cik0001476204-20230502
000147620400014762042023-05-022023-05-02

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): May 2, 2023

https://cdn.kscope.io/85059b4cbc2fb6136272844aa13c4196-pecohorizontallogobluea26.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 May 2, 2023, Phillips Edison & Company, Inc. (the “Company”) issued a press release announcing its results for the quarter ended March 31, 2023. A copy of that press release is attached hereto as Exhibit 99.1 and incorporated herein by reference. A copy of the Company’s First Quarter 2023 Supplemental Disclosure is attached hereto as Exhibit 99.2 and incorporated herein by reference. The Company will host a conference call on Wednesday, May 3, 2023, at 12:00 p.m. Eastern Time to discuss the first quarter results and provide commentary on its business performance and guidance. The conference call can be accessed by dialing (888) 210-4659 (domestic) or (646) 960-0383 (international). A live webcast of the presentation can be accessed by visiting https://events.q4inc.com/attendee/650672678, and a replay of the webcast will be available approximately one hour after the conclusion of the live webcast at the webcast link above.

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: May 2, 2023By:/s/ Jennifer L. Robison
  Jennifer L. Robison
  Chief Accounting Officer and Senior Vice President
(Principal Accounting Officer)



Document

Phillips Edison & Company Reports
First Quarter 2023 Results and
Affirms Full Year Earnings Guidance

CINCINNATI - May 2, 2023 - 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 $16.6 million, or $0.14 per diluted share, for the three months ended March 31, 2023.

Highlights for the First Quarter Ended March 31, 2023
Reported Nareit FFO of $76.3 million, or $0.58 per diluted share
Reported Core FFO of $78.2 million, or $0.59 per diluted share
Increased same-center NOI year-over-year by 4.9%
Increased leased portfolio occupancy by 130 basis points year-over-year to a record-high 97.5%
Executed 0.6 million square feet of comparable new and renewal leases during the quarter at rent spreads of 27.4% and 16.1%, respectively
Acquired four Publix-anchored neighborhood shopping centers for $78.7 million
Executed a forward-starting interest rate swap effective September 15, 2023, with a notional value of $200.0 million at a rate of 3.36%

Management Commentary
Jeff Edison, chairman and chief executive officer of PECO stated:
“The PECO team delivered another solid quarter of growth with same-center NOI increasing by 4.9% and achieving record highs in occupancy, renewal leasing spreads and retention. The consistency of our performance is attributed to our differentiated and focused strategy of exclusively owning right-sized, grocery-anchored neighborhood shopping centers and our ability to drive results at the property level through our fully integrated and cycle-tested operating platform. When we consider the stability of our pricing power, we believe our growth strategy continues to generate more alpha with less beta.”

Financial Results for the First Quarter Ended March 31, 2023
Net Income
First quarter 2023 net income attributable to stockholders totaled $16.6 million, or $0.14 per diluted share, compared to net income of $10.1 million, or $0.09 per diluted share, during the first quarter of 2022.

Nareit FFO
First quarter 2023 funds from operations attributable to stockholders and operating partnership (“OP”) unit holders as defined by Nareit (“Nareit FFO”) increased 13.9% to $76.3 million, or $0.58 per diluted share, compared to $67.1 million, or $0.52 per diluted share, during the first quarter of 2022.

Core FFO
First quarter 2023 core funds from operations attributable to stockholders and OP unit holders (“Core FFO”) increased 7.7% to $78.2 million, or $0.59 per diluted share, compared to $72.6 million, or $0.56 per diluted share, during the first quarter of 2022.

Same-Center NOI
First quarter 2023 same-center net operating income (“NOI”) increased 4.9% to $98.6 million, compared to $94.0 million during the first quarter of 2022.
1




Portfolio Overview for the First Quarter Ended March 31, 2023
Portfolio Statistics
As of March 31, 2023, PECO’s wholly-owned portfolio consisted of 275 properties, totaling approximately 31.5 million square feet, located in 31 states. This compared to 269 properties, totaling approximately 30.8 million square feet, located in 31 states as of March 31, 2022.
Leased portfolio occupancy increased to 97.5% at March 31, 2023, compared to 96.2% at March 31, 2022.
Anchor occupancy increased to 99.3% at March 31, 2023, compared to 98.1% at March 31, 2022, and inline occupancy increased to 94.3% at March 31, 2023, compared to 92.6% at March 31, 2022.

Leasing Activity
During the first quarter of 2023, 263 leases (new, renewal, and options) were executed totaling 1.1 million square feet. This compared to 244 leases executed totaling 0.8 million square feet during the first quarter of 2022.
Comparable rent spreads during the three months ended March 31, 2023, 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 27.4% for new leases, 16.1% for renewal leases (excluding options) and 17.9% combined (new and renewal leases only, excluding options).

Acquisition Activity
During the three months ended March 31, 2023, the Company acquired four properties for $78.7 million. The centers are located in areas with strong median household income and growing populations, and the Company expects to drive growth in these assets through occupancy increases and rent growth. Grocery-anchored neighborhood shopping center acquisitions during the first quarter of 2023 included:
Providence Commons, a 110,000 square foot shopping center anchored by Publix located in a Nashville, Tennessee suburb.
Village Shoppes at Windermere, a 73,000 square foot shopping center anchored by Publix located in an Atlanta, Georgia suburb.
Town Center at Jensen Beach, a 109,000 square foot shopping center anchored by Publix located in a Miami, Florida suburb.
Shops at Sunset Lake, a 70,000 square foot shopping center shadow-anchored by Publix located in a Miami, Florida suburb.

Balance Sheet Highlights as of March 31, 2023
As of March 31, 2023, PECO had $634.2 million of total liquidity, comprised of $12.0 million of cash, cash equivalents and restricted cash, plus $622.2 million of borrowing capacity available on its $800 million revolving credit facility.
PECO’s net debt to annualized adjusted EBITDAre was unchanged from 5.3x at December 31, 2022.
PECO’s outstanding debt had a weighted-average interest rate of 3.8%, a weighted-average maturity of 4.1 years, and 81.6% of its total debt was fixed-rate debt.
During the quarter, PECO opportunistically executed a forward-starting swap effective September 15, 2023, with a notional value of $200.0 million at a rate of 3.36%.
2


