☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Maryland						27-1106076
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


11501 Northlake Drive, Cincinnati, Ohio						45249
(Address of principal executive offices)						(Zip code)


(513) 554-1110
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, par value $0.01 per share

PECO

Nasdaq Global Select Market


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.	Yes	☑	No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).	Yes	☑	No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

☐

☑

☐


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.	☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).	Yes	☐	No ☑

There were ~~19.6~~113.9 million shares of the registrant’s Common Stock, $0.01 par value per share, ~~and 93.7 million shares of Class B stock, $0.01 par value per share,~~ outstanding as of ~~October~~April 29, ~~2021.~~2022.

PHILLIPS EDISON & COMPANY, INC. FORM 10-Q


PHILLIPS EDISON & COMPANY ~~SEPTEMBER 30, 2021~~MARCH 31, 2022 FORM 10-Q									1


w PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

See notes to consolidated financial statements.


PHILLIPS EDISON & COMPANY ~~SEPTEMBER 30, 2021~~MARCH 31, 2022 FORM 10-Q									2

(In thousands, except per share amounts)

Three Months Ended
September 30, Nine Months Ended
September 30,
2021 2020 2021 2020
Revenues:
Rental income $ 128,826 $ 123,298 $ 386,784 $ 367,418
Fees and management income 2,435 2,581 7,095 7,506
Other property income 1,073 816 1,906 2,334
Total revenues 132,334 126,695 395,785 377,258
Operating Expenses:
Property operating 21,608 20,835 65,784 62,226
Real estate taxes 16,375 17,282 49,762 50,847
General and administrative 11,627 9,595 32,905 30,141
Depreciation and amortization 53,901 56,095 165,829 168,692
Impairment of real estate assets 698 — 6,754 —
Total operating expenses 104,209 103,807 321,034 311,906
Other:
Interest expense, net (18,570) (20,388) (57,765) (65,317)
Gain on disposal of property, net 14,093 10,734 31,678 8,616
Other (expense) income, net (7,086) 196 (25,595) 9,565
Net income 16,562 13,430 23,069 18,216
Net income attributable to noncontrolling interests (1,929) (1,646) (2,739) (2,251)
Net income attributable to stockholders $ 14,633 $ 11,784 $ 20,330 $ 15,965
Earnings per share of common stock:
Net income per share attributable to stockholders - basic and
diluted (Note 10)
$ 0.13 $ 0.12 $ 0.21 $ 0.16
Comprehensive income (loss):
Net income $ 16,562 $ 13,430 $ 23,069 $ 18,216
Other comprehensive income (loss):
Change in unrealized value on interest rate swaps 4,488 5,098 19,981 (40,013)
Comprehensive income (loss) 21,050 18,528 43,050 (21,797)
Net income attributable to noncontrolling interests (1,929) (1,646) (2,739) (2,251)
Change in unrealized value on interest rate swaps attributable to
noncontrolling interests (562) (653) (2,471) 5,145
Reallocation of comprehensive loss upon conversion of noncontrolling
interests — — (10) —
Comprehensive income (loss) attributable to stockholders $ 18,559 $ 16,229 $ 37,830 $ (18,903)


	Three Months Ended March 31,
		2022		2021
Revenues:
Rental income		$	138,748	$	127,623
Fees and management income		2,461		2,286
Other property income		954		472
Total revenues		142,163		130,381
Operating Expenses:
Property operating		23,320		22,202
Real estate taxes		17,491		16,573
General and administrative		11,532		9,341
Depreciation and amortization		57,226		55,341
Impairment of real estate assets		—		5,000
Total operating expenses		109,569		108,457
Other:
Interest expense, net		(18,199)		(20,063)
Gain on disposal of property, net		1,368		13,841
Other expense, net		(4,365)		(15,585)
Net income		11,398		117
Net income attributable to noncontrolling interests		(1,319)		(14)
Net income attributable to stockholders		$	10,079	$	103
Earnings per share of common stock:
Net income per share attributable to stockholders - basic and diluted (see Note 10)		$	0.09	$	0.00

Comprehensive income:
Net income		$	11,398	$	117
Other comprehensive income:
Change in unrealized value on interest rate swaps		27,573		12,120
Comprehensive income		38,971		12,237
Net income attributable to noncontrolling interests		(1,319)		(14)
Change in unrealized value on interest rate swaps attributable to noncontrolling interests		(2,702)		(1,509)
Reallocation of comprehensive loss upon conversion of noncontrolling interests		(212)		$	—
Comprehensive income attributable to stockholders		$	34,738	$	10,714

See notes to consolidated financial statements.


PHILLIPS EDISON & COMPANY ~~SEPTEMBER 30, 2021~~MARCH 31, 2022 FORM 10-Q									3

Common distributions declared, $0.255

Common distributions declared, $0.27

See notes to consolidated financial statements.


PHILLIPS EDISON & COMPANY ~~SEPTEMBER 30, 2021~~MARCH 31, 2022 FORM 10-Q									4

PHILLIPS EDISON & COMPANY, INC.

CONSOLIDATED STATEMENTS OF ~~EQUITY~~CASH FLOWS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~SEPTEMBER 30,~~MARCH 31, 2022 AND 2021 ~~AND 2020~~

(Condensed and Unaudited)

(In ~~thousands, except per share amounts)~~thousands)

Nine Months Ended September 30, 2021 and 2020
   Common Stock Class B Common Stock APIC AOCI Accumulated Deficit Total Stockholders’ Equity Noncontrolling Interests Total Equity
   Shares Amount Shares Amount
Balance at January 1, 2020 — $ — 96,349 $ 2,890 $ 2,779,130 $ (20,762) $ (947,252) $ 1,814,006 $ 354,788 $ 2,168,794
Dividend Reinvestment Plan (“DRIP”) — — 479 14 15,926 — — 15,940 — 15,940
Share repurchases — — (96) (3) (2,697) — — (2,700) — (2,700)
Change in unrealized value on interest
    rate swaps — — — — — (34,868) — (34,868) (5,145) (40,013)
Common distributions declared, $0.503
    per share
— — — — — — (48,809) (48,809) — (48,809)
Distributions to noncontrolling interests — — — — — — — — (7,105) (7,105)
Share-based compensation — — 36 2 2,508 — — 2,510 1,336 3,846
Conversion of noncontrolling interests — — 56 2 1,859 — — 1,861 (1,861) —
Other — — (2) — (71) — (438) (509) (7) (516)
Net income — — — — — — 15,965 15,965 2,251 18,216
Balance at September 30, 2020 — $ — 96,822 $ 2,905 $ 2,796,655 $ (55,630) $ (980,534) $ 1,763,396 $ 344,257 $ 2,107,653
Balance at January 1, 2021 — $ — 93,279 $ 2,798 $ 2,739,358 $ (52,306) $ (999,491) $ 1,690,359 $ 325,570 $ 2,015,929
Issuance of common stock 19,550 196 — — 547,205 — — 547,401 — 547,401
Offering costs, discounts, and
    commissions — — — — (39,042) — — (39,042) — (39,042)
DRIP — — 280 8 7,360 — — 7,368 — 7,368
Share repurchases — — (24) — (123) — — (123) — (123)
Change in unrealized value on interest
    rate swaps — — — — — 17,510 — 17,510 2,471 19,981
Common distributions declared, $0.765
    per share
— — — — — — (75,322) (75,322) — (75,322)
Distributions to noncontrolling interests — — — — — — — — (10,315) (10,315)
Share-based compensation — — 100 1 4,298 — — 4,299 4,532 8,831
Conversion of noncontrolling interests — — 28 — 743 — — 743 (743) —
Reallocation of operating partnership
    interests — — — — (56) (10) — (66) 66 —
Impact of reverse stock split — — — (1,871) 1,871 — — — — —
Other — — — — (29) — — (29) — (29)
Net income — — — — — — 20,330 20,330 2,739 23,069
Balance at September 30, 2021 19,550 $ 196 93,663 $ 936 $ 3,261,585 $ (34,806) $ (1,054,483) $ 2,173,428 $ 324,320 $ 2,497,748

~~See notes to consolidated financial statements.~~


	Three Months Ended March 31,
	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	11,398	$	117
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of real estate assets	56,321		54,341
Impairment of real estate assets	—		5,000
Depreciation and amortization of corporate assets	905		1,000
Net amortization of above- and below-market leases	(1,002)		(838)
Amortization of deferred financing expenses	801		1,227
Amortization of debt and derivative adjustments	586		354
Gain on disposal of property, net	(1,368)		(13,841)
Change in fair value of earn-out liability	1,809		16,000
Straight-line rent	(1,818)		(1,424)
Share-based compensation	3,146		1,110
Return on investment in unconsolidated joint ventures	—		1,546
Other	487		(567)
Changes in operating assets and liabilities:
Other assets, net	(10,978)		(10,787)
Accounts payable and other liabilities	(66)		(4,487)
Net cash provided by operating activities	60,221		48,751
CASH FLOWS FROM INVESTING ACTIVITIES:
Real estate acquisitions	(101,440)		(39,850)
Capital expenditures	(18,608)		(13,537)
Proceeds from sale of real estate, net	12,770		58,356
Investment in third parties	—		(3,000)
Return of investment in unconsolidated joint ventures	781		2,721
Net cash (used in) provided by investing activities	(106,497)		4,690
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from revolving credit facility	102,000		—
Payments on revolving credit facility	(56,000)		—
Payments on mortgages and loans payable	(62,515)		(16,505)
Distributions paid, net of DRIP	(30,926)		(24,296)
Distributions to noncontrolling interests	(4,343)		(4,530)
Repurchases of Class B common stock	—		(77,765)
Other	—		(29)
Net cash used in financing activities	(51,784)		(123,125)
NET DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	(98,060)		(69,684)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH:
Beginning of period	115,529		131,937
End of period	$	17,469	$	62,253

RECONCILIATION TO CONSOLIDATED BALANCE SHEETS:
Cash and cash equivalents	$	5,063	$	20,258
Restricted cash	12,406		41,995
Cash, cash equivalents, and restricted cash at end of period	$	17,469	$	62,253


PHILLIPS EDISON & COMPANY ~~SEPTEMBER 30, 2021~~MARCH 31, 2022 FORM 10-Q									5

PHILLIPS EDISON & COMPANY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

FOR THE ~~NINE~~THREE MONTHS ENDED ~~SEPTEMBER 30,~~MARCH 31, 2022 AND 2021 ~~AND 2020~~

(Condensed and Unaudited)

(In thousands)

Nine Months Ended September 30,
   2021 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 23,069 $ 18,216
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of real estate assets 162,979 164,288
Impairment of real estate assets 6,754 —
Depreciation and amortization of corporate assets 2,850 4,404
Net amortization of above- and below-market leases (2,633) (2,394)
Amortization of deferred financing expenses 3,581 3,739
Amortization of debt and derivative adjustments 1,133 2,154
Gain on disposal of property, net (31,678) (8,616)
Change in fair value of earn-out liability 23,000 (10,000)
Straight-line rent (6,884) (3,131)
Share-based compensation 8,831 3,846
Return on investment in unconsolidated joint ventures 1,520 825
Other 1,213 1,497
Changes in operating assets and liabilities:
Other assets, net (7,470) (11,914)
Accounts payable and other liabilities 12,048 (5,669)
Net cash provided by operating activities 198,313 157,245
CASH FLOWS FROM INVESTING ACTIVITIES:
Real estate acquisitions (88,954) (23,014)
Capital expenditures (49,315) (40,772)
Proceeds from sale of real estate 180,340 48,276
Investment in third parties (3,000) —
Return of investment in unconsolidated joint ventures 4,278 1,949
Investment in marketable securities (5,514) —
Net cash provided by (used in) investing activities 37,835 (13,561)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of common stock 547,401 —
Payment of offering costs (39,042) —
Repurchases of Class B stock (77,765) (5,211)
Proceeds from revolving credit facility 9,000 255,000
Payments on revolving credit facility (9,000) (255,000)
Proceeds from loans payable 480,000 —
Payments on mortgages and loans payable (1,077,422) (37,778)
Distributions paid, net of DRIP (75,669) (49,083)
Distributions to noncontrolling interests (11,344) (9,406)
Other (29) (516)
Net cash used in financing activities (253,870) (101,994)
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH (17,722) 41,690
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH:
Beginning of period 131,937 95,108
End of period $ 114,215 $ 136,798
RECONCILIATION TO CONSOLIDATED BALANCE SHEETS:
Cash and cash equivalents $ 24,455 $ 103,910
Restricted cash 89,760 32,888
Cash, cash equivalents, and restricted cash at end of period $ 114,215 $ 136,798


	Three Months Ended March 31,
	2022		2021
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	$	14,849	$	18,891
SUPPLEMENTAL SCHEDULE OF NON-CASH ACTIVITIES:
Settlement of earn-out liability	54,245		—
Right-of-use (“ROU”) assets obtained in exchange for new lease liabilities	—		194
Accrued capital expenditures	6,486		3,442
Change in distributions payable	(11)		(7,897)
Change in distributions payable - noncontrolling interests	(239)		(1,211)
Change in accrued share repurchase obligation	—		(77,642)
Distributions reinvested	—		7,368

See notes to consolidated financial statements.


PHILLIPS EDISON & COMPANY ~~SEPTEMBER 30, 2021~~MARCH 31, 2022 FORM 10-Q									6

~~PHILLIPS EDISON & COMPANY, INC.~~

~~CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)~~

~~FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020~~

~~(Condensed and Unaudited)~~

~~(In thousands)~~

Nine Months Ended September 30,
2021 2020
SUPPLEMENTAL CASH FLOW DISCLOSURE, INCLUDING NON-CASH INVESTING AND FINANCING ACTIVITIES:
Cash paid for interest $ 53,463 $ 59,906
Right-of-use (“ROU”) assets obtained in exchange for new lease liabilities 239 551
Accrued capital expenditures 4,075 3,587
Change in distributions payable (7,715) (16,214)
Change in distributions payable - noncontrolling interests (1,029) (2,301)
Change in accrued share repurchase obligation (77,642) (2,511)
Distributions reinvested 7,368 15,940

~~See notes to consolidated financial statements.~~


~~PHILLIPS EDISON & COMPANY~~ ~~SEPTEMBER 30, 2021 FORM 10-Q~~									7

Phillips Edison & Company, Inc.

Notes to Consolidated Financial Statements

(Condensed and Unaudited)
As of and for the ~~periods~~period ended ~~September 30, 2021~~March 31, 2022


1. ORGANIZATION

Phillips Edison & Company, Inc. (“we,” the “Company,” “PECO,” “our,” or “us”) was formed as a Maryland corporation in October 2009. Substantially all of our business is conducted through Phillips Edison Grocery Center Operating Partnership I, L.P., (the “Operating Partnership”), a Delaware limited partnership formed in December 2009. We are a limited partner of the Operating Partnership, and our wholly-owned subsidiary, Phillips Edison Grocery Center OP GP I LLC, is the sole general partner of the Operating Partnership.

We are a real estate investment trust (“REIT”) that invests primarily in omni-channel grocery-anchored neighborhood and community shopping centers that have a mix of creditworthy national, regional, and local retailers that sell necessity-based goods and services in strong demographic markets throughout the United States. In addition to managing our own shopping centers, our third-party investment management business provides comprehensive real estate and asset management services to two unconsolidated institutional joint ventures, in which we have a partial ownership interest, and one private fund (collectively, the “Managed Funds”) as of ~~September 30, 2021.~~March 31, 2022.

As of ~~September 30, 2021,~~March 31, 2022, we wholly-owned ~~267~~269 real estate properties. Additionally, we owned a 14% interest in Grocery Retail Partners I LLC (“GRP I”), a joint venture that owned 20 properties, and a 20% equity interest in Necessity Retail Partners (“NRP”), a joint venture that owned ~~2 properties.~~1 property.

