Highlights for the second quarter ended
- Rent and recovery collections from tenants (“Neighbors”) totaled over 98% of monthly billings for the quarter
- Total revenues increased 11.8% to
$133 .1 million - Funds from operations attributable to stockholders and OP unit holders as defined by Nareit (“Nareit FFO”) increased 19.9% to
$59.9 million , or$0.56 per diluted share - Core funds from operations (“Core FFO”) increased 24.3% to
$64.3 million , or$0.60 per diluted share - Same-center net operating income (“NOI”) increased 10.5% to
$87.7 million - Same-center NOI was 4.5% higher than the comparable same-center NOI in Q2 2019, illustrating growth since prior to the onset of the COVID-19 pandemic
- Leased portfolio occupancy totaled 94.7%, compared to 95.6% at
June 30, 2020 - Executed 124 new and 174 renewal and option leases totaling 1.4 million square feet
- Comparable new and renewal rent spreads were 18.5% and 8.0%, respectively; combined rent spreads (excluding options) were 10.4%
Highlights for the six months ended
- Total revenues increased 5.1% to
$263.5 million - Nareit FFO decreased 11.3% to
$104.9 million , or$0.98 per diluted share, primarily driven by the non-cash increase in the earn-out liability - Core FFO increased 14.2% to
$127.8 million ,$1.19 per diluted share - Same-center NOI increased 4.6% to
$173.1 million - Executed 277 new and 337 renewal and option leases totaling 2.8 million square feet
- Comparable new and renewal rent spreads were 15.3% and 8.0%, respectively; combined rent spreads (excluding options) were 9.9%
Underwritten Initial Public Offering and Nasdaq Listing
- Subsequent to quarter-end, PECO completed its underwritten IPO of 19,550,000 shares of common stock, including the underwriters’ full exercise of the over-allotment option, at a price to the public of
$28.00 per share, generating$547 .4 million of gross proceeds - PECO’s common stock began trading on the Nasdaq Global Select Market under the ticker symbol “PECO” on
July 15, 2021
Subsequent Highlights
- Closed a new
$980 million senior unsecured credit facility comprised of a$500 million revolving credit facility and two separate$240 million unsecured variable rate term loans - With a portion of the offering proceeds, PECO repaid its $375 million term loan maturing in 2022
- Received an initial credit rating of 'Baa3' with a stable outlook from Moody’s Investors Service and 'BBB-' with a stable outlook from
S&P Global Ratings , both of which are defined as “Investment Grade” by their respective ratings agency
Management Commentary
“The successful closing of our underwritten IPO is a transformative event for PECO as we raised $547 million, positioning us for robust growth,” stated
"The second quarter of 2021 illustrated dramatic improvement versus the second quarter of 2020. Today, 100% of our leased portfolio is open for business, and we continue to see our necessity-based and omni-channel Neighbors thrive. In fact, we are seeing signs of a full recovery in our portfolio as foot traffic at our centers during
“As a management team owning over 7% of the company on a fully diluted basis, we are very encouraged about the future and look forward to the next phase of growth for PECO. We believe we will continue to benefit from current macroeconomic tailwinds as businesses embrace working-from-home, the population continues to shift to the suburbs and Sunbelt, and leading grocers continue to adopt an omni-channel presence. Our portfolio is uniquely positioned to benefit from these trends, which has driven our robust growth expectations for 2021.”
Collection Details
The table below outlines PECO’s collections since
Q2 2021 | Q1 2021 | Q4 2020 | Q3 2020 | Q2 2020 | |
Originally Reported | NA | 95% | 95% | 94% | 86% |
Current(1) | 98% | 98% | 97% | 96% | 93% |
(1) Including collections received through
PECO continues to collect rent and recoverable expenses for past billing periods. As a result, the corresponding periods reflect increased collection rates versus the originally reported figures.
