Phillips Edison & Company, Inc. · NASDAQ:PECO
Phillips Edison & — FY2020 Earnings Presentation
31 slides from Phillips Edison &'s earnings presentation, Mar 11, 2021
Slide 1: Fourth Quarter and Full Year 2020 Results Presentation
Fourth Quarter and Full Year 2020 Results Presentation March 12, 2021
Slide 2: Agenda
PHILLIPS EDISON & COMPANY | 2WWW.PHILLIPSEDISON.COM/INVESTORS AGENDA PREPARED REMARKS JEFF EDISON - Chairman and CEO Portfolio Overview COVID-19 Update 2020 Highlights JOHN CAULFIELD - CFO Financial Results Balance Sheet JEFF EDISON - Chairman and CEO Outlook Liquidity Commentary QUESTION AND ANSWER
Slide 3: Forward-Looking Statement Disclosure
PHILLIPS EDISON & COMPANY | 3WWW.PHILLIPSEDISON.COM/INVESTORS FORWARD-LOOKING STATEMENT DISCLOSURE Certain statements contained in this presentation for Phillips Edison & Company, Inc. (the “Company,” or “PECO”) other than historical facts may be considered forward-looking statements within the mean
Slide 4: PECO's National Portfolio
PHILLIPS EDISON & COMPANY | 4WWW.PHILLIPSEDISON.COM/INVESTORS PECO’S NATIONAL PORTFOLIO Our national footprint of 283 wholly-owned shopping centers in 31 states is complemented by our local market expertise. 97.3% GROCERY-ANCHORED 31.7 million SQUARE FEET 94.7% TOTAL LEASED OCCUPANCY 88.9% INLINE OC
Slide 5: Diverse Roster of Necessity- and Service-Based Neighbors
PHILLIPS EDISON & COMPANY | 5WWW.PHILLIPSEDISON.COM/INVESTORS 6.9% 5.6% 4.5% 4.3% 2.3% 1.5% 1.4% 0.9% 0.9% 0.9% ABR by Neighbor Industry* ABR by Neighbor Type* DIVERSE ROSTER OF NECESSITY- AND SERVICE-BASED NEIGHBORS *Includes wholly-owned properties and pro rata ownership through joint ventures. TO
Slide 6: PECO's Resilient Performance During the COVID-19 Pandemic
PHILLIPS EDISON & COMPANY | 6WWW.PHILLIPSEDISON.COM/INVESTORS PECO’S RESILIENT PERFORMANCE DURING THE COVID-19 PANDEMIC Rent and Recoveries Collected(2,3) As a % of monthly billings 1. As of March 8, 2021. 2. Collections include monthly billings for rent and recoveries that were received through Mar
Slide 7: Leasing Activity Illustrates Demand for Brick-and-Mortar Real Estate
PHILLIPS EDISON & COMPANY | 7WWW.PHILLIPSEDISON.COM/INVESTORS Fourth Quarter Leasing Activity Full Year Leasing Activity Comparable Leasing Spreads* *Comparable rent spreads compare the percentage increase (or decrease) of new or renewal leases to the expiring lease of a unit that was occupied withi
Slide 8: Full Year 2020 Highlights
PHILLIPS EDISON & COMPANY | 8WWW.PHILLIPSEDISON.COM/INVESTORS ADDITIONAL FULL YEAR 2020 HIGHLIGHTS FULL YEAR 2020 HIGHLIGHTS (VS. 2019) • Reported net income of $5.5 million • Same-center NOI decreased 4.1% to $328.0 million • Core FFO decreased 4.5% to $220.4 million • Core FFO per diluted share de
Slide 9: Same-Center NOI - Full Year Results
PHILLIPS EDISON & COMPANY | 9WWW.PHILLIPSEDISON.COM/INVESTORS SAME-CENTER NOI(1) - FULL YEAR RESULTS Year Ended December 31, Favorable (Unfavorable) (in thousands) 2020 2019 $ Change % Change Revenues: Rental income(2) $ 364,998 $ 360,548 $ 4,450 1.2 % Tenant recovery income 122,835 120,870 1,965 1.