On June 18, 2021, our stockholders approved an amendment to our charter (the “Articles of Amendment”) that effected a change of each share of our common stock outstanding at the time the amendment became effective into one share of a newly created class of Class B common stock (the “Recapitalization”). The Articles of Amendment became effective upon filing with, and acceptance by, the State Department of Assessments and Taxation of Maryland on July 2, 2021. Unless otherwise indicated, all information in this Form 10-Q gives effect to the Recapitalization and references to “shares” and per share metrics refer to our common stock and Class B common stock, collectively.

On July 2, 2021, our board of directors (the “Board”) approved an amendment to our articles of incorporation to effect a one-for-three reverse stock split. Concurrent with the reverse split, the Operating Partnership enacted a one-for-three reverse split of its outstanding Operating Partnership units (“OP units”). Unless otherwise indicated, the information in this Form 10-Q gives effect to the reverse stock and OP unit splits (Note 9).

Underwritten Initial Public Offering—On July 19, 2021, we closed our underwritten initial public offering (“underwritten IPO”), through which we ~~offered 17.0~~issued 19.6 million shares, including the underwriters’ overallotment election, of a new class of common stock, $0.01 par value per share, at an initial price to the public of $28.00 per ~~share, pursuant to~~share. As a ~~registration statement filed with the U.S. Securities and Exchange Commission (“SEC”) on Form S-11 (File No. 333-255846), as amended. In connection with~~result of the underwritten IPO, ~~the underwriters exercised a 30-day option to purchase additional shares of common stock to cover overallotments, and, accordingly, on August 2, 2021,~~ we settled the sale of an additional 2.6 million shares at a price of $28.00 per share. These shares are listed on the Nasdaq Global Select Market (“NASDAQ”) under the trading symbol “PECO”. The underwritten IPO, including the underwriters overallotment election, resulted inreceived gross proceeds of $547.4 million.

On September 20, 2021, the SEC declared effective our bond offering registration as filed on Form S-3 (File Nos. 333-259059 and 333-259059-01) relating to the offer, from time to time, of an unspecified number of debt securities not to exceed a maximum aggregate offering of $1 billion (“Bond Registration”). In October 2021, in connection with this registration, we settled $350 million aggregate principal amount of 2.625% senior notes (“2021 Bond Offering”) priced at 98.692% of the principal amount and maturing in November 2031. The notes are fully and unconditionally guaranteed by us.

Following our underwritten IPO, we are presenting common stock and Class B common stock as separate classes within our consolidated balance sheets and consolidated statements of equity. Any references to “common stock” in this 10-Q refer to our Nasdaq-listed shares sold through the underwritten IPO, whereas Class B common stock refers to the newly-created class of common stock that is not listed. This applies to all historical periods presented herein.


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Set forth below is a summary of the significant accounting estimates and policies that management believes are important to the preparation of our condensed consolidated interim financial statements. Certain of our accounting estimates are particularly important for an understanding of our financial position and results of operations and require the application of significant judgment by management. For example, significant estimates and assumptions have been made with respect to the useful lives of assets, remaining hold ~~period~~periods of assets, recoverable amounts of receivables, and other fair value measurement assessments required for the preparation of the consolidated interim financial statements. As a result, these estimates are subject to a degree of uncertainty.

Beginning in 2020, the coronavirus (“COVID-19”) pandemic has caused significant disruption to our operations. All temporarily closed tenants have since been permitted to reopen; however, certain of our tenants have permanently closed. We have


~~PHILLIPS EDISON & COMPANY~~ ~~SEPTEMBER 30, 2021 FORM 10-Q~~									8

backfilled a number of these spaces and continue to work on backfilling any remaining vacancies. The continuing economic impacts of the COVID-19 pandemic could result in increased permanent store closures, reduce the demand for leasing space in our shopping centers, and/or result in a decline in occupancy and rental revenues in our real estate portfolio. Because of the adverse economic conditions that have occurred as a result of the impacts of the COVID-19 pandemic and any remaining uncertainty related to the pandemic, it is possible that the estimates and assumptions that have been utilized in the preparation of the consolidated financial statements could change significantly. All of this activity impacts our estimates around the collectibility of revenue and valuation of real estate assets, goodwill and other intangible assets, and certain liabilities, among others.

There were no changes to our significant accounting policies during the ~~nine~~three months ended ~~September 30, 2021,~~March 31, 2022, except for those discussed below. For a full summary of our significant accounting policies, refer to our ~~2020~~2021 Annual Report on Form 10-K, ~~as originally~~ filed with the SEC on ~~March 12, 2021.~~February 16, 2022.

Basis of Presentation and Principles of Consolidation—The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Readers of this Quarterly Report on Form 10-Q should refer to our audited consolidated financial statements for the year ended December 31, ~~2020,~~2021, which are included in our ~~2020~~2021 Annual Report on Form 10-K. In the opinion of management, all normal and recurring adjustments necessary for the fair presentation of the unaudited consolidated financial statements for the periods presented have been included in this Quarterly Report. Our results of operations for the three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2022 are not necessarily indicative of the operating results expected for the full year.

The accompanying consolidated financial statements include our accounts and ~~those~~the accounts of the Operating Partnership and its wholly-owned subsidiaries (over which we exercise financial and operating control). The financial statements of the Operating Partnership are prepared using accounting policies consistent with our ~~majority-owned subsidiaries.~~accounting policies. All intercompany balances and transactions are eliminated upon consolidation.

The basis of presentation of our shares of common stock is described as follows:

~~Underwritten IPO Costs~~•~~—Underwritten IPO costs are offset against underwritten IPO proceeds~~Reverse Stock Split—On July 2, 2021, our board of directors (the “Board”) approved an amendment to our charter to effect a one-for-three reverse stock split. Concurrent with the reverse split, the Operating Partnership enacted a one-for-three reverse split of its outstanding Operating Partnership units (“OP units”). Unless otherwise indicated, the information in this Form 10-Q gives effect to the reverse stock and ~~included~~OP unit splits (see Note 9).

•Recapitalization—On June 18, 2021, our stockholders approved an amendment to our charter (the “Articles of Amendment”) that effected a change of each share of our common stock outstanding at the time the amendment became effective into one share of a newly created class of Class B common stock (the “Recapitalization”). The


PHILLIPS EDISON & COMPANY MARCH 31, 2022 FORM 10-Q									7

Articles of Amendment became effective on July 2, 2021. Unless otherwise indicated, all information in this Form 10-Q gives effect to the Recapitalization and references to “shares” and per share metrics refer to our common stock and Class B common stock, collectively. Our Class B common stock automatically converted into our publicly traded common stock on January 18, 2022 (see Note 9). Prior to the conversion, we have presented common stock and Class B common stock as ~~a component of APIC on the~~separate classes within our consolidated balance ~~sheets. Costs incurred that were related to our underwritten IPO activities but were not directly related to our equity raise were not capitalized~~sheets and ~~are included as transaction costs, currently in Other (Expense) Income, Net on our~~ consolidated statements of operations and comprehensive income (loss) (“consolidated statements of operations”). As of September 30, 2021, we had underwritten IPO costs of approximately $39.0 million, and we incurred costs related to our underwritten IPO but not directly related to our equity raise of approximately $1.0 million.equity.

Income Taxes—Our consolidated financial statements include the operations of wholly-owned subsidiaries that have jointly elected to be treated as ~~Taxable~~taxable REIT ~~Subsidiaries~~subsidiary entities and are subject to U.S. federal, state, and local income taxes at regular corporate tax rates. We recognized an insignificant amount of federal, state, and local income tax expense for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ and we retain a full valuation allowance for our deferred tax asset. All income tax amounts are included in Other ~~(Expense) Income,~~Expense, Net on our consolidated statements of ~~operations.~~operations and comprehensive income (“consolidated statements of operations”).

~~Recently Issued~~Newly Adopted Accounting Pronouncements—~~On January 7, 2021,~~There were no newly adopted accounting pronouncements during the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-01 to amend the scope of the guidance in ASU 2020-04 on facilitation of the effects of reference rate reform on financial reporting. Specifically, the amendments in ASU 2021-01 clarify that certain optional expedients and exceptions in Accounting Standards Codification (“ASC”) Topic 848, ~~Reference Rate Reform~~ for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. We adopted ASU 2021-01 upon its issuance and the adoption of this standard did not have a material impact on our consolidated financial statements.

~~Reclassifications—The following line items on our consolidated statement of cash flows for the nine~~three months ended ~~September 30, 2020 were reclassified to conform to current year presentation:~~

•~~Return on Investment in Unconsolidated Joint Ventures was listed on a separate line from Other Assets, Net; and~~

•~~Net Change in Credit Facility was separated into two lines, Proceeds from Revolving Credit Facility and Payments on Revolving Credit Facility.~~March 31, 2022 that impacted the Company.


~~PHILLIPS EDISON & COMPANY~~ ~~SEPTEMBER 30, 2021 FORM 10-Q~~									9


3. LEASES

Lessor—The majority of our leases are largely similar in that the leased asset is retail space within our properties, and the lease agreements generally contain similar provisions and features, without substantial variations. All of our leases are currently classified as operating leases. Lease income related to our operating leases was as follows ~~for the three and nine months ended September 30, 2021 and 2020~~ (in thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020				2022		2021
Rental income related to fixed lease payments(1)	Rental income related to fixed lease payments(1)	$	95,080	$	94,511	$	284,531	$	285,572	Rental income related to fixed lease payments(1)		$	101,510	$	94,966
Rental income related to variable lease payments(1)(2)	Rental income related to variable lease payments(1)(2)	29,919		31,781		88,774		94,278		Rental income related to variable lease payments(1)(2)		33,467		31,401
Straight-line rent amortization(3)	Straight-line rent amortization(3)	2,365		1,772		6,627		3,103		Straight-line rent amortization(3)		1,695		1,369
Amortization of lease assets	Amortization of lease assets	898		802		2,602		2,367		Amortization of lease assets		992		827
Lease buyout income	Lease buyout income	560		664		3,138		972		Lease buyout income		1,964		797
Adjustments for collectibility(4)	Adjustments for collectibility(4)	4		(6,232)		1,112		(18,874)		Adjustments for collectibility(4)		(880)		(1,737)
Total rental income	Total rental income	$	128,826	$	123,298	$	386,784	$	367,418	Total rental income		$	138,748	$	127,623

(1)Includes rental income related to lease payments before assessing for collectibility.

(2)Variable payments are primarily related to tenant recovery income.

(3)For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021, includes unfavorable revenue adjustments to straight-line rent for tenants considered non-creditworthy of ~~$0.2~~$1.2 million and ~~$0.6~~$0.8 million, respectively. ~~Includes favorable adjustments for the three months ended September 30, 2020 of $0.3 million, and unfavorable adjustments of $2.9 million for the nine months ended September 30, 2020.~~

(4)Includes general reserves as well as adjustments for tenants not considered creditworthy for which we are recording revenue on a cash basis, per ~~ASC~~Accounting Standards Codification (“ASC”) Topic 842, Leases ~~(“ASC 842”)~~.

For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021, we had net favorable changes to general reserves of ~~$0.5~~$0.2 million and ~~$4.6~~$2.3 million, respectively. Additionally, we had net unfavorable adjustments of ~~$0.5~~$1.1 million and ~~$3.5 million, respectively, related to monthly revenue for tenants that we deemed non-creditworthy and for which we were recording revenue on a cash basis.~~

For the three and nine months ended September 30, 2020, we had net unfavorable adjustments of $0.8 million and $1.7 million, respectively, related to general reserve collections. Additionally, we had net unfavorable adjustments of $5.5 million and $17.2$4.0 million, respectively, related to monthly revenue for tenants that we deemed non-creditworthy and for which we were recording revenue on a cash basis.

Approximate future fixed contractual lease payments to be received under non-cancelable operating leases in effect as of ~~September 30, 2021,~~March 31, 2022, assuming no new or renegotiated leases or option extensions on lease agreements, and including the impact of rent abatements ~~payment plans,~~ and tenants who have been moved to the cash basis of accounting for revenue recognition purposes, are as follows (in thousands):

Year Amount
Remaining 2021 $ 95,360
2022 375,318
2023 332,359
2024 279,403
2025 225,293
Thereafter 568,425
Total $ 1,876,158

In response to the COVID-19 pandemic, we executed payment plans with our tenants. As of September 30, 2021, we had $4.1 million of outstanding payment plans with our tenants and we expect to receive remaining amounts owed to us from these plans over a weighted-average term of approximately 11 months.


Year	Amount
Remaining 2022	$	303,902
2023	374,916
2024	322,431
2025	266,544
2026	201,848
Thereafter	513,911
Total	$	1,983,552

No single tenant comprised 7%10% or more of our aggregate annualized base rent (“ABR”) as of ~~September 30, 2021.~~March 31, 2022. As of ~~September 30, 2021,~~March 31, 2022, our wholly-owned real estate investments in Florida and California represented ~~12.4%~~12.0% and ~~10.1%~~10.7% of our ABR, respectively. As a result, the geographic concentration of our portfolio makes it particularly susceptible to adverse weather or economic events ~~including the impact of the COVID-19 pandemic,~~ in the Florida and California real estate markets.


PHILLIPS EDISON & COMPANY ~~SEPTEMBER 30, 2021~~MARCH 31, 2022 FORM 10-Q									108

~~Lessee—Lease assets and liabilities, grouped by balance sheet line where they are recorded, consisted of the following as of September 30, 2021 and December 31, 2020 (in thousands):~~

Balance Sheet Information Balance Sheet Location September 30, 2021 December 31, 2020
ROU assets, net - operating leases Investment in Real Estate $ 3,975 $ 3,867
ROU assets, net - operating and finance leases Other Assets, Net 1,080 1,438
Operating lease liability Accounts Payable and Other
Liabilities 5,468 5,731
Finance lease liability Debt Obligations, Net 117 164


4. REAL ESTATE ACTIVITY

~~Property Sales—The following table summarizes our real estate disposition activity (dollars in thousands):~~

Nine Months Ended September 30,
2021 2020
Number of properties sold(1)
20 6
Number of outparcels sold(2)(3)
3 —
Proceeds from sale of real estate $ 180,340 $ 48,276
Gain on sale of properties, net(4)
33,121 9,915

~~(1)We retained an outparcel for one property sold during the nine months ended September 30, 2021, and therefore the sale did not result in a reduction in our total property count.~~

~~(2)~~During the nine months ended September 30, 2021, our outparcel sales included: (i) the only remaining portion of one of our properties; therefore, resulting in a reduction in our total property count; and (ii) an undeveloped parcel of land, as well as an outparcel adjacent to one of our centers, neither of which resulted in a reduction in our total property count.

~~(3)~~In addition to the three outparcels sold during the nine months ended September 30, 2021, a tenant at one of our properties exercised a bargain purchase option to acquire a parcel of land that we previously owned. This generated minimal proceeds for us.

~~(4)The gain on sale of properties, net does not include miscellaneous write-off activity, which is also recorded in Gain on Disposal of Property, Net on the consolidated statements of operations.~~

~~Subsequent to September 30, 2021, we sold 1 property for $4.4 million.~~

Acquisitions—The following table summarizes our real estate acquisition activity (dollars in thousands):


		Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020			2022		2021
Number of properties acquired	Number of properties acquired	4		1		Number of properties acquired	3		2
Number of outparcels acquired(1)	Number of outparcels acquired(1)	3		2		Number of outparcels acquired(1)	—		2
Total acquisition price		$	88,954	$	23,014
Contract price						Contract price	$	100,400	$	39,605
Total price of acquisitions(2)						Total price of acquisitions(2)	101,440		39,850

(1)Outparcels acquired are adjacent to shopping centers that we own.

