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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to __________
Commission file number: 001-38597
https://cdn.kscope.io/35bb6facb0084b4ba1958cea13247537-afin-20210630_g1.jpg
American Finance Trust, Inc.
(Exact name of registrant as specified in its charter)
Maryland  90-0929989
(State or other jurisdiction of incorporation or organization)  (I.R.S. Employer Identification No.)
650 Fifth Ave.30th Floor, New YorkNY                 10019
____________________________________________________ _________________________________________________
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (212) 415-6500
Securities registered pursuant to section 12(b) of the Act:
Title of each classTrading SymbolsName of each exchange on which registered
Class A Common Stock, $0.01 par value per shareAFINThe Nasdaq Global Select Market
7.50% Series A Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value per shareAFINPThe Nasdaq Global Select Market
7.375% Series C Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value per shareAFINOThe Nasdaq Global Select Market
Preferred Stock Purchase RightsThe Nasdaq Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer  Accelerated filer
Non-accelerated filerSmaller reporting company
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.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes No
As of July 30, 2021, the registrant had 117,819,839 shares of common stock outstanding.



AMERICAN FINANCE TRUST, INC.

TABLE OF CONTENTS

FORM 10-Q
Page

2

Table of Contents
PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

AMERICAN FINANCE TRUST, INC.

CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
June 30,
2021
December 31,
2020
ASSETS(Unaudited) 
Real estate investments, at cost:
Land$735,242 $723,316 
Buildings, fixtures and improvements2,881,710 2,830,508 
Acquired intangible lease assets454,323 454,245 
Total real estate investments, at cost4,071,275 4,008,069 
Less: accumulated depreciation and amortization(695,719)(639,367)
Total real estate investments, net3,375,556 3,368,702 
Cash and cash equivalents137,138 102,860 
Restricted cash14,816 10,537 
Deposits for real estate investments2,983 137 
Derivative assets, at fair value1,930  
Deferred costs, net17,487 16,663 
Straight-line rent receivable70,208 66,581 
Operating lease right-of-use assets18,299 18,546 
Prepaid expenses and other assets (including $2,089 and $1,939 due from related parties as of June 30, 2021 and December 31, 2020, respectively)
28,070 23,941 
Assets held for sale1,439  
Total assets$3,667,926 $3,607,967 
LIABILITIES AND EQUITY  
Mortgage notes payable, net $1,615,054 $1,490,798 
Credit facility155,742 280,857 
Below market lease liabilities, net80,971 78,674 
Accounts payable and accrued expenses (including $1,252 and $273 due to related parties as of June 30, 2021 and December 31, 2020, respectively)
31,118 25,210 
Operating lease liabilities19,214 19,237 
Derivative liabilities, at fair value 123 
Deferred rent and other liabilities10,025 9,794 
Dividends payable5,836 3,675 
Total liabilities1,917,960 1,908,368 
7.50% Series A cumulative redeemable perpetual preferred stock, $0.01 par value, liquidation preference $25.00 per share, 12,796,000 and 8,796,000 shares authorized, 7,933,711 and 7,842,008 issued and outstanding as of June 30, 2021 and December 31, 2020, respectively
79 79 
7.375% Series C cumulative redeemable perpetual preferred stock, $0.01 par value, liquidation preference $25.00 per share, 11,536,000 and 3,680,000 shares authorized, 4,594,498 and 3,535,700 issued and outstanding as of June 30, 2021 and December 31, 2020, respectively
46 35 
Common stock, $0.01 par value per share, 300,000,000 shares authorized, 117,706,586 and 108,837,209 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively
1,177 1,088 
Additional paid-in capital2,829,490 2,723,678 
Accumulated other comprehensive income (loss)1,930 (123)
Distributions in excess of accumulated earnings(1,119,182)(1,055,680)
Total stockholders’ equity1,713,540 1,669,077 
Non-controlling interests36,426 30,522 
Total equity1,749,966 1,699,599 
Total liabilities and equity$3,667,926 $3,607,967 

The accompanying notes are an integral part of these consolidated financial statements.
3