Slide 10: FFO and Core FFO - Full Year Results
PHILLIPS EDISON & COMPANY | 10WWW.PHILLIPSEDISON.COM/INVESTORS FFO AND CORE FFO - FULL YEAR RESULTS Year Ended December 31, Favorable (Unfavorable) (in thousands, except per share amounts) 2020 2019 $ Change % Change Net income (loss) $ 5,462 $ (72,826) $ 78,288 107.5 % Adjustments(1) 216,219 289,83
Slide 11: Debt Profile and Maturity Ladder
PHILLIPS EDISON & COMPANY | 11WWW.PHILLIPSEDISON.COM/INVESTORS DEBT PROFILE AND MATURITY LADDER 1. Inclusive of pro rata portion of net debt and cash and cash equivalents owned through joint ventures. Total equity value is calculated as the number of common shares and OP units outstanding multiplied
Slide 12: Total Returns
PHILLIPS EDISON & COMPANY | 12WWW.PHILLIPSEDISON.COM/INVESTORS TOTAL RETURNS 1. Assumes investment in PECO at $10.00 per share at the end of the initial public offering, assuming distributions are taken in cash plus the current estimated value per share of $8.75; and at the beginning of the offering
Slide 13: Strong Track Record of Stockholder Distributions
PHILLIPS EDISON & COMPANY | 13WWW.PHILLIPSEDISON.COM/INVESTORS STRONG TRACK RECORD OF STOCKHOLDER DISTRIBUTIONS First PECO Share Purchased Last PECO Share Purchased CUMULATIVE DISTRIBUTIONS PER SHARE
Slide 14: PECO: Focused on Long-Term Growth
PHILLIPS EDISON & COMPANY | 14WWW.PHILLIPSEDISON.COM/INVESTORS PECO: FOCUSED ON LONG-TERM GROWTH 1) GROCERY-ANCHORED CENTERS HAVE PROVEN RESILIENT 2) PECO’S FULLY-INTEGRATED PLATFORM OUT-PERFORMS 3) MAKE STRATEGIC INVESTMENTS TO DRIVE STOCKHOLDER VALUE 4) CAPITALIZE ON GROWTH OPPORTUNITIES
Slide 15: PECO: Outperforming Public Peers
PHILLIPS EDISON & COMPANY | 15WWW.PHILLIPSEDISON.COM/INVESTORS PECO: OUTPERFORMING PUBLIC PEERS Leased Occupancy 95.4% 94.7%95.5% 93.0% Dec 31, 2019 Dec 31, 2020 PECO Peer Average Current Dividend Yield(1) 3.89% 3.25% PECO Peer Average Same Center NOI Core FFO Growth Per Share 3.60% 2.80% 2017-2019
Slide 16: Potential Tailwinds Are Present
PHILLIPS EDISON & COMPANY | 16WWW.PHILLIPSEDISON.COM/INVESTORS POTENTIAL TAILWINDS ARE PRESENT MACRO MICRO • Strong financial performance pre-pandemic; resilient performance through 2020 • Leasing velocity showing positive signs • Optimism around a return to 2019 levels • Migration of people to subu
Slide 17: Improved Performance of Our Publicly Traded Peers' Equity
PHILLIPS EDISON & COMPANY | 17WWW.PHILLIPSEDISON.COM/INVESTORS -70% -60% -50% -40% -30% -20% -10% 0% 10% Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 Average Share Price of Public Peers Since January 1, 2020 IMPROVED PERFORMANCE OF OUR PUBLICLY TRADED PEERS’ EQUITY Range (3.8)% - 7.6% Med
Slide 18: Operations, EVPS Update, Equity Update and Liquidity Commentary
PHILLIPS EDISON & COMPANY | 18WWW.PHILLIPSEDISON.COM/INVESTORS OPERATIONS ESTIMATED VALUE PER SHARE (“EVPS”) UPDATE • We expect to update our EVPS in May 2021 when we report our Q1 2021 financials • The updated EVPS will be based on our March 31, 2021 financials • Timing is consistent with years pas
Slide 19: Question and Answer Session
PHILLIPS EDISON & COMPANY | 19WWW.PHILLIPSEDISON.COM/INVESTORS QUESTION AND ANSWER SESSION IF YOU ARE LOGGED INTO THE WEBCAST YOU CAN SUBMIT A QUESTION BY TYPING IT IN THE TEXT BOX AND CLICKING “SUBMIT QUESTION”
Slide 20: For More Information
PHILLIPS EDISON & COMPANY | 20WWW.PHILLIPSEDISON.COM/INVESTORS FOR MORE INFORMATION INVESTORRELATIONS@PHILLIPSEDISON.COM WWW.PHILLIPSEDISON.COM/INVESTORS INVESTORS AND NIGO SERVICING: (888) 518-8073 PECO ADVISOR SERVICES: (833) 347-5717 PECO uses, and intends to continue to use, its Investors websit
