cik0001476204-20210805
000147620400014762042021-08-052021-08-05

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

CURRENT REPORT

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

Date of Report (Date of earliest event reported): August 5, 2021

https://cdn.kscope.io/db422fe1f56e3724bcfa187be92e06e4-cik0001476204-20210805_g1.jpg
Phillips Edison & Company, Inc.
(Exact name of registrant as specified in its charter)


Maryland000-5469127-1106076
(State or other jurisdiction
of incorporation)
(Commission File Number)(IRS Employer
Identification No.)
11501 Northlake Drive
Cincinnati, Ohio
45249
(Address of principal executive offices)(Zip Code)
(513) 554-1110
(Registrant’s telephone number, including area code)


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

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.






Item 2.02   Results of Operations and Financial Condition.

Item 7.01 Regulation FD Disclosure.

On August 5, 2021, Phillips Edison & Company, Inc. (the “Company”) issued a press release announcing its results for the quarter ended June 30, 2021. A copy of that press release is attached hereto as Exhibit 99.1 and incorporated herein by reference. A copy of the Company’s Second Quarter 2021 Supplemental Disclosure is attached hereto as Exhibit 99.2 and incorporated herein by reference. The Company will host a stockholder update conference call and presentation on Friday, August 6, 2021, at 9:00 a.m. Eastern Time, during which management will discuss the second quarter results, provide commentary on business performance, and discuss the Company's underwritten IPO. The conference call can be accessed by dialing (844) 691-1115 (domestic) or (929) 517-0921 (international). A live webcast of the presentation can be accessed by visiting https://edge.media-server.com/mmc/p/rk8h4e8g, and a replay of the webcast will be available approximately one hour after the conclusion of the live webcast at the webcast link above.
The information in this Current Report on Form 8-K, including Exhibits 99.1 and 99.2, are being furnished to the Securities and Exchange Commission (“SEC”), and shall not be deemed to be “filed” with the SEC for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section and shall not be deemed to be incorporated by reference into any other filing with the SEC except as expressly set forth by specific reference in such filing.
Item  9.01   Financial Statements and Exhibits.
(d) Exhibits.
Exhibit NumberDescription of Exhibit
99.1
99.2
104Cover Page Interactive Data File (formatted as inline XBRL)




SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. 
   
 PHILLIPS EDISON & COMPANY, INC.
   
Dated: August 5, 2021By:/s/ Jennifer L. Robison
  Jennifer L. Robison
  Chief Accounting Officer and Senior Vice President
(Principal Accounting Officer)



Document


Phillips Edison & Company Reports
Second Quarter 2021 Results

CINCINNATI - August 5, 2021 - Phillips Edison & Company, Inc. (Nasdaq: PECO) (“PECO” or the “Company”), one of the nation’s largest owners and operators of grocery-anchored omni-channel neighborhood shopping centers, reported net income attributable to common stockholders of $5.6 million, or $0.06 per diluted share, and $5.7 million, or $0.06 per diluted share, for the three and six months ended June 30, 2021, respectively. All share and per share amounts have been adjusted to give retrospective effect to the one-for-three reverse stock split that was executed on July 2, 2021.

Highlights for the second quarter ended June 30, 2021 (vs. the second quarter ended June 30, 2020)
Rent and recovery collections from tenants (“Neighbors”) totaled over 98% of monthly billings for the quarter
Total revenues increased 11.8% to $133.1 million
Funds from operations attributable to stockholders and OP unit holders as defined by Nareit (“Nareit FFO”) increased 19.9% to $59.9 million, or $0.56 per diluted share
Core funds from operations (“Core FFO”) increased 24.3% to $64.3 million, or $0.60 per diluted share
Same-center net operating income (“NOI”) increased 10.5% to $87.7 million
Same-center NOI was 4.5% higher than the comparable same-center NOI in Q2 2019, illustrating growth since prior to the onset of the COVID-19 pandemic
Leased portfolio occupancy totaled 94.7%, compared to 95.6% at June 30, 2020
Executed 124 new and 174 renewal and option leases totaling 1.4 million square feet
Comparable new and renewal rent spreads were 18.5% and 8.0%, respectively; combined rent spreads (excluding options) were 10.4%

Highlights for the six months ended June 30, 2021 (vs. the six months ended June 30, 2020)
Total revenues increased 5.1% to $263.5 million
Nareit FFO decreased 11.3% to $104.9 million, or $0.98 per diluted share, primarily driven by the non-cash increase in the earn-out liability
Core FFO increased 14.2% to $127.8 million, $1.19 per diluted share
Same-center NOI increased 4.6% to $173.1 million
Executed 277 new and 337 renewal and option leases totaling 2.8 million square feet
Comparable new and renewal rent spreads were 15.3% and 8.0%, respectively; combined rent spreads (excluding options) were 9.9%

Underwritten Initial Public Offering and Nasdaq Listing
Subsequent to quarter-end, PECO completed its underwritten IPO of 19,550,000 shares of common stock, including the underwriters’ full exercise of the over-allotment option, at a price to the public of $28.00 per share, generating $547.4 million of gross proceeds
PECO’s common stock began trading on the Nasdaq Global Select Market under the ticker symbol “PECO” on July 15, 2021

Subsequent Highlights
Closed a new $980 million senior unsecured credit facility comprised of a $500 million revolving credit facility and two separate $240 million unsecured variable rate term loans
With a portion of the offering proceeds, PECO repaid its $375 million term loan maturing in 2022
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Received an initial credit rating of 'Baa3' with a stable outlook from Moody’s Investors Service and 'BBB-' with a stable outlook from S&P Global Ratings, both of which are defined as “Investment Grade” by their respective ratings agency

Management Commentary
“The successful closing of our underwritten IPO is a transformative event for PECO as we raised $547 million, positioning us for robust growth,” stated Jeff Edison, chairman and chief executive officer of PECO. “Throughout our 30-year operating history, we have had a differentiated and focused strategy of owning and operating small-format, grocery-anchored shopping centers. This strategy, together with our fully integrated operating platform and targeted portfolio, has produced superior financial and operational results throughout multiple market cycles, including prior to and since the onset of the COVID-19 pandemic. We believe format drives results.”
"The second quarter of 2021 illustrated dramatic improvement versus the second quarter of 2020. Today, 100% of our leased portfolio is open for business, and we continue to see our necessity-based and omni-channel Neighbors thrive. In fact, we are seeing signs of a full recovery in our portfolio as foot traffic at our centers during June 2021 totaled 102% of average monthly levels during 2019, and our second quarter same-center NOI increased 4.5% when compared to the second quarter of 2019. During the quarter, collections were 98%, combined new and renewal leasing spreads were 10.4%, and leasing demand for our brick and mortar retail space continues to be favorable. Altogether, these strong results validate our strategy and strengthen our mission, which is to create great omni-channel grocery-anchored shopping experiences and improve our communities one center at a time.
“As a management team owning over 7% of the company on a fully diluted basis, we are very encouraged about the future and look forward to the next phase of growth for PECO. We believe we will continue to benefit from current macroeconomic tailwinds as businesses embrace working-from-home, the population continues to shift to the suburbs and Sunbelt, and leading grocers continue to adopt an omni-channel presence. Our portfolio is uniquely positioned to benefit from these trends, which has driven our robust growth expectations for 2021.”

Collection Details
The table below outlines PECO’s collections since April 1, 2020, calculated as a percentage of monthly billings to Neighbors for rent and recoverable expenses (includes pro rata ownership through the Company’s joint ventures):
Q2 2021Q1 2021Q4 2020Q3 2020Q2 2020
Originally ReportedNA95%95%94%86%
Current(1)
98%98%97%96%93%
(1)Including collections received through July 20, 2021.

PECO continues to collect rent and recoverable expenses for past billing periods. As a result, the corresponding periods reflect increased collection rates versus the originally reported figures.

Financial Results for the Second Quarter and Six Months Ended June 30, 2021
Net Income
Second quarter 2021 net income attributable to common stockholders totaled $5.6 million, or $0.06 per diluted share, compared to net loss of $5.6 million, or $0.06 per diluted share, for the second quarter of 2020.
For the six months ended June 30, 2021, net income attributable to common stockholders totaled $5.7 million, or $0.06 per diluted share, compared to a net income attributable to common stockholders of $4.2 million, or $0.04 per diluted share, for the first six months of 2020.

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Nareit FFO
For the second quarter of 2021, Nareit FFO increased 19.9% to $59.9 million, or $0.56 per diluted share, from $50.0 million, or $0.45 per diluted share, during the same year-ago quarter.
For the six months ended June 30, 2021, Nareit FFO decreased 11.3% to $104.9 million, or $0.98 per diluted share, from $118.2 million, or $1.06 per diluted share, during the six months ended June 30, 2020.
The $9.9 million increase for the second quarter of 2021 was primarily driven by an increase in collections and operating performance during 2021.
The $13.3 million decrease for the six months ended June 30, 2021 was primarily driven by an increase in the earn-out liability, which resulted in $18.0 million of non-cash expense for 2021, compared to $10.0 million of non-cash income a year ago, offset by an increase in collections in 2021. The earn-out liability will continue to fluctuate based on the trading value of PECO’s Nasdaq-listed common stock and will be settled in equity during the first quarter of 2022.

