Broadstone Net Lease, Inc. - FORM 8-K - EX-99.2

Attached files

file	filename
EX-99.1 - EX-99.1 - Broadstone Net Lease, Inc.	ck0001424182-ex991_205.htm
8-K - 8-K FOR Q4 17 EARNINGS RELEASE AND SUPPLEMENTAL - Broadstone Net Lease, Inc.	ck0001424182-8k_20180315.htm

Exhibit 99.2

QUARTERLY SUPPLEMENTAL INFORMATION Broadstone Net Lease, Inc. is a publicly reporting, privately offered Real Estate Investment Trust (REIT) that acquires and holds freestanding, single-tenant, net-leased commercial properties. It is focused on generating predictable, tax-sheltered cash flow and attractive total return for Stockholders. www.broadstone.com

	Q4 2017 SUPPLEMENTAL INFORMATION

Table of Contents


Section	Page
Company Overview	4
Quarterly Financial Summary	5
Income Statement Summary	6
Funds From Operations (FFO)	7
Adjusted Funds From Operations (AFFO)	7
Balance Sheet	8
Capital Structure	9
Equity Summary	9
Debt Outstanding	10
Debt Maturities and Interest Rate Exposure	11
Credit Facility and Notes Covenants	12
Acquisitions	13
Dispositions	14
Portfolio at a Glance: Key Metrics	15
Diversification: Tenants and Brands	15
Diversification: Property Type	16
Diversification: Tenant Industry	16
Diversification: Geography	17
Lease Expirations	18
Occupancy	19
Dividends	19
Disclosures	20

	Q4 2017 SUPPLEMENTAL INFORMATION

About the Data

This data and other information described herein are as of and for the three months ended December 31, 2017, unless otherwise indicated. Future performance may not be consistent with past performance and is subject to change and inherent risks and uncertainties. This information should be read in conjunction with the financial statements and the Management's Discussion and Analysis of Financial Condition and Results of Operations sections contained in Broadstone Net Lease Inc.'s (the "Company," "BNL," "us," "our" and "we") Annual Report on Form 10-K for the year ended December 31, 2017 and Quarterly Reports on Form 10-Q for the periods ended September 30, 2017 and June 30, 2017.

Forward Looking Statements

This information contains “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” or other similar words. Forward-looking statements involve known and unknown risks, which may cause the Company’s actual future results to differ materially from expected results, including risks related to general economic conditions, local real estate conditions, tenant financial health, property acquisitions and the timing of these acquisitions, and the availability of capital to finance planned growth, among others, as described in the Company’s filings with the Securities and Exchange Commission. Consequently, forward-looking statements should be regarded solely as reflections of our current operating plans and estimates as of the dates indicated. Actual operating results may differ materially from what is expressed or forecast herein. The Company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date these statements were made.

	Q4 2017 SUPPLEMENTAL INFORMATION

Company Overview

Broadstone Net Lease, Inc. is an externally managed REIT, formed as a Maryland corporation in 2007 to acquire and hold single-tenant, net lease commercial real estate properties throughout the United States that are leased to the properties’ operators under long-term leases. We focus on real estate that is operated by a single tenant which is an integral part of the tenant’s business. Our diversified portfolio of real estate includes retail properties, such as quick service and casual dining restaurants, healthcare facilities, industrial manufacturing facilities, warehouse and distribution centers, and corporate offices, among others. We target properties with credit-worthy tenants that look to engage in a long-term lease relationship. Through long-term leases, our tenants are able to retain control of their critical locations, while conserving their debt and equity to fund their fundamental business operations.

Senior Management

Amy L. Tait

Executive Chairman of the Board & Chief Investment Officer

Christopher J. Czarnecki

Chief Executive Officer and Director

Sean T. Cutt

President and Chief Operating Officer

Ryan M. Albano

Executive Vice President and Chief Financial Officer

Tim Dieffenbacher

Chief Accounting Officer

David E. Kasprzak

Executive Vice President and Chief Business Development Officer

John D. Moragne

EVP, Chief Compliance Officer, General Counsel, and Secretary

Timothy J. Holland
Executive Vice President and Chief Administrative Officer

Board of Directors

Amy L. Tait

Executive Chairman & Chief Investment Officer of Broadstone Real Estate, LLC

Christopher J. Czarnecki

Chief Executive Officer of Broadstone Real Estate, LLC

Geoffrey H. Rosenberger

Lead Independent Director

Shekar Narasimhan

Independent Director

James H. Watters

Independent Director

David M. Jacobstein

Independent Director

Laurie A. Hawkes

Independent Director

Thomas P. Lydon, Jr.

Independent Director

Agha S. Khan

Director

Corporate Office & Contact Information

800 Clinton Square
Rochester, New York 14604
585-287-6500

info@broadstone.com
www.broadstone.com

Transfer Agent

Computershare Trust Company, N.A.

