Phillips Edison & Company, Inc. · NASDAQ:PECO
Phillips Edison & — Phillips Edison Grocery Center REIT I — Merger or Acquisition (May 2017)
18 slides from Phillips Edison &'s merger presentation, May 19, 2017
Slide 1: Phillips Edison Grocery Center REIT I to Acquire Phillips Edison Limited Partnership
Phillips Edison Grocery Center REIT I to Acquire Phillips Edison Limited Partnership May 2017
Slide 2: Forward-Looking Statement Disclosure
2 · FORWARD - LOOKING STATEMENT DISCLOSURE Certain statements contained in this press release may be considered forward - looking statements within the meaning of Section 27 A of the Securities Act of 1933 , as amended (the “Securities Act ”), and Section 21 E of the Securities Exchange Act of 1934
Slide 3: Information Disclosure
3 · INFORMATION DISCLOSURE Additional Information About the Transaction and Where to Find It This communication does not constitute a solicitation of materials of any vote or approval in respect of the proposed transac tio n involving PECO I or otherwise. In connection with the proposed transaction,
Slide 4: Agenda
4 · AGENDA 4 • Review of Transaction – Transaction Details – Consideration – Capital Structure • Overview of PELP • Pro Forma Phillips Edison Grocery Center REIT I – Portfolio – Capital Structure – Financial Benefits • Timeline • Key Takeaways – Liquidity
Slide 5: PECO I to Acquire PELP
1 · Phillips Edison Limited Partnership Real Estate 76 Shopping Centers 1 Necessity Retail Partners (20 % Interest) 12 Shopping Centers Property Count as of 3/31/2017 PECO I TO ACQUIRE PELP Phillips Edison Grocery Center REIT II, Inc. 78 Shopping Centers Phillips Edison Grocery Center REIT I, Inc. 1
Slide 6: Details: PECO I to Acquire PELP
6 · DETAILS: PECO I TO ACQUIRE PELP PECO I PELP • Externally managed non - traded REIT with estimated $3.0B TEV • 154 shopping centers with 16.8M square feet of GLA • IPO closed in 2014; raised $1.75B • Vertically integrated owner and operator of 76 shopping centers • Exclusively focused on grocery
Slide 7: Transaction Consideration
7 · TRANSACTION CONSIDERATION • Assets acquired include 76 real estate assets and 100% of PELP’s third - party asset management businesses • Transaction consideration excludes internalization fees 1 in accordance with PECO I’s advisory agreement with PELP • Earnout structure incentivizes future perf
Slide 8: Transaction Capital Structure
8 · TRANSACTION CAPITAL STRUCTURE • Transaction to be immediately accretive: Estimated pro forma FFO per share for Q1 2017 is higher by approximately 8 - 10% relative to the performance of stand - alone PECO I * • Estimated pro forma dividend coverage expected to exceed 100% (on a FFO/Total Dividend
Slide 9: Overview of PELP
9 · 2016 FFO/Share: $0.58 Projected accretion of 8 - 10% on estimated pro forma FFO per share for Q1 2017 * SSNOI Growth (‘16 v ‘15): 3.2% REAL ESTATE • National platform focused from its inception in 1991 on grocery - anchored shopping centers • Owns and operates 76 shopping centers, in 25 states,
Slide 10: Asset Management Business
10 · ASSET MANAGEMENT BUSINESS • $4.8B of third - party assets under management as of December 31, 2016 • Consistent asset management fees from PECO I, PECO II, PECO III and Necessity Retail Partners, a value - added joint venture between PECO II and TPG Real Estate • Generates annual fee and manage
Slide 11: Combination of Complementary Portfolios
11 · COMBINATION OF COMPLEMENTARY PORTFOLIOS 11 PELP PECO I COMBINED Property Count 76 in 25 states 154 in 28 states 230 in 32 states Square Feet 8.7 million 16.8 million 25.5 million Leased Occupancy 90.0% 96.0% 93.9% % ABR from Grocers, National, and Regional Tenants 76% 79% 78% PELP PECO I COMBIN
Slide 12: Projected Timeline
12 · AUGUST JULY PROJECTED TIMELINE May 2017 • Executed Contribution Agreement July 2017 • Proxy mailed to stockholders September 2017 • Stockholder vote • Receipt of required non recourse debt consents Q4 2017 • Transaction expected to close MAY JUNE SEPTEMBER Q4 2017 12
Slide 13: Key Takeaways
13 · KEY TAKEAWAYS • The result of this transaction will be the largest internally managed REIT exclusively focused on grocery - anchored properties • Expected to be immediately accretive to FFO per share • Estimated pro forma dividend coverage expected to exceed 100% • Strengthens balance sheet • I
Slide 14: Goal: To Provide Liquidity for PECO I Shareholders
14 · GOAL: TO PROVIDE LIQUIDITY FOR PECO I SHAREHOLDERS • Exclusive focus on grocery - anchored shopping centers: the most attractive space in shopping center real estate • Integrated veteran management team vested in the success of PECO I through a meaningful ownership stake • $4 billion TEV combin
Slide 15: For more information please contact: • Phillips Edison & Company: Michael Koehler, Director of
For more information please contact: • Phillips Edison & Company: Michael Koehler, Director of Investor Relations InvestorRelations@PhillipsEdison.com (513) 338 - 2743 15
Slide 16: Funds from Operations
16 · Funds from Operations Funds from operations (“FFO”) is a non - GAAP performance financial measure that is widely recognized as a measure of REIT operati ng performance. We use FFO as defined by the National Association of Real Estate Investment Trusts (“NAREIT”) to be net income (loss), compute
Slide 17: Same-Center Net Operating Income
17 · 17 Same - Center Net Operating Income We present Same - Center NOI as a supplemental measure of our performance. We define NOI as total operating revenues, adjusted to exc lude lease buy - out income and non - cash revenue items, less property operating expenses and real estate taxes. Same - Ce
Slide 18: Reconciliation of Non-GAAP Financials
18 · 18 RECONCILIATION OF NON - GAAP FINANCIALS
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