Core FFO
For the second quarter of 2021, Core FFO increased 24.3% to $64.3 million, or $0.60 per diluted share, compared to $51.7 million, or $0.47 per diluted share, during the same year-ago quarter.
For the first six months of 2021, Core FFO increased 14.2% to $127.8 million, or $1.19 per diluted share, compared to $111.9 million, or $1.01 per diluted share, during the same year-ago period.
The increase for both periods was driven by an increase in collections and lower interest costs offset by an increase in general and administrative expenses. Core FFO excludes one-time non-cash items like the aforementioned earn-out liability adjustment.

Same-Center NOI
Second quarter 2021 same-center NOI increased 10.5% to $87.7 million compared to $79.4 million during the second quarter of 2020.
For the six months ended June 30, 2021, same-center NOI increased 4.6% to $173.1 million compared to $165.4 million during the same period in 2020.
Results for the second quarter 2021 were driven by a $0.57, or 4.5%, increase in average base rent per square foot, and results for the six months ended June 30, 2021 were driven by a $0.55, or 4.4%, increase in average base rent per square foot versus the year-ago quarter and six month period. Further driving the increases in both periods were stronger collections compared to 2020, including collections on charges that were uncollected during 2020. Partially offsetting the increases were a 0.8% decrease in average economic occupancy and a lower recovery rate.

Portfolio Overview for the Second Quarter and Six Months Ended June 30, 2021
Portfolio Statistics
As of June 30, 2021, PECO’s wholly-owned portfolio consisted of 272 properties, totaling approximately 30.8 million square feet, located in 31 states. This compares to 284 properties, totaling approximately 31.8 million square feet, located in 31 states as of June 30, 2020.
Leased portfolio occupancy totaled 94.7% at June 30, 2021 as compared to 95.6% at June 30, 2020.
Anchor occupancy decreased to 96.8% compared to 98.3% a year ago, and inline occupancy increased to 90.6% from 90.3% at June 30, 2020. Leased portfolio occupancy accounts for all Neighbors under active leases.

Leasing Activity
During the second quarter of 2021, 298 leases (new, renewal, and options) were executed totaling 1.4 million square feet. This compared to 169 leases executed totaling 1.2 million square feet during the second quarter of 2020. The leasing activity was the result of strong demand for PECO’s retail spaces in its well located, grocery-anchored centers.
Comparable rent spreads during the quarter, 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 18.5% for new leases, 8.0% for renewal leases (excluding options), and 10.4% combined (new and renewal leases only).
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During the first six months of 2021, 614 leases (new, renewal, and options) were executed totaling approximately 2.8 million square feet. This compared to 383 leases executed totaling approximately 2.3 million square feet during the same year-ago period.
Comparable rent spreads during the first six months of 2021 were 15.3% for new leases, 8.0% for renewal leases (excluding options), and 9.9% combined (new and renewal leases).

Disposition & Acquisition Activity
During the second quarter of 2021, PECO sold seven properties, generating $61.3 million in proceeds. In the near term, disposition proceeds are expected to be used to fund tax-efficient acquisitions, to fund redevelopment opportunities in owned centers, and for general corporate purposes. PECO acquired one outparcel for $0.6 million during the second quarter.
During the six months ended June 30, 2021, 13 properties and one outparcel were sold, generating $119.6 million in proceeds. During the same period, the Company acquired two properties and three outparcels for a total of $40.5 million.

Balance Sheet Highlights as of June 30, 2021
As of June 30, 2021, PECO had approximately $489.3 million of borrowing capacity available on its $500 million revolving credit facility, net of outstanding letters of credit.
As of June 30, 2021, PECO’s net debt to annualized adjusted EBITDAre was 7.1x, compared to 7.3x at December 31, 2020. Adjusting for the IPO and capital markets activity subsequent to the quarter end, PECO’s net debt to annualized adjusted EBITDAre was 5.5x.
As of June 30, 2021, PECO’s outstanding debt had a weighted-average interest rate of 2.9%, a weighted-average maturity of 3.7 years, and 69.1% of its total debt was fixed-rate debt. This compared to a weighted-average interest rate of 3.1%, a weighted-average maturity of 4.1 years, and 74.8% fixed-rate debt at December 31, 2020.
Subsequent to the quarter-end, PECO completed its underwritten IPO of 19,550,000 million shares of common stock generating $547.4 million of gross proceeds, of which a portion was used to repay its $375 million term loan maturing in 2022. PECO also closed a new $980 million senior unsecured credit facility comprised of a $500 million revolving credit facility and two separate $240 million unsecured variable-rate term loans.
Also subsequent to the quarter-end, PECO received an initial credit rating of 'Baa3' with a stable outlook from Moody’s Investors Service and 'BBB-' with a stable outlook from S&P Global Ratings, both of which are defined as “Investment Grade” by their respective ratings agency.

Distributions for the Second Quarter Ended June 30, 2021
For the three months ended June 30, 2021, total distributions of $27.4 million were paid to common stockholders and operating partnership unit (“OP unit”) holders. PECO paid, and plans to continue to pay, distributions monthly.
For April, May and June 2021, the monthly distribution was $0.085 per share, which is equal to $1.02 if annualized.
Subsequent to the quarter-end, PECO made monthly distributions on July 1, 2021 and August 2, 2021 of $0.085 per share to stockholders of record at the close of business on June 15, 2021 and July 15, 2021, respectively.
On August 4, 2021, the Board authorized a monthly distribution in the amount of $0.085 per share payable on September 1, 2021 to stockholders of record at the close of business on August 16, 2021. OP unit holders receive distributions at the same rate, subject to required tax withholding. Future distributions are not guaranteed; however, the Board intends to evaluate distributions on a monthly basis throughout 2021. This discussion regarding distributions reflects the one-for three reverse stock split that was executed on July 2, 2021. Please see below for more details on the reverse stock split.

Reverse Stock Split & Reclassification into Class B Common Stock
On July 2, 2021, PECO effected a one-for-three reverse stock split of each issued and outstanding share of PECO’s common stock, $0.01 par value (the “Common Stock”), and a corresponding one-for-three reverse unit split of each issued and outstanding OP unit. On the same date, a reclassification transaction in which each issued and outstanding share of Common Stock (following the reverse stock split) changed into a share of PECO’s newly created Class B common stock, $0.01 par value (the “Class B Common Stock”).
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As a result of the reverse stock split and reclassification transaction, PECO’s stockholders received one share of post-split Class B Common Stock for every three shares of pre-split Common Stock they held.
The Class B Common Stock is identical to the Common Stock, including with respect to voting rights and distributions rights (i.e., monthly distributions), except that on January 15, 2022 (the six-month anniversary of the listing of PECO’s Common Stock on the Nasdaq), each share of the Class B Common Stock will automatically convert into one share of the listed Common Stock.

Initial 2021 Guidance
Full Year
2021 Guidance
Net income per share$0.06 - $0.12
Nareit FFO per share$1.83 - $1.89
Core FFO per share$2.10 - $2.16
Same-Center NOI growth5.6% - 6.8%
Second Half
2021 Guidance
Acquisitions$160 - $200 million
Dispositions$45 - $75 million

The following table provides a reconciliation of the range of the Company's 2021 estimated net income to estimated Nareit FFO and Core FFO:
(Unaudited, dollars in millions, except per share amounts)Low EndHigh End
Net income $0.06 $0.12 
Depreciation and amortization of real estate assets1.861.86
Gain on sale of real estate assets and related impairments(0.10)(0.10)
Adjustments related to unconsolidated joint ventures0.010.01
Nareit FFO$1.83 $1.89 
Depreciation and amortization of corporate assets0.030.03
Change in fair value of earn-out liability0.150.15
Loss on extinguishment of debt, net0.010.01
Transactions and other0.070.07
Amortization of joint venture basis differences0.010.01
Core FFO$2.10 $2.16 