250 Royall Street

Canton, Massachusetts 02021

800-736-3001

	Q4 2017 SUPPLEMENTAL INFORMATION

Quarterly Financial Summary

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

	Q4 2017			Q3 2017			Q2 2017			Q1 2017			Q4 2016
Financial Summary
Investment in rental property, net	$	2,227,758		$	1,933,320		$	1,816,900		$	1,743,087		$	1,684,971
Total assets		2,578,756			2,244,099			2,138,177			2,047,326			1,952,054
Mortgage and notes payable, net		67,832			57,883			67,705			91,326			106,686
Unsecured term notes, net and revolver		1,109,912			848,407			811,670			778,171			759,891
Total liabilities		1,294,555			1,011,333			971,379			954,943			953,517
Total Broadstone Net Lease, Inc. stockholders' equity		1,186,825			1,140,214			1,073,307			1,006,208			911,788
Total equity (Book Value)		1,284,201			1,232,766			1,166,798			1,092,383			998,537
Total revenues		49,472			46,235			43,671			42,185			39,449
Total operating expenses		26,284			26,827			22,026			21,544			21,927
Interest expense		(9,569	)		(9,380	)		(7,860	)		(7,942	)		(5,797	)
Net income (loss)		16,826			12,990			15,992			13,747			13,794
Net earnings per common share, basic and diluted	$	0.84		$	0.68		$	0.89		$	0.81		$	0.86
FFO		31,460			27,189			25,248			27,537			25,006
FFO per share, basic and diluted	$	1.57		$	1.42		$	1.40		$	1.62		$	1.57
AFFO		27,006			24,813			24,048			24,082			21,688
AFFO per share, basic and diluted	$	1.34		$	1.30		$	1.33		$	1.42		$	1.36
Net cash provided by operating activities		25,575			27,057			21,322			23,986			(5,176	)
Net cash used in investing activities		(313,614	)		(127,198	)		(77,252	)		(93,047	)		(174,457	)
Net cash provided by financing activities		283,696			78,087			58,878			80,230			182,155
Distributions declared		25,015			23,949			22,537			21,267			19,537
Distributions declared per diluted share	$	1.25		$	1.25		$	1.25		$	1.24		$	1.23

Portfolio Metrics
Properties		528			477			459			426			417
Rentable square feet	15.9M			14.1M			13.4M			13.3M			12.8M
% Leased		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Physical Occupancy		99.6	%		98.2	%		98.1	%		98.1	%		98.0	%
Weighted average remaining lease term (years)		13.1			13.2			13.4			13.5			13.4

	Q4 2017 SUPPLEMENTAL INFORMATION

Income Statement Summary

(unaudited, in thousands, except per share data)

	Three Months Ended
	December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016
Revenues
Rental income from operating leases	$	46,603		$	43,233		$	41,256		$	39,401		$	37,164
Earned income from direct financing leases		966			968			1,074			1,133			1,138
Operating expenses reimbursed from tenants		1,812			1,995			1,296			1,617			1,114
Other income from real estate transactions		91			39			45			34			33
Total revenues		49,472			46,235			43,671			42,185			39,449
Operating expenses
Depreciation and amortization		17,294			15,643			14,733			14,593			13,048
Asset management fees		4,088			3,844			3,629			3,193			3,185
Property management fees		1,353			1,249			1,218			1,168			1,071
Acquisition expenses		-			-			-			-			2,624
Property and operating expense		1,795			2,009			1,124			1,577			895
General and administrative		1,641			1,173			1,162			963			839
State and franchise tax		113			301			160			50			265
Provision for impairment of investment in rental properties		-			2,608			-			-			-
Total operating expenses		26,284			26,827			22,026			21,544			21,927
Operating income		23,188			19,408			21,645			20,641			17,522
Other income (expenses)
Preferred distribution income		187			187			182			181			182
Interest income		113			127			115			112			79
Interest expense		(9,569	)		(9,380	)		(7,860	)		(7,942	)		(5,797	)
(Cost) gain of debt extinguishment		(132	)		(1,404	)		(3,567	)		(48	)		(28	)
Gain (loss) on sale of real estate		2,660			4,052			5,477			803			1,836
Other gains		379			-			-			-			-
Net income		16,826			12,990			15,992			13,747			13,794
Net income attributable to non-controlling interests		(1,296	)		(1,042	)		(1,265	)		(1,153	)		(1,314	)
Net income attributable to Broadstone Net Lease, Inc.	$	15,530		$	11,948		$	14,727		$	12,594		$	12,480

Weighted average number of common shares outstanding
Basic		18,515			17,617			16,623			15,582			14,497
Diluted		20,096			19,147			18,051			17,009			15,924
Net earnings per common share
Basic and diluted	$	0.84		$	0.68		$	0.89		$	0.81		$	0.86

	Q4 2017 SUPPLEMENTAL INFORMATION

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

(unaudited, in thousands, except per share data)

