. The impact of the COVID-19 pandemic on the Company’s rental revenue for the second quarter of 2020 and thereafter cannot be determined at present. The ultimate impact on our future results of operations and liquidity will depend on the overall length and severity of the COVID-19 pandemic, which management is unable to predict. With respect to ongoing negotiations of rent deferrals, there can be no assurance that these negotiations will be successful and will lead to formal rent deferral agreements on favorable terms, or at all. With respect to the other remaining unpaid amounts, there can be no assurance the Company will be successful in its efforts to collect or defer these amounts on a timely basis, or at all.

4


19 Top 20 tenants based on April cash rents

Webcast and Conference Call

AFIN will host a webcast and call on May 7, 2020 at 11:00 a.m. ET to discuss its financial and operating results. This webcast will be broadcast live over the Internet and can be accessed by all interested parties through the AFIN website, www.americanfinancetrust.com, in the “Investor Relations” section.
 
Dial-in instructions for the conference call and the replay are outlined below.

To listen to the live call, please go to AFIN’s “Investor Relations” section of the website at least 15 minutes prior to the start of the call to register and download any necessary audio software. For those who are not able to listen to the live broadcast, a replay will be available shortly after the call on the AFIN website at www.americanfinancetrust.com.
 
Live Call
Dial-In (Toll Free): 1-888-317-6003
International Dial-In: 1-412-317-6061
Canada Dial-In (Toll Free): 1-866-605-3851
Participant Elite Entry Number: 4922290
 
Conference Replay*
Domestic Dial-In (Toll Free): 1-877-344-7529
International Dial-In: 1-412-317-0088
Canada Dial-In (Toll Free): 1-855-669-9658
Conference Number: 10141883 
*Available one hour after the end of the conference call through August 7, 2020.

About American Finance Trust, Inc.
 
American Finance Trust, Inc. (Nasdaq: AFIN) is a publicly traded real estate investment trust listed on the Nasdaq focused on acquiring and managing a diversified portfolio of primarily service-oriented and traditional retail and distribution related commercial real estate properties in the U.S. Additional information about AFIN can be found on its website at www.americanfinancetrust.com.
 
 Supplemental Schedules
 
The Company will file supplemental information packages with the Securities and Exchange Commission (the “SEC”) to provide additional disclosure and financial information. Once posted, the supplemental package can be found under the “Presentations” tab in the Investor Relations section of AFIN’s website at www.americanfinancetrust.com and on the SEC website at www.sec.gov.

Important Notice

The statements in this press release that are not historical facts may be forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results or events to be materially different. The words “anticipates,” “believes,” “expects,” “estimates,” “projects,” “plans,” “intends,” “may,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of the Company’s control, which could cause actual results to differ materially from the results contemplated by the forward-looking statements. These risks and uncertainties include the potential adverse effects of the ongoing global COVID-19 pandemic, including actions taken to contain or treat COVID-19, on the Company, the Company’s tenants and the global economy and financial markets and that any potential future acquisition is subject to market conditions and capital availability and may not be identified or completed on favorable terms, or at all, as well as those risks and uncertainties set forth in the Risk Factors section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed on February 27, 2020 and all other filings with the SEC after that date, as such risks, uncertainties and other important factors may be updated from time to time in the Company’s subsequent reports. Further, forward looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise any forward-looking statement to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results, unless required to do so by law.



5



Accounting Treatment of Rent Deferrals
 
The Company currently anticipates that the majority of the concessions granted to its tenants as a result of the COVID-19 pandemic will be rent deferrals with the original lease term unchanged and collection of deferred rent deemed probable. The Company’s revenue recognition policy requires that it must be probable that the Company will collect virtually all of the lease payments due and does not provide for partial reserves, or the ability to assume partial recovery. In light of the COVID-19 pandemic, the FASB and SEC agreed that for leases where the total lease cash flows will remain substantially the same or less than those after the COVID-19 related effects, companies may choose to forgo the evaluation of the enforceable rights and obligations of the original lease contract as a practical expedient and account for rent concessions as if they were part of the enforceable rights and obligations of the parties under the existing lease contract. As a result, we do not expect rental revenue used to calculate Net Income and Nareit FFO to be significantly impacted by deferrals. In addition, since we currently believe that these amounts are collectible, we would not plan to adjust from AFFO the amounts recognized under GAAP relating to rent deferrals.



Contacts:
Investors and Media:
Email: investorrelations@americanfinancetrust.com
Phone: (866) 902-0063

6



American Finance Trust, Inc.
Consolidated Balance Sheets
(In thousands. except share and per share data)


 
March 31,
2020
 
December 31,
2019
 
(Unaudited)
 
 
ASSETS
 
 
 
Real estate investments, at cost:
 
 
 
Land
$
705,761

 
$
685,889

Buildings, fixtures and improvements
2,739,793

 
2,681,485

Acquired intangible lease assets
448,642

 
448,175

Total real estate investments, at cost
3,894,196

 
3,815,549

Less: accumulated depreciation and amortization
(554,271
)
 
(529,052
)
Total real estate investments, net
3,339,925

 
3,286,497

Cash and cash equivalents
175,745

 
81,898

Restricted cash
18,192

 
17,942

Deposits for real estate acquisitions
1,140

 
85

Deferred costs, net
16,934

 
17,467

Straight-line rent receivable
49,272

 
46,976

Operating lease right-of-use assets
18,841

 
18,959

Prepaid expenses and other assets (including $659 and $503 due from related parties as of March 31, 2020 and December 31, 2019, respectively)
20,142

 
19,188

Assets held for sale
5,937

 
1,176

Total assets
$
3,646,128

 
$
3,490,188

 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Mortgage notes payable, net
$
1,309,513

 
$
1,310,943

Credit facility
483,147

 
333,147

Below market lease liabilities, net
82,624

 
84,041

Accounts payable and accrued expenses (including $473 and $1,153 due to related parties as of March 31, 2020 and December 31, 2019, respectively)
53,333

 
26,817

Operating lease liabilities
19,305

 
19,318

Deferred rent and other liabilities
8,685

 
10,392

Dividends payable
3,619

 
3,300

Total liabilities
1,960,226

 
1,787,958

 
 
 
 
7.50% Series A cumulative redeemable perpetual preferred stock, $0.01 par value, liquidation preference $25.00 per share, 8,796,000 shares authorized, 7,719,689 and 6,917,230 issued and outstanding as of March 31, 2020 and December 31, 2019, respectively
77

 
69

Common stock, $0.01 par value per share, 300,000,000 shares authorized, 108,475,266 and 108,475,266 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively
1,085

 
1,085

Additional paid-in capital
2,634,953

 
2,615,089

Distributions in excess of accumulated earnings
(972,019
)
 
(932,912
)
Total stockholders’ equity
1,664,096

 
1,683,331

Non-controlling interests
21,806

 
18,899

Total equity
1,685,902

 
1,702,230

Total liabilities and equity
$
3,646,128

 
$
3,490,188



7



American Finance Trust, Inc.
Consolidated Statements of Operations (Unaudited)
(In thousands, except share and per share data)

 
Three Months Ended March 31,
 
2020
 
2019
Revenue from tenants
$
74,564

 
$
71,541

 
 
 
 
Operating expenses:
 
 
 
Asset management fees to related party
6,905

 
6,038

Property operating expense
12,282

 
12,836

Impairment of real estate investments

 
823

Acquisition, transaction and other costs [1]
452

 
854

Equity-based compensation [2]
3,211

 
3,021

General and administrative
5,328

 
6,061

Depreciation and amortization
34,335

 
32,086

Total operating expenses
62,513

 
61,719

          Operating income before gain on sale of real estate investments
12,051

 
9,822

Gain on sale of real estate investments
1,440

 
2,873

   Operating income
13,491

 
12,695

Other (expense) income:
 