Closing Commentary
Edison added: “Since our inception 30 years ago, our focus has been owning and operating small-format centers anchored by the top one or two grocer in a market. Our centers are located in the neighborhood, close to the customer, where America’s top grocers make money, and support our Neighbors’ omni-channel strategies. We believe this differentiated strategy, coupled with our experienced and cycle-tested team, are the key drivers of our strong performance, year after year.
“Looking forward, we see meaningful growth opportunities driven by a number of macroeconomic tailwinds, including population migration to the suburbs and the Sun Belt, and more people working from home. Our investment grade balance sheet and strong cash flow generating portfolio will drive our growth. As a management team owning 7% of the Company, we have meaningful skin in the game and are committed to driving long-term shareholder value.”
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Results Presentation Details
PECO plans to host a conference call and webcast on Friday, August 6, 2021 at 9:00 a.m. Eastern Time to discuss these results. Chairman and Chief Executive Officer Jeff Edison, President Devin Murphy, and Chief Financial Officer John Caulfield will host the presentation.
Date: Friday, August 6, 2021
Time: 9:00 a.m. Eastern Time
Toll-Free Dial-In Number: (844) 691-1115
International Dial-In Number: (929) 517-0921
Conference ID: 6167623
Webcast link: https://edge.media-server.com/mmc/p/rk8h4e8g
A webcast replay will be available approximately one hour after the conclusion of the presentation using the Webcast link above.
PECO’s earnings release, quarterly financial supplement, and 10-Q are expected to be filed with the SEC and posted to its website, www.phillipsedison.com/investors, after market close on Thursday, August 5, 2021.
For more information on the Company’s financial results, please refer to the Company’s Form 10-Q, filed with the SEC on August 5, 2021 and available on the SEC’s website at www.sec.gov.
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PHILLIPS EDISON & COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2021 AND DECEMBER 31, 2020
(Condensed and Unaudited)
(In thousands, except per share amounts)
  June 30, 2021December 31, 2020
ASSETS    
Investment in real estate:    
Land and improvements$1,529,803 $1,549,362 
Building and improvements3,184,601 3,237,986 
In-place lease assets434,499 441,683 
Above-market lease assets64,795 66,106 
Total investment in real estate assets5,213,698 5,295,137 
Accumulated depreciation and amortization(1,021,456)(941,413)
Net investment in real estate assets4,192,242 4,353,724 
Investment in unconsolidated joint ventures32,746 37,366 
Total investment in real estate assets, net4,224,988 4,391,090 
Cash and cash equivalents22,205 104,296 
Restricted cash89,196 27,641 
Goodwill29,066 29,066 
Other assets, net126,056 126,470 
Real estate investments and other assets held for sale14,261 — 
Total assets$4,505,772 $4,678,563 
LIABILITIES AND EQUITY    
Liabilities:    
Debt obligations, net$2,228,232 $2,292,605 
Below-market lease liabilities, net93,949 101,746 
Earn-out liability40,000 22,000 
Derivative liabilities39,929 54,759 
Deferred income18,978 14,581 
Accounts payable and other liabilities88,436 176,943 
Liabilities of real estate investments held for sale860 — 
Total liabilities2,510,384 2,662,634 
Equity:    
Preferred stock, $0.01 par value per share, 10,000 shares authorized, zero shares issued and
outstanding at June 30, 2021 and December 31, 2020— — 
Common stock, $0.01 par value per share, 1,000,000 shares authorized, 93,640 and 93,279    
shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively2,808 2,798 
Additional paid-in capital2,749,680 2,739,358 
Accumulated other comprehensive loss(38,732)(52,306)
Accumulated deficit(1,041,617)(999,491)
Total stockholders’ equity1,672,139 1,690,359 
Noncontrolling interests323,249 325,570 
Total equity1,995,388 2,015,929 
Total liabilities and equity$4,505,772 $4,678,563 


7


PHILLIPS EDISON & COMPANY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021 AND 2020
(Condensed and Unaudited)
(In thousands, except per share amounts)
Three Months Ended June 30,Six Months Ended June 30,
  2021202020212020
Revenues:
Rental income$130,335 $115,654 $257,958 $244,120 
Fees and management income2,374 2,760 4,660 4,925 
Other property income361 626 833 1,518 
Total revenues133,070 119,040 263,451 250,563 
Operating Expenses:
Property operating21,974 19,629 44,176 41,391 
Real estate taxes16,814 16,453 33,387 33,565 
General and administrative11,937 9,806 21,278 20,546 
Depreciation and amortization56,587 56,370 111,928 112,597 
Impairment of real estate assets1,056 — 6,056 — 
Total operating expenses108,368 102,258 216,825 208,099 
Other:
Interest expense, net(19,132)(22,154)(39,195)(44,929)
Gain (loss) on disposal of property, net3,744 (541)17,585 (2,118)
Other (expense) income, net(2,924)(500)(18,509)9,369 
Net income6,390 (6,413)6,507 4,786 
Net (income) loss attributable to noncontrolling interests(796)825 (810)(605)
Net income (loss) attributable to stockholders$5,594 $(5,588)$5,697 $4,181 
Earnings per common share:
Net income (loss) per share attributable to stockholders - basic
    and diluted
$0.06 $(0.06)$0.06 $0.04 


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Reconciliation of Non-GAAP Measures
Same-Center Net Operating Income
The Company presents Same-Center NOI as a supplemental measure of its performance. The Company defines NOI as total operating revenues, adjusted to exclude non-cash revenue items, less property operating expenses and real estate taxes. For the three and six months ended June 30, 2021 and 2020, Same-Center NOI represents the NOI for the 268 properties that were wholly-owned and operational for the entire portion of both 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, 2019, it highlights operating trends such as occupancy levels, rental rates, and operating costs on properties that were operational for both 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.
Funds from Operations and Core Funds from Operations
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 gains (or losses) from sales of property and gains (or losses) from change in control, plus depreciation and amortization related to real estate, and after adjustments for 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 FFO on the same basis. The Company calculates FFO Attributable to Stockholders and OP Unit Holders in a manner consistent with the Nareit definition.
Core FFO is an additional financial performance measure used by the Company as 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 FFO Attributable to Stockholders and OP Unit Holders to exclude certain recurring and non-recurring items including, but not limited to, depreciation and amortization of corporate assets, changes in the fair value of the earn-out liability, amortization of unconsolidated joint venture basis differences, gains or losses on the extinguishment or modification of debt, other impairment charges, and transaction and acquisition expenses.
FFO, FFO Attributable to Stockholders and OP Unit Holders, and Core FFO should not be considered alternatives to net income (loss) under GAAP, as an indication of the Company’s liquidity, nor as an indication of funds available to cover its cash needs, including its ability to fund distributions. Core FFO may not be a useful measure of the impact of long-term operating performance on value if the Company does not continue to operate its business plan in the manner currently contemplated.
Accordingly, FFO, FFO Attributable to Stockholders and OP Unit Holders, and Core FFO should be reviewed in connection with other GAAP measurements, and should not be viewed as more prominent measures of performance than net income (loss) or cash flows from operations prepared in accordance with GAAP. The Company’s FFO, FFO Attributable to Stockholders and OP Unit Holders, and Core FFO, as presented, may not be comparable to amounts calculated by other REITs.
Earnings Before Interest, Taxes, Depreciation, and Amortization for Real Estate and Adjusted EBITDAre
Nareit defines EBITDAre as net income (loss) computed in accordance with GAAP before (i) interest expense, (ii) income tax expense, (iii) depreciation and amortization, (iv) gains or losses from disposition of depreciable property, and (v) impairment write-downs of depreciable property. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect EBITDAre on the same basis.
Adjusted EBITDAre is an additional performance measure used by the Company as EBITDAre includes certain non-comparable items that affect the Company’s performance over time. To arrive at Adjusted EBITDAre, the Company excludes certain recurring and non-recurring items from EBITDAre, including, but not limited to: (i) changes in the fair value of the earn-out liability; (ii) other impairment charges; (iii) amortization of basis
9


differences in the Company’s investments in its unconsolidated joint ventures; and (iv) transaction and acquisition expenses.
The Company has included the calculation of EBITDAre to better align with publicly traded REITs. The Company uses EBITDAre and Adjusted EBITDAre as additional measures of operating performance which allow it to compare earnings independent of capital structure, determine debt service and fixed cost coverage, and measure enterprise value. Additionally, the Company believes they are a useful indicator of its ability to support its debt obligations. EBITDAre and Adjusted EBITDAre should not be considered as alternatives to net income (loss), as an indication of the Company’s liquidity, nor as an indication of funds available to cover its cash needs, including its ability to fund distributions. Accordingly, EBITDAre and Adjusted EBITDAre should be reviewed in connection with other GAAP measurements, and should not be viewed as more prominent measures of performance than net income (loss) or cash flows from operations prepared in accordance with GAAP. The Company’s EBITDAre and Adjusted EBITDAre, as presented, may not be comparable to amounts calculated by other REITs.
10


Same-Center Net Operating Income—The table below compares same-center NOI (in thousands):
Three Months Ended June 30,Favorable (Unfavorable)Six Months Ended June 30,Favorable (Unfavorable)
20212020$ Change% Change20212020$ Change% Change
Revenues:
Rental income(1)
$91,305 $90,814 $491 $182,599 $182,852 $(253)
Tenant recovery income27,250 30,197 (2,947)57,851 60,980 (3,129)
Reserves for uncollectibility(2)
2,889 (9,706)12,595 1,261 (12,129)13,390 
Other property income284 600 (316)756 1,465 (709)
Total revenues121,728 111,905 9,823 8.8 %242,467 233,168 9,299 4.0 %
Operating expenses:
Property operating expenses
17,504 16,495 (1,009)36,614 34,562 (2,052)
Real estate taxes
16,519 16,038 (481)32,749 33,182 433 
Total operating expenses34,023 32,533 (1,490)(4.6)%69,363 67,744 (1,619)(2.4)%
Total Same-Center NOI$87,705 $79,372 $8,333 10.5 %$173,104 $165,424 $7,680 4.6 %
(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 we deem it appropriate to resume recording revenue on an accrual basis, rather than on a cash basis.
Same-Center Net Operating Income Reconciliation—Below is a reconciliation of Net Income to NOI and Same-Center NOI (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
20212020201920212020
Net income (loss)$6,390 $(6,413)$(42,172)$6,507 $4,786 
Adjusted to exclude:
Fees and management income(2,374)(2,760)(3,051)(4,660)(4,925)
Straight-line rental (income) expense(1)
(2,970)948 (2,819)(4,392)(1,364)
Net amortization of above- and
    below-market leases
(887)(795)(1,091)(1,725)(1,583)
Lease buyout income(1,781)(214)(223)(2,578)(308)
General and administrative expenses11,937 9,806 13,540 21,278 20,546 
Depreciation and amortization56,587 56,370 59,554 111,928 112,597 
Impairment of real estate assets1,056 — 25,199 6,056 — 
Interest expense, net19,132 22,154 25,758 39,195 44,929 
(Gain) loss on disposal of property, net(3,744)541 1,266 (17,585)2,118 
Other expense (income), net2,924 500 10,573 18,509 (9,369)
Property operating expenses related to
    fees and management income
1,306 891 1,531 2,122 1,528 
NOI for real estate investments87,576 81,028 88,065 174,655 168,955 
Less: Non-same-center NOI(2)
129 (1,656)(5,689)(1,551)(3,531)
Total Same-Center NOI$87,705 $79,372 $82,376 $173,104 $165,424 
Less: Centers not included in 2019 Same-Center(3)
(2,195)(585)
Total Same-Center NOI - adjusted for 2019(3)
$85,510 $81,791 
(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.
(3)When comparing Same-Center NOI for the three months ended June 30, 2021 and 2019, Same-Center NOI represents the NOI for the properties that were wholly-owned and operational for the entire portion of both comparable reporting periods. Same-Center NOI when comparing the three months ended June 30, 2021 and 2019 excludes the change in NOI from properties acquired or disposed of after March 31, 2019.