	Three Months Ended
	December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016
Net income	$	16,826		$	12,990		$	15,992		$	13,747		$	13,794
Real property depreciation and amortization		17,294			15,643			14,733			14,593			13,048
Gain on sale of real estate		(2,660	)		(4,052	)		(5,477	)		(803	)		(1,836	)
Provision for impairment of investment in rental properties		-			2,608			-			-			-
FFO	$	31,460		$	27,189		$	25,248		$	27,537		$	25,006
Capital improvements/reserves		(49	)		(49	)		(49	)		(48	)		(47	)
Straight line rent adjustment		(4,547	)		(4,520	)		(4,030	)		(4,038	)		(4,085	)
Cost of debt extinguishment		132			1,404			3,567			48			28
Other gains		(379	)		-			-			-			-
Amortization of debt issuance costs		452			486			433			424			538
Amortization of net mortgage premiums		(74	)		205			(29	)		(41	)		(48	)
Gain on interest rate swaps and other non-cash interest expense		-			-			(1,280	)		-			(2,219	)
Amortization of lease intangibles		11			99			188			200			(109	)
Acquisition expenses		-			-			-			-			2,624
AFFO	$	27,006		$	24,813		$	24,048		$	24,082		$	21,688

Diluted weighted average shares outstanding¹		20,096			19,147			18,051			17,009			15,924
Net earnings per share, basic and diluted	$	0.84		$	0.68		$	0.89		$	0.81		$	0.86
FFO per diluted share		1.57			1.42			1.40			1.62			1.57
AFFO per diluted share		1.34			1.30			1.33			1.42			1.36

¹ Diluted weighted average number of shares of our common stock and membership units in Broadstone Net Lease, LLC outstanding computed in accordance with GAAP.

	Q4 2017 SUPPLEMENTAL INFORMATION

Balance Sheet

(unaudited, in thousands)

	December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016
Assets
Accounted for using the operating method, net of accumulated depreciation	$	2,186,141		$	1,891,708		$	1,775,293		$	1,695,815		$	1,637,700
Accounted for using the direct financing method		41,617			41,612			41,607			47,272			47,271
Investment in rental property, net		2,227,758			1,933,320			1,816,900			1,743,087			1,684,971
Cash and cash equivalents		9,355			13,698			35,752			32,804			21,635
Restricted cash		744			925			8,019			6,833			1,468
Accrued rental income		52,018			47,766			43,930			40,335			36,577
Tenant and other receivables, net		897			1,120			900			3,175			355
Tenant and capital reserves		943			897			848			799			767
Prepaid expenses and other assets		267			699			1,202			656			260
Notes receivable		6,527			6,527			6,527			6,527			6,527
Investment in related party		10,000			10,000			10,000			10,000			10,000
Interest rate swap, assets		11,008			7,493			7,781			10,515			9,598
Intangible lease assets, net		242,659			205,469			190,467			179,924			168,121
Debt issuance costs – unsecured revolver, net		3,026			3,139			3,325			682			446
Leasing fees, net		13,554			13,046			12,526			11,989			11,329
Total assets	$	2,578,756		$	2,244,099		$	2,138,177		$	2,047,326		$	1,952,054
Liabilities and equity
Unsecured revolver	$	273,000		$	126,500		$	90,000		$	120,000		$	102,000
Mortgages and notes payable, net		67,832			57,883			67,705			91,326			106,686
Unsecured term notes, net		836,912			721,907			721,670			658,171			657,891
Interest rate swap, liabilities		5,020			7,119			7,691			8,472			10,217
Accounts payable and other liabilities		20,345			18,426			18,233			19,151			17,396
Due to related parties		722			1,688			1,310			406			364
Tenant improvement allowances		5,669			6,627			5,627			7,204			9,490
Accrued interest payable		3,311			4,880			2,439			1,457			1,602
Intangible lease liabilities, net		81,744			66,303			56,704			48,756			47,871
Total liabilities		1,294,555			1,011,333			971,379			954,943			953,517
Commitments and contingencies¹
Equity
Broadstone Net Lease, Inc. stockholders' equity:
Preferred stock, $0.001 par value; 20,000 shares authorized, no shares issued or outstanding		—			—			—			—			—
Common stock, $0.001 par value; 80,000 shares authorized, 18,909 and 15,158 shares issued and outstanding at December 31, 2017 and December 31, 2016, respectively		19			18			17			16			15
Additional paid-in capital		1,301,979			1,253,431			1,176,319			1,098,696			1,009,431
Subscriptions receivable		(15	)		(470	)		-			(250	)		(9,790	)
Cumulative distributions in excess of retained earnings		(120,280	)		(112,725	)		(102,711	)		(96,692	)		(89,960	)
Accumulated other comprehensive income		5,122			(40	)		(318	)		4,438			2,092
Total Broadstone Net Lease, Inc. stockholders’ equity		1,186,825			1,140,214			1,073,307			1,006,208			911,788
Non-controlling interests		97,376			92,552			93,491			86,175			86,749
Total equity		1,284,201			1,232,766			1,166,798			1,092,383			998,537
Total liabilities and equity	$	2,578,756		$	2,244,099		$	2,138,177		$	2,047,326		$	1,952,054

¹See Notes to Financial Statements.

