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): October 31, 2023
(Exact name of registrant as specified in its charter)
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| (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:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
$0.01 par value per share | ||||||||||||||
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.
On October 31, 2023 , Phillips Edison & Company, Inc. (the “Company”) issued a press release announcing its results for the quarter ended September 30, 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 Third Quarter 2023 Supplemental Disclosure is attached hereto as Exhibit 99.2 and incorporated herein by reference.
The information in this Item 2.02 and Exhibits 99.1 and 99.2 of this Current Report on Form 8-K is 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 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On October 27, 2023, Devin Murphy, President of Phillips Edison & Company, Inc. notified the Company that he will step down as the Company’s President, effective December 31, 2023. Mr. Murphy will serve as Managing Director of Investment Management through his planned retirement at the end of June 2024. He will work closely with the Company's senior leadership team through the transition date to ensure a seamless handoff of his current responsibilities. In addition, Mr. Murphy is in discussions with the Nominating and Governance Committee about joining the Company’s board of directors following his retirement. Mr. Murphy’s resignation is not a result of any disagreement with the Company.
Robert Myers, the Company’s current Chief Operating Officer and Executive Vice President, has been selected to serve as the Company’s President and will assume such role effective January 1, 2024, following the effectiveness of Mr. Murphy’s resignation, at which time Mr. Myers will no longer serve as the Company’s Chief Operating Officer. Mr. Myers has served as the Company’s Chief Operating Officer since October 2010 and Executive Vice President since August 2020. Mr. Myers joined the Company in 2003 as a Senior Leasing Manager, was promoted to Regional Leasing Manager in 2005 and became Vice President of Leasing in 2006. He was named Senior Vice President of Leasing and Operations in 2009, Chief Operating Officer in 2010 and Executive Vice President in 2020. Before joining the Company, Mr. Myers spent six years with Equity Investment Group, where he started as a property manager in 1997. He served as director of operations for Equity Investment Group from 1998 to 2000 and as director of lease renegotiations/leasing agent for Equity Investment Group from 2000 to 2003. He received his Bachelor of Science in business administration from Huntington College in 1995. Mr. Myers' compensation is described in the Company’s definitive proxy statement filed with the Securities and Exchange Commission on March 24, 2023 (the “2023 Proxy Statement”). As of the date of this report, there are no changes to Mr. Myers’ compensation. Any changes as a result of this appointment to Mr. Myers’ compensation or to any plans or arrangements in which Mr. Myers participates have not yet been determined. There are no family relationships existing between Mr. Myers and any executive officer or director of the Company. Mr. Myers has no direct or indirect material interest in any transaction that would require disclosure under Item 404(a) of Regulation S-K other than those disclosed under the heading “Related Party Transactions—Agreements with Related Persons” in the 2023 Proxy Statement.
Effective January 1, 2024, in connection with Mr. Myers’ appointment as President, Joseph Schlosser, the Company’s current Senior Vice President of Portfolio Management, has been selected to serve as the Company’s Chief Operating Officer and Executive Vice President. Mr. Schlosser has been with the Company for 19 years and joined the Company in 2004 as a Financial Analyst and underwriter. In 2005, he became a Leasing Agent and was promoted to Director of Leasing in 2007. He was named Director of Portfolio Management in 2010, Vice President in 2014 and Senior Vice President in 2016, where his role has been to develop and execute the Company’s long-term asset management strategy at a national level. Prior to joining the Company, Mr. Schlosser gained extensive experience providing construction management services on commercial real estate projects including grocery-anchored shopping centers. It has not yet been determined if any plans, contracts or arrangements will be entered into in connection with Mr. Schlosser’s appointment as Chief Operating Officer. There are no family relationships existing between Mr. Schlosser and any executive officer or director of the Company. Mr. Schlosser has no direct or indirect material interest in any transaction that would require disclosure under Item 404(a) of Regulation S-K.
Item 7.01 Regulation FD Disclosure.
On October 31, 2023 , the Company issued a press release announcing the officer changes described above. A copy of the press release is attached hereto as exhibit 99.3 and is incorporated herein by reference.
The Company will host a conference call on Wednesday, November 1, 2023, at 12:00 p.m. Eastern Time to discuss the third 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/292709717, 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 Item 7.01 and Exhibit 99.3 of this Current Report on Form 8-K is being furnished to the 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 Number | Description of Exhibit | |||||||
| 99.1 | ||||||||
| 99.2 | ||||||||
| 99.3 | ||||||||
| 104 | Cover 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: October 31, 2023 | By: | /s/ Jennifer L. Robison | ||||||
| Jennifer L. Robison | ||||||||
| Chief Accounting Officer and Senior Vice President (Principal Accounting Officer) | ||||||||
Phillips Edison & Company Reports
Third Quarter 2023 Results and
Updates Full Year Earnings Guidance
CINCINNATI - October 31, 2023 - Phillips Edison & Company, Inc. (Nasdaq: PECO) (“PECO” or the “Company”), one of the nation’s largest owners and operators of grocery-anchored neighborhood shopping centers, today reported financial and operating results for the period ended September 30, 2023 and provided updated full year 2023 earnings guidance. For the three and nine months ended September 30, 2023, net income attributable to stockholders was $12.2 million, or $0.10 per diluted share, and $43.3 million, or $0.37 per diluted share, respectively.
Highlights for the Third Quarter Ended September 30, 2023
•Reported Nareit FFO of $72.5 million, or $0.55 per diluted share
•Reported Core FFO of $77.0 million, or $0.58 per diluted share
•Updated 2023 Nareit FFO and Core FFO guidance to a range of $2.23 to $2.27 per diluted share and $2.31 to $2.35 per diluted share, respectively
•The midpoint of 2023 Core FFO guidance represents 2.6% year-over-year growth
•Increased same-center NOI year-over-year by 3.2%
•Increased leased portfolio occupancy by 70 basis points year-over-year to 97.8%
•Executed comparable renewal leases during the quarter at a rent spread of 16.9%
•Executed comparable new leases during the quarter at a rent spread of 26.3%
•As previously announced, closed on amendments to extend the maturities on its 2024 term loans, leaving no meaningful maturities until 2025
•Generated net proceeds of $70.1 million through the issuance of 2.0 million common shares at a gross weighted average price of $35.59 per common share through the Company’s ATM program
•Acquired one grocery-anchored neighborhood shopping center and one land parcel for a total of $13.4 million
•Subsequent to quarter end, acquired one property and one outparcel for $19.4 million
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 3.2% and continued strength in occupancy and rent spreads. The continued strength of our operating performance is attributed to our differentiated and focused strategy of exclusively owning grocery-anchored neighborhood shopping centers and our ability to drive results at the property level through our integrated and cycle-tested operating platform, as evidenced by our Neighbor retention rate of 93% during the third quarter. Based on the current pipeline of assets that we expect to acquire during the fourth quarter of 2023, we are confident in our ability to close on $250 to $300 million in net acquisitions this year. We continue to see a resilient consumer and strong retailer demand, and we believe we will end the year with positive earnings growth despite interest expense headwinds.”
Financial Results for the Third Quarter and Nine Months Ended September 30, 2023
Net Income
Third quarter 2023 net income attributable to stockholders totaled $12.2 million, or $0.10 per diluted share, which included a non-cash impairment charge of $3.0 million related to a third-party investment. This compared to net income of $11.0 million, or $0.09 per diluted share, during the third quarter of 2022.
For the nine months ended September 30, 2023, net income attributable to stockholders totaled $43.3 million, or $0.37 per diluted share, compared to net income of $34.6 million, or $0.30 per diluted share, for the same period in 2022.
1
Nareit FFO
Third quarter 2023 funds from operations attributable to stockholders and operating partnership (“OP”) unit holders as defined by Nareit (“Nareit FFO”) increased 0.7% to $72.5 million, or $0.55 per diluted share, which included a non-cash impairment charge of $3.0 million related to a third-party investment. This compared to $72.0 million, or $0.55 per diluted share, during the third quarter of 2022.
For the nine months ended September 30, 2023, Nareit FFO increased 6.9% to $224.7 million, or $1.70 per diluted share, compared to $210.2 million, or $1.62 per diluted share, during the same period a year ago.
Core FFO
Third quarter 2023 core funds from operations attributable to stockholders and OP unit holders (“Core FFO”) increased 0.5% to $77.0 million, or $0.58 per diluted share, compared to $76.6 million, or $0.58 per diluted share, during the third quarter of 2022.
For the nine months ended September 30, 2023, Core FFO increased 5.4% to $232.8 million, or $1.76 per diluted share, compared to $221.0 million, or $1.70 per diluted share, for the same period in 2022.
Same-Center NOI
Third quarter 2023 same-center net operating income (“NOI”) increased 3.2% to $99.9 million, compared to $96.8 million during the third quarter of 2022.
For the nine months ended September 30, 2023, same-center NOI increased 4.5% to $297.4 million, compared to $284.7 million during the same period a year ago.