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Nareit Funds from Operations and Core Funds from Operations—The following table presents the Company’s calculation of Nareit FFO, Nareit FFO Attributable to Stockholders and OP Unit Holders, and Core FFO and provides additional information related to its operations (in thousands, except per share amounts):
  Three Months Ended June 30,Six Months Ended June 30,
  2021202020212020
Calculation of Nareit FFO Attributable to Stockholders and OP Unit Holders
Net income (loss)$6,390 $(6,413)$6,507 $4,786 
Adjustments:
Depreciation and amortization of real estate assets55,654 54,892 109,995 109,709 
Impairment of real estate assets1,056 — 6,056 — 
(Gain) loss on disposal of property, net(3,744)541 (17,585)2,118 
Adjustments related to unconsolidated joint
    ventures
537 940 (100)1,594 
Nareit FFO attributable to stockholders and OP unit holders$59,893 $49,960 $104,873 $118,207 
Calculation of Core FFO
Nareit FFO attributable to stockholders and OP unit holders$59,893 $49,960 $104,873 $118,207 
Adjustments:
Depreciation and amortization of corporate assets933 1,478 1,933 2,888 
Change in fair value of earn-out liability2,000 — 18,000 (10,000)
Amortization of unconsolidated joint venture
    basis differences
79 254 825 721 
Loss on extinguishment of debt, net419 — 1,110 73 
Transaction and acquisition expenses934 14 1,075 59 
Core FFO$64,258 $51,706 $127,816 $111,948 
Nareit FFO Attributable to Stockholders and OP Unit Holders/Core FFO per Share(1)
Weighted-average common shares outstanding -
    diluted
107,175 111,165 107,102 111,140 
Nareit FFO attributable to stockholders and OP unit
    holders per share - diluted
$0.56 $0.45 $0.98 $1.06 
Core FFO per share - diluted$0.60 $0.47 $1.19 $1.01 
(1)Restricted stock awards were dilutive to Nareit FFO Attributable to Stockholders and OP Unit Holders per share and Core FFO per share for the three and six months ended June 30, 2021 and 2020, and, accordingly, their impact was included in the weighted-average common shares used in their respective per share calculations. For the three months ended June 30, 2020 restricted stock units had an anti-dilutive effect upon the calculation of earnings per share and thus were excluded.
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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 June 30,Six Months Ended June 30,Year Ended December 31,
20212020202120202020
Calculation of EBITDAre
Net income (loss)$6,390 $(6,413)$6,507 $4,786 $5,462 
Adjustments:
Depreciation and amortization56,587 56,370 111,928 112,597 224,679 
Interest expense, net19,132 22,154 39,195 44,929 85,303 
(Gain) loss on disposal of property, net(3,744)541 (17,585)2,118 (6,494)
Impairment of real estate assets1,056 — 6,056 — 2,423 
Federal, state, and local tax expense165 180 331 209 491 
Adjustments related to unconsolidated
    joint ventures
(535)1,391 597 2,568 3,355 
EBITDAre
$79,051 $74,223 $147,029 $167,207 $315,219 
Calculation of Adjusted EBITDAre
EBITDAre
$79,051 $74,223 $147,029 $167,207 $315,219 
Adjustments:
Change in fair value of earn-out liability2,000 — 18,000 (10,000)(10,000)
Transaction and acquisition expenses934 14 1,075 59 539 
Amortization of unconsolidated joint
    venture basis differences
79 254 825 721 1,883 
Other impairment charges— — — — 359 
Adjusted EBITDAre
$82,064 $74,491 $166,929 $157,987 $308,000 
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Financial Leverage Ratios—The Company’s net debt to Adjusted EBITDAre, net debt to total enterprise value, and debt covenant compliance as of June 30, 2021 allows the Company 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 joint ventures, as of June 30, 2021 and December 31, 2020 (in thousands):
June 30, 2021
(As Adjusted)(2)
June 30, 2021December 31, 2020
Net debt:
Total debt, excluding market adjustments and deferred financing expenses$1,906,754 $2,272,268 $2,345,620 
Less: Cash and cash equivalents153,902 22,633 104,952 
Total net debt$1,752,852 $2,249,635 $2,240,668 
Enterprise value:
Net debt$1,752,852 $2,249,635 $2,240,668 
Total equity value(1)
3,543,624 3,386,803 2,797,234 
Total enterprise value$5,296,476 $5,636,438 $5,037,902 
(1)Total equity value is calculated as the number of common shares and OP units outstanding multiplied by the EVPS as of June 30, 2021 and December 31, 2020, respectively. There were 107.0 million diluted shares outstanding with an EVPS of $31.65 as of June 30, 2021 and 106.6 million diluted shares outstanding with an EVPS of $26.25 as of December 31, 2020.
(2)In July, the Company entered into a new credit facility comprised of a revolving credit facility and two unsecured term loan tranches (the "Refinancing"). In connection with this activity PECO paid off a term loan due in 2025. In addition to this activity, the Company used underwritten IPO proceeds to retire a term loan due in 2022. Total Net Debt has been adjusted as though the Refinancing, underwritten IPO, and retirement of the term loan using the underwritten IPO proceeds had occurred as of June 30, 2021.
The following table presents the calculation of net debt to Adjusted EBITDAre and net debt to total enterprise value as of June 30, 2021 and December 31, 2020 (dollars in thousands):
June 30, 2021
(As Adjusted)(2)
June 30, 2021December 31, 2020
Net debt to Adjusted EBITDAre - annualized:
Net debt$1,752,852$2,249,635$2,240,668
Adjusted EBITDAre - annualized(1)
316,307316,942308,000
Net debt to Adjusted EBITDAre - annualized
5.5x7.1x7.3x
Net debt to total enterprise value
Net debt$1,752,852$2,249,635$2,240,668
Total enterprise value5,296,4765,636,4385,037,902
Net debt to total enterprise value33.1%39.9%44.5%
(1)Adjusted EBITDAre is based on a trailing twelve month period.
(2)In July, the Company entered into the Refinancing. In connection with this activity PECO paid off a term loan due in 2025. In addition to this activity, the Company used underwritten IPO proceeds to retire a term loan due in 2022. Total Net Debt has been adjusted as though the Refinancing, underwritten IPO, and retirement of the term loan using the underwritten IPO proceeds had occurred as of June 30, 2021.

About Phillips Edison & Company
Phillips Edison & Company, Inc. (“PECO”), an internally-managed REIT, is one of the nation’s largest owners and operators of grocery-anchored shopping centers. PECO’s diversified portfolio of well-occupied neighborhood shopping centers features a mix of national and regional retailers selling necessity-based goods and services in fundamentally strong markets throughout the United States. Through its vertically-integrated operating platform, the Company manages a portfolio of 294 shopping centers, including 272 wholly-owned centers comprising approximately 30.8 million square feet across 31 states (as of June 30, 2021). PECO has generated strong operating results over its 30+ year history and has partnered with leading institutional commercial real estate investors including TPG Real Estate and The Northwestern Mutual Life Insurance Company. The Company remains exclusively focused on creating great grocery-anchored shopping experiences and improving the communities it serves one center at a time. For more information, please visit www.phillipsedison.com.
PECO uses, and intends to continue to use, its Investors website, which can be found at www.phillipsedison.com/investors, as a means of disclosing material nonpublic information and for complying with its disclosure obligations under Regulation FD.
14



Forward-Looking Statements
Certain statements contained in this press release of Phillips Edison & Company, Inc. (the “Company”) other than historical facts may be considered 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 for all such forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in those acts. 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 this report is filed with the U.S. Securities and Exchange Commission (“SEC”). Such statements include, in particular, statements about the Company’s plans, strategies, and prospects (including any potential listing), and are subject to certain risks and uncertainties, including known and unknown risks, 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) changes in interest rates and the availability of permanent mortgage financing; (v) competition from other available properties and the attractiveness of properties in the Company’s portfolio to its tenants; (vi) the financial stability of tenants, including the ability of tenants to pay rent; (vii) changes in tax, real estate, environmental, and zoning laws; (viii) the concentration of the Company’s portfolio in a limited number of industries, geographies, or investments; and (ix) 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 2020 Annual Report on Form 10-K, filed with the SEC on March 12, 2021, and the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, filed on August 5, 2021, in each case 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. Except as required by law, the Company does not undertake any obligation to update or revise any forward-looking statements contained in this release.

