000147620400014762042022-08-042022-08-04

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 4, 2022

cik0001476204-20220804_g1.jpg
Phillips Edison & Company, Inc.
(Exact name of registrant as specified in its charter)


Maryland000-5469127-1106076
(State or other jurisdiction
of incorporation)
(Commission File Number)(IRS 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)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:
     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock
$0.01 par value per share
PECOThe Nasdaq Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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.






Item 2.02   Results of Operations and Financial Condition.

Item 7.01 Regulation FD Disclosure.

On August 4, 2022, Phillips Edison & Company, Inc. (the “Company”) issued a press release announcing its results for the quarter ended June 30, 2022. A copy of that press release is attached hereto as Exhibit 99.1 and incorporated herein by reference. A copy of the Company’s Second Quarter 2022 Supplemental Disclosure is attached hereto as Exhibit 99.2 and incorporated herein by reference. The Company will host a conference call on Friday, August 5, 2022, at 12:00 p.m. Eastern Time to discuss the second quarter results and provide commentary on its business performance and guidance. This call is being webcast live at the Company’s website at https://investors.phillipsedison.com. The webcast is listen-only. A webcast replay will be available approximately one hour after the conclusion of the call using the same link. Those interested in participating in the question-and-answer session may register for the call at https://register.vevent.com/register/BI04c758008a6c42b89fcadb125bd3bf59 to receive the dial-in numbers and unique PIN to access the call. It is recommended that you join 10 minutes prior to the event start (although you may register and dial in at any time during the call).
The information in this Current Report on Form 8-K, including Exhibits 99.1 and 99.2, are being furnished to the Securities and Exchange Commission (“SEC”), and shall not be deemed to be “filed” with the SEC for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section and shall not be deemed to be incorporated by reference into any other filing with the SEC except as expressly set forth by specific reference in such filing.
Item  9.01   Financial Statements and Exhibits.
(d) Exhibits.
Exhibit NumberDescription of Exhibit
99.1
99.2
104Cover Page Interactive Data File (formatted as inline XBRL)




SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. 
   
 PHILLIPS EDISON & COMPANY, INC.
   
Dated: August 4, 2022By:/s/ Jennifer L. Robison
  Jennifer L. Robison
  Chief Accounting Officer and Senior Vice President
(Principal Accounting Officer)




Document

Phillips Edison & Company Reports
Second Quarter 2022 Results and
Raises Core FFO Guidance

CINCINNATI - August 4, 2022 - Phillips Edison & Company, Inc. (Nasdaq: PECO) (“PECO” or the “Company”), one of the nation’s largest owners and operators of grocery-anchored omni-channel neighborhood shopping centers, reported net income attributable to stockholders of $13.5 million, or $0.12 per diluted share, for the three months ended June 30, 2022.

Highlights for the Second Quarter Ended June 30, 2022
Nareit FFO totaled $71.1 million, or $0.55 per diluted share
Core FFO totaled $71.8 million, or $0.56 per diluted share
Same-center NOI increased 4.3% versus the second quarter ended June 30, 2021
Leased portfolio occupancy as of June 30, 2022 increased to a record-high 96.8%
Comparable new and renewal rent spreads were 39.0% and 14.4%, respectively
Acquired one grocery-anchored shopping center and one outparcel for $68.9 million
Expanded the capacity of the Company’s unsecured revolving credit facility to $800 million from $500 million
Net debt to annualized adjusted EBITDAre was 5.5x compared to 5.6x at December 31, 2021
Generated gross proceeds of $90.1 million through the issuance of 2.6 million shares at a weighted-average price of $34.23 per share through the Company’s ATM program, including 0.8 million shares issued after June 30, 2022
Subsequent to quarter end, established a $250 million share repurchase program

Management Commentary
“The PECO team continues to successfully execute on our growth strategy through acquisitions and strong income growth at our properties,” stated Jeff Edison, chairman and chief executive officer of PECO. “We delivered excellent operational results with same-center NOI growth of 4.3%, combined new and renewal leasing spreads of 20.1%, and record occupancy of 96.8% at the end of the quarter. We are excited about the acquisition of Centennial Lakes, in Minneapolis, MN, a Whole Foods-anchored neighborhood center. Our strong performance and well-positioned balance sheet provide us with the momentum and flexibility to continue to successfully grow our business no matter the macroeconomic environment ahead.”
“Given our accomplishments this quarter, we are raising our guidance for Net Income, Core FFO, and same-center NOI. The PECO team and the strength of our Neighbors continue to drive operating performance beyond our internal expectations. Due to the uncertainty in the capital markets environment, we are updating our 2022 acquisition guidance. As interest costs and inflation headwinds impact the transaction market, we remain cautious with our capital allocation decisions including the timing and volume of our acquisitions to ensure we are acquiring assets that are accretive to financial results and meet our return expectations.”


Financial Results for the Second Quarter and Six Months Ended June 30, 2022
Net Income
Second quarter 2022 net income attributable to stockholders totaled $13.5 million, or $0.12 per diluted share, compared to net income of $5.6 million, or $0.06 per diluted share during the second quarter of 2021.
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For the six months ended June 30, 2022, net income attributable to stockholders totaled $23.6 million, or $0.21 per diluted share, compared to net income of $5.7 million, or $0.06 per diluted share for the same period in 2021.

Nareit FFO
Second quarter 2022 funds from operations attributable to stockholders and operating partnership (“OP”) unit holders as defined by Nareit (“Nareit FFO”) increased 18.8% to $71.1 million, or $0.55 per diluted share, from $59.9 million, or $0.56 per diluted share, during the second quarter of 2021.
For the six months ended June 30, 2022, Nareit FFO increased 31.8% to $138.2 million, or $1.07 per diluted share, from $104.9 million, or $0.98 per diluted share, during the same period in 2021.
The $11.2 million increase for the second quarter of 2022 was driven by an increase in rental income, realizing $2.5 million of performance income for achieving return hurdles in the Necessity Retail Partners (“NRP”) joint venture, and reduced interest expense due to our lower leverage from a year ago. These amounts were partially offset by higher transaction and acquisition costs in the second quarter of 2022. The decrease in the per diluted share metric was primarily due to an increase in the share count of 18% as a result of PECO’s July 2021 underwritten IPO.
The $33.3 million increase for the six months ended June 30, 2022 was driven by an increase in rental income and reduced interest expense, partially offset by higher transaction and acquisition costs in the current year. Results were additionally driven by $2.7 million of performance income from the NRP joint venture, as well as a reduction in non-cash expense as a result of the final settlement of the earn-out liability with the issuance of 1.6 million OP units in January 2022.

Core FFO
Second quarter 2022 core funds from operations (“Core FFO”) increased 11.8% to $71.8 million, or $0.56 per diluted share, compared to $64.3 million, or $0.60 per diluted share, during the second quarter of 2021.
For the six months ended June 30, 2022, Core FFO increased 13.0% to $144.4 million, or $1.12 per diluted share, from $127.8 million, or $1.19 per diluted share, during the same period in 2021.
Results for both periods were driven by increased rental income as a result of the Company’s portfolio expansion, increased occupancy, improved average base rent per square foot, as well as lower interest costs. The decrease in the per diluted share metrics was primarily due to an increase in the share count of 18% as a result of PECO’s July 2021 underwritten IPO.

Same-Center NOI
Second quarter 2022 same-center net operating income (“NOI”) increased 4.3% to $89.7 million compared to $86.0 million during the second quarter of 2021.
For the six months ended June 30, 2022, same-center NOI increased 5.5% to $179.3 million from $169.9 million during the six months ended June 30, 2021.
Results for both periods were driven by a $0.37 increase in average base rent per square foot and an improvement in average occupancy, offset by reduced out-of-period recoveries in 2022 when compared to the same year-ago period.

Portfolio Overview for the Second Quarter and Six Months Ended June 30, 2022
Portfolio Statistics
As of June 30, 2022, PECO’s wholly-owned portfolio consisted of 269 properties, totaling approximately 30.9 million square feet, located in 31 states. This compared to 272 properties, totaling approximately 30.8 million square feet, located in 31 states as of June 30, 2021.
Leased portfolio occupancy increased to 96.8% at June 30, 2022 compared to 94.7% at June 30, 2021.
Anchor occupancy increased to 98.7% at June 30, 2022 compared to 96.8% at June 30, 2021, and inline occupancy increased to 93.2% at June 30, 2022 compared to 90.6% at June 30, 2021.

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Leasing Activity
During the second quarter of 2022, 265 leases (new, renewal, and options) were executed totaling 1.6 million square feet. This compared to 298 leases executed totaling 1.4 million square feet during the second quarter of 2021.
During the six months ended June 30, 2022, 509 leases (new, renewal, and options) were executed totaling 2.4 million square feet. This compared to 614 leases executed totaling 2.8 million square feet during the same year-ago period.
Comparable rent spreads during the second quarter of 2022, which compare the percentage increase (or decrease) of new or renewal leases to the expiring lease of a unit that was occupied within the past twelve months, were 39.0% for new leases, 14.4% for renewal leases (excluding options), and 20.1% combined (new and renewal leases only).
Comparable rent spreads during the six months ended June 30, 2022 were 36.6% for new leases, 14.6% for renewal leases (excluding options), and 16.2% combined (new and renewal leases only).