Portfolio Overview for the Third Quarter and Nine Months Ended September 30, 2023
Portfolio Statistics
As of September 30, 2023, PECO’s wholly-owned portfolio consisted of 275 properties, totaling approximately 31.4 million square feet, located in 31 states. This compared to 270 properties, totaling approximately 31.1 million square feet, located in 31 states as of September 30, 2022.
Leased portfolio occupancy increased to 97.8% at September 30, 2023, compared to 97.1% at September 30, 2022.
Anchor occupancy increased to 99.3% at September 30, 2023, compared to 98.9% at September 30, 2022, and inline occupancy increased to 94.9% at September 30, 2023, compared to 93.6% at September 30, 2022.
Leasing Activity
During the third quarter of 2023, 231 leases were executed totaling 0.9 million square feet. This compared to 240 leases executed totaling 1.2 million square feet during the third quarter of 2022.
During the nine months ended September 30, 2023, 779 leases were executed totaling 3.6 million square feet. This compared to 749 leases executed totaling 3.6 million square feet during the same period in 2022.
Comparable rent spreads during the third quarter of 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 26.3% for new leases, 16.9% for renewal leases and 19.6% combined.
Comparable rent spreads during the nine months ended September 30, 2023 were 26.2% for new leases, 17.0% for renewal leases and 18.8% combined.
2
Transaction Activity
During the three months ended September 30, 2023, the Company acquired one property and one land parcel for a total of $13.4 million. No properties were sold during the quarter. Third quarter 2023 acquisitions consisted of:
•Lake Pointe Market, a 40,600 square foot shopping center anchored by Tom Thumb located in a Dallas, TX suburb. The center is located in an area with strong median household income and a growing population. The Company expects to drive growth in the asset through occupancy increases and rent growth, as well as potential future development of ground up outparcel retail spaces.
•Land parcel adjacent to the Market Place at Pabst Farms, a PECO-owned center anchored by Metro Market located in a Milwaukee, WI suburb. The center is located in an area with strong median household income. The Company expects to drive growth through ground up expansion development opportunities.
During the nine months ended September 30, 2023, the Company acquired five properties and one land parcel for a total of $92.1 million. During the same period, one property and two outparcels were sold for $6.3 million.
Subsequent to quarter end, the company acquired one property and one outparcel for $19.4 million. Acquisitions completed subsequent to quarter end consisted of:
•Mansell Village, an 89,600 square foot shopping center anchored by Kroger in an Atlanta, GA suburb. The center is located in an area with strong median household income and a growing population. The Company expects to drive growth in the asset through occupancy increases and rent growth.
Balance Sheet Highlights
As of September 30, 2023, PECO had $713.8 million of total liquidity, comprised of $8.2 million of cash, cash equivalents and restricted cash, plus $705.6 million of borrowing capacity available on its $800 million revolving credit facility.
As of September 30, 2023, PECO’s net debt to annualized adjusted EBITDAre was 4.9x. This compared to 5.3x at December 31, 2022.
As of September 30, 2023, PECO’s outstanding debt had a weighted-average interest rate of 4.1% and a weighted-average maturity of 4.4 years when including all extension options, and 81.6% of total debt was fixed-rate debt.
During the three and nine months ended September 30, 2023, PECO generated net proceeds of $70.1 million after commissions through the issuance of 2.0 million common shares at a gross weighted-average price of $35.59 per common share through the Company’s ATM program.
Extension of Term Loans
As previously announced, on July 31, 2023, PECO amended three senior unsecured term loans with a total notional amount of $475.0 million scheduled to mature during 2024. The amended three senior unsecured term loans have a total notional amount of $484.8 million. The $161.8 million unsecured term loan is scheduled to mature on January 31, 2026, extendable with two one-year options to 2028, subject to certain terms and conditions. The $158.0 million and $165.0 million unsecured term loans are scheduled to mature on January 31, 2027. Based on PECO’s current investment grade credit ratings, the term loans are priced at SOFR plus 1.35%, representing no change in pricing from the previous term loan tranches.
3
2023 Guidance
PECO has updated its 2023 earnings guidance, as summarized in the table below, which is based upon the Company’s current view of existing market conditions and assumptions for the year ending December 31, 2023. 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) | Q3 YTD | Updated Full Year 2023 Guidance | Previous Full Year 2023 Guidance | ||||||||||||||
| Results: | |||||||||||||||||
| Net income per share | $0.37 | $0.46 - $0.50 | $0.51 - $0.55 | ||||||||||||||
| Nareit FFO per share | $1.70 | $2.23 - $2.27 | $2.27 - $2.32 | ||||||||||||||
| Core FFO per share | $1.76 | $2.31 - $2.35 | $2.30 - $2.36 | ||||||||||||||
| Same-Center NOI growth | 4.5% | 3.75% - 4.50% | 3.75% - 4.50% | ||||||||||||||
| Portfolio Activity: | |||||||||||||||||
| Acquisitions (net of dispositions) | $85,810 | $250,000 - $300,000 | $200,000 - $300,000 | ||||||||||||||
| Development and redevelopment spend | $29,276 | $35,000 - $45,000 | $35,000 - $45,000 | ||||||||||||||
| Other: | |||||||||||||||||
| Interest expense, net | $61,663 | $85,000 - $88,000 | $85,000 - $90,000 | ||||||||||||||
| G&A expense | $33,604 | $44,000 - $47,000 | $44,000 - $48,000 | ||||||||||||||
Non-cash revenue items(1) | $11,873 | $15,500 - $18,500 | $16,000 - $19,000 | ||||||||||||||
| Adjustments for collectibility | $2,174 | $3,000 - $4,000 | $3,000 - $4,000 | ||||||||||||||
(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 End | High End | |||||||||
Net income per share | $ | 0.46 | $ | 0.50 | |||||||
| Depreciation and amortization of real estate assets | 1.76 | 1.76 | |||||||||
Gain on sale of real estate assets | (0.01) | (0.01) | |||||||||
| Adjustments related to unconsolidated joint ventures | 0.02 | 0.02 | |||||||||
Nareit FFO per share | $ | 2.23 | $ | 2.27 | |||||||
| Depreciation and amortization of corporate assets | 0.02 | 0.02 | |||||||||
Transaction costs and other | 0.06 | 0.06 | |||||||||
Core FFO per share | $ | 2.31 | $ | 2.35 | |||||||
4
Conference Call Details
PECO plans to host a conference call and webcast on Wednesday, November 1, 2023 at 12:00 p.m. Eastern Time to discuss third 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.
Third Quarter 2023 Earnings Conference Call Details:
Date: Wednesday, November 1, 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: Third Quarter 2023 Webcast
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 September 30, 2023.
Connect with PECO
For additional information, please visit https://www.phillipsedison.com/
Follow PECO on:
•Twitter at https://twitter.com/PhillipsEdison
•Facebook at https://www.facebook.com/phillipsedison.co
•Instagram at https://www.instagram.com/phillips.edison/; and
•Find PECO on LinkedIn at https://www.linkedin.com/company/phillipsedison&company
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 September 30, 2023, PECO managed 295 shopping centers, including 275 wholly-owned centers comprising 31.4 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.