Investors:
Phillips Edison & Company, Inc.
Michael Koehler, Vice President of Investor Relations
(513) 338-2743
InvestorRelations@phillipsedison.com

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


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Table of Contents
EBITDAre Metrics
Joint Venture Summary and Financials
Summary of Outstanding Debt
Covenant Disclosures




























































































































Phillips Edison & Company
1



Introductory Notes
SUPPLEMENTAL INFORMATION
Phillips Edison & Company, Inc. (“we,” the “Company,” “our,” “us,” or "PECO") is an internally-managed real estate investment trust (“REIT”) that is one of the nation’s largest owners and operators of grocery-anchored shopping centers. Additionally, we operate an investment management business providing property management and advisory services to third-party owned grocery-anchored real estate. 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 may contain 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 (collectively, the “Acts”). We intend for all such forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in those Acts. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” “seek,” “objective,” “goal,” “strategy,” “plan,” “should,” “could,” or other similar words. Such forward-looking statements are subject to various risks and uncertainties, including the risks that are described under the section entitled “Risk Factors” in our Annual Report on Form 10-K, as such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this press release and in our filings with the SEC. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.
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 11-22 and definitions of our non-GAAP measures are included in our Glossary of Terms on page 59.
PRO RATA FINANCIAL INFORMATION
We may present our consolidated financial information inclusive of our prorated portion owned through unconsolidated joint ventures. The presentation of pro rata financial information has limitations as an analytical tool, which include but are not limited to: (i) amounts shown on individual line items were calculated by applying our overall economic ownership interest percentage determined when applying the equity method of accounting, and may not represent our legal claim to the assets and liabilities, or the revenues and expenses; and (ii) other REITs may use different methodologies for calculating their pro-rata interest. Accordingly, pro-rata financial information should be reviewed in connection with other GAAP measurements, and should not be viewed as more prominent measures of performance than net income (loss) or cash flows from operations prepared in accordance with GAAP.
REVERSE STOCK SPLIT
We effected a one-for-three reverse stock split effective on July 2, 2021. In addition, we effected a corresponding reverse split of our Operating Partnership’s OP units. As a result of the reverse stock and OP unit split, every three shares of our common stock and OP units were automatically combined and converted into one issued and outstanding share of common stock or OP unit, as applicable, rounded to the nearest 1/100th share or OP unit. The reverse stock and OP unit splits impacted all classes of common stock and OP units proportionately and had no impact on any stockholder’s or limited partner’s percentage ownership of all issued and outstanding common stock or OP units. Unless otherwise indicated, the information in this supplement gives effect to the reverse stock and OP unit splits.


























































































































Phillips Edison & Company
2



Introductory Notes
RECAPITALIZATION
Our stockholders approved an amendment to our charter (the "Articles of Amendment") that effected a change of each share of our common stock outstanding at the time the amendment became effective into one share of a newly created class of Class B common stock (the "Recapitalization"). The Articles of Amendment became effective upon filing with, and acceptance by, the State Department of Assessments and Taxation of Maryland on July 2, 2021.
Our Class B common stock is identical to our common stock, except that (i) we do not intend to list our Class B common stock on a national securities exchange, and (ii) upon the six-month anniversary of the listing of our common stock for trading on a national securities exchange, or January 15, 2022 (or such earlier date or dates as may be approved by our board of directors in certain circumstances with respect to all or any portion of the outstanding shares of our Class B common stock), each share of our Class B common stock will automatically, and without any stockholder action, convert into one share of our listed common stock.
Unless otherwise indicated, all information in this supplemental disclosure gives effect to the Recapitalization and references to "shares" and per share metrics refer to our common stock and Class B common stock, collectively.


























































































































Phillips Edison & Company
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FINANCIAL RESULTS
Quarter Ended June 30, 2021





Earnings Release
Unaudited
Phillips Edison & Company Reports
Second Quarter 2021 Results

CINCINNATI - August 5, 2021 - Phillips Edison & Company, Inc. (Nasdaq: PECO) (“PECO” or the “Company”), one of the nation’s largest owners and operators of grocery-anchored omni-channel neighborhood shopping centers, reported net income attributable to common stockholders of $5.6 million, or $0.06 per diluted share, and $5.7 million, or $0.06 per diluted share, for the three and six months ended June 30, 2021, respectively. All share and per share amounts have been adjusted to give retrospective effect to the one-for-three reverse stock split that was executed on July 2, 2021.

Highlights for the second quarter ended June 30, 2021 (vs. the second quarter ended June 30, 2020)
Rent and recovery collections from tenants (“Neighbors”) totaled over 98% of monthly billings for the quarter
Total revenues increased 11.8% to $133.1 million
Funds from operations attributable to stockholders and OP unit holders as defined by Nareit (“Nareit FFO”) increased 19.9% to $59.9 million, or $0.56 per diluted share
Core funds from operations (“Core FFO”) increased 24.3% to $64.3 million, or $0.60 per diluted share
Same-center net operating income (“NOI”) increased 10.5% to $87.7 million;
Same-center NOI was 4.5% higher than the comparable same-center NOI in Q2 2019, illustrating growth since prior to the onset of the COVID-19 pandemic
Leased portfolio occupancy totaled 94.7%, compared to 95.6% at June 30, 2020
Executed 124 new and 174 renewal and option leases totaling 1.4 million square feet
Comparable new and renewal rent spreads were 18.5% and 8.0%, respectively; combined rent spreads (excluding options) were 10.4%

Highlights for the six months ended June 30, 2021 (vs. the six months ended June 30, 2020)
Total revenues increased 5.1% to $263.5 million
Nareit FFO decreased 11.3% to $104.9 million, or $0.98 per diluted share, primarily driven by the non-cash increase in the earn-out liability
Core FFO increased 14.2% to $127.8 million, $1.19 per diluted share
Same-center NOI increased 4.6% to $173.1 million
Executed 277 new and 337 renewal and option leases totaling 2.8 million square feet
Comparable new and renewal rent spreads were 15.3% and 8.0%, respectively; combined rent spreads (excluding options) were 9.9%

Underwritten Initial Public Offering and Nasdaq Listing
Subsequent to quarter-end, PECO completed its underwritten IPO of 19,550,000 shares of common stock, including the underwriters’ full exercise of the over-allotment option, at a price to the public of $28.00 per share, generating $547.4 million of gross proceeds
PECO’s common stock began trading on the Nasdaq Global Select Market under the ticker symbol “PECO” on July 15, 2021



























































































































Phillips Edison & Company
5



Subsequent Highlights
Closed a new $980 million senior unsecured credit facility comprised of a $500 million revolving credit facility and two separate $240 million unsecured variable rate term loans
With a portion of the offering proceeds, PECO repaid its $375 million term loan maturing in 2022
Received an initial credit rating of 'Baa3' with a stable outlook from Moody’s Investors Service and 'BBB-' with a stable outlook from S&P Global Ratings, both of which are defined as “Investment Grade” by their respective ratings agency

Management Commentary
“The successful closing of our underwritten IPO is a transformative event for PECO as we raised $547 million, positioning us for robust growth,” stated Jeff Edison, chairman and chief executive officer of PECO. “Throughout our 30-year operating history, we have had a differentiated and focused strategy of owning and operating small-format, grocery-anchored shopping centers. This strategy, together with our fully integrated operating platform and targeted portfolio, has produced superior financial and operational results throughout multiple market cycles, including prior to and since the onset of the COVID-19 pandemic. We believe format drives results.”
"The second quarter of 2021 illustrated dramatic improvement versus the second quarter of 2020. Today, 100% of our leased portfolio is open for business, and we continue to see our necessity-based and omni-channel Neighbors thrive. In fact, we are seeing signs of a full recovery in our portfolio as foot traffic at our centers during June 2021 totaled 102% of average monthly levels during 2019, and our second quarter same-center NOI increased 4.5% when compared to the second quarter of 2019. During the quarter, collections were 98%, combined new and renewal leasing spreads were 10.4%, and leasing demand for our brick and mortar retail space continues to be favorable. Altogether, these strong results validate our strategy and strengthen our mission, which is to create great omni-channel grocery-anchored shopping experiences and improve our communities one center at a time.
“As a management team owning over 7% of the company on a fully diluted basis, we are very encouraged about the future and look forward to the next phase of growth for PECO. We believe we will continue to benefit from current macroeconomic tailwinds as businesses embrace working-from-home, the population continues to shift to the suburbs and Sunbelt, and leading grocers continue to adopt an omni-channel presence. Our portfolio is uniquely positioned to benefit from these trends, which has driven our robust growth expectations for 2021.”

Collection Details
The table below outlines PECO’s collections since April 1, 2020, calculated as a percentage of monthly billings to Neighbors for rent and recoverable expenses (includes pro rata ownership through the Company’s joint ventures):
Q2 2021Q1 2021Q4 2020Q3 2020Q2 2020
Originally ReportedNA95%95%94%86%
Current(1)
98%98%97%96%93%
(1)Including collections received through July 20, 2021.

PECO continues to collect rent and recoverable expenses for past billing periods. As a result, the corresponding periods reflect increased collection rates versus the originally reported figures.