Acquisition & Disposition Activity
During the second quarter of 2022, one property and one outparcel were acquired for $68.9 million. During the same period, one property and two outparcels were sold for $15.0 million. Second quarter 2022 grocery-anchored shopping center acquisitions included:
Centennial Lakes, a 198,000 square foot shopping center anchored by Whole Foods in Edina, MN, part of the Minneapolis MSA
During the six months ended June 30, 2022, four properties and one outparcel were acquired for $169.3 million. During the same period, three properties and two outparcels were sold for $28.3 million.

Balance Sheet Highlights as of June 30, 2022
As of June 30, 2022, PECO had $784.4 million of total liquidity, comprised of $43.7 million of cash, cash equivalents, and restricted cash, plus $740.7 million of borrowing capacity available on its $800 million revolving credit facility.
PECO’s net debt to annualized adjusted EBITDAre was 5.5x, compared to 5.6x at December 31, 2021.
PECO’s outstanding debt had a weighted-average interest rate of 3.2%, a weighted-average maturity of 4.9 years, and 86.9% of its total debt was fixed-rate debt.
The Company generated gross proceeds of $90.1 million through the issuance of 2.6 million shares at a weighted-average price of $34.23 per share through the Company’s ATM program, including 0.8 million shares issued after June 30, 2022.

Monthly Stockholder Distributions
For the three months ended June 30, 2022, total distributions of $35.6 million were paid to common stockholders and OP unit holders. Distributions paid in April, May, and June were each $0.09 per share. Subsequent to the quarter end, distributions of $0.09 per share were paid in July and August. PECO has paid, and plans to continue to pay, distributions monthly.
Subsequent to the quarter end, the Board authorized a monthly distribution of $0.09 per share payable in September 2022, to stockholders of record at the close of business on August 15, 2022.
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Updated 2022 Guidance
PECO has updated earnings guidance for the year ending December 31, 2022 to reflect the following:
Accelerated same-center NOI growth due to favorable leasing activity;
Favorable bad debt and straight-line rent impacts;
The issuance to-date of common shares through the Company’s ATM program; and
Updated acquisition activity and debt transactions
Updated Full Year
2022 Guidance
Prior Full Year
2022 Guidance
Net income per share$0.34 - $0.40$0.29 - $0.35
Nareit FFO per share$2.09 - $2.15$2.07 - $2.13
Core FFO per share$2.19 - $2.25$2.18 - $2.24
Same-Center NOI growth3.75% - 4.5%3.25% - 4.0%
Acquisitions (net of dispositions)$200 - $300 million$300 - $400 million
The following table provides a reconciliation of the range of the Company's 2022 estimated net income to estimated Nareit FFO and Core FFO:
(Unaudited)Low EndHigh End
Net income $0.34 $0.40 
Depreciation and amortization of real estate assets1.741.75
Gain on sale of real estate assets— (0.01)
Adjustments related to unconsolidated joint ventures0.010.01
Nareit FFO$2.09 $2.15 
Depreciation and amortization of corporate assets0.030.03
Change in fair value of earn-out liability0.010.01
Loss on extinguishment of debt, net0.010.01
Transactions and other0.050.05
Core FFO$2.19 $2.25 

Jeff Edison summarized the quarter: “Second quarter results highlight the strength of PECO’s focused and differentiated strategy of owning and operating small-format, neighborhood centers anchored by the #1 or #2 grocer in a market which drives high-recurring foot traffic and Neighbor demand and results in superior financial and operating performance. PECO is a growth company positioned to gain share as we target and buy grocery-anchored shopping centers from a target market of 5,800 identified grocery-anchored shopping centers across the U.S. Our investment grade balance sheet, one of the strongest in our sector, and strong cash-flow-generating portfolio support this growth. With our experienced cycle-tested team, integrated operating platform, and grocery-anchored strategy, we are well-positioned to outperform in the future.”

Conference Call Details
PECO plans to host a conference call and webcast on Friday, August 5, 2022 at 12:00 p.m. Eastern Time to discuss these results. Chairman and Chief Executive Officer Jeff Edison, President Devin Murphy, and Chief Financial Officer John Caulfield will host the presentation.
This call is being webcast live at the Company’s website at https://investors.phillipsedison.com. The webcast is listen-only. A webcast replay will be available approximately one hour after the conclusion of the call using the
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same link. Those interested in participating in the question-and-answer session should follow the conference call dial-in instructions below.
Participants may register for the call at https://register.vevent.com/register/BI04c758008a6c42b89fcadb125bd3bf59 to receive the dial-in numbers and unique PIN to access the call seamlessly. It is recommended that you join 10 minutes prior to the event start (although you may register and dial in at any time during the call).
For more information on the Company’s financial results, please refer to the Company’s Form 10-Q, filed with the SEC on August 4, 2022 and available on the SEC’s website at www.sec.gov.

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PHILLIPS EDISON & COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2022 AND DECEMBER 31, 2021
(Condensed and Unaudited)
(In thousands, except per share amounts)
  June 30, 2022December 31, 2021
ASSETS    
Investment in real estate:    
Land and improvements$1,623,203 $1,586,993 
Building and improvements3,487,920 3,355,433 
In-place lease assets465,417 452,504 
Above-market lease assets70,842 68,736 
Total investment in real estate assets5,647,382 5,463,666 
Accumulated depreciation and amortization(1,216,331)(1,110,426)
Net investment in real estate assets4,431,051 4,353,240 
Investment in unconsolidated joint ventures28,096 31,326 
Total investment in real estate assets, net4,459,147 4,384,566 
Cash and cash equivalents24,657 92,585 
Restricted cash19,030 22,944 
Goodwill29,066 29,066 
Other assets, net162,712 138,050 
Real estate investments and other assets held for sale— 1,557 
Total assets$4,694,612 $4,668,768 
LIABILITIES AND EQUITY    
Liabilities:    
Debt obligations, net$1,877,107 $1,891,722 
Below-market lease liabilities, net108,323 107,526 
Earn-out liability— 52,436 
Derivative liabilities52 24,096 
Deferred income21,629 19,145 
Accounts payable and other liabilities92,856 97,229 
Liabilities of real estate investments held for sale— 288 
Total liabilities2,099,967 2,192,442 
Equity:    
Preferred stock, $0.01 par value per share, 10,000 shares authorized, zero shares issued and
outstanding at June 30, 2022 and December 31, 2021
— — 
Common stock, $0.01 par value per share, 1,000,000 shares authorized, 115,782 shares issued
and outstanding at June 30, 2022; 650,000 shares authorized, 19,550 shares issued and
outstanding at December 31, 2021
1,157 196 
Class B common stock, $0.01 par value per share, zero shares authorized, issued, and
outstanding at June 30, 2022; 350,000 shares authorized, 93,665 shares issued and outstanding at December 31, 2021
— 936 
Additional paid-in capital3,341,646 3,264,038 
Accumulated other comprehensive income (loss)8,571 (24,819)
Accumulated deficit(1,129,151)(1,090,837)
Total stockholders’ equity2,222,223 2,149,514 
Noncontrolling interests372,422 326,812 
Total equity2,594,645 2,476,326 
Total liabilities and equity$4,694,612 $4,668,768 


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PHILLIPS EDISON & COMPANY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021
(Condensed and Unaudited)
(In thousands, except per share amounts)
Three Months Ended June 30,Six Months Ended June 30,
  2022202120222021
Revenues:
Rental income$137,230 $130,335 $275,978 $257,958 
Fees and management income4,781 2,374 7,242 4,660 
Other property income505 361 1,459 833 
Total revenues142,516 133,070 284,679 263,451 
Operating Expenses:
Property operating22,852 21,974 46,172 44,176 
Real estate taxes16,473 16,814 33,964 33,387 
General and administrative11,376 11,937 22,908 21,278 
Depreciation and amortization60,769 56,587 117,995 111,928 
Impairment of real estate assets— 1,056 — 6,056 
Total operating expenses111,470 108,368 221,039 216,825 
Other:
Interest expense, net(17,127)(19,132)(35,326)(39,195)
Gain on disposal of property, net2,793 3,744 4,161 17,585 
Other expense, net(1,457)(2,924)(5,822)(18,509)
Net income15,255 6,390 26,653 6,507 
Net income attributable to noncontrolling interests(1,727)(796)(3,046)(810)
Net income attributable to stockholders$13,528 $5,594 $23,607 $5,697 
Earnings per share of common stock:
Net income per share attributable to stockholders - basic and
   diluted
$0.12 $0.06 $0.21 $0.06 