Financial Results for the Second Quarter and Six Months Ended
Net Income
Second quarter 2021 net income attributable to common stockholders totaled $5.6 million, or
For the six months ended
Nareit FFO
For the second quarter of 2021, Nareit FFO increased 19.9% to
For the six months ended
The
The
Core FFO
For the second quarter of 2021, Core FFO increased 24.3% to
For the first six months of 2021, Core FFO increased 14.2% to
The increase for both periods was driven by an increase in collections and lower interest costs offset by an increase in general and administrative expenses. Core FFO excludes one-time non-cash items like the aforementioned earn-out liability adjustment.
Same-Center NOI
Second quarter 2021 same-center NOI increased 10.5% to
For the six months ended
Results for the second quarter 2021 were driven by a
Portfolio Overview for the Second Quarter and Six Months Ended
Portfolio Statistics
As of
Leased portfolio occupancy totaled 94.7% at
Anchor occupancy decreased to 96.8% compared to 98.3% a year ago, and inline occupancy increased to 90.6% from 90.3% at
Leasing Activity
During the second quarter of 2021, 298 leases (new, renewal, and options) were executed totaling 1.4 million square feet. This compared to 169 leases executed totaling 1.2 million square feet during the second quarter of 2020. The leasing activity was the result of strong demand for PECO’s retail spaces in its well located, grocery-anchored centers.
Comparable rent spreads during the quarter, which compare the percentage increase (or decrease) of new or renewal leases to the expiring lease of a unit that was occupied within the past twelve months, were 18.5% for new leases, 8.0% for renewal leases (excluding options), and 10.4% combined (new and renewal leases only).
During the first six months of 2021, 614 leases (new, renewal, and options) were executed totaling approximately 2.8 million square feet. This compared to 383 leases executed totaling approximately 2.3 million square feet during the same year-ago period.
Comparable rent spreads during the first six months of 2021 were 15.3% for new leases, 8.0% for renewal leases (excluding options), and 9.9% combined (new and renewal leases).
Disposition & Acquisition Activity
During the second quarter of 2021, PECO sold seven properties, generating
During the six months ended
Balance Sheet Highlights as of
As of
As of
As of
Subsequent to the quarter-end, PECO completed its underwritten IPO of 19,550,000 million shares of common stock generating
Also subsequent to the quarter-end, PECO received an initial credit rating of 'Baa3' with a stable outlook from Moody’s Investors Service and 'BBB-' with a stable outlook from
Distributions for the Second Quarter Ended
For the three months ended
For April, May and
Subsequent to the quarter-end, PECO made monthly distributions on
On
Reverse Stock Split & Reclassification into Class B Common Stock
On
As a result of the reverse stock split and reclassification transaction, PECO’s stockholders received one share of post-split Class B Common Stock for every three shares of pre-split Common Stock they held.
The Class B Common Stock is identical to the Common Stock, including with respect to voting rights and distributions rights (i.e., monthly distributions), except that on
Initial 2021 Guidance
Full Year 2021 Guidance | |
Net income per share | |
Nareit FFO per share | |
Core FFO per share | |
Same-Center NOI growth | 5.6% - 6.8% |
Second Half 2021 Guidance | |
Acquisitions | |
Dispositions |
The following table provides a reconciliation of the range of the Company's 2021 estimated net income to estimated Nareit FFO and Core FFO:
(Unaudited, dollars in millions, except per share amounts) | Low End | High End | |||||||
Net income | $ | 0.06 | $ | 0.12 | |||||
Depreciation and amortization of real estate assets | 1.86 | 1.86 | |||||||
Gain on sale of real estate assets and related impairments | (0.10 | ) | (0.10 | ) | |||||
Adjustments related to unconsolidated joint ventures | 0.01 | 0.01 | |||||||
Nareit FFO | $ | 1.83 | $ | 1.89 | |||||
Depreciation and amortization of corporate assets | 0.03 | 0.03 | |||||||
Change in fair value of earn-out liability | 0.15 | 0.15 | |||||||
Loss on extinguishment of debt, net | 0.01 | 0.01 | |||||||
Transactions and other | 0.07 | 0.07 | |||||||
Amortization of joint venture basis differences | 0.01 | 0.01 | |||||||
Core FFO | $ | 2.10 | $ | 2.16 |
Closing Commentary
Edison added: “Since our inception 30 years ago, our focus has been owning and operating small-format centers anchored by the top one or two grocer in a market. Our centers are located in the neighborhood, close to the customer, where America’s top grocers make money, and support our Neighbors’ omni-channel strategies. We believe this differentiated strategy, coupled with our experienced and cycle-tested team, are the key drivers of our strong performance, year after year.