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PHILLIPS EDISON & COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2023 AND DECEMBER 31, 2022
(Condensed and Unaudited)
(In thousands, except per share amounts)
| September 30, 2023 | December 31, 2022 | ||||||||||
| ASSETS | |||||||||||
| Investment in real estate: | |||||||||||
| Land and improvements | $ | 1,714,136 | $ | 1,674,133 | |||||||
| Building and improvements | 3,679,549 | 3,572,146 | |||||||||
| In-place lease assets | 477,859 | 471,507 | |||||||||
| Above-market lease assets | 72,398 | 71,954 | |||||||||
| Total investment in real estate assets | 5,943,942 | 5,789,740 | |||||||||
| Accumulated depreciation and amortization | (1,484,658) | (1,316,743) | |||||||||
| Net investment in real estate assets | 4,459,284 | 4,472,997 | |||||||||
| Investment in unconsolidated joint ventures | 25,609 | 27,201 | |||||||||
| Total investment in real estate assets, net | 4,484,893 | 4,500,198 | |||||||||
| Cash and cash equivalents | 3,777 | 5,478 | |||||||||
| Restricted cash | 4,462 | 11,871 | |||||||||
| Goodwill | 29,066 | 29,066 | |||||||||
| Other assets, net | 196,263 | 188,879 | |||||||||
| Total assets | $ | 4,718,461 | $ | 4,735,492 | |||||||
| LIABILITIES AND EQUITY | |||||||||||
| Liabilities: | |||||||||||
| Debt obligations, net | $ | 1,869,984 | $ | 1,896,594 | |||||||
| Below-market lease liabilities, net | 105,302 | 109,799 | |||||||||
| Accounts payable and other liabilities | 117,783 | 113,185 | |||||||||
| Deferred income | 17,900 | 18,481 | |||||||||
| Total liabilities | 2,110,969 | 2,138,059 | |||||||||
| Equity: | |||||||||||
Preferred stock, $0.01 par value per share, 10,000 shares authorized, zero shares issued and outstanding at September 30, 2023 and December 31, 2022 | — | — | |||||||||
Common stock, $0.01 par value per share, 1,000,000 shares authorized, 119,578 and 117,126 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively | 1,195 | 1,171 | |||||||||
| Additional paid-in capital | 3,461,981 | 3,383,978 | |||||||||
| Accumulated other comprehensive income | 19,846 | 21,003 | |||||||||
| Accumulated deficit | (1,226,379) | (1,169,665) | |||||||||
| Total stockholders’ equity | 2,256,643 | 2,236,487 | |||||||||
| Noncontrolling interests | 350,849 | 360,946 | |||||||||
| Total equity | 2,607,492 | 2,597,433 | |||||||||
| Total liabilities and equity | $ | 4,718,461 | $ | 4,735,492 | |||||||
6
PHILLIPS EDISON & COMPANY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Condensed and Unaudited)
(In thousands, except per share amounts)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Rental income | $ | 149,566 | $ | 142,857 | $ | 446,274 | $ | 418,835 | |||||||||||||||
| Fees and management income | 2,168 | 2,081 | 7,192 | 9,323 | |||||||||||||||||||
| Other property income | 740 | 716 | 2,209 | 2,175 | |||||||||||||||||||
| Total revenues | 152,474 | 145,654 | 455,675 | 430,333 | |||||||||||||||||||
| Operating Expenses: | |||||||||||||||||||||||
| Property operating | 24,274 | 23,089 | 74,010 | 69,261 | |||||||||||||||||||
| Real estate taxes | 19,028 | 18,041 | 55,481 | 52,005 | |||||||||||||||||||
| General and administrative | 10,385 | 10,843 | 33,604 | 33,751 | |||||||||||||||||||
| Depreciation and amortization | 58,706 | 60,013 | 176,871 | 178,008 | |||||||||||||||||||
| Total operating expenses | 112,393 | 111,986 | 339,966 | 333,025 | |||||||||||||||||||
| Other: | |||||||||||||||||||||||
| Interest expense, net | (21,522) | (17,569) | (61,663) | (52,895) | |||||||||||||||||||
| Gain (loss) on disposal of property, net | 53 | (10) | 1,070 | 4,151 | |||||||||||||||||||
| Other expense, net | (4,883) | (3,916) | (6,542) | (9,738) | |||||||||||||||||||
| Net income | 13,729 | 12,173 | 48,574 | 38,826 | |||||||||||||||||||
| Net income attributable to noncontrolling interests | (1,484) | (1,135) | (5,259) | (4,181) | |||||||||||||||||||
| Net income attributable to stockholders | $ | 12,245 | $ | 11,038 | $ | 43,315 | $ | 34,645 | |||||||||||||||
| Earnings per share of common stock: | |||||||||||||||||||||||
Net income per share attributable to stockholders - basic and diluted | $ | 0.10 | $ | 0.09 | $ | 0.37 | $ | 0.30 | |||||||||||||||
7
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 nine months ended September 30, 2023 and 2022, Same-Center NOI represents the NOI for the 262 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)
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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 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 September 30, | Favorable (Unfavorable) | Nine Months Ended September 30, | Favorable (Unfavorable) | ||||||||||||||||||||||||||||||||||||||||||||
| 2023 | 2022 | $ Change | % Change | 2023 | 2022 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||||||||||||||||||||||||||
Rental income(1) | $ | 103,770 | $ | 100,490 | $ | 3,280 | $ | 310,278 | $ | 297,673 | $ | 12,605 | |||||||||||||||||||||||||||||||||||
| Tenant recovery income | 33,965 | 32,362 | 1,603 | 101,426 | 95,571 | 5,855 | |||||||||||||||||||||||||||||||||||||||||
Reserves for uncollectibility(2) | (789) | 70 | (859) | (2,058) | (591) | (1,467) | |||||||||||||||||||||||||||||||||||||||||
| Other property income | 638 | 684 | (46) | 2,006 | 2,050 | (44) | |||||||||||||||||||||||||||||||||||||||||
| Total revenues | 137,584 | 133,606 | 3,978 | 3.0 | % | 411,652 | 394,703 | 16,949 | 4.3 | % | |||||||||||||||||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||||||||||||||||||||
| Property operating expenses | 19,692 | 19,413 | (279) | 61,628 | 59,279 | (2,349) | |||||||||||||||||||||||||||||||||||||||||
| Real estate taxes | 17,991 | 17,399 | (592) | 52,661 | 50,732 | (1,929) | |||||||||||||||||||||||||||||||||||||||||
| Total operating expenses | 37,683 | 36,812 | (871) | (2.4) | % | 114,289 | 110,011 | (4,278) | (3.9) | % | |||||||||||||||||||||||||||||||||||||
| Total Same-Center NOI | $ | 99,901 | $ | 96,794 | $ | 3,107 | 3.2 | % | $ | 297,363 | $ | 284,692 | $ | 12,671 | 4.5 | % | |||||||||||||||||||||||||||||||
(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 September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Net income | $ | 13,729 | $ | 12,173 | $ | 48,574 | $ | 38,826 | ||||||||||||||||||
| Adjusted to exclude: | ||||||||||||||||||||||||||
| Fees and management income | (2,168) | (2,081) | (7,192) | (9,323) | ||||||||||||||||||||||
Straight-line rental income(1) | (2,265) | (3,932) | (8,129) | (9,060) | ||||||||||||||||||||||
| Net amortization of above- and below- market leases | (1,294) | (1,081) | (3,784) | (3,161) | ||||||||||||||||||||||
| Lease buyout income | (587) | (221) | (1,016) | (2,362) | ||||||||||||||||||||||
| General and administrative expenses | 10,385 | 10,843 | 33,604 | 33,751 | ||||||||||||||||||||||
| Depreciation and amortization | 58,706 | 60,013 | 176,871 | 178,008 | ||||||||||||||||||||||
| Interest expense, net | 21,522 | 17,569 | 61,663 | 52,895 | ||||||||||||||||||||||
| (Gain) loss on disposal of property, net | (53) | 10 | (1,070) | (4,151) | ||||||||||||||||||||||
| Other expense, net | 4,883 | 3,916 | 6,542 | 9,738 | ||||||||||||||||||||||
| Property operating expenses related to fees and management income | 649 | 704 | 1,675 | 3,061 | ||||||||||||||||||||||
| NOI for real estate investments | 103,507 | 97,913 | 307,738 | 288,222 | ||||||||||||||||||||||
Less: Non-same-center NOI(2) | (3,606) | (1,119) | (10,375) | (3,530) | ||||||||||||||||||||||
| Total Same-Center NOI | $ | 99,901 | $ | 96,794 | $ | 297,363 | $ | 284,692 | ||||||||||||||||||
(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.
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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 September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| Calculation of Nareit FFO Attributable to Stockholders and OP Unit Holders | |||||||||||||||||||||||
Net income | $ | 13,729 | $ | 12,173 | $ | 48,574 | $ | 38,826 | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Depreciation and amortization of real estate assets | 58,144 | 59,136 | 175,212 | 175,305 | |||||||||||||||||||
| (Gain) loss on disposal of property, net | (53) | 10 | (1,070) | (4,151) | |||||||||||||||||||
| Adjustments related to unconsolidated joint ventures | 646 | 662 | 1,989 | 181 | |||||||||||||||||||
| Nareit FFO attributable to stockholders and OP unit holders | $ | 72,466 | $ | 71,981 | $ | 224,705 | $ | 210,161 | |||||||||||||||
| Calculation of Core FFO Attributable to Stockholders and OP Unit Holders | |||||||||||||||||||||||
| Nareit FFO attributable to stockholders and OP unit holders | $ | 72,466 | $ | 71,981 | $ | 224,705 | $ | 210,161 | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Depreciation and amortization of corporate assets | 562 | 877 | 1,659 | 2,703 | |||||||||||||||||||
| Change in fair value of earn-out liability | — | — | — | 1,809 | |||||||||||||||||||
| Impairment of investment in third parties | 3,000 | — | 3,000 | — | |||||||||||||||||||
| Transaction and acquisition expenses | 580 | 3,740 | 3,179 | 7,820 | |||||||||||||||||||
| Loss (gain) on extinguishment or modification of debt and other, net | 375 | (4) | 366 | 1,025 | |||||||||||||||||||
| Amortization of unconsolidated joint venture basis differences | 4 | 1 | 12 | 220 | |||||||||||||||||||
Realized performance income(1) | — | — | (75) | (2,742) | |||||||||||||||||||
| Core FFO attributable to stockholders and OP unit holders | $ | 76,987 | $ | 76,595 | $ | 232,846 | $ | 220,996 | |||||||||||||||
| Nareit FFO/Core FFO Attributable to Stockholders and OP Unit Holders per Diluted Share | |||||||||||||||||||||||
| Weighted-average shares of common stock outstanding - diluted | 132,800 | 131,593 | 132,335 | 129,805 | |||||||||||||||||||
| Nareit FFO attributable to stockholders and OP unit holders per share - diluted | $ | 0.55 | $ | 0.55 | $ | 1.70 | $ | 1.62 | |||||||||||||||
| Core FFO attributable to stockholders and OP unit holders per share - diluted | $ | 0.58 | $ | 0.58 | $ | 1.76 | $ | 1.70 | |||||||||||||||
(1)Realized performance income includes fees received related to the achievement of certain performance targets in the Company’s NRP joint venture.