2023 Guidance
The following guidance is based upon PECO’s current view of existing market conditions and assumptions for the year ending December 31, 2023. The Company has revised its assumptions for net interest expense and non-cash revenue items as reflected in the table below. All other assumptions for 2023 provided with the Company’s fourth quarter 2022 earnings results remain the same. The following statements are forward-looking and actual results could differ materially depending on market conditions and the factors set forth under "Forward-Looking Statements" below.
(in thousands, except per share amounts)2023 YTD
Updated Full Year
2023 Guidance
Initial Full Year
2023 Guidance
Results:
Net income per share$0.14$0.47 - $0.52$0.47 - $0.52
Nareit FFO per share$0.58$2.23 - $2.29$2.23 - $2.29
Core FFO per share$0.59$2.28 - $2.34$2.28 - $2.34
Same-Center NOI growth4.9%3.0% - 4.0%3.0% - 4.0%
Portfolio Activity:
Acquisitions (net of dispositions)$78,650$200,000 - $300,000$200,000 - $300,000
Development and redevelopment spend$11,977$50,000 -$60,000$50,000 -$60,000
Other:
Interest expense, net$19,466$85,000 - $90,000$83,000 - $89,000
G&A expense$11,533$44,000 - $48,000$44,000 - $48,000
Non-cash revenue items(1)
$3,794$14,000 - $19,000$15,000 - $20,000
Adjustments for collectibility$913$3,500 - $4,500$3,500 - $4,500
(1)Represents straight-line rental income and net amortization of above- and below-market leases.
The Company does not provide a reconciliation for same-center NOI estimates on a forward-looking basis because it is unable to provide a meaningful or reasonably accurate calculation or estimation of certain reconciling items which could be significant to our results without unreasonable effort.
The following table provides a reconciliation of the range of the Company's 2023 estimated net income to estimated Nareit FFO and Core FFO:
(Unaudited)Low EndHigh End
Net income $0.47 $0.52 
Depreciation and amortization of real estate assets1.741.75
Adjustments related to unconsolidated joint ventures0.020.02
Nareit FFO$2.23 $2.29 
Depreciation and amortization of corporate assets0.020.02
Transactions and other0.030.03
Core FFO$2.28 $2.34 

Jeff Edison summarized the quarter: “Our strong first quarter 2023 results continue to highlight the strength of PECO’s focused and differentiated strategy of exclusively 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. Our well-aligned and cycle-tested team, fully integrated operating platform and grocery-anchored strategy place PECO in a strong position, despite an uncertain macroeconomic environment, with a fortress balance sheet and liquidity that will allow us to take advantage of opportunities as they arise.”
3



Conference Call Details
PECO plans to host a conference call and webcast on Wednesday, May 3, 2023 at 12:00 p.m. Eastern Time to discuss first quarter 2023 results and provide further business updates. Chairman and Chief Executive Officer Jeff Edison, President Devin Murphy and Chief Financial Officer John Caulfield will host the conference call and webcast. Dial-in and webcast information is below.
First Quarter 2023 Earnings Conference Call Details:
Date: Wednesday, May 3, 2023
Time: 12:00 p.m. ET
Toll-Free Dial-In Number: (888) 210-4659
International Dial-In Number: (646) 960-0383
Conference ID: 2035308
Webcast: First Quarter 2023 Webcast Link
An audio replay will be available approximately one hour after the conclusion of the conference call using the webcast link above.
For more information on the Company’s financial results, please refer to the Company’s Form 10-Q for the quarter ended March 31, 2023.

About Phillips Edison & Company
Phillips Edison & Company, Inc. (“PECO”) is one of the nation’s largest owners and operators of omni-channel 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, Albertsons, and Ahold Delhaize. As of March 31, 2023, PECO managed 295 shopping centers, including 275 wholly-owned centers comprising 31.5 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.
4


PHILLIPS EDISON & COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2023 AND DECEMBER 31, 2022
(Condensed and Unaudited)
(In thousands, except per share amounts)
  March 31, 2023December 31, 2022
ASSETS    
Investment in real estate:    
Land and improvements$1,701,404 $1,674,133 
Building and improvements3,639,646 3,572,146 
In-place lease assets478,477 471,507 
Above-market lease assets72,524 71,954 
Total investment in real estate assets5,892,051 5,789,740 
Accumulated depreciation and amortization(1,373,124)(1,316,743)
Net investment in real estate assets4,518,927 4,472,997 
Investment in unconsolidated joint ventures26,584 27,201 
Total investment in real estate assets, net4,545,511 4,500,198 
Cash and cash equivalents6,405 5,478 
Restricted cash5,559 11,871 
Goodwill29,066 29,066 
Other assets, net200,373 188,879 
Total assets$4,786,914 $4,735,492 
LIABILITIES AND EQUITY    
Liabilities:    
Debt obligations, net$1,967,252 $1,896,594 
Below-market lease liabilities, net111,007 109,799 
Accounts payable and other liabilities111,471 113,185 
Deferred income24,243 18,481 
Total liabilities2,213,973 2,138,059 
Equity:    
Preferred stock, $0.01 par value per share, 10,000 shares authorized, zero shares issued and
outstanding at March 31, 2023 and December 31, 2022
— — 
Common stock, $0.01 par value per share, 1,000,000 shares authorized, 117,259 and 117,126
   shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively
1,172 1,171 
Additional paid-in capital3,382,368 3,383,978 
Accumulated other comprehensive income15,181 21,003 
Accumulated deficit(1,186,074)(1,169,665)
Total stockholders’ equity2,212,647 2,236,487 
Noncontrolling interests360,294 360,946 
Total equity2,572,941 2,597,433 
Total liabilities and equity$4,786,914 $4,735,492 










5


PHILLIPS EDISON & COMPANY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(Condensed and Unaudited)
(In thousands, except per share amounts)
Three Months Ended March 31,
  20232022
Revenues:
Rental income$147,728 $138,748 
Fees and management income2,478 2,461 
Other property income858 954 
Total revenues151,064 142,163 
Operating Expenses:
Property operating25,062 23,320 
Real estate taxes18,056 17,491 
General and administrative11,533 11,532 
Depreciation and amortization58,498 57,226 
Total operating expenses113,149 109,569 
Other:
Interest expense, net(19,466)(18,199)
Gain on disposal of property, net942 1,368 
Other expense, net(755)(4,365)
Net income18,636 11,398 
Net income attributable to noncontrolling interests(2,017)(1,319)
Net income attributable to stockholders$16,619 $10,079 
Earnings per share of common stock:
Net income per share attributable to stockholders - basic and diluted
$0.14 $0.09 


6


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 months ended March 31, 2023 and 2022, Same-Center NOI represents the NOI for the 263 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, 2021, 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 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 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 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 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 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 Earnings Before Interest, Taxes, Depreciation, and Amortization for Real Estate (“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)
7


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 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.
8


