Phillips Edison & Company, Inc. · NASDAQ:PECO
Phillips Edison & — Q2 2020 Earnings Presentation
28 slides from Phillips Edison &'s earnings presentation, Aug 12, 2020
Slide 1: Second Quarter 2020 Results Presentation
Second Quarter 2020 Results Presentation Thursday, August 13, 2020
Slide 2: Agenda
Agenda Prepared Remarks Jeff Edison - Chairman and CEO • Overview • Q2 2020 Highlights John Caulfield - CFO • Financial Results • Balance Sheet and Debt Profile Jeff Edison - Chairman and CEO • COVID-19 Update • 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 284 Our broad national footprint of grocery- Wholly-owned Properties anchored shopping centers is complemented by 97.0% local market expertise. Grocery-anchored 31 States 31.8 million Square Feet 95.6% Total Occupancy 90.3% In-line Occupancy 76.6% Grocer, national & regiona
Slide 5: Diverse Roster of Necessity- and Service-based Neighbors
Diverse Roster of Necessity- and Service-based Neighbors Top 5 Grocery-Anchors & Percent of Total ABR* Top 5 In-line Neighbors & Percent of In-line ABR* 6.8% 5.6% 4.5% 4.1% 2.3% 1.5% 1.3% 1.0% 1.0% 0.9% ABR by Neighbor Industry* ABR by Neighbor Type* Retail Grocery Grocery 23.0% National & Anchor An
Slide 6: Highlights Second Quarter 2020
Highlights Second Quarter 2020 (vs. Second Quarter 2019) • 97% of neighbor spaces are open for business as of August 10, 2020 • Rent and recovery collections totaled 86% of monthly billings for the quarter • Reported net loss of $6.4 million • Same-center net operating income (“NOI”) decreased 5.2%
Slide 7: Same-Center NOI
Same-Center NOI Six Months Ended June 30, 2020 Six Months Ended Favorable June 30, (Unfavorable) (in thousands) 2020 2019 $ Change % Change Revenues:(1) Rental income(2) $ 175,422 $ 179,696 $ (4,274) (2.4)% Tenant recovery income 58,372 56,005 2,367 4.2 % Other property income 1,465 1,059 406 38.3 %
Slide 8: Financial Results
Financial Results Six Months Ended June 30, 2020 Six Months Ended Favorable June 30, (Unfavorable) (in thousands, except per share amounts) 2020 2019 $ Change % Change Net Income (Loss) $ 4,786 $ (47,960) $ 52,746 110.0 % Adjustments(1) 113,421 152,106 (38,685) (25.4)% FFO Attributable to Stockholde
Slide 9: Same-Center NOI and Core FFO Quarterly and YTD
Same-Center NOI and Core FFO Quarterly and YTD 2020 2019 % Change Same-Center NOI - Q1 $ 86,732 $ 84,492 2.7 % Same Center NOI - Q2 80,272 84,672 (5.2)% Same-Center NOI - YTD $ 167,004 $ 169,164 (1.3)% 2020 2019 % Change Q1 Core FFO $ 60,242 $ 55,594 8.4 % Core FFO per share - diluted $ 0.18 $ 0.17
Slide 10: Debt Profile and Maturity Ladder
Debt Profile and Maturity Ladder June 30, 2020 Net Debt to Total Enterprise Value(1) 44.4% Net Debt to Adjusted EBITDAre(2) 7.1x Weighted-Average Interest Rate 3.1% Weighted-Average Years to Maturity(3) 4.5 Fixed-Rate Debt 75.2% Approximate Availability Remaining on $500M Line of Credit(4) $490M 600
Slide 11: Impact of the COVID-19 Pandemic
Impact of the COVID-19 Pandemic • Second Quarter 2020 U.S. GDP decreased 32.9%, the largest quarterly decrease ever(1) • July 2020 unemployment rate of 10.2%(2) • Initial unemployment claims have been over 1 million for the 20th consecutive week(3) • Concerns about retail - 23 major retailers (both
Slide 12: PECO Portfolio Neighbor Details by ABR
PECO Portfolio Neighbor Details by ABR Essential Retail & Services represents businesses generally deemed essential under most state and local stay-at-home orders. ABR = Annualized Base www.phillipsedison.com/investors Rent. Statistics reflect percentage of ABR, including pro rata ownership through
Slide 13: Portfolio Impact as a Result of the COVID-19 Pandemic
Portfolio Impact as a Result of the COVID-19 Pandemic 100% of our centers have remained open and operating throughout the COVID-19 pandemic. However, our revenue and collections have been negatively impacted. Total Neighbor Spaces Open(1) Rent and Recoveries Collected(1,2) As a % of total ABR As a %