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AMERICAN FINANCE TRUST, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
(In thousands, except per share data)
(Unaudited)
 Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Revenue from tenants
$81,577 $74,934 $160,764 $149,498 
Operating expenses:   
Asset management fees to related party7,922 6,918 15,243 13,823 
Property operating expense13,329 12,541 26,768 24,823 
Impairment of real estate investments91 11,502 91 11,502 
Acquisition, transaction and other costs136 721 178 1,173 
Equity-based compensation
5,283 3,247 9,630 6,458 
General and administrative3,540 6,864 9,989 12,192 
Depreciation and amortization32,428 35,443 64,747 69,778 
Total operating expenses
62,729 77,236 126,646 139,749 
          Operating income before gain on sale of real estate investments
18,848 (2,302)34,118 9,749 
Gain on sale/exchange of real estate investments11 2,838 297 4,278 
   Operating income
18,859 536 34,415 14,027 
Other (expense) income:
Interest expense(20,361)(18,801)(39,695)(37,907)
Other income20 61 44 133 
Total other expense, net
(20,341)(18,740)(39,651)(37,774)
Net loss(1,482)(18,204)(5,236)(23,747)
Net loss attributable to non-controlling interests2 20 8 29 
Allocation for preferred stock(5,925)(3,619)(11,588)(7,238)
Net loss attributable to common stockholders(7,405)(21,803)(16,816)(30,956)
Other comprehensive income (loss):
Change in unrealized income on derivatives(431) 2,053  
Comprehensive loss attributable to common stockholders$(7,836)$(21,803)$(14,763)$(30,956)
Weighted-average shares outstanding — Basic
110,898,056 108,386,013 109,674,113 108,375,048 
Net loss per share attributable to common stockholders — Basic$(0.07)$(0.20)$(0.15)$(0.29)
Weighted-average shares outstanding — Basic and Diluted
110,898,056 108,386,013 109,674,113 108,375,048 
Net loss per share attributable to common stockholders — Basic and Diluted$(0.07)$(0.20)$(0.15)$(0.29)
 

The accompanying notes are an integral part of these consolidated financial statements.
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AMERICAN FINANCE TRUST, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In thousands, except share data)
(Unaudited)

Six Months Ended June 30, 2021
Series A Preferred StockSeries C Preferred StockCommon Stock
 Number of
Shares
Par ValueNumber of
Shares
Par ValueNumber of
Shares
Par ValueAdditional Paid-in
Capital
Accumulated Other Comprehensive income (loss)Distributions in excess of accumulated earningsTotal Stockholders’ EquityNon-controlling InterestsTotal Equity
Balance, December 31, 20207,842,008 $79 3,535,700 $35 108,837,209 $1,088 $2,723,678 $(123)$(1,055,680)$1,669,077 $30,522 $1,699,599 
Issuance of Common Stock, net— — — — 8,634,223 86 76,913 — — 76,999 — 76,999 
Issuance of Series A Preferred Stock, net91,703  — — — — 2,156 — — 2,156 — 2,156 
Issuance of Series C Preferred Stock, net— — 1,058,798 11 — — 25,596 — — 25,607 — 25,607 
Equity-based compensation (1)
— — — — 293,599 3 1,763 — (154)1,612 5,928 7,540 
Common stock shares withheld upon vesting of restricted stock— — — — (58,445)— (559)— — (559)— (559)
Dividends declared on Common Stock,$0.42 per share
— — — — — — — — (46,097)(46,097)— (46,097)
Dividends declared on Series A Preferred Stock, $0.94 per share
— — — — — — — — (7,453)(7,453)— (7,453)
Dividends declared on Series C Preferred Stock, $0.99 per share
— — — — — — — — (4,380)(4,380)— (4,380)
Distributions to non-controlling interest holders— — — — — — — — (190)(190)(73)(263)
Net loss— — — — — — — — (5,228)(5,228)(8)(5,236)
Other comprehensive loss— — — — — — — 2,053 — 2,053 — 2,053 
Rebalancing of ownership percentage— — — — — — (57)— — (57)57  
Balance, June 30, 20217,933,711 $79 4,594,498 $46 117,706,586 $1,177 $2,829,490 $1,930 $(1,119,182)$1,713,540 $36,426 $1,749,966 

(1) Presented net of forfeitures. 19,875 restricted shares with a fair value of approximately $136,000 were forfeited during the period.

Three Months Ended June 30, 2021
Series A Preferred StockSeries C Preferred StockCommon Stock
 Number of
Shares
Par ValueNumber of
Shares
Par ValueNumber of
Shares
Par ValueAdditional Paid-in
Capital
Accumulated Other Comprehensive income (loss)Distributions in excess of accumulated earningsTotal Stockholders’ EquityNon-controlling InterestsTotal Equity
Balance, March 31, 20217,933,711 $79 4,099,801 $41 108,872,337 $1,089 $2,740,648 $2,361 $(1,088,559)$1,655,659 $33,440 $1,689,099 
Issuance of Common Stock, net— — — — 8,634,223 86 77,002 — — 77,088 — 77,088 
Issuance of Series A Preferred Stock, net — — — — — (46)— — (46)— (46)
Issuance of Series C Preferred Stock, net— — 494,697 5 — — 12,125 — — 12,130 — 12,130 
Equity-based compensation (1)
— — — — 258,471 2 380 — (68)314 2,964 3,278 
Common stock shares withheld upon vesting of restricted shares— — — — (58,445)— (559)— — (559)— (559)
Dividends declared on Common Stock,$0.21 per share
— — — — — — — — (23,054)(23,054)— (23,054)
Dividends declared on Series A Preferred Stock, $0.47 per share
— — — — — — — — (3,719)(3,719)— (3,719)
Dividends declared on Series C Preferred Stock, $0.53 per share
— — — — — — — — (2,206)(2,206)— (2,206)
Distributions to non-controlling interest holders— — — — — — — — (96)(96)(36)(132)
Net loss— — — — — — — — (1,480)(1,480)(2)(1,482)
Other comprehensive loss— — — — — — — (431)— (431)— (431)
Rebalancing of ownership percentage— — — — — — (60)— — (60)60  
Balance, June 30, 20217,933,711 $79 4,594,498 $46 117,706,586 $1,177 $2,829,490 $1,930 $(1,119,182)$1,713,540 $36,426 $1,749,966 