	Q4 2017 SUPPLEMENTAL INFORMATION

Capital Structure

(unaudited, in thousands, except per share data)

EQUITY ($ in thousands, except per share amounts)
Shares of Common Stock		18,909
Membership Units		1,551
Common Stock & OP Units		20,461
Price Per Share / Unit	$	81.00
IMPLIED EQUITY MARKET CAPITALIZATION	$	1,657,318
% of Total Capitalization		58.4	%
DEBT ($ in thousands)
Unsecured Revolving Credit Facility - 2022	$	273,000
Unsecured Term Loan Facilities		690,000
Unsecured Term Loan - 2021		325,000
Unsecured Term Loan - 2023		265,000
Unsecured Term Loan - 2024		100,000
Senior Unsecured Notes - 2027		150,000
Mortgage Debt - Various		68,470
TOTAL DEBT	$	1,181,470
% of Total Capitalization		41.6	%
% of Total Capitalization Floating Rate Debt		6.1	%
% of Total Capitalization Fixed Rate Debt		35.5	%

ENTERPRISE VALUE ($ in thousands)
Total Capitalization	$	2,838,788
Less: Cash and Cash Equivalents		(9,355	)
Enterprise Value	$	2,829,433

$325 million loan facility is depicted with extension options. The value of common stock and operating company unit equity is calculated by multiplying the total number of shares and units by BNL’s Determined Share Value of $81 as of December 31, 2017. The data presented assumes cash balances used to pay down line of credit (LOC) after month-end. The fixed/hedged unsecured debt encompasses both outstanding term notes and a portion of BNL’s LOC.

Equity Summary

(unaudited, dollars in millions)

Broadstone Net Lease raises equity on a monthly basis through private offerings to accredited investors. Beginning in November 2017, BNL implemented a $15 million cap on new and additional investments at its monthly equity closings. The cap applies to new or additional investments and does not apply to investments made pursuant to its DRIP or equity capital received (operating company units) in connection with UPREIT transactions.

	Q4 2017 SUPPLEMENTAL INFORMATION

Debt Outstanding

(unaudited, in thousands)

Year of Maturity	2015 Unsecured Term Loan Agreement		5.5-Year Term Loan		7-Year Term Loan		Revolver		Senior Notes		Mortgages and Notes Payable		Total
2018	$	-	$	-	$	-	$	-	$	-	$	3,127	$	3,127
2019		325,000		-		-		-		-		3,351		328,351
2020		-		-		-		-		-		8,777		8,777
2021		-		-		-		-		-		18,263		18,263
2022		-		-		-		273,000		-		25,495		298,495
Thereafter		-		265,000		100,000		-		150,000		9,457		524,457
Total	$	325,000	$	265,000	$	100,000	$	273,000	$	150,000	$	68,470	$	1,181,470

	Outstanding Balance December 31,
		2017			2016		Interest Rate	Maturity Date
2015 Unsecured Term Loan Agreement	$	325,000		$	375,000		1 month LIBOR + 1.40%	Feb. 2019
2017 Unsecured Revolving Credit and Term Loan Agreement
Revolver		273,000			-		1 and 3 month LIBOR + 1.20%	Jan. 2022
5.5-Year Term Loan		265,000			-		1 month LIBOR + 1.35%	Jan. 2023
7-Year Term Loan		100,000			-		1 month LIBOR + 1.90%	Jun. 2024
		638,000			-
2017 Senior Notes		150,000			-		4.84%	Apr. 2027
2012 Unsecured Credit Agreement
Term Note		-			50,000		3 month LIBOR + 1.45%	Jun. 2017
Term Note		-			50,000		1 month LIBOR + 1.45%	Jun. 2017
Revolver		-			102,000		1 month LIBOR + 1.45%	Jun. 2017
		-			202,000
2013 Unsecured Credit Agreement		-			185,000		1 month LIBOR + 1.75% to 2.50%	Oct. 2018
Total		1,113,000			762,000
Debt issuance costs, net		(3,088	)		(2,109	)
		1,109,912			759,891

	Q4 2017 SUPPLEMENTAL INFORMATION

Debt Maturities and Interest Rate Exposure

(unaudited, dollars in millions)

Debt Maturities

Broadstone Net Lease utilizes diversified sources of debt capital including unsecured bank debt, private placement and secured mortgages (where appropriate).

$325 million term loan facility depicted with extension options.

Interest Rate Exposure

Broadstone Net Lease uses interest rate swaps to mitigate the impact of interest rate variability. The intended net impact of the swaps is that the Company pays a fixed interest rate on its variable rate borrowings.

Interest rate exposure not inclusive of floating rate debt, as borrowings are short-term in nature.

	Q4 2017 SUPPLEMENTAL INFORMATION

Credit Facility and Notes Covenants

(unaudited)

The following is a summary of key financial covenants for the Company’s unsecured credit facility. These calculations, which are not based on U.S. GAAP measurements, are presented to investors to show that as of December 31, 2017, the Company believes it is in compliance with the covenants.