“Looking forward, we see meaningful growth opportunities driven by a number of macroeconomic tailwinds, including population migration to the suburbs and the
Results Presentation Details
PECO plans to host a conference call and webcast on
Date:
Friday, August 6, 2021 Time:
9:00 a.m. Eastern Time Toll-Free Dial-In Number: (844) 691-1115
International Dial-In Number: (929) 517-0921
Conference ID: 6167623
Webcast link: https://edge.media-server.com/mmc/p/rk8h4e8g
A webcast replay will be available approximately one hour after the conclusion of the presentation using the Webcast link above.
PECO’s earnings release, quarterly financial supplement, and 10-Q are expected to be filed with the
For more information on the Company’s financial results, please refer to the Company’s Form 10-Q, filed with the
CONSOLIDATED BALANCE SHEETS
AS OF
(Condensed and Unaudited)
(In thousands, except per share amounts)
ASSETS | |||||||||
Investment in real estate: | |||||||||
Land and improvements | $ | 1,529,803 | $ | 1,549,362 | |||||
Building and improvements | 3,184,601 | 3,237,986 | |||||||
In-place lease assets | 434,499 | 441,683 | |||||||
Above-market lease assets | 64,795 | 66,106 | |||||||
Total investment in real estate assets | 5,213,698 | 5,295,137 | |||||||
Accumulated depreciation and amortization | (1,021,456 | ) | (941,413 | ) | |||||
Net investment in real estate assets | 4,192,242 | 4,353,724 | |||||||
Investment in unconsolidated joint ventures | 32,746 | 37,366 | |||||||
Total investment in real estate assets, net | 4,224,988 | 4,391,090 | |||||||
Cash and cash equivalents | 22,205 | 104,296 | |||||||
Restricted cash | 89,196 | 27,641 | |||||||
29,066 | 29,066 | ||||||||
Other assets, net | 126,056 | 126,470 | |||||||
Real estate investments and other assets held for sale | 14,261 | — | |||||||
Total assets | $ | 4,505,772 | $ | 4,678,563 | |||||
LIABILITIES AND EQUITY | |||||||||
Liabilities: | |||||||||
Debt obligations, net | $ | 2,228,232 | $ | 2,292,605 | |||||
Below-market lease liabilities, net | 93,949 | 101,746 | |||||||
Earn-out liability | 40,000 | 22,000 | |||||||
Derivative liabilities | 39,929 | 54,759 | |||||||
Deferred income | 18,978 | 14,581 | |||||||
Accounts payable and other liabilities | 88,436 | 176,943 | |||||||
Liabilities of real estate investments held for sale | 860 | — | |||||||
Total liabilities | 2,510,384 | 2,662,634 | |||||||
Equity: | |||||||||
Preferred stock, | |||||||||
outstanding at | — | — | |||||||
Common stock, | |||||||||
shares issued and outstanding at | 2,808 | 2,798 | |||||||
Additional paid-in capital | 2,749,680 | 2,739,358 | |||||||
Accumulated other comprehensive loss | (38,732 | ) | (52,306 | ) | |||||
Accumulated deficit | (1,041,617 | ) | (999,491 | ) | |||||
Total stockholders’ equity | 1,672,139 | 1,690,359 | |||||||
Noncontrolling interests | 323,249 | 325,570 | |||||||
Total equity | 1,995,388 | 2,015,929 | |||||||
Total liabilities and equity | $ | 4,505,772 | $ | 4,678,563 |
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED
(Condensed and Unaudited)
(In thousands, except per share amounts)
Three Months Ended | Six Months Ended | ||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||
Revenues: | |||||||||||||||||||
Rental income | $ | 130,335 | $ | 115,654 | $ | 257,958 | $ | 244,120 | |||||||||||
Fees and management income | 2,374 | 2,760 | 4,660 | 4,925 | |||||||||||||||
Other property income | 361 | 626 | 833 | 1,518 | |||||||||||||||
Total revenues | 133,070 | 119,040 | 263,451 | 250,563 | |||||||||||||||
Operating Expenses: | |||||||||||||||||||
Property operating | 21,974 | 19,629 | 44,176 | 41,391 | |||||||||||||||
