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Item 9A. Controls and Procedures

2021-03-12 compared with 2020-03-12 · 1950 added, 1185 removed, 902 unchanged (78% of the section changed)

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Our management, with the participation of our Principal Executive Officer and Principal Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of December 31, 2020.

Based on that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) were effective as of December 31, 2019 .

Based on that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our

disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) were effective as of December 31, 2020.

Management’s Report on Internal Control Over Financial Reporting

6 unchanged sentences

DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

The information required by this Item is set forth in our definitive proxy statement to be filed with the SEC by April 30, 2020, and is hereby incorporated by reference into this Form 10-K.

Below is certain information about our current directors serving on the Board of Directors (“Board”) for Phillips Edison & Company, Inc.

(“we,” the “Company,” “PECO,” “our,” or “us”) as of the date hereof:

Director Since 2009

Edison has served as PECO’s Chairman of the Board and Chief Executive Officer since December 2009 and also served as President from October 2017 to August 2019.

Edison also served as Chairman of the Board and Chief Executive Officer of Phillips Edison Grocery Center REIT III, Inc.

(“REIT III”) from April 2016 through the date it merged with PECO in October 2019, and served as Chairman of the Board and Chief Executive Officer of Phillips Edison Grocery Center REIT II, Inc.

(“REIT II”) from 2013 through the date it merged with PECO in November 2018.

Edison co-founded Phillips Edison Limited Partnership (“PELP”) and has served as a principal of it since 1995.

Before founding Phillips Edison, Mr.

Edison was a senior vice president from 1993 until 1995 and was a vice president from 1991 until 1993 at Nations Bank’s South Charles Realty Corporation.

Edison was employed by Morgan Stanley Realty Incorporated from 1987 until 1990, and was employed by The Taubman Company from 1984 to 1987.

Edison holds a Bachelor of Arts in mathematics and economics from Colgate University and a Master of Business Administration from Harvard University.

Among the most important factors that led to the Board’s recommendation that Mr.

Edison serve as a director are his leadership skills, integrity, judgment, knowledge of PECO, his experience as a director and chief executive officer of PECO, REIT II, and REIT III, and his commercial real estate expertise.

Lead Independent Director

Director Since 2010

Chao has served as a director since July 2010 and as Lead Independent Director since November 2017.

He retired in 2008 as Chief Executive Officer of Chelsea Property Group, Inc., a New York Stock Exchange (“NYSE”) listed shopping center real estate investment trust (“REIT”) with operations in the United States, Asia and Mexico (now part of Simon Property Group, NYSE:

SPG), previously serving as President and Chief Financial Officer.

He has been a board member of London-based Value Retail PLC since 2009;

and a co-founder and chairman of entities comprising Value Retail China, a privately-held owner/developer of retail properties, since 2012.

From 2005 to 2008 he was an inaugural member of the board of Link REIT, the first publicly-listed and largest REIT in Hong Kong.

Earlier in his career, Mr.

Chao was with Manufacturers Hanover Corporation (now part of JPMorgan Chase & Co.), ending in 1987 as a Vice President in the bank holding company treasury group.

He received an MBA from Columbia University and an AB from Dartmouth College, where he is a member of the President’s Leadership Council and the advisory board of the Hopkins Center for the Arts.

He is based in New York City.

Among the most important factors that led to the Board’s recommendation that Mr.

Chao serve as a director are his extensive domestic and international commercial real estate expertise, accounting and

financial management expertise, public company director experience, integrity, judgment, leadership skills, and independence from management and our affiliates.

Elizabeth Fischer

Director Since 2019

Fischer joined Goldman Sachs & Co.

LLC in 1998 and most recently served as Managing Director of the Bank Debt Portfolio Group from 2010 until her retirement in May 2019, where she managed Leveraged Finance-led syndicated loans.

She also served four years as co-head of Goldman Sachs’ firm-wide Women’s Network for the Americas.

Prior to joining Goldman Sachs, she held various positions in the leveraged finance, syndications, and risk management group at the Canadian Imperial Bank of Commerce (CIBC).

Fischer began her career at KPMG LLP.

She holds a Bachelor of Arts from Colgate University and a Master of Business Administration from New York University.

Among the most important factors that led to the Board’s recommendation that Ms.

Fischer serve as a director are her financial and investment expertise, leadership skills, integrity, judgment, and independence from management and our affiliates.

Director Since 2010

Massey began his career in 1983 at Coldwell Banker Commercial Real Estate Services, now CBRE, in Midtown Manhattan, first as the head of the market research department, and next as an investment sales broker.

Together with partner Robert A.

Knakal, he founded Massey Knakal Realty Services, which became New York City’s largest investment property sales brokerage firm, of which Mr.

Massey served as Chief Executive Officer.

With 250 sales professionals serving more than 200,000 property owners, Massey Knakal Realty Services was ranked as New York City’s #1 property sales company in transaction volume by the Costar Group, a national, independent real estate analytics provider.

With more than $4.0 billion in annual sales, Massey Knakal was also ranked as one of the nation’s largest privately-owned real estate brokerage firms.

On December 31, 2014, Massey Knakal was sold to global commercial real estate firm Cushman & Wakefield, Inc., for which Mr.

Massey served as President - New York Investment Sales through April 2018.

In July 2018, Mr.

Massey founded B6 Real Estate Advisors, a real estate brokerage firm in New York City, and currently serves as its Chief Executive Officer.

Massey was the recipient of the Real Estate Board of New York’s (“REBNY’’) prestigious Louis B.

Smadbeck Broker Recognition Award.

Massey also serves as Chair for REBNY’s Ethics and Business Practice Subcommittee, was a director on the Commercial Board of Directors of REBNY, is Chairman of the Board of Trustees of the Roxbury Latin School, and serves as a chair or member of numerous other committees.

He served as a director of REIT II from July 2014 to August 2017.

Massey holds a Bachelor of Arts in economics from Colgate University.

Among the most important factors that led to the Board’s recommendation that Mr.

Massey serve as a director are his integrity, judgment, leadership skills, extensive commercial real estate expertise, familiarity with our company, and independence from management and our affiliates.

Director Since 2013

Quazzo is co-founder and Chief Executive Officer of Pearlmark Real Estate, L.L.C.

From 1991 to 1996, Mr.

Quazzo served as President of Equity Institutional Investors, Inc., a subsidiary of investor Sam Zell’s private holding company, Equity Group Investments, Inc.

Quazzo was responsible for raising equity capital and performing various portfolio management services in connection with the firm’s real estate investments, including institutional opportunity funds and public REITs.

Prior to joining the Zell organization, Mr.

Quazzo was in the Real Estate Department of Goldman, Sachs & Co., where he was a vice president responsible for the firm’s real estate investment banking activities in the Midwest.

Quazzo holds a Bachelor of Arts and a Master of Business Administration from Harvard University, where he serves as a member of the Board of Dean’s Advisors for the business school.

He is a Trustee of the Urban Land Institute (ULI), Trustee and immediate past Chair of the ULI Foundation, a member of the Pension Real Estate Association, and a licensed real estate broker in Illinois.

In addition, Mr.

Quazzo currently serves a director of Marriott Vacations Worldwide (NYSE:

VAC) and previously served as a director of ILG, Inc.

ILG) until September 2018 and Starwood Hotels & Resorts Worldwide, Inc.

HOT) until September 2016.

He also sits on a number of non-profit boards, including Rush University Medical Center, the Chicago Symphony Orchestra Endowment, the Chicago Parks Foundation, Deerfield Academy, and City Year Chicago.

Among the most important factors that led to the Board’s recommendation that Mr.

Quazzo serve as a director are his commercial real estate expertise, investment management expertise, public company director experience, leadership skills, integrity, judgment, and independence from management and our affiliates.

Director Since 2019

Silfen is the founder and owner of Mayfair Advisors LLC, which was founded in 2019 to advise clients on sustainability and clean technology investment opportunities.

Since 2015, she also has served as Vice President at Mayfair Management Co., Inc., a New York City-based family office, where she is responsible for overseeing and making public and private investments.

In February of 2021, Ms.

Silfen was named interim CFO of Genera Energy Inc., a sustainable packaging company.

Silfen began her career in investment banking at Goldman Sachs and later served as Vice President at Encourage Capital, LLC.

She holds a Bachelor of Arts from the University of Pennsylvania and a Master in Public Policy and Master of Business Administration from Harvard University.

Among the most important factors that led to the Board’s recommendation that Ms.

Silfen serve as a director are her investment experience, clean technology and sustainability expertise, integrity, judgment, and independence from management and our affiliates.

Director Since 2018

Since July 2010, Dr.

Strong has served as Chairman and Chief Executive Officer of Bankers Financial Corporation, a diversified financial services company for outsourcing solutions for claims, policy and flood products for insurers;

insurance tracking for lenders;

human resources solutions for small business;

warranties for consumer electronics and new homes;

insurance and maintenance services for properties, businesses and builders;

and surety bonds for bail.

From 2005 to 2010, he served as the President and Managing Partner of Greensboro Radiology.

Since 2007, Dr.

Strong has served as a board member of Bankers Financial Corporation.

He previously served as a director of REIT II from May 2017 to November 2018 when it merged into PECO.

Strong holds a Bachelor of Arts in mathematics from Duke University and a Doctor of Medicine degree from Michigan State University College of Human Medicine as well as his residency and fellowship in radiology from Duke University.

Among the most important factors that led to the Board’s recommendation that Dr.

Strong serve as a director are his financial and management expertise, judgment, leadership skills, and independence from management and our affiliates.

Director Since 2016

Wood has been Executive Vice President and Chief Financial Officer of EnergySolutions, Inc., a leading services provider to the nuclear industry, since June 2012.

Prior to that, Mr.

Wood held the role of Chief Financial Officer at numerous public and private companies, including Actian Corporation, Silicon Graphics, Liberate Technologies, and InterTrust Technologies.

Wood was a director of Steinway Musical Instruments, Inc.

from October 2011 to October 2013, where he also served as Chairman of the Audit Committee.

Wood, a certified public accountant (inactive), holds a Bachelor of Business Administration in accounting from the University of San Diego and a Juris Doctor from the University of San Francisco School of Law.

Among the most important factors that led to the Board’s recommendation that Mr.

Wood serve as a director are Mr.

Wood’s accounting and financial management expertise, public company director experience, integrity, judgment, and independence from management and our affiliates.

Board Leadership Structure

The Board believes that it should have the flexibility to periodically (i) determine the leadership structure that is best for the Company and (ii) review such structure to determine whether it continues to serve the Company and its stockholders.

The Board believes the current leadership structure, with Mr.

Edison serving as both Chief Executive Officer and Chairman of the Board, provides a well-functioning and effective balance between strong management leadership and appropriate oversight by the Lead Independent Director.

The Board believes this is the optimal structure to guide the Company and maintain the focus required to achieve the business goals and grow stockholder value.

As Chairman of the Board, Mr.

Edison presides over Board and stockholder meetings, oversees the setting of the agenda for those meetings and the dissemination of information about the Company to the Board, and represents the Company at public events.

Because the Chairman is an employee of the Company, the Board elects a Lead Independent Director from its independent directors.

Chao has served as our Lead Independent Director since November 2017.

The Chairman and Chief Executive Officer consults periodically with the Lead Independent Director on Board matters, Board agendas, and on issues facing the Company.

In addition, the Lead Independent Director:

(i) serves as the principal liaison between the Chairman of the Board and the independent directors;

(ii) presides at all meetings of the Board at which the Chairman is not present, including executive sessions of the independent directors;

and (iii) performs such other duties as may be assigned by the Board.

Our Lead Independent Director also has the authority to call meetings of the independent directors of the Board.

Board Committees

To assist the Board in undertaking its responsibilities, and to allow deeper engagement in certain areas of Company oversight, the Board has established two standing committees:

Audit Committee and Compensation Committee.

Both committees are comprised exclusively of independent directors, as determined under the NYSE listing standards.

Each committee’s charter is available on our website at www.phillipsedison.com/investors/governance.

The current chairs and members of each committee are set forth below:

Audit Committee Compensation Committee

Elizabeth Fischer Member

Quazzo Member

Jane Silfen Member

Audit Committe e — The Audit Committee’s primary function is to assist the Board in fulfilling its responsibilities by overseeing the Company’s independent registered public accounting firm, reviewing the financial information to be provided to our stockholders and others, overseeing the system of internal control over financial reporting that management has established, and overseeing our audit and financial reporting process.

The Audit Committee also is responsible for overseeing our compliance with applicable laws and regulations and for establishing procedures for the ethical conduct of our business.

The Board has determined that Mr.

Chao qualifies as an “audit committee financial expert” as defined by applicable U.S.

and Exchange Commission (“SEC”) regulations and that all members of the Audit Committee are “financially literate” within the meaning of the NYSE listing standards.

During 2020, the Audit Committee held five meetings.

Compensation Committee — The Compensation Committee’s primary functions are to discharge the Board’s responsibility relating to compensation of our directors and executive officers by evaluating and approving director and executive officer compensation plans, policies and programs.

The Compensation Committee also is responsible for (i) reviewing and discussing with management the Compensation Discussion and Analysis (‘‘CD&A’’) required to be included in this Annual Report on Form 10-K, (ii) recommending to the Board whether the CD&A should be included in such Annual Report, and (iii) providing a Compensation Committee Report that complies with the applicable federal securities laws and regulations for inclusion in this Annual Report on Form 10-K.

During 2020, the Compensation Committee held five meetings.

Director Nomination Process

The Board is responsible for selecting its own nominees and recommending them for election by our stockholders.

All director nominees then stand for election by our stockholders annually.

The Board does not have a standing nominating committee or a charter that governs the director nomination process.

The Board believes that the primary reason for creating a standing nominating committee is to ensure that candidates for independent director positions can be identified and their qualifications assessed under a process free from conflicts of interest with PECO.

Because nominations for vacancies in independent director positions are handled exclusively by the independent directors, the Board has determined that the creation of a standing nominating committee is not necessary at this time.

Board Membership Criteria — The Board annually reviews the appropriate experience, skills, and characteristics required of directors in the context of the then-current membership of the Board.

This assessment includes, in the context of the perceived needs of the Board at that time, issues of knowledge, experience, judgment, and skills such as an understanding of commercial real estate, capital markets, business leadership, accounting, financial management, and environmental, social, and corporate governance matters.

No one person is likely to possess deep experience in all of these areas.

Therefore, the Board has sought a diverse board of directors whose members collectively possess these skills and experiences.

Other considerations include the candidate’s independence from PECO and our affiliates and the ability of the candidate to participate in Board meetings regularly and to devote an appropriate amount of time and effort in preparation for those meetings.

It also is expected that independent directors nominated by the Board shall be individuals who possess a reputation and hold (or have held) positions or affiliations befitting a director of a large public company and are (or have been) actively engaged in their occupations or professions or are otherwise regularly involved in the business, professional, or academic community.

As detailed in the director biographies above, the Board believes that the slate of directors recommended for election at the Annual Meeting possesses these diverse skills and experiences.

Stockholder Nominees — Stockholders may directly nominate potential directors (without the recommendation of the Board) by satisfying the procedural requirements for such nomination as provided in Section 2.12 of our Bylaws.

In order for stockholder nominees to be considered for nomination by the Board, recommendations made by stockholders must be submitted within the timeframe required to request a proposal to be included in the proxy materials.

In evaluating the persons recommended by stockholders as potential directors, the Board will consider each candidate without regard to the source of the recommendation and take into account those factors that the Board determines are relevant.

Corporate Governance Guidelines

The Board has adopted the Corporate Governance Guidelines, which are available on our website at www.phillipsedison.com/investors/governance.

The contents of our website are not incorporated by reference into this Form 10-K.

Code of Ethics

The Board has adopted a Code of Ethics that applies to all of our directors, officers, and employees, including our principal executive, principal financial, and principal accounting officers.

The Code of Ethics is available on our website at www.phillipsedison.com/investors/governance.

In the event of any changes to the Code of Ethics, revised copies will be made available on our website.

The contents of our website are not incorporated by reference into this Form 10-K.

The Board held seven meetings in 2020.

During 2020, each director attended at least 75% of the aggregate number of the meetings of the Board and each committee of the Board on which he or she then served.

Each of the directors then serving on the Board attended the 2020 annual meeting of stockholders.

Each director is expected to make reasonable efforts to attend all meetings of the Board and Committees on which the director serves, as well as the Company’s annual meeting.

Board’s Role in Risk Oversight

While day-to-day risk management is primarily the responsibility of PECO’s management team, the Board is responsible for strategic planning and overall supervision of our risk management activities.

The Board, including through its Audit Committee, is actively involved in overseeing risk management for PECO through:

(i) its oversight of our executive officers and our subsidiaries and affiliates;

(ii) its review and approval of all transactions with related parties;

(iii) its review and discussion of regular periodic reports to the Board and its committees, including management reports on property operating data, compliance with debt covenants, actual and projected financial results, compliance with requirements set forth in our charter and Corporate Governance Guidelines, and various other matters relating to our business;

and (iv) its review and discussion of regular periodic reports from our independent registered public accounting firm to the Audit Committee regarding various areas of potential risk.

The Board’s Compensation Committee also assesses executive compensation risk and balances it so that Company executives are not incentivized to take actions which create unnecessary risk for the Company.

Compensation Committee Interlocks and Insider Participation

No member of the Compensation Committee was an officer or employee of PECO during 2020, and no member of the Compensation Committee is a former officer of PECO or was a party to any related party transaction involving PECO required to be disclosed under Item 404 of Regulation S-K.

During 2020, none of our executive officers served on the board of directors

or on the compensation committee of any other entity that has or had executive officers serving as a member of the Board or the Compensation Committee.

Stockholder Communications with the Board

We have established several means for our stockholders to communicate concerns to the Board.

If the concern relates to our financial statements, accounting practices, or internal controls, then stockholders should submit the concern in writing directed to the Audit Committee Chair, c/o our Corporate Secretary at our executive offices.

If the concern relates to our governance practices, business ethics, or corporate conduct, then stockholders should submit the concern in writing to the Lead Independent Director, c/o our Corporate Secretary at our executive offices.

If uncertain as to which category a concern relates, then a stockholder should submit the concern in writing to the Independent Directors, c/o our Corporate Secretary at our executive offices.

Executive Officers

Below is certain information about our current executive officers as of the date hereof:

Chairman & Chief Executive Officer

Edison has served as PECO’s Chairman of the Board and Chief Executive Officer since December 2009 and also served as President from October 2017 to August 2019.

Edison also served as Chairman of the Board and Chief Executive Officer of REIT III from April 2016 through the date it merged with PECO in October 2019, and served as Chairman of the Board and Chief Executive Officer of REIT II from 2013 through the date it merged with PECO in November 2018.

Edison co-founded PELP and has served as a principal of it since 1995.

Before founding Phillips Edison, Mr.

Edison was a senior vice president from 1993 until 1995 and was a vice president from 1991 until 1993 at Nations Bank’s South Charles Realty Corporation.

Edison was employed by Morgan Stanley Realty Incorporated from 1987 until 1990, and was employed by The Taubman Company from 1984 to 1987.

Edison holds a Bachelor of Arts in mathematics and economics from Colgate University and a Master of Business Administration from Harvard University.

Murphy has served as our President since August 2019.

Prior to that, he served as our Chief Financial Officer from June 2013, when he joined the Company, to August 2019.

Before joining Phillips Edison in 2013, Mr.

Murphy worked for 28 years as an investment banker and held senior leadership roles at Morgan Stanley and Deutsche Bank.

He served as the Global Head of Real Estate Investment Banking at Deutsche Bank.

His Deutsche Bank team executed over 500 transactions of all types for clients representing total transaction volume exceeding $400 billion and included initial public offerings, mergers and acquisitions, common stock offerings, secured and unsecured debt offerings, and private placements of both debt and equity.

Murphy began his banking career at Morgan Stanley in 1986 and held a number of senior positions including Vice Chairman, co-head of US Real Estate Investment Banking, and Head of Real Estate Private Capital Markets.

He also served on the Investment Committee of the Morgan Stanley Real Estate Funds, a series of global real estate funds with over $35 billion in assets under management.

During his 20 years with Morgan Stanley, Mr.

Murphy and his teams executed numerous capital markets and merger and acquisition transactions including a number of industry-defining transactions.

Murphy served as a Director of the NYSE-listed real estate services firm Grubb and Ellis prior to its sale to BGC Partners and of the S&P 500 company Apartment Investment and Management (AIV) prior to its spin off transaction.

Murphy currently serves as an independent director of Apartment Income REIT Corp (AIRC), a NYSE-listed apartment REIT, and serves on the Audit, Compensation, and Nominating Committees of AIRC.

He is also an independent director of CoreCivic (CXW), a NYSE-listed corporation that provides diversified government solutions in corrections and detention management.

He serves on the Audit and Risk Committees at CXW.

Murphy received a Bachelor of Arts in English and History with Honors from the College of William and Mary and a Masters of Business Administration from the University of Michigan.

Chief Operating Officer & Executive Vice President

Myers has served as our Chief Operating Officer since October 2010.

Myers joined PECO in 2003 as a Senior Leasing Manager, was promoted to Regional Leasing Manager in 2005 and became Vice President of Leasing in 2006.

He was named Senior Vice President of Leasing and Operations in 2009, and Chief Operating Officer in 2010.

Before joining PECO, Mr.

Myers spent six years with Equity Investment Group, where he started as a property manager in 1997.

He served as director of operations from 1998 to 2000 and as director of lease renegotiations/leasing agent from 2000 to 2003.

He received his Bachelor’s degree in business administration from Huntington College in 1995.

Chief Financial Officer, Senior Vice President & Treasurer

Caulfield has served as our Chief Financial Officer, Senior Vice President, and Treasurer since August 2019.

Prior to that, he served as our Senior Vice President of Finance from January 2016 to August 2019, with responsibility for financial planning and analysis, budgeting and forecasting, risk management, and investor relations.

He served as chief financial officer, treasurer, and secretary of REIT III from August 2019 to October 2019 when it merged with PECO.

He joined PECO in March 2014 as vice president of treasury and investor relations.

Prior to joining PECO, Mr.

Caulfield served as vice president of treasury and investor relations with CyrusOne Inc.

CONE) from February 2012 to March 2014 where he played a key role in the company’s successful spinoff and IPO from Cincinnati Bell (NYSE:

the establishment of its capital structure and treasury function;

and creation, positioning, and strategy of messaging and communications with investors and research analysts.

Prior to that, he spent seven years with Cincinnati Bell, holding various positions in treasury, finance, and accounting, including assistant treasurer and director of investor relations.

Caulfield has a Bachelor’s degree in accounting and a Master of Business Administration from Xavier University and is a certified public accountant.

General Counsel, Senior Vice President & Secretary

Brady has served as our General Counsel and Senior Vice President since January 2015 and as Secretary since November 2018.

She joined PECO in 2013 as Vice President and Assistant General Counsel.

She has over 20 years of experience in commercial real estate and corporate transactions, including joint venture and fund formation matters, structuring and negotiating asset and entity-level acquisitions and dispositions and related financings, the sales and purchases of distressed loans, and general corporate matters.

She also has extensive commercial leasing and sale leaseback experience.

Prior to joining PECO, Ms.

Brady was a partner at the law firm of Kirkland & Ellis LLP in Chicago, Illinois.