 
 
Interest expense
(19,106
)
 
(18,440
)
Other income
72

 
2,545

Total other expense, net
(19,034
)
 
(15,895
)
Net loss
(5,543
)
 
(3,200
)
Net loss attributable to non-controlling interests
9

 
3

Preferred stock dividends
(3,619
)
 
(30
)
Net loss attributable to common stockholders
$
(9,153
)
 
$
(3,227
)
 
 
 
 
Basic and Diluted Net Loss Per Share:
 
 
 
Net loss per share attributable to common stockholders — Basic and Diluted
$
(0.08
)
 
$
(0.03
)
Weighted-average shares outstanding — Basic and Diluted
108,364,082

 
106,076,588

______

[1] For the three months ended March 31, 2020 and 2019, includes litigation costs related to AFIN’s 2017 merger with American Realty Capital - Retail Centers of America, Inc. (the “Merger”) of $0.3 million and $0.3 million, respectively.
[2] For the three months ended March 31, 2020 and 2019, includes expense related to the Company’s restricted common shares of $0.2 million and $0.3 million, respectively.

8



American Finance Trust, Inc.
Quarterly Reconciliation of Non-GAAP Measures (Unaudited)
(In thousands)



 
 
Three Months Ended March 31,
 
 
2020
 
2019
Adjusted EBITDA
 
 
 
 
Net loss
 
$
(5,543
)
 
$
(3,200
)
Depreciation and amortization
 
34,335

 
32,086

Interest expense
 
19,106

 
18,440

Impairment of real estate investments
 

 
823

Acquisition, transaction and other costs [1]
 
452

 
854

Equity-based compensation [2]
 
3,211

 
3,021

Gain on sale of real estate investments
 
(1,440
)
 
(2,873
)
Other income
 
(72
)
 
(2,545
)
Adjusted EBITDA
 
50,049

 
46,606

Asset management fees to related party
 
6,905

 
6,038

General and administrative
 
5,328

 
6,061

NOI
 
62,282

 
58,705

   Amortization of market lease and other intangibles, net
 
(992
)
 
(1,839
)
Straight-line rent
 
(2,265
)
 
(1,196
)
  Cash NOI
 
$
59,025

 
$
55,670

 
 
 
 
 
Cash Paid for Interest:
 
 
 
 
   Interest expense
 
$
19,106

 
$
18,440

   Amortization of deferred financing costs, net and change in accrued interest
 
(1,712
)
 
(1,329
)
   Amortization of mortgage discounts and premiums on borrowings
 
560

 
794

   Total cash paid for interest
 
$
17,954

 
$
17,905

______

[1] For the three months ended March 31, 2020 and 2019, includes litigation costs related to the Merger of $0.3 million and $0.3 million, respectively.
[2] For the three months ended March 31, 2020 and 2019, includes expense related to the Company’s restricted common shares of $0.2 million and $0.3 million, respectively.




9



American Finance Trust, Inc.
Quarterly Reconciliation of Non-GAAP Measures (Unaudited)
(In thousands)



 
 
Three Months Ended March 31,
 
Three Months Ended December 31,
 
 
2020
 
2019
 
2019
Net loss attributable to common stockholders (in accordance with GAAP)
 
$
(9,153
)
 
$
(3,227
)
 
$
(4,827
)
Impairment of real estate investments
 

 
823

 

   Depreciation and amortization
 
34,335

 
32,086

 
31,802

   Gain on sale of real estate investments
 
(1,440
)
 
(2,873
)
 
(4,519
)
   Proportionate share of adjustments for non-controlling interest to arrive at FFO
 
(52
)
 
(49
)
 
(44
)
FFO attributable to common stockholders
 
23,690

 
26,760

 
22,412

   Acquisition, transaction and other costs [1]
 
452

 
854

 
3,022

   Litigation cost reimbursements related to the Merger [2]
 
(9
)
 
(1,833
)
 
(316
)
   Amortization of market lease and other intangibles, net
 
(992
)
 
(1,839
)
 
(1,307
)
   Straight-line rent
 
(2,265
)
 
(1,196
)
 
(2,847
)
   Amortization of mortgage premiums on borrowings
 
(560
)
 
(794
)
 
(1,344
)
   Equity-based compensation [3]
 
3,211

 
3,021

 
3,211

   Amortization of deferred financing costs, net and change in accrued interest
 
1,712

 
1,329

 
2,394

   Proportionate share of adjustments for non-controlling interest to arrive at AFFO
 
(2
)
 
1

 
(5
)
AFFO attributable to common stockholders
 
$
25,237

 
$
26,303

 
$
25,220

______

[1] Primarily includes prepayment costs incurred in connection with early debt extinguishment as well as litigation costs related to the Merger.
[2] Included in "Other income" in the Company's consolidated statement of operations.
[3] Includes expense related to the amortization of the Company’s restricted common shares and LTIP Units.

10



Non-GAAP Financial Measures
This release discusses the non-GAAP financial measures we use to evaluate our performance, including Funds from Operations (“FFO”), Adjusted Funds from Operations (“AFFO”), Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”), Net Operating Income (“NOI”) and Cash Net Operating Income (“Cash NOI”). While NOI is a property-level measure, AFFO is based on our total performance and therefore reflects the impact of other items not specifically associated with NOI such as, interest expense, general and administrative expenses and operating fees to related parties. Additionally, NOI as defined herein, does not reflect an adjustment for straight-line rent but AFFO does. A description of these non-GAAP measures and reconciliations to the most directly comparable GAAP measure, which is net income, is provided below. Adjustments for unconsolidated partnerships and joint ventures are calculated to exclude the proportionate share of the non-controlling interest to arrive at FFO, AFFO and NOI attributable to stockholders.
Caution on Use of Non-GAAP Measures
FFO, AFFO, Adjusted EBITDA, NOI and Cash NOI should not be construed to be more relevant or accurate than the current GAAP methodology in calculating net income or in its applicability in evaluating our operating performance. The method utilized to evaluate the value and performance of real estate under GAAP should be construed as a more relevant measure of operational performance and considered more prominently than the non-GAAP measures.
Other REITs may not define FFO in accordance with the current National Association of Real Estate Investment Trusts (“NAREIT”), an industry trade group, definition (as we do), or may interpret the current NAREIT definition differently than we do, or may calculate AFFO differently than we do. Consequently, our presentation of FFO and AFFO may not be comparable to other similarly titled measures presented by other REITs.
We consider FFO and AFFO useful indicators of our performance. Because FFO and AFFO calculations exclude such factors as depreciation and amortization of real estate assets and gains or losses from sales of operating real estate assets (which can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates), FFO and AFFO presentations facilitate comparisons of operating performance between periods and between other REITs in our peer group.
As a result, we believe that the use of FFO and AFFO, together with the required GAAP presentations, provide a more complete understanding of our performance, including relative to our peers and a more informed and appropriate basis on which to make decisions involving operating, financing, and investing activities. However, FFO and AFFO are not indicative of cash available to fund ongoing cash needs, including the ability to pay cash dividends. Investors are cautioned that FFO and AFFO should only be used to assess the sustainability of our operating performance excluding these activities, as they exclude certain costs that have a negative effect on our operating performance during the periods in which these costs are incurred.
Funds from Operations and Adjusted Funds from Operations
Funds from Operations
Due to certain unique operating characteristics of real estate companies, as discussed below, the NAREIT, an industry trade group, has promulgated a performance measure known as FFO, which we believe to be an appropriate supplemental measure to reflect the operating performance of a REIT. FFO is not equivalent to net income or loss as determined under GAAP.
We calculate FFO, a non-GAAP measure, consistent with the standards established over time by the Board of Governors of NAREIT, as restated in a White Paper and approved by the Board of Governors of NAREIT effective in December 2018 (the “White Paper”). The White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding depreciation and amortization related to real estate, gains and losses from sales of certain real estate assets, gain and losses from change in control and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. Adjustments for consolidated partially-owned entities (including our Operating Partnership) and equity in earnings of unconsolidated affiliates are made to arrive at our proportionate share of FFO attributable to our stockholders. Our FFO calculation complies with NAREIT’s definition.
The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, and straight-line amortization of intangibles. We believe that, because real estate values historically rise and fall with market conditions, including inflation, interest rates, unemployment and consumer spending, presentations of operating results for a REIT using historical accounting for depreciation and certain other items may be less informative. Historical accounting for real estate involves the use of GAAP. Any other method of accounting for real estate such as the fair value method cannot be construed to be any more accurate or relevant than the comparable methodologies of real estate valuation found in GAAP. Nevertheless, we believe that the use of FFO, which excludes the impact of real estate related depreciation and amortization, among other things, provides a more complete understanding of our performance to investors and to management, and when compared year over year, reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs, which may not be immediately apparent from net income.
Adjusted Funds from Operations
In calculating AFFO, we start with FFO, then we exclude certain income or expense items from AFFO that we consider to be more reflective of investing activities, such as fees related to the Listing, non-cash income and expense items and the income and expense effects of other activities that are not a fundamental attribute of our day to day operating business plan, such as amounts related to litigation

