Phillips Edison & Company, Inc. · NASDAQ:PECO
Phillips Edison & — Q2 2018 Earnings Presentation
23 slides from Phillips Edison &'s earnings presentation, Aug 8, 2018
Slide 1: Second Quarter 2018 Results Presentation
Second Quarter 2018 Results Presentation Wednesday, August 8, 2018
Slide 2: Agenda
Agenda Prepared Remarks R. Mark Addy - Executive Vice President • Intro & Portfolio Update Jeff Edison - Chairman and CEO • PECO and REIT II Merger Devin Murphy - CFO • Financial Results R. Mark Addy - Executive Vice President • Share Repurchase Program & Liquidity Question and Answer Session www.ph
Slide 3: Forward-Looking Statement Disclosure
Forward-Looking Statement Disclosure This presentation may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements include, but are not limited to, statements related to the anticipate
Slide 4: Q2 2018 Portfolio Highlights
Q2 2018 Portfolio Highlights June 30, 2018 Total Properties 235 Leading Grocery Anchors 34 States 32 26.3 Square Feet million Leased Occupancy 93.8% Rent from grocer, national and regional tenants 76.5% www.phillipsedison.com/investors 4
Slide 5: Q2 2018 Portfolio Overview
Q2 2018 Portfolio Overview Annualized Base Rent by Tenant Type Annualized Base Rent by Tenant Industry Top 5 Grocers by % of Annualized Base Rent Grocer % of ABR # of Locations Kroger 9.1% 55 Publix Super Markets 6.1% 37 Ahold Delhaize 3.6% 19 Albertsons Companies 3.4% 17 Giant Eagle 2.4% 9 We calcu
Slide 6: Q2 2018 Highlights
Q2 2018 Highlights Second Quarter 2018 Highlights (vs. Second Quarter 2017) • Net loss totaled $14.1 million1 • Pro forma same-center net operating income (NOI)2 increased 6.5% to $62.4 million • Funds from operations (FFO) per diluted share increased 13.3% to $0.17 • FFO totaled 100.3% of total dis
Slide 7: Strategic Merger Positions PECO for Increased Growth & Liquidity
Strategic Merger Positions PECO for Increased Growth & Liquidity • Improves portfolio while maintaining exclusive grocery focus • Increases size, scale, and market prominence, which better positions company for liquidity • Improves earnings quality and maintains positive distribution coverage • Main
Slide 8: Pro Forma Same-Center NOI Three Months Ended June 30
Pro Forma Same-Center NOI(1) Three Months Ended June 30, 2018 Three Months Ended June 30, (in thousands) 2018 2017 $ Change % Change Revenues: Rental income(2) $ 66,299 $ 63,916 $ 2,383 3.7% Tenant recovery income 20,510 20,108 402 2.0% Other property income 591 387 204 52.7% Total Revenues 87,400 8
Slide 9: Pro Forma Same-Center NOI Six Months Ended June 30
Pro Forma Same-Center NOI(1) Six Months Ended June 30, 2018 Six Months Ended June 30, (in thousands) 2018 2017 $ Change % Change Revenues: Rental income(2) $ 131,511 $ 128,196 $ 3,315 2.6% Tenant recovery income 41,661 41,202 459 1.1% Other property income 1,161 861 300 34.8% Total Revenues 174,333
Slide 10: Financial Results Three Months Ended June 30
Financial Results Three Months Ended June 30, 2018 Three Months Ended June 30, (in thousands) 2018 2017 $ Change % Change Net Loss $ (14,076) $ (1,221) $ (12,855) NM Adjustments(1) 52,764 28,207 24,557 87.1% FFO Attributable to Stockholders and Convertible Noncontrolling Interests(2) 38,688 26,986 1
Slide 11: Financial Results Six Months Ended June 30
Financials Results Six Months Ended June 30, 2018 Six Months Ended June 30, (in thousands) 2018 2017 $ Change % Change Net Loss $ (15,913) $ (87) $ (15,826) NM Adjustments(1) 94,966 55,831 39,135 70.1% FFO Attributable to Stockholders and Convertible Noncontrolling Interests(2) 79,053 55,744 23,309
Slide 12: Debt Profile and Maturity Ladder
Debt Profile and Maturity Ladder June 30, 2018 Net Debt to Enterprise Value* 42.2% Weighted-Average Interest Rate 3.5% Weighted-Average Years to Maturity 4.9 Fixed-Rate Debt 86.0% Variable-Rate Debt 14.1% www.phillipsedison.com/investors *See Appendix for a complete calculation of net debt to enterp
Slide 13: Share Repurchase Program
Share Repurchase Program • Repurchased $42.1 million during the second quarter 2018 • In connection with the proposed merger, PECO was required to temporarily suspend the SRP during July 2018 and will resume the SRP in August 2018 as the joint preliminary proxy statement was filed on August 6, 2018.
Slide 14: Key Takeaways
Key Takeaways • Our portfolio of grocery-anchored shopping centers continues to produce strong operating and financial results as illustrated by our second quarter results • The merger with REIT II is an important step toward a full-cycle liquidity event, with many benefits for both PECO and REIT II
Slide 15: Question and Answer Session
Question and Answer Session If you are logged in to the webcast presentation, you can submit a question by typing it into the text box, and clicking submit. www.phillipsedison.com/investors 15
Slide 16: For More Information
For More Information: InvestorRelations@PhillipsEdison.com www.phillipsedison.com/investors DST: (888) 518-8073 Griffin Capital Securities: (866) 788-8614
Slide 17: Appendix
Appendix
Slide 18: Reconciliation of Non-GAAP Financials
Reconciliation of Non-GAAP Financials Same-center NOI represents the NOI for the properties that were owned and operational for the entire portion of both comparable reporting periods, except for the properties we currently classify as redevelopment. For purposes of evaluating Same-center NOI on a c
Slide 19: Reconciliation of Non-GAAP Financials
Reconciliation of Non-GAAP Financials Below is a reconciliation of Net Loss to NOI and Same-Center NOI for the three and six months ended June 30, 2018 and 2017 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Net loss $ (14,076) $ (1,221) $ (15,913) $ (87) A
Slide 20: Reconciliation of Non-GAAP Financials
Reconciliation of Non-GAAP Financials NOI from the PELP properties acquired prior to the PELP transaction was obtained from the accounting records of PELP without adjustment. The accounting records were subject to internal review by the company. The table below provides Same-Center NOI detail for th
Slide 21: Reconciliation of Non-GAAP Financials
Reconciliation of Non-GAAP Financials Funds from Operations and Modified Funds from Operations FFO is a non-GAAP performance financial measure that is widely recognized as a measure of REIT operating performance. The National Association of Real Estate Investment Trusts (“NAREIT”) defines FFO as net
Slide 22: Reconciliation of Non-GAAP Financials
Reconciliation of Non-GAAP Financials Three Months Ended June 30, Six Months Ended June 30, (in thousands, except per share amounts) 2018 2017 2018 2017(1) Calculation of FFO Attributable to Stockholders and Convertible Noncontrolling Interests Net loss $ (14,076) $ (1,221) $ (15,913) $ (87) Adjustm
Slide 23: Net Debt to Total Enterprise Value
Net Debt to Total Enterprise Value The following table presents the company’s calculation of debt to total enterprise value as of June 30, 2018 and December 31, 2017 (dollars in thousands): 2018 2017 Net debt: Total debt, excluding below-market adjustments and deferred financing costs $ 1,847,983 $
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