Covenants	Required	Actual as of December 31, 2017
Leverage ratio	≤ 0.60 to 1.00		0.45
Secured indebtedness ratio	≤ 0.40 to 1.00		0.03
Unencumbered coverage ratio	≥ 1.75 to 1.00		5.33
Fixed charge coverage ratio	≥ 1.50 to 1.00		3.13
Total unsecured indebtedness to total unencumbered eligible property value	≤ 0.60 to 1.00		0.49
Dividends and other restricted payments	Only applicable in case of default	Not applicable

	Q4 2017 SUPPLEMENTAL INFORMATION

Acquisitions
(unaudited, square feet and dollars in thousands)

The following table summarizes the Company’s property acquisition activity during 2017.

Q1 2017
Property Type	Number of Properties		Square Feet ('000s)		Weighted Average Lease Term (years)		Acquisition Price ($'000s)
Retail		10		545		20.0		89,716
Total Properties		10		545		20.0		89,716
Weighted average cash cap rate								7.5	%

Q2 2017
Property Type	Number of Properties		Square Feet ('000s)		Weighted Average Lease Term (years)		Acquisition Price ($'000s)
Retail		27		147		19.8		51,598
Healthcare		9		125		12.6		39,289
Industrial		2		87		17.0		12,250
Total Properties		38		359		16.9		103,137
Weighted average cash cap rate								7.2	%

Q3 2017
Property Type	Number of Properties		Square Feet ('000s)		Weighted Average Lease Term (years)		Acquisition Price ($'000s)
Retail		10		213		13.7		24,599
Healthcare		6		94		14.3		28,432
Industrial		5		546		11.2		73,927
Office		1		157		15.1		32,210
Total Properties		22		1,010		13.0		159,168
Weighted average cash cap rate								7.7	%

Q4 2017
Property Type	Number of Properties		Square Feet ('000s)		Weighted Average Lease Term (years)		Acquisition Price ($'000s)
Retail		30		226		15.4		69,222
Healthcare		9		117		12.4		37,641
Industrial		6		1,080		14.8		119,917
Office		4		327		12.7		66,565
Other		5		148		12.9		38,278
Total Properties		54		1,898		14.0		331,623
Weighted average cash cap rate								7.0	%

	Q4 2017 SUPPLEMENTAL INFORMATION

Dispositions

(unaudited, square feet and dollars in thousands)

The following table summarizes the Company’s property disposition activity during 2017.

Q1 2017
Property Type	Number of Properties		Square Feet ('000s)		Acquisition Price ($'000s)		Disposition Price ($'000s)		Net Book Value ($'000s)		Cash Cap Rate
Healthcare		1		12		5,300		6,320		5,127		6.9	%
Total Properties		1		12		5,300		6,320		5,127		6.9	%

Q2 2017
Property Type	Number of Properties		Square Feet ('000s)		Acquisition Price ($'000s)		Disposition Price ($'000s)		Net Book Value ($'000s)		Cash Cap Rate
Retail		1		8		1,803		2,171		1,419		7.6	%
Healthcare		2		16		4,112		5,854		3,830		7.2	%
Industrial		2		245		12,439		16,100		10,859		8.0	%
Total Properties		5		270		18,354		24,125		16,108		7.8	%

Q3 2017
Property Type	Number of Properties		Square Feet ('000s)		Acquisition Price ($'000s)		Disposition Price ($'000s)		Net Book Value ($'000s)		Cash Cap Rate
Healthcare		1		5		1,627		2,135		1,565		7.4	%
Industrial		3		296		23,650		25,590		20,759		7.5	%
Total Properties		4		301		25,277		27,725		22,324		7.5	%

Q4 2017
Property Type	Number of Properties		Square Feet ('000s)		Acquisition Price ($'000s)		Disposition Price ($'000s)		Net Book Value ($'000s)		Cash Cap Rate
Healthcare		3		32		6,145		8,362		5,365		7.2	%
Total Properties		3		32		6,145		8,362		5,365		7.2	%

	Q4 2017 SUPPLEMENTAL INFORMATION

Portfolio at a Glance: Key Metrics

Properties	528
States	40
Total Building Sq. Footage	15.9M
Enterprise Value	$2.8B
Tenants	134
Brands	112
Industries	43
% Leased	100%
Physical Occupancy (based on SF)	99.6%
Top Ten Tenant Concentration	26.0%
Investment Grade (tenant/guarantor)	11.1%
Financial Reporting Coverage	87.8%
Weighted Average Annual Rent Increases	2.0%
Weighted Average Remaining Lease Term	13.1 years

Diversification: Tenants & Brands

(unaudited, rent percentages based on contractual rent over the next twelve months)