Same-Center Net Operating Income—The table below compares Same-Center NOI (dollars in thousands):
Three Months Ended March 31,Favorable (Unfavorable)
20232022$ Change% Change
Revenues:
Rental income(1)
$103,750 $98,829 $4,921 
Tenant recovery income33,916 33,163 753 
Reserves for uncollectibility(2)
(919)(838)(81)
Other property income801 900 (99)
Total revenues137,548 132,054 5,494 4.2 %
Operating expenses:
Property operating expenses21,585 20,707 (878)
Real estate taxes17,347 17,299 (48)
Total operating expenses38,932 38,006 (926)(2.4)%
Total Same-Center NOI$98,616 $94,048 $4,568 4.9 %
(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 March 31,
20232022
Net income
$18,636 $11,398 
Adjusted to exclude:
Fees and management income(2,478)(2,461)
Straight-line rental income(1)
(2,580)(1,809)
Net amortization of above- and below- market leases(1,228)(1,002)
Lease buyout income(355)(1,965)
General and administrative expenses11,533 11,532 
Depreciation and amortization58,498 57,226 
Interest expense, net19,466 18,199 
Gain on disposal of property, net(942)(1,368)
Other expense, net755 4,365 
Property operating expenses related to fees and management income315 1,070 
NOI for real estate investments101,620 95,185 
Less: Non-same-center NOI(2)
(3,004)(1,137)
Total Same-Center NOI$98,616 $94,048 
(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.


9


Nareit FFO and Core FFO—The following table presents the Company’s calculation of Nareit FFO and Core FFO and provides additional information related to its operations (in thousands, except per share amounts):
  Three Months Ended March 31,
  20232022
Calculation of Nareit FFO Attributable to Stockholders and OP Unit Holders
Net income
$18,636 $11,398 
Adjustments:
Depreciation and amortization of real estate assets57,953 56,320 
Gain on disposal of property, net(942)(1,368)
Adjustments related to unconsolidated joint ventures698 705 
Nareit FFO attributable to stockholders and OP unit holders$76,345 $67,055 
Calculation of Core FFO Attributable to Stockholders and OP Unit Holders
Nareit FFO attributable to stockholders and OP unit holders$76,345 $67,055 
Adjustments:
Depreciation and amortization of corporate assets545 906 
Change in fair value of earn-out liability— 1,809 
Transaction and acquisition expenses1,338 2,045 
Loss on extinguishment or modification of debt and other, net— 900 
Amortization of unconsolidated joint venture basis differences44 
Realized performance income(1)
(75)(196)
Core FFO attributable to stockholders and OP unit holders$78,154 $72,563 
Nareit FFO/Core FFO Attributable to Stockholders and OP Unit Holders per Diluted Share
Weighted-average shares of common stock outstanding - diluted131,943 128,503 
Nareit FFO attributable to stockholders and OP unit holders per share - diluted$0.58 $0.52 
Core FFO attributable to stockholders and OP unit holders per share - diluted$0.59 $0.56 
(1)Realized performance income includes fees received related to the achievement of certain performance targets in the Company’s NRP joint venture.
10


EBITDAre and Adjusted EBITDAre—The following table presents the Company’s calculation of EBITDAre and Adjusted EBITDAre (in thousands):
Three Months Ended
 March 31,
Year Ended December 31,
202320222022
Calculation of EBITDAre
Net income
$18,636 $11,398 $54,529 
Adjustments:
Depreciation and amortization58,498 57,226 236,224 
Interest expense, net19,466 18,199 71,196 
Gain on disposal of property, net(942)(1,368)(7,517)
Impairment of real estate assets— — 322 
Federal, state, and local tax expense118 97 806 
Adjustments related to unconsolidated joint ventures966 1,019 1,987 
EBITDAre
$96,742 $86,571 $357,547 
Calculation of Adjusted EBITDAre
EBITDAre
$96,742 $86,571 $357,547 
Adjustments:
Change in fair value of earn-out liability— 1,809 1,809 
Transaction and acquisition expenses1,338 2,045 10,551 
Amortization of unconsolidated joint venture basis differences44 220 
Realized performance income(1)
(75)(196)(2,742)
Adjusted EBITDAre
$98,006 $90,273 $367,385 
(1)Realized performance income includes fees received related to the achievement of certain performance targets in the Company’s NRP joint venture.
11



Financial Leverage Ratios—The Company believes its net debt to Adjusted EBITDAre, net debt to total enterprise value, and debt covenant compliance as of March 31, 2023 allow 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 March 31, 2023 and December 31, 2022 (in thousands):
March 31, 2023December 31, 2022
Net debt:
Total debt, excluding discounts, market adjustments, and deferred financing expenses$2,007,436 $1,937,142 
Less: Cash and cash equivalents6,784 5,740 
Total net debt$2,000,652 $1,931,402 
Enterprise value:
Net debt$2,000,652 $1,931,402 
Total equity market capitalization(1)(2)
4,291,389 4,178,204 
Total enterprise value$6,292,041 $6,109,606 
(1)Total equity market capitalization is calculated as diluted shares multiplied by the closing market price per share, which includes 131.6 million and 131.2 million diluted shares as of March 31, 2023 and December 31, 2022, respectively, and the closing market price per share of $32.62 and $31.84 as of March 31, 2023 and December 31, 2022, respectively.
(2)Fully diluted shares include common stock and OP units.
The following table presents the Company’s calculation of net debt to Adjusted EBITDAre and net debt to total enterprise value as of March 31, 2023 and December 31, 2022 (dollars in thousands):
March 31, 2023December 31, 2022
Net debt to Adjusted EBITDAre - annualized:
Net debt$2,000,652$1,931,402
Adjusted EBITDAre - annualized(1)
375,118367,385
Net debt to Adjusted EBITDAre - annualized
5.3x5.3x
Net debt to total enterprise value:
Net debt$2,000,652$1,931,402
Total enterprise value6,292,0416,109,606
Net debt to total enterprise value31.8%31.6%
(1)Adjusted EBITDAre is based on a trailing twelve month period.


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
12


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, pandemics or other health crises; (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 2022 Annual Report on Form 10-K, filed with the SEC on February 21, 2023, 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

Source: Phillips Edison & Company, Inc.
###
13
Document


https://cdn.kscope.io/85059b4cbc2fb6136272844aa13c4196-coverpagea.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, pandemics or other health crises; (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 2022 Annual Report on Form 10-K, filed with the SEC on February 21, 2023, 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 15-19 and definitions of our non-GAAP measures are included in our Glossary of Terms on page 60.




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.