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Discussion and Reconciliation of Non-GAAP Measures
Same-Center Net Operating Income
The Company presents Same-Center NOI as a supplemental measure of its performance. The Company defines NOI as total operating revenues, adjusted to exclude non-cash revenue items, less property operating expenses and real estate taxes. For the three and six months ended June 30, 2022 and 2021, Same-Center NOI represents the NOI for the 255 properties that were wholly-owned and operational for the entire portion of all comparable reporting periods. The Company believes Same-Center NOI provides useful information to its investors about its 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). Because Same-Center NOI excludes the change in NOI from properties acquired or disposed of after December 31, 2020, it highlights operating trends such as occupancy levels, rental rates, and operating costs on properties that were operational for all comparable periods. Other REITs may use different methodologies for calculating Same-Center NOI, and accordingly, PECO’s Same-Center NOI may not be comparable to other REITs.
Same-Center NOI should not be viewed as an alternative measure of the Company’s financial performance as it does not reflect the operations of its entire portfolio, nor does it reflect the impact of general and administrative expenses, depreciation and amortization, interest expense, other income (expense), or the level of capital expenditures and leasing costs necessary to maintain the operating performance of the Company’s properties that could materially impact its results from operations.
Nareit Funds from Operations and Core Funds from Operations
Nareit FFO is a non-GAAP financial performance measure that is widely recognized as a measure of REIT operating performance. The National Association of Real Estate Investment Trusts (“Nareit”) defines FFO as net income (loss) computed 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; and (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. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect Nareit FFO on the same basis. The Company calculates Nareit FFO Attributable to Stockholders and OP Unit Holders in a manner consistent with the Nareit definition.
Core FFO is an additional financial performance measure used by the Company as Nareit FFO includes certain non-comparable items that affect its performance over time. The Company believes that Core FFO is helpful in assisting management and investors with the assessment of the sustainability of operating performance in future periods, and that it is more reflective of its core operating performance and provides an additional measure to compare PECO’s performance across reporting periods on a consistent basis by excluding items that may cause short-term fluctuations in net income (loss). To arrive at Core FFO, the Company adjusts Nareit FFO Attributable to Stockholders and OP Unit Holders 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 modification of debt and other; (v) other impairment charges; (vi) transaction and acquisition expenses; and (vii) realized performance income.
Nareit FFO, Nareit FFO Attributable to Stockholders and OP Unit Holders, and Core FFO should not be considered alternatives to net income (loss) under GAAP, as an indication of the Company’s liquidity, nor as an indication of funds available to cover its cash needs, including its ability to fund distributions. Core FFO may not be a useful measure of the impact of long-term operating performance on value if the Company does not continue to operate its business plan in the manner currently contemplated.
Accordingly, Nareit FFO, Nareit FFO Attributable to Stockholders and OP Unit Holders, and Core FFO should be reviewed in connection with other GAAP measurements, and should not be viewed as more prominent measures of performance than net income (loss) or cash flows from operations prepared in accordance with GAAP. The Company’s Nareit FFO, Nareit FFO Attributable to Stockholders and OP Unit Holders, and Core FFO, as presented, may not be comparable to amounts calculated by other REITs.
Earnings Before Interest, Taxes, Depreciation, and Amortization for Real Estate and Adjusted EBITDAre
Nareit defines EBITDAre as net income (loss) computed in accordance with GAAP before: (i) interest expense; (ii) income tax expense; (iii) depreciation and amortization; (iv) gains or losses from disposition of depreciable property; and (v) impairment write-downs of depreciable property. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect EBITDAre on the same basis.
Adjusted EBITDAre is an additional performance measure used by the Company as EBITDAre includes certain non-comparable items that affect the Company’s performance over time. To arrive at Adjusted EBITDAre, the Company excludes certain recurring and non-recurring items from EBITDAre, including, but not limited to: (i)
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changes in the fair value of the earn-out liability; (ii) other impairment charges; (iii) amortization of basis differences in the Company’s investments in its unconsolidated joint ventures; (iv) transaction and acquisition expenses; and (v) realized performance income.
The Company has included the calculation of EBITDAre to better align with publicly traded REITs. The Company uses EBITDAre and Adjusted EBITDAre as additional measures of operating performance which allow it to compare earnings independent of capital structure, determine debt service and fixed cost coverage, and measure enterprise value. Additionally, the Company believes they are a useful indicator of its ability to support its debt obligations. EBITDAre and Adjusted EBITDAre should not be considered as alternatives to net income (loss), as an indication of the Company’s liquidity, nor as an indication of funds available to cover its cash needs, including its ability to fund distributions. Accordingly, EBITDAre and Adjusted EBITDAre should be reviewed in connection with other GAAP measurements, and should not be viewed as more prominent measures of performance than net income (loss) or cash flows from operations prepared in accordance with GAAP. The Company’s EBITDAre and Adjusted EBITDAre, as presented, may not be comparable to amounts calculated by other REITs.
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Same-Center Net Operating Income—The table below compares Same-Center NOI (dollars in thousands):
Three Months Ended June 30,Favorable (Unfavorable)Six Months Ended June 30,Favorable (Unfavorable)
20222021$ Change% Change20222021$ Change% Change
Revenues:
Rental income(1)
$94,169 $89,516 $4,653 $188,562 $179,141 $9,421 
Tenant recovery income28,375 26,818 1,557 59,772 56,921 2,851 
Reserves for uncollectibility(2)
256 2,783 (2,527)(515)1,221 (1,736)
Other property income439 286 153 1,186 751 435 
Total revenues123,239 119,403 3,836 3.2 %249,005 238,034 10,971 4.6 %
Operating expenses:
Property operating expenses18,337 17,043 (1,294)38,105 35,756 (2,349)
Real estate taxes15,213 16,331 1,118 31,650 32,341 691 
Total operating expenses33,550 33,374 (176)(0.5)%69,755 68,097 (1,658)(2.4)%
Total Same-Center NOI$89,689 $86,029 $3,660 4.3 %$179,250 $169,937 $9,313 5.5 %
(1)Excludes straight-line rental income, net amortization of above- and below-market leases, and lease buyout income.
(2)Includes billings that will not be recognized as revenue until cash is collected or the Neighbor resumes regular payments and/or the Company deems it appropriate to resume recording revenue on an accrual basis, rather than on a cash basis.
Same-Center Net Operating Income Reconciliation—Below is a reconciliation of Net Income to NOI and Same-Center NOI (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Net income
$15,255 $6,390 $26,653 $6,507 
Adjusted to exclude:
Fees and management income(4,781)(2,374)(7,242)(4,660)
Straight-line rental income(1)
(3,319)(2,970)(5,128)(4,392)
Net amortization of above- and below-
   market leases
(1,078)(887)(2,080)(1,725)
Lease buyout income(176)(1,781)(2,141)(2,578)
General and administrative expenses11,376 11,937 22,908 21,278 
Depreciation and amortization60,769 56,587 117,995 111,928 
Impairment of real estate assets— 1,056 — 6,056 
Interest expense, net17,127 19,132 35,326 39,195 
Gain on disposal of property, net
(2,793)(3,744)(4,161)(17,585)
Other expense, net1,457 2,924 5,822 18,509 
Property operating expenses related to
   fees and management income
1,287 1,306 2,357 2,122 
NOI for real estate investments95,124 87,576 190,309 174,655 
Less: Non-same-center NOI(2)
(5,435)(1,547)(11,059)(4,718)
Total Same-Center NOI$89,689 $86,029 $179,250 $169,937 
(1)Includes straight-line rent adjustments for Neighbors for whom revenue is being recorded on a cash basis.
(2)Includes operating revenues and expenses from non-same-center properties which includes properties acquired or sold and corporate activities.


10



Nareit Funds from Operations and Core Funds from Operations—The following table presents the Company’s calculation of Nareit FFO Attributable to Stockholders and OP Unit Holders and Core FFO and provides additional information related to its operations (in thousands, except per share amounts):
  Three Months Ended June 30,Six Months Ended June 30,
  2022202120222021
Calculation of Nareit FFO Attributable to Stockholders and OP Unit Holders
Net income
$15,255 $6,390 $26,653 $6,507 
Adjustments:
Depreciation and amortization of real estate assets59,849 55,654 116,169 109,995 
Impairment of real estate assets— 1,056 — 6,056 
Gain on disposal of property, net
(2,793)(3,744)(4,161)(17,585)
Adjustments related to unconsolidated joint
   ventures
(1,186)537 (481)(100)
Nareit FFO attributable to stockholders and OP unit
   holders
$71,125 $59,893 $138,180 $104,873 
Calculation of Core FFO
Nareit FFO attributable to stockholders and OP unit
   holders
$71,125 $59,893 $138,180 $104,873 
Adjustments:
Depreciation and amortization of corporate assets920 933 1,826 1,933 
Change in fair value of earn-out liability— 2,000 1,809 18,000 
Transaction and acquisition expenses2,035 934 4,080 1,075 
Loss on extinguishment or modification of debt and
   other, net
129 419 1,029 1,110 
Amortization of unconsolidated joint venture basis
   differences
175 79 219 825 
Realized performance income(1)
(2,546)— (2,742)— 
Core FFO$71,838 $64,258 $144,401 $127,816 
Nareit FFO Attributable to Stockholders and OP Unit Holders/Core FFO per Diluted Share
Weighted-average shares of common stock
   outstanding - diluted
129,117 107,175 128,857 107,102 
Nareit FFO attributable to stockholders and OP unit
   holders per share - diluted
$0.55 $0.56 $1.07 $0.98 
Core FFO per share - diluted$0.56 $0.60 $1.12 $1.19 
(1)Realized performance income includes fees received related to the achievement of certain performance targets in our NRP joint venture.
11