(2)Total price of acquisitions includes closing costs and credits.

The ~~fair value~~aggregate purchase price of the assets acquired during the three months ended March 31, 2022 and 2021 were allocated as follows (in thousands):


	March 31, 2022		March 31, 2021
ASSETS
Land and improvements	$	30,274	$	23,305
Building and improvements	65,028		13,990
In-place lease assets	8,557		4,155
Above-market lease assets	708		52
Total assets	104,567		41,502

LIABILITIES
Below-market lease liabilities	3,127		1,652
Total liabilities	3,127		1,652

Net assets acquired	$	101,440	$	39,850

The weighted-average ~~useful life at acquisition~~amortization periods for in-place, above-market, and below-market lease intangibles acquired during the three months ended March 31, 2022 and 2021 are as follows (in years):


	March 31, 2022	March 31, 2021
Acquired in-place leases	14	7
Acquired above-market leases	6	5
Acquired below-market leases	24	6

Property Dispositions—The following table summarizes our real estate disposition activity (dollars in ~~thousands, weighted-average useful life~~thousands):


	Three Months Ended March 31,
	2022		2021
Number of properties sold	2		6
Number of outparcels sold(1)	—		1
Contract Price	$	13,325	$	60,563
Proceeds from sale of real estate, net(2)	12,770		58,356
Gain on sale of property, net(3)	1,368		14,355

(1)During the three months ended March 31, 2021, the 1 outparcel sale included the only remaining portion of a property we previously owned; therefore, the sale resulted in ~~years):~~a reduction in our total property count.

Nine Months Ended
September 30, 2021 September 30, 2020
Fair Value Weighted-Average Useful Life Fair Value Weighted-Average Useful Life
In-place leases $ 8,728 10 $ 1,682 16
Above-market leases 198 5 120 5
Below-market leases (7,250) 17 (1,882) 26
(2)Total proceeds from sale of real estate, net includes closing costs and credits.

~~Subsequent to September 30,~~(3)During the three months ended March 31, 2021, ~~we purchased 2 properties for $91.2 million.~~Gain on Disposal of Property, Net on the consolidated statements of operations includes miscellaneous write-off activity, which is not included in gain on sale of property, net, presented above.


PHILLIPS EDISON & COMPANY ~~SEPTEMBER 30, 2021~~MARCH 31, 2022 FORM 10-Q									119

Property Held for Sale—As of ~~September 30,~~March 31, 2022 and December 31, 2021, ~~3 properties were~~1 property was classified as held for sale. ~~As of December 31, 2020, no properties were classified as held for sale. Properties~~A property classified as held for sale ~~as of September 30, 2021 were~~is under contract to sell, with no substantive contingencies, and the prospective ~~buyers~~buyer had significant funds at ~~risk as of the reporting date. Subsequent to September 30, 2021, we sold 1 of our held for sale properties.~~risk. A summary of assets and liabilities for the properties held for sale as of ~~September 30,~~March 31, 2022 and December 31, 2021 is below (in thousands):


	~~September 30, 2021~~
~~ASSETS~~
~~Total investment in real estate assets, net~~	$	~~16,109~~
~~Other assets, net~~	~~355~~
~~Total assets~~	$	~~16,464~~
~~LIABILITIES~~
~~Below-market lease liabilities, net~~	$	~~323~~
~~Accounts payable and other liabilities~~	~~317~~
~~Total liabilities~~	$	~~640~~


	March 31, 2022		December 31, 2021
ASSETS
Total investment in real estate assets, net	$	6,332	$	1,554
Other assets, net	215		3
Total assets	$	6,547	$	1,557
LIABILITIES
Below-market lease liabilities, net	$	114	$	284
Accounts payable and other liabilities	84		4
Total liabilities	$	198	$	288


5. OTHER ASSETS, NET

The following is a summary of Other Assets, Net outstanding as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, excluding amounts related to assets classified as held for sale (in thousands):


		September 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Other assets, net:	Other assets, net:					Other assets, net:
Deferred leasing commissions and costs	Deferred leasing commissions and costs	$	46,732	$	41,664	Deferred leasing commissions and costs	$	45,688	$	44,968
Deferred financing expenses(1)	Deferred financing expenses(1)	4,898		13,971		Deferred financing expenses(1)	4,898		4,898
Office equipment, ROU assets, and other		23,418		21,578
Office equipment, including capital lease assets, and other						Office equipment, including capital lease assets, and other	25,833		24,823
Corporate intangible assets	Corporate intangible assets	6,706		6,804		Corporate intangible assets	6,690		6,706
Total depreciable and amortizable assets	Total depreciable and amortizable assets	81,754		84,017		Total depreciable and amortizable assets	83,109		81,395
Accumulated depreciation and amortization	Accumulated depreciation and amortization	(43,204)		(45,975)		Accumulated depreciation and amortization	(42,867)		(41,236)
Net depreciable and amortizable assets	Net depreciable and amortizable assets	38,550		38,042		Net depreciable and amortizable assets	40,242		40,159
Accounts receivable, net(2)	Accounts receivable, net(2)	35,683		46,893		Accounts receivable, net(2)	39,002		36,762
Accounts receivable - affiliates	Accounts receivable - affiliates	417		543		Accounts receivable - affiliates	638		711
Deferred rent receivable, net(3)	Deferred rent receivable, net(3)	37,821		32,298		Deferred rent receivable, net(3)	41,756		40,212
Derivative assets						Derivative assets	5,365		—
Prepaid expenses and other	Prepaid expenses and other	18,623		8,694		Prepaid expenses and other	18,528		11,655
Investment in third parties	Investment in third parties	3,000		—		Investment in third parties	3,000		3,000
Investment in marketable securities	Investment in marketable securities	5,357		—		Investment in marketable securities	5,189		5,551
Total other assets, net	Total other assets, net	$	139,451	$	126,470	Total other assets, net	$	153,720	$	138,050

(1)Deferred financing expenses per the above table are related to our revolving ~~line of~~ credit facility, and as such we have elected to classify them as an asset rather than as a contra-liability.

(2)Net of ~~$6.3~~$4.1 million and ~~$8.9~~$3.5 million of general reserves for uncollectible amounts as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. Receivables that were removed for tenants considered to be non-creditworthy were ~~$12.5~~$7.3 million and ~~$22.8~~$9.2 million as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively.

(3)Net of ~~$4.8~~$5.8 million and ~~$4.4~~$4.7 million of receivables removed as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively, related to straight-line rent for tenants previously or currently considered to be non-creditworthy.


PHILLIPS EDISON & COMPANY ~~SEPTEMBER 30, 2021~~MARCH 31, 2022 FORM 10-Q									1210


6. DEBT OBLIGATIONS

The following is a summary of the outstanding principal balances and interest rates, which include the effect of derivative financial instruments, for our debt obligations as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 (dollars in thousands):


		Interest Rate(1)	September 30, 2021			December 31, 2020				Interest Rate(1)	March 31, 2022			December 31, 2021
Revolving credit facility	Revolving credit facility	LIBOR + 1.1%	$	—		$	—		Revolving credit facility	LIBOR + 1.1%	$	46,000		$	—
Term loans(2)	Term loans(2)	1.3% - 4.3%	1,105,000			1,622,500			Term loans(2)	1.6% - 4.2%	955,000			955,000
Senior unsecured notes due 2031									Senior unsecured notes due 2031	2.6%	350,000			350,000
Secured loan facilities	Secured loan facilities	3.4% - 3.5%	395,000			395,000			Secured loan facilities	3.4% - 3.5%	395,000			395,000
Mortgages	Mortgages	3.5% - 7.2%	215,597			290,022			Mortgages	3.5% - 6.4%	150,805			213,316
Finance lease liability	Finance lease liability		117			164			Finance lease liability		762			766
Discount on notes payable									Discount on notes payable		(7,512)			(7,680)
Assumed market debt adjustments, net	Assumed market debt adjustments, net		(1,568)			(1,543)			Assumed market debt adjustments, net		(1,546)			(1,530)
Deferred financing expenses, net	Deferred financing expenses, net		(14,729)			(13,538)			Deferred financing expenses, net		(12,301)			(13,150)
Total	Total		$	1,699,417		$	2,292,605		Total		$	1,876,208		$	1,891,722

Weighted-average interest rate			3.3		%	3.1		%
Weighted-average interest rate(3)									Weighted-average interest rate(3)		3.2		%	3.3		%

(1)Interest rates are as of ~~September 30, 2021.~~March 31, 2022.

(2)Our term loans carry an interest rate of LIBOR plus a spread. While most of the rates are fixed through the use of swaps, there is a portion of these loans that are not subject to a swap, and thus are still indexed to LIBOR.

~~Debt Activity~~(3)~~—In July 2021, we entered into a new $980 million credit facility comprised~~Includes the effects of ~~a $500 million senior unsecured revolving credit facility~~derivative financial instruments (see Notes 7 and ~~two $240 million senior unsecured term loan tranches (the “Refinancing”)~~12). In connection with the Refinancing, we paid off a $472.5 million term loan due in November 2025. The revolving credit facility will mature in January 2026, and the two senior unsecured term loan tranches will mature in November 2025 and July 2026, respectively. Additionally, we used proceeds from the underwritten IPO to retire a $375 million term loan that was set to mature in April 2022.

~~In August 2021,~~2022 Debt Activity—During the three months ended March 31, 2022, we ~~paid down $150~~executed early repayments of $61.0 million ~~of our $300 million term loan that was set to mature~~ in ~~November 2023.~~

In October 2021, in connection with our Bond Registration, we settled $350 million aggregate principal amount of 2.625% senior notes priced at 98.692% of the principal amount, resulting in gross proceeds of $345.4 million and maturing in November 2031. The notes are fully and unconditionally guaranteed by us. In October 2021, we paid down the remaining $150 million outstanding balance of our $300 million term loan that was set to mature in November 2023, as described above.mortgage debt.

Debt Allocation—The allocation of total debt between fixed-rate and variable-rate as well as between secured and unsecured, excluding market debt adjustments, discount on senior notes, and deferred financing expenses, net, and including the effects of derivative financial instruments ~~(see Notes 7 and 12)~~ as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 is summarized below (in thousands):


		September 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
As to interest rate:	As to interest rate:					As to interest rate:
Fixed-rate debt(1)	Fixed-rate debt(1)	$	1,540,714	$	1,727,186	Fixed-rate debt(1)	$	1,826,567	$	1,889,082
Variable-rate debt	Variable-rate debt	175,000		580,500		Variable-rate debt	71,000		25,000
Total	Total	$	1,715,714	$	2,307,686	Total	$	1,897,567	$	1,914,082
As to collateralization:	As to collateralization:					As to collateralization:
Unsecured debt	Unsecured debt	$	1,105,000	$	1,622,500	Unsecured debt	$	1,351,000	$	1,305,000
Secured debt	Secured debt	610,714		685,186		Secured debt	546,567		609,082
Total	Total	$	1,715,714	$	2,307,686	Total	$	1,897,567	$	1,914,082

(1)Fixed-rate debt includes, and variable-rate debt excludes, the portion of such debt that has been hedged by interest rate derivatives. As of March 31, 2022, $930.0 million in variable rate debt is hedged to a fixed rate for a weighted-average of 1.9 years.


7. DERIVATIVES AND HEDGING ACTIVITIES

Risk Management Objective of Using Derivatives—We are exposed to certain risks arising from both our business operations and economic conditions. We principally manage our exposure to a wide variety of business and operational risks through management of our core business activities. We manage economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of our debt funding, and through the use of derivative financial instruments. Specifically, we enter into interest rate swaps to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. Our derivative financial instruments are used to manage differences in the amount, timing, and duration of our known or expected cash receipts and our known or expected cash payments principally related to our investments and borrowings.


~~PHILLIPS EDISON & COMPANY~~ ~~SEPTEMBER 30, 2021 FORM 10-Q~~									13

Cash Flow Hedges of Interest Rate Risk—Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for our making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

The changes in the fair value of derivatives designated, and that qualify, as cash flow hedges are recorded in AOCI and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the ~~nine~~ three


PHILLIPS EDISON & COMPANY MARCH 31, 2022 FORM 10-Q									11

months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ such derivatives were used to hedge the variable cash flows associated with certain variable-rate debt. Amounts reported in AOCI related to these derivatives will be reclassified to Interest Expense, Net as interest payments are made on the variable-rate debt. During the next twelve months, we estimate that an additional ~~$17.5~~$3.2 million will be reclassified from AOCI as an increase to Interest Expense, Net.

The following is a summary of our interest rate swaps that were designated as cash flow hedges of interest rate risk as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 (dollars in thousands):

September 30, 2021 December 31, 2020
Count 5 6
Notional amount $ 930,000 $ 1,042,000
Fixed LIBOR 1.3% - 2.9% 1.3% - 2.9%
Maturity date 2022 - 2025 2021 - 2025
Weighted-average term (in years) 2.4 2.8

We assumed 5 hedges with a notional amount of $570 million as a part of a merger in 2018. The fair value of the five hedges assumed was $14.7 million and is amortized over the remaining lives of the respective hedges and recorded in Interest Expense, Net in the consolidated statements of operations. As of September 30, 2021 and December 31, 2020 there was 1 remaining hedge with a net unamortized amount remaining of $4.0 million and $5.0 million, respectively.


	March 31, 2022		December 31, 2021
Count	5		5
Notional amount	$	930,000	$	930,000
Fixed LIBOR	1.3% - 2.9%		1.3% - 2.9%
Maturity date	2022-2025		2022 - 2025
Weighted-average term (in years)	1.6		1.9

The table below details the nature of the gain and loss recognized on interest rate derivatives designated as cash flow hedges in the consolidated statements of operations (in thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020				2022		2021
Amount of (loss) gain recognized in Other Comprehensive Income (Loss)		$	(417)	$	(45)	$	5,397	$	(51,575)
Amount of gain recognized in Other Comprehensive Income										Amount of gain recognized in Other Comprehensive Income		$	22,899	$	7,265
Amount of loss reclassified from AOCI into Interest Expense, Net	Amount of loss reclassified from AOCI into Interest Expense, Net	4,905		5,143		14,584		11,562		Amount of loss reclassified from AOCI into Interest Expense, Net		4,674		4,855

Credit-risk-related Contingent Features—We have agreements with our derivative counterparties that contain provisions where, if we default, or are capable of being declared in default, on any of our indebtedness, we could also be declared to be in default on our derivative obligations. As of ~~September 30, 2021,~~March 31, 2022, the fair value of our derivatives in a net liability position, which included accrued interest but excluded any adjustment for nonperformance risk related to these agreements, was approximately ~~$35.8~~$2.2 million. As of ~~September 30, 2021,~~March 31, 2022, we had not posted any collateral related to these agreements and were not in breach of any agreement provisions. If we had breached any of these provisions, we could have been required to settle our obligations under the agreements at their termination value of ~~$35.8~~$2.2 million.


8. COMMITMENTS AND CONTINGENCIES

Litigation—We are involved in various claims and litigation matters arising in the ordinary course of business, some of which involve claims for damages. Many of these matters are covered by insurance, although they may nevertheless be subject to deductibles or retentions. Although the ultimate liability for these matters cannot be determined, based upon information currently available, we believe the resolution of such claims and litigation will not have a material adverse effect on our consolidated financial statements.

Environmental Matters—In connection with the ownership and operation of real estate, we may potentially be liable for costs and damages related to environmental matters. In addition, we may own or acquire certain properties that are subject to environmental remediation. Depending on the nature of the environmental matter, the seller of the property, a tenant of the property, and/or another third party may be responsible for environmental remediation costs related to a property. Additionally, in connection with the purchase of certain properties, the respective sellers and/or tenants may agree to indemnify us against future remediation costs. We also carry environmental liability insurance on our properties that provides limited coverage for any remediation liability and/or pollution liability for third-party bodily injury and/or property damage claims for which we may be liable. We are not aware of any environmental matters which we believe are reasonably likely to have a material effect on our consolidated financial statements.