Phillips Edison & Company
4











https://cdn.kscope.io/85059b4cbc2fb6136272844aa13c4196-image8.jpg
FINANCIAL RESULTS
Quarter Ended March 31, 2023




Earnings Release
Unaudited
Phillips Edison & Company Reports
First Quarter 2023 Results and
Affirms Full Year Earnings Guidance

CINCINNATI - May 2, 2023 - 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 $16.6 million, or $0.14 per diluted share, for the three months ended March 31, 2023.

Highlights for the First Quarter Ended March 31, 2023
Reported Nareit FFO of $76.3 million, or $0.58 per diluted share
Reported Core FFO of $78.2 million, or $0.59 per diluted share
Increased same-center NOI year-over-year by 4.9%
Increased leased portfolio occupancy by 130 basis points year-over-year to a record-high 97.5%
Executed 0.6 million square feet of comparable new and renewal leases during the quarter at rent spreads of 27.4% and 16.1%, respectively
Acquired four Publix-anchored neighborhood shopping centers for $78.7 million
Executed a forward-starting interest rate swap effective September 15, 2023, with a notional value of $200.0 million at a rate of 3.36%

Management Commentary
Jeff Edison, chairman and chief executive officer of PECO stated:
“The PECO team delivered another solid quarter of growth with same-center NOI increasing by 4.9% and achieving record highs in occupancy, renewal leasing spreads and retention. The consistency of our performance is attributed to our differentiated and focused strategy of exclusively owning right-sized, grocery-anchored neighborhood shopping centers and our ability to drive results at the property level through our fully integrated and cycle-tested operating platform. When we consider the stability of our pricing power, we believe our growth strategy continues to generate more alpha with less beta.”

Financial Results for the First Quarter Ended March 31, 2023
Net Income
First quarter 2023 net income attributable to stockholders totaled $16.6 million, or $0.14 per diluted share, compared to net income of $10.1 million, or $0.09 per diluted share, during the first quarter of 2022.

Nareit FFO
First quarter 2023 funds from operations attributable to stockholders and operating partnership (“OP”) unit holders as defined by Nareit (“Nareit FFO”) increased 13.9% to $76.3 million, or $0.58 per diluted share, compared to $67.1 million, or $0.52 per diluted share, during the first quarter of 2022.

Core FFO
First quarter 2023 core funds from operations attributable to stockholders and OP unit holders (“Core FFO”) increased 7.7% to $78.2 million, or $0.59 per diluted share, compared to $72.6 million, or $0.56 per diluted share, during the first quarter of 2022.

Same-Center NOI
First quarter 2023 same-center net operating income (“NOI”) increased 4.9% to $98.6 million, compared to $94.0 million during the first quarter of 2022.

Phillips Edison & Company
6


Earnings Release
Unaudited

Portfolio Overview for the First Quarter Ended March 31, 2023
Portfolio Statistics
As of March 31, 2023, PECO’s wholly-owned portfolio consisted of 275 properties, totaling approximately 31.5 million square feet, located in 31 states. This compared to 269 properties, totaling approximately 30.8 million square feet, located in 31 states as of March 31, 2022.
Leased portfolio occupancy increased to 97.5% at March 31, 2023, compared to 96.2% at March 31, 2022.
Anchor occupancy increased to 99.3% at March 31, 2023, compared to 98.1% at March 31, 2022, and inline occupancy increased to 94.3% at March 31, 2023, compared to 92.6% at March 31, 2022.

Leasing Activity
During the first quarter of 2023, 263 leases (new, renewal, and options) were executed totaling 1.1 million square feet. This compared to 244 leases executed totaling 0.8 million square feet during the first quarter of 2022.
Comparable rent spreads during the three months ended March 31, 2023, 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 27.4% for new leases, 16.1% for renewal leases (excluding options) and 17.9% combined (new and renewal leases only, excluding options).

Acquisition Activity
During the three months ended March 31, 2023, the Company acquired four properties for $78.7 million. The centers are located in areas with strong median household income and growing populations, and the Company expects to drive growth in these assets through occupancy increases and rent growth. Grocery-anchored neighborhood shopping center acquisitions during the first quarter of 2023 included:
Providence Commons, a 110,000 square foot shopping center anchored by Publix located in a Nashville, Tennessee suburb.
Village Shoppes at Windermere, a 73,000 square foot shopping center anchored by Publix located in an Atlanta, Georgia suburb.
Town Center at Jensen Beach, a 109,000 square foot shopping center anchored by Publix located in a Miami, Florida suburb.
Shops at Sunset Lake, a 70,000 square foot shopping center shadow-anchored by Publix located in a Miami, Florida suburb.

Balance Sheet Highlights as of March 31, 2023
As of March 31, 2023, PECO had $634.2 million of total liquidity, comprised of $12.0 million of cash, cash equivalents and restricted cash, plus $622.2 million of borrowing capacity available on its $800 million revolving credit facility.
PECO’s net debt to annualized adjusted EBITDAre was unchanged from 5.3x at December 31, 2022.
PECO’s outstanding debt had a weighted-average interest rate of 3.8%, a weighted-average maturity of 4.1 years, and 81.6% of its total debt was fixed-rate debt.
During the quarter, PECO opportunistically executed a forward-starting swap effective September 15, 2023, with a notional value of $200.0 million at a rate of 3.36%.

Phillips Edison & Company
7


Earnings Release
Unaudited
2023 Guidance
The following guidance is based upon PECO’s current view of existing market conditions and assumptions for the year ending December 31, 2023. The Company has revised its assumptions for net interest expense and non-cash revenue items as reflected in the table below. All other assumptions for 2023 provided with the Company’s fourth quarter 2022 earnings results remain the same. The following statements are forward-looking and actual results could differ materially depending on market conditions and the factors set forth under "Forward-Looking Statements" below.
(in thousands, except per share amounts)2023 YTD
Updated Full Year
2023 Guidance
Initial Full Year
2023 Guidance
Results:
Net income per share$0.14$0.47 - $0.52$0.47 - $0.52
Nareit FFO per share$0.58$2.23 - $2.29$2.23 - $2.29
Core FFO per share$0.59$2.28 - $2.34$2.28 - $2.34
Same-Center NOI growth4.9%3.0% - 4.0%3.0% - 4.0%
Portfolio Activity:
Acquisitions (net of dispositions)$78,650$200,000 - $300,000$200,000 - $300,000
Development and redevelopment spend$11,977$50,000 -$60,000$50,000 -$60,000
Other:
Interest expense, net$19,466$85,000 - $90,000$83,000 - $89,000
G&A expense$11,533$44,000 - $48,000$44,000 - $48,000
Non-cash revenue items(1)
$3,794$14,000 - $19,000$15,000 - $20,000
Adjustments for collectibility$913$3,500 - $4,500$3,500 - $4,500
(1)Represents straight-line rental income and net amortization of above- and below-market leases.
The Company does not provide a reconciliation for same-center NOI estimates on a forward-looking basis because it is unable to provide a meaningful or reasonably accurate calculation or estimation of certain reconciling items which could be significant to our results without unreasonable effort.
The following table provides a reconciliation of the range of the Company's 2023 estimated net income to estimated Nareit FFO and Core FFO:
(Unaudited)Low EndHigh End
Net income $0.47 $0.52 
Depreciation and amortization of real estate assets1.741.75
Adjustments related to unconsolidated joint ventures0.020.02
Nareit FFO$2.23 $2.29 
Depreciation and amortization of corporate assets0.020.02
Transactions and other0.030.03
Core FFO$2.28 $2.34 