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EBITDAre and Adjusted EBITDAre—The following table presents the Company’s calculation of EBITDAre and Adjusted EBITDAre (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | Year Ended December 31, | |||||||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | 2022 | |||||||||||||||||||||||||
Calculation of EBITDAre | |||||||||||||||||||||||||||||
Net income | $ | 13,729 | $ | 12,173 | $ | 48,574 | $ | 38,826 | $ | 54,529 | |||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||||||||
| Depreciation and amortization | 58,706 | 60,013 | 176,871 | 178,008 | 236,224 | ||||||||||||||||||||||||
| Interest expense, net | 21,522 | 17,569 | 61,663 | 52,895 | 71,196 | ||||||||||||||||||||||||
| (Gain) loss on disposal of property, net | (53) | 10 | (1,070) | (4,151) | (7,517) | ||||||||||||||||||||||||
| Impairment of real estate assets | — | — | — | — | 322 | ||||||||||||||||||||||||
| Federal, state, and local tax expense | 120 | 179 | 357 | 373 | 806 | ||||||||||||||||||||||||
| Adjustments related to unconsolidated joint ventures | 918 | 927 | 2,802 | 1,061 | 1,987 | ||||||||||||||||||||||||
EBITDAre | $ | 94,942 | $ | 90,871 | $ | 289,197 | $ | 267,012 | $ | 357,547 | |||||||||||||||||||
Calculation of Adjusted EBITDAre | |||||||||||||||||||||||||||||
EBITDAre | $ | 94,942 | $ | 90,871 | $ | 289,197 | $ | 267,012 | $ | 357,547 | |||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||||||||
| Impairment of investment in third parties | 3,000 | — | 3,000 | — | — | ||||||||||||||||||||||||
| Change in fair value of earn-out liability | — | — | — | 1,809 | 1,809 | ||||||||||||||||||||||||
| Transaction and acquisition expenses | 580 | 3,740 | 3,179 | 7,820 | 10,551 | ||||||||||||||||||||||||
| Amortization of unconsolidated joint venture basis differences | 4 | 1 | 12 | 220 | 220 | ||||||||||||||||||||||||
Realized performance income(1) | — | — | (75) | (2,742) | (2,742) | ||||||||||||||||||||||||
Adjusted EBITDAre | $ | 98,526 | $ | 94,612 | $ | 295,313 | $ | 274,119 | $ | 367,385 | |||||||||||||||||||
(1)Realized performance income includes fees received related to the achievement of certain performance targets in the Company’s NRP joint venture.
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Financial Leverage Ratios—The Company believes its net debt to Adjusted EBITDAre, net debt to total enterprise value, and debt covenant compliance as of September 30, 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 September 30, 2023 and December 31, 2022 (in thousands):
| September 30, 2023 | December 31, 2022 | ||||||||||
| Net debt: | |||||||||||
| Total debt, excluding discounts, market adjustments, and deferred financing expenses | $ | 1,913,120 | $ | 1,937,142 | |||||||
| Less: Cash and cash equivalents | 4,075 | 5,740 | |||||||||
| Total net debt | $ | 1,909,045 | $ | 1,931,402 | |||||||
| Enterprise value: | |||||||||||
| Net debt | $ | 1,909,045 | $ | 1,931,402 | |||||||
Total equity market capitalization(1)(2) | 4,480,340 | 4,178,204 | |||||||||
| Total enterprise value | $ | 6,389,385 | $ | 6,109,606 | |||||||
(1)Total equity market capitalization is calculated as diluted shares multiplied by the closing market price per share, which includes 133.6 million and 131.2 million diluted shares as of September 30, 2023 and December 31, 2022, respectively, and the closing market price per share of $33.54 and $31.84 as of September 30, 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 September 30, 2023 and December 31, 2022 (dollars in thousands):
| September 30, 2023 | December 31, 2022 | ||||||||||
Net debt to Adjusted EBITDAre - annualized: | |||||||||||
| Net debt | $ | 1,909,045 | $ | 1,931,402 | |||||||
Adjusted EBITDAre - annualized(1) | 388,579 | 367,385 | |||||||||
Net debt to Adjusted EBITDAre - annualized | 4.9x | 5.3x | |||||||||
| Net debt to total enterprise value: | |||||||||||
| Net debt | $ | 1,909,045 | $ | 1,931,402 | |||||||
| Total enterprise value | 6,389,385 | 6,109,606 | |||||||||
| Net debt to total enterprise value | 29.9% | 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 Company’s portfolio to its tenants; (v) the financial stability of the Company’s tenants, including, without
13
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:
Kimberly Green, Head of Investor Relations
(513) 692-3399
kgreen@phillipsedison.com
Curt Siegmeyer, Director of Investor Relations
(513) 338-2751
csiegmeyer@phillipsedison.com
###
14
| Table of Contents | |||||
Earnings Release | |||||
Consolidated Statements of Operations (Quarterly) | |||||
FFO, Core FFO, and Adjusted FFO (Quarterly) | |||||
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 15-20 and definitions of our non-GAAP measures are included in our Glossary of Terms on page 61.
| 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 | |||||||
| FINANCIAL RESULTS | ||
Quarter Ended September 30, 2023 | ||
Earnings Release Unaudited | ||||||||
Phillips Edison & Company Reports
Third Quarter 2023 Results and
Updates Full Year Earnings Guidance
CINCINNATI - October 31, 2023 - Phillips Edison & Company, Inc. (Nasdaq: PECO) (“PECO” or the “Company”), one of the nation’s largest owners and operators of grocery-anchored neighborhood shopping centers, today reported financial and operating results for the period ended September 30, 2023 and provided updated full year 2023 earnings guidance. For the three and nine months ended September 30, 2023, net income attributable to stockholders was $12.2 million, or $0.10 per diluted share, and $43.3 million, or $0.37 per diluted share, respectively.
Highlights for the Third Quarter Ended September 30, 2023
•Reported Nareit FFO of $72.5 million, or $0.55 per diluted share
•Reported Core FFO of $77.0 million, or $0.58 per diluted share
•Updated 2023 Nareit FFO and Core FFO guidance to a range of $2.23 to $2.27 per diluted share and $2.31 to $2.35 per diluted share, respectively
•The midpoint of 2023 Core FFO guidance represents 2.6% year-over-year growth
•Increased same-center NOI year-over-year by 3.2%
•Increased leased portfolio occupancy by 70 basis points year-over-year to 97.8%
•Executed comparable renewal leases during the quarter at a rent spread of 16.9%
•Executed comparable new leases during the quarter at a rent spread of 26.3%
•As previously announced, closed on amendments to extend the maturities on its 2024 term loans, leaving no meaningful maturities until 2025
•Generated net proceeds of $70.1 million through the issuance of 2.0 million common shares at a gross weighted average price of $35.59 per common share through the Company’s ATM program
•Acquired one grocery-anchored neighborhood shopping center and one land parcel for a total of $13.4 million
•Subsequent to quarter end, acquired one property and one outparcel for $19.4 million
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 3.2% and continued strength in occupancy and rent spreads. The continued strength of our operating performance is attributed to our differentiated and focused strategy of exclusively owning grocery-anchored neighborhood shopping centers and our ability to drive results at the property level through our integrated and cycle-tested operating platform, as evidenced by our Neighbor retention rate of 93% during the third quarter. Based on the current pipeline of assets that we expect to acquire during the fourth quarter of 2023, we are confident in our ability to close on $250 to $300 million in net acquisitions this year. We continue to see a resilient consumer and strong retailer demand, and we believe we will end the year with positive earnings growth despite interest expense headwinds.”
Financial Results for the Third Quarter and Nine Months Ended September 30, 2023
Net Income
Third quarter 2023 net income attributable to stockholders totaled $12.2 million, or $0.10 per diluted share, which included a non-cash impairment charge of $3.0 million related to a third-party investment. This compared to net income of $11.0 million, or $0.09 per diluted share, during the third quarter of 2022.
For the nine months ended September 30, 2023, net income attributable to stockholders totaled $43.3 million, or $0.37 per diluted share, compared to net income of $34.6 million, or $0.30 per diluted share, for the same period in 2022.
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Earnings Release Unaudited | ||||||||
Nareit FFO
Third quarter 2023 funds from operations attributable to stockholders and operating partnership (“OP”) unit holders as defined by Nareit (“Nareit FFO”) increased 0.7% to $72.5 million, or $0.55 per diluted share, which included a non-cash impairment charge of $3.0 million related to a third-party investment. This compared to $72.0 million, or $0.55 per diluted share, during the third quarter of 2022.
For the nine months ended September 30, 2023, Nareit FFO increased 6.9% to $224.7 million, or $1.70 per diluted share, compared to $210.2 million, or $1.62 per diluted share, during the same period a year ago.