Slide 14: Current Response to COVID-19
Current Response to COVID-19 The following steps have been implemented to maximize financial flexibility and preserve cash given the uncertainty and fluidity of the COVID-19 pandemic: 1. Temporary reductions to the 2020 base salary of the CEO (25%) and executive management team (10%), and a temporar
Slide 15: Alignment with Stockholders
Alignment with Stockholders • Temporary executive and board salary/compensation reductions Internal Management Structure • Total compensation for PECO’s CEO and executive management team is highly incentive-based and In 2017, we merged with dependent on Company performance: our external advisor to b
Slide 16: Distributions & Total Return
Distributions & Total Return Distributions PECO Total Return Distributions for original PECO stockholders total between and $4.17/ Original PECO investors have seen a total share and $6.32/share.(1) return between 29% and 65% on their original investment.(2) Over $1.3 Billion returned to stockholder
Slide 17: 2020 Outlook
2020 Outlook 1.Focus on preservation of capital and net asset value a. Conserve cash and liquidity during this time of uncertainty b. Support our neighbors in reopening and implement plans to collect missed rent 2.Prepare for future strategic opportunities a. Acquisition opportunities b. Investment
Slide 18: 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 18
Slide 19: Thank you for joining us
Thank you for joining us For More Information: InvestorRelations@PhillipsEdison.com www.phillipsedison.com/investors Investors and NIGO Servicing: (888) 518-8073 Phillips Edison Advisor Services: (833) 347-5717 www.phillipsedison.com/investors 19
Slide 20: Appendix
Appendix
Slide 21: 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. For the three and six months ended June 30, 2020 and 2019, Same-Ce
Slide 22: Non-GAAP Measures: Net Income to NOI Reconciliation
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 June 30, Six Months Ended June 30, 2020 2019(1) 2020 2019(1) Net (loss) income $ (6,413) $ (42,172) $ 4,786 $ (47,960) Adjusted to exclude: Fees
Slide 23: 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 24: Non-GAAP Measures: FFO Calculation
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 June 30, Six Months En
Slide 25: Non-GAAP Measures: Three Months Ended June 30
Non-GAAP Measures Three Months Ended Favorable June 30, (Unfavorable (in thousands, except per share amounts) 2020 2019 $ Change % Change Net Loss $ (6,413) $ (42,172) $ 35,759 (84.8)% Adjustments(1) 56,373 85,303 (28,930) (33.9)% FFO Attributable to Stockholders and Convertible Noncontrolling Inter
Slide 26: Non-GAAP Measures: EBITDAre and Adjusted EBITDAre
Non-GAAP Measures Earnings Before Interest, Taxes, Depreciation, and Amortization for Real Estate (“EBITDAre”) and Adjusted EBITDAre We have included the calculation of EBITDAre to better align with publicly traded REITs. Additionally, we believe that, as another important earnings metric, it is a u
Slide 27: Non-GAAP Measures: EBITDAre Calculation
Non-GAAP Measures The following table presents our calculation of EBITDAre and Adjusted EBITDAre and provides additional information related to our operations (in thousands, except per share amounts): Three Months Ended June 30, Six Months Ended June 30, Year Ended 2020 2019 2020 2019 2019 Calculati
Slide 28: Non-GAAP Measures: Net Debt to Adjusted EBITDAre
Non-GAAP Measures The following table presents our calculation of net debt to Adjusted EBITDAre and net debt to total enterprise value as of June 30, 2020 and December 31, 2019 (dollars in thousands): June 30, 2020 December 31, 2019 Net debt to Adjusted EBITDAre - annualized: Net debt $ 2,329,659 $
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