Top 10 Tenants

Tenant	# Properties		NTM Rent ($'000s)		NTM Rent as a % of Total Portfolio			Square Feet ('000s)		SF as a % of Total Portfolio
Red Lobster Hospitality		25	$	7,239		3.8	%		203		1.3	%
Art Van Furniture		9		6,594		3.4	%		542		3.4	%
Jack's Family Restaurants		36		5,851		3.0	%		121		0.8	%
Outback Steakhouse		24		5,337		2.8	%		152		1.0	%
Big Tex Trailer Manufacturing		17		4,579		2.4	%		1,302		8.2	%
Siemens		2		4,462		2.3	%		545		3.4	%
Nestle' Dreyer's Ice Cream Company		1		4,227		2.2	%		309		1.9	%
Nationwide Mutual Insurance Company		2		3,977		2.1	%		407		2.6	%
Arkansas Surgical Hospital		1		3,964		2.1	%		128		0.8	%
Bob Evans Restaurants		25		3,691		1.9	%		131		0.8	%
Total Top 10 Tenants		142	$	49,921		26.0	%		3,841		24.1	%

Top 10 Brands

Brand	# Properties		NTM Rent ($'000s)		NTM Rent as a % of Total Portfolio			Square Feet ('000s)		SF as a % of Total Portfolio
Bob Evans Farms		27	$	7,325		3.8	%		462		2.9	%
Red Lobster		25		7,239		3.8	%		203		1.3	%
Art Van Furniture		9		6,594		3.4	%		542		3.4	%
Jack's Family Restaurants		36		5,851		3.0	%		121		0.8	%
Taco Bell		41		5,159		2.7	%		103		0.6	%
Wendy's		35		4,961		2.6	%		105		0.7	%
Outback Steakhouse		22		4,667		2.4	%		139		0.9	%
Big Tex Trailers		17		4,579		2.4	%		1,302		8.2	%
Siemens		2		4,462		2.3	%		545		3.4	%
Nestle'		1		4,227		2.2	%		309		1.9	%
Total Top 10 Brands		215	$	55,064		28.6	%		3,831		24.1	%

	Q4 2017 SUPPLEMENTAL INFORMATION

Diversification: Property Type

(unaudited, rent percentages based on contractual rent over the next twelve months)

Property Type	# Properties		NTM Rent ($'000s)		NTM Rent as a % of Total Portfolio			Square Feet ('000s)		SF as a % of Total Portfolio
Healthcare - Clinical		46		22,725		11.8	%		1,129		7.1	%
Healthcare - Surgical		13		9,656		5.0	%		322		2.0	%
Healthcare - Other		35		8,342		4.4	%		340		2.1	%
Healthcare Total		94		40,722		21.2	%		1,791		11.2	%
Industrial - Flex		9		10,911		5.7	%		1,371		8.6	%
Industrial - Manufacturing		42		20,212		10.5	%		4,415		27.7	%
Industrial - Warehouse/Distribution		19		22,201		11.5	%		2,962		18.6	%
Industrial - Other		4		6,531		3.4	%		744		4.7	%
Industrial Total		74		59,855		31.1	%		9,493		59.6	%
Retail - Casual Dining		104		22,754		11.8	%		657		4.1	%
Retail – Quick Service Restaurants		133		20,603		10.7	%		409		2.6	%
Retail - Other		95		22,443		11.7	%		1,735		10.9	%
Retail Total		332		65,800		34.2	%		2,802		17.6	%
Office Total		15		18,707		9.7	%		1,369		8.6	%
Other Total		13		7,292		3.8	%		473		3.0	%
Total		528		192,377		100.0	%		15,928		100.0	%

Diversification: Tenant Industry
(unaudited, rent percentages based on contractual rent over the next twelve months)

Industry	# Properties		NTM Rent ($'000s)		NTM Rent as a % of Total Portfolio			Square Feet ('000s)		SF as a % of Total Portfolio
Restaurants		237		43,357		22.5	%		1,067		6.7	%
Health Care Facilities		82		35,383		18.4	%		1,446		9.1	%
Home Furnishing Retail		17		9,473		4.9	%		1,012		6.4	%
Specialized Consumer Services		37		9,406		4.9	%		741		4.7	%
Packaged Foods & Meats		5		8,758		4.6	%		727		4.6	%
Auto Parts & Equipment		31		8,721		4.5	%		2,008		12.6	%
Health Care Services		11		5,361		2.8	%		334		2.1	%
Industrial Conglomerates		2		4,462		2.3	%		545		3.4	%
Multi-line Insurance		2		3,977		2.1	%		407		2.6	%
Life Sciences Tools & Services		5		3,899		2.0	%		301		1.9	%
Distributors		10		3,886		2.0	%		336		2.1	%
Air Freight & Logistics		2		3,589		1.9	%		226		1.4	%
Industrial Machinery		11		3,476		1.8	%		782		4.9	%
Food Retail		7		3,243		1.7	%		22		0.1	%
Metal & Glass Containers		3		3,140		1.6	%		516		3.2	%
All others (28)		66		42,245		22.0	%		5,458		34.3	%
Total Industries		528		192,377		100.0	%		15,928		100.0	%

	Q4 2017 SUPPLEMENTAL INFORMATION

Diversification: Geography

(unaudited, rent percentages based on contractual rent over the next twelve months)