11



arising out of the Merger. These amounts include legal costs incurred as a result of the litigation, portions of which have been and may in the future be reimbursed under insurance policies maintained by us. Insurance reimbursements are deducted from AFFO in the period of reimbursement. We believe that excluding the litigation costs and subsequent insurance reimbursements related to litigation arising out of the Merger helps to provide a better understanding of the operating performance of our business. Other income and expense items also include early extinguishment of debt and unrealized gains and losses, which may not ultimately be realized, such as gains or losses on derivative instruments and gains and losses on investments. In addition, by excluding non-cash income and expense items such as amortization of above-market and below-market leases intangibles, amortization of deferred financing costs, straight-line rent, vesting and conversion of the Class B Units and share-based compensation related to restricted shares and the 2018 OPP from AFFO, we believe we provide useful information regarding those income and expense items which have a direct impact on our ongoing operating performance.
In calculating AFFO, we exclude certain expenses which under GAAP are characterized as operating expenses in determining operating net income (loss). All paid and accrued merger, acquisition and transaction related fees and certain other expenses negatively impact our operating performance during the period in which expenses are incurred or properties are acquired will also have negative effects on returns to investors but are not reflective of our on-going performance. Further, under GAAP, certain contemplated non-cash fair value and other non-cash adjustments are considered operating non-cash adjustments to net income (loss). In addition, as discussed above, we view gains and losses from fair value adjustments as items which are unrealized and may not ultimately be realized and not reflective of ongoing operations and are therefore typically adjusted for when assessing operating performance. Excluding income and expense items detailed above from our calculation of AFFO provides information consistent with management’s analysis of our operating performance. Additionally, fair value adjustments, which are based on the impact of current market fluctuations and underlying assessments of general market conditions but can also result from operational factors such as rental and occupancy rates, may not be directly related or attributable to our current operating performance. By excluding such changes that may reflect anticipated and unrealized gains or losses, we believe AFFO provides useful supplemental information. By providing AFFO, we believe we are presenting useful information that can be used to better assess the sustainability of our ongoing operating performance without the impact of transactions or other items that are not related to the ongoing performance of our portfolio of properties. AFFO presented by us may not be comparable to AFFO reported by other REITs that define AFFO differently. Furthermore, we believe that in order to facilitate a clear understanding of our operating results, AFFO should be examined in conjunction with net income (loss) as presented in our consolidated financial statements. AFFO should not be considered as an alternative to net income (loss) as an indication of our performance or to cash flows as a measure of our liquidity or ability to pay dividends.
Adjusted Earnings before Interest, Taxes, Depreciation and Amortization, Net Operating Income and Cash Net Operating Income.
We believe that Adjusted EBITDA, which is defined as earnings before interest, taxes, depreciation and amortization adjusted for acquisition and transaction-related expenses, fees related to the Listing, other non-cash items such as the vesting and conversion of the Class B Units, expense related to our multi-year outperformance agreement with the Advisor and including our pro-rata share from unconsolidated joint ventures, is an appropriate measure of our ability to incur and service debt. Adjusted EBITDA should not be considered as an alternative to cash flows from operating activities, as a measure of our liquidity or as an alternative to net income as an indicator of our operating activities. Other REITs may calculate Adjusted EBITDA differently and our calculation should not be compared to that of other REITs.
NOI is a non-GAAP financial measure used by us to evaluate the operating performance of our real estate. NOI is equal to total revenues, excluding contingent purchase price consideration, less property operating and maintenance expense. NOI excludes all other items of expense and income included in the financial statements in calculating net income (loss). We believe NOI provides useful and relevant information because it reflects only those income and expense items that are incurred at the property level and presents such items on an unleveraged basis. We use NOI to assess and compare property level performance and to make decisions concerning the operations of the properties. Further, we believe NOI is useful to investors as a performance measure because, when compared across periods, NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating expenses and acquisition activity on an unleveraged basis, providing perspective not immediately apparent from net income (loss). NOI excludes certain items included in calculating net income (loss) in order to provide results that are more closely related to a property’s results of operations. For example, interest expense is not necessarily linked to the operating performance of a real estate asset. In addition, depreciation and amortization, because of historical cost accounting and useful life estimates, may distort operating performance at the property level. NOI presented by us may not be comparable to NOI reported by other REITs that define NOI differently. We believe that in order to facilitate a clear understanding of our operating results, NOI should be examined in conjunction with net income (loss) as presented in our consolidated financial statements. NOI should not be considered as an alternative to net income (loss) as an indication of our performance or to cash flows as a measure of our liquidity or our ability to pay dividends.
Cash NOI, is a non-GAAP financial measure that is intended to reflect the performance of our properties. We define Cash NOI as NOI excluding amortization of above/below market lease intangibles and straight-line adjustments that are included in GAAP lease revenues. We believe that Cash NOI is a helpful measure that both investors and management can use to evaluate the current financial performance of our properties and it allows for comparison of our operating performance between periods and to other REITs. Cash NOI should not be considered as an alternative to net income, as an indication of our financial performance, or to cash flows as a measure of liquidity or our ability to fund all needs. The method by which we calculate and present Cash NOI may not be directly comparable to the way other REITs present Cash NOI.


12
Exhibit
EXHIBIT 99.2






American Finance Trust, Inc.
Supplemental Information

Quarter ended March 31, 2020 (unaudited)





American Finance Trust, Inc.
Supplemental Information
Quarter ended March 31, 2020 (Unaudited)


Table of Contents
 
 
 
 
 
Item
 
Page
Non-GAAP Definitions
 
3
Key Metrics
 
6
Consolidated Balance Sheets
 
8
Consolidated Statements of Operations
 
9
Non-GAAP Measures
 
10
Debt Overview
 
12
Future Minimum Lease Rents
 
13
Top Ten Tenants
 
14
Diversification by Property Type
 
15
Diversification by Geography
 
16
Lease Expirations
 
17
 
 
 
Please note that totals may not add due to rounding.
 