Captive Insurance—Our captive insurance company, Silver Rock Insurance, Inc. (“Silver Rock”), provides general liability insurance, wind, reinsurance, and other coverage to us and ~~our~~certain related-party joint ventures. We capitalize Silver Rock in accordance with applicable regulatory requirements.

Silver Rock established annual premiums based on the past loss experience of the insured properties. An independent third party was engaged to perform an actuarial estimate of projected future claims, related deductibles, and projected future expenses necessary to fund associated risk management programs. Premiums paid to Silver Rock may be adjusted based on ~~these estimates,~~this estimate, and such premiums may be reimbursed by tenants pursuant to specific lease terms.


~~PHILLIPS EDISON & COMPANY~~ ~~SEPTEMBER 30, 2021 FORM 10-Q~~									14

As of ~~September 30, 2021,~~March 31, 2022, we had 4 letters of credit outstanding totaling approximately $9.0 million to provide security for our obligations under Silver Rock’s insurance and reinsurance contracts.

General—The holders of common stock are entitled to ~~one~~1 vote per share on all matters voted on by stockholders, including one vote per nominee in the election of the Board. Our charter does not provide for cumulative voting in the election of directors.


PHILLIPS EDISON & COMPANY MARCH 31, 2022 FORM 10-Q									12

At-the-Market Offering (“ATM”)—On February 10, 2022, we and the Operating Partnership entered into a sales agreement relating to the potential sale of shares of common stock pursuant to a continuous offering program. In accordance with the terms of the sales agreement, we may offer and sell shares of our common stock having an aggregate offering price of up to $250 million from time to time through our sales agents, or, if applicable, as forward sellers. As of March 31, 2022, we have issued zero shares under the ATM program.

Reverse Stock Split—On July 2, 2021, we effected a one-for-three reverse stock split. Concurrent with the reverse split, the Operating Partnership enacted a one-for-three reverse split of its outstanding OP units. Neither the number of authorized shares nor the par value of the common stock were impacted. As a result of the reverse split, every three shares of our common stock or OP units were automatically combined and converted into one issued and outstanding share of common stock or OP unit rounded to the nearest 1/100th share. The reverse stock split ~~impacts~~impacted all common stock and OP units proportionately and had no impact on any stockholder’s percentage ownership of common stock.

In connection with the reverse stock split, the number of shares of common stock and OP units underlying the outstanding share-based awards was also proportionately reduced. All references to shares of common stock, number of OP units, and per share data for all periods presented in our consolidated financial statements and notes have been adjusted to reflect the reverse split on a retroactive basis.

Class B Common Stock—On June 18, 2021, our stockholders approved Articles of Amendment that effected the Recapitalization, wherein each share of our common stock outstanding at the time the amendment became effective was converted into ~~one~~1 share of a newly created class of Class B common stock.

Our Class B common stock iswas identical to our common stock, except that ~~(i) our Class B common stock is~~it was not listed on a national securities ~~exchange, and (ii) upon~~exchange. Per the ~~six month anniversary~~terms of the ~~listing of our common stock for trading~~Recapitalization, on ~~a national securities exchange, or~~ January ~~15,~~18, 2022, ~~(or such earlier date or dates as may be approved by our Board in certain circumstances with respect to all or any portion of the outstanding shares of our Class B common stock),~~ each share of our Class B common stock ~~will~~ automatically ~~and without any stockholder action, convert~~converted into ~~one~~1 share of our listed common stock.

On May 5, 2022, we filed Articles Supplementary to our charter with the Maryland State Department of Assessments and Taxation in order to reclassify and designate all of the 350 million authorized shares of our Class B common stock, $0.01 par value per share, all of which were unissued at such time, as shares of our common stock, $0.01 par value per share.

Underwritten IPO—On July 19, 2021, we completed an underwritten IPO and issued 17.0 million shares of common stock at an offering price to the public of $28.00 per share. We used a portion of the net proceeds to reduce our leverage and ~~expect to use~~used the remaining amount to fund external growth with property acquisitions and for other general corporate uses. As part of the underwritten IPO, underwriters were granted an option exercisable within 30 days from July 14, 2021 to purchase up to an additional ~~2.55~~2.6 million shares of common stock at the underwritten IPO price, less underwriting discounts and commissions. On July 29, 2021, the underwriters exercised their option. The underwritten IPO, including the ~~underwriters~~underwriters’ overallotment election, resulted in gross proceeds of $547.4 million.

Distributions—Distributions paid to stockholders and OP unit holders of record subsequent to ~~September 30, 2021~~March 31, 2022 were as follows (dollars in thousands, excluding per share amounts):

Month Date of Record Monthly Distribution Rate Date Distribution Paid Cash Distribution
September 2021 9/15/2021 $ 0.085 10/1/2021 $ 9,623
October 2021 10/15/2021 0.090 11/1/2021 10,189

Month

Date of Record

Date Distribution Paid

Monthly Distribution Rate

Cash Distribution

March

3/15/2022

4/1/2022

0.09

11,520

April

4/15/2022

5/2/2022

0.09

11,520

On ~~November 3, 2021,~~May 4, 2022, our Board authorized 2022 distributions for ~~November~~May, June, and ~~December 2021, as well as January 2022,~~July of $0.09 per share to the stockholders of record at the close of business on ~~November~~May 16, 2022, June 15, ~~2021, December~~2022, and July 15, ~~2021, and January 19,~~ 2022, ~~respectively, equal to a monthly amount of $0.09 per share of common stock.~~respectively. OP unit holders will receive distributions at the same rate as common ~~stockholders.~~stockholders, subject to certain withholdings.

Convertible Noncontrolling Interests—As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, we had approximately ~~13.4~~14.5 million and ~~13.3~~13.4 million outstanding OP units, respectively. Additionally, certain of our outstanding restricted share and performance share awards will result in the issuance of OP units upon vesting in future periods.

Under the terms of the Fourth Amended and Restated Agreement of Limited Partnership, ~~(the “Partnership Agreement”),~~ OP unit holders may elect to ~~exchange~~cause the Operating Partnership to redeem their OP units. The Operating Partnership controls the form of the redemption, and may elect to ~~exchange~~redeem OP units ~~either~~ for shares of our ~~Class B~~ common stock, provided that the OP units have been outstanding for at least one year, or for cash. As the form of redemption for OP units is within our control, the OP units outstanding as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 are classified as Noncontrolling Interests within permanent equity on our consolidated balance sheets.


~~PHILLIPS EDISON & COMPANY~~ ~~SEPTEMBER 30, 2021 FORM 10-Q~~									15

On January 18, 2022, we issued approximately 1.6 million OP units in full settlement of the earn-out liability (see note 12).

The table below is a summary of our OP unit activity for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ (dollars and shares in thousands):

OP units converted into shares of

Class B common stock(1)

OP units converted into shares of common stock(1)

Distributions paid on OP units(2)

(1)Prior to the Recapitalization, OP units ~~are~~were converted to shares of common stock at a 1:1 ratio. From the Recapitalization through January 18, 2022, OP units were converted into shares of our Class B common stock at a 1:1 ratio. On January 18, 2022, each share of our Class B common stock automatically converted into 1 share of our listed common stock, and going forward, OP units will be converted into shares of our common stock at a 1:1 ratio.

(2)Distributions paid on OP units are included in Distributions to Noncontrolling Interests on the consolidated statements of ~~equity.~~equity and cash flows.


PHILLIPS EDISON & COMPANY MARCH 31, 2022 FORM 10-Q									13

~~Underwritten IPO Grants~~
—In connection with our underwritten IPO, we issued a total of 0.5 million restricted stock units (“RSUs”), inclusive of 0.3 million OP units, and restricted stock awards in the form of time-based stock compensation awards with expenses included within Other (Expense) Income, Net. The shares have a grant price of $28.00 per share and, with the exception of one individual whose award is subject to accelerated vesting provisions, 50% of the shares will vest after 18 months and the remaining 50% will vest after 36 months.

Estimated Value per Share—Prior to our underwritten IPO, on April 29, 2021, our Board increased the estimated value per share (“EVPS”) of our common stock to $31.65 from $26.25 based substantially on the estimated market value of our portfolio of real estate properties and our third-party investment management business as of March 31, 2021. We engaged a third-party valuation firm to provide a calculation of the range in EVPS of our common stock as of March 31, 2021, which reflected certain balance sheet assets and liabilities as of that date. ~~Previously, our EVPS was $26.25, based substantially on the estimated market value of our portfolio of real estate properties and our third-party investment management business as of March 31, 2020.~~

Dividend Reinvestment Plan and Share Repurchase Program (“SRP”)—On August 4, 2021, as a result of our underwritten IPO, our Board approved the termination of the DRIP and the SRP.


10. EARNINGS PER SHARE

~~We use the two-class method of computing~~Basic earnings per share (“EPS”), which is an earnings allocation formula that determines EPS for common stock and any participating securities according to dividends declared (whether paid or unpaid). Under the two-class method, basic EPS is computed by dividing Net Income Attributable to Stockholders by the weighted-average number of shares of common stock outstanding for the period. Diluted EPS reflects the potential dilution that could occur from share equivalent activity.

OP units held by limited partners other than us are considered to be participating securities because they contain non-forfeitable rights to dividends or dividend equivalents, and have the potential to be exchanged for an equal number of shares of our common stock in accordance with the terms of the Partnership Agreement.

The impact of these outstanding OP units on basic and diluted EPS has been calculated using the two-class method whereby earnings are allocated to the OP units based on dividends declared and the OP units’ participation rights in undistributed earnings. The effects of the two-class method on basic and diluted EPS were immaterial to the consolidated financial statements during the three and nine months ended September 30, 2021 and 2020.

The following table provides a reconciliation of the numerator and denominator of the earnings per share calculations ~~restated for prior periods to display the effect of the reverse split~~ (in thousands, except per share amounts):

Net income attributable to convertible OP units(1)

Weighted-average shares - basic~~(2)~~

(1)OP units include units that are convertible into ~~Class B~~ common stock or cash, at the Operating Partnership’s option. The Operating Partnership income or loss attributable to these OP units, which is included as a component of Net Income Attributable to Noncontrolling Interests on the consolidated statements of operations, has been added back in the numerator as these OP units were included in the


~~PHILLIPS EDISON & COMPANY~~ ~~SEPTEMBER 30, 2021 FORM 10-Q~~									16

denominator for all periods presented. OP units are allocated income on a consistent basis with the common stockholder and therefore have no dilutive impact to earnings per share ~~of common stock.~~

~~(2)Includes 93.7 million weighted-average shares of Class B common stock and 15.3 million weighted-average shares~~ of common stock.


11. RELATED PARTY TRANSACTIONS

Revenue—We have entered into agreements with the Managed Funds related to certain advisory, management, and administrative services we provide to their real estate assets in exchange for fees and reimbursement of certain expenses. Summarized below are amounts included in Fees and Management Income. The revenue includes the fees and reimbursements earned by us from the Managed Funds and other revenues that are not in the scope of ASC Topic 606, Revenue from Contracts with Customers, but that are included in this table for the purpose of disclosing all related party revenues (in thousands):

Transactional revenue and

Transactional revenue and reimbursements(2)

Insurance premiums(3)

(1)Recurring fees include asset management fees and property management fees.

(2)Transactional revenue includes items such as leasing commissions, construction management fees, and acquisition fees.

(3)Insurance premium income includes amounts for reinsurance from third parties not affiliated with us.


PHILLIPS EDISON & COMPANY MARCH 31, 2022 FORM 10-Q									14

Tax Protection Agreement—Through our Operating Partnership, we are currently party to a tax protection agreement (the “2017 TPA”) with certain partners that contributed property to our Operating Partnership on October 4, 2017, among them certain of our executive officers, including Jeffrey S. Edison, our Chairman and Chief Executive Officer, under which the Operating Partnership has agreed to indemnify such partners for tax liabilities that could accrue to them personally related to our potential disposition of certain properties within our portfolio. The 2017 TPA will expire on October 4, 2027. On July 19, 2021, we entered into an additional tax protection agreement (the “2021 TPA”) with certain of our executive officers, including Mr. Edison. The 2021 TPA carries a term of four years and will become effective upon the expiration of the 2017 TPA. As of ~~September 30, 2021,~~March 31, 2022, the potential “make-whole amount” on the estimated aggregate amount of built-in gain subject to protection under the agreements is approximately ~~$150~~$143.3 million. The protection provided under the terms of the 2021 TPA will expire in 2031. We have not recorded any liability related to the 2017 TPA or the 2021 TPA on our consolidated balance sheets for any periods presented, nor recognized any expense since the inception of the 2017 TPA, owing to the fact that any potential liability under the agreements is controlled by us and we believe we will either (i) continue to own and operate the protected properties or (ii) be able to successfully complete tax-deferred exchanges under Section 1031 ~~Exchanges~~of the Internal Revenue Code of 1986, as amended (unless there is a change in applicable law) or complete other tax-efficient transactions to avoid any liability under the agreements.

Other Related Party Matters—We are the limited guarantor for up to $190 million, capped at $50 million in most instances, of debt for our NRP joint venture. As of ~~September 30, 2021,~~March 31, 2022, the outstanding loan balance related to our NRP joint venture was ~~$32.1~~$15.3 million. As of ~~September 30, 2021,~~March 31, 2022, we were also the limited guarantor of a $175 million mortgage loan secured by GRP I properties. Our guaranty for both the NRP and GRP I debt is limited to being the non-recourse carveout guarantor and the environmental indemnitor. Further, in both cases, we are also party to an agreement with our institutional joint venture partners in which any potential liability under such guarantees will be apportioned between us and our applicable joint venture partner based on our respective ownership percentages in the applicable joint venture. We have no liability recorded on our consolidated balance sheets for either guaranty as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021.

Additionally, during 2021, we made a cash investment of $3.0 million into a third-party company in exchange for preferred shares of their stock. As part of the investment agreement, the third-party company committed to enter into leases at two of our properties. As of September 30, 2021, we had entered into 2 leases under the terms of the investment agreement, both of which carry a term of ten years, over which period we expect to receive contractual rents of $2.6 million in total for both leases.


12. FAIR VALUE MEASUREMENTS

The following describes the methods we use to estimate the fair value of our financial and nonfinancial assets and liabilities:

Cash and Cash Equivalents, Restricted Cash, Accounts Receivable, and Accounts Payable—We consider the carrying values of these financial instruments to approximate fair value because of the short period of time between origination of the instruments and their expected realization.

Real Estate Investments—The purchase prices of the investment properties, including related lease intangible assets and liabilities, ~~were~~are allocated at estimated fair value based on Level 3 inputs, such as discount rates, capitalization rates, comparable sales, replacement costs, income and expense growth rates, and current market rents and allowances as determined by management.


~~PHILLIPS EDISON & COMPANY~~ ~~SEPTEMBER 30, 2021 FORM 10-Q~~									17

Debt Obligations—We estimate the fair value of our ~~debt~~revolving credit facility, term loans, secured portfolio of loans, and mortgages by discounting the future cash flows of each instrument at rates currently offered for similar debt instruments of comparable maturities by our lenders using Level 3 inputs. The discount rates used approximate current lending rates for loans or groups of loans with similar maturities and credit quality, assuming the debt is outstanding through maturity and considering the debt’s collateral (if applicable). We have utilized market information, as available, or present value techniques to estimate the amounts required to be disclosed. We estimate the fair value of our senior unsecured notes by using quoted prices in active markets, which are considered Level 1 inputs.