Prior to that, she held associate positions at the law firms of Freeborn & Peters LLP (Chicago, Illinois), King & Spalding LLP (Atlanta, Georgia), and Scoggins & Goodman, P.C.

(Atlanta, Georgia).

Brady received a Bachelor of Civil Law degree with honors from the National University of Ireland College of Law in Dublin, Ireland, and a Juris Doctor from DePaul University College of Law in Chicago.

She is licensed to practice in Illinois, Georgia, Ohio, and Utah.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires directors, executive officers, the chief accounting officer, and any persons beneficially owning more than 10% of our common stock to report their initial ownership of the common stock and most changes in that ownership to the SEC.

The SEC has designated specific due dates for these reports, and we are required to identify those persons who did not file these reports when due.

Based solely on our review of copies of the reports filed with the SEC and written representations of our directors, executive officers and chief accounting officer, we believe all persons subject to these reporting requirements filed the reports on a timely basis in 2020.

EXECUTIVE COMPENSATION

The information required by this Item is set forth in our definitive proxy statement to be filed with the SEC by April 30, 2020, and is hereby incorporated by reference into this Form 10-K.

COMPENSATION DISCUSSION AND ANALYSIS

Named Executive Officers —This Compensation Discussion and Analysis describes our compensation program as it relates to our named executive officers (“NEOs”).

For 2020, our named executive officers were:

Edison, Chairman of the Board and Chief Executive Officer;

Murphy, President;

Caulfield, Chief Financial Officer, Senior Vice President, and Treasurer;

Myers, Chief Operating Officer and Executive Vice President;

Brady, Senior Vice President, General Counsel, and Secretary.

Summary of Key Compensation Practices

WHAT WE DO WHAT WE DON’T DO

√ A significant portion of our executive officers’ total compensation opportunity is based on performance and is not guaranteed.

× We do not provide “single-trigger” change in control cash severance payments.

√ We have a formulaic annual incentive bonus program based on goals for management.

× We do not guarantee annual salary increases or minimum cash bonuses.

√ We align the interests of our executive officers with our stockholders by awarding a significant percentage of their equity compensation in the form of multi-year, performance-based equity awards.

× We do not provide tax gross-up payments to any of our executive officers for tax amounts they might pay pursuant to Section 4999 or Section 409A of the Internal Revenue Code (the “Code”).

√ We enhance executive officer retention with time-based, multi-year vesting equity incentive awards.

× We do not allow for repricing or buyouts of stock options without prior stockholder approval.

√ The Compensation Committee, which is comprised solely of independent directors, engages an independent compensation consultant.

COVID Impact —We recognized the uncertainty the COVID-19 pandemic was going to cause on our business operations.

Early in 2020, as the COVID-19 pandemic’s impact developed, the Compensation Committee approved, at the recommendation of management, a temporary 25% reduction to the base salary of our chief executive officer, a temporary 10% reduction to the base salaries of each of our other NEOs, and a 10% reduction to the Board’s annual compensation.

The reduction to base salaries was in effect until January 1, 2021.

The Compensation Committee also considered adjusting performance metrics as a result of the COVID-19 pandemic.

However, the Compensation Committee determined that as opposed to adjusting targets mid-year, the best approach would be to use its discretion in evaluating management’s performance for the year ended December 31, 2020.

In a time when many of our peers were withdrawing guidance on their results, the Compensation Committee did not believe it could provide earnings goals that would appropriately measure management’s performance.

Accordingly, the Compensation Committee took into account the impact of the COVID-19 pandemic in early 2021 when it considered our performance against our 2020 performance goals and determined to primarily assess the Company’s performance for 2020 on a relative basis to our performance-based peers as a suitable means for evaluating performance.

Notwithstanding performing among the very top of our peer group on Adjusted Funds from Operations (“AFFO”)/Funds from Operations (“FFO”)/Same-Center net operating income (“NOI”) and collections, the

Compensation Committee ultimately approved bonuses that were 75% of target as discussed under “2020 Annual Cash Incentive Program”.

2020 Financial Performance —As discussed in “Part II, Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this filing on Form 10-K, the following are the Company’s 2020 financial highlights:

• Net income of $5.5 million as compared to a net loss of $72.8 million a year ago, largely owing to lower impairments in 2020 due to the successful execution of our capital recycling program in recent years.

• Core FFO decreased by $10.5 million to $220.4 million, and declined by $0.04 to $0.66 per diluted share.

• Same-Center NOI decreased 4.1% to $328.0 million.

• General and administrative expenses decreased $7.1 million, or 14.7%, primarily due to expense reductions taken to reduce the impact of the COVID-19 pandemic, with the majority of these decreases related to compensation.

• We suspended stockholder distributions after the March 2020 distribution, and resumed monthly stockholder distributions beginning December 2020.

• Completed a tender offer which resulted in the repurchase of 13.5 million shares of common stock.

• Net debt to Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization for Real Estate (“Adjusted EBITDA re”) – annualized was 7.3x as compared to 7.2x during the same period a year ago.

• Leased portfolio occupancy totaled 94.7%, compared to 95.4% a year ago.

• Executed 861 leases (new, renewal, and options) totaling 4.7 million square feet with comparable new lease spreads of 8.2% and comparable renewal and option lease spreads of 6.7%.

• Realized $57.9 million of cash proceeds from the sale of seven properties and one outparcel.

• Acquired two properties and two outparcels for a total cost of $41.5 million.

• Net debt to total enterprise value of 44.5% compared to 39.5% at December 31, 2019.

For a more detailed discussion of our 2020 results, including a reconciliation of how we calculate FFO, Core FFO, Same-Center NOI, and EBITDA re , please see “Part II, Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Measures” of this filing on Form 10-K.

Management believes these Non-GAAP metrics are useful to investors and analysts.

Summary of Fixed and At Risk Pay Elements —The fixed and at risk pay elements of NEO compensation are reflected in the table and charts below:

Element Form Description

Fixed Compensation

Base Salary Cash • Designed to compensate executive officers for services rendered on a day-to-day basis

• Provides guaranteed cash compensation to secure services of our executive talent

• Established based on scope of responsibilities, experience, performance, contributions, and internal pay equity considerations

• Compensation Committee reviews annually

Compensation Annual Incentive Plan Cash Bonus • Designed to encourage outstanding individual and Company performance by motivating executives to achieve short-term Company and individual goals by rewarding performance measured against key annual strategic objectives

• 2020 Company performance metrics were AFFO per share and Same-Center NOI growth, which metrics were not adjusted during the COVID-19 pandemic

Long-Term Incentive Plan Time-Based Restricted Stock Units • Compensation Committee believes a substantial portion of each executive’s compensation should be in the form of long-term equity incentives

• Designed to encourage management to create stockholder value over the long term;

value of equity awards directly tied to changes in value of our common stock over time

• 2020 awards were 60% performance-based restricted stock units (or operating partnership units) and 40% time-based restricted stock units (or operating partnership units)

• Performance-based LTIP Units granted under the 2018 LTIP Program were deemed earned at maximum based on performance through December 31, 2020, but were capped at the target amount due to a decrease in Net Asset Value (“NAV”) per share from the beginning of the performance period

Performance-Based Restricted Stock Units

The following charts illustrate each NEO’s base salary, target annual cash incentive award, and target long-term equity incentive award as a percentage of total target compensation for 2020 (excluding certain ”Special LTIP Awards” which were granted to both our CEO and our President and which we will describe later within this Item):

Executive Compensation Objectives and Philosophy

The key objectives of our executive compensation program are to:

(1) attract, motivate, reward, and retain superior executive officers with the skills necessary to successfully lead and manage our business;

(2) achieve accountability for performance by linking annual cash incentive compensation to the achievement of measurable performance objectives;

and (3) incentivize our executive officers to build value and achieve financial objectives designed to increase the value of our business through short-term and long-term incentive compensation programs.

For our executive officers, these short-term and long-term incentives are designed to accomplish these objectives by providing a significant correlation between our financial results and their actual total compensation.

We expect to continue to provide our executive officers with a significant portion of their compensation through cash incentive compensation contingent upon the achievement of financial and individual performance metrics as well as through equity compensation.

These two elements of executive compensation are aligned with the interests of our stockholders because the amount of compensation ultimately received will vary with our financial performance.

We seek to apply a consistent philosophy to compensation for all executive officers.

Setting Executive Compensation

The Compensation Committee is responsible for approving the compensation of the CEO and other executive officers.

When setting executive compensation, the Compensation Committee considers our overall Company performance, including our achievement of financial goals, and individual performance.

In addition, in a time of adversity, such as the COVID-19 pandemic, the Compensation Committee will evaluate the executives’ ability to respond to the challenges present and will consider the NEOs’ compensation in light of their performance and response.

They also consider compensation paid by similarly-situated REITs for their executive roles.

In addition, the Compensation Committee continues to consider the projected performance and strategic outlook for the Company, the changing roles and responsibilities of our executive officers, and the expected future contributions of our executive officers.

The Compensation Committee believes that understanding competitive market data is an important part of its decision-making process;

while this exercise does not perfectly capture all the unique aspects of our business, typically it provides a solid foundation upon which to base executive compensation decisions.

Role of the Compensation Committee —The Compensation Committee, which is comprised entirely of independent directors, reviews the compensation packages for our executive officers, including an analysis of all elements of compensation separately and in the aggregate.

The Compensation Committee operates under a written charter adopted by our Board, which provides that the Compensation Committee has overall responsibility to:

• review and approve corporate goals and objectives relevant to CEO compensation, evaluate the CEO’s performance in light of those goals and objectives, and approve the CEO’s compensation levels based on such evaluation;

• review and approve the annual salary, bonus, and equity-based incentives and other benefits, direct and indirect, of the CEO and other executive officers;

• review and approve any employment agreements, severance arrangements, and change in control agreements or provisions, in each case as, when, and if appropriate;

• administer the Company’s equity incentive plans, as well as any other stock option, stock purchase, incentive, or other benefit plans of the Company, fulfilling such duties and responsibilities as set forth in such plans.

In reviewing and approving these matters, the Compensation Committee considers such matters as it deems appropriate, including our financial and operating performance, the alignment of the interests of our executive officers and our stockholders, and our ability to attract and retain qualified and committed individuals.

The Compensation Committee has the discretion to adjust performance goals used in our executive compensation programs to take into account extraordinary, unusual, or infrequently-occurring events and transactions not anticipated at the time the performance goals were set.

In determining appropriate compensation levels for our CEO, the Compensation Committee meets outside the presence of management.

With respect to the compensation levels of all other executives, the Compensation Committee meets outside the presence of all executive officers except our CEO.

Our CEO annually reviews the performance of each of the other executives with the Compensation Committee.

Role of Compensation Consultant —The Compensation Committee engaged FPL Associates L.P.

(“FPL”) to provide guidance regarding our executive compensation program for 2020.

The Compensation Committee performs an annual assessment of the compensation consultant’s independence to determine whether the consultant is independent.

During 2020, FPL did not provide services to the Company other than the services provided to the Compensation Committee.

The Compensation Committee has determined that FPL is independent and that its work has not raised any conflicts of interest.

Benchmarking and Peer Group Comparisons —The Compensation Committee reviews competitive compensation data from a select group of peer companies and broader survey sources.

Although comparisons of compensation paid to our NEOs relative to compensation paid to similarly situated executives in the survey and by our peers assist the Compensation Committee in determining compensation, the Compensation Committee principally evaluates executive compensation based on corporate objectives and individual performance.

For 2020, the following peer group, which is used to benchmark pay practices and with whom we compete for talent, was reviewed.

Our management team proposed the peer group of companies, which was reviewed and approved by the Compensation Committee after it was independently verified by FPL:

Acadia Realty Trust Kimco Realty Corporation Retail Properties of America, Inc.

Brixmor Property Group Inc.

Kite Realty Group Trust SITE Centers Corp.

(formerly DDR)

Federal Realty Investment Trust Regency Centers Corporation Weingarten Realty Investors

InvenTrust Properties Corp Retail Opportunity Investments Corp.

FPL also furnished a report to the Compensation Committee that compared the compensation of our executive officers to data in the National Association of Real Estate Investment Trusts (“Nareit”) survey to assess compensation levels for 2020.

The Nareit survey includes 123 REITs and provides a broad market reference of REITs, including retail REITs, many of which compete with the Company for executive talent.

Advisory Vote on Executive Compensation

Each year, the Compensation Committee considers the outcome of the stockholder advisory vote on executive compensation when making future decisions relating to the compensation of our named executive officers and our executive compensation program and policies.

In 2020, stockholders showed support for our executive compensation programs, with approximately 85% of the votes cast for the approval of the “say-on-pay” proposal at our 2020 annual meeting of stockholders.

The Compensation Committee believes that this support is attributable to its commitment to continuing the alignment of our NEOs’ compensation with the Company’s performance.

Elements of Executive Compensation

Annual base salary, annual cash incentive, and long-term equity incentives are the primary elements of our executive compensation program, and, on an aggregate basis, they are intended to substantially satisfy our program’s overall objectives.

The Compensation Committee seeks to set each of these elements of compensation at the same time to enable it to simultaneously consider all of the significant elements and their impact on compensation as a whole.

Taking this comprehensive view of all compensation components also allows the Compensation Committee to make compensation determinations that reflect the principles of our compensation philosophy.

We strive to achieve an appropriate mix between the various elements of our compensation program to meet our compensation objectives and philosophy;

however, the Compensation Committee does not apply any rigid allocation formula in setting our executive compensation, and may make adjustments to this approach for various positions after giving due consideration to prevailing circumstances, internal pay equity, and each individual’s responsibilities, experience, and performance.

The Compensation Committee seeks to establish an appropriate mix of cash payments and equity awards to meet our short-term and long-term goals and objectives.

Base Salary — We provide base salaries to our NEOs to compensate them for services rendered on a day-to-day basis.

Base salaries also provide g uaranteed cash compensation to secure the services of our executive talent.

The base salaries of our NEOs are primarily established based on the scope of their responsibilities, experience, performance, and contributions, and internal pay equity considerations, taking into account comparable company data provided by our compensation consultant and based upon the Compensation Committee’s understanding of compensation paid to similarly situated executives, adjusted as necessary to recruit or retain specific individuals.

The Compensation Committee reviews the base salaries of our executive officers annually and may also increase the base salary of an executive at other times if a change in the scope of his or her responsibilities, such as a promotion, justifies such consideration.

We believe that providing a competitive base salary relative to the companies with which we compete for executive talent is a necessary element of a compensation program that is designed to attract and retain talented and experienced executives.

We also believe that attractive base salaries can motivate and reward our executive officers for their overall performance.

Accordingly, the compensation philosophy and approach of the Compensation Committee is to generally provide a base salary for each of our executive officers at or near the 50 th percentile base salary amount of similarly situated executives at companies in the National Association of Real Estate Investment Trusts (“Nareit”) survey with adjustments made to take into account other factors such as the executive’s responsibilities and experience and internal pay equity.

Based on such review, Mr.

Caulfield received a 10.0% increase to his base salary and Ms.

Brady received a 4.3% increase to her base salary in 2020.

The following table presents the base salary earned by each of our NEOs for the years ended December 31, 2020 and 2019:

Executive 2019 Base Salary 2020 Base Salary % Increase

Edison $ 850,000 $ 850,000 —

Murphy 490,000 490,000 —

Myers 490,000 490,000 —

Caulfield 300,000 330,000 10.0%

Brady 350,000 365,000 4.3%

In addition, during the first quarter of 2020, in response to the COVID-19 pandemic, the Compensation Committee approved, at the recommendation of management, a temporary 25% reduction to the base salary of our chief executive officer and a temporary 10% reduction to the base salaries of each of our other NEOs.

The reduction to the base salaries was in effect until January 1, 2021.

2020 Annual Cash Incentive Program

Highlights of 2020 Program

Program Design

In March 2020, the Compensation Committee, in consultation with FPL, approved the 2020 annual cash incentive program for our executive officers.

The 2020 program used the same Company performance measures, AFFO and Same-Center NOI growth, as in 2019.

Accordingly, under the 2020 annual cash incentive program, for all executive officers except Mr.

Murphy, the weighting of Company and individual performance was as follows:

AFFO per share target (50%), Same-Center NOI growth (20%), and individual performance (30%).

Murphy’s award was based on AFFO per share (10%) and individual performance (90%).

The Compensation Committee chose the relative weights of the performance measures based on its desire to emphasize financial results while maintaining a focus on non-financial initiatives.

Company Performance Goals

The Compensation Committee believes that AFFO is an appropriate and effective measure of annual Company-wide performance.

FFO is a non-GAAP performance financial measure that is widely recognized as a measure of REIT operating performance.

FFO is net income (loss) attributable to common stockholders computed in accordance with GAAP, excluding gains (or losses) from sales of property, plus real estate depreciation and amortization, and after adjustments for impairment losses on real estate.

Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis.

FFO is calculated in a manner consistent with the Nareit definition, with an additional adjustment made for noncontrolling interests that are not convertible into common stock.

AFFO adjusts FFO for depreciation and amortization of corporate assets and associated write-offs, 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, transaction and acquisition expenses, straight-line rents, amortization of in-place leases, deferred financing costs amortization and associated write-offs, amortization of market debt adjustments, equity compensation expense, tenant improvement capital expenditures, leasing costs, and maintenance capital expenditures.

Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect AFFO on the same basis.

The Compensation Committee believes that Same-Center NOI growth is an appropriate and effective measure of financial performance compared to the prior year.

Same-Center NOI is a non-GAAP performance financial measure that is widely used to highlight operating trends such as occupancy rates, rental rates, and operating costs on properties that were operational for both comparable periods.

Short-Term Incentive Program Performance Against Pre-COVID-19 Performance Targets

The 2020 performance criteria for the Company performance metrics, and our actual performance, are set forth below:

Performance Metric Threshold

(0.5x Payout) Target

(1.0x Payout) Maximum

(1.5x Payout) Actual Weighting (NEOs other than Mr.

Weighting (Mr.

AFFO per Share $0.57 $0.59 $0.64 $0.56 50% 10%

Same-Center NOI Growth 2.5% 3.0% 4.0% (4.1)% 20% —

(1) 30% of the short-term incentive is based on individual performance metrics;

this percentage is 90% in the case of Mr.

In the latter half of 2020, we made strategic decisions to spend capital and accelerate certain expenses that will benefit the Company in the future, resulting in a lower AFFO.

In the absence of these expenditures, the Company would have achieved a result between threshold and target for AFFO per share.

Due to the volume of retailers experiencing distress, the mandated closures, and the bankruptcies in the retail industry, the initial same-center NOI growth target was not able to be achieved.

Our same-center NOI revenue declined 3.1% as a result of these circumstances.

Impact of COVID-19

As discussed above, the Compensation Committee determined that rather than adjusting targets mid-year, the best approach would be to use its discretion in evaluating management’s performance for the year ended December 31, 2020.

Accordingly, in reviewing the performance of management for 2020, the Compensation Committee considered the initial goals and targets of the annual incentive program in light of the circumstances due to the COVID-19 pandemic.

As performance against absolute targets set pre-COVID-19 was not an accurate reflection of how the NEOs performed in 2020, the Compensation Committee focused instead on relative performance to our peer group as a guide to making decisions regarding the appropriate level of payout under the short-term incentive program.

In addition to Company performance relative to our peers, the Compensation Committee also considered the individual performance of each NEO, as evaluated by the Board, with respect to the CEO, and the CEO assisted with this decision with respect to our other NEOs.

Relative Performance Versus Peer Set

While the pandemic heavily impacted our ability to achieve pre-COVID-19 targets on AFFO and same-center NOI growth, management’s performance relative to the peer group described above in the industry was outstanding.

The chart below reflects our performance relative to that of our peers, not only with respect to same-center NOI and AFFO per share growth, but also Core FFO per share growth and collections:

Performance Metric Peer Range Peer Mean Peer Median PECO Rank

Same-Center NOI Growth (11.6)% - (4.6)% (8.2)% (7.7)% (4.1)% 1 st

Core FFO per Share Growth (25.0)% - (4.5)% (18.7)% (20.1)% (5.7)% 2 nd

AFFO per Share Growth (25.6)% - 1.8% (13.3)% (18.1)% (3.4)% 3 rd

Q4 Collections 91% - 95% 93% 92% 95% 1 st (tie)

One measure that our Compensation Committee considered for 2020 was collections relative to our peers as a fair assessment of our executives’ performance and management of our business during the COVID-19 pandemic.

In the pandemic, cash management, collection, and conservation was incredibly important as it required frequent communication with tenants (whom we refer to as our “Neighbors”) and coordination across various groups within PECO, including property management, leasing, accounting, legal, and others.

Short-Term Incentive Program Capped at Target

Given that we did not achieve our operational metrics for the year, the Compensation Committee determined that short-term incentive program payouts would be capped at no more than target for the NEOs, regardless of the level of relative performance achieved.

We believe this is appropriate because only peak performance should result in a maximum award payout under the short-term incentive program.

We considered the experiences of our stockholders and determined that a short-term incentive program payout at target, even considering the outstanding relative performance achieved, would also not be appropriate.

While the Compensation Committee believes management’s performance reflected favorably when considering the circumstances, the Compensation Committee also considered that the short-term incentive program is designed to reward the NEOs for performance on an annual basis.

Therefore, the Compensation Committee has made the determination to pay each NEO 75% of his/her target bonus for the year ended December 31, 2020.

It should be noted this is the lowest funded short-term incentive program since we internalized the management company in 2017, and bonuses for each NEO were between 54% and 57% based on the bonuses received for 2019.

Individual Performance Goals

In determining to pay 75% of each NEO’s target incentive compensation for 2020, the Compensation Committee not only considered the Company’s performance relative to that of its peers, but it also reviewed the performance of each NEO against his or her individual goals.

The individual goals, as originally set for each NEO at the beginning of March 2020, are described below.

Edison’s individual goals in 2020 included performance related to the achievement of financial performance targets of the Company, creating and advancing the Company’s strategic vision, interfacing with the board of directors to develop Company strategy to maximize long term value, interfacing with major institutional investors and partners, and evaluating liquidity options.

Murphy’s individual goals in 2020 included performance related to the achievement of financial performance targets of the Company, growing revenue from the investment management business, achieving performance and disposition plans for our joint ventures, monitoring and improving profitability of the investment management business, and evaluating liquidity options.

Myers’ individual goals in 2020 included performance related to the achievement of financial performance targets of the Company, launching accretive redevelopment projects, sourcing properties to meet capital growth objectives, completing quality improvement and opportunistic disposition plans, and maintaining effective cost controls.

Caulfield’s individual goals in 2020 included performance related to the achievement of financial performance targets of the Company, decreasing the Company’s leverage, refinancing the revolving loan facility, maintaining effective internal controls and cost controls, and evaluating liquidity options.

Brady’s individual goals in 2020 included performance related to the achievement of financial performance targets of the Company, overseeing the transactional activity of the Company from acquisitions and dispositions to Neighbor leases, facilitating future growth in our investment management business through advising on structuring and legal considerations, maintaining effective cost controls, and evaluating liquidity options.