EBITDAre and Adjusted EBITDAre—The following table presents the Company’s calculation of EBITDAre and Adjusted EBITDAre (in thousands):
Three Months Ended
 June 30,
Six Months Ended
 June 30,
Year Ended December 31,
20222021202220212021
Calculation of EBITDAre
Net income
$15,255 $6,390 $26,653 $6,507 $17,233 
Adjustments:
Depreciation and amortization60,769 56,587 117,995 111,928 221,433 
Interest expense, net17,127 19,132 35,326 39,195 76,371 
Gain on disposal of property, net
(2,793)(3,744)(4,161)(17,585)(30,421)
Impairment of real estate assets— 1,056 — 6,056 6,754 
Federal, state, and local tax expense97 165 194 331 327 
Adjustments related to
   unconsolidated joint ventures
(885)(535)134 597 1,431 
EBITDAre
$89,570 $79,051 $176,141 $147,029 $293,128 
Calculation of Adjusted EBITDAre
EBITDAre
$89,570 $79,051 $176,141 $147,029 $293,128 
Adjustments:
Change in fair value of earn-out
   liability
— 2,000 1,809 18,000 30,436 
Transaction and acquisition
   expenses
2,035 934 4,080 1,075 5,363 
Amortization of unconsolidated joint
   venture basis differences
175 79 219 825 1,167 
Realized performance income(1)
$(2,546)$— (2,742)— (675)
Adjusted EBITDAre
$89,234 $82,064 $179,507 $166,929 $329,419 
(1)Realized performance income includes fees received related to the achievement of certain performance targets in our NRP joint venture.
12



Financial Leverage Ratios—The Company believes its net debt to Adjusted EBITDAre, net debt to total enterprise value, and debt covenant compliance as of June 30, 2022 allows it access to future borrowings as needed in the near term. The following table presents the Company’s calculation of net debt and total enterprise value, inclusive of its prorated portion of net debt and cash and cash equivalents owned through its unconsolidated joint ventures, as of June 30, 2022 and December 31, 2021 (in thousands):
June 30, 2022December 31, 2021
Net debt:
Total debt, excluding discounts, market adjustments, and deferred
   financing expenses
$1,919,467 $1,941,504 
Less: Cash and cash equivalents25,072 93,109 
Total net debt$1,894,395 $1,848,395 
Enterprise value:
Net debt$1,894,395 $1,848,395 
Total equity market capitalization(1)(2)
4,354,726 4,182,996 
Total enterprise value$6,249,121 $6,031,391 
(1)Total equity market capitalization is calculated as diluted shares multiplied by the closing market price per share, which includes 130.3 million and 126.6 million diluted shares as of June 30, 2022 and December 31, 2021, respectively, and the closing market price per share of $33.41 and $33.04 as of June 30, 2022 and December 31, 2021, respectively.
(2)Fully diluted shares include common stock and OP units as of June 30, 2022 and Class B common stock, common stock, and OP units as of December 31, 2021.
The following table presents the calculation of net debt to Adjusted EBITDAre and net debt to total enterprise value as of June 30, 2022 and December 31, 2021 (dollars in thousands):
June 30, 2022December 31, 2021
Net debt to Adjusted EBITDAre - annualized:
Net debt$1,894,395$1,848,395
Adjusted EBITDAre - annualized(1)
341,997329,419
Net debt to Adjusted EBITDAre - annualized
5.5x5.6x
Net debt to total enterprise value:
Net debt$1,894,395$1,848,395
Total enterprise value6,249,1216,031,391
Net debt to total enterprise value30.3%30.6%
(1)Adjusted EBITDAre is based on a trailing twelve month period.


About Phillips Edison & Company
Phillips Edison & Company, Inc. (“PECO”), an internally-managed REIT, is one of the nation’s largest owners and operators of grocery-anchored shopping centers. Founded in 1991, PECO has generated strong results through its vertically-integrated operating platform and national footprint of well-occupied shopping centers. PECO’s centers feature a mix of national and regional retailers providing necessity-based goods and services in fundamentally strong markets throughout the United States. PECO’s top grocery anchors include Kroger, Publix, Ahold Delhaize, and Albertsons. As of June 30, 2022, PECO manages 289 shopping centers, including 269 wholly-owned centers comprising 30.9 million square feet across 31 states, and 20 shopping centers owned in one institutional joint venture. PECO is exclusively focused on creating great omni-channel, grocery-anchored shopping experiences and improving communities, one neighborhood shopping center at a time.

PECO uses, and intends to continue to use, its Investors website, which can be found at https://investors.phillipsedison.com, as a means of disclosing material nonpublic information and for complying with its disclosure obligations under Regulation FD.

13


Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Phillips Edison & Company, Inc. (the “Company”) intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with the safe harbor provisions. Such forward-looking statements can generally be identified by the Company’s use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” “seek,” “objective,” “goal,” “strategy,” “plan,” “focus,” “priority,” “should,” “could,” “potential,” “possible,” “look forward,” “optimistic,” or other similar words. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this earnings release. Such statements include, but are not limited to: (a) statements about the Company’s plans, strategies, initiatives, and prospects; (b) statements about the Company’s underwritten incremental yields; and (c) statements about the Company’s future results of operations, capital expenditures, and liquidity. Such statements are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially from those projected or anticipated, including, without limitation: (i) changes in national, regional, or local economic climates; (ii) local market conditions, including an oversupply of space in, or a reduction in demand for, properties similar to those in the Company’s portfolio; (iii) vacancies, changes in market rental rates, and the need to periodically repair, renovate, and re-let space; (iv) competition from other available shopping centers and the attractiveness of properties in the Company’s portfolio to its tenants; (v) the financial stability of the Company’s tenants, including, without limitation, their ability to pay rent; (vi) the Company’s ability to pay down, refinance, restructure, or extend its indebtedness as it becomes due; (vii) increases in the Company’s borrowing costs as a result of changes in interest rates and other factors; (viii) potential liability for environmental matters; (ix) damage to the Company’s properties from catastrophic weather and other natural events, and the physical effects of climate change; (x) the Company’s ability and willingness to maintain its qualification as a REIT in light of economic, market, legal, tax, and other considerations; (xi) changes in tax, real estate, environmental, and zoning laws; (xii) information technology security breaches; (xiii) the Company’s corporate responsibility initiatives; (xiv) loss of key executives; (xv) the concentration of the Company’s portfolio in a limited number of industries, geographies, or investments; (xvi) the economic, political, and social impact of, and uncertainty relating to, the COVID-19 pandemic; (xvii) the Company’s ability to re-lease its properties on the same or better terms, or at all, in the event of non-renewal or in the event the Company exercises its right to replace an existing tenant; (xviii) the loss or bankruptcy of the Company’s tenants; (xix) to the extent the Company is seeking to dispose of properties, the Company’s ability to do so at attractive prices or at all; and (xx) the impact of inflation on the Company and on its tenants. Additional important factors that could cause actual results to differ are described in the filings made from time to time by the Company with the SEC and include the risk factors and other risks and uncertainties described in the Company’s 2021 Annual Report on Form 10-K, filed with the SEC on February 16, 2022, as updated from time to time in the Company’s periodic and/or current reports filed with the SEC, which are accessible on the SEC’s website at www.sec.gov. Therefore, such statements are not intended to be a guarantee of the Company’s performance in future periods.
Except as required by law, the Company does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

Investors:
Phillips Edison & Company, Inc.

Kimberly Green, Vice President of Investor Relations
(513) 692-3399
kgreen@phillipsedison.com

Stephanie Hout, Director of Investor Relations
(513) 746-2594
shout@phillipsedison.com

Source: Phillips Edison & Company, Inc.
###
14

Document


coverpageq2a.jpg



Table of Contents
Earnings Release
EBITDAre Metrics
Joint Venture Summary and Financials
Summary of Outstanding Debt
Covenant Disclosures
INVESTOR INFORMATION


Phillips Edison & Company
2



Introductory Notes
SUPPLEMENTAL INFORMATION
Phillips Edison & Company, Inc. (“we,” the “Company,” “our,” “us,” or "PECO") is one of the nation’s largest owners and operators of omni-channel grocery-anchored neighborhood shopping centers. The enclosed information should be read in conjunction with our filings with the U.S. Securities and Exchange Commission (“SEC”), including, but not limited to, our Form 10-Qs filed quarterly and Form 10-Ks filed annually. Additionally, the enclosed information does not purport to disclose all items required under Generally Accepted Accounting Principles (“GAAP”).

CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS
This supplemental disclosure contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with the safe harbor provisions. Such forward-looking statements can generally be identified by the Company’s use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” “seek,” “objective,” “goal,” “strategy,” “plan,” “focus,” “priority,” “should,” “could,” “potential,” “possible,” “look forward,” “optimistic,” or other similar words. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this supplemental disclosure. Such statements include, in particular, statements about the Company’s plans, strategies, and prospects, are based on the current beliefs and expectations of the Company’s management, and are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially from those projected or anticipated. These risks include, without limitation: (i) changes in national, regional, or local economic climates; (ii) local market conditions, including an oversupply of space in, or a reduction in demand for, properties similar to those in the Company’s portfolio; (iii) vacancies, changes in market rental rates, and the need to periodically repair, renovate, and re-let space; (iv) competition from other available properties and the attractiveness of properties in the Company’s portfolio to its tenants; (v) the financial stability of tenants, including, without limitation, the ability of tenants to pay rent; (vi) the Company’s ability to pay down, refinance, restructure, or extend its indebtedness as it becomes due; (vii) increases in the Company’s borrowing costs as a result of changes in interest rates and other factors; (viii) potential liability for environmental matters; (ix) damage to the Company’s properties from catastrophic weather and other natural events, and the physical effects of climate change; (x) the Company’s ability and willingness to maintain its qualification as a REIT in light of economic, market, legal, tax, and other considerations; (xi) changes in tax, real estate, environmental, and zoning laws; (xii) information technology security breaches; (xiii) the Company’s corporate responsibility initiatives; (xiv) the loss of key executives; (xv) the concentration of the Company’s portfolio in a limited number of industries, geographies, or investments; (xvi) the economic, political, and social impact of, and uncertainty relating to, the COVID-19 pandemic; (xvii) the Company's ability to re-lease its properties on the same or better terms, or at all, in the event of non-renewal or in the event the Company exercises its right to replace an existing tenant; (xviii) the loss or bankruptcy of the Company’s tenants; (xix) to the extent the Company is seeking to dispose of properties, its ability to do so at attractive prices or at all; (xx) the impact of inflation on the Company and its tenants; and (xxi) any of the other risks included in the Company’s SEC filings. Therefore, such statements are not intended to be a guarantee of the Company’s performance in future periods.

