Mission Statement, Vision, & Core Values (2024) of Phillips Edison & Company, Inc. (PECO)

An Overview of Phillips Edison & Company, Inc. (PECO)

General Summary of Phillips Edison & Company, Inc. (PECO)

Phillips Edison & Company, Inc. (PECO) is a leading owner and operator of grocery-anchored shopping centers across the United States. Founded in 1991, the company has established a significant presence in the retail real estate sector. As of 2024, PECO operates a portfolio of 290 properties, totaling approximately 32.9 million square feet across 31 states. The company specializes in grocery-anchored shopping centers, with 96.6% of its annual base rent (ABR) derived from this segment.

In 2024, PECO reported total revenues of $488.3 million, marking an increase of 7.2% compared to the previous year. The company’s primary sources of income include rental income, fees, and management income, contributing significantly to its financial performance.

Company's Financial Performance in the Latest Financial Reports

For the nine months ended September 30, 2024, Phillips Edison & Company reported:

• Total Revenues: $488.3 million
• Rental Income: $478.1 million, up 7.1% from $446.3 million in 2023
• Fees and Management Income: $7.9 million, an increase of 10.4% year-over-year
• Net Income Attributable to Stockholders: $44.5 million, a 2.8% increase from $43.3 million
• Earnings per Share (EPS): $0.36, compared to $0.37 in 2023

Operating expenses for the same period totaled $363.1 million, reflecting a 6.8% increase from $340.0 million in the prior year. The company’s interest expense rose to $71.9 million compared to $61.7 million in 2023, primarily due to increased debt and interest rates. As of September 30, 2024, PECO's total debt obligations amounted to $2.1 billion, with a weighted-average interest rate of 4.4% and a weighted-average term of 5.9 years.

Introduction to Company as One of the Leaders in the Industry

Phillips Edison & Company is recognized as one of the leading firms in the grocery-anchored shopping center sector. The company's strategic focus on high-quality properties in attractive demographic markets has facilitated sustained growth and resilience in its operations. As of September 30, 2024, PECO maintained a leased occupancy rate of 97.8%, with anchor spaces at 99.4% occupancy.

PECO's ability to adapt to market trends and consumer preferences has positioned it favorably within the retail real estate landscape. The company has demonstrated a commitment to enhancing its portfolio through strategic acquisitions, having acquired 8 properties during the first nine months of 2024 at a total cost of $205 million, compared to 5 properties for $83 million in the same period of 2023. This proactive approach underscores PECO's dedication to maintaining its status as a market leader.

Mission Statement of Phillips Edison & Company, Inc. (PECO)

Mission Statement of Phillips Edison & Company, Inc. (PECO)

Phillips Edison & Company, Inc. (PECO) operates with a mission statement that emphasizes their commitment to providing high-quality retail real estate solutions. This mission serves as a guiding principle for the company's strategic decisions and long-term objectives. The mission statement is structured around three core components: enhancing tenant experiences, maximizing shareholder value, and promoting sustainable practices.

Core Component 1: Enhancing Tenant Experiences

PECO's mission stresses the importance of enhancing tenant experiences within their shopping centers. This commitment is reflected in their operational strategies and property management practices. For instance, as of September 30, 2024, PECO reported a leased occupancy rate of 97.8% across their total portfolio, indicating strong tenant engagement and satisfaction. Furthermore, the average remaining lease term was 4.4 years, which suggests stability and long-term relationships with tenants.

The company's investment in tenant improvements also underscores this focus. In the nine months ended September 30, 2024, PECO allocated $18.7 million for tenant improvements, enhancing the retail environments for their tenants.

Core Component 2: Maximizing Shareholder Value

Maximizing shareholder value is a fundamental aspect of PECO's mission. As a Real Estate Investment Trust (REIT), PECO is obligated to distribute at least 90% of their taxable income to shareholders. For the month of September 2024, the company declared a monthly distribution of $0.1025 per common share, reflecting a 5.1% increase from previous distributions. This distribution strategy is designed to provide consistent returns to shareholders while maintaining compliance with REIT regulations.

Financially, PECO reported a net income attributable to stockholders of $44.5 million for the nine months ended September 30, 2024, marking an increase of 2.8% compared to the previous year. The company also generated total revenues of $488.3 million during the same period, up 7.2% year-over-year.

Core Component 3: Promoting Sustainable Practices

PECO's mission includes a commitment to sustainability, which is increasingly important in the commercial real estate sector. The company aims to incorporate environmentally responsible practices in their operations and developments. For instance, PECO’s capital expenditures for redevelopment and development projects totaled $18.2 million in the nine months ending September 30, 2024, focusing on enhancing the sustainability of their properties.

Additionally, the company’s portfolio primarily consists of grocery-anchored shopping centers, with 96.6% of their annual base rent (ABR) derived from this category, which tends to have lower carbon footprints compared to traditional retail. This strategic focus not only supports the mission but also aligns with broader market trends favoring sustainable and community-oriented retail environments.

Vision Statement of Phillips Edison & Company, Inc. (PECO)

Vision Statement of Phillips Edison & Company, Inc. (PECO)

As of 2024, Phillips Edison & Company, Inc. (PECO) articulates its vision through a commitment to enhancing the quality of life in the communities it serves by developing and managing grocery-anchored shopping centers that meet the evolving needs of consumers and retailers. This vision is underpinned by a focus on sustainability, innovation, and operational excellence.

PECO's vision emphasizes a strong commitment to community engagement and sustainability. The company aims to create shopping environments that foster community interaction and contribute positively to local economies. As of September 30, 2024, PECO's portfolio includes:

This data reflects PECO's dedication to maintaining high occupancy rates and focusing on grocery-anchored centers, which are essential for community convenience and sustainability.

PECO's vision also includes a commitment to innovation and adaptation in the retail space. The company is focused on leveraging technology to enhance the shopping experience and streamline operations. Key statistics that illustrate this commitment include:

These metrics highlight PECO's proactive approach to managing its leases and maximizing rental income through innovation and improved tenant relations.

Operational excellence is a core component of PECO's vision. The company aims to optimize its portfolio through efficient property management and strategic acquisitions. For the nine months ended September 30, 2024, PECO reported:

This financial performance underscores PECO's commitment to operational excellence and its ability to generate consistent revenue while managing expenses effectively.

PECO envisions future growth through strategic expansion and redevelopment of its properties to meet changing consumer preferences. In 2024, the company has undertaken significant acquisitions:

This strategic focus on acquisitions and redevelopment reflects PECO's vision of adapting to market demands and enhancing its property portfolio.

Through its vision statement, Phillips Edison & Company, Inc. (PECO) seeks to position itself as a leader in the grocery-anchored retail sector, committed to community engagement, sustainability, innovation, operational excellence, and strategic growth.

Core Values of Phillips Edison & Company, Inc. (PECO)

Integrity

The core value of integrity at Phillips Edison & Company, Inc. (PECO) emphasizes transparency, honesty, and ethical behavior in all business practices. This commitment is paramount in maintaining trust with stakeholders, including investors, tenants, and employees.

In 2024, PECO demonstrated its integrity through consistent and transparent reporting of financial performance. For instance, in the third quarter of 2024, the company reported a net income of $12.9 million, representing a slight decrease of 6% from $13.7 million in the same quarter of 2023. This transparency in financial performance fosters trust among investors and aligns with the company's core value of integrity.

Collaboration

Collaboration is vital for PECO, facilitating partnerships that enhance operational efficiency and customer satisfaction. The company actively engages with various stakeholders, including tenants and community partners, to create value.

For example, as of September 30, 2024, PECO owned equity interests in 311 shopping centers across 31 states, encompassing approximately 35.2 million square feet. This expansive portfolio reflects collaborative efforts in property management and tenant relations that contribute to high occupancy rates, which stood at 97.8%.

Innovation

Innovation drives PECO to explore new strategies and technologies that enhance operational performance and customer engagement. The company invests in modernization and sustainability initiatives to stay competitive in the retail real estate sector.

In 2024, PECO allocated $55.6 million towards capital expenditures, focusing on redevelopment and development projects. Such investments not only enhance property values but also demonstrate the company's commitment to innovative practices that meet evolving market demands.

Excellence

Excellence is a guiding principle for PECO, striving for superior performance in all aspects of its operations. This commitment is reflected in the company's high standards for property management and tenant services.

As of September 30, 2024, the total annualized base rent (ABR) from PECO's portfolio reached $497.1 million, up from $453.0 million in 2023, showcasing a robust growth rate of 9.7%. This financial performance underscores the company’s pursuit of excellence in maximizing rental income and asset management.

Community Focus

PECO prioritizes community engagement and social responsibility, recognizing the importance of contributing positively to the neighborhoods it serves. This value reflects the company's commitment to sustainability and local economic development.

In response to community needs, PECO has implemented various initiatives, including tenant programs that support local businesses. As of September 30, 2024, the company reported a portfolio occupancy of 99.4% for anchor spaces, indicating strong community support for its shopping centers. Additionally, the company has been involved in disaster recovery efforts following Hurricanes Helene and Milton, which impacted its properties in the southeast.

Article updated on 8 Nov 2024

Resources:

• Phillips Edison & Company, Inc. (PECO) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Phillips Edison & Company, Inc. (PECO)' financial performance, including balance sheets, income statements, and cash flow statements.
• SEC Filings – View Phillips Edison & Company, Inc. (PECO)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.