Real estate taxes | 16,814 | 16,453 | 33,387 | 33,565 | |||||||||||||||
General and administrative | 11,937 | 9,806 | 21,278 | 20,546 | |||||||||||||||
Depreciation and amortization | 56,587 | 56,370 | 111,928 | 112,597 | |||||||||||||||
Impairment of real estate assets | 1,056 | — | 6,056 | — | |||||||||||||||
Total operating expenses | 108,368 | 102,258 | 216,825 | 208,099 | |||||||||||||||
Other: | |||||||||||||||||||
Interest expense, net | (19,132 | ) | (22,154 | ) | (39,195 | ) | (44,929 | ) | |||||||||||
Gain (loss) on disposal of property, net | 3,744 | (541 | ) | 17,585 | (2,118 | ) | |||||||||||||
Other (expense) income, net | (2,924 | ) | (500 | ) | (18,509 | ) | 9,369 | ||||||||||||
Net income | 6,390 | (6,413 | ) | 6,507 | 4,786 | ||||||||||||||
Net (income) loss attributable to noncontrolling interests | (796 | ) | 825 | (810 | ) | (605 | ) | ||||||||||||
Net income (loss) attributable to stockholders | $ | 5,594 | $ | (5,588 | ) | $ | 5,697 | $ | 4,181 | ||||||||||
Earnings per common share: | |||||||||||||||||||
Net income (loss) per share attributable to stockholders - basic and diluted | $ | 0.06 | $ | (0.06 | ) | $ | 0.06 | $ | 0.04 |
Reconciliation of Non-GAAP Measures
Same-Center Net Operating Income
The Company presents Same-Center NOI as a supplemental measure of its performance. The Company defines 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
Same-Center NOI should not be viewed as an alternative measure of the Company’s financial performance as it does not reflect the operations of its entire portfolio, nor does it reflect the impact of general and administrative expenses, depreciation and amortization, interest expense, other income (expense), or the level of capital expenditures and leasing costs necessary to maintain the operating performance of the Company’s properties that could materially impact its results from operations.
Funds from Operations and Core Funds from Operations
FFO is a non-GAAP financial performance measure that is widely recognized as a measure of REIT operating performance.
Core FFO is an additional financial performance measure used by the Company as FFO includes certain non-comparable items that affect its performance over time. The Company believes that Core FFO is helpful in assisting management and investors with the assessment of the sustainability of operating performance in future periods, and that it is more reflective of its core operating performance and provides an additional measure to compare PECO’s performance across reporting periods on a consistent basis by excluding items that may cause short-term fluctuations in net income (loss). To arrive at Core FFO, the Company adjusts FFO Attributable to Stockholders and OP Unit Holders to exclude certain recurring and non-recurring items including, but not limited to, depreciation and amortization of corporate assets, changes in the fair value of the earn-out liability, amortization of unconsolidated joint venture basis differences, gains or losses on the extinguishment or modification of debt, other impairment charges, and transaction and acquisition expenses.
FFO, FFO Attributable to Stockholders and OP Unit Holders, and Core FFO should not be considered alternatives to net income (loss) under GAAP, as an indication of the Company’s liquidity, nor as an indication of funds available to cover its cash needs, including its ability to fund distributions. Core FFO may not be a useful measure of the impact of long-term operating performance on value if the Company does not continue to operate its business plan in the manner currently contemplated.