Additional important factors that could cause actual results to differ are described in the filings made from time to time by the Company with the SEC and include the risk factors and other risks and uncertainties described in the Company’s 2021 Annual Report on Form 10-K, filed with the SEC on February 16, 2022, which is accessible on the SEC’s website at www.sec.gov. Except as required by law, the Company does not undertake any obligation to update or revise any forward-looking statements contained in this supplement to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting such forward-looking statements.

NOTICE REGARDING NON-GAAP FINANCIAL MEASURES
In addition to GAAP measures, this supplemental disclosure contains and refers to certain non-GAAP measures. We do not consider our non-GAAP measures included in our Glossary of Terms 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 to maintain the operating performance of our properties 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. Reconciliations of our non-GAAP measures to the most directly comparable GAAP financial measures are included in this supplemental disclosure on pages 16-20 and definitions of our non-GAAP measures are included in our Glossary of Terms on page 59.




Phillips Edison & Company
3



Introductory Notes
PRO RATA FINANCIAL INFORMATION
We may present our consolidated financial information inclusive of our prorated portion owned through unconsolidated joint ventures. The presentation of pro rata financial information has limitations as an analytical tool, which include but are not limited to: (i) amounts shown on individual line items were calculated by applying our overall economic ownership interest percentage determined when applying the equity method of accounting, and may not represent our legal claim to the assets and liabilities, or the revenues and expenses; and (ii) other REITs may use different methodologies for calculating their pro-rata interest. Accordingly, pro-rata financial information 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.
REVERSE STOCK SPLIT
We effected a one-for-three reverse stock split effective on July 2, 2021. In addition, we effected a corresponding reverse split of our Operating Partnership’s OP units. As a result of the reverse stock and OP unit split, every three shares of our common stock and OP units were automatically combined and converted into one issued and outstanding share of common stock or OP unit, as applicable, rounded to the nearest 1/100th share or OP unit. The reverse stock and OP unit splits impacted all classes of common stock and OP units proportionately and had no impact on any stockholder’s or limited partner’s percentage ownership of all issued and outstanding common stock or OP units. Unless otherwise indicated, the information in this supplement gives effect to the reverse stock and OP unit splits.
CLASS B COMMON STOCK
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.
Our Class B common stock was identical to our common stock except that it was not listed on a national securities exchange. Per the terms of the Recapitalization, on January 18, 2022, each share of our Class B common stock automatically converted into one 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. We no longer have Class B common stock authorized for issue.
Unless otherwise indicated, all information in this supplemental disclosure gives effect to the Recapitalization and references to "shares" and per share metrics refer to our common stock and Class B common stock, collectively.


Phillips Edison & Company
4











pecostackedlogobluea03a.jpg
FINANCIAL RESULTS
Quarter Ended June 30, 2022




Earnings Release
Unaudited

Phillips Edison & Company Reports
Second Quarter 2022 Results and
Raises Core FFO Guidance

CINCINNATI - August 4, 2022 - Phillips Edison & Company, Inc. (Nasdaq: PECO) (“PECO” or the “Company”), one of the nation’s largest owners and operators of grocery-anchored omni-channel neighborhood shopping centers, reported net income attributable to stockholders of $13.5 million, or $0.12 per diluted share, for the three months ended June 30, 2022.

Highlights for the Second Quarter Ended June 30, 2022
Nareit FFO totaled $71.1 million, or $0.55 per diluted share
Core FFO totaled $71.8 million, or $0.56 per diluted share
Same-center NOI increased 4.3% versus the second quarter ended June 30, 2021
Leased portfolio occupancy as of June 30, 2022 increased to a record-high 96.8%
Comparable new and renewal rent spreads were 39.0% and 14.4%, respectively
Acquired one grocery-anchored shopping center and one outparcel for $68.9 million
Expanded the capacity of the Company's unsecured revolving credit facility to $800 million from $500 million
Net debt to annualized adjusted EBITDAre was 5.5x compared to 5.6x at December 31, 2021
Generated gross proceeds of $90.1 million through the issuance of 2.6 million shares at a weighted-average price of $34.23 per share through the Company’s ATM program, including 0.8 million shares issued after June 30, 2022
Subsequent to quarter end, established a $250 million share repurchase program

Management Commentary
“The PECO team continues to successfully execute on our growth strategy through acquisitions and strong income growth at our properties,” stated Jeff Edison, chairman and chief executive officer of PECO. “We delivered excellent operational results with same-center NOI growth of 4.3%, combined new and renewal leasing spreads of 20.1%, and record occupancy of 96.8% at the end of the quarter. We are excited about the acquisition of Centennial Lakes, in Minneapolis, MN, a Whole Foods-anchored neighborhood center. Our strong performance and well-positioned balance sheet provide us with the momentum and flexibility to continue to successfully grow our business no matter the macroeconomic environment ahead.”
“Given our accomplishments this quarter, we are raising our guidance for Net Income, Core FFO, and same-center NOI. The PECO team and the strength of our Neighbors continue to drive operating performance beyond our internal expectations. Due to the uncertainty in the capital markets environment, we are updating our 2022 acquisition guidance. As interest costs and inflation headwinds impact the transaction market, we remain cautious with our capital allocation decisions including the timing and volume of our acquisitions to ensure we are acquiring assets that are accretive to financial results and meet our return expectations.”


Financial Results for the Second Quarter and Six Months Ended June 30, 2022
Net Income
Second quarter 2022 net income attributable to stockholders totaled $13.5 million, or $0.12 per diluted share, compared to net income of $5.6 million, or $0.06 per diluted share during the second quarter of 2021.
For the six months ended June 30, 2022, net income attributable to stockholders totaled $23.6 million, or $0.21 per diluted share, compared to net income of $5.7 million, or $0.06 per diluted share for the same period in 2021.

Phillips Edison & Company
6


Earnings Release
Unaudited

Nareit FFO
Second quarter 2022 funds from operations attributable to stockholders and operating partnership (“OP”) unit holders as defined by Nareit (“Nareit FFO”) increased 18.8% to $71.1 million, or $0.55 per diluted share, from $59.9 million, or $0.56 per diluted share, during the second quarter of 2021.
For the six months ended June 30, 2022, Nareit FFO increased 31.8% to $138.2 million, or $1.07 per diluted share, from $104.9 million, or $0.98 per diluted share, during the same period in 2021.
The $11.2 million increase for the second quarter of 2022 was driven by an increase in rental income, realizing $2.5 million of performance income for achieving return hurdles in the Necessity Retail Partners (“NRP”) joint venture, and reduced interest expense due to our lower leverage from a year ago. These amounts were partially offset by higher transaction and acquisition costs in the second quarter of 2022. The decrease in the per diluted share metric was primarily due to an increase in the share count of 18% as a result of PECO’s July 2021 underwritten IPO.
The $33.3 million increase for the six months ended June 30, 2022 was driven by an increase in rental income and reduced interest expense, partially offset by higher transaction and acquisition costs in the current year. Results were additionally driven by $2.7 million of performance income from the NRP joint venture, as well as a reduction in non-cash expense as a result of the final settlement of the earn-out liability with the issuance of 1.6 million OP units in January 2022.

Core FFO
Second quarter 2022 core funds from operations (“Core FFO”) increased 11.8% to $71.8 million, or $0.56 per diluted share, compared to $64.3 million, or $0.60 per diluted share, during the second quarter of 2021.
For the six months ended June 30, 2022, Core FFO increased 13.0% to $144.4 million, or $1.12 per diluted share, from $127.8 million, or $1.19 per diluted share, during the same period in 2021.
Results for both periods were driven by increased rental income as a result of the Company’s portfolio expansion, increased occupancy, improved average base rent per square foot, as well as lower interest costs. The decrease in the per diluted share metrics was primarily due to an increase in the share count of 18% as a result of PECO’s July 2021 underwritten IPO.

Same-Center NOI
Second quarter 2022 same-center net operating income (“NOI”) increased 4.3% to $89.7 million compared to $86.0 million during the second quarter of 2021.
For the six months ended June 30, 2022, same-center NOI increased 5.5% to $179.3 million from $169.9 million during the six months ended June 30, 2021.
Results for both periods were driven by a $0.37 increase in average base rent per square foot and an improvement in average occupancy, offset by reduced out-of-period recoveries in 2022 when compared to the same year-ago period.

Portfolio Overview for the Second Quarter and Six Months Ended June 30, 2022
Portfolio Statistics
As of June 30, 2022, PECO’s wholly-owned portfolio consisted of 269 properties, totaling approximately 30.9 million square feet, located in 31 states. This compared to 272 properties, totaling approximately 30.8 million square feet, located in 31 states as of June 30, 2021.
Leased portfolio occupancy increased to 96.8% at June 30, 2022 compared to 94.7% at June 30, 2021.
Anchor occupancy increased to 98.7% at June 30, 2022 compared to 96.8% at June 30, 2021, and inline occupancy increased to 93.2% at June 30, 2022 compared to 90.6% at June 30, 2021.