The accompanying notes are an integral part of these consolidated financial statements.
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AMERICAN FINANCE TRUST, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In thousands, except share data)
(Unaudited)
Six Months Ended June 30, 2020
Preferred StockCommon Stock
 Number of
Shares
Par ValueNumber of
Shares
Par ValueAdditional Paid-in
Capital
Accumulated Other Comprehensive income (loss)Distributions in excess of accumulated earningsTotal Stockholders' EquityNon-controlling InterestsTotal Equity
Balance, December 31, 20196,917,230 $69 108,475,266 $1,085 $2,615,089 $ $(932,912)$1,683,331 $18,899 $1,702,230 
Issuance of Common Stock, net— — — — (90)— — (90)— (90)
Issuance of Preferred Stock, net802,459 8 — — 19,601 — — 19,609 — 19,609 
Equity-based compensation— — 52,468  528 — — 528 5,930 6,458 
Dividends declared on Common Stock, $0.46 per share
— — — — — — (52,889)(52,889)— (52,889)
Dividends declared on Preferred Stock, $0.76 per share
— — — — — — (7,238)(7,238)— (7,238)
Distributions to non-controlling interest holders— — — — — — (220)(220)(84)(304)
Net loss— — — — — — (23,718)(23,718)(29)(23,747)
Rebalancing of ownership percentage— — — — 38 — — 38 (38)— 
Balance, June 30, 20207,719,689 $77 108,527,734 $1,085 $2,635,166 $ $(1,016,977)$1,619,351 $24,678 $1,644,029 

Three Months Ended June 30, 2020
Preferred StockCommon Stock
 Number of
Shares
Par ValueNumber of
Shares
Par ValueAdditional Paid-in
Capital
Accumulated Other Comprehensive income (loss)Distributions in excess of accumulated earningsTotal Stockholders' EquityNon-controlling InterestsTotal Equity
Balance, March 31, 20207,719,689 $77 108,475,266 $1,085 $2,634,953 $ $(972,019)$1,664,096 $21,806 $1,685,902 
Issuance of Common Stock, net— — — — (42)— — (42)— (42)
Issuance of Preferred Stock, net— — — — (64)— — (64)— (64)
Equity-based compensation
— — 52,468 — 281 — — 281 2,966 3,247 
Dividends declared on Common Stock,$0.21 per share
— — — — — — (23,058)(23,058)— (23,058)
Dividends declared on Preferred Stock,$0.38 per share
— — — — — — (3,619)(3,619)— (3,619)
Distributions to non-controlling interest holders
— — — — — — (97)(97)(36)(133)
Net loss— — — — — — (18,184)(18,184)(20)(18,204)
Rebalancing of ownership percentage— — — — 38 — — 38 (38)— 
Balance, June 30, 20207,719,689 $77 108,527,734 $1,085 $2,635,166 $ $(1,016,977)$1,619,351 $24,678 $1,644,029 

The accompanying notes are an integral part of these consolidated financial statements.
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AMERICAN FINANCE TRUST, INC.
  
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended June 30,
20212020
Cash flows from operating activities:  
Net (loss) income$(5,236)$(23,747)
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation44,511 45,381 
Amortization of in-place lease assets19,208 23,337 
Amortization of deferred leasing costs 1,028 1,061 
Amortization (including accelerated write-off) of deferred financing costs5,368 3,178 
Amortization of mortgage discounts (premiums) on borrowings, net (644)(1,149)
Accretion of market lease and other intangibles, net
(1,976)(3,281)
Equity-based compensation9,630 6,458 
Gain on sale/exchange of real estate investments(297)(4,278)
Impairment charges and goodwill impairment 91 11,502 
Payments of prepayment costs on mortgages 271 
Changes in assets and liabilities:
Straight-line rent receivable (3,627)(7,872)
Straight-line rent payable