Accordingly, FFO, FFO Attributable to Stockholders and OP Unit Holders, and Core FFO should be reviewed in connection with other GAAP measurements, and should not be viewed as more prominent measures of performance than net income (loss) or cash flows from operations prepared in accordance with GAAP. The Company’s FFO, FFO Attributable to Stockholders and OP Unit Holders, and Core FFO, as presented, may not be comparable to amounts calculated by other REITs.
Earnings Before Interest, Taxes, Depreciation, and Amortization for Real Estate and Adjusted EBITDAre
Nareit defines EBITDAre as net income (loss) computed in accordance with GAAP before (i) interest expense, (ii) income tax expense, (iii) depreciation and amortization, (iv) gains or losses from disposition of depreciable property, and (v) impairment write-downs of depreciable property. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect EBITDAre on the same basis.
Adjusted EBITDAre is an additional performance measure used by the Company as EBITDAre includes certain non-comparable items that affect the Company’s performance over time. To arrive at Adjusted EBITDAre, the Company excludes certain recurring and non-recurring items from EBITDAre, including, but not limited to: (i) changes in the fair value of the earn-out liability; (ii) other impairment charges; (iii) amortization of basis differences in the Company’s investments in its unconsolidated joint ventures; and (iv) transaction and acquisition expenses.
The Company has included the calculation of EBITDAre to better align with publicly traded REITs. The Company uses EBITDAre and Adjusted EBITDAre as additional measures of operating performance which allow it to compare earnings independent of capital structure, determine debt service and fixed cost coverage, and measure enterprise value. Additionally, the Company believes they are a useful indicator of its ability to support its debt obligations. EBITDAre and Adjusted EBITDAre should not be considered as alternatives to net income (loss), as an indication of the Company’s liquidity, nor as an indication of funds available to cover its cash needs, including its ability to fund distributions. Accordingly, EBITDAre and Adjusted EBITDAre should be reviewed in connection with other GAAP measurements, and should not be viewed as more prominent measures of performance than net income (loss) or cash flows from operations prepared in accordance with GAAP. The Company’s EBITDAre and Adjusted EBITDAre, as presented, may not be comparable to amounts calculated by other REITs.
Same-Center Net Operating Income—The table below compares same-center NOI (in thousands):
Three Months Ended | Favorable (Unfavorable) | Six Months Ended | Favorable (Unfavorable) | ||||||||||||||||||||||||||||||
2021 | 2020 | $ Change | % Change | 2021 | 2020 | $ Change | % Change | ||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||
Rental income(1) | $ | 91,305 | $ | 90,814 | $ | 491 | $ | 182,599 | $ | 182,852 | $ | (253 | ) | ||||||||||||||||||||
Tenant recovery income | 27,250 | 30,197 | (2,947 | ) | 57,851 | 60,980 | (3,129 | ) | |||||||||||||||||||||||||
Reserves for uncollectibility(2) | 2,889 | (9,706 | ) | 12,595 | 1,261 | (12,129 | ) | 13,390 | |||||||||||||||||||||||||
Other property income | 284 | 600 | (316 | ) | 756 | 1,465 | (709 | ) | |||||||||||||||||||||||||
Total revenues | 121,728 | 111,905 | 9,823 | 8.8 | % | 242,467 | 233,168 | 9,299 | 4.0 | % | |||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||
Property operating expenses | 17,504 | 16,495 | (1,009 | ) | 36,614 | 34,562 | (2,052 | ) | |||||||||||||||||||||||||
Real estate taxes | 16,519 | 16,038 | (481 | ) | 32,749 | 33,182 | 433 | ||||||||||||||||||||||||||
Total operating expenses | 34,023 | 32,533 | (1,490 | ) | (4.6 | )% | 69,363 | 67,744 | (1,619 | ) | (2.4 | )% | |||||||||||||||||||||
Total Same-Center NOI | $ | 87,705 | $ | 79,372 | $ | 8,333 | 10.5 | % | $ | 173,104 | $ | 165,424 | $ | 7,680 | 4.6 | % |
(1) Excludes straight-line rental income, net amortization of above- and below-market leases, and lease buyout income.