The following is a summary of borrowings as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 (in thousands):

Recorded Principal Balance(1)

(1)~~Recorded~~As of March 31, 2022 and December 31, 2021, respectively, recorded principal balances ~~include~~include: (i) net deferred financing ~~expenses~~fees of ~~$14.7~~$12.3 million and ~~$13.5 million as of September 30, 2021 and December 31, 2020, respectively. Recorded principal balances also include~~$13.2 million; (ii) assumed market debt adjustments of ~~$1.6~~$1.5 million and $1.5 million; and (iii) notes payable discounts of $7.5 million ~~as of September 30, 2021~~ and December 31, 2020, respectively. We have recorded deferred financing expenses related to our revolving credit facility, which are not included in these balances, but included in Other Assets, Net on our consolidated balance sheets.$7.7 million.

(2)Our finance lease liability is included in the mortgages line item, as presented.


PHILLIPS EDISON & COMPANY MARCH 31, 2022 FORM 10-Q									15

Recurring and Nonrecurring Fair Value Measurements—Our marketable securities, earn-out liability, and interest rate swaps are measured and recognized at fair value on a recurring basis, while certain real estate assets and liabilities are measured and recognized at fair value as needed. Fair value measurements that occurred as of and during the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 and the year ended December 31, ~~2020,~~2021 were as follows (in thousands):

Derivative liabilities(1)

Derivative assets(1)

Derivative liabilities(2)

Impaired real estate assets, net(2)

Impaired real estate assets, net(3)

(1)We recordderivative assets in Other Assets, Net on our consolidated balance sheets.

(2)We record derivative liabilities in Derivative Liabilities on our consolidated balance sheets.

~~(2)~~(3)The carrying value of impaired real estate assets may have subsequently increased or decreased after the measurement date due to capital improvements, depreciation, or sale.

Marketable Securities—We estimate the fair value of marketable securities using Level 1 inputs. We utilize unadjusted quoted prices for identical assets in active markets that we have the ability to access.

Derivative Instruments—As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, we had interest rate swaps that fixed LIBOR on portions of our unsecured term loan facilities.

All interest rate swap agreements are measured at fair value on a recurring basis. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves.

To comply with the provisions of ASC Topic 820, Fair Value Measurement, we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.

Although we determined that the significant inputs used to value our derivatives fell within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our counterparties and our own credit risk utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by us and our counterparties. However, as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and have determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives. As a result, we have determined that our derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.


~~PHILLIPS EDISON & COMPANY~~ ~~SEPTEMBER 30, 2021 FORM 10-Q~~									18

Earn-out—As part of our acquisition of Phillips Edison Limited Partnership (“PELP”) in 2017, an earn-out structure was established which gave PELP the opportunity to earn additional OP units based upon the potential achievement of certain performance targets subsequent to the acquisition. After the expiration of certain provisions in 2019, PELP ~~is now~~was eligible to earn a minimum of 1.0 million and a maximum of approximately 1.7 million OP units as contingent consideration based ~~upon~~on the timing and valuation of a liquidity event for PECO. Certain of these performance targets ~~are~~were tied to the post-underwritten IPO trading price of our common stock. The number of OP units awarded ~~will vary~~varied based on the highest volume weighted average price per share of our common stock over any 30 consecutive trading day period during the 180 days following the underwritten IPO commencement (the “liquidity event price per share”):

•if the liquidity event price per share iswas greater than or equal to $33.60, PELP ~~will~~would receive approximately 1.7 million OP units;

•if the liquidity event price per share iswas less than $33.60 but greater than or equal to $26.40, PELP ~~will~~would receive a number of OP units equal to (i) 1.0 million plus (ii) the product of (A) approximately 0.7 million and (B) the quotient obtained by dividing the liquidity event price per share in excess of $26.40 by $7.20; or

•if the liquidity event price per share iswas less than $26.40, PELP ~~will~~would receive 1.0 million OP units.

Prior to the second quarter of 2021, we estimated the fair value of ~~the earn-out~~this liability on a quarterly basis using the Monte Carlo method. Following our underwritten IPO, the only remaining variable for calculating final amounts to be paid under the earn-out agreement was the liquidity event price per share. ~~Therefore, as~~On January 11, 2022, at the end of ~~September 30, 2021,~~the 180-day period following our underwritten IPO commencement, we ~~estimated~~finalized the fair value of the earn-out liability related to the earn-out using a probability-weighted model to estimate the liquidity event price per share. In calculating the fair value of this liability as of September 30, 2021, we have determined that 1.4and issued approximately 1.6 million OP units ~~have been earned~~in full settlement of the liability with ~~the possibility~~a value of ~~up to an additional 0.3 million units being issued.~~

~~For the three months ended September 30, 2021, we~~$54.2 million. We recorded expense of ~~$5.0~~$1.8 million ~~related to the change in fair value of the earn-out liability. There was no change to the fair value of our earn-out liability~~and $16.0 million,


PHILLIPS EDISON & COMPANY MARCH 31, 2022 FORM 10-Q									16

respectively, for the three months ended ~~September 30, 2020. We recorded expense of $23.0 million~~March 31, 2022 and ~~income of $10.0 million, respectively, for the nine months ended September 30,~~March 31, 2021 ~~and September 30, 2020~~ related to changes in the fair value of the earn-out ~~liability. The increase in the fair value of the~~ liability ~~as of September 30, 2021 was attributable to the commencement of our underwritten IPO as well as improved market conditions in 2021. The change in fair value for each period has been recognized~~ in Other ~~(Expense) Income,~~Expense, Net in the consolidated statements of operations.

Real Estate Asset Impairment—Our real estate assets are measured and recognized at fair value, less costs to sell for held-for-sale properties, on a nonrecurring basis dependent upon when we determine an impairment has occurred. During the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021, we impaired assets that were under contract at a disposition price that was less than carrying value, or that had other operational impairment indicators. The valuation technique used for the fair value of all impaired real estate assets was the expected net sales proceeds, which we consider to be a Level 2 input in the fair value hierarchy. There were no impairment charges recorded during the three ~~and nine~~ months ended ~~September 30, 2020.~~March 31, 2022.

On a quarterly basis, we employ a multi-step approach to assess our real estate assets for possible impairment and record any impairment charges identified. The first step is the identification of potential triggering events, such as significant decreases in occupancy or the presence of large dark or vacant spaces. If we observe any of these indicators for a shopping center, we then perform an additional screen test consisting of a years-to-recover analysis to determine if we will recover the net ~~carrying~~book value of the property over its remaining economic life based upon net operating income (“NOI”) as forecasted for the current year. In the event that the results of this first step indicate a triggering event for a center, we proceed to the second step, utilizing an undiscounted cash flow model for the center to identify potential impairment. If the undiscounted cash flows are less than the net book value of the center as of the balance sheet date, we ~~proceed to~~record an impairment charge based on the fair value determined in the third step. In performing the third step, we utilize market data such as capitalization rates and sales price per square foot on comparable recent real estate transactions to estimate the fair value of the real estate assets. We also utilize expected net sales proceeds to estimate the fair value of any centers that are actively being marketed for sale. ~~If the estimated fair value of the property is less than the recorded net book value at the balance sheet date, we record an impairment charge.~~

In addition to these procedures, we also review undeveloped or unimproved land parcels that we own for evidence of impairment and record any impairment charges as necessary. Primary impairment triggers for these land parcels are changes to our plans or intentions with regards to such properties, or planned dispositions at prices that are less than the current carrying values.

It is possible that we could experience unanticipated changes in assumptions that are employed in our impairment review which could impact our cash flows and fair value conclusions. Such unanticipated changes relative to our expectations may include but are not limited to: increases or decreases in the duration or permanence of tenant closures, increases or decreases in collectibility reserves and write-offs, additional capital required to fill vacancies, extended lease-up periods, future closings of large tenants, changes in macroeconomic assumptions such as rate of inflation and capitalization rates, and changes to the estimated timing of disposition of the properties under review.

We recorded the following expense upon impairment of real estate assets (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Impairment of real estate assets $ 698 $ — $ 6,754 $ —


	Three Months Ended March 31,
		2022		2021
Impairment of real estate assets		$	—	$	5,000


~~PHILLIPS EDISON & COMPANY~~ ~~SEPTEMBER 30, 2021 FORM 10-Q~~									19


13. SUBSEQUENT EVENTS

In preparing the condensed and unaudited consolidated financial statements, we have evaluated subsequent events through the date of filing of this report on Form 10-Q for recognition and/or disclosure purposes. Based on this evaluation, we have determined that there were no events that have occurred that require recognition or disclosure, other than certain events and transactions that have been disclosed elsewhere in these consolidated financial statements.


PHILLIPS EDISON & COMPANY ~~SEPTEMBER 30, 2021~~MARCH 31, 2022 FORM 10-Q									2017

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our accompanying consolidated financial statements and notes ~~thereto.~~thereto and the more detailed information contained in our 2021 Annual Report on Form 10-K, filed with the SEC on February 16, 2022. All references to “Notes” throughout this document refer to the footnotes to the consolidated financial statements in ~~“Part I, Item~~“Item 1. Financial Statements”. See also “Cautionary Note Regarding Forward-Looking Statements” below.


CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Except as required by law, we do not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.


KEY PERFORMANCE INDICATORS AND DEFINED TERMS

We use certain key performance indicators (“KPIs”), which include both financial and nonfinancial metrics, to measure the performance of our operations. We believe these KPIs, as well as the core concepts and terms defined below, allow our Board, management, and investors to analyze trends around our business strategy, financial condition, and results of operations in a manner that is focused on items unique to the retail real estate industry.

We do not consider our non-GAAP measures to be alternatives to measures required in accordance with GAAP. Certain non-GAAP measures should not be viewed as an alternative measure of our financial performance as they may not reflect the operations of our entire portfolio, and they may not 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


~~PHILLIPS EDISON & COMPANY~~ ~~SEPTEMBER 30, 2021 FORM 10-Q~~									21

to maintain the operating performance of our shopping centers that could materially impact our results from operations. Additionally, certain non-GAAP measures should not be considered as an indication of our liquidity, nor as an indication of funds available to cover our cash needs, including our ability to fund distributions, and may not be a useful measure of the impact of long-term operating performance on value if we do not continue to operate our business in the manner currently contemplated. Accordingly, non-GAAP measures 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. Other REITs may use different methodologies for calculating similar non-GAAP measures, and accordingly, our non-GAAP measures may not be comparable to other REITs.


PHILLIPS EDISON & COMPANY MARCH 31, 2022 FORM 10-Q									18

Our KPIs and terminology can be grouped into three key areas:

PORTFOLIO—Portfolio metrics help management to gauge the health of our centers overall and individually.

•Anchor space—We define an anchor space as a space greater than or equal to 10,000 square feet of gross leasable area (“GLA”).

•ABR—We use ABR to refer to the monthly contractual base rent asat the end of ~~September 30, 2021~~the period multiplied by twelve months.

•ABR ~~per~~Per Square Foot (“PSF”)—This metric is calculated by dividing ABR by leased GLA. Increases in ABR PSF can be an indication of our ability to create rental rate growth in our centers, as well as an indication of demand for our spaces, which generally provides us with greater leverage during lease negotiations.

•GLA—We use GLA to refer to the total occupied and unoccupied square footage of a building that is available for tenants (whom we refer to as a “Neighbor” or our “Neighbors”) or other retailers to lease.

•Inline space—We define an inline space as a space containing less than 10,000 square feet of GLA.

•Leased Occupancy—This metric is calculated as the percentage of total GLA for which a lease has been signed regardless of whether the lease has commenced or the Neighbor has taken possession. High occupancy is an indicator of demand for our spaces, which generally provides us with greater leverage during lease negotiations.

•Underwritten incremental unlevered yield—This reflects the yield we target to generate from a project upon expected stabilization and is calculated as the estimated incremental NOI for a project at stabilization divided by its estimated net project investment. The estimated incremental NOI is the difference between the estimated annualized NOI we target to generate by project upon stabilization and the estimated annualized NOI without the planned improvements. Underwritten incremental unlevered yield does not include peripheral impacts, such as lease rollover risk or the impact on the long term value of the property upon sale or disposition. Actual incremental unlevered yields may vary from our underwritten incremental unlevered yield range based on the actual total cost to complete a project and its actual incremental NOI at stabilization.

LEASING—Leasing is a key driver of growth for our company.

•Comparable lease—We use this term to refer to a lease with consistent ~~structure~~terms that is executed for substantially the ~~exact~~ same space that has been vacant less than twelve months.

•Comparable rent spread—This metric is calculated as the percentage increase or decrease in first-year ABR (excluding any free rent or escalations) on new or renewal leases (excluding options) where the lease was considered a comparable lease. This metric provides an indication of our ability to generate revenue growth through leasing activity.

•Cost of executing new leases—We use this term to refer to certain costs associated with new leasing, namely, leasing commissions, tenant improvement costs, and tenant concessions.

•Portfolio retention rate—This metric is calculated by dividing (i) total square feet of retained Neighbors with current period lease expirations by (ii) the total square feet of leases expiring during the period. The portfolio retention rate provides insight into our ability to retain Neighbors at our shopping centers as their leases approach expiration. Generally, the costs to retain an existing Neighbor are lower than costs to replace with a new Neighbor.

•Recovery rate—This metric is calculated by dividing (i) total recovery income by (ii) total recoverable expenses during the period. A high recovery rate is an indicator of our ability to recover certain property operating expenses and capital costs from our Neighbors.

FINANCIAL PERFORMANCE—In addition to financial metrics calculated in accordance with GAAP, such as net income or cash flows from operations, we utilize non-GAAP metrics to measure our operational and financial performance. See ~~the section within this Item 2 titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP~~“Non-GAAP Measures” below for further discussion on the following metrics.

•Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization for Real Estate (“Adjusted EBITDAre”)—To arrive at Adjusted EBITDAre, we adjust EBITDAre, as defined below, to exclude certain recurring and non-recurring items 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 our investments in our unconsolidated joint ventures; ~~and~~ (iv) transaction and acquisition ~~expenses.~~expenses; and (v) realized performance income. We use EBITDAre and Adjusted EBITDAre as additional measures of operating performance which allow us to compare earnings independent of capital structure and evaluate debt leverage and fixed cost coverage.

•Core Funds From Operations (“~~Core~~ FFO”)—To arrive at Core FFO, we adjust Nareit FFO ~~attributable~~Attributable to ~~stockholders~~Stockholders and OP ~~unit holders,~~Unit Holders, as defined below, to exclude certain recurring and non-recurring items including, but not limited to: (i) depreciation and amortization of corporate assets; (ii) changes in the fair value of the earn-out liability; (iii) amortization of unconsolidated joint venture basis differences; (iv) gains or losses on the extinguishment or


~~PHILLIPS EDISON & COMPANY~~ ~~SEPTEMBER 30, 2021 FORM 10-Q~~									22

modification of debt and other; (v) other impairment charges; ~~and~~ (vi) transaction and acquisition ~~expenses.~~expenses; and (vii) realized performance income. We believe Nareit FFO provides insight into our operating performance as it excludes certain items that are not indicative of such performance. Core FFO provides further insight into the sustainability of our operating performance and provides an additional measure to compare our performance across reporting periods on a consistent basis by excluding items that may cause short-term fluctuations in net income (loss).

•EBITDAre—The National Association of Real Estate Investment Trusts (“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.


PHILLIPS EDISON & COMPANY MARCH 31, 2022 FORM 10-Q									19

•Equity Market Capitalization—We calculate equity market capitalization as the total dollar value of all outstanding ~~shares.~~shares using the closing price for the applicable date.