Phillips Edison & Company
8


Earnings Release
Unaudited

Jeff Edison summarized the quarter: “Our strong first quarter 2023 results continue to highlight the strength of PECO’s focused and differentiated strategy of exclusively 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. Our well-aligned and cycle-tested team, fully integrated operating platform and grocery-anchored strategy place PECO in a strong position, despite an uncertain macroeconomic environment, with a fortress balance sheet and liquidity that will allow us to take advantage of opportunities as they arise.”

Conference Call Details
PECO plans to host a conference call and webcast on Wednesday, May 3, 2023 at 12:00 p.m. Eastern Time to discuss first quarter 2023 results and provide further business updates. Chairman and Chief Executive Officer Jeff Edison, President Devin Murphy and Chief Financial Officer John Caulfield will host the conference call and webcast. Dial-in and webcast information is below.
First Quarter 2023 Earnings Conference Call Details:
Date: Wednesday, May 3, 2023
Time: 12:00 p.m. ET
Toll-Free Dial-In Number: (888) 210-4659
International Dial-In Number: (646) 960-0383
Conference ID: 2035308
Webcast: First Quarter 2023 Webcast Link
An audio replay will be available approximately one hour after the conclusion of the conference call using the webcast link above.
For more information on the Company’s financial results, please refer to the Company’s Form 10-Q for the quarter ended March 31, 2023.


Phillips Edison & Company
9



Overview of Results
Unaudited, in thousands (excluding per share and per square foot amounts)
Three Months Ended
 March 31,
20232022
SUMMARY FINANCIAL RESULTS
Total revenues (page 13)
$151,064 $142,163 
Net income attributable to stockholders (page 13)
16,619 10,079 
Net income per share - basic and diluted (page 13)
$0.14 $0.09 
Same-Center NOI (page 19)
98,616 94,048 
Adjusted EBITDAre (page 17)
98,006 90,273 
Nareit FFO (page 15)
76,345 67,055 
Nareit FFO per share - diluted (page 15)
$0.58 $0.52 
Core FFO (page 15)
78,154 72,563 
Core FFO per share - diluted (page 15)
$0.59 $0.56 
 
SUMMARY OF FINANCIAL AND OPERATING RATIOS
Same-Center NOI margin (page 19)
71.7 %71.2 %
Same-Center NOI change (page 19)(1)
4.9 %6.8 %
LEASING RESULTS
Comparable rent spreads - new leases (page 39)(2)
27.4 %34.0 %
Comparable rent spreads - renewals (page 39)(2)
16.1 %14.7 %
Portfolio retention rate94.7 %89.7 %
As of March 31,
20232022
OUTSTANDING STOCK AND PARTNERSHIP UNITS
Common stock outstanding117,259113,819
Operating Partnership (OP) units outstanding14,29814,540
SUMMARY PORTFOLIO STATISTICS(2)
Number of properties275 269 
GLA (page 41)
31,456 30,813 
Leased occupancy (page 35)
97.5 %96.2 %
Economic occupancy (page 35)
96.7 %95.7 %
Leased ABR PSF (page 35)
$14.52 $13.91 
Leased Anchor ABR PSF (page 35)
$9.95 $9.78 
Leased Inline ABR PSF (page 35)
$23.66 $22.33 
(1)Reflects Same-Center NOI change as initially reported for the specified period.
(2)Statistics represent our wholly-owned properties.


Phillips Edison & Company
10











https://cdn.kscope.io/85059b4cbc2fb6136272844aa13c4196-image8.jpg
FINANCIAL SUMMARY
Quarter Ended March 31, 2023
























Consolidated Balance Sheets
Condensed and Unaudited, in thousands (excluding per share amounts)
March 31, 2023December 31, 2022
ASSETS  
Investment in real estate:    
Land and improvements$1,701,404 $1,674,133 
Building and improvements3,639,646 3,572,146 
In-place lease assets478,477 471,507 
Above-market lease assets72,524 71,954 
Total investment in real estate assets5,892,051 5,789,740 
Accumulated depreciation and amortization(1,373,124)(1,316,743)
Net investment in real estate assets4,518,927 4,472,997 
Investment in unconsolidated joint ventures26,584 27,201 
Total investment in real estate assets, net4,545,511 4,500,198 
Cash and cash equivalents6,405 5,478 
Restricted cash5,559 11,871 
Goodwill29,066 29,066 
Other assets, net200,373 188,879 
Total assets$4,786,914 $4,735,492 
LIABILITIES AND EQUITY    
Liabilities:    
Debt obligations, net$1,967,252 $1,896,594 
Below-market lease liabilities, net111,007 109,799 
Accounts payable and other liabilities111,471 113,185 
Deferred income24,243 18,481 
Total liabilities2,213,973 2,138,059 
Equity:    
Preferred stock, $0.01 par value per share, 10,000 shares authorized as of March 31, 2023 and December 31, 2022
— — 
Common stock, $0.01 par value per share, 1,000,000 shares authorized,
 117,259 and 117,126 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively
1,172 1,171 
Additional paid-in capital3,382,368 3,383,978 
Accumulated other comprehensive income15,181 21,003 
Accumulated deficit(1,186,074)(1,169,665)
Total stockholders’ equity2,212,647 2,236,487 
Noncontrolling interests360,294 360,946 
Total equity2,572,941 2,597,433 
Total liabilities and equity$4,786,914 $4,735,492 

Phillips Edison & Company
12




Consolidated Statements of Operations
Condensed and Unaudited, in thousands (excluding per share amounts)
  Three Months Ended March 31,
  20232022
REVENUES    
Rental income$147,728 $138,748 
Fees and management income2,478 2,461 
Other property income858 954 
Total revenues151,064 142,163 
OPERATING EXPENSES    
Property operating25,062 23,320 
Real estate taxes18,056 17,491 
General and administrative11,533 11,532 
Depreciation and amortization58,498 57,226 
Total operating expenses113,149 109,569 
OTHER    
Interest expense, net(19,466)(18,199)
Gain on disposal of property, net942 1,368 
Other expense, net
(755)(4,365)
Net income
18,636 11,398 
Net income attributable to noncontrolling interests
(2,017)(1,319)
Net income attributable to stockholders
$16,619 $10,079 
EARNINGS PER SHARE OF COMMON STOCK    
Net income per share attributable to stockholders - basic and diluted
$0.14 $0.09 