Core FFO
Third quarter 2023 core funds from operations attributable to stockholders and OP unit holders (“Core FFO”) increased 0.5% to $77.0 million, or $0.58 per diluted share, compared to $76.6 million, or $0.58 per diluted share, during the third quarter of 2022.
For the nine months ended September 30, 2023, Core FFO increased 5.4% to $232.8 million, or $1.76 per diluted share, compared to $221.0 million, or $1.70 per diluted share, for the same period in 2022.
Same-Center NOI
Third quarter 2023 same-center net operating income (“NOI”) increased 3.2% to $99.9 million, compared to $96.8 million during the third quarter of 2022.
For the nine months ended September 30, 2023, same-center NOI increased 4.5% to $297.4 million, compared to $284.7 million during the same period a year ago.
Portfolio Overview for the Third Quarter and Nine Months Ended September 30, 2023
Portfolio Statistics
As of September 30, 2023, PECO’s wholly-owned portfolio consisted of 275 properties, totaling approximately 31.4 million square feet, located in 31 states. This compared to 270 properties, totaling approximately 31.1 million square feet, located in 31 states as of September 30, 2022.
Leased portfolio occupancy increased to 97.8% at September 30, 2023, compared to 97.1% at September 30, 2022.
Anchor occupancy increased to 99.3% at September 30, 2023, compared to 98.9% at September 30, 2022, and inline occupancy increased to 94.9% at September 30, 2023, compared to 93.6% at September 30, 2022.
Leasing Activity
During the third quarter of 2023, 231 leases were executed totaling 0.9 million square feet. This compared to 240 leases executed totaling 1.2 million square feet during the third quarter of 2022.
During the nine months ended September 30, 2023, 779 leases were executed totaling 3.6 million square feet. This compared to 749 leases executed totaling 3.6 million square feet during the same period in 2022.
Comparable rent spreads during the third quarter of 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 26.3% for new leases, 16.9% for renewal leases and 19.6% combined.
Comparable rent spreads during the nine months ended September 30, 2023 were 26.2% for new leases, 17.0% for renewal leases and 18.8% combined.
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Earnings Release Unaudited | ||||||||
Transaction Activity
During the three months ended September 30, 2023, the Company acquired one property and one land parcel for a total of $13.4 million. No properties were sold during the quarter. Third quarter 2023 acquisitions consisted of:
•Lake Pointe Market, a 40,600 square foot shopping center anchored by Tom Thumb located in a Dallas, TX suburb. The center is located in an area with strong median household income and a growing population. The Company expects to drive growth in the asset through occupancy increases and rent growth, as well as potential future development of ground up outparcel retail spaces.
•Land parcel adjacent to the Market Place at Pabst Farms, a PECO-owned center anchored by Metro Market located in a Milwaukee, WI suburb. The center is located in an area with strong median household income. The Company expects to drive growth through ground up expansion development opportunities.
During the nine months ended September 30, 2023, the Company acquired five properties and one land parcel for a total of $92.1 million. During the same period, one property and two outparcels were sold for $6.3 million.
Subsequent to quarter end, the company acquired one property and one outparcel for $19.4 million. Acquisitions completed subsequent to quarter end consisted of:
•Mansell Village, an 89,600 square foot shopping center anchored by Kroger in an Atlanta, GA suburb. The center is located in an area with strong median household income and a growing population. The Company expects to drive growth in the asset through occupancy increases and rent growth.
Balance Sheet Highlights
As of September 30, 2023, PECO had $713.8 million of total liquidity, comprised of $8.2 million of cash, cash equivalents and restricted cash, plus $705.6 million of borrowing capacity available on its $800 million revolving credit facility.
As of September 30, 2023, PECO’s net debt to annualized adjusted EBITDAre was 4.9x. This compared to 5.3x at December 31, 2022.
As of September 30, 2023, PECO’s outstanding debt had a weighted-average interest rate of 4.1% and a weighted-average maturity of 4.4 years when including all extension options, and 81.6% of total debt was fixed-rate debt.
During the three and nine months ended September 30, 2023, PECO generated net proceeds of $70.1 million after commissions through the issuance of 2.0 million common shares at a gross weighted-average price of $35.59 per common share through the Company’s ATM program.
Extension of Term Loans
As previously announced, on July 31, 2023, PECO amended three senior unsecured term loans with a total notional amount of $475.0 million scheduled to mature during 2024. The amended three senior unsecured term loans have a total notional amount of $484.8 million. The $161.8 million unsecured term loan is scheduled to mature on January 31, 2026, extendable with two one-year options to 2028, subject to certain terms and conditions. The $158.0 million and $165.0 million unsecured term loans are scheduled to mature on January 31, 2027. Based on PECO’s current investment grade credit ratings, the term loans are priced at SOFR plus 1.35%, representing no change in pricing from the previous term loan tranches.
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Earnings Release Unaudited | ||||||||
2023 Guidance
PECO has updated its 2023 earnings guidance, as summarized in the table below, which is based upon the Company’s current view of existing market conditions and assumptions for the year ending December 31, 2023. 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) | Q3 YTD | Updated Full Year 2023 Guidance | Previous Full Year 2023 Guidance | ||||||||||||||
| Results: | |||||||||||||||||
| Net income per share | $0.37 | $0.46 - $0.50 | $0.51 - $0.55 | ||||||||||||||
| Nareit FFO per share | $1.70 | $2.23 - $2.27 | $2.27 - $2.32 | ||||||||||||||
| Core FFO per share | $1.76 | $2.31 - $2.35 | $2.30 - $2.36 | ||||||||||||||
| Same-Center NOI growth | 4.5% | 3.75% - 4.50% | 3.75% - 4.50% | ||||||||||||||
| Portfolio Activity: | |||||||||||||||||
| Acquisitions (net of dispositions) | $85,810 | $250,000 - $300,000 | $200,000 - $300,000 | ||||||||||||||
| Development and redevelopment spend | $29,276 | $35,000 - $45,000 | $35,000 - $45,000 | ||||||||||||||
| Other: | |||||||||||||||||
| Interest expense, net | $61,663 | $85,000 - $88,000 | $85,000 - $90,000 | ||||||||||||||
| G&A expense | $33,604 | $44,000 - $47,000 | $44,000 - $48,000 | ||||||||||||||
Non-cash revenue items(1) | $11,873 | $15,500 - $18,500 | $16,000 - $19,000 | ||||||||||||||
| Adjustments for collectibility | $2,174 | $3,000 - $4,000 | $3,000 - $4,000 | ||||||||||||||
(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 End | High End | |||||||||
Net income per share | $ | 0.46 | $ | 0.50 | |||||||
| Depreciation and amortization of real estate assets | 1.76 | 1.76 | |||||||||
Gain on sale of real estate assets | (0.01) | (0.01) | |||||||||
| Adjustments related to unconsolidated joint ventures | 0.02 | 0.02 | |||||||||
Nareit FFO per share | $ | 2.23 | $ | 2.27 | |||||||
| Depreciation and amortization of corporate assets | 0.02 | 0.02 | |||||||||
Transaction costs and other | 0.06 | 0.06 | |||||||||
Core FFO per share | $ | 2.31 | $ | 2.35 | |||||||
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Earnings Release Unaudited | ||||||||
Conference Call Details
PECO plans to host a conference call and webcast on Wednesday, November 1, 2023 at 12:00 p.m. Eastern Time to discuss third 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.
Third Quarter 2023 Earnings Conference Call Details:
Date: Wednesday, November 1, 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: Third Quarter 2023 Webcast
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 September 30, 2023.
Connect with PECO
For additional information, please visit https://www.phillipsedison.com/
Follow PECO on:
•Twitter at https://twitter.com/PhillipsEdison
•Facebook at https://www.facebook.com/phillipsedison.co
•Instagram at https://www.instagram.com/phillips.edison/; and
•Find PECO on LinkedIn at https://www.linkedin.com/company/phillipsedison&company
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 September 30, 2023, PECO managed 295 shopping centers, including 275 wholly-owned centers comprising 31.4 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.