2020 Cash Target Awards and Resulting Awards Earned

The following table shows the annual cash incentive target award and the actual amount earned by each NEO for 2020:

Executive Target Award

Total Award Earned and Paid

Amount Earned % of Target

Edison $ 1,250,000 $ 937,500 75%

Murphy 490,000 367,500 75%

Myers 490,000 367,500 75%

Caulfield 220,000 165,000 75%

Brady 175,000 131,250 75%

Long-Term Equity Incentive Program —The Compensation Committee believes that a substantial portion of each executive’s annual compensation should be in the form of long-term equity incentive awards.

Long-term equity incentive awards encourage management to create stockholder value over the long term because the value of the equity awards is directly attributable to changes in the value of our common stock over time.

In addition, long-term equity incentive awards are an effective tool for management retention because full vesting of the awards generally requires continued employment for multiple years.

The purpose of the long-term incentive program is to further align the interests of our stockholders with that of management by encouraging our NEOs to remain employed by us for the long term and to create stockholder value in a “pay for performance” structure.

2020 Long-Term Incentive Program

In March 2020, the Compensation Committee approved the 2020 Long-Term Incentive Program for executive officers (the “2020 LTIP Program”), a multi-year long-term incentive program.

Pursuant to the 2020 LTIP Program, we issued long-term equity awards (“LTIP Units”) in the form of restricted stock units (“RSUs”) in the Company or Class C limited partnership units (“Class C Units”) of Phillips Edison Grocery Center Operating Partnership I, L.P.

(“PECO OP”), at the election of the executive.

For 2020, Messrs.

Edison, Myers and Caulfield and Ms.

Brady elected to receive RSUs.

Under the 2020 LTIP Program, the Compensation Committee maintained the portion tied to future performance at 60% and the portion of the award that is time-based at 40%.

The time-based LTIP Units, which are granted the year following the

target award approval, vest in equal annual installments over a four-year period from January 1 of the year of grant, subject to the executive’s continued employment through the relevant vesting dates.

The performance-based LTIP Units are earned based on the achievement of specified performance metrics measured at the end of the three-year performance period.

The maximum number of performance-based LTIP Units earned cannot exceed two times the target number.

Half of the earned performance-based LTIP Units vest when earned at the end of the three-year performance period and half of the earned performance-based LTIP Units vest one year later, subject to continued employment.

The Compensation Committee may, in its discretion, accelerate the vesting schedule.

The below graphic summarizes the vesting schedule of our executives’ performance-based and time-based equity awards as granted under the 2020 LTIP Program:

60 % Performance-Based Equity Awards Vesting

40 % Time-Based Equity Awards

In March 2020, the NEOs (other than Mr.

Murphy, whose long-term incentives are tied to the Special LTIP Award he received in 2019, as described in the footnote to the table below) were granted LTIP Units with the grant date fair values set forth below, calculated in accordance with Accounting Standards Codification (“ASC”) Topic 718:

Compensation—Stock Compensation (“ASC 718”).

The time-based awards represent the grant at target levels of time-based awards that were part of the 2019 Long-Term Incentive Program (“2019 LTIP Program”).

The value of the performance-based awards represents the target level of performance achievable under the 2020 LTIP Program, which is 50% of the maximum performance-based award that can be earned and paid.

The below table summarizes the awards granted to our NEOs in March 2020:

Name Time-Based LTIP Units Performance-Based LTIP Units at Target Total LTIP Units Granted in 2020

$ 1,169,996 $ 1,754,999 $ 2,924,995

Myers 359,995 540,004 899,999

Caulfield 163,337 198,002 361,339

Brady 59,996 108,003 167,999

(1) In 2019, each of Mr.

Edison and Mr.

Murphy received one-time Special LTIP Awards of performance-based LTIP Units.

The Special LTIP Award to Mr.

Murphy is tied entirely to incremental revenue streams from the investment management business with the objective of focusing his efforts more on building recurring revenue than transaction-based fee income in order to create bespoke long-term incentives for each executive officer.

Murphy’s Special LTIP Award was granted in lieu of any time-based or performance-based awards under the 2019 LTIP Program and future LTIP programs.

For the performance-based LTIP Units, there are two separate, equally-weighted performance metrics:

(i) three-year average Same-Center NOI growth measured against a peer group of eight public retail REITs (listed below) and (ii) three-year Core FFO per share growth measured against the same peer group.

At the end of the three-year performance period, 50% of the award earned based on achievement of the performance metrics vests and the remaining 50% of the earned award vests on the one-year anniversary of such date, subject to continued employment.

The threshold, target, and maximum levels for the performance-based LTIP Units were as follows:

Metric Weighting Threshold

(25% Payout) Target

(50% Payout) Maximum

(100% Payout)

Three-Year Average Same-Center NOI Growth 50% 25th Percentile

of Peer Group 50th Percentile

of Peer Group 75th Percentile

of Peer Group

Three-Year Core FFO per Share Growth 50% 25th Percentile

of Peer Group 50th Percentile

of Peer Group 75th Percentile

of Peer Group

For the 2020 LTIP Program, the eight public retail REITs against which we will measure these metrics are:

Brixmor Property Group RPT Realty Retail Properties of America, Inc.

Kimco Realty Corporation Regency Centers Corporation Weingarten Realty Investors

Kite Realty Group Trust Retail Opportunity Investments Corp.

In addition, a NAV modifier will be applied if the growth in the Company’s NAV per share for the performance period is negative.

Specifically, to the extent performance above the target level is achieved at the end of the performance period, yet the Company’s NAV per share growth for that same performance period is negative, the amount of earned awards will be capped at the target amount.

The remaining amount of awards (the difference between those that would have otherwise been earned based on actual performance and the capped amount at target level) may become earned and thereafter vested if the Company’s NAV per share growth becomes positive at any point of time measured from the beginning of the performance period through up to five years following the completion of the performance period, assuming continued employment on such date;

otherwise, the LTIP Units will be forfeited.

Summary of Long-Term Incentive Program Achievement

PERFORMANCE-BASED LONG-TERM INCENTIVES

Through December 31, 2020

LTIP Performance Period and Metrics Weighting 2018 2019 2020 2021 2022 Status Result Payout %

2018-2020 Performance-Based LTIP

Same-Center NOI Growth vs.

Peers 50% 100% Completed Maximum 1st Place 100%

Core FFO per Share Growth vs.

Peers 50% 3-Year Measurement Period with 5 Year Maximum 1st Place 100%

NAV per Share Growth Modifier Recoupment Period Payout Capped at Target/Award Subject to Recoupment -20.5% Reduced to Target (50%)

2019-2021 Performance-Based LTIP

Same-Center NOI Growth vs.

Peers 50% 67% Completed Tracking at Maximum Tracking at 1st Place Tracking at 100%

Core FFO per Share Growth vs.

Peers 50% 3-Year Measurement Period with 5 Year Tracking at Maximum Tracking at 1st Place Tracking at 100%

NAV per Share Growth Modifier Recoupment Period Tracking to be Capped at Target/Award Subject to Recoupment Tracking at -20.8% Tracking to be Reduced to Target

2020-2022 Performance-Based LTIP

Same-Center NOI Growth vs.

Peers 50% 33% Completed Tracking at Maximum Tracking at 1st Place Tracking at 100%

Core FFO per Share Growth vs.

Peers 50% 3-Year Measurement Period with 5 Year Tracking at Maximum Tracking at 2nd Place Tracking at 100%

NAV per Share Growth Modifier Recoupment Period Tracking to be Capped at Target/Award Subject to Recoupment Tracking at -21.2% Tracking to be Reduced to Target

Payout under the 2018 Long-Term Incentive Program

The performance period for the performance-based LTIP Units granted under the 2018 LTIP Program ended on December 31, 2020.

Based on our performance through December 31, 2020, these LTIP Units would have been earned at maximum, but because our NAV per share growth for that same performance period was negative, the amount of earned awards was capped at the target amount.

The unearned portion in excess of target and up to the maximum will remain eligible to vest if our NAV per share becomes positive on or prior to December 31, 2025.

Employee Benefits

We believe that establishing competitive benefit packages for our employees is an important factor in attracting and retaining highly qualified personnel.

Our NEOs are eligible to participate in all of our employee benefit plans, in each case on the same basis as other employees.

We also provide a Company matching contribution under our 401(k) savings plan to employees generally, including our NEOs, up to the Internal Revenue Service limitations for matching contributions.

Other Benefits

Edison receives personal tax services provided by our internal tax department and has a time-share agreement with the Company for personal use of the corporate aircraft leased by the Company.

Employment, Severance, Change in Control, and Other Arrangements

We do not have employment agreements, severance or change in control agreements, or other arrangements with any of our NEOs other those described below.

Executive Change in Control Severance Plan —Our Amended and Restated Executive Change in Control Severance Plan for executive officers (the “Severance Plan”) provides for specified payments and benefits in connection with a termination of employment by the Company not for Cause or a resignation by the executive for Good Reason (as each such term is defined in the Severance Plan).

Our goal in providing these severance and change in control payments and benefits is to offer sufficient cash continuity protection such that our NEOs will focus their full time and attention on the requirements of the business rather than the potential implications for their respective positions.

We prefer to have certainty regarding the potential severance amounts payable to the NEOs , rather than negotiating severance at the time employment terminates.

We also have determined that accelerated vesting provisions with respect to outstanding equity awards in connection with a qualifying termination of employment are appropriate because they encourage our NEOs to stay focused on the business in those circumstances rather than focusing on the potential implications for them personally.

In order to receive the severance payments and benefits under the Severance Plan, the NEOs must execute a general release of claims and comply with non-competition and non-solicitation provisions that apply for 18 months (or 24 months in the case of Mr.

Edison) following termination of employment and confidentiality provisions that apply during and following termination of employment.

Vesting Agreement with Devin Murphy —In October 2017, PECO entered into an agreement with Mr.

Murphy regarding the vesting of his equity incentive awards (the “Murphy Vesting Agreement”).

Pursuant to the Murphy Vesting Agreement, all time-based equity awards granted to Mr.

Murphy vested upon the earlier of the vesting date set forth in the applicable equity award agreement and the date Mr.

Murphy reached both (i) age 58 and (ii) a combined age and continuous years of service with the Company of 65 years (such date, the “Murphy Retirement Eligibility Date”).

The Murphy Retirement Eligibility Date occurred in June 2019.

The Murphy Vesting Agreement further provides that, if Mr.

Murphy’s employment terminates on or

following the Murphy Retirement Eligibility Date, he will remain eligible to vest in any performance-based LTIP Units, excluding the Special LTIP Award, as follows:

(a) if his retirement occurs before 50% of the performance period has elapsed, then he will vest in a prorated portion of any performance-based LTIP Units actually earned based on performance at the end of the performance period, with the proration calculated based on the ratio of the number of days Mr.

Murphy was employed during the performance period to the total number of days in the performance period and (b) if his retirement occurs after 50% or more performance period has elapsed, then Mr.

Murphy will vest in any performance-based LTIP Units that are actually earned at the end of the performance period.

The provisions of the Murphy Vesting Agreement do not apply to Mr.

Murphy’s Special LTIP Award.

Tax and Accounting Considerations

We have not provided or agreed to provide any of our executive officers or directors with a gross-up or other reimbursement for tax amounts they might pay pursuant to Section 4999 or Section 409A of the Code.

Sections 280G and 4999 of the Code provide that executive officers, directors who hold significant stockholder interests, and certain other service providers could be subject to significant additional taxes if they receive payments or benefits in connection with a change in control of our Company that exceed certain limits, and that we or our successor could lose a deduction on the amounts subject to the additional taxes.

Section 409A also imposes additional significant taxes on the individual in the event that an employee, director or service provider receives “deferred compensation” that does not meet the requirements of Section 409A.

Section 162(m) of the Code limits the annual compensation deduction available to publicly held corporations to $1.0 million for certain “covered employees,” which generally includes our NEOs.

In December 2020, the IRS issued final regulations that, among other things, expanded the definition of compensation to include a publicly held corporate partner’s distributable share of a partnership’s deduction for compensation expense attributable to amounts paid by the partnership for services performed by “covered employees” of the publicly held corporation.

We anticipate that our taxable income will increase on an annual basis beginning with the 2021 calendar year as a result of the application of Section 162(m).

To maintain our status as a REIT, we are required to distribute at least 90% of our taxable income to our stockholders in the form of dividends.

The increase in taxable income resulting from the application of the final regulations will be taken into account as the Board determines the amount of dividends to be paid to our stockholders for tax years ending on and after December 31, 2021.

Although the Compensation Committee intends to consider the impact of Section 162(m) in structuring compensation programs, the Compensation Committee expects its primary focus to be on creating programs that address the needs and objectives of the Company regardless of the impact of Section 162(m).

As a result, the Compensation Committee may make awards and structure programs that are not deductible under Section 162(m).

Hedging, Pledging, and Speculative Transactions

Our Insider Trading Policy prohibits all directors, officers, and other employees from engaging in any short-term speculative securities transactions such as short sales or buying or selling puts, calls, and other derivative securities, or engaging in any other hedging transaction with respect to the Company’s securities.

The policy also prohibits all directors, officers, and other employees from pledging our securities as collateral for a loan or as collateral in a margin account.

Compensation Committee Report

The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis contained in this Annual Report on Form 10-K.

Based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Annual Report on Form 10-K.

Submitted by the Compensation Committee

Strong (Chair)

EXECUTIVE COMPENSATION TABLES

Summary Compensation Table

The following table and footnotes provide information regarding the compensation of our NEOs for the years presented:

Name and Principal Position Year Salary ($)

Bonus ($) (1)

Stock Awards ($) (2)(3)

Non-Equity Incentive Plan Compensation ($) (4)

All Other Compensation ($) (5)

Chairman of the Board and Chief Executive Officer

2020 $ 751,923 $ 937,500 $ 2,924,995 $ — $ 157,324 $ 4,771,742

2019 838,269 352,500 2,730,145 1,312,500 283,468 5,516,882

2018 725,385 300,000 4,005,035 1,200,000 393,168 6,623,588

2020 478,692 367,500 — — 45,832 892,024

2019 487,045 138,180 437,624 514,500 178,296 1,755,645

2018 464,827 143,222 1,374,922 572,886 285,358 2,841,215

Chief Operating Officer and Executive Vice President

2020 478,692 367,500 899,999 — 46,302 1,792,493

2019 487,045 171,990 1,517,622 514,500 166,883 2,858,040

2018 474,731 143,222 1,287,372 572,886 289,215 2,767,426

Caulfield (6)

Chief Financial Officer, Senior Vice President and Treasurer

2020 316,615 165,000 361,339 — 23,104 866,058

2019 259,505 53,580 210,996 199,500 38,659 762,240

General Counsel, Senior Vice President, and Secretary

2020 353,692 131,250 167,999 — 20,417 673,358

2019 345,192 45,120 275,625 168,000 36,642 870,579

(1) For 2018 and 2019, represents amounts paid under the Annual Cash Incentive Program for the portion attributable to individual performance for each of 2018 and 2019 and paid in the following calendar year.

For 2020, represents the discretionary bonus the Compensation Committee determined to pay our named executive officers for their performance in 2020.

See “Compensation Discussion & Analysis - 2020 Annual Cash Incentive Program” for additional information regarding the amount paid for 2020.

(2) Amounts reflect the grant date fair value of time-based and performance-based LTIP Units as computed in accordance with FASB ASC Topic 718.

The time-based awards were awarded in 2019 under the 2019 LTIP Program and granted in March 2020.

The performance-based LTIP Units were awarded and granted in March 2020 under the 2020 LTIP Program.

See “Compensation Discussion & Analysis - Long-Term Equity Incentive Program” for additional information regarding these awards.

The grant date fair value of the performance-based awards in the stock awards column is computed based on the probable outcome of performance conditions as of the grant date.

This amount is consistent with the estimate of aggregate compensation cost to be recognized by the Company over the three-year performance period of the award determined as of the grant date under FASB ASC Topic 718.

The assumptions used in calculating the valuations are set forth in Note 14 to the consolidated financial statements in this Annual Report on Form 10-K.

Assuming the maximum level of performance is achieved, the aggregate grant date fair value of each of the 2020, 2019, and 2018 awards is as shown in the following table:

Name Performance-Based Awards Assuming Maximum Performance (2020 Awards) Performance-Based Awards Assuming Maximum Performance (2019 Awards) Performance-Based Awards Assuming Maximum Performance (2018 Awards)

Edison $ 3,510,000 $ 3,510,000 $ 1,950,690

Murphy — — 875,243

Myers 1,080,000 1,080,005 875,243

Caulfield 396,000 132,003 —

Brady 216,000 180,005 —

(3) In 2019, in addition to the amounts reflected in the Stock Awards column and described in footnote 2 above, each of Messrs.

Edison and Murphy received a Special LTIP Award.

See “Compensation Discussion & Analysis - Special LTIP Awards” for additional information on these awards.

The table below shows the grant date fair value as computed in accordance with FASB ASC Topic 718 based on the probable outcome of performance conditions as of the grant date.

This amount is consistent with the estimate of aggregate compensation cost to be recognized by the Company over the applicable five- or seven-year performance period of the award determined as of the grant date under FASB ASC Topic 718, excluding the effect of estimated forfeitures.

The assumptions used in calculating the valuations below are set forth in Note 14 to the consolidated financial statements in this Annual Report on Form 10-K:

Name Grant Date Fair Value of Special LTIP Award Value Assuming Maximum Performance

Edison $ 7,500,005 $ 15,000,010

Murphy 3,750,005 7,500,010

(4) Represents amounts paid under the Annual Cash Incentive Program for each of 2019 and 2018 for the portion attributable to Company performance for the applicable year.

See “Compensation Discussion & Analysis - 2020 Annual Cash Incentive Program” for additional information regarding the incentive paid for the 2020 year.

(5) Amounts reported in the “All Other Compensation” column for 2020 include Company contributions to the 401(k) plan, distributions paid on unvested equity awards and phantom shares, the value of tax and accounting services provided by our internal tax and accounting departments, and personal use of the Company’s leased airplane.

The following table identifies the value of each benefit:

Name Retirement Plan Contributions Distributions Paid on Unvested Equity Awards (a)

Perquisites (b)

Edison $ 8,550 $ 55,733 $ 93,041 $ 157,324

Murphy 8,550 37,282 — 45,832

Myers 8,550 37,752 — 46,302

Caulfield 8,550 14,554 — 23,104

Brady 8,550 11,921 — 20,471

(a) Includes distributions paid on unvested time-based LTIP Units, unearned performance-based Class C Units, and dividend equivalents paid on unvested phantom shares.

Distributions are paid on approximately 10% of the maximum number of unearned performance-based Class C Units and will be netted against the distributions to be paid on the earned Class C Units upon vesting.

Dividends are not paid on performance-based RSUs until the first vesting date.

Edison, this amount includes $75,000 for personal tax and accounting services provided by our tax and accounting departments and $18,041 for personal use of the Company’s leased airplane.

See “Related Party Transactions - Airplane Leases” for more information on personal use of the airplane.

Caulfield and Ms.

Brady first became NEOs in 2019.

Accordingly, pursuant to SEC rules, their prior year information is not included.

Caulfield became Chief Financial Officer on August 15, 2019.

2020 Grants of Plan-Based Awards

The following table provides information about equity and non-equity incentive awards granted to the NEOs in 2020:

Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1)

Estimated Future Payouts Under Equity Incentive Plan Awards All Other Stock Awards:

Number of Shares of Stock or Units (2)

Grant Date Fair Value of Stock Awards

Name Grant Date Threshold ($) Target ($) Maximum ($) Threshold (#) Target (#) Maximum (#)

Edison 3/11/20 $ 625,000 $ 1,250,000 $ 1,875,000 — — — — $ —

— — — 79,054 158,108 316,216 — 1,754,999

3/11/20 — — — — — — 105,405 1,169,996

Murphy 3/11/20 245,000 490,000 735,000 — — — — —

Myers 3/11/20 245,000 490,000 735,000 — — — — —

— — — 24,325 48,649 97,298 — 540,004

3/11/20 — — — — — — 32,432 359,995

Caulfield 3/11/20 110,000 220,000 330,000 — —

— — — 8,919 17,838 35,676 — 198,002

3/11/20 — — — — — — 14,715 163,337

Brady 3/11/20 87,500 175,000 262,500 — — — — —

— — — 4,865 9,730 19,460 — 108,003

3/11/20 — — — — — — 5,405 59,996

(1) These amounts relate to the 2020 Annual Cash Incentive Program.

The amounts actually paid in March 2020 are included in the Summary Compensation Table for 2020 in the “Bonus” column and described in footnote 1 to that table.

(2) Represents the number of time-based LTIP Units granted in 2020 pursuant to awards under the 2019 LTIP Program.

These units vest in four equal annual installments beginning on the first anniversary of the grant date.

The aggregate grant date fair value reported in the last column is calculated in accordance with ASC 718.

The aggregate grant date fair value for these awards is included in the Summary Compensation Table for 2020 in the “Stock Awards” column and described in footnote 2 to that table.

(3) Represents performance-based LTIP Units awarded under the 2020 LTIP Program, which covers performance during the three-year period 2020 through 2022.

The aggregate grant date fair value reported in the last column is based on the probable outcome of the performance conditions as of the grant date.

This amount is consistent with the estimate of aggregate compensation cost to be recognized by the Company over the performance period of the award determined as of the grant date under ASC 718, excluding the effect of estimated forfeitures.

The aggregate grant date fair value for these awards is included in the Summary Compensation Table for 2020 in the “Stock Awards” column and described in footnote 2 to that table.

2020 Outstanding Equity Awards at Fiscal Year End

The following table provides information about outstanding equity-based incentive compensation awards for the NEOs as of December 31, 2020.

The market value of unvested stock or units and unearned performance units is based on the estimated value per share of $8.75 on December 31, 2020.

Stock Awards Equity Incentive Plan Awards

Name Grant Date Number of Shares or Units of Stock That Have Not Vested (#)

Market Value of Shares or Units of Stock That Have Not Vested ($) Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)

Edison 3/11/2020 (1)

105,405 $ 922,294 — $ —

3/11/2020 (2)

— — 158,108 1,383,445

3/14/2019 (3)(7)

66,186 579,128 — —

3/14/2019 (4)(7)

— — 158,824 1,389,710

3/14/2019 (5)(7)

— — 407,240 3,563,350

3/15/2018 (6)(7)

44,334 387,923 88,668 775,845

3/15/2018 (7)(8)

137,714 1,204,998 — —

Murphy 3/14/2019 (5)(7)

— — 203,620 1,781,675

Myers 3/11/2020 (1)

32,432 283,780 — —

3/11/2020 (2)

— — 48,649 425,679

3/14/2019 (3)(7)

29,703 259,901 — —

3/14/2019 (4)(7)

— — 48,870 427,613

3/15/2018 (6)(7)

19,892 174,055 39,784 348,110

3/15/2018 (7)(8)

38,626 337,978 — —

Caulfield 3/11/2020 (1)

14,715 128,756 — —

3/11/2020 (2)

— — 17,838 156,083

3/14/2019 (3)

5,362 46,918 — —

3/14/2019 (4)

— — 3,318 29,033

3/15/2018 (6)

1,197 10,474 2,394 20,948

3/15/2018 (8)

4,546 39,778 — —

3/15/2018 (9)

25,000 218,750 — —

Brady 3/11/2020 (1)

5,405 47,294 — —

3/11/2020 (2)

— — 9,730 85,138

3/14/2019 (3)

6,490 56,788 — —

3/14/2019 (4)

— — 8,146 71,278

3/15/2018 (6)

1,499 13,116 2,898 25,378

3/15/2018 (8)

5,000 43,750 — —

3/15/2018 (9)

13,636 119,315 — —

(1) Time-based RSUs granted in March 2020 that vest in equal amounts over four years, beginning on January 1, 2021.