Phillips Edison & Company
13




Consolidated Statements of Operations
Condensed and Unaudited, in thousands (excluding per share amounts)
  Three Months Ended
   March 31,
2023
 December 31,
2022
September 30, 2022 June 30,
2022
 March 31,
2022
REVENUES
Rental income$147,728 $141,703 $142,857 $137,230 $138,748 
Fees and management income2,478 2,218 2,081 4,781 2,461 
Other property income858 1,118 716 505 954 
Total revenues151,064 145,039 145,654 142,516 142,163 
OPERATING EXPENSES
Property operating25,062 26,098 23,089 22,852 23,320 
Real estate taxes18,056 15,859 18,041 16,473 17,491 
General and administrative11,533 11,484 10,843 11,376 11,532 
Depreciation and amortization58,498 58,216 60,013 60,769 57,226 
Impairment of real estate assets— 322 — — — 
Total operating expenses113,149 111,979 111,986 111,470 109,569 
OTHER  
Interest expense, net(19,466)(18,301)(17,569)(17,127)(18,199)
Gain (loss) on disposal of property, net942 3,366 (10)2,793 1,368 
Other expense, net(755)(2,422)(3,916)(1,457)(4,365)
Net income18,636 15,703 12,173 15,255 11,398 
Net income attributable to noncontrolling interests(2,017)(2,025)(1,135)(1,727)(1,319)
Net income attributable to stockholders$16,619 $13,678 $11,038 $13,528 $10,079 
EARNINGS PER SHARE OF COMMON STOCK  
Net income per share attributable to stockholders - basic and diluted$0.14 $0.12 $0.09 $0.12 $0.09 













































Phillips Edison & Company
14



Nareit FFO, Core FFO, and Adjusted FFO
Unaudited, in thousands (excluding per share amounts)
  Three Months Ended
 March 31,
  20232022
CALCULATION OF NAREIT FFO ATTRIBUTABLE TO STOCKHOLDERS AND OP UNIT HOLDERS
Net income
$18,636 $11,398 
Adjustments:
Depreciation and amortization of real estate assets57,953 56,320 
Gain on disposal of property, net(942)(1,368)
Adjustments related to unconsolidated joint ventures698 705 
Nareit FFO attributable to stockholders and OP unit holders$76,345 $67,055 
CALCULATION OF CORE FFO ATTRIBUTABLE TO STOCKHOLDERS AND OP UNIT HOLDERS
Nareit FFO attributable to stockholders and OP unit holders$76,345 $67,055 
Adjustments:    
Depreciation and amortization of corporate assets545 906 
Change in fair value of earn-out liability— 1,809 
Transaction and acquisition expenses1,338 2,045 
Loss on extinguishment or modification of debt and other, net— 900 
Amortization of unconsolidated joint venture basis differences44 
Realized performance income(1)
(75)(196)
Core FFO attributable to stockholders and OP unit holders$78,154 $72,563 
CALCULATION OF ADJUSTED FFO ATTRIBUTABLE TO STOCKHOLDERS AND OP UNIT HOLDERS
Core FFO attributable to stockholders and OP unit holders$78,154 $72,563 
Adjustments:
Net amortization of above-market contracts(125)— 
Straight-line rent and above- and below-market leases(3,794)(2,820)
Non-cash debt adjustments1,563 1,388 
Capital expenditures and leasing commissions(2)
(13,141)(13,776)
Non-cash share-based compensation expense2,005 2,233 
Adjustments related to unconsolidated joint ventures(138)(92)
Adjusted FFO attributable to stockholders and OP unit holders$64,524 $59,496 
NAREIT FFO/CORE FFO ATTRIBUTABLE TO STOCKHOLDERS AND OP UNIT HOLDERS PER DILUTED SHARE
Weighted-average shares of common stock outstanding - diluted131,943 128,503 
Nareit FFO attributable to stockholders and OP unit holders per share - diluted$0.58 $0.52 
Core FFO attributable to stockholders and OP unit holders per share - diluted$0.59 $0.56 
(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
15



Nareit FFO, Core FFO, and Adjusted FFO
Unaudited, in thousands (excluding per share amounts)
Three Months Ended
   March 31,
2023
 December 31,
2022
 September 30,
 2022
 June 30,
2022
 March 31,
 2022
CALCULATION OF NAREIT FFO ATTRIBUTABLE TO STOCKHOLDERS AND OP UNIT HOLDERS
Net income$18,636 $15,703 $12,173 $15,255 $11,398 
Adjustments:
Depreciation and amortization of real estate assets57,953 57,266 59,136 59,849 56,320 
Impairment of real estate assets— 322 — — — 
(Gain) loss on disposal of property, net(942)(3,366)10 (2,793)(1,368)
Adjustments related to unconsolidated joint ventures698 661 662 (1,186)705 
Nareit FFO attributable to stockholders and OP unit holders$76,345 $70,586 $71,981 $71,125 $67,055 
CALCULATION OF CORE FFO ATTRIBUTABLE TO STOCKHOLDERS AND OP UNIT HOLDERS
Nareit FFO attributable to stockholders and OP unit holders$76,345 $70,586 $71,981 $71,125 $67,055 
Adjustments:
Depreciation and amortization of corporate assets545 950 877 920 906 
Change in fair value of earn-out liability— — — — 1,809 
Transaction and acquisition expenses1,338 2,731 3,740 2,035 2,045 
(Gain) loss on extinguishment or modification of debt and other, net— — (4)129 900 
Amortization of unconsolidated joint venture basis differences— 175 44 
Realized performance income(1)
(75)— — (2,546)(196)
Core FFO attributable to stockholders and OP unit holders$78,154 $74,267 $76,595 $71,838 $72,563 
CALCULATION OF ADJUSTED FFO ATTRIBUTABLE TO STOCKHOLDERS AND OP UNIT HOLDERS
Core FFO attributable to stockholders and OP unit holders$78,154 $74,267 $76,595 $71,838 $72,563 
Adjustments:
Net amortization of above-market contracts(125)— — — — 
Straight-line rent and above- and below-market leases(3,794)(4,377)(5,022)(4,406)(2,820)
Non-cash debt adjustments1,563 1,529 1,524 1,443 1,388 
Capital expenditures and leasing commissions(2)
(13,141)(13,512)(17,296)(11,898)(13,776)
Non-cash share-based compensation expense2,005 2,488 2,502 2,005 2,233 
Adjustments related to unconsolidated joint ventures(138)(146)(236)(139)(92)
Adjusted FFO attributable to stockholders and OP unit holders$64,524 $60,249 $58,067 $58,843 $59,496 
NAREIT FFO/CORE FFO ATTRIBUTABLE TO STOCKHOLDERS AND OP UNIT HOLDERS PER DILUTED SHARE
Weighted-average shares of common stock outstanding - diluted131,943 131,781 131,593 129,117 128,503 
Nareit FFO attributable to stockholders and OP unit holders per share - diluted$0.58 $0.54 $0.55 $0.55 $0.52 
Core FFO attributable to stockholders and OP unit holders per share - diluted$0.59 $0.56 $0.58 $0.56 $0.56 
(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