(2) Includes billings that will not be recognized as revenue until cash is collected or the Neighbor resumes regular payments and/or we deem it appropriate to resume recording revenue on an accrual basis, rather than on a cash basis.
Same-Center Net Operating Income Reconciliation—Below is a reconciliation of Net Income to NOI and Same-Center NOI (in thousands):
Three Months Ended | Six Months Ended | |||||||||||||||||||||||
2021 | 2020 | 2019 | 2021 | 2020 | ||||||||||||||||||||
Net income (loss) | $ | 6,390 | $ | (6,413 | ) | $ | (42,172 | ) | $ | 6,507 | $ | 4,786 | ||||||||||||
Adjusted to exclude: | ||||||||||||||||||||||||
Fees and management income | (2,374 | ) | (2,760 | ) | (3,051 | ) | (4,660 | ) | (4,925 | ) | ||||||||||||||
Straight-line rental (income) expense(1) | (2,970 | ) | 948 | (2,819 | ) | (4,392 | ) | (1,364 | ) | |||||||||||||||
Net amortization of above- and below-market leases | (887 | ) | (795 | ) | (1,091 | ) | (1,725 | ) | (1,583 | ) | ||||||||||||||
Lease buyout income | (1,781 | ) | (214 | ) | (223 | ) | (2,578 | ) | (308 | ) | ||||||||||||||
General and administrative expenses | 11,937 | 9,806 | 13,540 | 21,278 | 20,546 | |||||||||||||||||||
Depreciation and amortization | 56,587 | 56,370 | 59,554 | 111,928 | 112,597 | |||||||||||||||||||
Impairment of real estate assets | 1,056 | — | 25,199 | 6,056 | — | |||||||||||||||||||
Interest expense, net | 19,132 | 22,154 | 25,758 | 39,195 | 44,929 | |||||||||||||||||||
(Gain) loss on disposal of property, net | (3,744 | ) | 541 | 1,266 | (17,585 | ) | 2,118 | |||||||||||||||||
Other expense (income), net | 2,924 | 500 | 10,573 | 18,509 | (9,369 | ) | ||||||||||||||||||
Property operating expenses related to fees and management income | 1,306 | 891 | 1,531 | 2,122 | 1,528 | |||||||||||||||||||
NOI for real estate investments | 87,576 | 81,028 | 88,065 | 174,655 | 168,955 | |||||||||||||||||||
Less: Non-same-center NOI(2) | 129 | (1,656 | ) | (5,689 | ) | (1,551 | ) | (3,531 | ) | |||||||||||||||
Total Same-Center NOI | $ | 87,705 | $ | 79,372 | $ | 82,376 | $ | 173,104 | $ | 165,424 | ||||||||||||||
Less: Centers not included in 2019 Same-Center(3) | (2,195 | ) | (585 | ) | ||||||||||||||||||||
Total Same-Center NOI - adjusted for 2019(3) | $ | 85,510 | $ | 81,791 |
(1) Includes straight-line rent adjustments for Neighbors for whom revenue is being recorded on a cash basis.
(2) Includes operating revenues and expenses from non-same-center properties which includes properties acquired or sold and corporate activities.