(2) Performance-based LTIP Units granted under the 2020 LTIP Program that will be earned, to the extent performance conditions are achieved, as of December 31, 2022, the last day of the performance period.

Half of the earned units will vest on December 31, 2022 and half will vest on December 31, 2023.

Because the units earned are not currently determinable, in accordance with SEC rules, the number of units and the corresponding market value reflect actual performance through 2020, which was above the threshold level and is therefore reported at the target level.

(3) Remaining portion of time-based RSUs/LTIP Units granted in March 2019 that vest in equal amounts over four years, beginning on January 1, 2020.

(4) Performance-based LTIP Units granted under the 2019 LTIP Program that will be earned, to the extent performance conditions are achieved, as of December 31, 2021, the last day of the performance period.

Half of the earned units will vest on December 31, 2021 and half will vest on December 31, 2022.

(5) Special LTIP Award granted to Messrs.

Edison and Murphy in 2019 that will be earned, to the extent performance conditions are achieved, as of the last day of the performance period on March 31, 2026 and March 31, 2024, respectively.

See “Compensation Discussion & Analysis - Long Term Equity Incentive Program - Special LTIP Award” for information on the performance metrics and vesting terms.

Because the units earned are not currently determinable, in accordance with SEC rules, the number of units and the corresponding market value reflect actual performance through 2019.

(6) Performance-based LTIP Units granted under the 2018 LTIP Program were deemed earned at maximum based on performance through December 31, 2020.

However, because the Company’s NAV per share growth for that same performance period is negative, the amount of earned awards were capped at the target amount.

Half of the earned units vested on December 31, 2020.

The amount reported in the “Stock Awards” column represents the remaining half that will vest on December 31, 2021.

The unearned portion in excess of target and up to the maximum will remain eligible to vest if the Company’s NAV per share becomes positive on or prior to December 31, 2025 (the “Contingent Portion”).

The amount reported in the “Equity Incentive Plan Awards” column represents the Contingent Portion.

(7) At issuance, these Class C Units were subject to vesting, and did not have full parity with Operating Partnership units (“OP units”) with respect to liquidating distributions, but upon the occurrence of certain events described in PECO OP’s partnership agreement, could over time achieve full parity with the OP units for all purposes.

Upon vesting and achieving full parity with OP units, the Class C Units would convert into an equal number of OP units.

Each OP unit acquired upon conversion of a Class C Unit may be presented for redemption at the election of the holder, for cash equal to the fair market value of a share of PECO common stock, except that PECO OP may, at its election, acquire each OP unit so presented for one share of PECO common stock.

The Class C Units granted in 2018 have achieved parity;

those granted in 2019 have not yet achieved parity.

(8) Remaining unvested portion of time-based LTIP Units granted in March 2018 that vest in equal amounts over four years, beginning on January 1, 2019.

(9) Special restricted stock award that vests in full on January 1, 2022

2020 Stock Vested

The following table shows the number of LTIP Units and phantom units that vested during 2020 and the value realized on vesting by each of our NEOs.

The phantom units are based on the value of shares of our common stock but are paid out in cash upon vesting.

The vested phantom units are phantom units that vested and were paid on December 31, 2020.

The Compensation Committee accelerated vesting and payment to March 13, 2020 for Mr.

Murphy, having determined such acceleration was in the best interests of the Company.

The value realized upon the vesting is determined by multiplying the number of units that vested by the estimated value per share of our common stock on the date of vesting.

The number of LTIP Units and phantom units that vested during 2020 and the value realized on vesting by each of our NEOs are as follows:

Name Number of OP Units/Shares Acquired on Vesting (#) Value Realized

on Vesting ($)

Edison 165,168 $ 1,658,878

Murphy 58,503 649,383

Myers 56,438 562,483

Caulfield 6,106 57,969

Brady 7,391 75,631

Payments upon Termination or Change in Control

Amended and Restated Executive Change in Control Severance Plan —Each of our executive officers participates in the Severance Plan.

Under the plan, in the event that an executive’s employment is terminated by the Company or its affiliates not for Cause (as defined in the Severance Plan) or the executive resigns for Good Reason (as defined in the Severance Plan), then the executive will be entitled to (1) a lump sum payment equal to the product of (i) 1.5 (or 2.0 in the case of Mr.

Edison) and (ii) the sum of (A) the executive’s base salary and (B) the executive’s average annual cash performance bonus for the most recent three fiscal years (or such shorter period that the executive was eligible to receive an annual cash performance bonus), (2) if the executive elects to receive group health insurance under COBRA following the termination date, the Company will provide such coverage for 18 months (or 24 months in the case of Mr.

Edison) following termination, provided that the executive continues to pay the same amount of the monthly premium as in effect for the Company’s other executives and;

provided, further, that if the executive becomes employed by another employer during such period and is eligible to receive group health insurance under such other employer’s plans, the Company’s obligations will be reduced to the extent that comparable coverage is actually provided to the executive and his or her covered dependents, and (3) (i) the executive’s unvested time-base equity awards that would have otherwise vested during the 18 months (or 24 months in the case of Mr.

Edison) following termination will vest on the termination date and be paid in full within 70 days of the date of termination and (ii) the executive will remain eligible to vest and be paid on a pro-rata portion of performance-based equity awards based on actual performance at the end of the performance period, with pro-ration based on the period of time elapsed between the beginning of the performance period and the termination date as a percentage of the full performance period.

In lieu of the benefits described in the immediately preceding paragraph, in the event that an executive’s employment is terminated by the Company or its affiliates not for Cause or the executive resigns for Good Reason, in either case within two years following a Change in Control (as defined in the Severance Plan), then the executive will be entitled to (1) a lump sum payment equal to the product of (i) 2.0 (or 2.5 in the case of Mr.

Edison) and (ii) the sum of (A) the executive’s base salary and (B) the executive’s average annual cash performance bonus for the most recent three fiscal years (or such shorter period that the executive was eligible to receive an annual cash performance bonus) and (2) if the executive elects to receive group health insurance under COBRA following the termination date, the Company will provide such coverage for 24 months following termination (or 30 months following termination in the case of Mr.

Edison), provided that the executive continues to pay the same amount of the monthly premium as in effect for the Company’s other executives and;

The executive’s unvested time-based equity awards and earned but unvested performance-based equity awards will vest as of the date of termination and be paid in full within 70 days of the date of termination.

Upon the closing of any Change in Control, the Compensation Committee will determine the number of performance-based equity awards held by the executive that will be considered earned under such awards based upon the Company’s performance by pro-rating the performance targets for the shortened performance period and then measuring such pro-rated targets against actual Company performance through the closing of the Change in Control.

Any such earned awards will then be converted into time-based awards that will vest and be paid based on continued service through the end of the performance period that was applicable to such award prior to the Change in Control, subject to acceleration as described in the last sentence of the prior paragraph.

If the executive dies or if the Company and its affiliates terminate an executive’s employment due to Disability, the executive or his or her legal heirs will be entitled to (1) a pro-rated portion of his annual cash performance bonus for the year of termination if the Compensation Committee determines that performance is achieved, (2) accelerated vesting of unvested time-based equity awards that would have otherwise vested during the 18 months (or 24 months in the case of Mr.

Edison) following termination, and (3) remain eligible to vest and be paid on a pro-rated portion of performance-based equity awards based on actual performance at the end of the performance period with pro-ration based on the period of time elapsed between the beginning of the performance period and the termination date as a percentage of the full performance period.

Receipt of the severance payments and benefits under the Severance Plan is subject to the execution and non-revocation of a release agreement by the executive and compliance with non-competition and non-solicitation provisions that apply or 18 months (24 months in the case of Mr.

Edison) following termination of employment and confidentiality provisions that apply during and following termination of employment.

Special LTIP Awards —Pursuant to the terms of each Special LTIP Award, the last day of the applicable performance period and the number of Class C Units earned under the Special LTIP Award (the “Earned LTIP Units”) will be measured as of the earliest of a specified date, a change of control, or the executive’s termination of employment (other than a termination for cause).

In the case of a voluntary termination or a termination without cause, the number of Class C Units earned will further be prorated based upon the number of days that elapsed from the effective date of the award through the date of such termination, divided by the number of days in the performance period;

provided that, in the case of death or disability, the proration will be based upon the sum of (i) the number of days that elapsed from the effective date of the award through the date of such termination and (ii) the number of days in the executive’s applicable severance period (24 months, in the case of Mr.

Edison, and 18 months, in the case of Mr.

Murphy), divided by the number of days in the performance period.

The provisions of the Severance Plan do not apply to the Special LTIP Awards.

Murphy Vesting Agreement —Pursuant to the Murphy Vesting Agreement, if Mr.

Murphy’s employment terminates on or following the Retirement Eligibility Date, he will remain eligible to vest in any performance-based equity awards granted by the Company as follows:

(i) if his retirement occurs before 50% of the performance period has elapsed, then he will vest in a pro-rated portion of any performance-based equity awards actually earned based on performance at the end of the performance period, with the pro-ration calculated based on the ratio of the number of days he was employed during the performance period to the total number of days in the performance period and (ii) if his retirement occurs after 50% or more performance period has elapsed, then he will vest in any performance-based awards that are actually earned at the end of the performance period.

The provisions of the Vesting Agreement do not apply to Mr.

Murphy’s Special LTIP Award.

Quantification of Payments upon Termination or Change in Control

The following table provides information regarding certain potential payments that would have been made to the NEOs if the triggering event occurred on December 31, 2020, the last day of the fiscal year, based on the value of a share of our common stock on such date, where applicable.

Amounts actually received upon the occurrence of a triggering event will vary based on factors such as the timing during the year of such event and the estimated value per share of our common stock.

The only plan or agreement that provides for potential payments upon a termination or change in control is the Severance Plan.

Accordingly, all amounts shown in the table below represent the applicable potential payments under the Severance Plan:

Name Benefit Retirement

($) Termination for Cause or Resignation without Good Reason

($) Termination without Cause or Resignation for Good Reason

($) Death or Disability

($) Change in Control without Termination

($) Change in Control with Termination

Jeffrey Edison Severance Pay $ — $ — $ 4,435,000 $ 937,500 $ — $ 5,543,750

Health Care Benefits (1)

— — 27,779 — — 34,724

Time-Based Equity Acceleration — — 2,654,733 2,654,733 — 3,308,918

Performance-Based Equity Acceleration 1,018,101 — 3,181,572 2,036,202 3,563,354 7,112,354

Total 1,018,101 — 10,299,084 5,628,435 3,563,354 15,999,746

Devin Murphy Severance Pay — — 1,603,144 367,500 — 2,137,525

Health Care Benefits (1)

— — 33,336 — — 44,448

Time-Based Equity Acceleration — — — — — —

Performance-Based Equity Acceleration 752,455 — 1,060,781 1,286,958 1,781,677 2,129,787

Total 752,455 — 2,697,261 1,654,458 1,781,677 4,311,760

Robert Myers Severance Pay — — 1,643,858 367,500 — 2,179,810

Health Care Benefits (1)

— — 33,336 — — 44,448

Time-Based Equity Acceleration — — 822,124 822,124 — 1,050,648

Performance-Based Equity Acceleration — — 755,079 755,079 — 1,201,401

Total — — 3,254,397 1,944,703 — 4,476,307

John Caulfield Severance Pay — — 821,203 165,000 — 1,094,937

Health Care Benefits (1)

— — 31,023 — — 41,364

Time-Based Equity Acceleration — — 354,191 354,191 — 434,201

Performance-Based Equity Acceleration — — 92,330 92,330 — 206,063

Total — — 1,298,747 611,521 — 1,776,565

Tanya Brady Severance Pay — — 815,560 131,250 — 1,087,413

Health Care Benefits (1)

— — 10,414 — — 13,886

Time-Based Equity Acceleration — — 224,578 224,578 — 267,146

Performance-Based Equity Acceleration — — 101,255 101,255 — 181,773

Total — — 1,151,807 457,083 — 1,550,218

(1) Represents the aggregate present value of continued participation in the Company’s group health insurance coverage based on the portion of the premiums payable by the Company during the eligible period.

The eligible period for a termination without cause or resignation for good reason is 24 months for Mr.

Edison and 18 months for the other NEOs.

The eligible period for a change in control with termination is 30 months for Mr.

Edison and 24 months for the other NEOs.

The amounts reported may ultimately be lower if the NEO is no longer eligible to receive benefits, which could occur upon obtaining other employment and becoming eligible for group health insurance coverage through the new employer.

CEO Pay Ratio

As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information regarding the ratio of the annual total compensation of our Chairman and CEO, Mr.

Edison, to the annual total compensation of our median employee.

As reported in the Summary Compensation Table, our CEO had annual total compensation for 2020 of $4,771,742.

Using this Summary Compensation Table methodology, the annual total compensation of our median employee for 2020 was $95,787.

As a result, we estimate that the ratio of our CEO’s annual total compensation to that of our median employee for fiscal 2020 was 49.8 to 1.

We believe that our compensation philosophy must be consistent and internally equitable to motivate our employees to create stockholder value.

We are committed to internal pay equity, and our Compensation Committee monitors the relationship between the pay our CEO receives and the pay our non-executive employees receive.

We identified the median employee in 2020 based on the pool of individuals who were employed by us on December 31, 2020 (whether employed on a full-time, part-time, or seasonal basis).

Employees on leave of absence were excluded from the list

and reportable wages were annualized for those employees who were not employed for the full calendar year.

The compensation of this pool of employees was calculated using the Summary Compensation Table methodology.

The pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules, based on our internal records and the methodology described above.

The SEC rules for identifying the median compensated employee allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices.

Accordingly, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may use different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.

Director Compensation

Edison, our Chairman of the Board and Chief Executive Officer, does not receive compensation for his Board service.

A description of the 2020 compensation for non-employee directors is as follows:

Fees Earned or Paid in Cash

($) Stock Awards

All Other Compensation

Chao $ 74,988 $ 51,529 $ 1,071 $ 127,588

Elizabeth Fischer (4)

$ 54,388 $ 77,289 $ 250 $ 131,927

$ 54,388 $ 51,529 $ 1,071 $ 106,988

Quazzo $ 54,388 $ 51,529 $ 1,071 $ 106,988

Jane Silfen (4)

$ 54,388 $ 77,289 $ 250 $ 131,927

Strong $ 54,388 $ 51,529 $ 745 $ 106,662

Wood $ 54,388 $ 51,529 $ 1,071 $ 106,988

$ 31,363 $ — $ 579 $ 31,942

(1) Represents the aggregate grant date fair value of restricted stock awards made to our directors in 2020, calculated in accordance with FASB ASC Topic 718 , excluding any estimated forfeitures related to service-vesting conditions.

The amounts reported in this column reflect the accounting cost for these restricted stock awards, and do not correspond to the actual economic value that may be received by the director upon vesting of the awards.

Assumptions used in the calculation of these amounts are included in Note 14 to our audited consolidated financial statements in our Annual Report on Form 10-K.

(2) As of December 31, 2020, each of Messrs.

Chao, Massey, Quazzo, and Wood held 6,502 shares of unvested restricted stock, Mr.

Strong held 5,889 shares of unvested restricted stock, and Mses.

Fischer and Silfen held 8,833 shares of unvested restricted stock.

(3) Represents distributions paid on unvested restricted stock.

Fischer and Silfen began serving on the Board on November 1, 2019, after the 2019 director stock awards were issued to our directors.

Thus, the Compensation Committee awarded an additional 2,944 shares of restricted stock to each of Mses.

Fischer and Silfen in 2020 to compensate them for their prior partial year of service.

Garrison retired from the Board effective June 17, 2020.

Our director compensation program is intended to provide a total compensation package that enables PECO to attract and retain qualified and experienced directors and to align our directors’ interests with those of our stockholders by including a substantial portion of their compensation in shares of PECO common stock.

Non-employee director compensation is set by the Compensation Committee.

Effective May 5, 2020, based on input from its independent compensation consultant and to be in solidarity with the austerity measures adopted by the Company in response to the potential effects of COVID-19 on our business, the Compensation Committee approved the following non-employee director compensation program for 2020, which represents a 10% reduction from 2019 :

an annual cash retainer of $51,525 and an annual equity retainer of $51,525.

The Compensation Committee also approved annual cash retainers for the Lead Independent Director, Audit Committee chair, and Compensation Committee chair of $10,300, which remained unchanged from 2019.

In addition, the directors received reimbursement of reasonable out-of-pocket expenses incurred in connection with attending meetings in person.

Annual equity retainers vest on the first anniversary of the grant date, subject to continued service through such date.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this Item is set forth in our definitive proxy statement to be filed with the SEC by April 30, 2020, and is hereby incorporated by reference into this Form 10-K.

Beneficial Ownership of Common Stock

The shares of our common stock and OP units, which are exchangeable on a one-for-one basis with shares of our common stock, beneficially owned as of February 26, 2021 by our directors, NEOs, our directors and executive officers as a group, and

any person who is known by us to be the beneficial owner of more than 5% of the outstanding shares of our common stock, are as follows:

Common Stock Common Stock and OP Units

Name of Beneficial Owner Number of Shares Beneficially Owned Percentage of All Shares (1)

Number of Shares and OP Units Beneficially Owned Percentage of All Shares and OP Units (2)

Non-Employee Directors

Chao 49,069 (3)

Elizabeth Fischer 8,833 (4)

Quazzo 85,567 (5)

Jane Silfen 8,833 (4)

Strong 15,979 (6)

Wood 20,724 (5)

* 23,309,254 (9)

40,727 * 1,351,471 (10)

18,033 * 215,721 (11)

Caulfield 11,056 * 11,056 *

Brady 9,787 * 9,787 *

All directors and executive officers

as a group (12 persons) 869,800 — 25,120,625 7.83 %

* Less than 1%.

(1) As of February 26, 2021, 280,518,352 shares of our common stock were outstanding, including unvested restricted stock, but excluding unvested performance-based equity awards granted to the Company’s directors, executive officers and employees pursuant to our equity compensation plans, which may or may not be earned in accordance with the terms thereof and excludes shares of common stock that may be acquired by redeeming OP units.

(2) As of February 26, 2021, 40,190,143 OP units were outstanding, including unvested time-based LTIP unit awards, but excluding unvested performance-based equity awards granted to the Company’s directors, executive officers and employees pursuant to our equity compensation plans, which may or may not be earned in accordance with the terms thereof.

Amounts assume that all outstanding OP units are exchanged for shares of our common stock, regardless of when such OP units are exchangeable.

Pursuant to the limited partnership agreement of our operating partnership, after receiving a redemption notice from an OP unit holder, our operating partnership must redeem units for cash or, at our option, shares of common stock on a one-for-one basis, subject to certain conditions.

(3) Beneficial ownership includes 567 shares held by Mr.

Chao’s wife, as well as 6,502 shares of unvested restricted stock held by Mr.

(4) All 8,833 shares are unvested restricted stock.

(5) Includes 6,502 shares of unvested restricted stock.

(6) Includes 5,889 shares of unvested restricted stock.

(7) Amount of beneficial ownership in shares of common stock and/or OP units represents direct and indirect ownership held by this individual and his affiliates.

(8) Beneficial ownership includes 51,167 shares of common stock held by a trust of which Mr.

Edison’s wife is the trustee and a beneficiary.

Beneficial ownership also includes 232,064 shares of our common stock held by PELP because Mr.

Edison has voting and dispositive control of the shares it holds.

Beneficial ownership also includes 36,267 shares of common stock held by Phillips Edison Properties LLC because Mr.

Edison has shared voting and dispositive control of the shares it holds.

(9) Includes 112,981 unvested time-based LTIP units.

Beneficial ownership also includes 755,075 OP units held by Old 97, Inc and 3,092,572 OP units held by Edison Properties LLC because Mr.

Edison has shared voting and dispositive control of the OP units held by these entities.

Beneficial ownership also includes (i) 6,112,821 OP units held by a trust of which Mr.

Edison’s wife is the trustee and their descendants are beneficiaries and (ii) 1,175,808 OP units held by a trust of which Mr.

Edison is a co-trustee and beneficiary.

(10) Includes 41,105 unvested time-based LTIP units.

(11) Includes 39,115 unvested time-based LTIP units.

Securities Authorized for Issuance under Equity Compensation Plans

Information related to the Company’s equity compensation plans, including the number of unvested awarded shares outstanding and the number of shares available for future issuance as of December 31, 2020 under such programs, is as follows:

Plan Category (a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and Rights (1)

(b) Weighted-Average Exercise Price of Outstanding Options, Warrants, and Rights (c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a)) (2)

Equity compensation plans

approved by security

$ 4,400,000 $ — $ 3,500,000

Equity compensation plans

not approved by security

$ 4,400,000 $ — $ 3,500,000

(1) Includes 4.4 million performance stock units (“PSUs”) at maximum achievement level under the plan metrics that were issued under the Amended and Restated 2010 Long-Term Incentive Plan (“2010 Plan”).

Based upon results to date, we currently expect a total of 2.3 million of such PSUs to vest.

(2) As of December 31, 2020, there were 3.5 million shares of our common stock available for grants under the 2020 Incentive Plan.

There are no shares available under the 2010 Plan.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this Item is set forth in our definitive proxy statement to be filed with the SEC by April 30, 2020, and is hereby incorporated by reference into this Form 10-K.

Related Party Transactions Policy and Procedures

The Board has adopted the Related Party Transactions Policy requiring transactions with related persons to be reviewed and approved or ratified by the Audit Committee.

The policy applies to all transactions or series of transactions in which the aggregate amount involved will or may exceed $120,000 in any fiscal year, between the Company and a director, executive officer or beneficial owner of more than 5% of our common stock, in which such related person had, has, or will have a direct or indirect material interest.

Prior to entering into a transaction covered by the policy, a majority of the members of the Audit Committee must conclude that the transaction is fair and reasonable to us and on terms and conditions not less favorable to us than those available from unaffiliated third parties.

The Audit Committee has preapproved certain transactions that involve:

(i) employment of an executive officer if the related compensation is required to be reported in the Company’s proxy statement or Annual Report on Form 10-K under Item 402 of Regulation S-K;

(ii) any compensation paid to a director if the related compensation is required to be reported in the Company’s proxy statement or Annual Report on Form 10-K under Item 402 of Regulation S-K;

and (iii) any transaction with another company where the related person’s interest arises solely as an employee, a beneficial owner of less than 10% of that company’s equity, or in the case of limited partnerships, a limited partner, if the aggregate amount involved does not exceed the greater of $1,000,000 or 2% of that company’s total annual revenues.

Agreements with Related Persons

Advisory, Services, and Joint Venture Agreements —We have entered into certain advisory, services, and joint venture agreements under which we earn revenue for managing day-to-day activities and implementing the investment strategy for two institutional joint ventures in which we retain a partial ownership interest and one private fund (collectively the “Managed Funds”).

Our services agreement with PELP has a five-year term through October 3, 2022.

Our Necessity Retail Partners (“NRP”) joint venture agreement has a seven-year term through March 21, 2023.