Financial Results for the Second Quarter and Six Months Ended June 30, 2021
Net Income
Second quarter 2021 net income attributable to common stockholders totaled $5.6 million, or $0.06 per diluted share, compared to net loss of $5.6 million, or $0.06 per diluted share, for the second quarter of 2020.
For the six months ended June 30, 2021, net income attributable to common stockholders totaled $5.7 million, or $0.06 per diluted share, compared to a net income attributable to common stockholders of $4.2 million, or $0.04 per diluted share, for the first six months of 2020.



























































































































Phillips Edison & Company
6



Nareit FFO
For the second quarter of 2021, Nareit FFO increased 19.9% to $59.9 million, or $0.56 per diluted share, from $50.0 million, or $0.45 per diluted share, during the same year-ago quarter.
For the six months ended June 30, 2021, Nareit FFO decreased 11.3% to $104.9 million, or $0.98 per diluted share, from $118.2 million, or $1.06 per diluted share, during the six months ended June 30, 2020.
The $9.9 million increase for the second quarter of 2021 was primarily driven by an increase in collections and operating performance during 2021.
The $13.3 million decrease for the six months ended June 30, 2021 was primarily driven by an increase in the earn-out liability, which resulted in $18.0 million of non-cash expense for 2021, compared to $10.0 million of non-cash income a year ago, offset by an increase in collections in 2021. The earn-out liability will continue to fluctuate based on the trading value of PECO’s Nasdaq-listed common stock and will be settled in equity during the first quarter of 2022.

Core FFO
For the second quarter of 2021, Core FFO increased 24.3% to $64.3 million, or $0.60 per diluted share, compared to $51.7 million, or $0.47 per diluted share, during the same year-ago quarter.
For the first six months of 2021, Core FFO increased 14.2% to $127.8 million, or $1.19 per diluted share, compared to $111.9 million, or $1.01 per diluted share, during the same year-ago period.
The increase for both periods was driven by an increase in collections and lower interest costs offset by an increase in general and administrative expenses. Core FFO excludes one-time non-cash items like the aforementioned earn-out liability adjustment.

Same-Center NOI
Second quarter 2021 same-center NOI increased 10.5% to $87.7 million compared to $79.4 million during the second quarter of 2020.
For the six months ended June 30, 2021, same-center NOI increased 4.6% to $173.1 million compared to $165.4 million during the same period in 2020.
Results for the second quarter 2021 were driven by a $0.57, or 4.5%, increase in average base rent per square foot, and results for the six months ended June 30, 2021 were driven by a $0.55, or 4.4%, increase in average base rent per square foot versus the year-ago quarter and six month period. Further driving the increases in both periods were stronger collections compared to 2020, including collections on charges that were uncollected during 2020. Partially offsetting the increases were a 0.8% decrease in average economic occupancy and a lower recovery rate.

Portfolio Overview for the Second Quarter and Six Months Ended June 30, 2021
Portfolio Statistics
As of June 30, 2021, PECO’s wholly-owned portfolio consisted of 272 properties, totaling approximately 30.8 million square feet, located in 31 states. This compares to 284 properties, totaling approximately 31.8 million square feet, located in 31 states as of June 30, 2020.
Leased portfolio occupancy totaled 94.7% at June 30, 2021 as compared to 95.6% at June 30, 2020.
Anchor occupancy decreased to 96.8% compared to 98.3% a year ago, and inline occupancy increased to 90.6% from 90.3% at June 30, 2020. Leased portfolio occupancy accounts for all Neighbors under active leases.

Leasing Activity
During the second quarter of 2021, 298 leases (new, renewal, and options) were executed totaling 1.4 million square feet. This compared to 169 leases executed totaling 1.2 million square feet during the second quarter of 2020. The leasing activity was the result of strong demand for PECO’s retail spaces in its well located, grocery-anchored centers.
Comparable rent spreads during the quarter, 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 18.5% for new leases, 8.0% for renewal leases (excluding options), and 10.4% combined (new and renewal leases only).


























































































































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During the first six months of 2021, 614 leases (new, renewal, and options) were executed totaling approximately 2.8 million square feet. This compared to 383 leases executed totaling approximately 2.3 million square feet during the same year-ago period.
Comparable rent spreads during the first six months of 2021 were 15.3% for new leases, 8.0% for renewal leases (excluding options), and 9.9% combined (new and renewal leases).

Disposition & Acquisition Activity
During the second quarter of 2021, PECO sold seven properties, generating $61.3 million in proceeds. In the near term, disposition proceeds are expected to be used to fund tax-efficient acquisitions, to fund redevelopment opportunities in owned centers, and for general corporate purposes. PECO acquired one outparcel for $0.6 million during the second quarter.
During the six months ended June 30, 2021, 13 properties and one outparcel were sold, generating $119.6 million in proceeds. During the same period, the Company acquired two properties and three outparcels for a total of $40.5 million.

Balance Sheet Highlights as of June 30, 2021
As of June 30, 2021, PECO had approximately $489.3 million of borrowing capacity available on its $500 million revolving credit facility, net of outstanding letters of credit.
As of June 30, 2021, PECO’s net debt to annualized adjusted EBITDAre was 7.1x, compared to 7.3x at December 31, 2020. Adjusting for the IPO and capital markets activity subsequent to the quarter end, PECO’s net debt to annualized adjusted EBITDAre was 5.5x.
As of June 30, 2021, PECO’s outstanding debt had a weighted-average interest rate of 2.9%, a weighted-average maturity of 3.7 years, and 69.1% of its total debt was fixed-rate debt. This compared to a weighted-average interest rate of 3.1%, a weighted-average maturity of 4.1 years, and 74.8% fixed-rate debt at December 31, 2020.
Subsequent to the quarter-end, PECO completed its underwritten IPO of 19,550,000 million shares of common stock generating $547.4 million of gross proceeds, of which a portion was used to repay its $375 million term loan maturing in 2022. PECO also closed a new $980 million senior unsecured credit facility comprised of a $500 million revolving credit facility and two separate $240 million unsecured variable-rate term loans.
Also subsequent to the quarter-end, PECO received an initial credit rating of 'Baa3' with a stable outlook from Moody’s Investors Service and 'BBB-' with a stable outlook from S&P Global Ratings, both of which are defined as “Investment Grade” by their respective ratings agency.

Distributions for the Second Quarter Ended June 30, 2021
For the three months ended June 30, 2021, total distributions of $27.4 million were paid to common stockholders and operating partnership unit (“OP unit”) holders. PECO paid, and plans to continue to pay, distributions monthly.
For April, May and June 2021, the monthly distribution was $0.085 per share, which is equal to $1.02 if annualized.
Subsequent to the quarter-end, PECO made monthly distributions on July 1, 2021 and August 2, 2021 of $0.085 per share to stockholders of record at the close of business on June 15, 2021 and July 15, 2021, respectively.
On August 4, 2021, the Board authorized a monthly distribution in the amount of $0.085 per share payable on September 1, 2021 to stockholders of record at the close of business on August 16, 2021. OP unit holders receive distributions at the same rate, subject to required tax withholding. Future distributions are not guaranteed; however, the Board intends to evaluate distributions on a monthly basis throughout 2021. This discussion regarding distributions reflects the one-for three reverse stock split that was executed on July 2, 2021. Please see below for more details on the reverse stock split.

Reverse Stock Split & Reclassification into Class B Common Stock
On July 2, 2021, PECO effected a one-for-three reverse stock split of each issued and outstanding share of PECO’s common stock, $0.01 par value (the “Common Stock”), and a corresponding one-for-three reverse unit split of each issued and outstanding OP unit. On the same date, a reclassification transaction in which each issued and outstanding share of Common Stock (following the reverse stock split) changed into a share of PECO’s newly created Class B common stock, $0.01 par value (the “Class B Common Stock”).



























































































































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As a result of the reverse stock split and reclassification transaction, PECO’s stockholders received one share of post-split Class B Common Stock for every three shares of pre-split Common Stock they held.
The Class B Common Stock is identical to the Common Stock, including with respect to voting rights and distributions rights (i.e., monthly distributions), except that on January 15, 2022 (the six-month anniversary of the listing of PECO’s Common Stock on the Nasdaq), each share of the Class B Common Stock will automatically convert into one share of the listed Common Stock.