 

Forward-looking Statements:
This supplemental package of American Finance Trust, Inc. (the "Company") includes “forward looking statements.” These forward-looking statements involve risks and uncertainties that could cause the outcome to be materially different. In addition, words such as “may,” “will,” “seeks,” “anticipates,” “believes,” “estimates,” “expects,” “plans,” “intends,” “should” or similar expressions indicate a forward-looking statement, although not all forward-looking statements include these words. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of the Company’s control, which could cause actual results to differ materially from the results contemplated by the forward-looking statements. These risks and uncertainties include the potential adverse effects of the ongoing global COVID-19 pandemic, including actions taken to contain or treat COVID-19, on the Company, the Company’s tenants and the global economy and financial markets, as well as those set forth in the Risk Factors section of the Company’s most recent Annual Report on Form 10-K for the year ended December 31, 2019 filed February 27, 2020 and all other filings filed with the Securities and Exchange Commission after that date. Further, forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required by law.
Accounting Treatment of Rent Deferrals  
The Company currently anticipates that the majority of the concessions granted to its tenants as a result of the COVID-19 pandemic will be rent deferrals with the original lease term unchanged and collection of deferred rent deemed probable. The Company’s revenue recognition policy requires that it must be probable that the Company will collect virtually all of the lease payments due and does not provide for partial reserves, or the ability to assume partial recovery. In light of the COVID-19 pandemic, the FASB and SEC agreed that for leases where the total lease cash flows will remain substantially the same or less than those after the COVID-19 related effects, companies may choose to forgo the evaluation of the enforceable rights and obligations of the original lease contract as a practical expedient and account for rent concessions as if they were part of the enforceable rights and obligations of the parties under the existing lease contract. As a result, we do not expect rental revenue used to calculate Net Income and Nareit FFO to be significantly impacted by deferrals. In addition, since we currently believe that these amounts are collectible, we would not plan to adjust from AFFO the amounts recognized under GAAP relating to rent deferrals.


2


American Finance Trust, Inc.
Supplemental Information
Quarter ended March 31, 2020 (Unaudited)

Non-GAAP Financial Measures
This section discusses non-GAAP financial measures we use to evaluate our performance, including Funds from Operations ("FFO"), Adjusted Funds from Operations ("AFFO"), Adjusted Earnings before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA"), Net Operating Income ("NOI") and Cash Net Operating Income ("Cash NOI"). While NOI is a property-level measure, AFFO is based on total Company performance and therefore reflects the impact of other items not specifically associated with NOI such as, interest expense, general and administrative expenses and operating fees to related parties. Additionally, NOI as defined herein, does not reflect an adjustment for straight-line rent but AFFO does. A description of these non-GAAP measures and reconciliations to the most directly comparable GAAP measure, which is net income (loss), is provided below. Adjustments for unconsolidated partnerships and joint ventures are calculated to exclude the proportionate share of the non-controlling interest to arrive at FFO, AFFO and NOI attributable to stockholders.
Caution on Use of Non-GAAP Measures
FFO, AFFO, Adjusted EBITDA, NOI and Cash NOI should not be construed to be more relevant or accurate than the current GAAP methodology in calculating net income or in its applicability in evaluating our operating performance. The method utilized to evaluate the value and performance of real estate under GAAP should be construed as a more relevant measure of operational performance and considered more prominently than the non-GAAP measures.
Other REITs may not define FFO in accordance with the current National Association of Real Estate Investment Trusts ("NAREIT"), an industry trade group, definition (as we do), or may interpret the current NAREIT definition differently than we do, or may calculate AFFO differently than we do. Consequently, our presentation of FFO and AFFO may not be comparable to other similarly-titled measures presented by other REITs.
We consider FFO and AFFO useful indicators of our performance. Because FFO and AFFO calculations exclude such factors as depreciation and amortization of real estate assets and gains or losses from sales of operating real estate assets (which can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates), FFO and AFFO presentations facilitate comparisons of operating performance between periods and between other REITs in our peer group.
As a result, we believe that the use of FFO and AFFO, together with the required GAAP presentations, provide a more complete understanding of our performance, including relative to our peers and a more informed and appropriate basis on which to make decisions involving operating, financing, and investing activities. However, FFO and AFFO are not indicative of cash available to fund ongoing cash needs, including the ability to pay cash dividends. Investors are cautioned that FFO and AFFO should only be used to assess the sustainability of our operating performance excluding these activities, as they exclude certain costs that have a negative effect on our operating performance during the periods in which these costs are incurred.
Funds from Operations and Adjusted Funds from Operations
Funds from Operations
Due to certain unique operating characteristics of real estate companies, as discussed below, NAREIT, an industry trade group, has promulgated a performance measure known as FFO, which we believe to be an appropriate supplemental measure to reflect the operating performance of a REIT. FFO is not equivalent to net income or loss as determined under GAAP.
We calculate FFO, a non-GAAP measure, consistent with the standards established over time by the Board of Governors of NAREIT, as restated in a White Paper and approved by the Board of Governors of NAREIT effective in December 2018 (the “White Paper”). The White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding depreciation and amortization related to real estate, gains and losses from sales of certain real estate assets, gain and losses from change in control and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. Adjustments for consolidated partially-owned entities (including our Operating Partnership) and equity in earnings of unconsolidated affiliates are made to arrive at our proportionate share of FFO attributable to our stockholders. Our FFO calculation complies with NAREIT’s definition.
The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, and straight-line amortization of intangibles, which implies that the value of a real estate asset diminishes predictably over time. We believe that, because real estate values historically rise and fall with market conditions, including inflation, interest rates, unemployment and consumer spending, presentations of operating results for a REIT using historical accounting for depreciation and certain other items may be less informative. Historical accounting for real estate involves the use of GAAP. Any other method of accounting for real estate such as the fair value method cannot be construed to be any more accurate or relevant than the comparable methodologies of real estate valuation found in GAAP. Nevertheless, we believe that the use of FFO, which excludes the impact of real estate related depreciation and amortization, among other things, provides a more complete understanding of our performance to investors and to management, and when compared year over year, reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs, which may not be immediately apparent from net income.

3


American Finance Trust, Inc.
Supplemental Information
Quarter ended March 31, 2020 (Unaudited)