Our joint venture agreements with Northwestern Mutual Life Insurance Company (“Northwestern Mutual”), pursuant to which we formed Grocery Retail Partners I LLC (“GRP I”) and Grocery Retail Partners II LLC (“GRP II”), each have a 10-year term through November 8, 2028.

GRP I acquired the assets of GRP II through a contribution transaction in September 2020 and GRP II was dissolved in December 2020.

Under the terms of our agreements with the Managed Funds, we receive certain monthly asset management fees from the Managed Funds.

The asset management fees paid by the Managed Funds vary from a flat fee to fees based on percentages of the assets under management or equity invested and are paid in cash.

We earned asset management fees of approximately $2.7 million for the year ended December 31, 2020.

Guarantees —In connection with our NRP joint venture, we are the limited guarantor for up to $190 million, capped at $50 million in most instances, of NRP debt.

As a part of the GRP I joint venture, GRP I assumed from us a $175 million mortgage loan for which we are the limited guarantor.

Our GRP I guarantee is limited to being the non-recourse carveout guarantor and the environmental indemnitor.

We entered into a separate agreement with Northwestern Mutual in which we agree to apportion any potential liability under this guarantee between us and them based on our respective ownership percentages in GRP I.

Property Management and Services Agreements —Under our property management and services agreements with the Managed Funds (collectively, “Management Agreements”), we earn revenues for managing day-to-day activities at the properties of the Managed Funds.

As property manager, we are to provide various services (e.g., accounting, finance, and operations) for which we receive a distinct fee based on a set percentage of gross cash receipts each month.

Under the Management Agreements, we also serve as a leasing agent to the Managed Funds.

For each new lease, lease renewal or extension, and lease expansion, we receive a leasing commission.

Leasing commissions are recognized as lease deals occur

and are dependent on the terms of the lease.

We also assist in overseeing the construction of various improvements for Managed Funds, for which we receive a distinct fee based on a set percentage of total project cost calculated upon completion of construction.

We may have hired, directed, or established policies for employees who had direct responsibility for the operations of each real property we managed, which may have included on-site managers and building and maintenance personnel.

We consider our Management Agreements with PELP month-to-month contracts because they are generally terminable by either party upon satisfaction of certain notice requirements.

Our Management Agreements with our joint ventures have terms commensurate with their respective joint venture agreements, which are terminable by the joint ventures for cause and by us upon satisfaction of certain notice requirements.

Under the terms of our Management Agreements, we generally earn a monthly property management fee equal to 4% of the monthly cash receipts of the properties we managed for the Managed Funds.

For the year ended December 31, 2020, we earned property management fees of approximately $2.1 million.

We also earned leasing commissions and construction management fees from the Managed Funds in an amount that is usual and customary for comparable services rendered to properties in a similar geographic market.

For the year ended December 31, 2020, we earned leasing commissions and construction management fees of approximately $1.9 million.

We were also reimbursed for costs and expenses incurred by us, including legal, tax, travel, and other out-of-pocket expenses, that were directly related to the management of specific properties of the Managed Funds.

For the year ended December 31, 2020, we received other fees and reimbursements of approximately $0.8 million.

Airplane Leases —PECO Air L.L.C.

(“PECO Air”), an entity in which Mr.

Edison, our Chairman and Chief Executive Officer, owns a 50% interest, owns an airplane that the Company uses for business purposes in the course of its operations pursuant to two written lease agreements.

Pursuant to the two lease agreements, we pay PECO Air aggregate annual fees of approximately $0.9 million for 135 hours of operation, plus $500 for each hour of operation as well as fuel and certain maintenance costs.

During 2020, we made aggregate payments of approximately $1.0 million to PECO Air.

In addition, we entered into an aircraft time sharing agreement with Mr.

Edison for personal use of the aircraft leased to us by PECO Air.

The FAA limits the costs that can be charged and reimbursed under a time share arrangement.

Edison pays an hourly fee that is within the restraints of the FAA requirements.

In 2020, the cost to us exceeded the amount reimbursed by approximately $26,500, which amount is included in the All Other Compensation column of the Summary Compensation Table.

Director Independence

Although shares of our common stock are not currently listed for trading on a national securities exchange, a majority of our directors and all of the members of the Audit Committee and the Compensation Committee are “independent” as defined by the rules of the NYSE.

The NYSE independence standards provide that to qualify as an independent director, in addition to satisfying certain bright-line criteria, the Board must affirmatively determine that a director has no material relationship with the Company (either directly or as a partner, stockholder, or officer of an organization that has a relationship with the Company).

The Board has determined that each of our non-employee directors is “independent” as defined by the NYSE.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this Item is set forth in our definitive proxy statement to be filed with the SEC by April 30, 2020, and is hereby incorporated by reference into this Form 10-K.

The aggregate fees billed for professional services provided by Deloitte & Touche LLP for the annual audit of our financial statements, and for audit-related, tax, and other services performed in 2020 and 2019 are as follows:

Audit fees (1)

$ 890,000 $ 940,000

Audit-related fees (2)

10,000 48,121

93,573 46,055

All other fees

$ 993,573 $ 1,034,176

(1) Includes aggregate fees billed for annual audit and quarterly reviews of our consolidated financial statements, including services related to the Company’s adoption of certain new accounting pronouncements.

(2) Includes fees billed for services reasonably related to the performance of the audit and review of the consolidated financial statements, including review of other SEC filings.

(3) Includes aggregate fees billed for services related to tax advice and planning.

Preapproval Policies

The Audit Committee charter imposes a duty on the Audit Committee to preapprove all auditing services performed for us by our independent auditors, as well as all permitted nonaudit services (including the fees and terms thereof) in order to ensure that the provision of such services does not impair the auditors’ independence.

Unless a type of service to be provided by the independent auditors has received “general” preapproval, it will require “specific” preapproval by the Audit Committee.

Additionally, any proposed services exceeding “general” preapproved cost levels will require specific preapproval by the Audit Committee.

All requests or applications for services to be provided by the independent auditor that do not require specific preapproval by the Audit Committee will be submitted to management and must include a detailed description of the services to be rendered.

Management will determine whether such services are included within the list of services that have received the general

preapproval of the Audit Committee.

The Audit Committee will be informed on a timely basis of any such services rendered by the independent auditors.

Requests or applications to provide services that require specific preapproval by the Audit Committee will be submitted to the Audit Committee by both the independent auditors and the chief financial officer, and must include a joint statement as to whether, in their view, the request or application is consistent with the SEC’s rules on auditor independence.

The Chair of the Audit Committee has been delegated the authority to specifically preapprove all services not covered by the general preapproval guidelines.

Amounts requiring preapproval in excess of the “general” preapproved cost levels require specific preapproval by all members of the Audit Committee prior to engagement of our independent auditors.

All amounts specifically preapproved by the Chair of the Audit Committee in accordance with this policy are to be disclosed to the full Audit Committee at the next regularly scheduled meeting.

All services rendered by Deloitte & Touche LLP for the year ended December 31, 2020 were preapproved in accordance with the policies and procedures described above.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

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(f/k/a Phillips Edison Grocery Center REIT I, Inc.), Phillips Edison Grocery Center Operating Partnership I, L.P., and the Contributors listed therein, dated as of March 12, 2019 (incorporated by reference to Exhibit 2.2 to the Company’s Annual Report on Form 10-K filed March 23, 2019)

Fourth Articles of Amendment and Restatement (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed July 15, 2014)

Articles of Amendment (incorporated by reference to Exhibit 3.3 to the Company’s Annual Report on Form 10-K filed March 9, 2015)

Second Articles of Amendment (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed December 15, 2017)

Articles of Amendment (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed November 19, 2018)

3.1 Fifth Articles of Amendment and Restatement (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed August 10, 2020)

3.2 Third Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed October 11, 2017)

8 unchanged sentences

4.3 Phillips Edison & Company, Inc.

Third Amended and Restated Share Repurchase Program, dated August 7, 2019.

(incorporated by reference to Exhibit 99.1 to the Company’s Quarterly Report on Form 10-Q filed August 12, 2019)

Fourth Amended and Restated Share Repurchase Program, dated January 8, 2021 (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed January 14, 2021)

Agreement of Limited Partnership of Operating Partnership

4.4 Fourth Amended and Restated Agreement of Limited Partnership of Phillips Edison Grocery Center Operating Partnership I, L.P., dated March 31, 2018 (incorporated by reference to Exhibit 4.4 to the Company’s Annual Report on Form 10-K filed March 30, 2018)

Description of Securities Registered Pursuant to Section 12

4.5 Description of Phillip Edison & Company, Inc.’s Securities Registered Under Section 12 of the Securities Exchange Act of 1934.**

Tax Protection Agreement

12 unchanged sentences

Compensatory Plans

10.8 Phillips Edison & Company, Inc.

2020 Omnibus Incentive Plan (incorporated by reference to Appendix A to the Company’s Definitive Proxy Statement on Schedule 14A filed on April 7, 2020)

10.9 Amended and Restated 2010 Independent Director Stock Plan (incorporated by reference to Exhibit 10.3 to Pre-Effective Amendment No.

1 unchanged sentence

333-164313) filed August 11, 2010)

Form of Restricted Stock Grant Agreement for Independent Director Stock Plan (incorporated by reference to Exhibit 99.2 to the Company’s Registration Statement on Form S-8 (No.

333-212876) filed August 3, 2016)

10.10 Amended and Restated 2010 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.14 to the Company’s Quarterly Report on Form 10-Q filed November 9, 2017)*

2 unchanged sentences

10.12 Phillips Edison and Company, Inc.

Amended & Restated Executive Severance and Change in Control Plan dated March 11, 2020*

Amended & Restated Executive Severance and Change in Control Plan dated March 11, 2020 (incorporated by reference to Exhibit 10.12 to the Company's Annual Report on Form 10-K filed March 12, 2020)*

10.13 Equity Vesting Agreement with Devin Murphy dated October 2, 2017 (incorporated by reference to Exhibit 10.15 to the Company’s Quarterly Report on Form 10-Q filed November 9, 2017)*

4 unchanged sentences

10.18 Participation Agreement for John Caulfield dated August 7, 2019 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed August 12, 2019)*

Form of Time-Based Restricted Stock Unit Award Agreement for Executives (incorporated by reference to Exhibit 10.24 to the Company’s Annual Report on Form 10-K filed March 13, 2019)*

Form of Performance Restricted Stock Unit Award Agreement for Executives (incorporated by reference to Exhibit 10.25 to the Company’s Annual Report on Form 10-K filed March 13, 2019)*

10.19 2019 Performance LTIP Unit Award Agreement for Jeffrey S.

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10.20 Amendment to 2019 Performance LTIP Unit Award Agreement for Jeffrey S.

Edison, dated March 11, 2020*

Edison, dated March 11, 2020 (incorporated by reference to Exhibit 10.22 to the Company's Annual Report on Form 10-K filed March 12, 2020)*

10.21 2019 Performance LTIP Unit Award Agreement for Devin I.

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10.22 Amendment to 2019 Performance LTIP Unit Award Agreement for Devin I.

Murphy, dated March 11, 2020*

Form of 2020 Time-Based Restricted Stock Unit Award Agreement for Executives*

Form of 2020 Performance-Based Restricted Stock Unit Award Agreement for Executives*

Murphy, dated March 11, 2020 (incorporated by reference to Exhibit 10.24 to the Company's Annual Report on Form 10-K filed March 12, 2020)*

21.1 Subsidiaries of the Company**

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and (iv) Consolidated Statements of Cash Flows

101.INS Inline XBRL Instance Document

101.SCH Inline XBRL Taxonomy Extension Schema Document

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document

104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Management Contract or Compensatory Plan

** Filed herewith

*** Furnished herewith

FORM 10-K SUMMARY

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Financial Statements

Financial Statements Page

Report of Independent Registered Public Accounting Firm

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Investment in Real Estate – Evaluation of Impairment – Refer to Notes 2 and 17 to the financial statements .

Critical Audit Matter Description

The Company’s evaluation for impairment of its investment in real estate involves an initial assessment of each real estate asset to determine whether events or changes in circumstances exist that may indicate that the carrying amount of a real estate asset is no longer recoverable.

Possible indicators of impairment may include changes in market conditions;

significant decreases in a real estate asset’s occupancy, rental income, operating income, or market value;

declines in tenant performance;

tenant bankruptcies;

changes to lease structures;

or a planned disposition in which a real estate asset’s fair value is less than its current carrying value, among others.

When an indicator of potential impairment exists, the Company evaluates the real estate asset for impairment by comparing undiscounted future cash flows expected to be generated over the holding period of the real estate asset to its respective carrying amount.

If the carrying amount of the real estate asset exceeds its undiscounted future cash flows, an analysis is performed to determine the fair value of the real estate asset for measurement of impairment.

The Company makes significant assumptions, the most critical of which involve assessments of market conditions, hold periods, and market values of its real estate assets, to identify those with potential impairment.

Changes in these assumptions could have a significant impact on which real estate assets are identified for further analysis.

For a real estate asset with an identified indicator of potential impairment, the Company makes significant estimates and assumptions to project the real estate asset’s undiscounted future cash flows expected to be generated over the Company’s remaining holding period.

Estimates and assumptions made include those related to the real estate asset’s market rent growth and terminal capitalization rates, and assumptions related to tenant activity, such as future lease signings and renewals.

In the event that a real estate asset is not recoverable based on the results of the undiscounted cash flow analysis, the Company will adjust the real estate asset to its fair value based upon discounted cash flow or direct capitalization models, third-party appraisals, or broker selling estimates or sale agreements, when available, and recognize an impairment loss for the carrying amount in excess of fair value.

Based on the Company’s impairment analysis, certain real estate assets were identified as possessing impairment indicators and were then subject to an undiscounted cash flow test.

Based on the results of the undiscounted cash flow tests, certain real estate assets were determined to be unrecoverable by the Company.

An impairment loss of approximately $2.4 million was recognized during the year ended December 31, 2020 on those unrecoverable real estate assets.

We identified the identification and analysis of impairment indicators for real estate assets and the impairment of real estate assets as a critical audit matter because of (1) the significant assumptions management makes when identifying and analyzing

indicators to determine whether events or changes in circumstances have occurred indicating that the carrying amounts of real estate assets may not be recoverable and (2) for those real estate assets where indications of impairment have been identified, the significant estimates and assumptions management makes to estimate the undiscounted cash flows of real estate assets, and for those real estate assets that are not recoverable, the significant estimates and assumptions management makes to determine the fair value of the real estate assets.

A high degree of auditor judgment was required when performing audit procedures to evaluate (1) whether management appropriately identified and analyzed impairment indicators, (2) the reasonableness of management’s undiscounted future cash flows analysis, and (3) the determination of fair value for unrecoverable real estate assets.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the identification and analysis of real estate assets for possible indications of impairment, and our procedures related to the estimate of future undiscounted cash flows and the determination of fair value for unrecoverable real estate assets, included the following, among others:

• We evaluated the Company’s identification and analysis of impairment indicators by:

◦ Searching for adverse asset-specific and market conditions through review of third-party industry reports, real estate industry news sources, and websites and financial reports of key anchor tenants across the portfolio, among other sources.

◦ Independently evaluating key impairment indicators, such as projected net operating income and changes in occupancy of each real estate asset, and comparing the results of our analysis to the indicators identified by management.

◦ Reviewing management’s specific real estate asset disposition plans and assessing for impairment any real estate asset with potential sales prices below the recorded real estate asset value.

• We evaluated the Company’s estimate of undiscounted future cash flows and the determination of fair value for unrecoverable real estate assets by:

◦ Comparing the projections included in management’s estimate of future undiscounted cash flows to the Company’s historical results and external market sources.

◦ Evaluating whether the impacts caused by the COVID-19 pandemic on a real estate asset’s cash flows were properly considered in the Company’s cash flow projections, including the projected hold period, impact of rent deferrals and concessions, probability of lease renewals and execution of new leases, and operational health of tenant businesses.

◦ Assessing the market rent growth rate and terminal capitalization rate used to determine the residual value of the real estate asset upon future sale against third-party industry reports and recent comparable sales information.

◦ Discussing with management the assumptions used in the Company’s valuation models and evaluating the consistency of the assumptions used with evidence obtained in other areas of the audit.

◦ Evaluating the source information used by management when determining the fair value of a real estate asset based on broker selling estimates or sale agreements.

/s/ Deloitte & Touche LLP

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Restricted cash 27,641 77,288

Corporate intangible assets, net

Goodwill 29,066 29,066

Other assets, net 126,470 128,690

Real estate investment and other assets held for sale — 6,038

Total assets $ 4,678,563 $ 4,828,195

LIABILITIES AND EQUITY

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shares issued and outstanding at December 31, 2020 and 2019, respectively

Additional paid-in capital

Accumulated other comprehensive (loss) income (“AOCI”)

Additional paid-in capital (“APIC”) 2,739,358 2,779,130

Accumulated other comprehensive loss (“AOCI”)

( 52,306 ) ( 20,762 )

Accumulated deficit ( 999,491 ) ( 947,252 )

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Noncontrolling interests 325,570 354,788

Total equity 2,015,929 2,168,794

Total liabilities and equity $ 4,678,563 $ 4,828,195

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(In thousands, except per share amounts)

2020 2019 2018

Rental income $ 485,483 $ 522,270 $ 395,790

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Impairment of real estate assets 2,423 87,393 40,782

Vesting of Class B units

Termination of affiliate arrangements

Total operating expenses 422,991 533,852 415,021

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Transaction expenses — — ( 3,331 )

Other (expense) income, net

Net (loss) income

Net loss (income) attributable to noncontrolling interests

Net (loss) income attributable to stockholders

Other income (expense), net 9,245 ( 676 ) ( 1,723 )

Net income (loss) 5,462 ( 72,826 ) 46,975

Net (income) loss attributable to noncontrolling interests ( 690 ) 9,294 ( 7,837 )

Net income (loss) attributable to stockholders $ 4,772 $ ( 63,532 ) $ 39,138

Earnings per common share:

Net (loss) income per share attributable to stockholders -

Net income (loss) per share attributable to stockholders -

basic and diluted (See Note 15)

$ 0.02 $ ( 0.22 ) $ 0.20

Comprehensive (loss) income:

Net (loss) income

Other comprehensive (loss) income:

Net income (loss) $ 5,462 $ ( 72,826 ) $ 46,975

Other comprehensive loss:

Change in unrealized value on interest rate swaps ( 33,820 ) ( 38,274 ) ( 4,156 )

Comprehensive (loss) income ( 28,358 ) ( 111,100 ) 42,819

Net loss (income) attributable to noncontrolling interests

Other comprehensive loss attributable to noncontrolling interests

Net (income) loss attributable to noncontrolling interests ( 690 ) 9,294 ( 7,837 )

Change in unrealized value on interest rate swaps attributable to noncontrolling interests 4,351 5,150 22

Reallocation of comprehensive loss upon conversion of noncontrolling interests ( 2,075 ) — —

Comprehensive (loss) income attributable to stockholders $ ( 26,772 ) $ ( 96,656 ) $ 35,004

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(In thousands, except per share amounts)

Additional Paid-In Capital

Accumulated Deficit

Total Stockholders’ Equity

Non-Controlling Interests

Common Stock APIC AOCI Accumulated Deficit Total Stockholders’ Equity Non-Controlling Interests Total Equity

Shares Amount

Balance at January 1, 2018 185,233 $ 1,852 $ 1,629,130 $ 16,496 $ ( 601,238 ) $ 1,046,240 $ 432,442 $ 1,478,682

Issuance of common stock for acquisition 95,452 955 1,053,790 — — 1,054,745 — 1,054,745

Dividend reinvestment plan (“DRIP”) 3,997 40 44,031 — — 44,071 — 44,071

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Change in unrealized value on interest

rate swaps — — — ( 4,134 ) — ( 4,134 ) ( 22 ) ( 4,156 )

Common distributions declared, $ 0.67

— — — — ( 129,945 ) ( 129,945 ) — ( 129,945 )

Distributions to noncontrolling interests — — — — — — ( 28,661 ) ( 28,661 )

Reclassification of affiliate distributions

Share-based compensation 5 — 1,783 — — 1,783 3,315 5,098

Redemption of noncontrolling interests

Issuance of partnership units for asset management services

Issuance of partnership units in PELP transaction

Other — — ( 154 ) — — ( 154 ) — ( 154 )

Net income — — — — 39,138 39,138 7,837 46,975

Balance at December 31, 2018 279,803 2,798 2,674,871 12,362 ( 692,045 ) 1,997,986 414,911 2,412,897

Issuance of common stock for acquisition

Adoption of Accounting Standards Codification Topic 842, Leases

— — — — ( 528 ) ( 528 ) — ( 528 )

Balance at January 1, 2019 as adjusted 279,803 2,798 2,674,871 12,362 ( 692,573 ) 1,997,458 414,911 2,412,369

Issuance of common stock for acquisition, net 4,516 45 49,891 — — 49,936 — 49,936

DRIP 6,086 60 67,367 — — 67,427 — 67,427

Share repurchases ( 3,311 ) ( 33 ) ( 35,930 ) — — ( 35,963 ) — ( 35,963 )

Change in unrealized value on interest

rate swaps — — — ( 33,124 ) — ( 33,124 ) ( 5,150 ) ( 38,274 )

Common distributions declared, $ 0.67

— — — — ( 191,147 ) ( 191,147 ) — ( 191,147 )

Distributions to noncontrolling interests — — — — — — ( 30,444 ) ( 30,444 )

Share-based compensation 65 1 2,051 — — 2,052 5,664 7,716

Conversion of noncontrolling interests 1,888 19 20,880 — — 20,899 ( 20,899 ) —

Net loss — — — — ( 63,532 ) ( 63,532 ) ( 9,294 ) ( 72,826 )

Balance at December 31, 2019 289,047 2,890 2,779,130 ( 20,762 ) ( 947,252 ) 1,814,006 354,788 2,168,794

Adoption of new accounting pronouncement (see Note 3)

Balance at January 1, 2019 as adjusted

Issuance of common stock for acquisition, net

DRIP 1,436 14 15,926 — — 15,940 — 15,940

Share repurchases ( 13,746 ) ( 138 ) ( 80,260 ) — — ( 80,398 ) — ( 80,398 )

Change in unrealized value on interest

rate swaps — — — ( 29,469 ) — ( 29,469 ) ( 4,351 ) ( 33,820 )

Common distributions declared, $ 0.19

— — — — ( 57,011 ) ( 57,011 ) — ( 57,011 )

Distributions to noncontrolling interests — — — — — — ( 8,255 ) ( 8,255 )

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Conversion of noncontrolling interests 2,990 30 18,056 — — 18,086 ( 18,086 ) —

Reallocation of operating partnership interests — — 3,442 ( 2,075 ) — 1,367 ( 1,367 ) —

Other — — ( 644 ) — — ( 644 ) — ( 644 )

Net income — — — — 4,772 4,772 690 5,462

Balance at December 31, 2020 279,836 $ 2,798 $ 2,739,358 $ ( 52,306 ) $ ( 999,491 ) $ 1,690,359 $ 325,570 $ 2,015,929

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(In thousands)

2020 2019 2018

CASH FLOWS FROM OPERATING ACTIVITIES:

Net (loss) income

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Net income (loss) $ 5,462 $ ( 72,826 ) $ 46,975

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization of real estate assets 218,738 231,023 177,504

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Gain on sale or contribution of property, net ( 6,494 ) ( 28,170 ) ( 109,300 )

Vesting of Class B units

Change in fair value of earn-out liability and derivatives ( 10,000 ) ( 7,500 ) 2,393

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Other impairment charges 359 9,661 —

Return on investment in unconsolidated joint ventures 1,962 3,922 —

Other 1,287 540 1,039

Changes in operating assets and liabilities:

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Real estate acquisitions ( 41,482 ) ( 71,722 ) ( 87,068 )

Distributions and proceeds from unconsolidated joint ventures

Capital expenditures ( 63,965 ) ( 75,492 ) ( 48,980 )

Proceeds from sale of real estate 57,902 223,083 78,654

Distributions and proceeds from unconsolidated joint ventures 3,453 5,310 162,046

Acquisition of REIT III, net of cash acquired — ( 16,996 ) —

Acquisition of REIT II, net of cash acquired — — ( 363,519 )

Acquisition of PELP, net of cash acquired

Net cash provided by (used in) investing activities

Net cash (used in) provided by investing activities ( 44,092 ) 64,183 ( 258,867 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Net change in credit facility

Proceeds from revolving credit facility 255,000 122,641 475,357

Payments on revolving credit facility ( 255,000 ) ( 196,000 ) ( 463,567 )

Proceeds from mortgages and loans payable — 260,000 622,500

Payments on mortgages and loans payable ( 64,848 ) ( 275,710 ) ( 301,669 )

Payments of deferred financing expenses

Payments on deferred financing expenses ( 130 ) ( 3,696 ) ( 7,655 )

Distributions paid, net of DRIP ( 49,331 ) ( 123,135 ) ( 80,728 )

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Repurchases of common stock ( 5,267 ) ( 34,675 ) ( 53,153 )

Redemption of noncontrolling interests

Other ( 644 ) — —

Net cash (used in) provided by financing activities ( 129,655 ) ( 280,254 ) 162,435

NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH

NET INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH 36,829 10,804 56,859

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH:

Beginning of year 95,108 84,304 27,445

End of year $ 131,937 $ 95,108 $ 84,304

RECONCILIATION TO CONSOLIDATED BALANCE SHEETS

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Cash, cash equivalents, and restricted cash at end of year $ 131,937 $ 95,108 $ 84,304

2020 2019 2018

SUPPLEMENTAL CASH FLOW DISCLOSURE, INCLUDING NON-CASH INVESTING AND FINANCING ACTIVITIES:

Cash paid for interest $ 78,521 $ 89,373 $ 67,556

Cash paid (refund) for income taxes, net 947 589 ( 146 )

Obligation for shares tendered pursuant to a tender offer 77,642 — —

Right-of-use (“ROU”) assets obtained in exchange for new

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Change in distributions payable - noncontrolling interests ( 1,180 ) 765 11

Change in accrued share repurchase obligation

Change in accrued share repurchase plan obligation ( 2,511 ) 1,288 605

Distributions reinvested 15,940 67,427 44,071

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Property contributed to joint venture, net — — 273,790

Amounts related to the acquisition of REIT III, REIT II, and PELP:

Amounts related to the merger of GRP I and GRP II:

Ownership interest in fair value of assets assumed 5,062 — —

Ownership interest in GRP II contributed to GRP I ( 5,105 ) — —

Amounts related to the acquisition of REIT III and REIT II:

Fair value of assumed debt — — 464,462

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Notes to Consolidated Financial Statements

For the Years Ended December 31, 2020, 2019, and 2018

Phillips Edison & Company, Inc.