(3) When comparing Same-Center NOI for the three months ended
Nareit Funds from Operations and Core Funds from Operations—The following table presents the Company’s calculation of Nareit FFO, Nareit FFO Attributable to Stockholders and OP Unit Holders, and Core FFO and provides additional information related to its operations (in thousands, except per share amounts):
Three Months Ended | Six Months Ended | ||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||
Calculation of Nareit FFO Attributable to Stockholders and OP Unit Holders | |||||||||||||||||||
Net income (loss) | $ | 6,390 | $ | (6,413 | ) | $ | 6,507 | $ | 4,786 | ||||||||||
Adjustments: | |||||||||||||||||||
Depreciation and amortization of real estate assets | 55,654 | 54,892 | 109,995 | 109,709 | |||||||||||||||
Impairment of real estate assets | 1,056 | — | 6,056 | — | |||||||||||||||
(Gain) loss on disposal of property, net | (3,744 | ) | 541 | (17,585 | ) | 2,118 | |||||||||||||
Adjustments related to unconsolidated joint ventures | 537 | 940 | (100 | ) | 1,594 | ||||||||||||||
Nareit FFO attributable to stockholders and OP unit holders | $ | 59,893 | $ | 49,960 | $ | 104,873 | $ | 118,207 | |||||||||||
Calculation of Core FFO | |||||||||||||||||||
Nareit FFO attributable to stockholders and OP unit holders | $ | 59,893 | $ | 49,960 | $ | 104,873 | $ | 118,207 | |||||||||||
Adjustments: | |||||||||||||||||||
Depreciation and amortization of corporate assets | 933 | 1,478 | 1,933 | 2,888 | |||||||||||||||
Change in fair value of earn-out liability | 2,000 | — | 18,000 | (10,000 | ) | ||||||||||||||
Amortization of unconsolidated joint venture basis differences | 79 | 254 | 825 | 721 | |||||||||||||||
Loss on extinguishment of debt, net | 419 | — | 1,110 | 73 | |||||||||||||||
Transaction and acquisition expenses | 934 | 14 | 1,075 | 59 | |||||||||||||||
Core FFO | $ | 64,258 | $ | 51,706 | $ | 127,816 | $ | 111,948 | |||||||||||
Nareit FFO Attributable to Stockholders and OP Unit Holders/Core FFO per Share(1) | |||||||||||||||||||
Weighted-average common shares outstanding - diluted | 107,175 | 111,165 | 107,102 | 111,140 | |||||||||||||||
Nareit FFO attributable to stockholders and OP unit holders per share - diluted | $ | 0.56 | $ | 0.45 | $ | 0.98 | $ | 1.06 | |||||||||||
Core FFO per share - diluted | $ | 0.60 | $ | 0.47 | $ | 1.19 | $ | 1.01 |
(1) Restricted stock awards were dilutive to Nareit FFO Attributable to Stockholders and OP Unit Holders per share and Core FFO per share for the three and six months ended
EBITDAre and Adjusted EBITDAre—The following table presents the Company’s calculation of EBITDAre and Adjusted EBITDAre (in thousands):
Three Months Ended | Six Months Ended | Year Ended | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2020 | ||||||||||||||||||||
Calculation of EBITDAre | ||||||||||||||||||||||||
Net income (loss) | $ | 6,390 | $ | (6,413 | ) | $ | 6,507 | $ | 4,786 | $ | 5,462 | |||||||||||||
Adjustments: | ||||||||||||||||||||||||
Depreciation and amortization | 56,587 | 56,370 | 111,928 | 112,597 | 224,679 | |||||||||||||||||||
Interest expense, net | 19,132 | 22,154 | 39,195 | 44,929 | 85,303 | |||||||||||||||||||
(Gain) loss on disposal of property, net | (3,744 | ) | 541 | (17,585 | ) | 2,118 | (6,494 | ) | ||||||||||||||||
Impairment of real estate assets | 1,056 | — | 6,056 | — | 2,423 | |||||||||||||||||||
Federal, state, and local tax expense | 165 | 180 | 331 | 209 | 491 | |||||||||||||||||||
Adjustments related to unconsolidated joint ventures | (535 | ) | 1,391 | 597 | 2,568 | 3,355 | ||||||||||||||||||
EBITDAre | $ | 79,051 | $ | 74,223 | $ | 147,029 | $ | 167,207 | $ | 315,219 | ||||||||||||||
Calculation of Adjusted EBITDAre | ||||||||||||||||||||||||