Adjusted Funds from Operations
In calculating AFFO, we start with FFO, then we exclude certain income or expense items from AFFO that we consider to be more reflective of investing activities, such as non-cash income and expense items and the income and expense effects of other activities that are not a fundamental attribute of our day to day operating business plan, such as amounts related to litigation arising out of AFIN's 2017 merger with American Realty Capital - Retail Centers of America, Inc. (the "Merger"). These amounts include legal costs incurred as a result of the litigation, portions of which have been and may in the future be reimbursed under insurance policies maintained by us. Insurance reimbursements are deducted from AFFO in the period of reimbursement. We believe that excluding the litigation costs and subsequent insurance reimbursements related to litigation arising out of the Merger helps to provide a better understanding of the operating performance of our business. Other income and expense items also include early extinguishment of debt and unrealized gains and losses, which may not ultimately be realized, such as gains or losses on derivative instruments and gains and losses on investments. In addition, by excluding non-cash income and expense items such as amortization of above-market and below-market leases intangibles, amortization of deferred financing costs, straight-line rent, and share-based compensation related to restricted shares and the multi-year outperformance agreement from AFFO, we believe we provide useful information regarding those income and expense items which have a direct impact on our ongoing operating performance.
In calculating AFFO, we exclude certain expenses which under GAAP are characterized as operating expenses in determining operating net income (loss). All paid and accrued merger, acquisition and transaction related fees and certain other expenses negatively impact our operating performance during the period in which expenses are incurred or properties are acquired will also have negative effects on returns to investors but are not reflective of our on-going performance. Further, under GAAP, certain contemplated non-cash fair value and other non-cash adjustments are considered operating non-cash adjustments to net income (loss). In addition, as discussed above, we view gains and losses from fair value adjustments as items which are unrealized and may not ultimately be realized and not reflective of ongoing operations and are therefore typically adjusted for when assessing operating performance. Excluding income and expense items detailed above from our calculation of AFFO provides information consistent with management's analysis of our operating performance. Additionally, fair value adjustments, which are based on the impact of current market fluctuations and underlying assessments of general market conditions but can also result from operational factors such as rental and occupancy rates, may not be directly related or attributable to our current operating performance. By excluding such changes that may reflect anticipated and unrealized gains or losses, we believe AFFO provides useful supplemental information. By providing AFFO, we believe we are presenting useful information that can be used to better assess the sustainability of our ongoing operating performance without the impact of transactions or other items that are not related to the ongoing performance of our portfolio of properties. AFFO presented by us may not be comparable to AFFO reported by other REITs that define AFFO differently. Furthermore, we believe that in order to facilitate a clear understanding of our operating results, AFFO should be examined in conjunction with net income (loss) as presented in our consolidated financial statements. AFFO should not be considered as an alternative to net income (loss) as an indication of our performance or to cash flows as a measure of our liquidity or ability to pay dividends.
Adjusted Earnings before Interest, Taxes, Depreciation and Amortization, Net Operating Income and Cash Net Operating Income.
We believe that Adjusted EBITDA, which is defined as earnings before interest, taxes, depreciation and amortization adjusted for acquisition and transaction-related expenses, other non-cash items such as expense related to our multi-year outperformance agreement with the Advisor and including our pro-rata share from unconsolidated joint ventures, is an appropriate measure of our ability to incur and service debt. Adjusted EBITDA should not be considered as an alternative to cash flows from operating activities, as a measure of our liquidity or as an alternative to net income as an indicator of our operating activities. Other REITs may calculate Adjusted EBITDA differently and our calculation should not be compared to that of other REITs.
NOI is a non-GAAP financial measure used by us to evaluate the operating performance of our real estate. NOI is equal to total revenues, excluding contingent purchase price consideration, less property operating and maintenance expense. NOI excludes all other items of expense and income included in the financial statements in calculating net income (loss). We believe NOI provides useful and relevant information because it reflects only those income and expense items that are incurred at the property level and presents such items on an unleveraged basis. We use NOI to assess and compare property level performance and to make decisions concerning the operations of the properties. Further, we believe NOI is useful to investors as a performance measure because, when compared across periods, NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating expenses and acquisition activity on an unleveraged basis, providing perspective not immediately apparent from net income (loss). NOI excludes certain items included in calculating net income (loss) in order to provide results that are more closely related to a property's results of operations. For example, interest expense is not necessarily linked to the operating performance of a real estate asset. In addition, depreciation and amortization, because of historical cost accounting and useful life estimates, may distort operating performance at the property level. NOI presented by us may not be comparable to NOI reported by other REITs that define NOI differently. We believe that in order to facilitate a clear understanding of our operating results, NOI should be examined in conjunction with net income (loss) as presented in our consolidated financial statements. NOI should not be considered as an alternative to net income (loss) as an indication of our performance or to cash flows as a measure of our liquidity or our ability to pay dividends.
Cash NOI, is a non-GAAP financial measure that is intended to reflect the performance of our properties. We define Cash NOI as NOI excluding amortization of above/below market lease intangibles and straight-line adjustments that are included in GAAP lease

4


American Finance Trust, Inc.
Supplemental Information
Quarter ended March 31, 2020 (Unaudited)

revenues. We believe that Cash NOI is a helpful measure that both investors and management can use to evaluate the current financial performance of our properties and it allows for comparison of our operating performance between periods and to other REITs. Cash NOI should not be considered as an alternative to net income, as an indication of our financial performance, or to cash flows as a measure of liquidity or our ability to fund all needs. The method by which we calculate and present Cash NOI may not be directly comparable to the way other REITs present Cash NOI.



5


American Finance Trust, Inc.
Supplemental Information
Quarter ended March 31, 2020 (Unaudited)

Key Metrics
As of and for the three months ended March 31, 2020
Financial Results (Amounts in thousands, except per share data)
 
 
Revenue from tenants
 
$
74,564

Net loss attributable to common stockholders
 
$
(9,153
)
Basic and diluted net loss per share attributable to common stockholders
 
$
(0.08
)
Cash NOI [1]
 
$
59,025

Adjusted EBITDA [1]
 
$
50,049

AFFO attributable to common stockholders [1]
 
$
25,237

Dividends declared on common stock [2]
 
$
29,831

 
 
 
Balance Sheet and Capitalization (Amounts in thousands, except ratios and percentages)
 
 
Gross asset value [3]
 
$
4,200,399

Net debt [4] [5]
 
$
1,628,824

Total consolidated debt [5]
 
$
1,804,569

Total assets
 
$
3,646,128

Liquidity [6]
 
$
215,012

 
 
 
Common shares outstanding as of March 31, 2020
 
108,475

 
 
 
Net debt to gross asset value
 
38.8
%
Net debt to adjusted EBITDA [1] (annualized based on quarterly results)
 
8.1
x
 
 
 
Weighted-average interest rate cost [7]
 
4.2
%
Weighted-average debt maturity (years) [8]
 
3.5

Interest Coverage Ratio [9]
 
2.8
x
Real Estate Portfolio
 
Single-Tenant Portfolio
 
Multi-Tenant Portfolio
 
Total Portfolio
Portfolio Metrics:
 
 
 
 
 
 
Real estate investments, at cost (in billions)
 
$
2.4

 
$
1.5

 
$
3.9

Number of properties
 
815

 
33

 
848

Square footage (in millions)
 
11.7

 
7.2

 
18.9

Annualized straight-line rent (in millions) [10]
 
$
185.8

 
$
87.9

 
$
273.7

Annualized straight-line rent per leased square foot
 
$
16.0

 
$
14.0

 
$
15.3

Occupancy [11]
 
99.3
%
 
87.3
%
 
94.7
%
Weighted-average remaining lease term (years) [12]
 
10.9

 
4.8

 
8.9

% investment grade [13]
 
65.8
%
 
%
 
N/A

% of anchor tenants in multi-tenant portfolio that are investment grade [13] [14]
 
N/A

 
30.3
%
 
N/A

% of leases with rent escalators [15]
 
83.3
%
 
68.4
%
 
80.9
%
Average annual rent escalator [15]
 
1.3
%
 
1.2
%
 
1.3
%
——
[1] This Non-GAAP metric is reconciled below.
[2] Represents dividends declared on shares of the Company’s common stock payable to holders of record on the applicable record date.
[3] Defined as total assets plus accumulated depreciation and amortization as of March 31, 2020.
[4] Represents total debt outstanding less cash and cash equivalents.
[5] Excludes the effect of deferred financing costs, net and mortgage premiums, net.
[6] Liquidity includes the amount available for future borrowings under the Company's credit facility of $39.3 million and cash and cash equivalents. In accordance with the Company's credit facility, the Company is permitted to pay distributions in an aggregate amount not exceeding 105% of MFFO (as defined in the Company's credit facility) for any applicable period (commencing with the period of two consecutive fiscal quarters ended on September 30, 2019) if, as of the last day of the period, the Company is able to satisfy a maximum leverage ratio after giving effect to the payments and also has a combination of cash, cash equivalents and amounts available for future borrowings under the credit facility of not less than $60.0 million. The Company satisfied these requirements and relied on this exception for all applicable periods (including the period ended March 31, 2020). The Company also expects it will rely on this exception in future periods.
[7] Weighted based on the outstanding principal balance of the debt as of March 31, 2020.
[8] Weighted based on the outstanding principal balance of the debt as of March 31, 2020 and does not reflect any changes to maturity dates subsequent to
March 31, 2020. The Company has the right to extend the maturity date to April 2023.