Initial 2021 Guidance
Full Year
2021 Guidance
Net income per share$0.06 - $0.12
Nareit FFO per share$1.83 - $1.89
Core FFO per share$2.10 - $2.16
Same-Center NOI growth5.6% - 6.8%
Second Half
2021 Guidance
Acquisitions$160 - $200 million
Dispositions$45 - $75 million

The following table provides a reconciliation of the range of the Company's 2021 estimated net income to estimated Nareit FFO and Core FFO:
(Unaudited, dollars in millions, except per share amounts)Low EndHigh End
Net income $0.06 $0.12 
Depreciation and amortization of real estate assets1.861.86
Gain on sale of real estate assets and related impairments(0.10)(0.10)
Adjustments related to unconsolidated joint ventures0.010.01
Nareit FFO$1.83 $1.89 
Depreciation and amortization of corporate assets0.030.03
Change in fair value of earn-out liability0.150.15
Loss on extinguishment of debt, net0.010.01
Transactions and other0.070.07
Amortization of joint venture basis differences0.010.01
Core FFO$2.10 $2.16 

Closing Commentary
Edison added: “Since our inception 30 years ago, our focus has been owning and operating small-format centers anchored by the top one or two grocer in a market. Our centers are located in the neighborhood, close to the customer, where America’s top grocers make money, and support our Neighbors’ omni-channel strategies. We believe this differentiated strategy, coupled with our experienced and cycle-tested team, are the key drivers of our strong performance, year after year.
“Looking forward, we see meaningful growth opportunities driven by a number of macroeconomic tailwinds, including population migration to the suburbs and the Sun Belt, and more people working from home. Our investment grade balance sheet and strong cash flow generating portfolio will drive our growth. As a management team owning 7% of the Company, we have meaningful skin in the game and are committed to driving long-term shareholder value.”


























































































































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Results Presentation Details
PECO plans to host a conference call and webcast on Friday, August 6, 2021 at 9:00 a.m. Eastern Time to discuss these results. Chairman and Chief Executive Officer Jeff Edison, President Devin Murphy, and Chief Financial Officer John Caulfield will host the presentation.
Date: Friday, August 6, 2021
Time: 9:00 a.m. Eastern Time
Toll-Free Dial-In Number: (844) 691-1115
International Dial-In Number: (929) 517-0921
Conference ID: 6167623
Webcast link: https://edge.media-server.com/mmc/p/rk8h4e8g
A webcast replay will be available approximately one hour after the conclusion of the presentation using the Webcast link above.
PECO’s earnings release, quarterly financial supplement, and 10-Q are expected to be filed with the SEC and posted to its website, www.phillipsedison.com/investors, after market close on Thursday, August 5, 2021.
For more information on the Company’s financial results, please refer to the Company’s Form 10-Q, filed with the SEC on August 5, 2021 and available on the SEC’s website at www.sec.gov.

Same-Center Net Operating Income—The table below compares same-center NOI (in thousands):
Three Months Ended June 30,Favorable (Unfavorable)Six Months Ended June 30,Favorable (Unfavorable)
20212020$ Change% Change20212020$ Change% Change
Revenues:
Rental income(1)
$91,305 $90,814 $491 $182,599 $182,852 $(253)
Tenant recovery income27,250 30,197 (2,947)57,851 60,980 (3,129)
Reserves for uncollectibility(2)
2,889 (9,706)12,595 1,261 (12,129)13,390 
Other property income284 600 (316)756 1,465 (709)
Total revenues121,728 111,905 9,823 8.8 %242,467 233,168 9,299 4.0 %
Operating expenses:
Property operating expenses
17,504 16,495 (1,009)36,614 34,562 (2,052)
Real estate taxes
16,519 16,038 (481)32,749 33,182 433 
Total operating expenses34,023 32,533 (1,490)(4.6)%69,363 67,744 (1,619)(2.4)%
Total Same-Center NOI$87,705 $79,372 $8,333 10.5 %$173,104 $165,424 $7,680 4.6 %
(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 we deem it appropriate to resume recording revenue on an accrual basis, rather than on a cash basis.













































































































































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Same-Center Net Operating Income Reconciliation—Below is a reconciliation of Net Income to NOI and Same-Center NOI (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
20212020201920212020
Net income (loss)$6,390 $(6,413)$(42,172)$6,507 $4,786 
Adjusted to exclude:
Fees and management income(2,374)(2,760)(3,051)(4,660)(4,925)
Straight-line rental (income) expense(1)
(2,970)948 (2,819)(4,392)(1,364)
Net amortization of above- and
    below-market leases
(887)(795)(1,091)(1,725)(1,583)
Lease buyout income(1,781)(214)(223)(2,578)(308)
General and administrative expenses11,937 9,806 13,540 21,278 20,546 
Depreciation and amortization56,587 56,370 59,554 111,928 112,597 
Impairment of real estate assets1,056 — 25,199 6,056 — 
Interest expense, net19,132 22,154 25,758 39,195 44,929 
(Gain) loss on disposal of property, net(3,744)541 1,266 (17,585)2,118 
Other expense (income), net2,924 500 10,573 18,509 (9,369)
Property operating expenses related to
    fees and management income
1,306 891 1,531 2,122 1,528 
NOI for real estate investments87,576 81,028 88,065 174,655 168,955 
Less: Non-same-center NOI(2)
129 (1,656)(5,689)(1,551)(3,531)
Total Same-Center NOI$87,705 $79,372 $82,376 $173,104 $165,424 
Less: Centers not included in 2019 Same-Center(3)
(2,195)(585)
Total Same-Center NOI - adjusted for 2019(3)
$85,510 $81,791 
(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.
(3)When comparing Same-Center NOI for the three months ended June 30, 2021 and 2019, Same-Center NOI represents the NOI for the properties that were wholly-owned and operational for the entire portion of both comparable reporting periods. Same-Center NOI when comparing the three months ended June 30, 2021 and 2019 excludes the change in NOI from properties acquired or disposed of after March 31, 2019.


About Phillips Edison & Company
Phillips Edison & Company, Inc. (“PECO”), an internally-managed REIT, is one of the nation’s largest owners and operators of grocery-anchored shopping centers. PECO’s diversified portfolio of well-occupied neighborhood shopping centers features a mix of national and regional retailers selling necessity-based goods and services in fundamentally strong markets throughout the United States. Through its vertically-integrated operating platform, the Company manages a portfolio of 294 shopping centers, including 272 wholly-owned centers comprising approximately 30.8 million square feet across 31 states (as of June 30, 2021). PECO has generated strong operating results over its 30+ year history and has partnered with leading institutional commercial real estate investors including TPG Real Estate and The Northwestern Mutual Life Insurance Company. The Company remains exclusively focused on creating great grocery-anchored shopping experiences and improving the communities it serves one center at a time. For more information, please visit www.phillipsedison.com.
PECO uses, and intends to continue to use, its Investors website, which can be found at www.phillipsedison.com/investors, as a means of disclosing material nonpublic information and for complying with its disclosure obligations under Regulation FD.

Forward-Looking Statements
Certain statements contained in this press release of Phillips Edison & Company, Inc. (the “Company”) other than historical facts may be considered 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 for all such forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in those acts. 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


























































































































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cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this report is filed with the U.S. Securities and Exchange Commission (“SEC”). Such statements include, in particular, statements about the Company’s plans, strategies, and prospects (including any potential listing), and are subject to certain risks and uncertainties, including known and unknown risks, 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) changes in interest rates and the availability of permanent mortgage financing; (v) competition from other available properties and the attractiveness of properties in the Company’s portfolio to its tenants; (vi) the financial stability of tenants, including the ability of tenants to pay rent; (vii) changes in tax, real estate, environmental, and zoning laws; (viii) the concentration of the Company’s portfolio in a limited number of industries, geographies, or investments; and (ix) 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 2020 Annual Report on Form 10-K, filed with the SEC on March 12, 2021, and the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, filed on August 5, 2021, in each case 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. Except as required by law, the Company does not undertake any obligation to update or revise any forward-looking statements contained in this release.

Investors:
Phillips Edison & Company, Inc.
Michael Koehler, Vice President of Investor Relations
(513) 338-2743
InvestorRelations@phillipsedison.com

Source: Phillips Edison & Company, Inc.
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Overview of Results
Unaudited, in thousands (excluding per share and per square foot amounts)
Three Months Ended
 June 30,
Six Months Ended
 June 30,
2021202020212020
SUMMARY FINANCIAL RESULTS
Total revenues (page 16)
$133,070 $119,040 $263,451 $250,563 
Net income (loss) attributable to stockholders (page 16)
5,594 (5,588)5,697 4,181 
Net income (loss) income per share - basic and diluted (page 16)
$0.06 $(0.06)$0.06 $0.04 
Same-Center NOI (page 22)
87,705 79,372 173,104 165,424 
Adjusted EBITDAre (page 20)
82,064 74,491 166,929 157,987 
Nareit FFO (page 18)
59,893 49,960 104,873 118,207 
Nareit FFO per share - basic and diluted (page 18)
$0.56 $0.45 $0.98 $1.06 
Core FFO (page 18)
64,258 51,706 127,816 111,948 
Core FFO per share - basic and diluted (page 18)
$0.60 $0.47 $1.19 $1.01 
 
SUMMARY OF FINANCIAL AND OPERATING RATIOS
Same-Center NOI margin (page 22)
72.0 %70.9 %71.4 %70.9 %
Same-Center NOI change (page 22)(1)
10.5 %(5.2)%4.6 %(1.3)%
LEASING RESULTS
Comparable rent spreads - new leases (page 41)(2)
18.5 %15.5 %15.3 %10.8 %
Comparable rent spreads - renewals (page 41)(2)
8.0 %7.1 %8.0 %9.2 %
Portfolio retention rate85.5 %88.2 %87.2 %79.5 %
As of June 30,
20212020
OUTSTANDING STOCK AND PARTNERSHIP UNITS
Common shares outstanding93,64096,822
Operating Partnership (OP) units outstanding13,36814,223
SUMMARY PORTFOLIO STATISTICS(2)
Number of properties272 284 
GLA - all properties (page 43)
30,778 31,787 
Leased occupancy (page 37)
94.7 %95.6 %
Economic occupancy (page 37)
94.1 %95.2 %
Leased ABR PSF (page 37)
$13.21 $12.69 
Leased Anchor ABR PSF (page 37)
$9.41 $9.16 
Leased Inline ABR PSF (page 37)
$21.10 $20.28 
(1)Reflects Same-Center NOI change as reported for the specified period.
(2)Statistics represent our wholly-owned properties.



























































































