| Phillips Edison & Company | 10 | |||||||
Overview of Results Unaudited, in thousands (excluding per share and per square foot amounts) | |||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| SUMMARY FINANCIAL RESULTS | |||||||||||||||||||||||
Total revenues (page 14) | $ | 152,474 | $ | 145,654 | $ | 455,675 | $ | 430,333 | |||||||||||||||
Net income attributable to stockholders (page 14) | 12,245 | 11,038 | 43,315 | 34,645 | |||||||||||||||||||
Net income per share - basic and diluted (page 14) | $ | 0.10 | $ | 0.09 | $ | 0.37 | $ | 0.30 | |||||||||||||||
Same-Center NOI (page 20) | 99,901 | 96,794 | 297,363 | 284,692 | |||||||||||||||||||
Adjusted EBITDAre (page 18) | 98,526 | 94,612 | 295,313 | 274,119 | |||||||||||||||||||
Nareit FFO (page 16) | 72,466 | 71,981 | 224,705 | 210,161 | |||||||||||||||||||
Nareit FFO per share - diluted (page 16) | $ | 0.55 | $ | 0.55 | $ | 1.70 | $ | 1.62 | |||||||||||||||
Core FFO (page 16) | 76,987 | 76,595 | 232,846 | 220,996 | |||||||||||||||||||
Core FFO per share - diluted (page 16) | $ | 0.58 | $ | 0.58 | $ | 1.76 | $ | 1.70 | |||||||||||||||
| SUMMARY OF FINANCIAL AND OPERATING RATIOS | |||||||||||||||||||||||
Same-Center NOI margin (page 20) | 72.6 | % | 72.4 | % | 72.2 | % | 72.1 | % | |||||||||||||||
Same-Center NOI change (page 20)(1) | 3.2 | % | 4.3 | % | 4.5 | % | 5.1 | % | |||||||||||||||
| LEASING RESULTS | |||||||||||||||||||||||
Comparable rent spreads - new leases (page 40)(2) | 26.3 | % | 21.3 | % | 26.2 | % | 31.3 | % | |||||||||||||||
Comparable rent spreads - renewals (page 40)(2) | 16.9 | % | 15.5 | % | 17.0 | % | 14.9 | % | |||||||||||||||
| Portfolio retention rate | 93.1 | % | 88.5 | % | 94.1 | % | 90.1 | % | |||||||||||||||
| As of September 30, | |||||||||||||||||||||||
| 2023 | 2022 | ||||||||||||||||||||||
| OUTSTANDING STOCK AND PARTNERSHIP UNITS | |||||||||||||||||||||||
| Common stock outstanding | 119,578 | 117,084 | |||||||||||||||||||||
| Operating Partnership (OP) units outstanding | 14,004 | 14,046 | |||||||||||||||||||||
SUMMARY PORTFOLIO STATISTICS(2) | |||||||||||||||||||||||
| Number of properties | 275 | 270 | |||||||||||||||||||||
GLA (page 42) | 31,425 | 31,098 | |||||||||||||||||||||
Leased occupancy (page 36) | 97.8 | % | 97.1 | % | |||||||||||||||||||
Economic occupancy (page 36) | 97.6 | % | 96.4 | % | |||||||||||||||||||
Leased ABR PSF (page 36) | $ | 14.74 | $ | 14.21 | |||||||||||||||||||
Leased Anchor ABR PSF (page 36) | $ | 9.98 | $ | 9.85 | |||||||||||||||||||
Leased Inline ABR PSF (page 36) | $ | 24.19 | $ | 23.00 | |||||||||||||||||||
(1)Reflects Same-Center NOI change as initially reported for the specified period.
(2)Statistics represent our wholly-owned properties.
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| FINANCIAL SUMMARY | ||
Quarter Ended September 30, 2023 | ||
Consolidated Balance Sheets Condensed and Unaudited, in thousands (excluding per share amounts) | |||||||||||
| September 30, 2023 | December 31, 2022 | ||||||||||
| ASSETS | |||||||||||
| Investment in real estate: | |||||||||||
| Land and improvements | $ | 1,714,136 | $ | 1,674,133 | |||||||
| Building and improvements | 3,679,549 | 3,572,146 | |||||||||
| In-place lease assets | 477,859 | 471,507 | |||||||||
| Above-market lease assets | 72,398 | 71,954 | |||||||||
| Total investment in real estate assets | 5,943,942 | 5,789,740 | |||||||||
| Accumulated depreciation and amortization | (1,484,658) | (1,316,743) | |||||||||
| Net investment in real estate assets | 4,459,284 | 4,472,997 | |||||||||
| Investment in unconsolidated joint ventures | 25,609 | 27,201 | |||||||||
| Total investment in real estate assets, net | 4,484,893 | 4,500,198 | |||||||||
| Cash and cash equivalents | 3,777 | 5,478 | |||||||||
| Restricted cash | 4,462 | 11,871 | |||||||||
| Goodwill | 29,066 | 29,066 | |||||||||
| Other assets, net | 196,263 | 188,879 | |||||||||
| Total assets | $ | 4,718,461 | $ | 4,735,492 | |||||||
| LIABILITIES AND EQUITY | |||||||||||
| Liabilities: | |||||||||||
| Debt obligations, net | $ | 1,869,984 | $ | 1,896,594 | |||||||
| Below-market lease liabilities, net | 105,302 | 109,799 | |||||||||
| Accounts payable and other liabilities | 117,783 | 113,185 | |||||||||
| Deferred income | 17,900 | 18,481 | |||||||||
| Total liabilities | 2,110,969 | 2,138,059 | |||||||||
| Equity: | |||||||||||
Preferred stock, $0.01 par value per share, 10,000 shares authorized as of September 30, 2023 and December 31, 2022 | — | — | |||||||||
Common stock, $0.01 par value per share, 1,000,000 shares authorized, 119,578 and 117,126 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively | 1,195 | 1,171 | |||||||||
| Additional paid-in capital | 3,461,981 | 3,383,978 | |||||||||
| Accumulated other comprehensive income | 19,846 | 21,003 | |||||||||
| Accumulated deficit | (1,226,379) | (1,169,665) | |||||||||
| Total stockholders’ equity | 2,256,643 | 2,236,487 | |||||||||
| Noncontrolling interests | 350,849 | 360,946 | |||||||||
| Total equity | 2,607,492 | 2,597,433 | |||||||||
| Total liabilities and equity | $ | 4,718,461 | $ | 4,735,492 | |||||||
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Consolidated Statements of Operations Condensed and Unaudited, in thousands (excluding per share amounts) | |||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| REVENUES | |||||||||||||||||||||||
| Rental income | $ | 149,566 | $ | 142,857 | $ | 446,274 | $ | 418,835 | |||||||||||||||
| Fees and management income | 2,168 | 2,081 | 7,192 | 9,323 | |||||||||||||||||||
| Other property income | 740 | 716 | 2,209 | 2,175 | |||||||||||||||||||
| Total revenues | 152,474 | 145,654 | 455,675 | 430,333 | |||||||||||||||||||
| OPERATING EXPENSES | |||||||||||||||||||||||
| Property operating | 24,274 | 23,089 | 74,010 | 69,261 | |||||||||||||||||||
| Real estate taxes | 19,028 | 18,041 | 55,481 | 52,005 | |||||||||||||||||||
| General and administrative | 10,385 | 10,843 | 33,604 | 33,751 | |||||||||||||||||||
| Depreciation and amortization | 58,706 | 60,013 | 176,871 | 178,008 | |||||||||||||||||||
| Total operating expenses | 112,393 | 111,986 | 339,966 | 333,025 | |||||||||||||||||||
| OTHER | |||||||||||||||||||||||
| Interest expense, net | (21,522) | (17,569) | (61,663) | (52,895) | |||||||||||||||||||
| Gain (loss) on disposal of property, net | 53 | (10) | 1,070 | 4,151 | |||||||||||||||||||
Other expense, net | (4,883) | (3,916) | (6,542) | (9,738) | |||||||||||||||||||
Net income | 13,729 | 12,173 | 48,574 | 38,826 | |||||||||||||||||||
Net income attributable to noncontrolling interests | (1,484) | (1,135) | (5,259) | (4,181) | |||||||||||||||||||
Net income attributable to stockholders | $ | 12,245 | $ | 11,038 | $ | 43,315 | $ | 34,645 | |||||||||||||||
| EARNINGS PER SHARE OF COMMON STOCK | |||||||||||||||||||||||
Net income per share attributable to stockholders - basic and diluted | $ | 0.10 | $ | 0.09 | $ | 0.37 | $ | 0.30 | |||||||||||||||
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Consolidated Statements of Operations Condensed and Unaudited, in thousands (excluding per share amounts) | |||||||||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||
| September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022 | September 30, 2022 | |||||||||||||||||||||||||
| REVENUES | |||||||||||||||||||||||||||||
| Rental income | $ | 149,566 | $ | 148,980 | $ | 147,728 | $ | 141,703 | $ | 142,857 | |||||||||||||||||||
| Fees and management income | 2,168 | 2,546 | 2,478 | 2,218 | 2,081 | ||||||||||||||||||||||||
| Other property income | 740 | 611 | 858 | 1,118 | 716 | ||||||||||||||||||||||||
| Total revenues | 152,474 | 152,137 | 151,064 | 145,039 | 145,654 | ||||||||||||||||||||||||
| OPERATING EXPENSES | |||||||||||||||||||||||||||||
| Property operating | 24,274 | 24,674 | 25,062 | 26,098 | 23,089 | ||||||||||||||||||||||||