Phillips Edison & Company
7


Earnings Release
Unaudited

Leasing Activity
During the second quarter of 2022, 265 leases (new, renewal, and options) were executed totaling 1.6 million square feet. This compared to 298 leases executed totaling 1.4 million square feet during the second quarter of 2021.
During the six months ended June 30, 2022, 509 leases (new, renewal, and options) were executed totaling 2.4 million square feet. This compared to 614 leases executed totaling 2.8 million square feet during the same year-ago period.
Comparable rent spreads during the second quarter of 2022, which compare the percentage increase (or decrease) of new or renewal leases to the expiring lease of a unit that was occupied within the past twelve months, were 39.0% for new leases, 14.4% for renewal leases (excluding options), and 20.1% combined (new and renewal leases only).
Comparable rent spreads during the six months ended June 30, 2022 were 36.6% for new leases, 14.6% for renewal leases (excluding options), and 16.2% combined (new and renewal leases only).

Acquisition & Disposition Activity
During the second quarter of 2022, one property and one outparcel were acquired for $68.9 million. During the same period, one property and two outparcels were sold for $15.0 million. Second quarter 2022 grocery-anchored shopping center acquisitions included:
Centennial Lakes, a 198,000 square foot shopping center anchored by Whole Foods in Edina, MN, part of the Minneapolis MSA
During the six months ended June 30, 2022, four properties and one outparcel were acquired for $169.3 million. During the same period, three properties and two outparcels were sold for $28.3 million.

Balance Sheet Highlights as of June 30, 2022
As of June 30, 2022, PECO had $784.4 million of total liquidity, comprised of $43.7 million of cash, cash equivalents, and restricted cash, plus $740.7 million of borrowing capacity available on its $800 million revolving credit facility.
PECO’s net debt to annualized adjusted EBITDAre was 5.5x, compared to 5.6x at December 31, 2021.
PECO’s outstanding debt had a weighted-average interest rate of 3.2%, a weighted-average maturity of 4.9 years, and 86.9% of its total debt was fixed-rate debt.
The Company generated gross proceeds of $90.1 million through the issuance of 2.6 million shares at a weighted-average price of $34.23 per share through the Company’s ATM program, including 0.8 million shares issued after June 30, 2022.

Monthly Stockholder Distributions
For the three months ended June 30, 2022, total distributions of $35.6 million were paid to common stockholders and OP unit holders. Distributions paid in April, May, and June were each $0.09 per share. Subsequent to the quarter end, distributions of $0.09 per share were paid in July and August. PECO has paid, and plans to continue to pay, distributions monthly.
Subsequent to the quarter end, the Board authorized a monthly distribution of $0.09 per share payable in September 2022, to stockholders of record at the close of business on August 15, 2022.

Phillips Edison & Company
8


Earnings Release
Unaudited

Updated 2022 Guidance
PECO has updated earnings guidance for the year ending December 31, 2022 to reflect the following:
Accelerated same-center NOI growth due to favorable leasing activity;
Favorable bad debt and straight-line rent impacts;
The issuance to-date of common shares through the Company’s ATM program; and
Updated acquisition activity and debt transactions
Updated Full Year
2022 Guidance
Prior Full Year
2022 Guidance
Net income per share$0.34 - $0.40$0.29 - $0.35
Nareit FFO per share$2.09 - $2.15$2.07 - $2.13
Core FFO per share$2.19 - $2.25$2.18 - $2.24
Same-Center NOI growth3.75% - 4.5%3.25% - 4.0%
Acquisitions (net of dispositions)$200 - $300 million$300 - $400 million
The following table provides a reconciliation of the range of the Company's 2022 estimated net income to estimated Nareit FFO and Core FFO:
(Unaudited)Low EndHigh End
Net income $0.34 $0.40 
Depreciation and amortization of real estate assets1.741.75
Gain on sale of real estate assets— (0.01)
Adjustments related to unconsolidated joint ventures0.010.01
Nareit FFO$2.09 $2.15 
Depreciation and amortization of corporate assets0.030.03
Change in fair value of earn-out liability0.010.01
Loss on extinguishment of debt, net0.010.01
Transactions and other0.050.05
Core FFO$2.19 $2.25 

Jeff Edison summarized the quarter: “Second quarter results highlight the strength of PECO’s focused and differentiated strategy of owning and operating small-format, neighborhood centers anchored by the #1 or #2 grocer in a market which drives high-recurring foot traffic and Neighbor demand and results in superior financial and operating performance. PECO is a growth company positioned to gain share as we target and buy grocery-anchored shopping centers from a target market of 5,800 identified grocery-anchored shopping centers across the U.S. Our investment grade balance sheet, one of the strongest in our sector, and strong cash-flow-generating portfolio support this growth. With our experienced cycle-tested team, integrated operating platform, and grocery-anchored strategy, we are well-positioned to outperform in the future.”

Phillips Edison & Company
9


Earnings Release
Unaudited

Conference Call Details
PECO plans to host a conference call and webcast on Friday, August 5, 2022 at 12:00 p.m. Eastern Time to discuss these results. Chairman and Chief Executive Officer Jeff Edison, President Devin Murphy, and Chief Financial Officer John Caulfield will host the presentation.
This call is being webcast live at the Company’s website at https://investors.phillipsedison.com. The webcast is listen-only. A webcast replay will be available approximately one hour after the conclusion of the call using the same link. Those interested in participating in the question-and-answer session should follow the conference call dial-in instructions below.
Participants may register for the call at https://register.vevent.com/register/BI04c758008a6c42b89fcadb125bd3bf59 to receive the dial-in numbers and unique PIN to access the call seamlessly. It is recommended that you join 10 minutes prior to the event start (although you may register and dial in at any time during the call).
For more information on the Company’s financial results, please refer to the Company’s Form 10-Q, filed with the SEC on August 4, 2022 and available on the SEC’s website at www.sec.gov.





Phillips Edison & Company
10



Overview of Results
Unaudited, in thousands (excluding per share and per square foot amounts)
Three Months Ended
 June 30,
Six Months Ended
 June 30,
2022202120222021
SUMMARY FINANCIAL RESULTS
Total revenues (page 14)
$142,516 $133,070 $284,679 $263,451 
Net income attributable to stockholders (page 14)
13,528 5,594 23,607 5,697 
Net income per share - basic and diluted (page 14)
$0.12 $0.06 $0.21 $0.06 
Same-Center NOI (page 20)
89,689 86,029 179,250 169,937 
Adjusted EBITDAre (page 18)
89,234 82,064 179,507 166,929 
Nareit FFO (page 16)
71,125 59,893 138,180 104,873 
Nareit FFO per share - diluted (page 16)
$0.55 $0.56 $1.07 $0.98 
Core FFO (page 16)
71,838 64,258 144,401 127,816 
Core FFO per share - diluted (page 16)
$0.56 $0.60 $1.12 $1.19 
 
SUMMARY OF FINANCIAL AND OPERATING RATIOS
Same-Center NOI margin (page 20)
72.8 %72.0 %72.0 %71.4 %
Same-Center NOI change (page 20)(1)
4.3 %10.5 %5.5 %4.6 %
LEASING RESULTS
Comparable rent spreads - new leases (page 40)(2)
39.0 %18.5 %36.6 %15.3 %
Comparable rent spreads - renewals (page 40)(2)
14.4 %8.0 %14.6 %8.0 %
Portfolio retention rate92.1 %85.5 %90.6 %87.2 %
As of June 30,
20222021
OUTSTANDING STOCK AND PARTNERSHIP UNITS
Common stock outstanding115,782
Class B common stock outstanding93,640
Operating Partnership (OP) units outstanding14,56013,368
SUMMARY PORTFOLIO STATISTICS(2)
Number of properties269 272 
GLA - all properties (page 42)
30,935 30,778 
Leased occupancy (page 36)
96.8 %94.7 %
Economic occupancy (page 36)
96.2 %94.1 %
Leased ABR PSF (page 36)
$14.06 $13.21 
Leased Anchor ABR PSF (page 36)
$9.83 $9.41 
Leased Inline ABR PSF (page 36)
$22.66 $21.10 
(1)Reflects Same-Center NOI change as initially reported for the specified period.
(2)Statistics represent our wholly-owned properties.