TOTAL PROPERTIES: 528

TOTAL STATES: 40

State	# Properties		NTM Rent ($'000s)		NTM Rent as a % of Total Portfolio			Square Feet ('000s)		SF as a % of Total Portfolio			State	# Properties		NTM Rent ($'000s)		NTM Rent as a % of Total Portfolio			Square Feet ('000s)		SF as a % of Total Portfolio
TX		49		20,047		10.4	%		1,832		11.5	%	LA		2		2,726		1.4	%		161		1.0	%
FL		47		15,407		8.0	%		721		4.5	%	NM		7		2,359		1.2	%		77		0.5	%
WI		30		13,960		7.3	%		1,365		8.6	%	KS		7		2,343		1.2	%		72		0.4	%
MI		25		13,036		6.8	%		1,255		7.9	%	UT		6		2,143		1.1	%		155		1.0	%
PA		16		8,944		4.6	%		1,067		6.7	%	AZ		3		2,081		1.1	%		138		0.9	%
NC		21		8,772		4.6	%		1,064		6.7	%	WA		12		2,059		1.1	%		103		0.6	%
MN		15		8,507		4.4	%		1,101		6.9	%	IA		1		1,657		0.9	%		411		2.6	%
OH		30		8,184		4.3	%		610		3.8	%	CT		2		1,573		0.8	%		55		0.3	%
IL		15		8,070		4.2	%		745		4.7	%	WV		8		1,564		0.8	%		36		0.2	%
CA		9		8,045		4.2	%		674		4.2	%	NE		5		1,547		0.8	%		164		1.0	%
NY		13		7,613		4.0	%		413		2.6	%	CO		4		1,384		0.7	%		100		0.6	%
AL		43		7,297		3.8	%		163		1.0	%	MD		3		1,303		0.7	%		99		0.6	%
AR		11		7,089		3.7	%		284		1.8	%	NV		2		1,250		0.6	%		81		0.5	%
OK		30		6,177		3.2	%		623		3.9	%	NJ		4		1,006		0.5	%		18		0.1	%
IN		19		5,860		3.0	%		626		3.9	%	SC		4		996		0.5	%		192		1.2	%
TN		27		4,467		2.3	%		137		0.9	%	DE		3		648		0.3	%		35		0.2	%
GA		17		3,828		2.0	%		607		3.8	%	WY		1		279		0.1	%		21		0.1	%
VA		10		3,454		1.8	%		61		0.4	%	MS		1		256		0.1	%		7		0.0	%
KY		15		3,196		1.7	%		144		0.9	%	MA		1		115		0.1	%		9		0.1	%
MO		9		3,037		1.6	%		496		3.1	%	OR		1		96		0.0	%		4		0.0	%
													Total		528		192,377		100.0	%		15,928		100.0	%

	Q4 2017 SUPPLEMENTAL INFORMATION

Lease Expirations

(unaudited, rent percentages based on contractual rent over the next twelve months)

WEIGHTED AVERAGE
REMAINING LEASE TERM: 13.1 YRS

Expiration Year	# Properties		NTM Rent ($'000s)		NTM Rent as a % of Total Portfolio			Square Feet ('000s)		SF as a % of Total Portfolio
2018		1		106		0.1	%		2		0.0	%
2019		2		280		0.1	%		8		0.1	%
2020		3		1,099		0.6	%		95		0.6	%
2021		4		578		0.3	%		9		0.1	%
2022		3		2,442		1.3	%		87		0.5	%
2023		13		6,836		3.6	%		724		4.5	%
2024		15		14,023		7.3	%		1,741		10.9	%
2025		8		1,038		0.5	%		28		0.2	%
2026		28		11,970		6.2	%		801		5.0	%
2027		35		18,596		9.7	%		1,726		10.8	%
2028		29		13,563		7.1	%		1,169		7.3	%
2029		62		17,901		9.3	%		2,664		16.7	%
Thereafter		325		103,945		53.9	%		6,872		43.1	%

	Q4 2017 SUPPLEMENTAL INFORMATION

Portfolio Occupancy

(unaudited, based upon square feet)

Dividends Paid Per Share

(unaudited)

At the current share price of $81.00, the $0.43/share monthly dividend results in a dividend yield of 6.4% for new investments.

	Q4 2017 SUPPLEMENTAL INFORMATION

Important Disclosures and Definitions Regarding Broadstone Net Lease, Inc. (BNL)

Not an offer to sell securities: Offers to sell interests in BNL are made exclusively through BNL’s Private Placement Memorandum (PPM). Offers, solicitations, and sales are not made in jurisdictions where not lawful or prohibited. Securities are not offered to residents of Arizona.

BNL’s securities are privately offered: BNL’s securities have not been registered under the Securities Act of 1933, as amended (the “Securities Act”). BNL conducts its private offering in reliance upon the exemptions from Securities Act registration provided by Rule 506(c) under Regulation D promulgated under the Securities Act and Section 4(a)(2) of the Securities Act and certain state securities laws. BNL’s securities have not been approved or disapproved by the U.S. Securities and Exchange Commission (the “SEC”), the attorney general of the State of New York, any other state securities commission or any other regulatory authority, nor have any of the foregoing passed upon the accuracy or adequacy of the information presented. Any representation to the contrary is a criminal offense.