| Real estate taxes | 19,028 | 18,397 | 18,056 | 15,859 | 18,041 | ||||||||||||||||||||||||
| General and administrative | 10,385 | 11,686 | 11,533 | 11,484 | 10,843 | ||||||||||||||||||||||||
| Depreciation and amortization | 58,706 | 59,667 | 58,498 | 58,216 | 60,013 | ||||||||||||||||||||||||
| Impairment of real estate assets | — | — | — | 322 | — | ||||||||||||||||||||||||
| Total operating expenses | 112,393 | 114,424 | 113,149 | 111,979 | 111,986 | ||||||||||||||||||||||||
| OTHER | |||||||||||||||||||||||||||||
| Interest expense, net | (21,522) | (20,675) | (19,466) | (18,301) | (17,569) | ||||||||||||||||||||||||
| Gain (loss) on disposal of property, net | 53 | 75 | 942 | 3,366 | (10) | ||||||||||||||||||||||||
| Other expense, net | (4,883) | (904) | (755) | (2,422) | (3,916) | ||||||||||||||||||||||||
| Net income | 13,729 | 16,209 | 18,636 | 15,703 | 12,173 | ||||||||||||||||||||||||
| Net income attributable to noncontrolling interests | (1,484) | (1,758) | (2,017) | (2,025) | (1,135) | ||||||||||||||||||||||||
| Net income attributable to stockholders | $ | 12,245 | $ | 14,451 | $ | 16,619 | $ | 13,678 | $ | 11,038 | |||||||||||||||||||
| EARNINGS PER SHARE OF COMMON STOCK | |||||||||||||||||||||||||||||
| Net income per share attributable to stockholders - basic and diluted | $ | 0.10 | $ | 0.12 | $ | 0.14 | $ | 0.12 | $ | 0.09 | |||||||||||||||||||
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Nareit FFO, Core FFO, and Adjusted FFO Unaudited, in thousands (excluding per share amounts) | |||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| CALCULATION OF NAREIT FFO ATTRIBUTABLE TO STOCKHOLDERS AND OP UNIT HOLDERS | |||||||||||||||||||||||
Net income | $ | 13,729 | $ | 12,173 | $ | 48,574 | $ | 38,826 | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Depreciation and amortization of real estate assets | 58,144 | 59,136 | 175,212 | 175,305 | |||||||||||||||||||
| (Gain) loss on disposal of property, net | (53) | 10 | (1,070) | (4,151) | |||||||||||||||||||
| Adjustments related to unconsolidated joint ventures | 646 | 662 | 1,989 | 181 | |||||||||||||||||||
| Nareit FFO attributable to stockholders and OP unit holders | $ | 72,466 | $ | 71,981 | $ | 224,705 | $ | 210,161 | |||||||||||||||
| CALCULATION OF CORE FFO ATTRIBUTABLE TO STOCKHOLDERS AND OP UNIT HOLDERS | |||||||||||||||||||||||
| Nareit FFO attributable to stockholders and OP unit holders | $ | 72,466 | $ | 71,981 | $ | 224,705 | $ | 210,161 | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Depreciation and amortization of corporate assets | 562 | 877 | 1,659 | 2,703 | |||||||||||||||||||
| Change in fair value of earn-out liability | — | — | — | 1,809 | |||||||||||||||||||
| Impairment of investment in third parties | 3,000 | — | 3,000 | — | |||||||||||||||||||
| Transaction and acquisition expenses | 580 | 3,740 | 3,179 | 7,820 | |||||||||||||||||||
| Loss (gain) on extinguishment or modification of debt and other, net | 375 | (4) | 366 | 1,025 | |||||||||||||||||||
| Amortization of unconsolidated joint venture basis differences | 4 | 1 | 12 | 220 | |||||||||||||||||||
Realized performance income(1) | — | — | (75) | (2,742) | |||||||||||||||||||
| Core FFO attributable to stockholders and OP unit holders | $ | 76,987 | $ | 76,595 | $ | 232,846 | $ | 220,996 | |||||||||||||||
| CALCULATION OF ADJUSTED FFO ATTRIBUTABLE TO STOCKHOLDERS AND OP UNIT HOLDERS | |||||||||||||||||||||||
| Core FFO attributable to stockholders and OP unit holders | $ | 76,987 | $ | 76,595 | $ | 232,846 | $ | 220,996 | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Straight-line rent and above- and below-market leases and contracts | (3,683) | (5,022) | (12,247) | (12,248) | |||||||||||||||||||
| Non-cash debt adjustments | 1,992 | 1,524 | 5,187 | 4,355 | |||||||||||||||||||
Capital expenditures and leasing commissions(2) | (18,497) | (17,296) | (47,171) | (42,970) | |||||||||||||||||||
| Non-cash share-based compensation expense | 1,048 | 2,502 | 5,753 | 6,740 | |||||||||||||||||||
| Adjustments related to unconsolidated joint ventures | (144) | (236) | (538) | (467) | |||||||||||||||||||
| Adjusted FFO attributable to stockholders and OP unit holders | $ | 57,703 | $ | 58,067 | $ | 183,830 | $ | 176,406 | |||||||||||||||
| NAREIT FFO/CORE FFO ATTRIBUTABLE TO STOCKHOLDERS AND OP UNIT HOLDERS PER DILUTED SHARE | |||||||||||||||||||||||
| Weighted-average shares of common stock outstanding - diluted | 132,800 | 131,593 | 132,335 | 129,805 | |||||||||||||||||||
| Nareit FFO attributable to stockholders and OP unit holders per share - diluted | $ | 0.55 | $ | 0.55 | $ | 1.70 | $ | 1.62 | |||||||||||||||
| Core FFO attributable to stockholders and OP unit holders per share - diluted | $ | 0.58 | $ | 0.58 | $ | 1.76 | $ | 1.70 | |||||||||||||||
(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 | |||||||||||||||||||||||||||||
| September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022 | September 30, 2022 | |||||||||||||||||||||||||
| CALCULATION OF NAREIT FFO ATTRIBUTABLE TO STOCKHOLDERS AND OP UNIT HOLDERS | |||||||||||||||||||||||||||||
| Net income | $ | 13,729 | $ | 16,209 | $ | 18,636 | $ | 15,703 | $ | 12,173 | |||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||||||||
| Depreciation and amortization of real estate assets | 58,144 | 59,115 | 57,953 | 57,266 | 59,136 | ||||||||||||||||||||||||
| Impairment of real estate assets | — | — | — | 322 | — | ||||||||||||||||||||||||
| (Gain) loss on disposal of property, net | (53) | (75) | (942) | (3,366) | 10 | ||||||||||||||||||||||||
| Adjustments related to unconsolidated joint ventures | 646 | 645 | 698 | 661 | 662 | ||||||||||||||||||||||||
| Nareit FFO attributable to stockholders and OP unit holders | $ | 72,466 | $ | 75,894 | $ | 76,345 | $ | 70,586 | $ | 71,981 | |||||||||||||||||||
| CALCULATION OF CORE FFO ATTRIBUTABLE TO STOCKHOLDERS AND OP UNIT HOLDERS | |||||||||||||||||||||||||||||
| Nareit FFO attributable to stockholders and OP unit holders | $ | 72,466 | $ | 75,894 | $ | 76,345 | $ | 70,586 | $ | 71,981 | |||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||||||||
| Depreciation and amortization of corporate assets | 562 | 552 | 545 | 950 | 877 | ||||||||||||||||||||||||
| Impairment of investment in third parties | 3,000 | — | — | — | — | ||||||||||||||||||||||||
| Transaction and acquisition expenses | 580 | 1,261 | 1,338 | 2,731 | 3,740 | ||||||||||||||||||||||||
| Loss (gain) on extinguishment or modification of debt and other, net | 375 | (9) | — | — | (4) | ||||||||||||||||||||||||
| Amortization of unconsolidated joint venture basis differences | 4 | 7 | 1 | — | 1 | ||||||||||||||||||||||||
Realized performance income(1) | — | — | (75) | — | — | ||||||||||||||||||||||||
| Core FFO attributable to stockholders and OP unit holders | $ | 76,987 | $ | 77,705 | $ | 78,154 | $ | 74,267 | $ | 76,595 | |||||||||||||||||||
| CALCULATION OF ADJUSTED FFO ATTRIBUTABLE TO STOCKHOLDERS AND OP UNIT HOLDERS | |||||||||||||||||||||||||||||
| Core FFO attributable to stockholders and OP unit holders | $ | 76,987 | $ | 77,705 | $ | 78,154 | $ | 74,267 | $ | 76,595 | |||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||||||||
| Straight-line rent and above- and below-market leases and contracts | (3,683) | (4,645) | (3,919) | (4,377) | (5,022) | ||||||||||||||||||||||||
| Non-cash debt adjustments | 1,992 | 1,632 | 1,563 | 1,529 | 1,524 | ||||||||||||||||||||||||
Capital expenditures and leasing commissions(2) | (18,497) | (15,533) | (13,141) | (13,512) | (17,296) | ||||||||||||||||||||||||
| Non-cash share-based compensation expense | 1,048 | 2,700 | 2,005 | 2,488 | 2,502 | ||||||||||||||||||||||||
| Adjustments related to unconsolidated joint ventures | (144) | (256) | (138) | (146) | (236) | ||||||||||||||||||||||||