(“we,” the “Company,” “our,” or “us”) was formed as a Maryland corporation in October 2009.

(“we,” the “Company,” “PECO,” “our,” or “us”) was formed as a Maryland corporation in October 2009.

Substantially all of our business is conducted through Phillips Edison Grocery Center Operating Partnership I, L.P., (the “Operating Partnership”), a Delaware limited partnership formed in December 2009.

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We are a real estate investment trust (“REIT”) that invests primarily in well-occupied, grocery-anchored, neighborhood and community shopping centers that have a mix of creditworthy national, regional, and local retailers that sell necessity-based goods and services in strong demographic markets throughout the United States.

In addition to managing our own shopping centers, our third-party investment management business provides comprehensive real estate and asset management services to three institutional joint ventures, in which we retain a partial ownership interest, and one private fund (collectively, the “Managed Funds”).

On October 31, 2019, we completed a merger with Phillips Edison Grocery Center REIT III, Inc.

(“REIT III”), a public non-traded REIT that was advised and managed by us, in a transaction valued at approximately $71 million.

This resulted in the acquisition of three properties, as well as a 10% equity interest in Grocery Retail Partners II LLC (“GRP II”), a joint venture with Northwestern Mutual Life Insurance Company (“Northwestern Mutual”) owning three properties;

see Note 6 for more detail.

In addition to managing our own shopping centers, our third-party investment management business provides comprehensive real estate and asset management services to two institutional joint ventures, in which we retain a partial ownership interest, and one private fund (collectively, the “Managed Funds”).

On October 1, 2020, Grocery Retail Partners I LLC (“GRP I”), a joint venture with Northwestern Mutual Life Insurance Company (“Northwestern Mutual”) in which we own an equity interest, acquired Grocery Retail Partners II LLC (“GRP II”), an additional joint venture with Northwestern Mutual in which we owned an equity interest.

Our ownership in the combined entity was adjusted upon consummation of the transaction, and we own approximately a 14 % interest in GRP I as a result of the acquisition.

In November 2018, we completed a merger (the “Merger”) with Phillips Edison Grocery Center REIT II, Inc.

(“REIT II”), a public non-traded REIT that was advised and managed by us (see Note 4).

In the same month, we also contributed or sold 17 properties in the formation of Grocery Retail Partners I LLC (“GRP I” or the “GRP I joint venture”), a joint venture with Northwestern Mutual;

see Note 8 for more detail.

In October 2017, we completed a transaction to acquire certain real estate assets and the third-party investment management business of Phillips Edison Limited Partnership (“PELP”) in exchange for stock and cash (the “PELP transaction”);

In the same month, we also contributed or sold 17 properties in the formation of GRP I;

see Note 7 for more detail.

As of December 31, 2020, we wholly-owned 283 real estate properties.

Additionally, we owned a 20% equity interest in Necessity Retail Partners (“NRP”), a joint venture that owned eight properties;

a 15% interest in GRP I, which owned 17 properties;

and a 10% interest in GRP II, which owned three properties.

Additionally, we owned a 20 % equity interest in Necessity Retail Partners (“NRP”), a joint venture that owned five properties, and a 14 % interest in GRP I, which owned 20 properties.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Set forth below is a summary of the significant accounting estimates and policies that management believes are important to the preparation of our consolidated financial statements.

Certain of our accounting estimates are particularly important for an understanding of our financial position and results of operations and require the application of significant judgment by management.

For example, significant estimates and assumptions have been made with respect to the useful lives of assets, remaining hold periods of assets, recoverable amounts of receivables, and other fair value measurement assessments required for the preparation of the consolidated financial statements.

As a result, these estimates are subject to a degree of uncertainty.

During the first quarter of 2020, a novel coronavirus (“COVID-19”) began spreading globally, with the outbreak being classified as a pandemic by the World Health Organization on March 11, 2020.

Because of the adverse economic conditions that exist as a result of the impacts of the COVID-19 pandemic, it is possible that the estimates and assumptions that have been utilized in the preparation of the consolidated financial statements could change significantly.

Specifically, as it relates to our business, the current economic situation resulted in temporary tenant closures at our shopping centers, often as a result of “stay-at-home” government mandates which limited travel and movement of the general public to essential activities only and required all non-essential businesses to close.

Temporary closures of tenant spaces at our centers peaked in April 2020 and have significantly decreased as states reduced or removed restrictions on business operations and the travel and movement of the general public.

Certain tenants remain temporarily closed, have since closed after reopening, are limiting the number of customers allowed in their stores, or have modified their operations in other ways that may impact their profitability, either as a result of government mandates or self-elected efforts to reduce the spread of COVID-19.

These actions could result in increased permanent store closings and could reduce the demand for leasing space in our shopping centers and result in a decline in occupancy and rental revenues in our estate portfolio.

All of this activity impacts our estimates around the collectibility of revenue and valuation of real estate assets, goodwill and other intangible assets, and certain liabilities, among others.

Basis of Presentation and Principles of Consolidation —The accompanying consolidated financial statements include our accounts and the accounts of the Operating Partnership and its wholly-owned subsidiaries (over which we exercise financial and operating control).

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For example, significant estimates and assumptions have been made with respect to the useful lives of assets;

remaining hold periods of assets;

recoverable amounts of receivables;

initial valuations of tangible and intangible assets and liabilities, including goodwill, and related amortization periods of deferred costs and intangibles, particularly with respect to property acquisitions;

the valuation and nature of derivatives and their effectiveness as hedges;

the valuation and nature of

derivatives and their effectiveness as hedges;

valuations of contingent consideration;

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As such, we have consolidated the Operating Partnership and its wholly-owned subsidiaries.

Additionally, an Internal Revenue Code (“IRC”) Section 1031 like-kind exchange (“1031 exchange”) entails selling one property and reinvesting the proceeds in one or more properties that are similar in nature, character, or class within 180 days.

A reverse 1031 exchange occurs when one or more properties is purchased prior to selling one property to be matched in the like-kind exchange, during which time legal title to the purchased property is held by an intermediary.

Because we retain essentially all of the legal and economic benefits and obligations related to the acquisition, we consider the purchased property to be a VIE and therefore we will consolidate the entity as the primary beneficiary in these instances.

Further, as we hold a majority voting interest in the Operating Partnership, we qualify for the exemption from providing certain of the disclosure requirements associated with variable interest entities.

Additionally, an Internal Revenue Code (“IRC”) Section 1031 like-kind exchange (“Section 1031 Exchange”) entails selling one property and reinvesting the proceeds in one or more properties that are similar in nature, character, or class within 180 days.

A reverse Section 1031 Exchange occurs when one or more properties is purchased prior to selling one property to be matched in the like-kind exchange, during which time legal title to the purchased property is held by an intermediary.

Because we retain essentially all of the legal and economic benefits and obligations related to the acquisition, we consider the purchased property in a reverse Section 1031 Exchange to be a VIE, and therefore, we will consolidate the entity as the primary beneficiary in these instances.

Noncontrolling Interests —Noncontrolling interests represent the portion of equity that we do not own in the entities we consolidate.

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Short-term investments are stated at cost, which approximates fair value and may consist of investments in money market accounts and money market funds.

The cash and cash equivalent balances at one or more of our financial institutions exceed the Federal Depository Insurance Corporation coverage.

Restricted Cash —Restricted cash primarily consists of cash restricted for the purpose of facilitating a 1031 exchange, escrowed tenant improvement funds, real estate taxes, capital improvement funds, insurance premiums, and other amounts required to be escrowed pursuant to loan agreements.

As of December 31, 2019 and 2018 , we had six and four properties sold, respectively, as part of facilitating a 1031 exchange that remained open at the end of the period.

From time to time, the cash and cash equivalent balances at one or more of our financial institutions may exceed the Federal Depository Insurance Corporation coverage.

Restricted Cash —Restricted cash primarily consists of cash restricted for the purpose of facilitating a Section 1031 Exchange, escrowed tenant improvement funds, real estate taxes, capital improvement funds, insurance premiums, and other amounts required to be escrowed pursuant to loan agreements.

As of December 31, 2020 and 2019, we had two and six properties sold, respectively, as part of facilitating a Section 1031 Exchange that remained open at the end of the year.

The net proceeds of these sales held as restricted cash with a qualified intermediary totaled $ 10.3 million and $ 22.4 million, respectively.

The $ 10.3 million held as restricted cash as of December 31, 2020 has since been released.

As of December 31, 2019, we had $ 38.1 million of restricted cash associated with asset substitutions related to one of our secured debt facilities to facilitate the sale of one of our shopping centers.

This cash was released in January 2020.

Investment in Property and Lease Intangibles —Accounting Standards Update (“ASU”) 2017-01, Business Combinations (Topic 805):

Clarifying the Definition of a Business (“ASU 2017-01”) amended existing guidance in order to clarify when an integrated set of assets and activities is considered a business.

We adopted ASU 2017-01 on January 1, 2017 and applied it prospectively.

Under this guidance, most of our real estate acquisition activity is no longer considered a business combination and is instead classified as an asset acquisition.

As a result, most acquisition-related costs that would have been recorded on our consolidated statements of operations prior to adoption are now capitalized and will be amortized over the life of the related assets, and there is no recognition of goodwill.

Investment in Property and Lease Intangibles —We apply Accounting Standards Codification (“ASC”) Topic 805:

Business Combinations (“ASC 805”) when evaluating any purchases of real estate.

Under this guidance, generally our real estate acquisition activity is not considered a business combination and is instead classified as an asset acquisition.

As a result, most acquisition-related costs are capitalized and amortized over the life of the related assets, and there is no recognition of goodwill.

None of our real estate acquisitions in 2020 and 2019 met the definition of a business;

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Major replacements that extend the useful lives of the assets are capitalized, and maintenance and repair costs are expensed as incurred.

We assess the acquisition-date fair values of all tangible assets, identifiable intangibles, and assumed liabilities using methods similar to those used by independent appraisers (e.g., discounted cash flow analysis and replacement cost) and that utilize appropriate discount and/or capitalization rates and available market information.

We assess the acquisition-date fair values of all tangible assets, identifiable intangibles, and assumed liabilities using methods similar to those used by independent appraisers (e.g., discounted cash flow analysis, sales comparison approach, and replacement cost approach) and that utilize appropriate discount and/or capitalization rates and available market information.

Estimates of future cash flows are based on a number of factors including historical operating results, known and anticipated trends, and market and economic conditions.

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Such evaluation includes an estimate of the net market-based rental revenues and net operating costs (primarily consisting of real estate taxes, insurance, and utilities) that would be incurred during the lease-up period.

Acquired in-place leases as of the date of acquisition are amortized over the weighted-average remaining lease terms.

Acquired above- and below-market lease values are recorded based on the present value (using discount rates that reflect the risks associated with the leases acquired) of the difference between the contractual amounts to be paid pursuant to the in-place leases and management’s estimate of the market lease rates for the corresponding in-place leases.

Acquired in-place leases as of the date of acquisition are amortized over the remaining lease terms.

place leases and management’s estimate of the market lease rates for the corresponding in-place leases.

The capitalized above- and below-market lease values are amortized as adjustments to rental income over the remaining terms of the respective leases.

We also consider fixed-rate renewal options in our calculation of the fair value of below-market leases and the periods over which such leases are amortized.

If a tenant has a unilateral option to renew a below-market lease and we determine that the tenant has a financial incentive to exercise such option, we include such an option in the calculation of the fair value of such lease and the period over which the lease is amortized.

If a tenant has a unilateral option to renew a below-market lease and we determine that the tenant has a financial incentive to exercise such option, we include such option in the calculation of the fair value of such lease and the period over which the lease is amortized.

We estimate the value of tenant origination and absorption costs by considering the estimated carrying costs during hypothetical expected lease-up periods, considering current market conditions.

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Assumed loans payable are initially recorded at their estimated fair value as of the assumption date, and the difference between such estimated fair value and the loan’s outstanding principal balance is amortized over the life of the loan as an adjustment to interest expense.

Our accumulated amortization of below-market debt was $4.3 million and $3.8 million as of December 31, 2019 and 2018 , respectively.

Our accumulated amortization of above- and below-market debt was $ 2.9 million and $ 4.3 million as of December 31, 2020 and 2019, respectively.

Real estate assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the individual property may not be recoverable.

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If deemed unrecoverable on an undiscounted basis, such carrying amount would be adjusted, if necessary, to estimated fair values to reflect impairment in the value of the asset.

For additional information regarding real estate asset impairments, refer to Note 18 .

Goodwill and Other Intangibles —In the case of a business combination, after identifying all tangible and intangible assets and liabilities, the excess consideration paid over the fair value of the assets and liabilities acquired represents goodwill.

For additional information regarding real estate asset impairments, refer to our fair value measurement accounting policy below.

Goodwill and Other Intangibles —In the case of an acquisition of a business, after identifying all tangible and intangible assets and liabilities, the excess consideration paid over the fair value of the assets and liabilities acquired represents goodwill.

We allocate goodwill to the respective reporting units in which such goodwill arises.

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The accumulated amortization of deferred financing expenses in Debt Obligations, Net was $ 13.8 million and $ 10.8 million as of December 31, 2020 and 2019, respectively.

Fair Value Measurement —Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurement (“ASC 820”) , defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosures about fair value measurements.

Fair Value Measurement —ASC Topic 820, Fair Value Measurement (“ASC 820”) defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosures about fair value measurements.

ASC 820 emphasizes that fair value is intended to be a market-based measurement, as opposed to a transaction-specific measurement.

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Accordingly, the estimates presented herein are not necessarily indicative of the amounts we did or could actually realize upon disposition of the financial assets and liabilities previously sold or currently held.

On a quarterly basis, we employ a multi-step approach to assess our real estate assets for possible impairment and record any impairment charges identified.

The first step is the identification of potential triggering events, such as significant decreases in occupancy or the presence of large unleased or vacant spaces.

If we observe any of these indicators for a shopping center, we then perform an additional screen test consisting of a years-to-recover analysis to determine if we will recover the net book value of the property over its remaining economic life based upon net operating income (“NOI”) as forecasted for the current year.

In the event that the results of this first step indicate a triggering event for a center, we proceed to the second step, utilizing an undiscounted cash flow model for the center to identify potential impairment.

If the undiscounted cash flows directly associated with the use and ultimate disposition of the center are less than the net book value of the center as of the balance sheet date, we record an impairment charge based on the fair value determined in the third step.

In performing the third step, we utilize market data such as capitalization rates and sales price per square foot on comparable recent real estate transactions to estimate the fair value of the real estate assets.

We also utilize expected net sales proceeds to estimate the fair value of any centers that are actively being marketed for sale.

In addition to these procedures, we also review undeveloped or unimproved land parcels that we own for evidence of impairment and record any impairment charges as necessary.

Primary impairment triggers for these land parcels are changes to our plans or intentions with regards to such properties, or planned dispositions at prices that are less than the current carrying values.

Our quarterly impairment procedures have not been altered by the COVID-19 pandemic, as we believe key impairment indicators such as temporary store closings and large unleased or vacant spaces will continue to be identified in our review.

We have utilized forecasts that incorporate estimated decreases in NOI and cash flows as a result of the COVID-19 pandemic in performing our impairment analysis for the year ended December 31, 2020.

However, it is possible that we could experience unanticipated changes in assumptions that are employed in our impairment analysis which could impact our cash flows and fair value conclusions.

Such unanticipated changes relative to our expectations may include but are not limited to:

increases or decreases in the duration or permanence of tenant closures, increases or decreases in collectibility reserves and write-offs, additional capital required to fill vacancies, extended lease-up periods, future closings of large tenants, changes in macroeconomic assumptions such as rate of inflation and capitalization rates, and changes to the estimated timing of disposition of the properties under review.

Investments in Unconsolidated Joint Ventures —We account for our investments in unconsolidated joint ventures using the equity method of accounting as we exercise significant influence over, but do not control, these entities.

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Under a pro rata allocation, net income or loss is allocated between the partners in the joint ventures based on their respective stated ownership percentages.

We utilize the cumulative-earnings approach for purposes of determining whether distributions should be classified as either a return on investment, which would be included in operating activities, or a return of investment, which would be included in

investing activities on the consolidated statements of cash flows.

Under this approach, distributions are presumed to be returns on investment unless cumulative returns on investment exceed our cumulative equity in earnings.

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Where applicable, any estimated debt premiums, capitalization rates, discount rates and credit spreads used in these models are based upon rates we believe to be within a reasonable range of current market rates.

Certain of our joint venture investments were acquired as part of acquisitions and initially recorded at fair value.

Our joint venture investment in NRP was acquired as part of an acquisition and initially recorded at fair value.

Basis differences arise when the fair value we record differs from our proportionate share of the entity’s underlying net assets.

Basis differences for our joint ventures are amortized starting at the date of acquisition and recorded as an offset to earnings from the related joint venture in Other Expense, Net on our consolidated statements of operations.

A basis difference for our joint venture is amortized starting at the date of acquisition and recorded as an offset to earnings from the related joint venture in Other Income (Expense), Net on our consolidated statements of operations.

When a property is sold, the remaining basis difference related to that property is written off.

Our investments in NRP and GRP II differ from our proportionate share of the underlying net assets due to initial basis differences of $6.2 million and $0.9 million , respectively.

Our investment in NRP differs from our proportionate share of the underlying net assets due to an initial basis difference of $ 6.2 million.

For additional information regarding our unconsolidated joint ventures, refer to Note 7.

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Although we expect such cases to be rare, in the event that a direct-paying tenant failed to make their required payment to the taxing authorities, we would potentially be liable for such amounts, although they are not recorded as a liability in our consolidated balance sheets per the requirements of ASC 842.

We have made a policy election to exclude amounts collected from customers for all sales tax and other similar taxes from the transaction price in our recognition of lease revenue.

We have made a policy election to exclude amounts collected from customers for all sales

tax and other similar taxes from the transaction price in our recognition of lease revenue.

We record such taxes on a net basis in our consolidated statements of operations.

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These incentives usually take the form of payments made to or on behalf of the tenant, and such incentives will be deducted from the lease payment and recorded on a straight-line basis over the term of the new lease.

We record lease termination income if there is a signed termination agreement, all of the conditions of the agreement have been met, collectability is reasonably assured and the tenant is no longer occupying the property.

We record lease termination income if there is a signed termination agreement, all of the conditions of the agreement have been met, collectibility is reasonably assured and the tenant is no longer occupying the property.

Upon early lease termination, we provide for losses related to unrecovered tenant-specific intangibles and other assets.

We record lease termination income as Rental Income in the consolidated statements of operations.

Historically, we periodically reviewed the collectability of outstanding receivables.

Following the adoption of ASC 842, lease receivables are reviewed continually to determine whether or not it is probable that we will realize all amounts receivable for each of our tenants (i.e., whether a tenant is deemed to be a credit risk).

If we determine that the tenant is not a credit risk, no reserve or reduction of revenue is recorded, except in the case of disputed charges.

If we determine that the tenant is a credit risk, revenue for that tenant is recorded on a cash basis, including any amounts relating to straight-line rent receivables and/or receivables for recoverable expenses.

Historically, we periodically reviewed the collectibility of outstanding receivables.

Following the adoption of ASC 842, lease receivables are reviewed continually to determine whether or not it is probable that we will realize substantially all remaining lease payments for each of our tenants (i.e., whether a tenant is deemed to be a credit risk).

Additionally, we record a general reserve based on our review of operating lease receivables at a company level to ensure they are properly valued based on analysis of historical bad debt, outstanding balances, and the current economic climate.

If we determine it is not probable that we will collect substantially all of the remaining lease payments from a tenant, revenue for that tenant is recorded on a cash basis (“cash-basis tenant”), including any amounts relating to straight-line rent receivables and/or receivables for recoverable expenses.

We will resume recording lease income on an accrual basis for cash-basis tenants once we believe the collection of rent for the remaining lease term is probable, which will generally be after a period of regular payments.