Phillips Edison & Company
11











pecostackedlogobluea03a.jpg
FINANCIAL SUMMARY
Quarter Ended June 30, 2022
























Consolidated Balance Sheets
Condensed and Unaudited, in thousands (excluding per share amounts)
June 30, 2022December 31, 2021
ASSETS  
Investment in real estate:    
Land and improvements$1,623,203 $1,586,993 
Building and improvements3,487,920 3,355,433 
In-place lease assets465,417 452,504 
Above-market lease assets70,842 68,736 
Total investment in real estate assets5,647,382 5,463,666 
Accumulated depreciation and amortization(1,216,331)(1,110,426)
Net investment in real estate assets4,431,051 4,353,240 
Investment in unconsolidated joint ventures28,096 31,326 
Total investment in real estate assets, net4,459,147 4,384,566 
Cash and cash equivalents24,657 92,585 
Restricted cash19,030 22,944 
Goodwill29,066 29,066 
Other assets, net162,712 138,050 
Real estate investments and other assets held for sale— 1,557 
Total assets$4,694,612 $4,668,768 
LIABILITIES AND EQUITY    
Liabilities:    
Debt obligations, net$1,877,107 $1,891,722 
Below-market lease liabilities, net108,323 107,526 
Earn-out liability— 52,436 
Derivative liabilities52 24,096 
Deferred income21,629 19,145 
Accounts payable and other liabilities92,856 97,229 
Liabilities of real estate investments held for sale— 288 
Total liabilities2,099,967 2,192,442 
Equity:    
Preferred stock, $0.01 par value per share, 10,000 shares authorized as of
   June 30, 2022 and December 31, 2021
— — 
Common stock, $0.01 par value per share, 1,000,000 and 650,000
   authorized as of June 30, 2022 and December 31, 2021, respectively
1,157 196 
Class B common stock, $0.01 par value per share, zero and 350,000
   shares authorized as of June 30, 2022 and December 31, 2021,
   respectively
— 936 
Additional paid-in capital3,341,646 3,264,038 
Accumulated other comprehensive income (loss)8,571 (24,819)
Accumulated deficit(1,129,151)(1,090,837)
Total stockholders’ equity2,222,223 2,149,514 
Noncontrolling interests372,422 326,812 
Total equity2,594,645 2,476,326 
Total liabilities and equity$4,694,612 $4,668,768 

Phillips Edison & Company
13




Consolidated Statements of Operations
Condensed and Unaudited, in thousands (excluding per share amounts)
  Three Months Ended June 30,Six Months Ended June 30,
  2022202120222021
REVENUES        
Rental income$137,230 $130,335 $275,978 $257,958 
Fees and management income4,781 2,374 7,242 4,660 
Other property income505 361 1,459 833 
Total revenues142,516 133,070 284,679 263,451 
OPERATING EXPENSES        
Property operating22,852 21,974 46,172 44,176 
Real estate taxes16,473 16,814 33,964 33,387 
General and administrative11,376 11,937 22,908 21,278 
Depreciation and amortization60,769 56,587 117,995 111,928 
Impairment of real estate assets— 1,056 — 6,056 
Total operating expenses111,470 108,368 221,039 216,825 
OTHER        
Interest expense, net(17,127)(19,132)(35,326)(39,195)
Gain on disposal of property, net
2,793 3,744 4,161 17,585 
Other expense, net
(1,457)(2,924)(5,822)(18,509)
Net income
15,255 6,390 26,653 6,507 
Net income attributable to noncontrolling interests
(1,727)(796)(3,046)(810)
Net income attributable to stockholders
$13,528 $5,594 $23,607 $5,697 
EARNINGS PER SHARE OF COMMON STOCK        
Net income per share attributable to stockholders -
   basic and diluted
$0.12 $0.06 $0.21 $0.06 

Phillips Edison & Company
14




Consolidated Statements of Operations
Condensed and Unaudited, in thousands (excluding per share amounts)
  Three Months Ended
   June 30,
2022
 March 31,
2022
December 31, 2021 September 30,
2021
 June 30,
2021
REVENUES
Rental income$137,230 $138,748 $132,711 $128,826 $130,335 
Fees and management income4,781 2,461 3,240 2,435 2,374 
Other property income505 954 1,110 1,073 361 
Total revenues142,516 142,163 137,061 132,334 133,070 
OPERATING EXPENSES
Property operating22,852 23,320 27,130 21,608 21,974 
Real estate taxes16,473 17,491 15,619 16,375 16,814 
General and administrative11,376 11,532 15,915 11,627 11,937 
Depreciation and amortization60,769 57,226 55,604 53,901 56,587 
Impairment of real estate assets— — — 698 1,056 
Total operating expenses111,470 109,569 114,268 104,209 108,368 
OTHER  
Interest expense, net(17,127)(18,199)(18,606)(18,570)(19,132)
Gain (loss) on disposal of property, net2,793 1,368 (1,257)14,093 3,744 
Other expense, net(1,457)(4,365)(8,766)(7,086)(2,924)
Net income (loss)15,255 11,398 (5,836)16,562 6,390 
Net (income) loss attributable to noncontrolling interests(1,727)(1,319)627 (1,929)(796)
Net income (loss) attributable to stockholders$13,528 $10,079 $(5,209)$14,633 $5,594 
EARNINGS PER SHARE OF COMMON STOCK  
Net income (loss) per share attributable to stockholders - basic and diluted$0.12 $0.09 $(0.05)$0.13 $0.06 













































Phillips Edison & Company
15



Nareit FFO, Core FFO, and Adjusted FFO
Unaudited, in thousands (excluding per share amounts)
  Three Months Ended
 June 30,
Six Months Ended
 June 30,
  2022202120222021
NAREIT FFO ATTRIBUTABLE TO STOCKHOLDERS
    AND OP UNIT HOLDERS
Net income
$15,255 $6,390 $26,653 $6,507 
Adjustments:
Depreciation and amortization of real estate assets59,849 55,654 116,169 109,995 
Impairment of real estate assets— 1,056 — 6,056 
Gain on disposal of property, net
(2,793)(3,744)(4,161)(17,585)
Adjustments related to unconsolidated joint
   ventures
(1,186)537 (481)(100)
Nareit FFO attributable to stockholders and OP
   unit holders
$71,125 $59,893 $138,180 $104,873 
CORE FFO        
Nareit FFO attributable to stockholders and OP unit
   holders
$71,125 $59,893 $138,180 $104,873 
Adjustments:        
Depreciation and amortization of corporate assets920 933 1,826 1,933 
Change in fair value of earn-out liability— 2,000 1,809 18,000 
Transaction and acquisition expenses2,035 934 4,080 1,075 
Loss on extinguishment or modification of debt and
   other, net
129 419 1,029 1,110 
Amortization of unconsolidated joint venture basis
   differences
175 79 219 825 
Realized performance income(1)
(2,546)— (2,742)— 
Core FFO$71,838 $64,258 $144,401 $127,816 
ADJUSTED FFO
Core FFO$71,838 $64,258 $144,401 $127,816 
Adjustments:
Straight-line and non-cash adjustments(2,963)(2,256)(4,395)(2,938)
Capital expenditures and leasing commissions(2)
(11,898)(10,894)(25,674)(18,208)
Non-cash share-based compensation expense2,005 3,736 4,238 5,249 
Adjustments related to unconsolidated joint
   ventures
(139)(168)(231)(364)
Adjusted FFO$58,843 $54,676 $118,339 $111,555 
NAREIT FFO ATTRIBUTABLE TO STOCKHOLDERS AND OP UNIT HOLDERS AND CORE FFO PER DILUTED SHARE
Weighted-average shares of common stock
   outstanding - diluted
129,117 107,175 128,857 107,102 
Nareit FFO attributable to stockholders and OP unit
   holders per share - diluted
$0.55 $0.56 $1.07 $0.98 
Core FFO per share - diluted$0.56 $0.60 $1.12 $1.19 
(1)Realized performance income includes fees received related to the achievement of certain performance targets in our NRP joint venture.
(2)Excludes development and redevelopment projects.
Phillips Edison & Company
16



Nareit FFO, Core FFO, and Adjusted FFO
Unaudited, in thousands (excluding per share amounts)
Three Months Ended
   June 30,
2022
 March 31,
2022
 December 31,
 2021
 September 30,
2021
 June 30,
 2021
NAREIT FFO ATTRIBUTABLE TO STOCKHOLDERS AND OP
   UNIT HOLDERS
Net income (loss)$15,255 $11,398 $(5,836)$16,562 $6,390 
Adjustments:
Depreciation and amortization of real estate assets59,849 56,320 54,585 52,984 55,654 
Impairment of real estate assets— — — 698 1,056 
(Gain) loss on disposal of property, net(2,793)(1,368)1,257 (14,093)(3,744)
Adjustments related to unconsolidated joint ventures(1,186)705 (604)776 537 
Nareit FFO attributable to stockholders and OP unit holders$71,125 $67,055 $49,402 $56,927 $59,893 
CORE FFO
Nareit FFO attributable to stockholders and OP unit holders$71,125 $67,055 $49,402 $56,927 $59,893 
Adjustments:
Depreciation and amortization of corporate assets920 906 1,019 917 933 
Change in fair value of earn-out liability— 1,809 7,436 5,000 2,000 
Transaction and acquisition expenses2,035 2,045 2,513 1,775 934 
Loss on extinguishment or modification of debt and other, net129 900 808 1,674 419 
Amortization of unconsolidated joint venture basis differences175 44 262 80 79 
Realized performance income(1)
(2,546)(196)(675)— — 
Core FFO$71,838 $72,563 $60,765 $66,373 $64,258 
ADJUSTED FFO
Core FFO$71,838 $72,563 $60,765 $66,373 $64,258 
Adjustments:
Straight-line and non-cash adjustments(2,963)(1,432)(1,944)(1,866)(2,256)
Capital expenditures and leasing commissions(2)
(11,898)(13,776)(21,162)(12,639)(10,894)
Non-cash share-based compensation expense2,005 2,233 5,826 2,455 3,736 
Adjustments related to unconsolidated joint ventures(139)(92)(236)(183)(168)
Adjusted FFO$58,843 $59,496 $43,249 $54,140 $54,676 
NAREIT FFO ATTRIBUTABLE TO STOCKHOLDERS AND OP UNIT HOLDERS AND CORE FFO PER DILUTED SHARE
Weighted-average shares of common stock outstanding - diluted(3)
129,117 128,503 128,139 122,573 107,175 
Nareit FFO attributable to stockholders and OP unit holders
   per share - diluted
$0.55 $0.52 $0.39 $0.46 $0.56 
Core FFO per share - diluted$0.56 $0.56 $0.47 $0.54 $0.60 
(1)Realized performance income includes fees received related to the achievement of certain performance targets in our NRP joint venture.
(2)Excludes development and redevelopment projects.
(3)Restricted stock awards were anti-dilutive during the three months ended December 31, 2021 due to the GAAP net loss, and, accordingly, their impact was excluded from the weighted-average shares of common stock used in the respective per share calculations.

Phillips Edison & Company
17



EBITDAre Metrics
Unaudited, in thousands
Three Months Ended
 June 30,
Six Months Ended June 30,
2022202120222021
CALCULATION OF EBITDAre
Net income
$15,255 $6,390 $26,653 $6,507 
Adjustments:
Depreciation and amortization60,769 56,587 117,995 111,928 
Interest expense, net17,127 19,132 35,326 39,195 
Gain on disposal of property, net
(2,793)(3,744)(4,161)(17,585)
Impairment of real estate assets— 1,056 — 6,056 
Federal, state, and local tax expense97 165 194 331 
Adjustments related to unconsolidated joint ventures(885)(535)134 597 
EBITDAre
$89,570 $79,051 $176,141 $147,029 
CALCULATION OF ADJUSTED EBITDAre
EBITDAre
$89,570 $79,051 $176,141 $147,029 
Adjustments:
Change in fair value of earn-out liability— 2,000 1,809 18,000 
Transaction and acquisition expenses2,035 934 4,080 1,075 
Amortization of unconsolidated joint venture basis
   differences
175 79 219 825 
Realized performance income(1)
(2,546)— (2,742)— 
Adjusted EBITDAre
$89,234 $82,064 $179,507 $166,929 
(1)Realized performance income includes fees received related to the achievement of certain performance targets in our NRP joint venture.

Phillips Edison & Company
18



EBITDAre Metrics
Unaudited, in thousands
Three Months Ended
 June 30,
2022
 March 31,
 2022
 December 31,
 2021
 September 30,
 2021
 June 30,
 2021
CALCULATION OF EBITDAre
Net income (loss)$15,255 $11,398 $(5,836)$16,562 $6,390 
Adjustments:
Depreciation and amortization60,769 57,226 55,604 53,901 56,587 
Interest expense, net17,127 18,199 18,606 18,570 19,132 
(Gain) loss on disposal of property, net(2,793)(1,368)1,257 (14,093)(3,744)
Impairment of real estate assets— — — 698 1,056 
Federal, state, and local tax expense (income)97 97 (169)165 165 
Adjustments related to unconsolidated joint ventures(885)1,019 (273)1,107 (535)
EBITDAre
$89,570 $86,571 $69,189 $76,910 $79,051 
CALCULATION OF ADJUSTED EBITDAre
EBITDAre
$89,570 $86,571 $69,189 $76,910 $79,051 
Adjustments:
Change in fair value of earn-out liability— 1,809 7,436 5,000 2,000 
Transaction and acquisition expenses2,035 2,045 2,513 1,775 934 
Amortization of unconsolidated joint venture basis differences175 44 262 80 79 
Realized performance income(1)
(2,546)(196)(675)— — 
Adjusted EBITDAre
$89,234 $90,273 $78,725 $83,765 $82,064 
(1)Realized performance income includes fees received related to the achievement of certain performance targets in our NRP joint venture.
Phillips Edison & Company
19



Same-Center Net Operating Income
Unaudited, in thousands
Three Months Ended
 June 30,
Favorable (Unfavorable)
% Change
Six Months Ended
 June 30,
Favorable (Unfavorable)
% Change
2022202120222021
SAME-CENTER NOI(1)
Revenues:
Rental income(2)
$94,169$89,516$188,562$179,141
Tenant recovery income28,37526,81859,77256,921
Reserves for uncollectibility(3)
2562,783(515)1,221
Other property income4392861,186751
Total revenues123,239119,4033.2%249,005238,0344.6 %
Operating expenses:
Property operating expenses18,33717,04338,10535,756
Real estate taxes15,21316,33131,65032,341
Total operating expenses33,55033,374(0.5)%69,75568,097(2.4)%
Total Same-Center NOI$89,689$86,0294.3%$179,250$169,9375.5 %
Same-Center NOI margin72.8%72.0%72.0%71.4%
(1)Same-Center NOI represents the NOI for the 255 properties that were wholly-owned and operational for the entire portion of all comparable reporting periods.
(2)Excludes straight-line rental income, net amortization of above- and below-market leases, and lease buyout income.
(3)Includes billings that will not be recognized as revenue until cash is collected or the Neighbor resumes regular payments and/or we deem it appropriate to resume recording revenue on an accrual basis, rather than on a cash basis.
Three Months Ended
 June 30,
Six Months Ended
 June 30,
2022202120222021
SAME-CENTER NOI RECONCILIATION TO NET INCOME
Net income
$15,255 $6,390 $26,653 $6,507 
Adjusted to exclude:
Fees and management income(4,781)(2,374)(7,242)(4,660)
Straight-line rental income(1)
(3,319)(2,970)(5,128)(4,392)
Net amortization of above- and below-market leases(1,078)(887)(2,080)(1,725)
Lease buyout income(176)(1,781)(2,141)(2,578)
General and administrative expenses11,376 11,937 22,908 21,278 
Depreciation and amortization60,769 56,587 117,995 111,928 
Impairment of real estate assets— 1,056 — 6,056 
Interest expense, net17,127 19,132 35,326 39,195 
Gain on disposal of property, net
(2,793)(3,744)(4,161)(17,585)
Other expense, net
1,457 2,924 5,822 18,509 
Property operating expenses related to fees and
   management income
1,287 1,306 2,357 2,122 
NOI for real estate investments95,124 87,576 190,309 174,655 
Less: Non-same-center NOI(2)
(5,435)(1,547)(11,059)(4,718)
Total Same-Center NOI$89,689 $86,029 $179,250 $169,937 
(1)Includes straight-line rent adjustments for Neighbors for whom revenue is being recorded on a cash basis.
(2)Includes operating revenues and expenses from non-same-center properties which includes properties acquired or sold and corporate activities.
Phillips Edison & Company
20



Joint Venture Portfolio and Financial Summary
Unaudited, dollars and square feet in thousands
UNCONSOLIDATED JOINT VENTURE PORTFOLIO SUMMARY
As of June 30, 2022
Joint VentureInvestment PartnerOwnership PercentageNumber of Shopping CentersABRGLA
 Grocery Retail Partners I LLC ("GRP I")The Northwestern Mutual Life Insurance Company14%20$30,3082,210


UNCONSOLIDATED JOINT VENTURE FINANCIAL SUMMARY
As of June 30, 2022
GRP I
NRP(1)
Total assets$383,594 $1,184 
Gross debt174,026 — 
Pro rata share of debt24,358 — 
Three Months Ended
 June 30, 2022
Six Months Ended
 June 30, 2022
GRP I
NRP(1)
GRP I
NRP(1)
Pro rata share of Nareit FFO(2)(3)
$703 $(486)$1,379 $(468)
Pro rata share of NOI(2)
1,012 76 1,998 189 
(1)During the second quarter of 2022, the final property in the NRP joint venture was sold, and the outstanding debt balance was repaid. PECO's ownership percentage of the joint venture is 20%.
(2)PECO's shares of our unconsolidated joint ventures' Nareit FFO and NOI results are all calculated based upon the respective ownership percentages presented in Unconsolidated Joint Venture Portfolio Summary table above.
(3)Results for NRP include $2.5 million of performance fees paid to PECO related to the achievement of certain performance targets in the NRP joint venture.
Phillips Edison & Company
21



Supplemental Balance Sheets Detail
Unaudited, in thousands
June 30, 2022December 31, 2021
OTHER ASSETS, NET
Deferred leasing commissions and costs$46,592 $44,968 
Deferred financing expenses(1)
8,985 4,898 
Office equipment, capital lease assets, and other27,219 24,823 
Corporate intangible assets6,705 6,706 
Total depreciable and amortizable assets89,501 81,395 
Accumulated depreciation and amortization(44,848)(41,236)
Net depreciable and amortizable assets44,653 40,159 
Accounts receivable, net(2)
34,499 36,762 
Accounts receivable - affiliates630 711 
Deferred rent receivable, net(3)
45,068 40,212 
Derivative assets12,698 — 
Prepaid expenses and other14,540 11,655 
Investment in third parties3,000 3,000 
Investment in marketable securities7,624 5,551 
Total other assets, net(4)
$162,712 $138,050 
ACCOUNTS PAYABLE AND OTHER LIABILITIES
Accounts payable trade and other accruals$30,412 $30,434 
Accrued real estate taxes28,315 22,833 
Security deposits 13,478 12,667 
Distribution accrual876 1,548 
Accrued compensation 9,249 16,331 
Accrued interest5,726 6,969 
Capital expenditure accrual 4,800 6,443 
Accrued income taxes and deferred tax liabilities, net— 
Total accounts payable and other liabilities(4)
$92,856 $97,229