| Adjusted FFO attributable to stockholders and OP unit holders | $ | 57,703 | $ | 61,603 | $ | 64,524 | $ | 60,249 | $ | 58,067 | |||||||||||||||||||
| NAREIT FFO/CORE FFO ATTRIBUTABLE TO STOCKHOLDERS AND OP UNIT HOLDERS PER DILUTED SHARE | |||||||||||||||||||||||||||||
| Weighted-average shares of common stock outstanding - diluted | 132,800 | 131,887 | 131,943 | 131,781 | 131,593 | ||||||||||||||||||||||||
| Nareit FFO attributable to stockholders and OP unit holders per share - diluted | $ | 0.55 | $ | 0.58 | $ | 0.58 | $ | 0.54 | $ | 0.55 | |||||||||||||||||||
| Core FFO attributable to stockholders and OP unit holders per share - diluted | $ | 0.58 | $ | 0.59 | $ | 0.59 | $ | 0.56 | $ | 0.58 | |||||||||||||||||||
(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 | 17 | |||||||
EBITDAre Metrics Unaudited, in thousands | ||||||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
CALCULATION OF EBITDAre | ||||||||||||||||||||||||||
Net income | $ | 13,729 | $ | 12,173 | $ | 48,574 | $ | 38,826 | ||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||
| Depreciation and amortization | 58,706 | 60,013 | 176,871 | 178,008 | ||||||||||||||||||||||
| Interest expense, net | 21,522 | 17,569 | 61,663 | 52,895 | ||||||||||||||||||||||
| (Gain) loss on disposal of property, net | (53) | 10 | (1,070) | (4,151) | ||||||||||||||||||||||
| Federal, state, and local tax expense | 120 | 179 | 357 | 373 | ||||||||||||||||||||||
| Adjustments related to unconsolidated joint ventures | 918 | 927 | 2,802 | 1,061 | ||||||||||||||||||||||
EBITDAre | $ | 94,942 | $ | 90,871 | $ | 289,197 | $ | 267,012 | ||||||||||||||||||
CALCULATION OF ADJUSTED EBITDAre | ||||||||||||||||||||||||||
EBITDAre | $ | 94,942 | $ | 90,871 | $ | 289,197 | $ | 267,012 | ||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||
| Impairment of investment in third parties | 3,000 | — | 3,000 | — | ||||||||||||||||||||||
| Change in fair value of earn-out liability | — | — | — | 1,809 | ||||||||||||||||||||||
| Transaction and acquisition expenses | 580 | 3,740 | 3,179 | 7,820 | ||||||||||||||||||||||
| Amortization of unconsolidated joint venture basis differences | 4 | 1 | 12 | 220 | ||||||||||||||||||||||
Realized performance income(1) | — | — | (75) | (2,742) | ||||||||||||||||||||||
Adjusted EBITDAre | $ | 98,526 | $ | 94,612 | $ | 295,313 | $ | 274,119 | ||||||||||||||||||
(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 | |||||||||||||||||||||||||||||
| September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022 | September 30, 2022 | |||||||||||||||||||||||||
CALCULATION OF EBITDAre | |||||||||||||||||||||||||||||
| Net income | $ | 13,729 | $ | 16,209 | $ | 18,636 | $ | 15,703 | $ | 12,173 | |||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||||||||
| Depreciation and amortization | 58,706 | 59,667 | 58,498 | 58,216 | 60,013 | ||||||||||||||||||||||||
| Interest expense, net | 21,522 | 20,675 | 19,466 | 18,301 | 17,569 | ||||||||||||||||||||||||
| (Gain) loss on disposal of property, net | (53) | (75) | (942) | (3,366) | 10 | ||||||||||||||||||||||||
| Impairment of real estate assets | — | — | — | 322 | — | ||||||||||||||||||||||||
| Federal, state, and local tax expense | 120 | 119 | 118 | 433 | 179 | ||||||||||||||||||||||||
| Adjustments related to unconsolidated joint ventures | 918 | 918 | 966 | 926 | 927 | ||||||||||||||||||||||||
EBITDAre | $ | 94,942 | $ | 97,513 | $ | 96,742 | $ | 90,535 | $ | 90,871 | |||||||||||||||||||
CALCULATION OF ADJUSTED EBITDAre | |||||||||||||||||||||||||||||
EBITDAre | $ | 94,942 | $ | 97,513 | $ | 96,742 | $ | 90,535 | $ | 90,871 | |||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||||||||
| Impairment of investment in third parties | 3,000 | — | — | — | — | ||||||||||||||||||||||||
| Transaction and acquisition expenses | 580 | 1,261 | 1,338 | 2,731 | 3,740 | ||||||||||||||||||||||||
| Amortization of unconsolidated joint venture basis differences | 4 | 7 | 1 | — | 1 | ||||||||||||||||||||||||
Realized performance income(1) | — | — | (75) | — | — | ||||||||||||||||||||||||
Adjusted EBITDAre | $ | 98,526 | $ | 98,781 | $ | 98,006 | $ | 93,266 | $ | 94,612 | |||||||||||||||||||
(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 September 30, | Favorable (Unfavorable) % Change | Nine Months Ended September 30, | Favorable (Unfavorable) % Change | ||||||||||||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||||||||
SAME-CENTER NOI(1) | |||||||||||||||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||||||||||||||
Rental income(2) | $ | 103,770 | $ | 100,490 | $ | 310,278 | $ | 297,673 | |||||||||||||||||||||||||||
| Tenant recovery income | 33,965 | 32,362 | 101,426 | 95,571 | |||||||||||||||||||||||||||||||
Reserves for uncollectibility(3) | (789) | 70 | (2,058) | (591) | |||||||||||||||||||||||||||||||
| Other property income | 638 | 684 | 2,006 | 2,050 | |||||||||||||||||||||||||||||||
| Total revenues | 137,584 | 133,606 | 3.0% | 411,652 | 394,703 | 4.3 | % | ||||||||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||||||||
| Property operating expenses | 19,692 | 19,413 | 61,628 | 59,279 | |||||||||||||||||||||||||||||||
| Real estate taxes | 17,991 | 17,399 | 52,661 | 50,732 | |||||||||||||||||||||||||||||||
| Total operating expenses | 37,683 | 36,812 | (2.4)% | 114,289 | 110,011 | (3.9) | % | ||||||||||||||||||||||||||||
| Total Same-Center NOI | $ | 99,901 | $ | 96,794 | 3.2% | $ | 297,363 | $ | 284,692 | 4.5 | % | ||||||||||||||||||||||||
| Same-Center NOI margin | 72.6% | 72.4% | 72.2% | 72.1% | |||||||||||||||||||||||||||||||
(1)Same-Center NOI represents the NOI for the 262 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 September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
RECONCILIATION OF NET INCOME TO NOI AND SAME-CENTER NOI | |||||||||||||||||||||||
Net income | $ | 13,729 | $ | 12,173 | $ | 48,574 | $ | 38,826 | |||||||||||||||
| Adjusted to exclude: | |||||||||||||||||||||||
| Fees and management income | (2,168) | (2,081) | (7,192) | (9,323) | |||||||||||||||||||
Straight-line rental income(1) | (2,265) | (3,932) | (8,129) | (9,060) | |||||||||||||||||||
| Net amortization of above- and below-market leases | (1,294) | (1,081) | (3,784) | (3,161) | |||||||||||||||||||
| Lease buyout income | (587) | (221) | (1,016) | (2,362) | |||||||||||||||||||
| General and administrative expenses | 10,385 | 10,843 | 33,604 | 33,751 | |||||||||||||||||||
| Depreciation and amortization | 58,706 | 60,013 | 176,871 | 178,008 | |||||||||||||||||||
| Interest expense, net | 21,522 | 17,569 | 61,663 | 52,895 | |||||||||||||||||||
| (Gain) loss on disposal of property, net | (53) | 10 | (1,070) | (4,151) | |||||||||||||||||||
Other expense, net | 4,883 | 3,916 | 6,542 | 9,738 | |||||||||||||||||||
| Property operating expenses related to fees and management income | 649 | 704 | 1,675 | 3,061 | |||||||||||||||||||
| NOI for real estate investments | 103,507 | 97,913 | 307,738 | 288,222 | |||||||||||||||||||
Less: Non-same-center NOI(2) | (3,606) | (1,119) | (10,375) | (3,530) | |||||||||||||||||||
| Total Same-Center NOI | $ | 99,901 | $ | 96,794 | $ | 297,363 | $ | 284,692 | |||||||||||||||
(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 September 30, 2023 | |||||||||||||||||
| Joint Venture | Investment Partner | Ownership Percentage | Number of Shopping Centers | ABR | GLA | ||||||||||||
| Grocery Retail Partners I LLC ("GRP I") | The Northwestern Mutual Life Insurance Company | 14% | 20 | $31,625 | 2,213 | ||||||||||||
| UNCONSOLIDATED JOINT VENTURE FINANCIAL SUMMARY | |||||||||||||||||||||||||||||||||||
| As of September 30, 2023 | |||||||||||||||||
| GRP I | NRP(1) | ||||||||||||||||
| Total assets | $ | 368,302 | $ | 615 | |||||||||||||
| Gross debt | 174,026 | — | |||||||||||||||
| Pro rata share of debt | 24,358 | ||||||||||||||||