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https://cdn.kscope.io/db422fe1f56e3724bcfa187be92e06e4-pecostackedlogobluea03.jpg
FINANCIAL SUMMARY
Quarter Ended June 30, 2021
























Consolidated Balance Sheets
Condensed and Unaudited, in thousands (excluding per share amounts)
  June 30, 2021December 31, 2020
ASSETS  
Investment in real estate:    
Land and improvements$1,529,803 $1,549,362 
Building and improvements3,184,601 3,237,986 
In-place lease assets434,499 441,683 
Above-market lease assets64,795 66,106 
Total investment in real estate assets5,213,698 5,295,137 
Accumulated depreciation and amortization(1,021,456)(941,413)
Net investment in real estate assets4,192,242 4,353,724 
Investment in unconsolidated joint ventures32,746 37,366 
Total investment in real estate assets, net4,224,988 4,391,090 
Cash and cash equivalents22,205 104,296 
Restricted cash89,196 27,641 
Goodwill29,066 29,066 
Other assets, net126,056 126,470 
Real estate investments and other assets held for sale14,261 — 
Total assets$4,505,772 $4,678,563 
LIABILITIES AND EQUITY    
Liabilities:    
Debt obligations, net$2,228,232 $2,292,605 
Below-market lease liabilities, net93,949 101,746 
Earn-out liability40,000 22,000 
Derivative liabilities39,929 54,759 
Deferred income18,978 14,581 
Accounts payable and other liabilities88,436 176,943 
Liabilities of real estate investments held for sale860 — 
Total liabilities2,510,384 2,662,634 
Equity:    
Preferred stock, $0.01 par value per share, 10,000 shares authorized— — 
Common stock, $0.01 par value per share, 1,000,000 shares authorized2,808 2,798 
Additional paid-in capital2,749,680 2,739,358 
Accumulated other comprehensive loss(38,732)(52,306)
Accumulated deficit(1,041,617)(999,491)
Total stockholders’ equity1,672,139 1,690,359 
Noncontrolling interests323,249 325,570 
Total equity1,995,388 2,015,929 
Total liabilities and equity$4,505,772 $4,678,563 

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Consolidated Statements of Operations
Condensed and Unaudited, in thousands (excluding per share amounts)
  Three Months Ended
 June 30,
Six Months Ended
 June 30,
  2021202020212020
REVENUES        
Rental income$130,335 $115,654 $257,958 $244,120 
Fees and management income2,374 2,760 4,660 4,925 
Other property income361 626 833 1,518 
Total revenues133,070 119,040 263,451 250,563 
OPERATING EXPENSES        
Property operating21,974 19,629 44,176 41,391 
Real estate taxes16,814 16,453 33,387 33,565 
General and administrative11,937 9,806 21,278 20,546 
Depreciation and amortization56,587 56,370 111,928 112,597 
Impairment of real estate assets1,056 — 6,056 — 
Total expenses108,368 102,258 216,825 208,099 
OTHER        
Interest expense, net(19,132)(22,154)(39,195)(44,929)
Gain (loss) on sale of property, net3,744 (541)17,585 (2,118)
Other (expense) income, net(2,924)(500)(18,509)9,369 
Net income (loss)
6,390 (6,413)6,507 4,786 
Net (income) loss attributable to noncontrolling interests(796)825 (810)(605)
Net income (loss) attributable to stockholders$5,594 $(5,588)$5,697 $4,181 
EARNINGS PER COMMON SHARE        
Net income (loss) per share - basic and diluted
$0.06 $(0.06)$0.06 $0.04 

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Consolidated Statements of Operations
Condensed and Unaudited, in thousands (excluding per share amounts)
  Three Months Ended
  June 30,
2021
March 31,
2021
December 31,
2020
September 30,
2020
June 30,
 2020
REVENUES
Rental income$130,335 $127,623 $118,065 $123,298 $115,654 
Fees and management income2,374 2,286 2,314 2,581 2,760 
Other property income361 472 380 816 626 
Total revenues133,070 130,381 120,759 126,695 119,040 
OPERATING EXPENSES
Property operating21,974 22,202 25,264 20,835 19,629 
Real estate taxes16,814 16,573 16,169 17,282 16,453 
General and administrative11,937 9,341 11,242 9,595 9,806 
Depreciation and amortization56,587 55,341 55,987 56,095 56,370 
Impairment of real estate assets1,056 5,000 2,423 — — 
Total operating expenses108,368 108,457 111,085 103,807 102,258 
OTHER  
Interest expense, net(19,132)(20,063)(19,986)(20,388)(22,154)
Gain (loss) on sale of property, net3,744 13,841 (2,122)10,734 (541)
Other (expense) income, net(2,924)(15,585)(320)196 (500)
Net income (loss)6,390 117 (12,754)13,430 (6,413)
Net (income) loss attributable to noncontrolling interests(796)(14)1,561 (1,646)825 
Net income (loss) attributable to stockholders$5,594 $103 $(11,193)$11,784 $(5,588)
EARNINGS PER COMMON SHARE  
Net income (loss) per share - basic and diluted$0.06 $0.00 $(0.12)$0.12 $(0.06)













































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Nareit FFO and Core FFO
Unaudited, in thousands (excluding per share amounts)
  Three Months Ended
 June 30,
Six Months Ended
 June 30,
  2021202020212020
NAREIT FFO ATTRIBUTABLE TO STOCKHOLDERS AND
   OP UNIT HOLDERS
Net income (loss)$6,390 $(6,413)$6,507 $4,786 
Adjustments:
Depreciation and amortization of real estate assets55,654 54,892 109,995 109,709 
Impairment of real estate assets1,056 — 6,056 — 
(Gain) loss on disposal of property, net(3,744)541 (17,585)2,118 
Adjustments related to unconsolidated joint ventures537 940 (100)1,594 
Nareit FFO attributable to stockholders and OP unit
   holders
$59,893 $49,960 $104,873 $118,207 
CORE FFO        
Nareit FFO attributable to stockholders and OP unit holders$59,893 $49,960 $104,873 $118,207 
Adjustments:        
Depreciation and amortization of corporate assets933 1,478 1,933 2,888 
Change in fair value of earn-out liability2,000 — 18,000 (10,000)
Amortization of unconsolidated joint venture basis differences79 254 825 721 
Loss on extinguishment of debt, net419 — 1,110 73 
Transaction and acquisition expenses934 14 1,075 59 
Core FFO$64,258 $51,706 $127,816 $111,948 
ADJUSTED FFO
Core FFO$64,258 $51,706 $127,816 $111,948 
Adjustments:
Straight-line and non-cash adjustments(2,256)2,230 (2,938)1,465 
Capital expenditures(1)
(10,894)(5,120)(18,208)(11,745)
Non-cash share-based compensation expense3,736 1,712 5,249 1,744 
Adjustments related to unconsolidated joint ventures(168)(122)(364)(187)
Adjusted FFO$54,676 $50,406 $111,555 $103,225 
NAREIT FFO AND CORE FFO PER COMMON SHARE
Weighted-average common shares outstanding - diluted(2)
107,175 111,165 107,102 111,140 
Nareit FFO per share - diluted(2)
$0.56 $0.45 $0.98 $1.06 
Core FFO per share - diluted(2)
$0.60 $0.47 $1.19 $1.01 
(1)Excludes development and redevelopment projects.
(2)Restricted stock awards were dilutive to Nareit FFO Attributable to Stockholders and OP Unit Holders per share and Core FFO per share for the three and six months ended June 30, 2021 and 2020, and, accordingly, their impact was included in the weighted-average common shares used in their respective per share calculations. For the three months ended June 30, 2020, restricted stock units had an anti-dilutive effect upon the calculation of earnings per share and thus were excluded.

Phillips Edison & Company
18



Nareit FFO, Core FFO, and Adjusted FFO
Unaudited, in thousands (excluding per share amounts)
Three Months Ended
  June 30,
2021
March 31, 2021December 31,
2020
September 30, 2020June 30,
2020
NAREIT FFO ATTRIBUTABLE TO STOCKHOLDERS AND OP
   UNIT HOLDERS
Net income (loss)$6,390 $117 $(12,754)$13,430 $(6,413)
Adjustments:
Depreciation and amortization of real estate assets55,654 54,341 54,450 54,579 54,892 
Impairment of real estate assets1,056 5,000 2,423 — — 
(Gain) loss on disposal of property, net(3,744)(13,841)2,122 (10,734)541 
Adjustments related to unconsolidated joint ventures537 (637)(208)166 940 
Nareit FFO attributable to stockholders and OP unit holders$59,893 $44,980 $46,033 $57,441 $49,960 
CORE FFO
Nareit FFO attributable to stockholders and OP unit holders$59,893 $44,980 $46,033 $57,441 $49,960 
Adjustments:
Depreciation and amortization of corporate assets933 1,000 1,537 1,516 1,478 
Change in fair value of earn-out liability2,000 16,000 — — — 
Other impairment charges— — 359 — — 
Amortization of unconsolidated joint venture basis differences79 746 616 546 254 
Loss (gain) on extinguishment or modification of debt, net419 691 (69)— — 
Transaction and acquisition expenses934 141 328 152 14 
Core FFO$64,258 $63,558 $48,804 $59,655 $51,706 
ADJUSTED FFO
Core FFO$64,258 $63,558 $48,804 $59,655 $51,706 
Adjustments: