Phillips Edison & Company, Inc. · NASDAQ:PECO
Phillips Edison & — Q1 2020 Earnings Presentation
28 slides from Phillips Edison &'s earnings presentation, May 12, 2020
Slide 1: First Quarter 2020 Results Presentation
First Quarter 2020 Results Presentation Wednesday, May 13, 2020
Slide 2: Agenda
Agenda Prepared Remarks Jeff Edison - Chairman and CEO • Overview • Q1 2020 Highlights John Caulfield - CFO • Financial Results • Balance Sheet Jeff Edison - Chairman and CEO • COVID-19 Update • Estimated Value Per Share • 2020 Outlook Question and Answer Session www.phillipsedison.com/investors 2
Slide 3: Forward-Looking Statement Disclosure
Forward-Looking Statement Disclosure Certain statements contained in this presentation for Phillips Edison & Company, Inc. (“we,” the “Company,” “our,” or “us”) other than historical facts may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, a
Slide 4: PECO's National Portfolio
PECO’s National Portfolio Our broad national footprint of grocery-anchored shopping centers is complemented by local market expertise. Wholly-owned Total Properties Occupancy 285 95.6% Percent In-line Grocery- Occupancy anchored 97.0% 90.1% Rent from States grocer, national & regional 31 neighbors*
Slide 5: Diverse Tenant Mix Supports Same-Center NOI Growth
Diverse Tenant Mix Supports Same- Center NOI Growth Diverse Roster of Service-Based, E-Commerce Resistant Neighbors Top 5 Grocery-Anchors & Top 5 In-line Tenants & Percent of Total ABR* Percent of In-line ABR* 6.9% 1.6% 5.6% 1.3% 4.5% 1.0% 4.3% 0.9% 2.3% 0.9% • No grocer accounts for more than 6.9%
Slide 6: Q1 2020 Portfolio Key Metrics
Q1 2020 Portfolio Key Metrics Leased Portfolio Occupancy at March 31, 2020 vs December 31, 2019 Total: 95.6%; increased from 95.4% Anchor: 98.3%; increased from 98.0% In-line: 90.1%; decreased from 90.2% Total ABR* In-line ABR* ABR by Neighbor Type* 76.8% of ABR comes from grocery and national & reg
Slide 7: Q1 2020 Highlights
Q1 2020 Highlights First Quarter 2020 Highlights (vs. First Quarter 2019) • Reported net income of $11.2 million, an improvement from a net loss of $5.8 million • Same-center net operating income (“NOI”) increased 2.6% to $86.9 million • Leased portfolio occupancy increased to 95.6% • Core FFO incre
Slide 8: Same-Center NOI
Same-Center NOI Three Months Ended March 31, 2020 Three Months Ended Favorable March 31, (Unfavorable) (in thousands) 2020 2019 $ Change % Change Revenues:(1) Rental income $ 90,447 $ 89,684 $ 763 0.9% Tenant recovery income 31,036 28,947 2,089 7.2% Other property income 878 613 265 43.2% Total Reve
Slide 9: Financial Results
Financial Results Three Months Ended March 31, 2020 Three Months Ended Favorable March 31, (Unfavorable) (in thousands, except per share amounts) 2020 2019 $ Change % Change Net Income (Loss) $ 11,199 $ (5,788) $ 16,987 NM Adjustments(1) 57,048 66,803 (9,755) (14.6)% FFO Attributable to Stockholders
Slide 10: Debt and Liquidity Profile
Debt and Liquidity Profile March 31, 2020 Net Debt to Total Enterprise Value(1) 45.0% Weighted-Average Interest Rate 3.3% Weighted-Average Years to Maturity(2) 4.7 Fixed-Rate Debt 81.9% Variable-Rate Debt 18.1% Approximate Availability Remaining on $500M Line of Credit(3) $255M (1) Inclusive of our
Slide 11: COVID-19's Impact by State
COVID-19’s Impact by State States that are reopening and states that • 100% of our centers have remained are still under stay-at-home orders open during the pandemic • 69% of our centers are in states that are at least partially reopened or will reopen soon • States with the most PECO properties are
Slide 12: PECO Portfolio Neighbor Details
PECO Portfolio Neighbor Details As of March 31, 2020 by ABR Essential Retail & Services represents businesses generally deemed essential under most state and local stay-at-home orders www.phillipsedison.com/investors ABR = Annualized Base Rent. Statistics reflect percentage of ABR, including pro rat
Slide 13: COVID-19's Impact on PECO
COVID-19’s Impact on PECO Our non-grocery neighbors have been severely impacted: April 2020(1) May 2020(1) Rent and recoveries collected (% of monthly billing) 77% 74% Neighbor spaces closed temporarily 1,950 1,640 Neighbor spaces closed temporarily (% of total) 35% 30% Closures (% of total ABR) 25%
Slide 14: Our Response to COVID-19
Our Response to COVID-19 PECO has taken the following steps to maximize its financial flexibility and preserve cash given the uncertainty and fluidity of the COVID-19 pandemic: 1. The Board approved a temporary 25% reduction to the CEO’s base salary, a temporary 10% reduction to the executive manage
Slide 15: Alignment with Stockholders
Alignment with Stockholders • CEO and executive management base salary reductions Internal Management Structure • Reduction to independent director base compensation for the 2020-2021 term In 2017, we merged with • Total compensation for PECO’s CEO and executive our external advisor to management te
Slide 16: Working with our Neighbors: Preparing to Reopen
Working with our Neighbors: Preparing to Reopen As government orders begin to lift, we are focused on helping our neighbors prepare to reopen their doors. • We have been working with our neighbors to understand their financial position and to inform them about available assistance programs. • Our fo
Slide 17: Estimated Value Per Share Update
Estimated Value Per Share Update Duff & Phelps, an independent third-party valuation firm, produced an estimated value per share (“EVPS”) range of $8.45 to $9.68 as of March 31, 2020 • On May 6, 2020, the Company’s board of directors established the EVPS of its common stock to be $8.75 • 12.5% below
Slide 18: Strong Track Record of Stockholder Distributions
Strong Track Record of Stockholder Distributions Cumulative Distributions per Share www.phillipsedison.com/investors 18
Slide 19: Distributions & Total Return
Distributions & Total Return Distributions PECO Total Return ⦁ Distributions for original PECO stockholders total between and $4.11/share and Original PECO investors have seen a $6.26/share.(1) total return between 29% and 64% on their original investment.(2) ⦁ Over $1.3 Billion returned to stockhol
Slide 20: 2020 Outlook
2020 Outlook 1. Facilitate neighbor re-openings a. Maintain regular dialogue with neighbors b. Work with our neighbors to reopen as states allow c. Discuss plans for missed rent 2. Remain focused on execution a. Maintain leased portfolio occupancy b. Identify releasing opportunities to grow same-cen
Slide 21: 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 Question” www.phillipsedison.com/investors 21
Slide 22: For More Information
For More Information: InvestorRelations@PhillipsEdison.com www.phillipsedison.com/investors Investors and NIGO Servicing: (888) 518-8073 Phillips Edison Advisor Services: (833) 347-5717
Slide 23: Appendix
Appendix
Slide 24: Non-GAAP Measures
Non-GAAP Measures We present Same-Center NOI as a supplemental measure of our performance. We define NOI as total operating revenues, adjusted to exclude non-cash revenue items, less property operating expenses and real estate taxes. . As of March 31, 2020, Same-Center NOI represents the NOI for the
Slide 25: Non-GAAP Measures
Non-GAAP Measures Below is a reconciliation of Net income (loss) to NOI for real estate investments and Same-Center NOI (in thousands): Three Months Ended March 31, 2020 2019(1) Net income (loss) $ 11,199 $ (5,788) Adjusted to exclude: Fees and management income (2,165) (3,261) Straight-line rental
Slide 26: Non-GAAP Measures: Funds from Operations and Core FFO
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 Investment Trusts (“Nareit”) defines FFO as net income (loss) computed
Slide 27: Non-GAAP Measures
Non-GAAP Measures The table below presents our calculation of FFO, FFO Attributable to Stockholders and Convertible Noncontrolling Interests, and Core FFO and provides additional information related to our operations (in thousands, except per share amounts): Three Months Ended March 31, 2020 2019(1)
Slide 28: Non-GAAP Measures
Non-GAAP Measures Our debt is subject to certain covenants, and as of March 31, 2020, we were in compliance with the restrictive covenants of our outstanding debt obligations. We expect to continue to meet the requirements of our debt covenants over the next twelve months. We believe our debt to tot
Phillips Edison & Company — Q1 2020 Earnings Presentation on 6ix