6


American Finance Trust, Inc.
Supplemental Information
Quarter ended March 31, 2020 (Unaudited)

[9] The interest coverage ratio is calculated by dividing adjusted EBITDA by cash paid for interest (interest expense less amortization of deferred financing
costs, net, change in accrued interest and amortization of mortgage premiums on borrowings) for the quarter ended March 31, 2020.
Adjusted EBITDA and cash paid for interest are Non-GAAP metrics and are reconciled below.
[10] Calculated using the most recent available lease terms as of March 31, 2020.
[11] Only includes leases which have commenced and were taken possession by the tenant as of March 31, 2020.
[12] The weighted-average remaining lease term (years) is based on annualized straight-line rent.
[13] As used herein, investment grade includes both actual investment grade ratings of the tenant or guarantor, if available, or implied investment grade. Implied investment grade may include actual ratings of tenant parent, guarantor parent (regardless of whether or not the parent has guaranteed the tenant’s obligation under the lease) or by using a proprietary Moody’s analytical tool, which generates an implied rating by measuring a company’s probability of default. Ratings information is as of March 31, 2020. The weighted averages are based on straight-line rent. Single-tenant portfolio tenants are 44.3% actual investment grade rated and 21.5% implied investment grade rated.
[14] Anchor tenants are defined as tenants that occupy over 10,000 square feet of one of the Company's multi-tenant properties. Anchor tenants are 19.7% actual
investment grade rated and 10.6% implied investment grade rated.
[15] Based on annualized straight-line rent as of March 31, 2020. Contractual rent increases include fixed percent or actual increases, or CPI-indexed
increases.

7

American Finance Trust, Inc.
Supplemental Information
Quarter ended March 31, 2020


Consolidated Balance Sheets
Amounts in thousands, except share and per share data
 
March 31,
2020
 
December 31,
2019
 
(Unaudited)
 
 
ASSETS
 
 
 
Real estate investments, at cost:
 
 
 
Land
$
705,761

 
$
685,889

Buildings, fixtures and improvements
2,739,793

 
2,681,485

Acquired intangible lease assets
448,642

 
448,175

Total real estate investments, at cost
3,894,196

 
3,815,549

Less: accumulated depreciation and amortization
(554,271
)
 
(529,052
)
Total real estate investments, net
3,339,925

 
3,286,497

Cash and cash equivalents
175,745

 
81,898

Restricted cash
18,192

 
17,942

Deposits for real estate investments
1,140

 
85

Deferred costs, net
16,934

 
17,467

Straight-line rent receivable
49,272

 
46,976

Operating lease right-of-use assets
18,841

 
18,959

Prepaid expenses and other assets (including $659 and $503 due from related parties as of March 31, 2020 and December 31, 2019, respectively)
20,142

 
19,188

Assets held for sale
5,937

 
1,176

Total assets
$
3,646,128

 
$
3,490,188

 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
Mortgage notes payable, net
$
1,309,513

 
$
1,310,943

Credit facility
483,147

 
333,147

Below market lease liabilities, net
82,624

 
84,041

Accounts payable and accrued expenses (including $473 and $1,153 due to related parties as of March 31, 2020 and December 31, 2019, respectively)
53,333

 
26,817

Operating lease liabilities
19,305

 
19,318

Deferred rent and other liabilities
8,685

 
10,392

Dividends payable
3,619

 
3,300

Total liabilities
1,960,226

 
1,787,958

 
 
 
 
7.50% Series A cumulative redeemable perpetual preferred stock, $0.01 par value, liquidation preference $25.00 per share, 8,796,000 shares authorized, 7,719,689 and 6,917,230 issued and outstanding as of March 31, 2020 and December 31, 2019, respectively
77

 
69

Common stock, $0.01 par value per share, 300,000,000 shares authorized, 108,475,266 and 108,475,266 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively
1,085

 
1,085

Additional paid-in capital
2,634,953

 
2,615,089

Distributions in excess of accumulated earnings
(972,019
)
 
(932,912
)
Total stockholders' equity
1,664,096

 
1,683,331

Non-controlling interests
21,806

 
18,899

Total equity
1,685,902

 
1,702,230

Total liabilities and equity
$
3,646,128

 
$
3,490,188



8


American Finance Trust, Inc.
Supplemental Information
Quarter ended March 31, 2020 (Unaudited)

Consolidated Statements of Operations
Amounts in thousands, except share and per share data

 
 
Three Months Ended
 
 
March 31,
2020
 
December 31,
2019
 
September 30, 2019
 
June 30,
2019
 
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
Revenue from tenants
 
$
74,564

 
$
76,231

 
$
72,863

 
$
79,109

 
 
 
 
 
 
 
 
 
 Operating expenses:
 
 
 
 
 
 
 
 
Asset management fees to related party
 
6,905

 
6,777

 
6,545

 
6,335

Property operating expense
 
12,282

 
14,344

 
12,398

 
13,137

Impairment of real estate investments
 

 

 

 
4

Acquisition, transaction and other costs [1]
 
452

 
3,022

 
489

 
1,892

Equity-based compensation [2]
 
3,211

 
3,211

 
3,217

 
3,268

General and administrative
 
5,328

 
4,300

 
3,573

 
6,441

Depreciation and amortization
 
34,335

 
31,802

 
29,901

 
30,924

Goodwill impairment
 

 

 

 
1,605

Total operating expenses
 
62,513

 
63,456

 
56,123

 
63,606

Operating income before gain on sale of real estate investments
 
12,051

 
12,775

 
16,740

 
15,503

Gain on sale of real estate investments
 
1,440

 
4,519

 
1,933

 
14,365

Operating income
 
13,491

 
17,294

 
18,673

 
29,868

Other (expense) income:
 
 
 
 
 
 
 
 
Interest expense
 
(19,106
)
 
(18,990
)
 
(18,569
)
 
(21,995
)
Other income
 
72

 
367

 
48

 
667

Total other expense, net
 
(19,034
)
 
(18,623
)
 
(18,521
)
 
(21,328
)
Net (loss) income
 
(5,543
)
 
(1,329
)
 
152

 
8,540

Net loss (income) attributable to non-controlling interests
 
9

 
(1
)
 
(4
)
 
(14
)
Preferred stock dividends
 
(3,619
)
 
(3,497
)
 
(3,079
)
 
(642
)
Net (loss) income attributable to common stockholders
 
$
(9,153
)
 
$
(4,827
)
 
$
(2,931
)
 
$
7,884

 
 
 
 
 
 
 
 
 
Basic and Diluted Net (Loss) Income Per Share:
 
 
 
 
 
 
 
 
Net (loss) income per share attributable to common stockholders — Basic and Diluted
 
$
(0.08
)
 
$
(0.04
)
 
$
(0.03
)
 
$
0.07

Weighted-average shares outstanding — Basic
 
108,364,082

 
107,286,620

 
106,139,668

 
106,075,741

Weighted-average shares outstanding — Diluted
 
108,364,082

 
107,286,620

 
106,139,668

 
106,394,277

——
[1] For the three months ended March 31, 2020, December 31, 2019, September 30, 2019, and June 30, 2019, includes litigation costs related to the Merger of $0.3 million, $0.7 million, $0.2 million, and $0.2 million, respectively.
[2] For the three months ended March 31, 2020, December 31, 2019, September 30, 2019, and June 30, 2019, includes equity-based compensation expense related to the Company's restricted common shares of $0.2 million, $0.2 million, $0.3 million, and $0.3 million, respectively.