Slide 21: Appendix
APPENDIX
Slide 22: PECO Portfolio and Neighbor Details by ABR
PHILLIPS EDISON & COMPANY | 22WWW.PHILLIPSEDISON.COM/INVESTORS Essential Retail & Services 51.3% Other Retail & Services 33.1% Restaurants 15.6% Essential Retail & Services represents businesses generally deemed essential under most state and local stay-at-home orders. ABR = Annualized Base Rent. St
Slide 23: Non-GAAP Measures
PHILLIPS EDISON & COMPANY | 23WWW.PHILLIPSEDISON.COM/INVESTORS NON-GAAP MEASURES PECO presents Same-Center NOI as a supplemental measure of its performance. PECO defines NOI as total operating revenues, adjusted to exclude non-cash revenue items, less property operating expenses and real estate taxe
Slide 24: Non-GAAP Measures: Net Income to NOI
PHILLIPS EDISON & COMPANY | 24WWW.PHILLIPSEDISON.COM/INVESTORS NON-GAAP MEASURES Below is a reconciliation of Net (Loss) Income to NOI for real estate investments and Same-Center NOI (in thousands): Three Months Ended December 31, Year Ended December 31, 2020 2019 2020 2019 Net (loss) income $ (12,7
Slide 25: Non-GAAP Measures: Funds from Operations
PHILLIPS EDISON & COMPANY | 25WWW.PHILLIPSEDISON.COM/INVESTORS NON-GAAP MEASURES Funds from Operations and Core 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 Investme
Slide 26: Non-GAAP Measures: FFO and Core FFO Calculation
PHILLIPS EDISON & COMPANY | 26WWW.PHILLIPSEDISON.COM/INVESTORS NON-GAAP MEASURES The table below presents PECO’s calculation of FFO, FFO Attributable to Stockholders and Convertible Noncontrolling Interests(1), and Core FFO and provides additional information related to its operations (in thousands,
Slide 27: Non-GAAP Measures
PHILLIPS EDISON & COMPANY | 27WWW.PHILLIPSEDISON.COM/INVESTORS NON-GAAP MEASURES Three Months Ended December 31, Favorable (Unfavorable) (in thousands, except per share amounts) 2020 2019 $ Change % Change Net (loss) income $ (12,754) $ 4,861 $ (17,615) (362.4)% Adjustments(1) 58,787 51,594 7,193 13
Slide 28: EBITDAre and Adjusted EBITDAre
PHILLIPS EDISON & COMPANY | 28WWW.PHILLIPSEDISON.COM/INVESTORS Earnings Before Interest, Taxes, Depreciation, and Amortization for Real Estate (“EBITDAre”) and Adjusted EBITDAre Nareit defines EBITDAre as net income (loss) computed in accordance with GAAP before (i) interest expense, (ii) income tax
Slide 29: Non-GAAP Measures: EBITDAre Calculation
PHILLIPS EDISON & COMPANY | 29WWW.PHILLIPSEDISON.COM/INVESTORS NON-GAAP MEASURES The following table presents PECO’s calculation of EBITDAre and Adjusted EBITDAre and provides additional information related to its operations (in thousands): Three Months Ended December 31, Year Ended December 31, 202
Slide 30: Net Debt and Enterprise Value
PHILLIPS EDISON & COMPANY | 30WWW.PHILLIPSEDISON.COM/INVESTORS December 31, 2020 December 31, 2019 Net debt: Total debt, excluding market adjustments and deferred financing expenses $ 2,345,620 $ 2,421,520 Less: Cash and cash equivalents 104,952 18,376 Total net debt $ 2,240,668 $ 2,403,144 Enterpri
Slide 31: Net Debt to Adjusted EBITDAre
PHILLIPS EDISON & COMPANY | 31WWW.PHILLIPSEDISON.COM/INVESTORS NON-GAAP MEASURES The following table presents our calculation of net debt to Adjusted EBITDAre and net debt to total enterprise value as of December 31, 2020 and 2019 (dollars in thousands): 1. Adjusted EBITDAre is annualized based on t
Phillips Edison & Company — FY2020 Earnings Presentation on 6ix