BNL files public reports with the SEC: BNL has registered its shares of common stock pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). BNL is subject to the registration requirements of Section 12(g) of the Exchange Act because as of December 31, 2016, the aggregate value of its assets exceeded the applicable threshold and its common stock was held of record by 2,000 or more persons. As a result of the registration of its common stock pursuant to the Exchange Act, BNL is subject to the requirements of the Exchange Act and the rules promulgated thereunder. In particular, BNL is required to file Quarterly Reports on Form 10-Q, Annual Reports on Form 10-K, and Current Reports on Form 8-K and otherwise comply with the disclosure obligations of the Exchange Act applicable to issuers filing registration statements to register a class of securities pursuant to Section 12(g) of the Exchange Act.

Investment Company Act: BNL’s securities are not subject to the protections of the Investment Company Act of 1940, as amended.

Accredited investors only: BNL’s securities are only offered and sold to “accredited investors,” as defined under the U.S. securities laws, pursuant to BNL’s PPM and related subscription documents. Individuals are accredited investors only if they meet certain minimum net worth

or sustained annual income thresholds. Entities are accredited investors only if they hold sufficient assets or are completely owned by accredited investors. Please see the definition on the SEC website. http://www.sec.gov/answers/accred.htm

Transfers restricted; No trading market: Transfers of BNL’s securities are restricted by federal and state securities laws and certain provisions of our organizational documents. There is no trading market for the shares and there can be no assurance that such a market will develop in the foreseeable future. BNL’s securities may not be transferred, resold, or otherwise disposed of by an investor unless, in the opinion of counsel acceptable to us, registration under federal and applicable state securities laws is not required or compliance is made with the registration requirements of such laws.

Liquidity of BNL’s securities is limited: Redemptions of BNL’s securities are limited in amount and require that the shares have been held for required periods. Provisions of state law, REIT requirements, and other matters may limit redemptions.

Investments involve significant risks: An investment in BNL’s securities involves significant risks. Only investors who can bear the economic risk of an investment of this type for an indefinite period of time and the risk of loss of their entire investment should invest in BNL’s securities. Factors that may cause our actual results, performance, or achievements to differ materially from our stated expectations include, among others: general economic conditions; local real estate conditions in the markets where our properties are located; financial difficulties of our tenants; loss of key personnel; interest rates rising; compliance with REIT requirements; and continued access to capital to fund growth. See the section entitled “Risk Factors” in our PPM for additional information.

This is not investment, financial, legal, or tax advice: This information is not investment, financial, legal, or tax advice and has been prepared without reference to any reader’s investment profile or financial circumstances. You should obtain financial and tax advice and conduct diligent investigation of information material to you before making any investment decision.

Performance data; Stock price: The value of investments and the income or distributions from investments may fall or rise. BNL’s stock price is not set by any market in the common stock but by our independent directors based on the net asset value of our portfolio of properties determined as described in the PPM. We are not required by law to follow any particular methodology in setting the stock price (referred to in our organizational documents as the Determined Share Value”). There may be variations from time to time in how our independent directors apply or weight the criteria described in the PPM in setting the stock price.

No guarantee of future performance: The information contained herein represents the past performance of BNL. Past performance is not a

guarantee of future performance. The current performance of BNL may be lower or higher than the past performance. Distributions are made at the discretion of BNL’s independent directors and past practices are not guarantees of the timing or amount of future distributions.

Funds From Operations (FFO) and Adjusted Funds From Operations (AFFO): Our reported results and net earnings per dilutive share are presented in accordance with accounting principles generally accepted in the United States of America (GAAP). We also disclose FFO and AFFO, each of which are non-GAAP measures. We believe the use of FFO and AFFO are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the operating performance of REITs. FFO and AFFO should not be considered alternatives to net income as a performance measure or to cash flows from operations, as reported on our statement of cash flows, or as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures.

We compute FFO in accordance with the standards established by the 2002 White Paper on FFO approved by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”). NAREIT defines FFO as GAAP net income or loss adjusted to exclude net gains (losses) from sales of depreciated real estate assets, depreciation and amortization expense from real estate assets, and impairment charges related to previously depreciated real estate assets. To derive AFFO, we modify the NAREIT computation of FFO to include other adjustments to GAAP net income related to certain non-cash revenues and expenses, including straight-line rents, cost of debt extinguishments, acquisition expenses, amortization of lease intangibles, amortization of debt issuance costs, amortization of net mortgage premiums, (gain) loss on interest rate swaps and other non-cash interest expense, extraordinary items and other specified non-cash items. We believe that such items are not a result of normal operations and thus we believe excluding such items assists management and investors in distinguishing whether changes in our operations are due to growth or decline of operations at our properties or from other factors.

Broadstone Net Lease, Inc. - FORM 8-K - EX-99.2 - March 15, 2018

Attached files

Broadstone Net Lease, Inc. Reports