9


American Finance Trust, Inc.
Supplemental Information
Quarter ended March 31, 2020 (Unaudited)

Non-GAAP Measures
Amounts in thousands
 
 
Three Months Ended
 
 
March 31,
2020
 
December 31,
2019
 
September 30, 2019
 
June 30,
2019
 
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
EBITDA:
 
 
 
 
 
 
 
 
Net (loss) income
 
$
(5,543
)
 
$
(1,329
)
 
$
152

 
$
8,540

Depreciation and amortization
 
34,335

 
31,802

 
29,901

 
30,924

Interest expense
 
19,106

 
18,990

 
18,569

 
21,995

   EBITDA [1]
 
47,898

 
49,463

 
48,622

 
61,459

Impairment of real estate investments
 

 

 

 
4

Acquisition, transaction and other costs [2]
 
452

 
3,022

 
489

 
1,892

Equity-based compensation [3]
 
3,211

 
3,211

 
3,217

 
3,268

Gain on sale of real estate investments
 
(1,440
)
 
(4,519
)
 
(1,933
)
 
(14,365
)
Other income
 
(72
)
 
(367
)
 
(48
)
 
(667
)
Goodwill impairment
 

 

 

 
1,605

   Adjusted EBITDA [1]
 
50,049

 
50,810

 
50,347

 
53,196

Asset management fees to related party
 
6,905

 
6,777

 
6,545

 
6,335

General and administrative
 
5,328

 
4,300

 
3,573

 
6,441

   NOI [1]
 
62,282

 
61,887

 
60,465

 
65,972

   Amortization of market lease and other intangibles, net
 
(992
)
 
(1,307
)
 
(2,503
)
 
(1,723
)
Straight-line rent
 
(2,265
)
 
(2,847
)
 
(2,716
)
 
(1,566
)
  Cash NOI [1]
 
$
59,025

 
$
57,733

 
$
55,246

 
$
62,683

 
 
 
 
 
 
 
 
 
Cash Paid for Interest:
 
 
 
 
 
 
 
 
   Interest expense
 
$
19,106

 
$
18,990

 
$
18,569

 
$
21,995

   Amortization of deferred financing costs, net and change in accrued interest
 
(1,712
)
 
(2,394
)
 
(725
)
 
(3,062
)
   Amortization of mortgage discounts and premiums on borrowings
 
560

 
1,344

 
839

 
839

   Total cash paid for interest
 
$
17,954

 
$
17,940

 
$
18,683

 
$
19,772

——
[1] For the three months ended June 30, 2019 includes income from a lease termination fee of $7.6 million, which is recorded in revenue from tenants in the consolidated statements of operations.
[2] For the three months ended March 31, 2020, December 31, 2019, September 30, 2019, and June 30, 2019, includes litigation costs related to the Merger of $0.3 million, $0.7 million, $0.2 million, and $0.2 million, respectively.
[3] For the three months ended March 31, 2020, December 31, 2019, September 30, 2019, and June 30, 2019, includes equity-based compensation expense related to the Company's restricted common shares of $0.2 million, $0.2 million, $0.3 million, and $0.3 million, respectively.








10


American Finance Trust, Inc.
Supplemental Information
Quarter ended March 31, 2020 (Unaudited)

Non-GAAP Measures
Amounts in thousands, except per share data
 
 
Three Months Ended
 
 
March 31,
2020
 
December 31,
2019
 
September 30, 2019
 
June 30,
2019
 
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
Funds from operations (FFO):
 
 
 
 
 
 
 
 
Net (loss) income attributable to common stockholders (in accordance with GAAP)
 
$
(9,153
)
 
$
(4,827
)
 
$
(2,931
)
 
$
7,884

Impairment of real estate investments
 

 

 

 
4

Depreciation and amortization
 
34,335

 
31,802

 
29,901

 
30,924

Gain on sale of real estate investments
 
(1,440
)
 
(4,519
)
 
(1,933
)
 
(14,365
)
Proportionate share of adjustments for non-controlling interest to arrive at FFO
 
(52
)
 
(44
)
 
(45
)
 
(27
)
FFO attributable to common stockholders [1]
 
23,690

 
22,412

 
24,992

 
24,420

Acquisition, transaction and other costs [2]
 
452

 
3,022

 
489

 
1,892

Litigation cost reimbursements related to the Merger [3]
 
(9
)
 
(316
)
 

 
(115
)
Amortization of market lease and other intangibles, net
 
(992
)
 
(1,307
)
 
(2,503
)
 
(1,723
)
Straight-line rent
 
(2,265
)
 
(2,847
)
 
(2,716
)
 
(1,566
)
Amortization of mortgage premiums on borrowings
 
(560
)
 
(1,344
)
 
(839
)
 
(839
)
Equity-based compensation [4]
 
3,211

 
3,211

 
3,217

 
3,268

Amortization of deferred financing costs, net and change in accrued interest
 
1,712

 
2,394

 
725

 
3,062

Goodwill impairment [5]
 

 

 

 
1,605

Proportionate share of adjustments for non-controlling interest to arrive at AFFO
 
(2
)
 
(5
)
 
3

 
(7
)
AFFO attributable to common stockholders [1]
 
$
25,237

 
$
25,220

 
$
23,368

 
$
29,997

 
 
 
 
 
 
 
 
 
Weighted-average common shares outstanding
 
108,364

 
107,287

 
106,140

 
106,394

Net (loss) income per share attributable to common stockholders — Basic and Diluted
 
$
(0.08
)
 
$
(0.04
)
 
$
(0.03
)
 
$
0.07

FFO per common share
 
$
0.22

 
$
0.21

 
$
0.24

 
$
0.23

AFFO per common share
 
$
0.23

 
$
0.24

 
$
0.22

 
$
0.28

Dividends declared
 
$
29,831

 
$
29,468

 
$
29,212

 
$
29,213

——
[1] FFO and AFFO for the three months ended June 30, 2019 includes income from a lease termination fee of $7.6 million, which is recorded in revenue from tenants in the consolidated statements of operations. While such termination payments occur infrequently, they represent cash income for accounting and tax purposes and as such management believes they should be included in both FFO and AFFO, consistent with what the Company believes to be general industry practice.
[2] Primarily includes prepayment costs incurred in connection with early debt extinguishment as well as litigation costs related to the Merger.
[3] Included in "Other Income" in the Company's consolidated statement of operations.
[4] Includes amortization expense of the Company's restricted common shares and LTIP Units related to its multi-year outperformance agreement for all periods presented.
[5] This is a non-cash item and is added back as it is not considered indicative of operating performance.

11


American Finance Trust, Inc.
Supplemental Information
Quarter ended March 31, 2020 (Unaudited)

Debt Overview
As of March 31, 2020
Amounts in thousands, except ratios and percentages

Year of Maturity
 
Number of Encumbered Properties
 
Weighted-Average Debt Maturity (Years) [3]
 
Weighted-Average Interest Rate [3][4]
 
Total Outstanding Balance [5]
 
Percent
Non-Recourse Debt
 
 
 
 
 
 
 
 
 
 
2020 (remainder)
 
245

 
0.6

 
4.5
%
 
$
537,656

 
 
2021
 
106

 
1.1

 
5.3
%
 
205,605

 
 
2022
 

 

 
%
 
2,311

 
 
2023
 

 

 
%
 
2,643

 
 
2024
 
1

 
3.9

 
5.0
%
 
22,287

 
 
Thereafter
 
263

 
7.6

 
4.2
%
 
550,920

 
 
Total Non-Recourse Debt
 
615

 
3.7

 
4.5
%
 
1,321,422

 
73
%
 
 
 
 
 
 
 
 
 
 
 
Recourse Debt [1]
 
 
 
 
 
 
 
 
 
 
   Credit Facility [2]
 
 
 
3.1

 
3.4
%
 
483,147

 
 
Total Recourse Debt
 
 
 
3.1

 
3.4
%
 
483,147

 
27
%
 
 
 
 
 
 
 
 
 
 
 
Total Debt
 
 
 
3.5

 
4.2
%
 
$
1,804,569

 
100
%
——
[1] Recourse debt is debt that is guaranteed by the Company.
[2] The maturity date of the Company's credit facility is April 2022. The Company has the right to extend the maturity date to April 2023.
[3] Weighted based on the outstanding principal balance of the debt.
[4] As of March 31, 2020, the Company’s total combined debt was 73.2% fixed rate and 26.8% floating rate.
[5] Excludes the effect of deferred financing costs, net and mortgage premiums and discounts, net.