EBITDAre | $ | 79,051 | $ | 74,223 | $ | 147,029 | $ | 167,207 | $ | 315,219 | ||||||||||||||
Adjustments: | ||||||||||||||||||||||||
Change in fair value of earn-out liability | 2,000 | — | 18,000 | (10,000 | ) | (10,000 | ) | |||||||||||||||||
Transaction and acquisition expenses | 934 | 14 | 1,075 | 59 | 539 | |||||||||||||||||||
Amortization of unconsolidated joint venture basis differences | 79 | 254 | 825 | 721 | 1,883 | |||||||||||||||||||
Other impairment charges | — | — | — | — | 359 | |||||||||||||||||||
Adjusted EBITDAre | $ | 82,064 | $ | 74,491 | $ | 166,929 | $ | 157,987 | $ | 308,000 |
Financial Leverage Ratios—The Company’s net debt to Adjusted EBITDAre, net debt to total enterprise value, and debt covenant compliance as of
June 30, 2021 (As Adjusted)(2) | |||||||||||
Net debt: | |||||||||||
Total debt, excluding market adjustments and deferred financing expenses | $ | 1,906,754 | $ | 2,272,268 | $ | 2,345,620 | |||||
Less: Cash and cash equivalents | 153,902 | 22,633 | 104,952 | ||||||||
Total net debt | $ | 1,752,852 | $ | 2,249,635 | $ | 2,240,668 | |||||
Enterprise value: | |||||||||||
Net debt | $ | 1,752,852 | $ | 2,249,635 | $ | 2,240,668 | |||||
Total equity value(1) | 3,543,624 | 3,386,803 | 2,797,234 | ||||||||
Total enterprise value | $ | 5,296,476 | $ | 5,636,438 | $ | 5,037,902 |
(1) Total equity value is calculated as the number of common shares and OP units outstanding multiplied by the EVPS as of
(2) In July, the Company entered into a new credit facility comprised of a revolving credit facility and two unsecured term loan tranches (the "Refinancing"). In connection with this activity PECO paid off a term loan due in 2025. In addition to this activity, the Company used underwritten IPO proceeds to retire a term loan due in 2022. Total Net Debt has been adjusted as though the Refinancing, underwritten IPO, and retirement of the term loan using the underwritten IPO proceeds had occurred as of
The following table presents the calculation of net debt to Adjusted EBITDAre and net debt to total enterprise value as of
June 30, 2021 (As Adjusted)(2) | |||||||||||
Net debt to Adjusted EBITDAre - annualized: | |||||||||||
Net debt | $ | 1,752,852 | $ | 2,249,635 | $ | 2,240,668 | |||||
Adjusted EBITDAre - annualized(1) | 316,307 | 316,942 | 308,000 | ||||||||
Net debt to Adjusted EBITDAre - annualized | 5.5x | 7.1x | 7.3x | ||||||||
Net debt to total enterprise value | |||||||||||
Net debt | $ | 1,752,852 | $ | 2,249,635 | $ | 2,240,668 | |||||
Total enterprise value | 5,296,476 | 5,636,438 | 5,037,902 | ||||||||
Net debt to total enterprise value | 33.1 | % | 39.9 | % | 44.5 | % |
(1) Adjusted EBITDAre is based on a trailing twelve month period.
(2) In July, the Company entered into the Refinancing. In connection with this activity PECO paid off a term loan due in 2025. In addition to this activity, the Company used underwritten IPO proceeds to retire a term loan due in 2022. Total Net Debt has been adjusted as though the Refinancing, underwritten IPO, and retirement of the term loan using the underwritten IPO proceeds had occurred as of
About
PECO uses, and intends to continue to use, its Investors website, which can be found at www.phillipsedison.com/investors, as a means of disclosing material nonpublic information and for complying with its disclosure obligations under Regulation FD.
Forward-Looking Statements
Certain statements contained in this press release of
Additional important factors that could cause actual results to differ are described in the filings made from time to time by the Company with the
Investors:
(513) 338-2743
InvestorRelations@phillipsedison.com
Source:
Source:
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