The COVID-19 pandemic has increased the uncertainty of collecting rents from a number of our tenants.

Under ASC 842, the aforementioned adjustments as well as any reserve for disputed charges are recorded as a reduction of Rental Income rather than in Property Operating, where our reserves were previously recorded, on the consolidated statements of operations.

As of December 31, 2019 and 2018 , the bad debt reserve for uncollectible amounts was $6.9 million and $6.0 million , respectively.

As of December 31, 2020 and 2019, the reserve in accounts receivable for uncollectible amounts was $ 8.9 million and $ 6.9 million, respectively.

Receivables on our consolidated balance sheets exclude amounts removed for tenants considered to be non-creditworthy, which were $ 27.2 million and $ 6.9 million as of December 31, 2020 and 2019, respectively.

In our efforts to maximize collections in the near term while also supporting our tenants as they operate through this pandemic, we have begun negotiating rent relief primarily in the form of payment plans and deferrals on rent and recovery charges, which allow for changes in the timing of payments, but not the total amount of consideration due to us under the lease.

In some instances, we may also agree to waive certain charges due to us under the lease;

for additional details, please refer to Note 3.

Lessee —We enter into leases as a lessee as part of our real estate operations in the form of ground leases of land for certain properties, and as part of our corporate operations in the form of office space and office equipment leases.

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Our determination involves a combination of contract-, asset-, entity-, and market-based factors and involves considerable judgment.

Currently, neither our operating leases nor our finance leases have residual value guarantees or other restrictions or covenants, but a small number may contain nonlease components which have been deemed not material.

Beginning January 1, 2019, we evaluate whether a lease is a finance or operating lease using the criteria established in ASC 842.

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These services are currently provided under various combinations of advisory agreements, property management agreements, and other service agreements (the “Management Agreements”).

variety of duties within the Management Agreements makes determining the performance obligations within the contracts a matter of judgment.

The wide variety of duties within the Management Agreements makes determining the performance obligations within the contracts a matter of judgment.

We have concluded that each of the separately disclosed fee types in the below table represents a separate performance obligation within the Management Agreements.

Performance Obligation Satisfied

Form and Timing of Payment

Asset Management

In cash, monthly

Because each increment of service is distinct, although substantially the same, revenue is recognized at the end of each reporting period based upon invested equity and the applicable rate.

Property Management

In cash, monthly

Because each increment of service is distinct, although substantially the same, revenue is recognized at the end of each month based on a percentage of the properties’ cash receipts.

Leasing Commissions

Point in time (upon close of a transaction)

In cash, upon completion

Revenue is recognized in an amount equal to the fees charged by unaffiliated persons rendering comparable services in the same geographic location.

Construction Management

Point in time (upon close of a project)

In cash, upon completion

Revenue is recognized in an amount equal to the fees charged by unaffiliated persons rendering comparable services in the same geographic location.

Acquisition/Disposition

Point in time (upon close of a transaction)

In cash, upon close of the transaction

Revenue is recognized based on a percentage of the purchase price or disposition price of the property acquired or sold.

Fee Performance Obligation Satisfied Form and Timing of Payment Description

Asset Management Over time In cash, monthly Because each increment of service is distinct, although substantially the same, revenue is recognized at the end of each reporting period based upon invested equity and the applicable rate.

Property Management Over time In cash, monthly Because each increment of service is distinct, although substantially the same, revenue is recognized at the end of each month based on a percentage of the properties’ cash receipts.

Leasing Commissions Point in time (upon close of a transaction) In cash, upon completion Revenue is recognized in an amount equal to the fees charged by unaffiliated persons rendering comparable services in the same geographic location.

Construction Management Point in time (upon close of a project) In cash, upon completion Revenue is recognized in an amount equal to the fees charged by unaffiliated persons rendering comparable services in the same geographic location.

Acquisition/Disposition Point in time (upon close of a transaction) In cash, upon close of the transaction Revenue is recognized based on a percentage of the purchase price or disposition price of the property acquired or sold.

Due to the nature of the services being provided under our Management Agreements, each performance obligation has a variable component.

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We have not recognized revenue related to these fees, nor will we until it is no longer highly probable that there would be a material reversal of revenue.

Additionally, effective January 1, 2018, sales or transfers to non-customers of non-financial assets or in substance non-financial assets that do not meet the definition of a business are accounted for within the scope of ASC Topic 610-20, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”).

Sales or transfers to non-customers of non-financial assets or in substance non-financial assets that do not meet the definition of a business are accounted for within the scope of ASC Topic 610-20, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”).

Generally, our sales of real estate would be considered a sale of a non-financial asset as defined by ASC 610-20.

Under ASC 610-20, if we determine we do not have a controlling financial interest in the entity that holds the asset and the arrangement meets the criteria to be accounted for as a contract, we would de-recognize the asset and recognize a gain or loss on the sale of the real estate when control of the underlying asset transfers to the buyer.

Further, we may defer a tax gain through a 1031 exchange by purchasing another property within a specified time period.

Further, we may defer a tax gain through a Section 1031 Exchange by purchasing another property within a specified time period.

For additional information regarding gain on sale of assets, refer to Note 5.

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federal income taxes on any taxable income that is not currently distributed to our stockholders.

If we fail to qualify as a REIT in any taxable

year, we will be subject to U.S.

If we fail to qualify as a REIT in any taxable year, we will be subject to U.S.

federal income taxes and may not be able to qualify as a REIT until the fifth subsequent taxable year.

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federal excise taxes if we engage in certain types of transactions.

We recognized an insignificant amount of federal, state, and local income tax expense for the years ended December 31, 2020 and 2019, respectively, and we retain a full valuation allowance for our deferred tax asset.

All income tax

amounts are included in Other Income (Expense), Net on the consolidated statements of operations.

For more information regarding our income taxes, see Note 11.

Recently Issued and Newly Adopted Accounting Pronouncements —The following table provides a brief description of recent accounting pronouncements that could have a material effect on our consolidated financial statements:

Planned Date of Adoption

Effect on the Financial Statements or Other Significant Matters

ASU 2016-13, Financial Instruments - Credit Losses (Topic 326):

Newly Adopted Accounting Pronouncements — The following table provides a brief description of newly-adopted accounting pronouncements and their effect on our consolidated financial statements:

Standard Description Date of Adoption Effect on the Financial Statements or Other Significant Matters

Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments

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ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments - Credit Losses

The amendments in this update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.

It clarifies that receivables arising from operating leases are not within the scope of Topic 326.

Instead, impairment of receivables arising from operating leases should be accounted for in accordance with ASC 842.

It also allows election of the fair value option on certain financial instruments.

This update is effective for public entities in fiscal years beginning after December 15, 2019, and interim periods within those fiscal years.

Early adoption was permitted after December 15, 2018.

January 1, 2020

We do not expect the adoption of this standard to have a material impact on our consolidated financial statements.

ASU 2020-02, Financial Instruments - Credit Losses (Topic 326) and Leases (Topic 842) The amendments in this update replaced the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.

It clarified that receivables arising from operating leases are not within the scope of ASC Topic 326.

Instead, impairment of receivables arising from operating leases will be accounted for in accordance with ASC 842.

It also allowed election of the fair value option on certain financial instruments.

January 1, 2020 The adoption of this standard did not have a material impact on our consolidated financial statements.

The majority of our financial instruments result from operating lease transactions, which are not within the scope of this standard.

ASU 2018-13, Fair Value Measurement (Topic 820):

Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement

This ASU eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of the Financial Accounting Standards Board’s disclosure framework project.

It is effective for annual and interim reporting periods beginning after December 15, 2019, but early adoption is permitted.

January 1, 2020

We do not expect the adoption of this standard to have a material impact on our consolidated financial statements.

ASU 2018-17, Consolidation (Topic 810):

Targeted Improvements to Related Party Guidance for Variable Interest Entities

This ASU amends two aspects of the related-party guidance in Topic 810:

(1) adds an elective private-company scope exception to the variable interest entity guidance for entities under common control and (2) indirect interests held through related parties in common control arrangements should be considered on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests.

For entities other than private companies, the amendments in this update are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years.

All entities are required to apply the amendments in this update retrospectively with a cumulative effect adjustment to retained earnings at the beginning of the earliest period presented.

Early adoption is permitted.

January 1, 2020

We do not expect the adoption of this standard to have a material impact on our consolidated financial statements.

ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments

This ASU amends a variety of topics, improving certain aspects of previously issued ASUs, including ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10):

Recognition and Measurement of Financial Assets and Financial Liabilities, ASU 2016-13, Financial Instruments-Credit Losses (Topic 326):

Targeted Improvements to Related Party Guidance for Variable Interest Entities This ASU amended two aspects of the

related-party guidance in Topic 810:

(1) added an elective private-company scope exception to the variable interest entity guidance for entities under common control, and (2) provided that indirect interests held through related parties in common control arrangements will be considered on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests.

January 1, 2020 The adoption of this standard did not have a material impact on our consolidated financial statements.

ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments This ASU amended a variety of topics,

improving certain aspects of previously issued ASUs, including ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10):

Recognition and Measurement of Financial Assets and Financial

Liabilities, ASU 2016-13, Financial

Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments, and ASU 2017-12, Derivatives and Hedging (Topic 815):

Targeted Improvements to Accounting for Hedging Activities.

This amendment is effective for PECO in fiscal years beginning after January 1, 2020.

January 1, 2020

We do not expect the adoption of this standard to have a material impact on our consolidated financial statements.

The following table provides a brief description of newly adopted accounting pronouncements and their effect on our consolidated financial statements:

Date of Adoption

Effect on the Financial Statements or Other Significant Matters

ASU 2016-02, Leases (Topic 842)

ASU 2018-01, Leases (Topic 842):

Land Easement Practical Expedient for Transition to Topic 842

ASU 2018-10, Codification Improvements to Topic 842, Leases

ASU 2018-11, Leases (Topic 842):

Targeted Improvements

ASU 2018-20, Leases (Topic 842):

Narrow-Scope Improvements for Lessors

ASU 2019-01, Leases (Topic 842):

Codification Improvements

These updates amended existing guidance by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements.

January 1, 2019

We adopted this standard on January 1, 2019 and a modified retrospective transition approach was required.

We determined that the adoption had a material impact on our consolidated financial statements;

please refer to Note 3 for additional details.

We elected to utilize the following optional practical expedients upon adoption:

- Package of practical expedients which permits us not to reassess our prior conclusions about lease identification, lease classification, and initial direct costs.

- Practical expedient permitting us not to assess whether existing, expired, or current land easements either are or contain a lease.

- Practical expedient which permits us as a lessor not to separate non-lease components, such as common area maintenance reimbursements, from the associated lease component, provided that the timing and pattern of transfer of the services are substantially the same.

Because of our decision to elect this practical expedient, we will no longer present our Rental Income and Tenant Recovery Income amounts separately on our consolidated statements of operations, and have reclassified Tenant Recovery Income amounts to Rental Income for all periods presented on the consolidated statements of operations.

- Practical expedient which permits us not to record a right of use asset or lease liability related to leases of twelve months or fewer, but instead allows us to record expense related to any such leases as it is incurred.

ASU 2018-07, Compensation - Stock Compensation

Improvements to Non-employee Share-Based Payment Accounting

The amendments in this update expanded the scope of ASC Topic 718:

Compensation - Stock Compensation to include share-based payment transactions for acquiring goods and services from non-employees, except for specific guidance on inputs to an option pricing model and the attribution of cost (that is, the period of time over which share-based payment awards vest and the pattern of cost recognition over that period).

January 1, 2019

The adoption of this standard did not have a material impact on our consolidated financial statements.

ASU 2018-16, Derivatives and Hedging (Topic 815):

Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes

This update permitted use of the OIS rate based on the SOFR as a US benchmark interest rate for hedge accounting purposes under ASC Topic 815.

The purpose of this was to facilitate the LIBOR to SOFR transition and provide sufficient lead time for entities to prepare for changes to interest rate risk hedging strategies for both risk management and hedge accounting purposes.

January 1, 2019

The adoption of this standard did not have a material impact on our consolidated financial statements.

Reclassifications —The following line items on our consolidated balance sheets as of December 31, 2018 were reclassified to conform to current year presentation:

Accounts Receivable - Affiliates was combined with Other Assets, Net;

Derivative Liability was listed on a separate line from Accounts Payable and Other Liabilities;

Liabilities of Real Estate Investment Held for Sale was combined with Accounts Payable and Other Liabilities.

The following line item on our consolidated statements of operations for the years ended December 31, 2018 and 2017 was reclassified to conform to current year presentation:

Tenant Recovery Income was combined with Rental Income.

January 1, 2020 The adoption of this standard did not have a material impact on our consolidated financial statements.

ASU 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting This ASU contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts.

The guidance in ASU

2020-04 is optional and may be elected over time as reference rate reform activities occur.

March 12, 2020 We have elected to apply the expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives.

Application of these expedients preserves the presentation of derivatives consistent with past presentation.

We continue to evaluate the impact of the guidance and may apply other elections as applicable as changes occur.

In response to the COVID-19 pandemic, the Financial Accounting Standards Board (“FASB”) issued interpretive guidance addressing the accounting treatment for lease concessions attributable to the pandemic.

Under this guidance, entities may elect to account for such lease concessions consistent with how they would be accounted for under ASC 842 if the enforceable rights and obligations for the lease concessions already existed within the lease agreement, regardless of whether such enforceable rights and obligations are explicitly outlined within the lease.

This accounting treatment may only be applied if (1) the lease concessions were granted as a direct result of the pandemic, and (2) the total cash flows under the modified lease are less than or substantially the same as the cash flows under the original lease agreement.

As a result, entities that make this election will not have to analyze each lease to determine whether enforceable rights and obligations for concessions exist within the contract, and may elect not to account for these concessions as lease modifications within the scope of ASC 842.

Some concessions will provide a deferral of payments, which may affect the timing of cash receipts without substantively impacting the total consideration per the original lease agreement.

The FASB has stated that there are multiple acceptable methods to account for deferrals under the interpretive guidance:

• Account for the concession as if no changes to the lease contract were made, increasing the lease receivable as payments accrue and continuing to recognize income;

• Account for deferred lease payments as variable lease payments.

We have elected not to account for any qualifying lease concessions granted as a result of the COVID-19 pandemic as lease modifications and will account for any qualifying concessions granted as if no changes to the lease contract were made.

This will result in an increase to the related lease receivable as payments accrue while we continue to recognize rental income.

We will, however, assess the impact of any such concessions on estimated collectibility of the related lease payments and will reflect any adjustments as necessary as an offset to Rental Income on the consolidated statements of operations.

Reclassifications —The following line item on our consolidated balance sheet as of December 31, 2019 was reclassified to conform to current year presentation:

• Corporate Intangible Assets, Net was included in Other Assets, Net.

The following line items on our consolidated statements of cash flows for the years ended December 31, 2019 and 2018 were reclassified to conform to current year presentation:

Amortization of Debt and Derivative Adjustments was listed on a separate line from Depreciation and Amortization of Real Estate Assets and Other Cash Flows from Operating Activities;

Loss (Gain) on Extinguishment or Modification of Debt, Net was listed on a separate line from Other Cash Flows from Operating Activities;

Change in Fair Value of Earn-out Liability and Derivatives was listed on a separate line from Other Cash Flows from Operating Activities;

Accounts Receivable - Affiliates was combined with Other Assets, Net;

Accounts Payable - Affiliates was combined with Accounts Payable and Other Liabilities;

Other Cash Flows from Investing Activities was combined with Distributions and Proceeds from Unconsolidated Joint Ventures.

Standard Adoption —Effective January 1, 2019, we adopted ASU 2016-02, Leases .

This standard was adopted in conjunction with the related updates, ASU 2018-01, Leases (Topic 842):

Land Easement Practical Expedient for Transition to Topic 842 ;

ASU 2018-10, C odification Improvements to Topic 842, Leases ;

ASU 2018-11, Leases (Topic 842):

Targeted Improvements ;

and ASU 2018-20, Leases (Topic 842):

Narrow-Scope Improvements for Lessors , and ASU 2019-01, Leases (Topic 842) :

Codification Improvements, collectively “ASC 842,” using a modified-retrospective approach, as required.

Consequently, financial information will not be updated, and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019.

The adoption of ASC 842 resulted in a $0.5 million adjustment to the current year’s opening balance in Accumulated Deficit on the consolidated balance sheets as a result of recognizing ROU assets and lease liabilities as well as adjustments to our collectability reserve.

Beginning January 1, 2019, due to the new standard’s narrowed definition of initial direct costs, we now expense significant lease origination costs as incurred, which were previously capitalized as initial direct costs and amortized to expense over the lease term.

We capitalized $6.2 million of internal costs for the year ended December 31, 2018 , some of which we will continue to capitalize in accordance with the standard.

During the year ended December 31, 2019 , the amount capitalized was $4.9 million .

Amounts that were capitalized prior to the adoption of ASC 842 will continue to be amortized over their remaining lives.

Additionally, ASC 842 requires that lessors exclude from variable payments all costs paid by a lessee directly to a third party.

For the year ended December 31, 2018 , $8.0 million in real estate tax payments made by tenants directly to third parties was recorded by us as both Rental Income and Real Estate Taxes.

Beginning January 1, 2019, such amounts are no longer recognized by us.

As the recorded expense was completely offset by the tenant recovery income recorded, this has no net impact to earnings.

Beginning January 1, 2019, operating lease receivables are accounted for under ASC 842, which requires us to recognize changes in the collectability assessment for an operating lease as an adjustment to lease income.

For the year ended December 31, 2018 , $2.9 million of expense was recorded as Property Operating on our consolidated statements of operations, which would have been recorded as a reduction to Rental Income under the new standard.

For the year ended December 31, 2019 , the total amount recorded as a reduction to Rental Income as a result of collectability reserves was $2.8 million .

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

• Net Change in Credit Facility was separated into two lines, Proceeds from Revolving Credit Facility and Payments on Revolving Credit Facility.

Lessor —The majority of our leases are largely similar in that the leased asset is retail space within our properties, and the lease agreements generally contain similar provisions and features, without substantial variations.

All of our leases are currently classified as operating leases.

Lease income related to our operating leases was as follows as of December 31, 2019 (dollars in thousands):

Lease income related to our operating leases was as follows as of December 31, 2020 and 2019 (dollars in thousands):

Rental income related to fixed lease payments (1)

$ 380,439 $ 385,948

Rental income related to variable lease payments (1)

125,256 127,790

Straight-line rent amortization (2)

Amortization of lease assets 3,138 4,138

Lease buyout income 1,237 1,166

Adjustments for collectibility (2)(3)

( 27,845 ) ( 5,775 )

Total rental income $ 485,483 $ 522,270

“Other” consists of amortization of above- and below-market lease intangibles, lease inducements, revenue adjustments related to changes in collectability, settlement income, and lease buyout income.

Approximate future fixed contractual lease payments to be received under noncancelable operating leases in effect as of December 31, 2019 , assuming no new or renegotiated leases or option extensions on lease agreements, is as follows (in thousands):

As of December 31, 2018 , the future minimum annual base rents to be received over the next five years pursuant to the terms of non-cancelable operating leases are included in the table below, assuming that no leases are renewed and no renewal options are exercised.

The table does not include any payments which may be received under certain leases for the reimbursement of property operating expenses or percentage rents (in thousands):

No single tenant comprised 10% or more of our aggregate annualized base rent (“ABR”) as of December 31, 2019 .

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

(2) Includes revenue adjustments for non-creditworthy tenants.

(3) Contains general reserves;

excludes reserves for straight-line rent amortization.

Approximate future fixed contractual lease payments to be received under non-cancelable operating leases in effect as of December 31, 2020, assuming no new or renegotiated leases or option extensions on lease agreements, and including the impact of rent abatements, payment plans, and tenants who have been moved to the cash basis of accounting for revenue recognition purposes are as follows (in thousands):

2021 $ 374,203

Thereafter 430,799

Total $ 1,852,320

In response to the COVID-19 pandemic, we executed payment plans with our tenants.

For tenants active as of March 8, 2021, we had agreed to defer approximately $ 8.6 million in rent and related charges, and we had granted abatements totaling approximately $ 4.2 million.

These payment plans and rent abatements represented approximately 2 % and 1 % of our wholly-owned portfolio’s annualized base rent (“ABR”), respectively.

As of March 8, 2021, approximately 87% of payments are scheduled to be received through December 31, 2021 for all executed payment plans, and the weighted-average remaining term over which we expect to receive payment on executed payment plans is approximately eleven months.

For the years ended December 31, 2020 and 2019, we had $ 28.1 million and $ 3.9 million, respectively, in monthly revenue that will not be recognized until cash is collected or the tenant resumes regular payments and/or is considered creditworthy.

These amounts include the estimated impact of tenants who have filed for bankruptcy.

No single tenant comprised 10% or more of our ABR as of December 31, 2020.

As of December 31, 2020, our real estate investments in Florida and California represented 12.3 % and 10.4 % of our ABR, respectively.

As a result, the geographic concentration of our portfolio makes it particularly susceptible to adverse economic or weather developments in the real estate markets of Florida or California.

Lessee —On January 1, 2019, as a lessee, we recognized additional operating lease liabilities of $6.2 million with corresponding ROU assets of $6.0 million , and the difference between them was recorded as an adjustment to Accumulated Deficit on the consolidated balance sheets.

On adoption of ASC 842, these asset and liability amounts represented the present value of the remaining fixed minimum rental payments under current leasing standards for existing leases, adjusted as appropriate for amounts written off in transition to the new guidance.

The initial measurement of a ROU asset may differ from the initial measurement of the corresponding lease liability due to initial direct costs, prepaid lease payments, and lease incentives.

Lease assets and liabilities, grouped by balance sheet line where they are recorded, consisted of the following as of December 31, 2019 , (in thousands):

Balance Sheet Location

ROU assets, net - operating leases

Investment in Real Estate

ROU assets, net - operating and finance leases

Other Assets, Net

Operating lease liability

Accounts Payable and Other Liabilities

Finance lease liability

Debt Obligations, Net

As of December 31, 2019 , the weighted-average remaining lease term was 2.0 years for finance lea s es and 12.7 years for operating leases.

As a result, the geographic

concentration of our portfolio makes it particularly susceptible to adverse weather or economic events, including the impact of the COVID-19 pandemic, in the Florida and California real estate markets.

Lessee —Lease assets and liabilities, grouped by balance sheet line where they are recorded, consisted of the following as of December 31, 2020 and 2019 (in thousands):

Balance Sheet Information Balance Sheet Location 2020 2019

ROU assets, net - operating leases Investment in Real Estate $ 3,867 $ 7,613

ROU assets, net - operating and finance leases Other Assets, Net 1,438 2,111

Operating lease liability Accounts Payable and Other Liabilities 5,731 9,453

Finance lease liability Debt Obligations, Net 164 443

During the year ended December 31, 2020, one of our acquisitions was land upon which one of our shopping centers is situated.

This land was previously subject to a ground lease in which the lessor controlled an option requiring us to purchase the land subject to the lease, and our valuation of the ROU asset and lease liability as of December 31, 2019 for this ground lease reflected the assumption that the lessor would exercise this option and that we would purchase the underlying land asset.

As of December 31, 2020, the weighted-average remaining lease term was approximately two years for finance leases and 20 years for operating leases.