12


American Finance Trust, Inc.
Supplemental Information
Quarter ended March 31, 2020 (Unaudited)

Future Minimum Base Lease Rents Due to the Company
As of March 31, 2020
Amounts in thousands

 
 
Future Minimum
Base Rent Payments
[1]
2020 (remainder)
 
$
194,429

2021
 
252,022

2022
 
241,267

2023
 
228,847

2024
 
210,238

2025
 
192,550

Thereafter
 
1,174,917

Total
 
$
2,494,270

——
[1] Represents future minimum base rent payments on a cash basis due to the Company over the next five years and thereafter. These amounts exclude contingent
rent payments, as applicable, that may be collected from certain tenants based on provisions related to sales thresholds and increases in annual rent based on
exceeding certain economic indexes among other items.


13


American Finance Trust, Inc.
Supplemental Information
Quarter ended March 31, 2020 (Unaudited)

Top Ten Tenants (by annualized straight-line rent)
As of March 31, 2020
Amounts in thousands, except percentages

Tenant / Lease Guarantor
 
Property Type
 
Tenant Industry
 
Annualized SL Rent [1]
 
SL Rent Percent
 
Remaining Lease Term [2]
 
Investment Grade [3]
Truist Bank
 
Retail
 
Retail Banking
 
$
18,226

 
7
%
 
9.3

 
Yes
Sanofi US
 
Office
 
Pharmaceuticals
 
17,143

 
6
%
 
12.8

 
Yes
Mountain Express
 
Retail
 
Gas/Convenience
 
13,237

 
5
%
 
18.4

 
No
AmeriCold
 
Distribution
 
Refrigerated Warehousing
 
12,720

 
5
%
 
7.5

 
Yes
Fresenius
 
Retail
 
Healthcare
 
11,376

 
4
%
 
8.5

 
Yes
Tenants 6 - 10
 
Various
 
Various
 
36,433

 
13
%
 
10.7

 
4 of 5 - Yes
Subtotal
 
 
 
 
 
109,135

 
40
%
 
11.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Remaining portfolio
 
 
 
 
 
164,585

 
60
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Portfolio
 
 
 
 
 
$
273,720

 
100
%
 
 
 
 
——
[1] Calculated using the most recent available lease terms as of March 31, 2020.
[2] Based on straight-line rent as of March 31, 2020.
[3] The top ten tenants are 60.5% actual investment grade rated and 19.7% implied investment grade rated (see page 6 for definition of Investment Grade).






14


American Finance Trust, Inc.
Supplemental Information
Quarter ended March 31, 2020 (Unaudited)

Diversification by Property Type
As of March 31, 2020
Amounts in thousands, except percentages

 
 
Total Portfolio 
Property Type
 
Annualized SL Rent [1]
 
SL Rent Percent
 
Square Feet
 
Sq. ft. Percent
Retail (including Power and Lifestyle Centers)
 
$
218,764

 
80
%
 
13,096

 
69
%
Distribution
 
28,857

 
11
%
 
4,351

 
23
%
Office
 
26,099

 
9
%
 
1,442

 
8
%
Total
 
$
273,720

 
100
%
 
18,889

 
100
%
 
 
 
Retail Properties
Tenant Type
 
Annualized SL Rent [1]
 
SL Rent Percent
 
Square Feet [2]
 
Sq. ft. Percent
Single-Tenant:
 
 
 
 
 
 
 
 
Service-oriented [3]
 
$
107,419

 
49
%
 
3,630

 
31
%
Traditional retail [4]
 
23,423

 
11
%
 
2,240

 
18
%
Multi-Tenant:
 
 
 
 
 
 
 
 
Experiential/e-commerce defensive [5]
 
43,179

 
20
%
 
2,471

 
20
%
Other traditional retail
 
44,743

 
20
%
 
3,796

 
31
%
Total
 
$
218,764

 
100
%
 
12,137

 
100
%
——
[1] Calculated using the most recent available lease terms as of March 31, 2020.
[2] Represents total rentable square feet of retail properties occupied as of March 31, 2020.
[3] Includes single-tenant retail properties leased to tenants in the retail banking, restaurant, grocery, pharmacy, gas/convenience, healthcare, and auto services sectors.
[4] Includes single-tenant retail properties leased to tenants in the discount retail, home improvement, furniture, specialty retail, auto retail, sporting goods sectors, wireless/electronics, department stores and home improvement.
[5] Represents multi-tenant properties leased to tenants in the restaurant, discount retail, entertainment, salon/beauty, and grocery sectors, among others.
 





15


American Finance Trust, Inc.
Supplemental Information
Quarter ended March 31, 2020 (Unaudited)

Diversification by Geography
As of March 31, 2020
Amounts in thousands, except percentages
 
 
Total Portfolio
Region
 
Annualized SL Rent [1]
 
SL Rent Percent
 
Square Feet
 
Sq. ft. Percent
Alabama
 
$
15,267

 
5.6
%
 
1,376

 
7.3
%
Alaska
 
409

 
0.1
%
 
10

 
0.1
%
Arizona
 
352

 
0.1
%
 
22

 
0.1
%
Arkansas
 
2,387

 
0.9
%
 
88

 
0.4
%
California
 
228

 
0.1
%
 
10

 
0.1
%
Colorado
 
776

 
0.3
%
 
52

 
0.3
%
Connecticut
 
1,640

 
0.6
%
 
84

 
0.4
%
Delaware
 
176

 
0.1
%
 
5

 
0.1
%
District of Columbia
 
236

 
0.1
%
 
4

 
0.1
%
Florida
 
19,744

 
7.2
%
 
1,208

 
6.4
%
Georgia
 
28,505

 
10.4
%
 
1,946

 
10.3
%
Idaho
 
331

 
0.1
%
 
14

 
0.1
%
Illinois
 
9,906

 
3.6
%
 
707

 
3.7
%
Indiana
 
2,015

 
0.7
%
 
90

 
0.5
%
Iowa
 
2,752

 
1.0
%
 
167

 
0.9
%
Kansas
 
3,098

 
1.1
%
 
264

 
1.4
%
Kentucky
 
10,762

 
3.9
%
 
663

 
3.4
%
Louisiana
 
5,481

 
2.0
%
 
319

 
1.7
%
Maine
 
202

 
0.1
%
 
12

 
0.1
%
Maryland
 
1,239

 
0.5
%
 
36

 
0.2
%
Massachusetts
 
6,069

 
2.2
%
 
591

 
3.1
%
Michigan
 
6,223

 
2.3
%
 
373

 
2.0
%
Minnesota
 
11,222

 
4.1
%
 
761

 
4.0
%
Mississippi
 
4,233

 
1.5
%
 
212

 
1.1
%
Missouri
 
5,830

 
2.1
%
 
486

 
2.6
%
Montana
 
1,243

 
0.5
%
 
45

 
0.2
%
Nebraska
 
514

 
0.2
%
 
12

 
0.1
%
Nevada
 
6,469

 
2.4
%
 
408

 
2.2
%
New Hampshire
 
127

 
0.1
%
 
7

 
0.1
%
New Jersey
 
18,655

 
6.8
%
 
818

 
4.3
%
New Mexico