EBITDAre Metrics
Unaudited, in thousands
Three Months Ended March 31,
20232022
CALCULATION OF EBITDAre
Net income
$18,636 $11,398 
Adjustments:
Depreciation and amortization58,498 57,226 
Interest expense, net19,466 18,199 
Gain on disposal of property, net(942)(1,368)
Federal, state, and local tax expense118 97 
Adjustments related to unconsolidated joint ventures966 1,019 
EBITDAre
$96,742 $86,571 
CALCULATION OF ADJUSTED EBITDAre
EBITDAre
$96,742 $86,571 
Adjustments:
Change in fair value of earn-out liability— 1,809 
Transaction and acquisition expenses1,338 2,045 
Amortization of unconsolidated joint venture basis differences44 
Realized performance income(1)
(75)(196)
Adjusted EBITDAre
$98,006 $90,273 
(1)Realized performance income includes fees received related to the achievement of certain performance targets in our NRP joint venture.

Phillips Edison & Company
17



EBITDAre Metrics
Unaudited, in thousands
Three Months Ended
 March 31,
2023
 December 31,
 2022
 September 30,
 2022
 June 30,
 2022
 March 31,
 2022
CALCULATION OF EBITDAre
Net income$18,636 $15,703 $12,173 $15,255 $11,398 
Adjustments:
Depreciation and amortization58,498 58,216 60,013 60,769 57,226 
Interest expense, net19,466 18,301 17,569 17,127 18,199 
(Gain) loss on disposal of property, net(942)(3,366)10 (2,793)(1,368)
Impairment of real estate assets— 322 — — — 
Federal, state, and local tax expense 118 433 179 97 97 
Adjustments related to unconsolidated joint ventures966 926 927 (885)1,019 
EBITDAre
$96,742 $90,535 $90,871 $89,570 $86,571 
CALCULATION OF ADJUSTED EBITDAre
EBITDAre
$96,742 $90,535 $90,871 $89,570 $86,571 
Adjustments:
Change in fair value of earn-out liability— — — — 1,809 
Transaction and acquisition expenses1,338 2,731 3,740 2,035 2,045 
Amortization of unconsolidated joint venture basis differences— 175 44 
Realized performance income(1)
(75)— — (2,546)(196)
Adjusted EBITDAre
$98,006 $93,266 $94,612 $89,234 $90,273 
(1)Realized performance income includes fees received related to the achievement of certain performance targets in our NRP joint venture.
Phillips Edison & Company
18



Same-Center Net Operating Income
Unaudited, in thousands
Three Months Ended
 March 31,
Favorable (Unfavorable)
% Change
20232022
SAME-CENTER NOI(1)
Revenues:
Rental income(2)
$103,750$98,829
Tenant recovery income33,91633,163
Reserves for uncollectibility(3)
(919)(838)
Other property income801900
Total revenues137,548132,0544.2 %
Operating expenses:
Property operating expenses21,58520,707
Real estate taxes17,34717,299
Total operating expenses38,93238,006(2.4)%
Total Same-Center NOI$98,616$94,0484.9 %
Same-Center NOI margin71.7%71.2%
(1)Same-Center NOI represents the NOI for the 263 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
 March 31,
20232022
RECONCILIATION OF NET INCOME TO NOI AND SAME-CENTER NOI
Net income
$18,636 $11,398 
Adjusted to exclude:
Fees and management income(2,478)(2,461)
Straight-line rental income(1)
(2,580)(1,809)
Net amortization of above- and below-market leases(1,228)(1,002)
Lease buyout income(355)(1,965)
General and administrative expenses11,533 11,532 
Depreciation and amortization58,498 57,226 
Interest expense, net19,466 18,199 
Gain on disposal of property, net(942)(1,368)
Other expense, net
755 4,365 
Property operating expenses related to fees and management income315 1,070 
NOI for real estate investments101,620 95,185 
Less: Non-same-center NOI(2)
(3,004)(1,137)
Total Same-Center NOI$98,616 $94,048 
(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
19



Joint Venture Portfolio and Financial Summary
Unaudited, dollars and square feet in thousands
UNCONSOLIDATED JOINT VENTURE PORTFOLIO SUMMARY
As of March 31, 2023
Joint VentureInvestment PartnerOwnership PercentageNumber of Shopping CentersABRGLA
 Grocery Retail Partners I LLC ("GRP I")The Northwestern Mutual Life Insurance Company14%20$30,9962,213


UNCONSOLIDATED JOINT VENTURE FINANCIAL SUMMARY
As of March 31, 2023
GRP I
NRP(1)
Total assets$373,913 $627 
Gross debt174,026 — 
Pro rata share of debt24,358 — 
Three Months Ended
 March 31, 2023
GRP I
NRP(1)
Pro rata share of Nareit FFO(2)
$708 $(16)
Pro rata share of NOI(2)
1,021 — 
(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.