•Nareit FFO—Nareit defines FFO as net income (loss) computed in accordance with GAAP, excluding: (i) gains (or losses) from sales of property and gains (or losses) from change in control; (ii) depreciation and amortization related to real estate; (iii) impairment losses on real estate and impairments of in-substance real estate investments in investees that are driven by measurable decreases in the fair value of the depreciable real estate held by the unconsolidated partnerships and joint ventures; and (iv) adjustments for unconsolidated partnerships and joint ventures, calculated to reflect FFO on the same basis. We calculate Nareit FFO in a manner consistent with the Nareit definition.

•Net Debt—We calculate net debt as total debt, excluding discounts, market adjustments, and deferred financing expenses, less cash and cash equivalents.

•Net Debt to Adjusted EBITDAre—This ratio is calculated by dividing net debt by Adjusted EBITDAre (included on an annualized basis within the calculation). It provides insight into our leverage rate based on earnings and is not impacted by fluctuations in our equity price.

•Net Debt to Total Enterprise Value—This ratio is calculated by dividing net debt by total enterprise value, as defined below. It provides insight into our capital structure and usage of debt.

•NOI—We calculate NOI as total operating revenues, adjusted to exclude non-cash revenue items, less property operating expenses and real estate taxes. NOI provides insight about our financial and operating performance because it provides a performance measure of the revenues and expenses directly involved in owning and operating real estate assets and provides a perspective not immediately apparent from net income (loss).

•Same-Center—We use this term to refer to a property, or portfolio of properties, that ~~has~~have been owned and operational for the entirety of each reporting period (i.e., since January 1, ~~2020)~~2021).

•Total Enterprise Value—We calculate total enterprise value as our net debt plus our equity market capitalization on a fully diluted basis.

We are a REIT and one of the nation’s largest owners and operators of omni-channel grocery-anchored ~~neighborhood and community~~ shopping centers. ~~The majority~~Our portfolio primarily consists of ~~our revenue is lease revenue derived from our real estate investments. Additionally,~~neighborhood centers anchored by the #1 or #2 grocer tenants by sales within their respective formats by trade area. Our Neighbors are a mix of national, regional, and local retailers that primarily provide necessity-based goods and services.

As of March 31, 2022, we ~~operate an investment management business providing property management~~owned equity interests in 290 shopping centers, including 269 wholly-owned shopping centers and ~~advisory services to over $460 million of~~21 shopping centers owned through two unconsolidated joint ~~ventures. This~~ventures, which comprised approximately 33.1 million square feet in 31 states. In addition to managing our shopping centers, our third-party investment management business provides comprehensive real estate ~~and asset~~ management services to the Managed Funds.

As of September 30, 2021, we wholly-owned 267 real estate properties. Additionally, we owned a 14% interest in GRP I, a joint venture that owned 20 properties, and a 20% interest in NRP, a joint venture that owned two properties.

~~RECAPITALIZATION~~—On June 18, 2021, our stockholders approved Articles of Amendment that effected the Recapitalization, wherein each share of our common stock outstanding at the time the amendment became effective was converted into one share of a newly created class of Class B common stock. The Articles of Amendment became effective upon filing with, and acceptance by, the State Department of Assessments and Taxation of Maryland on July 2, 2021. Unless otherwise indicated, all information in this Form 10-Q gives effect to the Recapitalization and references to “shares” and per share metrics refer to our common stock and Class B common stock, collectively (see Note 9).

~~REVERSE STOCK SPLIT~~—On July 2, 2021, our Board approved an amendment to our articles of incorporation to effect a one-for-three reverse stock split. Concurrent with the reverse split, the Operating Partnership enacted a one-for-three reverse split of its outstanding OP units. Unless otherwise indicated, the information in this Form 10-Q gives effect to the reverse stock and OP unit splits (see Note 9).

~~UNDERWRITTEN INITIAL PUBLIC OFFERING~~—On July 19, 2021, we closed our underwritten IPO, through which we offered 17.0 million shares of a new class of common stock, $0.01 par value per share, at an initial price to the public of $28.00 per share, pursuant to a registration statement filed with the SEC on Form S-11 (File No. 333-255846), as amended. In connection with the underwritten IPO, the underwriters exercised a 30-day option to purchase additional shares of common stock to cover overallotments, and, accordingly, on August 2, 2021, we settled the sale of an additional 2.6 million shares at a price of $28.00 per share. These shares are listed on NASDAQ under the trading symbol “PECO”. The underwritten IPO, including the underwriters overallotment election, resulted in gross proceeds of $547.4 million.


~~PHILLIPS EDISON & COMPANY~~ ~~SEPTEMBER 30, 2021 FORM 10-Q~~									23

~~On August 4, 2021, as a result of our underwritten IPO, our Board approved the termination of the DRIP and the SRP.~~

~~2021 BOND OFFERING~~—In October 2021, in connection with our Bond Registration, we settled the 2021 Bond Offering priced at 98.692% of the principal amount and maturing in November 2031. This offering resulted in gross proceeds of $345.4 million. The notes are fully and unconditionally guaranteed by us.

~~COVID-19 STRATEGY~~—During 2020, as a result of the COVID-19 pandemic, many state governments issued “stay-at-home” mandates that generally limited travel and movement of the general public to essential activities only and required all non-essential businesses to close. All statistics and financial results included in this COVID-19 Strategy section are approximate and include the prorated portion attributable to properties owned through our joint ventures.

Our management team determined the recovery of our portfolio was dependent on the execution of key actions, including guiding our Neighbors toward returning to monthly rent payments, recovering missed charges, and monitoring for credit risk. Our actions in conjunction with the resiliency of our tenant mix has led to improved collections from the second quarter of 2020. Further, we believe our collections have returned to levels consistent with those prior to the onset of the pandemic. The following table summarizes our collections by quarter, as they were originally reported as well as updated for payments received subsequent to the month billed:

Originally Reported
Current(1)
Q2 2020 86 % 93 %
Q3 2020 94 % 97 %
Q4 2020 95 % 97 %
Q1 2021 95 % 98 %
Q2 2021 98 % 99 %
Q3 2021 N/A 99 %

~~(1)Collections include those received through October 20, 2021.~~

We believe substantially all Neighbors, including those that were required to temporarily close under governmental mandates, are contractually obligated to continue with their rent payments as documented in our lease agreements with them. However, we decided to negotiate relief for a small subset of our Neighbors, including rent deferrals. As of October 20, 2021, we have $4.2 million of outstanding payment plans with our Neighbors of which approximately 28% are scheduled to be received by December 31, 2021. As of October 20, 2021, the weighted-average term over which we expect to receive remaining amounts owed on executed payment plans is approximately eleven months. We cannot guarantee that we will ultimately be able to collect these amounts.

Despite seeing improvements in collections for current and past due amounts during 2021, the negative impact the pandemic has had on our Neighbors continues to be considered in our evaluation of Neighbors who potentially pose a credit risk. For Neighbors with a higher degree of uncertainty as to their creditworthiness, we may not record revenue for amounts billed until the cash is received. For the three and nine months ended September 30, 2021, we had $0.6 million and $4.2 million, respectively, in net unfavorable monthly revenue adjustments for Neighbors who are being accounted for on a cash basis. For the three and nine months ended September 30, 2020, we had $5.3 million and $20.3 million, respectively, in net unfavorable monthly revenue adjustments for Neighbors who were being accounted for on a cash basis. As of September 30, 2021, our Neighbors currently being accounted for on a cash basis represented approximately 8% of our total Neighbor spaces, or approximately 7.3% of portfolio ABR. Further, many of our Neighbors who are on a cash basis of accounting are actively making payments toward their outstanding balances. When considering the ABR associated with Neighbors who are currently on a cash basis of accounting, 79% of this ABR is represented by Neighbors who are actively making payments.

Additionally, certain of our Neighbors entered into bankruptcy proceedings. We believe that Neighbors in the bankruptcy process represent an exposure of less than 1% of our total portfolio ABR as of September 30, 2021. We have included our assessment of the impact of these bankruptcies in our estimate of rent collectibility, which impacted recorded revenue, as noted previously.


TABLE OF CONTENTS

PART I.
ITEM 1.		FINANCIAL STATEMENTS (CONDENSED AND UNAUDITED)	2
		CONSOLIDATED BALANCE SHEETS AS OF ~~SEPTEMBER 30, 2021~~M ARCH 31, 2022 AND DECEMBER 31, ~~2020~~2021	2
		CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME ~~(LOSS)~~ FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER 30, 2021~~MARCH 31, 2022 AND ~~2020~~2021	3
		CONSOLIDATED STATEMENTS OF EQUITY FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER 30, 2021~~MARCH 31 , 202 2 AND ~~2020~~2021	4
		CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE ~~NINE~~THREE MONTHS ENDED ~~SEPTEMBER 30, 2021~~MARCH 3 1 , 202 2 AND ~~2020~~2021	65
		NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER 30, 2021~~MARCH 31, 2022
	NOTE 1	ORGANIZATION	87
	NOTE 2	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	87
	NOTE 3	LEASES	108
	NOTE 4	REAL ESTATE ACTIVITY	119
	NOTE 5	OTHER ASSETS, NET	1210
	NOTE 6	DEBT OBLIGATIONS	1311
	NOTE 7	DERIVATIVES AND HEDGING ACTIVITIES	1311
	NOTE 8	COMMITMENTS AND CONTINGENCIES	1412
	NOTE 9	EQUITY	1512
	NOTE 10	EARNINGS PER SHARE	1614
	NOTE 11	R ~~ELATED~~RELATED PARTY TRANSACTIONS	1714
	NOTE 12	FAIR VALUE MEASUREMENTS	1715
	NOTE 13	SUBSEQUENT EVENTS	2017
ITEM 2.		MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	2118
ITEM 3.		QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	4333
ITEM 4.		CONTROLS AND PROCEDURES	4433

PART II.
ITEM 1.		LEGAL PROCEEDINGS	4433
ITEM 1A.		RISK FACTORS	4434
ITEM 2.		UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	4434
ITEM 3.		DEFAULTS UPON SENIOR SECURITIES	34
ITEM 4.		MINE SAFETY DISCLOSURES	34
ITEM 5.		OTHER INFORMATION	34
ITEM 6.		EXHIBITS	4535
		SIGNATURES	4636


		September 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
ASSETS	ASSETS					ASSETS
Investment in real estate:	Investment in real estate:					Investment in real estate:
Land and improvements	Land and improvements	$	1,528,310	$	1,549,362	Land and improvements	$	1,611,991	$	1,586,993
Building and improvements	Building and improvements	3,191,637		3,237,986		Building and improvements	3,423,548		3,355,433
In-place lease assets	In-place lease assets	434,373		441,683		In-place lease assets	460,127		452,504
Above-market lease assets	Above-market lease assets	64,555		66,106		Above-market lease assets	69,187		68,736
Total investment in real estate assets	Total investment in real estate assets	5,218,875		5,295,137		Total investment in real estate assets	5,564,853		5,463,666
Accumulated depreciation and amortization	Accumulated depreciation and amortization	(1,058,765)		(941,413)		Accumulated depreciation and amortization	(1,161,965)		(1,110,426)
Net investment in real estate assets	Net investment in real estate assets	4,160,110		4,353,724		Net investment in real estate assets	4,402,888		4,353,240
Investment in unconsolidated joint ventures	Investment in unconsolidated joint ventures	32,315		37,366		Investment in unconsolidated joint ventures	30,491		31,326
Total investment in real estate assets, net	Total investment in real estate assets, net	4,192,425		4,391,090		Total investment in real estate assets, net	4,433,379		4,384,566
Cash and cash equivalents	Cash and cash equivalents	24,455		104,296		Cash and cash equivalents	5,063		92,585
Restricted cash	Restricted cash	89,760		27,641		Restricted cash	12,406		22,944
Goodwill	Goodwill	29,066		29,066		Goodwill	29,066		29,066
Other assets, net	Other assets, net	139,451		126,470		Other assets, net	153,720		138,050
Real estate investments and other assets held for sale	Real estate investments and other assets held for sale	16,464		—		Real estate investments and other assets held for sale	6,547		1,557
Total assets	Total assets	$	4,491,621	$	4,678,563	Total assets	$	4,640,181	$	4,668,768

LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Liabilities:	Liabilities:					Liabilities:
Debt obligations, net	Debt obligations, net	$	1,699,417	$	2,292,605	Debt obligations, net	$	1,876,208	$	1,891,722
Below-market lease liabilities, net	Below-market lease liabilities, net	96,298		101,746		Below-market lease liabilities, net	107,869		107,526
Earn-out liability	Earn-out liability	45,000		22,000		Earn-out liability	—		52,436
Derivative liabilities	Derivative liabilities	35,779		54,759		Derivative liabilities	2,217		24,096
Deferred income	Deferred income	17,251		14,581		Deferred income	21,941		19,145
Accounts payable and other liabilities	Accounts payable and other liabilities	99,488		176,943		Accounts payable and other liabilities	94,079		97,229
Liabilities of real estate investments held for sale	Liabilities of real estate investments held for sale	640		—		Liabilities of real estate investments held for sale	198		288
Total liabilities	Total liabilities	1,993,873		2,662,634		Total liabilities	2,102,512		2,192,442
Commitments and contingencies (Note 8)		—		—
Commitments and contingencies (see Note 8)						Commitments and contingencies (see Note 8)	—		—
Equity:	Equity:					Equity:
Preferred stock, $0.01 par value per share, 10,000 shares authorized, zero shares issued and	Preferred stock, $0.01 par value per share, 10,000 shares authorized, zero shares issued and					Preferred stock, $0.01 par value per share, 10,000 shares authorized, zero shares issued and
outstanding at September 30, 2021 and December 31, 2020		—		—
Common stock, $0.01 par value per share, 650,000 shares authorized, 19,550 shares issued and
outstanding at September 30, 2021; zero shares authorized, issued, and outstanding as of
December 31, 2020		196		—
Class B common stock, $0.01 par value per share, 350,000 shares authorized, 93,663 and
93,279 shares issued and outstanding at September 30, 2021 and December 31, 2020,
respectively		936		2,798
outstanding at March 31, 2022 and December 31, 2021						outstanding at March 31, 2022 and December 31, 2021	—		—
Common stock, $0.01 par value per share, 650,000 shares authorized, 113,819 and 19,550						Common stock, $0.01 par value per share, 650,000 shares authorized, 113,819 and 19,550
shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively						shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively	1,138		196
Class B common stock, $0.01 par value per share, 350,000 shares authorized, zero and 93,665						Class B common stock, $0.01 par value per share, 350,000 shares authorized, zero and 93,665
shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively						shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively	—		936
Additional paid-in capital (“APIC”)	Additional paid-in capital (“APIC”)	3,261,585		2,739,358		Additional paid-in capital (“APIC”)	3,276,151		3,264,038
Accumulated other comprehensive loss (“AOCI”)	Accumulated other comprehensive loss (“AOCI”)	(34,806)		(52,306)		Accumulated other comprehensive loss (“AOCI”)	(160)		(24,819)
Accumulated deficit	Accumulated deficit	(1,054,483)		(999,491)		Accumulated deficit	(1,111,673)		(1,090,837)
Total stockholders’ equity	Total stockholders’ equity	2,173,428		1,690,359		Total stockholders’ equity	2,165,456		2,149,514
Noncontrolling interests	Noncontrolling interests	324,320		325,570		Noncontrolling interests	372,213		326,812
Total equity	Total equity	2,497,748		2,015,929		Total equity	2,537,669		2,476,326
Total liabilities and equity	Total liabilities and equity	$	4,491,621	$	4,678,563	Total liabilities and equity	$	4,640,181	$	4,668,768


		September 30, 2021				December 31, 2020					March 31, 2022				December 31, 2021
		Recorded Principal Balance(1)		Fair Value		Recorded Principal Balance(1)		Fair Value			Recorded Principal Balance(1)		Fair Value		Recorded Principal Balance(1)		Fair Value

Revolving credit facility										Revolving credit facility	$	46,000	$	46,017	$	—	$	—
Term loans	Term loans	$	1,091,518	$	1,106,176	$	1,610,204	$	1,621,902	Term loans	943,949		955,934		943,127		955,919
Senior unsecured notes due 2031										Senior unsecured notes due 2031	342,488		307,339		342,320		344,099
Secured portfolio loan facilities	Secured portfolio loan facilities	391,492		404,132		391,131		404,715		Secured portfolio loan facilities	391,732		390,898		391,612		394,356
Mortgages(2)	Mortgages(2)	216,407		223,976		291,270		303,647		Mortgages(2)	152,039		157,036		214,663		221,741
Total	Total	$	1,699,417	$	1,734,284	$	2,292,605	$	2,330,264	Total	$	1,876,208	$	1,857,224	$	1,891,722	$	1,916,115


		September 30, 2021			September 30, 2020				March 31, 2022			March 31, 2021
Number of properties	Number of properties	267			283			Number of properties	269			278
Number of states	Number of states	31			31			Number of states	31			31
Total square feet	Total square feet	30,443			31,731			Total square feet	30,813			31,306
ABR	ABR	$	388,272		$	385,375		ABR	$	412,518		$	386,971
% ABR from omni-channel grocery-anchored shopping centers	% ABR from omni-channel grocery-anchored shopping centers	96.3		%	97.0		%	% ABR from omni-channel grocery-anchored shopping centers	97.3		%	96.4		%
Leased % of rentable square feet:
Leased occupancy %:								Leased occupancy %:
Total portfolio spaces	Total portfolio spaces	95.6		%	95.3		%	Total portfolio spaces	96.2		%	94.8		%
Anchor spaces	Anchor spaces	97.6		%	98.3		%	Anchor spaces	98.1		%	97.3		%
Inline spaces	Inline spaces	91.9		%	89.5		%	Inline spaces	92.6		%	89.8		%
Average remaining lease term (in years)(1)	Average remaining lease term (in years)(1)	4.6			4.5			Average remaining lease term (in years)(1)	4.5			4.6


Neighbor(1)	Neighbor(1)	ABR		% of ABR		Leased Square Feet	% of Leased Square Feet		Number of Locations(2)	Neighbor(1)	ABR		% of ABR		Leased Square Feet	% of Leased Square Feet		Number of Locations(2)
Kroger	Kroger	$	25,830	6.6	%	3,244	11.0	%	59	Kroger	$	27,411	6.6	%	3,366	11.2	%	61
Publix	Publix	23,145		5.9	%	2,304	7.8	%	57	Publix	23,621		5.7	%	2,314	7.7	%	57
Albertsons										Albertsons	18,215		4.4	%	1,709	5.7	%	31
Ahold Delhaize	Ahold Delhaize	17,113		4.4	%	1,204	4.1	%	22	Ahold Delhaize	17,662		4.2	%	1,249	4.2	%	23
Albertsons-Safeway		16,804		4.3	%	1,599	5.4	%	29
Walmart	Walmart	8,933		2.3	%	1,770	6.0	%	13	Walmart	8,933		2.1	%	1,770	5.9	%	13
Giant Eagle	Giant Eagle	7,924		2.0	%	828	2.8	%	11	Giant Eagle	7,732		1.9	%	828	2.8	%	12
Sprouts Farmers Market										Sprouts Farmers Market	6,494		1.6	%	421	1.4	%	14
TJX Companies	TJX Companies	5,205		1.3	%	445	1.5	%	16	TJX Companies	5,500		1.3	%	465	1.6	%	16
Sprouts Farmers Market		5,000		1.3	%	334	1.1	%	11
Raley's	Raley's	3,884		1.0	%	253	0.9	%	4	Raley's	3,884		0.9	%	253	0.8	%	4
Dollar Tree	Dollar Tree	3,448		0.9	%	351	1.2	%	37	Dollar Tree	3,265		0.8	%	329	1.1	%	35
SUPERVALU	SUPERVALU	3,209		0.8	%	336	1.1	%	5	SUPERVALU	3,244		0.8	%	336	1.1	%	5
Subway Group	Subway Group	2,633		0.7	%	106	0.4	%	75	Subway Group	2,516		0.6	%	99	0.3	%	70
Lowe's										Lowe's	2,469		0.6	%	369	1.3	%	4
Anytime Fitness, Inc.	Anytime Fitness, Inc.	2,598		0.7	%	166	0.6	%	34	Anytime Fitness, Inc.	2,366		0.6	%	150	0.5	%	31
Schnucks		2,545		0.6	%	249	0.8	%	4
Lowe's		2,470		0.6	%	369	1.3	%	4
Kohl's Corporation	Kohl's Corporation	2,241		0.6	%	365	1.3	%	4	Kohl's Corporation	2,241		0.5	%	365	1.2	%	4
Food 4 Less (PAQ)	Food 4 Less (PAQ)	2,215		0.6	%	118	0.4	%	2	Food 4 Less (PAQ)	2,215		0.5	%	119	0.4	%	2
Save Mart	Save Mart	2,174		0.6	%	258	0.9	%	5	Save Mart	2,174		0.5	%	258	0.9	%	5
Petco Animal Supplies, Inc.	Petco Animal Supplies, Inc.	2,130		0.5	%	127	0.4	%	11	Petco Animal Supplies, Inc.	2,136		0.5	%	127	0.4	%	11
Big Y		2,022		0.5	%	115	0.4	%	3
Franchise Group, Inc.										Franchise Group, Inc.	2,084		0.5	%	145	0.5	%	24
United Parcel Service										United Parcel Service	2,013		0.5	%	79	0.3	%	62
Total	Total	$	141,523	36.2	%	14,541	49.4	%	406	Total	$	146,175	35.1	%	14,751	49.3	%	484


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Revenues:
Rental income	$	128,826	$	123,298	$	386,784	$	367,418
Fees and management income	2,435		2,581		7,095		7,506
Other property income	1,073		816		1,906		2,334
Total revenues	132,334		126,695		395,785		377,258
Operating Expenses:
Property operating	21,608		20,835		65,784		62,226
Real estate taxes	16,375		17,282		49,762		50,847
General and administrative	11,627		9,595		32,905		30,141
Depreciation and amortization	53,901		56,095		165,829		168,692
Impairment of real estate assets	698		—		6,754		—
Total operating expenses	104,209		103,807		321,034		311,906
Other:
Interest expense, net	(18,570)		(20,388)		(57,765)		(65,317)
Gain on disposal of property, net	14,093		10,734		31,678		8,616
Other (expense) income, net	(7,086)		196		(25,595)		9,565
Net income	16,562		13,430		23,069		18,216
Net income attributable to noncontrolling interests	(1,929)		(1,646)		(2,739)		(2,251)
Net income attributable to stockholders	$	14,633	$	11,784	$	20,330	$	15,965
Earnings per share of common stock:
Net income per share attributable to stockholders - basic and diluted (Note 10)	$	0.13	$	0.12	$	0.21	$	0.16

Comprehensive income (loss):
Net income	$	16,562	$	13,430	$	23,069	$	18,216
Other comprehensive income (loss):
Change in unrealized value on interest rate swaps	4,488		5,098		19,981		(40,013)
Comprehensive income (loss)	21,050		18,528		43,050		(21,797)
Net income attributable to noncontrolling interests	(1,929)		(1,646)		(2,739)		(2,251)
Change in unrealized value on interest rate swaps attributable to noncontrolling interests	(562)		(653)		(2,471)		5,145
Reallocation of comprehensive loss upon conversion of noncontrolling interests	—		—		(10)		—
Comprehensive income (loss) attributable to stockholders	$	18,559	$	16,229	$	37,830	$	(18,903)


		Three Months Ended September 30, 2021 and 2020																											Three Months Ended March 31, 2022 and 2021
		Common Stock			Class B Common Stock			APIC				AOCI		Accumulated Deficit					Total Stockholders’ Equity			Noncontrolling Interests				Total Equity			Common Stock				Class B Common Stock			APIC		AOCI		Accumulated Deficit		Total Stockholders’ Equity		Noncontrolling Interests		Total Equity
		Shares	Amount		Shares	Amount												Shares						Amount						Shares		Amount
Balance at July 1, 2020		—	$	—	96,822	$	2,905			$	2,795,434					$	(60,075)				$	(991,939)			$	1,746,325			$	341,144	$	2,087,469
Change in unrealized value on interest rate swaps		—	—		—	—		—				4,445		—					4,445			653				5,098
Share-based compensation		—	—		—	—		1,036				—		—					1,036			818				1,854
Other		—	—		—	—		185				—		(379)					(194)			(4)				(198)
Net income		—	—		—	—		—				—		11,784					11,784			1,646				13,430
Balance at September 30, 2020		—	$	—	96,822	$	2,905	$	2,796,655			$	(55,630)	$	(980,534)				$	1,763,396		$	344,257			$	2,107,653

Balance at July 1, 2021		—	$	—	93,640	$	2,808	$	2,749,680			$	(38,732)	$	(1,041,617)				$	1,672,139		$	323,249			$	1,995,388
Issuance of common stock		19,550	196		—	—		547,205				—		—					547,401			—				547,401
Offering costs, discounts, and commissions		—	—		—	—		(39,042)				—		—					(39,042)			—				(39,042)
Balance at January 1, 2021																												Balance at January 1, 2021	—		$	—	93,279	$	2,798	$	2,739,358	$	(52,306)	$	(999,491)	$	1,690,359	$	325,570	$	2,015,929
Dividend reinvestment plan (“DRIP”)																												Dividend reinvestment plan (“DRIP”)	—		—		280	8		7,360		—		—		7,368		—		7,368
Share repurchases																												Share repurchases	—		—		(24)	—		(123)		—		—		(123)		—		(123)
Change in unrealized value on interest rate swaps	Change in unrealized value on interest rate swaps	—	—		—	—		—				3,926		—					3,926			562				4,488		Change in unrealized value on interest rate swaps	—		—		—	—		—		10,611		—		10,611		1,509		12,120
Common distributions declared, $0.255 per share	Common distributions declared, $0.255 per share	—	—		—	—		—				—		(27,499)					(27,499)			—				(27,499)		Common distributions declared, $0.255 per share	—		—		—	—		—		—		(23,767)		(23,767)		—		(23,767)
Distributions to noncontrolling interests	Distributions to noncontrolling interests	—	—		—	—		—				—		—					—			(3,536)				(3,536)		Distributions to noncontrolling interests	—		—		—	—		—		—		—		—		(3,319)		(3,319)
Share-based compensation	Share-based compensation	—	—		23	(1)		1,871				—		—					1,870			2,116				3,986		Share-based compensation	—		—		47	1		325		—		—		326		784		1,110
Impact of reverse stock split		—	—		—	(1,871)		1,871				—		—					—			—				—
Other																												Other	—		—		—	—		(29)		—		—		(29)		—		(29)
Net income	Net income	—	—		—	—		—				—		14,633					14,633			1,929				16,562		Net income	—		—		—	—		—		—		103		103		14		117
Balance at September 30, 2021		19,550	$	196	93,663	$	936	$	3,261,585			$	(34,806)	$	(1,054,483)				$	2,173,428		$	324,320			$	2,497,748
Balance at March 31, 2021																												Balance at March 31, 2021	—		$	—	93,582	$	2,807	$	2,746,891	$	(41,695)	$	(1,023,155)	$	1,684,848	$	324,558	$	2,009,406

Balance at January 1, 2022																												Balance at January 1, 2022	19,550		$	196	93,665	$	936	$	3,264,038	$	(24,819)	$	(1,090,837)	$	2,149,514	$	326,812	$	2,476,326
Conversion of Class B common stock																												Conversion of Class B common stock	93,665		936		(93,665)	(936)		—		—		—		—		—		—
Change in unrealized value on interest rate swaps																												Change in unrealized value on interest rate swaps	—		—		—	—		—		24,871		—		24,871		2,702		27,573
Common distributions declared, $0.27 per share																												Common distributions declared, $0.27 per share	—		—		—	—		—		—		(30,915)		(30,915)		—		(30,915)
Distributions to noncontrolling interests																												Distributions to noncontrolling interests	—		—		—	—		—		—		—		—		(4,104)		(4,104)
Share-based compensation																												Share-based compensation	71		1		—	—		467		—		—		468		2,678		3,146
Conversion of noncontrolling interests																												Conversion of noncontrolling interests	533		5		—	—		17,313		—		—		17,318		(17,318)		—
Reallocation of operating partnership interests																												Reallocation of operating partnership interests	—		—		—	—		(5,667)		(212)		—		(5,879)		5,879		—
Settlement of earn-out liability																												Settlement of earn-out liability	—		—		—	—		—		—		—		—		54,245		54,245
Net income																												Net income	—		—		—	—		—		—		10,079		10,079		1,319		11,398
Balance at March 31, 2022																												Balance at March 31, 2022	113,819		$	1,138	—	$	—	$	3,276,151	$	(160)	$	(1,111,673)	$	2,165,456	$	372,213	$	2,537,669


Year	Amount
Remaining 2021	$	95,360
2022	375,318
2023	332,359
2024	279,403
2025	225,293
Thereafter	568,425
Total	$	1,876,158


Balance Sheet Information	Balance Sheet Location	September 30, 2021		December 31, 2020
ROU assets, net - operating leases	Investment in Real Estate	$	3,975	$	3,867
ROU assets, net - operating and finance leases	Other Assets, Net	1,080		1,438
Operating lease liability	Accounts Payable and Other Liabilities	5,468		5,731
Finance lease liability	Debt Obligations, Net	117		164


	Nine Months Ended
	September 30, 2021			September 30, 2020
	Fair Value		Weighted-Average Useful Life	Fair Value		Weighted-Average Useful Life
In-place leases	$	8,728	10	$	1,682	16
Above-market leases	198		5	120		5
Below-market leases	(7,250)		17	(1,882)		26


	Originally Reported		Current(1)
Q2 2020	86	%	93	%
Q3 2020	94	%	97	%
Q4 2020	95	%	97	%
Q1 2021	95	%	98	%
Q2 2021	98	%	99	%
Q3 2021	N/A		99	%


	September 30, 2021
Joint Venture	Ownership Percentage	Number of Properties	ABR		GLA
Grocery Retail Partners I	14%	20	$	29,222	2,214
Necessity Retail Partners	20%	2	4,004		228


PHILLIPS EDISON & COMPANY ~~SEPTEMBER 30, 2021~~MARCH 31, 2022 FORM 10-Q									2621


PHILLIPS EDISON & COMPANY ~~SEPTEMBER 30, 2021~~MARCH 31, 2022 FORM 10-Q									2722


PHILLIPS EDISON & COMPANY ~~SEPTEMBER 30, 2021~~MARCH 31, 2022 FORM 10-Q									2823


		Three Months Ended September 30,				Favorable (Unfavorable) Change					Three Months Ended March 31,				Favorable (Unfavorable) Change
(Dollars in thousands)	(Dollars in thousands)	2021		2020		$		%(1)		(Dollars in thousands)	2022		2021		$		%(1)
Revenues:	Revenues:									Revenues:
Rental income	Rental income	$	128,826	$	123,298	$	5,528	4.5	%	Rental income	$	138,748	$	127,623	$	11,125	8.7	%
Fee and management income		2,435		2,581		(146)		(5.7)	%
Fees and management income										Fees and management income	2,461		2,286		175		7.7	%
Other property income	Other property income	1,073		816		257		31.5	%	Other property income	954		472		482		102.1	%
Total revenues	Total revenues	132,334		126,695		5,639		4.5	%	Total revenues	142,163		130,381		11,782		9.0	%
Operating Expenses:	Operating Expenses:									Operating Expenses:
Property operating expenses		21,608		20,835		(773)		(3.7)	%
Real estate tax expenses		16,375		17,282		907		5.2	%
General and administrative expenses		11,627		9,595		(2,032)		(21.2)	%
Property operating										Property operating	23,320		22,202		(1,118)		(5.0)	%
Real estate taxes										Real estate taxes	17,491		16,573		(918)		(5.5)	%
General and administrative										General and administrative	11,532		9,341		(2,191)		(23.5)	%
Depreciation and amortization	Depreciation and amortization	53,901		56,095		2,194		3.9	%	Depreciation and amortization	57,226		55,341		(1,885)		(3.4)	%
Impairment of real estate assets	Impairment of real estate assets	698		—		(698)		NM		Impairment of real estate assets	—		5,000		5,000		NM
Total operating expenses	Total operating expenses	104,209		103,807		(402)		(0.4)	%	Total operating expenses	109,569		108,457		(1,112)		(1.0)	%
Other:	Other:									Other:
Interest expense, net	Interest expense, net	(18,570)		(20,388)		1,818		8.9	%	Interest expense, net	(18,199)		(20,063)		1,864		9.3	%
Gain on disposal of property, net	Gain on disposal of property, net	14,093		10,734		3,359		31.3	%	Gain on disposal of property, net	1,368		13,841		(12,473)		(90.1)	%
Other (expense) income, net		(7,086)		196		(7,282)		NM
Other expense, net										Other expense, net	(4,365)		(15,585)		11,220		72.0	%
Net income	Net income	16,562		13,430		3,132		23.3	%	Net income	11,398		117		11,281		NM
Net income attributable to noncontrolling interests	Net income attributable to noncontrolling interests	(1,929)		(1,646)		(283)		(17.2)	%	Net income attributable to noncontrolling interests	(1,319)		(14)		(1,305)		NM
Net income attributable to stockholders	Net income attributable to stockholders	$	14,633	$	11,784	$	2,849	24.2	%	Net income attributable to stockholders	$	10,079	$	103	$	9,976	NM


PHILLIPS EDISON & COMPANY ~~SEPTEMBER 30, 2021~~MARCH 31, 2022 FORM 10-Q									3124


PHILLIPS EDISON & COMPANY ~~SEPTEMBER 30, 2021~~MARCH 31, 2022 FORM 10-Q									3225


		Total Deals						Inline Deals							Total Deals						Inline Deals
		2021			2020			2021			2020				2022			2021			2022			2021
New leases:	New leases:													New leases:
Number of leases	Number of leases	140			111			133			110			Number of leases	92			153			88			147
Square footage (in thousands)	Square footage (in thousands)	551			302			312			287			Square footage (in thousands)	257			467			186			341
ABR (in thousands)	ABR (in thousands)	$	9,172		$	5,181		$	6,749		$	5,023		ABR (in thousands)	$	4,941		$	8,120		$	4,321		$	6,605
ABR per square foot		$	16.63		$	17.15		$	21.64		$	17.49
Cost per square foot of executing new leases		$	24.11		$	27.25		$	31.15		$	26.01
ABR PSF														ABR PSF	$	19.25		$	17.39		$	23.21		$	19.34
Cost PSF of executing new leases														Cost PSF of executing new leases	$	28.90		$	29.00		$	33.40		$	29.65
Number of comparable leases	Number of comparable leases	57			34			56			34			Number of comparable leases	34			70			33			70
Comparable rent spread	Comparable rent spread	14.1		%	8.2		%	14.1		%	8.2		%	Comparable rent spread	34.0		%	12.4		%	27.4		%	12.4		%
Weighted-average lease term (in years)	Weighted-average lease term (in years)	8.6			6.6			6.2			6.3			Weighted-average lease term (in years)	6.8			8.0			7.5			6.2
Renewals and options:	Renewals and options:													Renewals and options:
Number of leases	Number of leases	128			119			110			101			Number of leases	152			163			146			147
Square footage (in thousands)	Square footage (in thousands)	854			1,035			211			244			Square footage (in thousands)	519			978			323			312
ABR (in thousands)	ABR (in thousands)	$	11,082		$	12,473		$	5,377		$	4,993		ABR (in thousands)	$	9,247		$	11,472		$	7,302		$	7,069
ABR per square foot		$	12.98		$	12.06		$	25.53		$	20.45
ABR per square foot prior to renewals		$	12.30		$	11.56		$	22.85		$	19.16
Percentage increase in ABR per square foot		5.5		%	4.3		%	11.7		%	6.7		%
Cost per square foot of executing renewals and options(2)		$	0.22		$	0.60		$	0.86		$	1.39
ABR PSF														ABR PSF	$	17.81		$	11.73		$	22.60		$	22.67
ABR PSF prior to renewals														ABR PSF prior to renewals	$	16.02		$	10.97		$	19.95		$	21.02
Percentage increase in ABR PSF														Percentage increase in ABR PSF	11.2		%	6.9		%	13.3		%	7.8		%
Cost PSF of executing renewals and options(2)														Cost PSF of executing renewals and options(2)	$	0.63		$	0.51		$	0.88		$	1.58
Number of comparable leases(3)	Number of comparable leases(3)	97			87			91			82			Number of comparable leases(3)	128			136			126			133
Comparable rent spread(3)	Comparable rent spread(3)	8.9		%	4.1		%	13.1		%	6.4		%	Comparable rent spread(3)	14.7		%	8.0		%	14.5		%	7.9		%
Weighted-average lease term (in years)	Weighted-average lease term (in years)	5.4			4.8			4.6			4.2			Weighted-average lease term (in years)	4.3			3.9			3.9			4.0
Portfolio retention rate	Portfolio retention rate	91.2		%	90.4		%	80.4		%	74.9		%	Portfolio retention rate	89.7		%	88.8		%	77.6		%	80.3		%


PHILLIPS EDISON & COMPANY ~~SEPTEMBER 30, 2021~~MARCH 31, 2022 FORM 10-Q									3426


		Three Months Ended September 30,				Favorable (Unfavorable)				Nine Months Ended September 30,				Favorable (Unfavorable)					Three Months Ended March 31,	Favorable (Unfavorable)
		2021		2020		$ Change		% Change		2021		2020		$ Change		% Change				2022		2021		$ Change		% Change
Revenues:	Revenues:																	Revenues:
Rental income(1)	Rental income(1)	$	91,490	$	89,188	$	2,302			$	271,643	$	269,669	$	1,974			Rental income(1)		$	94,626	$	89,824	$	4,802
Tenant recovery income	Tenant recovery income	29,937		31,102		(1,165)				87,025		91,211		(4,186)				Tenant recovery income		31,481		30,172		1,309
Reserves for uncollectibility(2)	Reserves for uncollectibility(2)	57		(5,807)		5,864				1,318		(17,817)		19,135				Reserves for uncollectibility(2)		(770)		(1,546)		776
Other property income	Other property income	1,010		765		245				1,740		2,213		(473)				Other property income		747		462		285
Total revenues	Total revenues	122,494		115,248		7,246		6.3	%	361,726		345,276		16,450		4.8	%	Total revenues		126,084		118,912		7,172		6.0	%
Operating expenses:	Operating expenses:																	Operating expenses:
Property operating expenses	Property operating expenses	17,333		16,439		(894)				53,397		50,448		(2,949)				Property operating expenses		19,813		18,751		(1,062)
Real estate taxes	Real estate taxes	16,039		16,793		754				48,452		49,648		1,196				Real estate taxes		16,457		16,033		(424)
Total operating expenses	Total operating expenses	33,372		33,232		(140)		(0.4)	%	101,849		100,096		(1,753)		(1.8)	%	Total operating expenses		36,270		34,784		(1,486)		(4.3)	%
Total Same-Center NOI	Total Same-Center NOI	$	89,122	$	82,016	$	7,106	8.7	%	$	259,877	$	245,180	$	14,697	6.0	%	Total Same-Center NOI		$	89,814	$	84,128	$	5,686	6.8	%


PHILLIPS EDISON & COMPANY ~~SEPTEMBER 30, 2021~~MARCH 31, 2022 FORM 10-Q									3628


		Three Months Ended September 30,				Nine Months Ended September 30,				Year Ended December 31,			Three Months Ended March 31,				Year Ended December 31,
		2021		2020		2021		2020		2020			2022		2021			2021
Calculation of EBITDAre	Calculation of EBITDAre											Calculation of EBITDAre
Net income	Net income	$	16,562	$	13,430	$	23,069	$	18,216	$	5,462	Net income	$	11,398	$	117		$	17,233
Adjustments:	Adjustments:											Adjustments:
Depreciation and amortization	Depreciation and amortization	53,901		56,095		165,829		168,692		224,679		Depreciation and amortization	57,226		55,341			221,433
Interest expense, net	Interest expense, net	18,570		20,388		57,765		65,317		85,303		Interest expense, net	18,199		20,063			76,371
Gain on disposal of property, net	Gain on disposal of property, net	(14,093)		(10,734)		(31,678)		(8,616)		(6,494)		Gain on disposal of property, net	(1,368)		(13,841)			(30,421)
Impairment of real estate assets	Impairment of real estate assets	698		—		6,754		—		2,423		Impairment of real estate assets	—		5,000			6,754
Federal, state, and local tax expense	Federal, state, and local tax expense	165		173		496		382		491		Federal, state, and local tax expense	97		166			327
Adjustments related to unconsolidated joint ventures	Adjustments related to unconsolidated joint ventures	1,107		594		1,704		3,162		3,355		Adjustments related to unconsolidated joint ventures	1,019		1,132			1,431
EBITDAre	EBITDAre	$	76,910	$	79,946	$	223,939	$	247,153	$	315,219	EBITDAre	$	86,571	$	67,978		$	293,128
Calculation of Adjusted EBITDAre	Calculation of Adjusted EBITDAre											Calculation of Adjusted EBITDAre
EBITDAre	EBITDAre	$	76,910	$	79,946	$	223,939	$	247,153	$	315,219	EBITDAre	$	86,571	$	67,978		$	293,128
Adjustments:	Adjustments:											Adjustments:
Change in fair value of earn-out liability	Change in fair value of earn-out liability	5,000		—		23,000		(10,000)		(10,000)		Change in fair value of earn-out liability	1,809		16,000			30,436
Transaction and acquisition expenses	Transaction and acquisition expenses	1,775		152		2,850		211		539		Transaction and acquisition expenses	2,045		141			5,363
Amortization of unconsolidated joint venture basis differences	Amortization of unconsolidated joint venture basis differences	80		546		905		1,267		1,883		Amortization of unconsolidated joint venture basis differences	44		746			1,167
Other impairment charges		—		—		—		—		359
Realized performance income												Realized performance income	(196)		—			(675)
Adjusted EBITDAre	Adjusted EBITDAre	$	83,765	$	80,644	$	250,694	$	238,631	$	308,000	Adjusted EBITDAre	$	90,273	$	84,865		$	329,419


PHILLIPS EDISON & COMPANY ~~SEPTEMBER 30, 2021~~MARCH 31, 2022 FORM 10-Q									3729


~~(1)~~See “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Key Performance Indicators” for the definition of Core FFO, or information regarding why we present Core FFO. See “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Measures - Nareit FFO and Core FFO” for a reconciliation of this non-GAAP financial measure to Net Income.


	Payments Due by Period
	Total		2021		2022		2023		2024		2025		Thereafter
Debt obligations - principal payments(1)	$	1,715,597	$	1,803	$	84,926	$	192,942	$	503,124	$	267,877	$	664,925
Debt obligations - interest payments(2)	227,429		14,145		54,242		50,221		37,535		24,687		46,599
Operating lease obligations	8,504		215		823		672		546		317		5,931
Finance lease obligations	121		12		45		40		24		—		—
Total	$	1,951,651	$	16,175	$	140,036	$	243,875	$	541,229	$	292,881	$	717,455


Period	Total Number of Shares Repurchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of a Publicly Announced Plan or Program	Approximate Dollar Value of Shares That May Yet Be Repurchased Under the Program
January 2022(1)	28,294	$	32.91	—	N/A
February 2022	—	—		—	N/A
March 2022(1)	1,492	32.02		—	N/A


Ex.		Description	Reference
3.1	*	~~Fifth~~F ifth Articles of ~~Amendment~~A m e ndment and ~~Restatement~~Res tatement of Phillips Edison & Company, Inc., as ~~amended~~ame nded	~~Form 10-Q, filed August 5, 2021. Exhibit 3.1~~
3.2		Fifth Amended and Restated Bylaws of Phillips Edison & Company, Inc.	Form 8-K, filed July 19, 2021, Exhibit 3.1
~~4.1~~10.1		Form of ~~Indenture, by and among Phillips Edison & Company, Inc., as issuer, and U.S. Bank National Association, as trustee~~Performance LTIP Unit Award Agreement (2022)	Form ~~S-3,~~8-K, filed ~~August 25, 2021,~~March 4, 2022, Exhibit ~~4.2~~
~~4.2~~		~~Form of Indenture, by and among Phillips Edison Grocery Center Operating Partnership I, L.P., as issuer, and U.S. Bank National Association, as trustee~~	~~Form S-3, filed August 25, 2021, Exhibit 4.3~~
10.1		First Amendment to Credit Agreement, by and among Phillips Edison Grocery Center Operating Partnership I, L.P., Phillips Edison & Company, Inc., the Lenders and Capital One, National Association, as administrative agent, dated November 16, 2018	~~Form S-11/A, filed July 7, 2021, Exhibit 10.4~~
10.2		~~Credit~~Form of Performance LTIP Unit Award Agreement among Phillips Edison Grocery Center Operating Partnership I, L.P., Phillips Edison & Company, Inc., the lenders party thereto, and PNC Bank, National Association as administrative agent, dated July 2, 2021(2022 - Murphy)	Form 8-K, filed ~~July 2, 2021,~~March 4, 2022, Exhibit ~~10.1~~10.2
10.3		~~Tax Protection~~Form of Time-Based LTIP Unit Award Agreement ~~by and among Phillips Edison & Company, Inc., Phillips Edison Grocery Center Operating Partnership I, L.P., and each Protected Partner identified as a signatory on Schedule I~~(2022)	Form 8-K, filed ~~July 19, 2021,~~March 4, 2022, Exhibit ~~10.1~~10.3
10.4		Form of Time-Based LTIP ~~Listing Equity Grant~~Unit Award Agreement (2022 - Murphy)	Form ~~S-11/A,~~8-K, filed ~~July 7, 2021,~~March 4, 2022, Exhibit ~~10.32~~10.4
~~10.5~~22.1	*	~~Form~~List of ~~LTIP Listing Equity Grant (Murphy)~~Issuers of Guaranteed Securities	~~Form S-11/A, filed July 7, 2021, Exhibit 10.33~~
~~10.6~~		~~Form of RSU Listing Equity Grant~~	~~Form S-11/A, filed July 7, 2021, Exhibit 10.34~~
~~10.7~~		~~Form of Restricted Stock Listing Equity Grant~~	~~Form S-11/A, filed July 7, 2021, Exhibit 10.35~~
31.1	*	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	*	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	*	Certification of Principal Executive Officer pursuant to 18 U.S.C. 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002
32.2	*	Certification of Principal Financial Officer pursuant to 18 U.S.C. 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002
101.INS		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as inline XBRL and contained in exhibit 101)


	PHILLIPS EDISON & COMPANY, INC.

Date: ~~November 4, 2021~~May 5, 2022	By:	/s/ Jeffrey S. Edison
		Jeffrey S. Edison
		Chairman of the Board and Chief Executive Officer (Principal Executive Officer)

Date: ~~November 4, 2021~~May 5, 2022	By:	/s/ John P. Caulfield
		John P. Caulfield
		Executive Vice President, Chief Financial Officer, ~~Senior Vice President~~ and Treasurer (Principal Financial Officer)