Phillips Edison & Company
20



Supplemental Balance Sheets Detail
Unaudited, in thousands
March 31, 2023December 31, 2022
OTHER ASSETS, NET
Deferred leasing commissions and costs$50,253 $49,687 
Deferred financing expenses(1)
9,069 8,984 
Office equipment, capital lease assets, and other23,132 23,051 
Corporate intangible assets6,692 6,692 
Total depreciable and amortizable assets89,146 88,414 
Accumulated depreciation and amortization(48,407)(47,483)
Net depreciable and amortizable assets40,739 40,931 
Accounts receivable, net(2)
43,471 37,274 
Accounts receivable - affiliates1,470 513 
Deferred rent receivable, net(3)
54,729 52,141 
Derivative assets19,200 25,853 
Prepaid expenses and other22,745 14,575 
Investment in third parties9,800 9,800 
Investment in marketable securities8,219 7,792 
Total other assets, net$200,373 $188,879 
ACCOUNTS PAYABLE AND OTHER LIABILITIES
Accounts payable trade and other accruals$44,019 $34,431 
Accrued real estate taxes26,557 30,979 
Security deposits 14,505 14,170 
Distribution accrual896 1,048 
Accrued compensation 6,013 14,210 
Accrued interest11,295 8,192 
Capital expenditure accrual 7,570 9,834 
Accrued income taxes and deferred tax liabilities, net432 321 
Derivative Liability184 — 
Total accounts payable and other liabilities$111,471 $113,185 
(1)Deferred financing expenses per the above table are related to our revolving credit facility, and as such we have elected to classify them as an asset rather than as a contra-liability.
(2)Net of $2.8 million and $3.0 million of general reserves for uncollectible amounts as of March 31, 2023 and December 31, 2022, respectively. Receivables that were removed for Neighbors considered to be non-creditworthy were $5.9 million and $6.2 million as of March 31, 2023 and December 31, 2022, respectively.
(3)Net of $4.0 million and $4.2 million of receivables removed as of March 31, 2023 and December 31, 2022, respectively, related to straight-line rent for Neighbors previously or currently considered to be non-creditworthy.

Phillips Edison & Company
21



Supplemental Statements of Operations Detail
Unaudited, in thousands
Three Months Ended March 31,
20232022
REVENUES
Rental income(1)
$108,883 $101,132 
Recovery income(1)
35,744 33,845 
Straight-line rent amortization 2,443 1,695 
Amortization of lease assets1,216 992 
Lease buyout income355 1,964 
Adjustments for collectibility(2)(3)
(913)(880)
Fees and management income 2,478 2,461 
Other property income 858 954 
Total revenues$151,064 $142,163 
(1)Includes income related to lease payments before assessing for collectibility.
(2)Includes revenue adjustments for non-creditworthy Neighbors.
(3)Contains general reserves but excludes reserves for straight-line rent amortization; includes recovery of previous revenue reserved.
INTEREST EXPENSE, NET
Interest on unsecured term loans and senior notes, net$11,292 $9,916 
Interest on secured debt4,888 5,531 
Interest on revolving credit facility, net1,568 247 
Non-cash amortization and other(1)
1,718 1,605 
Loss on extinguishment or modification of debt and other, net(2)
— 900 
Total interest expense, net $19,466 $18,199 
(1)Amortization of debt-related items includes items such as deferred financing expenses, assumed market debt, and derivative adjustments, net.
(2)Includes defeasance fees related to early repayments of debt.
OTHER EXPENSE, NET
Transaction and acquisition expenses$(1,338)$(2,045)
Federal, state, and local income tax expense(118)(97)
Equity in net income (loss) of unconsolidated joint ventures90 (54)
Increase in fair value of earn-out liability— (1,809)
Other611 (360)
Total other expense, net
$(755)$(4,365)

Phillips Edison & Company
22



Capital Expenditures
Unaudited, in thousands
Three Months Ended
 March 31,
20232022
CAPITAL EXPENDITURES FOR REAL ESTATE(1)(2)
Capital improvements$3,709 $1,797 
Tenant improvements6,419 7,260 
Redevelopment and development11,977 7,994 
Total capital expenditures for real estate$22,105 $17,051 
Corporate asset capital expenditures365 918 
Capitalized indirect costs(3)
1,214 639 
Total capital spending activity$23,684 $18,608 
Cash paid for leasing commissions$1,306 $2,110 
(1)Includes landlord work.
(2)Amounts reported are net of insurance proceeds for property damage claims for the three months ended March 31, 2023.
(3)Amount includes internal salaries and related benefits of personnel who work directly on capital projects as well as capitalized interest expense.

Phillips Edison & Company
23



Active Capital Projects
Unaudited, dollars in thousands
Project
Location
Description
Target Stabilization Quarter(1)
Incurred to DateFuture SpendTotal Estimated CostsEstimated Project Yield
GROUND UP EXPANSION DEVELOPMENT
Rivermont StationAlpharetta, GAConstruction of a 4K SF multi-tenant outparcel 100% leased with Jersey Mikes, ChipotleQ2 2023$1,946 $317 $2,262 
Atwater MarketplaceAtwater, CAConstruction of a 2K SF single tenant outparcel 100% leased with StarbucksQ2 20231,520 345 1,865 
Cinco Ranch at Market CenterKaty, TXConstruction of a 7K SF multi-tenant outparcel 100% leased with Chipotle, Floyd's 99 Barbershop, Cup Bop, Handel's Ice CreamQ3 20233,504 784 4,288 
New Prague CommonsNew Prague, MNConstruction of a 5K SF inline expansion 75% leased with Edward Jones, New Prague TobaccoQ3 20231,178 298 1,476 
Sunset Shopping CenterCorvallis, ORConstruction of a 2K SF single tenant outparcel 100% leased with StarbucksQ4 2023725 1,140 1,865 
Northstar MarketplaceRamsey, MNConstruction of a 7K SF multi-tenant outparcelQ4 20232,041 1,093 3,134 
Oak Mill PlazaNiles, ILConstruction of a 5K SF multi-tenant outparcel 74% leased with Starbucks, Buffalo Wild Wings GoQ4 20232,371 1,037 3,408 
Shasta CrossroadsRedding, CAConstruction of a 4K SF multi-tenant outparcel 100% leased with PaneraQ4 2023287 2,476 2,762 
Total$13,572 $7,490 $21,060 7%-10%
Phillips Edison & Company
24



Active Capital Projects
Unaudited, dollars in thousands
Project
Location
Description
Target Stabilization Quarter(1)
Incurred to DateFuture SpendTotal Estimated CostsEstimated Project Yield
REDEVELOPMENT
Lake Washington CrossingMelbourne, FLDemolish and rebuild Publix.Q2 2023$4,926 $1,873 $6,799 
Lafayette SquareLafayette, INRemerchandise former Needlers with Dollar Tree Family DollarQ2 2023527 750 1,277 
The OaksHudson, FLMulti-phase Repositioning project with EOS Fitness, Ross, and Five BelowQ3 20231,967 9,321 11,287 
Shoregate Town CenterWillowick, OHRemerchandise former Pat Catans with GoodwillQ3 2023182 1,665 1,847 
Loganville Town CenterLoganville, GAPurchase and repositioning of single tenant outparcel into multi-tenant. 100% leased with First Watch and Sage Dental.Q3 20232,652 769 3,421 
Total$10,254 $14,378 $24,631 9%-15%