The weighted-average discount rate was 3.5 % for finance leases and 4.1 % for operating leases.

Below are the amounts recorded in our consolidated statements of operations related to our ROU assets and lease liabilities by lease type for the year ended December 31, 2019 (in thousands):

Statements of operations information:

Finance lease cost:

Amortization of ROU assets in Depreciation and Amortization

Interest on lease liabilities in Interest Expense, Net

Operating lease costs (1)

Short term lease expense (1)

This amount is presented within Property Operating or General and Administrative on our consolidated statements of operation depending on the underlying nature of the lease.

Below are the amounts recorded in our consolidated statements of cash flows related to our leases by type (in thousands):

Statements of cash flows information:

Operating cash flows used for operating leases

Financing cash flows used for finance leases

Future undiscounted payments for fixed lease charges by lease type, inclusive of options reasonably certain to be exercised, as of December 31, 2019 , are as follows (in thousands):

Future undiscounted payments for fixed lease charges by lease type, inclusive of options reasonably certain to be exercised, are as follows as of December 31, 2020 (in thousands):

Year Operating Finance

2021 $ 831 $ 102

Thereafter 5,781 —

Total undiscounted cash flows from leases 8,896 171

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Difference between undiscounted cash flows and present value of lease liabilities $ 3,165 $ 7

Minimum rent commitments under noncancelable operating leases as of December 31, 2018 were as follows (in thousands):

MERGER WITH REIT II

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Total consideration and debt activity 1,918,668

debt assumed 464,462

Total consideration $ 1,454,206

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Upon completion of the Merger, our continuing stockholders owned approximately 71 % of the issued and outstanding shares of the Company on a fully diluted basis (determined as if each Operating Partnership unit or “OP unit”) was exchanged for one share of our common stock) and former REIT II stockholders owned approximately 29 % of the issued and outstanding shares of the Company on a fully diluted basis (determined as if each OP unit was exchanged for one share of our common stock).

Assets Acquired and Liabilities Assumed —After consideration of all applicable factors pursuant to the business combination accounting rules under ASC 805, Business Combinations (“ASC 805”), including the application of a screen test to evaluate if substantially all the fair value of the acquired properties is concentrated in a single asset or group of similar assets, we have concluded that the Merger qualifies as an asset acquisition.

Assets Acquired and Liabilities Assumed —After consideration of all applicable factors pursuant to the business combination accounting rules under ASC 805, including the application of a screen test to evaluate if substantially all the fair value of the acquired properties is concentrated in a single asset or group of similar assets, we have concluded that the Merger qualifies as an asset acquisition.

Additionally, prior to the close of the Merger, all of REIT II’s real properties were managed and leased by us, under the terms of various management agreements.

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Therefore, we determined that the termination of the agreements did not result in a settlement gain or loss under the relevant guidance, and thus no gain or loss was recorded in the consolidated financial statements.

Prior to the consummation of the Merger, we did, however, have an existing intangible asset related to our acquisition of certain management contracts between PELP and REIT II during the PELP transaction.

Prior to the consummation of the Merger, we did, however, have an existing intangible asset related to our acquisition of certain management contracts between Phillips Edison Limited Partnership (“PELP”), REIT II’s former external manager, and REIT II during our acquisition of PELP in 2017.

Because this relationship was internalized as part of the Merger, we derecognized the carrying value of these intangible assets upon completion of the Merger and have included the derecognized contract value of $ 30.4 million in our calculation of total consideration in the table above.

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Total assets acquired 2,012,396

Debt assumed 464,462

Intangible lease liabilities 60,421

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Intangible Assets and Liabilities — The fair value and weighted-average amortization periods for the intangible assets and liabilities acquired in the Merger are as follows (dollars in thousands, useful life in years):

Weighted-Average Useful Life

In-place leases

Above-market leases

Below-market leases

PELP ACQUISITION

On October 4, 2017 , we completed the PELP transaction.

The PELP transaction was approved by the independent special committee of our Board, which had retained independent financial and legal advisors.

It was also approved by our stockholders, as well as PELP’s partners.

Under the terms of this transaction, at the time of purchase, the following consideration was given in exchange for the contribution of PELP’s ownership interests in 76 shopping centers, its third-party investment management business, and its captive insurance company (in thousands):

Fair value of OP units issued

Debt assumed:

Corporate debt

Mortgages and notes payable

Cash payments

Fair value of earn-out

Total consideration

PELP debt repaid by the Company on the transaction date

Net consideration

We issued 39.4 million OP units with an estimated fair value per unit of $10.20 at the time of the transaction.

Certain of our executive officers who received OP units as part of the PELP transaction entered into an agreement which provides that they will not transfer their OP Units for either two or three years following the closing.

The remaining holders of the OP units are subject to the terms of exchange for shares of common stock outlined in the Fourth Amended and Restated Agreement of Limited Partnership, which is further described in Note 14 .

The terms of the transaction also include an earn-out structure with an opportunity for up to an additional 12.5 million OP units to be issued if certain milestones are achieved.

The milestones are related to a liquidity event for our stockholders and

fundraising targets in REIT III, of which PELP was a co-sponsor.

Following our merger with REIT III, we no longer expect to incur any liability related to the REIT III fundraising target milestone in the earn-out structure.

We will estimate the fair value of this earn-out liability at each reporting date during the contingency period and record any changes to our consolidated statement of operations.

As of December 31, 2019 , the fair value of the earn-out liability was $32.0 million .

As part of the transaction, we entered into a tax protection agreement with certain recipients of OP Units.

Under the agreement, we will provide certain protections with respect to tax matters for a period of ten years commencing at the closing date.

These protections include indemnification for certain tax liabilities incurred in connection with certain taxable transfers of contributed properties, failure to comply with certain obligations related to nonrecourse liability allocations and debt guarantee opportunities, and certain fundamental transactions.

These fundamental transactions mean with respect to any contributed entity, a merger, combination, consolidation, or similar transaction (including a transfer of all or substantially all of the assets of such entity).

Immediately following the closing of the PELP transaction, our stockholders owned approximately 80.6% and former PELP stockholders owned approximately 19.4% of the combined company.

Assets Acquired and Liabilities Assumed —After consideration of all applicable factors pursuant to the business combination accounting rules under ASC 805, we concluded that the PELP transaction qualified as a business combination under GAAP.

Additionally, prior to the close of the PELP transaction, all of PELP’s real properties were managed and leased by us, under the terms of various management agreements.

As we had contractual relationships with PELP, we considered the provisions of ASC 805 regarding the settlement of pre-existing relationships.

This guidance provides that a transaction that in effect settles pre-existing relationships between the acquirer and acquiree should be evaluated under the guidance set forth in ASC 805 for possible gain/loss recognition.

In applying the relevant guidance to the settlement of our contractual relationships with PELP, we noted that the provisions of the various agreements provided both parties to each of the agreements with substantial termination rights.

The agreements permitted either party to terminate without cause or penalty upon prior written notice within a specified number of days’ notice.

The following table summarizes the final purchase price allocation based on a valuation report prepared by a third-party valuation specialist that was subject to management’s review and approval (in thousands):

Land and improvements

Building and improvements

Intangible lease assets

Cash and cash equivalents

Accounts receivable and other assets

Management contracts

Total assets acquired

Accounts payable and other liabilities

Acquired below-market leases

Total liabilities assumed

Net assets acquired

The allocation of the purchase price is based on management’s assessment, which requires a significant amount of judgment and represents management’s best estimate of the fair value as of the acquisition date.

We had an immaterial decrease in goodwill during the year ended December 31, 2018, as the result of a measurement period adjustment.

Intangible Assets and Liabilities —The fair value and weighted-average amortization periods for the intangible assets and liabilities acquired in the PELP transaction are as follows (dollars in thousands, useful life in years):

Weighted-Average Useful Life

Management contracts (1)(2)

Fair Value Weighted-Average Useful Life

In-place leases $ 181,916 13

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Below-market leases ( 60,421 ) 17

In November 2018, in connection with the Merger, we derecognized management contracts associated with REIT II in the amount of $39.3 million .

We also derecognized the associated accumulated amortization of $8.9 million , resulting in a net derecognition of $30.4 million .

In October 2019, in connection with the merger with REIT III, we derecognized management contracts associated with REIT III in the amount of $1.9 million .

We also derecognized the associated accumulated amortization of $0.8 million , resulting in a net derecognition of $1.1 million .

Following the merger with REIT III, we re-assessed the weighted-average useful life of our management contracts based upon the expected life of the remaining management contracts and determined that the weighted-average useful life as of December 31, 2019 is one year.

Goodwill —In connection with the PELP transaction, we recorded goodwill of $29.1 million as a result of the consideration exceeding the fair value of the net assets acquired.

Goodwill represents the estimated future benefits arising from other assets acquired that could not be individually identified and separately recognized.

This goodwill is not deductible for tax purposes.

The goodwill recorded represents our management structure and its ability to generate additional opportunities for revenue and raise additional funds.

Results of Operations —The consolidated net assets and results of operations of PELP’s contributions are included in the consolidated financial statements from the transaction date going forward and resulted in the following impact to our consolidated statements of operations (in thousands):

Net (loss) income

Acquisition Costs —We incurred approximately $17.0 million of costs related to the PELP transaction, $15.7 million of which was incurred during 2017, and are recorded as Transaction Expenses on the consolidated statements of operations.

Pro Forma Results (Unaudited) —The following unaudited pro forma information summarizes selected financial information from our combined results of operations, as if the PELP transaction had occurred on January 1, 2017 .

These results contain certain, nonrecurring adjustments, such as the elimination of transaction expenses incurred related to the PELP transaction and the elimination of intercompany activity related to creating an internalized management structure.

This pro forma information is presented for informational purposes only, and may not be indicative of what actual results of operations would have been had the PELP transaction occurred at the beginning of the period, nor does it purport to represent the results of future operations.

(in thousands)

Pro forma revenues

Pro forma net income attributable to stockholders

REAL ESTATE ACTIVITY

2019 Acquisitions —During the year ended December 31, 2019 , we acquired two grocery-anchored shopping centers as well as two land parcels adjacent to properties we currently own.

We also acquired three shopping centers through the merger with REIT III.

After consideration of all applicable factors pursuant to the business combination accounting rules under ASC 805, including the application of a screen test to evaluate if substantially all the fair value of the acquired properties is concentrated in a single asset or group of similar assets, we have concluded that all of our acquisitions in the current year qualified as asset acquisitions.

The following table summarizes our individual real estate assets acquired during the year ended December 31, 2019 (excluding properties related to the merger with REIT III;

dollars in thousands):

Property Name

Anchor Tenant

Acquisition Date

Purchase Price

Leased % of Rentable Square Feet at Acquisition

Naperville Crossings

Naperville, IL

Murray Landing Outparcel

Alameda Crossing Outparcel

Del Paso Marketplace

Sacramento, CA

Sprouts Farmers Market

Additionally, in October 2019, we completed the merger with REIT III which resulted in the acquisition of the following portfolio of properties (dollars in thousands):

Property Name

Anchor Tenant

Acquisition Date

Allocated Fair Value

Leased % of Rentable Square Feet at Acquisition

Ashburn Farm Market Center

Ahold Delhaize

Sudbury Crossing

Sudbury Farms (1)

Orange Grove Shopping Center

Anchor tenant is in a portion of the shopping center that we do not own.

In addition to the above properties, as part of the merger with REIT III, we also acquired a 10% equity interest in GRP II valued at approximately $5.4 million (refer to Note 8 for further information) and a net working capital liability.

Property Sales —The following table summarizes our real estate disposition activity, excluding properties contributed or sold to GRP I (see Note 7), for the years ended December 31, 2020, 2019, and 2018 (dollars in thousands):

2020 2019 2018

Number of properties sold (1)

Number of outparcels sold 1 1 —

Proceeds from sale of real estate $ 57,902 $ 223,083 $ 82,145

Gain on sale of properties, net (2)

10,117 30,039 16,757

(1) We retained certain outparcels of land associated with one of our property dispositions during the year ended December 31, 2020, and as a result, this property is still included in our total property count.

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

Subsequent to December 31, 2020, we sold five properties and one outparcel for $ 44.4 million.

Acquisitions —The following table summarizes our real estate acquisition activity for the years ended December 31, 2020, 2019, and 2018 (dollars and square feet in thousands):

2020 2019 2018

Number of properties purchased (1)

Number of outparcels purchased (2)

Total price of acquisitions $ 41,482 $ 71,722 $ 98,941

Total square footage acquired 216 213 543

(1) Excludes 86 properties acquired in the Merger and three properties acquired in the merger with Phillips Edison Grocery Center REIT III, Inc.

(“REIT III”).

(2) Outparcels purchased in 2020, 2019, and 2018 are parcels of land adjacent to shopping centers that we own.

Subsequent to December 31, 2020, we acquired two properties and two outparcels for $ 39.6 million.

In October 2019, we completed a merger with REIT III which resulted in the acquisition of three properties.

As part of the merger with REIT III, we also acquired a 10 % equity interest in GRP II valued at approximately $ 5.4 million (refer to Note 7 for further information) and a net working capital liability.

GRP II was subsequently acquired by GRP I in October 2020.

Consideration for the merger with REIT III primarily included (i) the issuance of 4.5 million shares of our common stock with a value of $ 49.9 million;

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2018 Acquisitions —During the year ended December 31, 2018 , we acquired 91 grocery-anchored shopping centers, including 86 shopping centers through the Merger (see Note 4 for more detail) and five grocery-anchored shopping centers outside of the Merger.

We also acquired two land parcels adjacent to properties we currently own during the year ended December 31, 2018 .

The following table summarizes the individual real estate assets acquired during the year ended December 31, 2018 (excluding properties related to the Merger;

dollars in thousands):

Property Name

Anchor Tenant

Acquisition Date

Purchase Price (1)

Leased % of Rentable Square Feet at Acquisition

Shoppes of Lake Village

Golden Eagle Village Outparcel

Sierra Vista Plaza

Stater Brothers (2)

Wheat Ridge Marketplace

Wheat Ridge, CO

Atlantic Plaza

North Reading, MA

Cinco Ranch at Market Center

Contra Loma Plaza Outparcel

Purchase prices include the fair value of any debt that may be assumed as part of the acquisition.

Anchor tenant is in a portion of the shopping center that we do not own.

The fair value at acquisition and weighted-average useful life for in-place, above-market, and below-market lease intangibles acquired as part of the transactions above during the years ended December 31, 2019 and 2018 , are as follows (dollars in thousands, weighted-average useful life in years):

Weighted-Average Useful Life

The fair value and weighted-average useful life at acquisition for lease intangibles acquired as part of the transactions above during the years ended December 31, 2020 and 2019, are as follows (dollars in thousands, weighted-average useful life in years):

Fair Value Weighted-Average Useful Life Fair Value Weighted-Average Useful Life

In-place leases $ 3,360 10 $ 11,907 9

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Below-market leases ( 2,466 ) 21 ( 3,385 ) 15

Dispositions —The following table summarizes our real estate disposition activity, excluding properties contributed or sold to GRP I (see Note 8 ), for the years ended December 31, 2019 , 2018 , and 2017 (dollars in thousands):

Number of properties sold

Number of outparcels sold

Proceeds from sale of real estate

Gain on sale of properties, net (1)

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

Property Held for Sale —As of December 31, 2019 and 2018 , one and two properties, respectively, were classified as held for sale, as they were under contract to sell, with no substantive contingencies, and the prospective buyers had significant funds at risk.

The property classified as held for sale as of December 31, 2019 was subsequently sold.

Both properties classified as held for sale as of December 31, 2018 were disposed of during the year ended December 31, 2019 .

A summary of assets and liabilities for the properties held for sale as of December 31, 2019 and 2018 is presented below (in thousands):

Property Held for Sale —As of December 31, 2020, there were no properties held for sale.

As of December 31, 2019, one property was classified as held for sale, as it was under contract to sell, with no substantive contingencies, and the prospective buyer had significant funds at risk.

This property was disposed of during the year ended December 31, 2020.

A summary of assets and liabilities for the property held for sale as of December 31, 2019 is presented below (in thousands):

Total investment in real estate assets, net $ 5,859

Other assets, net 179

Total assets $ 6,038

LIABILITIES (1)

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Total liabilities $ 349

These amounts are included in Accounts Payable and Other Liabilities on the consolidated balance sheets.

(1) These amounts are included in Accounts Payable and Other Liabilities on the consolidated balance sheet.

INTANGIBLE ASSETS AND LIABILITIES

Goodwill —In connection with the PELP transaction, we recorded goodwill of approximately $29.1 million .

During the years ended December 31, 2019 and 2018 , we did not record any impairments to goodwill.

For more information regarding goodwill from the PELP transaction, see Note 5 .

Goodwill —During the years ended December 31, 2020, 2019, and 2018 we did not record any impairments or re-allocations of goodwill.

Other Intangible Assets and Liabilities — Other intangible assets and liabilities consisted of the following as of December 31, 2020 and 2019, excluding amounts related to other intangible assets and liabilities classified as held for sale (in thousands):

Accumulated Amortization

Management contracts

Gross Amount Accumulated Amortization Gross Amount Accumulated Amortization

Corporate intangible assets $ 6,804 $ ( 4,922 ) $ 4,883 $ ( 2,444 )

In-place leases 441,683 ( 204,698 ) 442,729 ( 170,272 )

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Summarized below is the amortization recorded on other intangible assets and liabilities for the years ended December 31, 2020, 2019, and 2018 (in thousands):

Management contracts

2020 2019 2018

Corporate intangible assets $ 2,478 $ 2,735 $ 10,618

In-place leases 36,000 42,902 37,101

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please refer to Note 17 .

In addition, the portion of this asset that is related to our contract with REIT III was internalized as part of the merger with REIT III.

As a result, we derecognized a net book value of $1.1 million of these intangible assets and included the amount within capitalized asset acquisition costs for that transaction.

In addition, the portion of this asset that was related to our contract with REIT III was internalized as part of the merger with REIT III.

As a result, during the year ended December 31, 2019, we derecognized a net book value of $ 1.1 million of these intangible assets and included the amount within capitalized asset acquisition costs for that transaction.

We evaluated the useful life of the remaining management contracts after this derecognition and concluded that the asset now has a remaining useful life of one year.

Estimated future amortization of the respective other intangible assets and liabilities as of December 31, 2020, excluding estimated amounts related to other intangible assets and liabilities classified as held for sale, for each of the next five years is as follows (in thousands):

Management Contracts

In-Place Leases

Above-Market Leases

Below-Market Leases

Corporate Intangible Assets In-Place Leases Above-Market Leases Below-Market Leases

2021 $ 384 $ 32,877 $ 6,211 $ ( 9,556 )

2022 384 30,293 5,329 ( 9,094 )

2023 384 26,541 4,573 ( 8,420 )

2024 384 23,439 3,284 ( 7,839 )

2025 346 20,435 2,131 ( 7,341 )

INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES

Grocery Retail Partners I —On November 9, 2018 , through our direct and indirect subsidiaries, we entered into a joint venture with Northwestern Mutual, pursuant to which we contributed 14 and sold 3 grocery-anchored shopping centers with a fair value of approximately $359 million to the new joint venture, GRP I, in exchange for a 15% ownership interest in GRP I.

Grocery Retail Partners I and II —In November 2018, through our direct and indirect subsidiaries, we entered into a joint venture with Northwestern Mutual, pursuant to which we contributed 14 and sold three grocery-anchored shopping centers with a fair value of approximately $ 359 million to the new joint venture, GRP I, in exchange for a 15 % ownership interest in GRP I.

Northwestern Mutual acquired an 85 % ownership interest in GRP I by contributing cash of $ 167.1 million.

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We recognized a gain of $ 92.5 million on the transaction which is recorded as Gain on Sale or Contribution of Property, Net on the consolidated statements of operations.

Grocery Retail Partners II —In connection with the merger with REIT III, we assumed a 10% equity interest in GRP II with a fair value of $5.4 million at acquisition.

GRP II was initially formed in November 2018 pursuant to the terms of a joint venture agreement between REIT III and Northwestern Mutual and is set to expire ten years after the date of the joint venture contribution agreement unless otherwise extended by the members.

In connection with the merger with REIT III, we assumed a 10 % equity interest in GRP II with a fair value of $ 5.4 million at acquisition.

GRP II was initially formed in November 2018 pursuant to the terms of a joint venture agreement between REIT III and Northwestern Mutual and was set to expire ten years after the date of the joint venture contribution agreement unless otherwise extended by the members.

In October 2020, GRP I acquired GRP II.

As a part of the transaction, the carrying amount of our investment in GRP II was contributed to GRP I as consideration for an additional interest in GRP I.

Our ownership interest in GRP I upon consummation of the transaction was adjusted to approximately 14 % as a result of the acquisition.

Necessity Retail Partners —In connection with the Merger, we assumed a 20 % equity interest in NRP.

NRP was initially formed in March 2016 pursuant to the terms of a joint venture agreement between REIT II and an affiliate of TPG Real Estate and is set to expire seven years after the date of the joint venture contribution agreement unless otherwise extended by the members.

This joint venture agreement requires a contribution of up to $50 million to the joint venture.

This joint venture agreement required a contribution of up to $ 50 million to the joint venture.

Of the maximum $ 50 million contribution, approximately $ 17.5 million was previously contributed by REIT II prior to the Merger.

The following tables summarize the activity related to our unconsolidated joint ventures as of and for the years ended December 31, 2019 and 2018 (dollars in thousands):

December 31, 2019

Joint Venture

Ownership Percentage

Number of Shopping Centers

Investment Balance

Unamortized Basis Difference

Current Year Distributions to PECO

We are in the process of disposing and liquidating the assets of this joint venture as a result the planned expiration.

Subsequent to December 31, 2020, the NRP joint venture sold two properties.

The following table summarizes balances on the consolidated balance sheets related to our unconsolidated joint ventures as of December 31, 2020 and 2019 (dollars in thousands):

Joint Venture Ownership Percentage Number of Shopping Centers Investment Balance Unamortized Basis Difference Ownership Percentage Number of Shopping Centers Investment Balance Unamortized Basis Difference

NRP 20 % 5 $ 6,304 $ 1,381 20 % 8 $ 10,183 $ 3,189

GRP I 14 % 20 31,062 — 15 % 17 27,356 —

GRP II N/A N/A N/A N/A 10 % 3 5,315 879

The following table summarizes the activity on the consolidated statements of operations related to our unconsolidated joint ventures as of December 31, 2020, 2019, and 2018 (in thousands):

2020 2019 2018

Distributions to PECO After Formation or Assumption

NRP $ 4,192 $ 7,167 $ 200

GRP I 1,047 2,025 —

GRP II 177 40 N/A

Gain (Loss) from Unconsolidated Joint Ventures

Amortization and Write-off of Basis Differences

December 31, 2018

Joint Venture

Ownership Percentage

Number of Shopping Centers

Investment Balance

Unamortized Basis Difference

Distributions After Formation or Assumption

(Loss) From Unconsolidated Joint Ventures

NRP $ 2,119 $ 3,989 $ ( 73 )

GRP I ( 309 ) ( 72 ) ( 35 )

GRP II 42 6 N/A

Amortization and Write-Off of Basis Differences

As of December 31, 2017 , we had no ownership interest in any unconsolidated joint ventures.

NRP $ 1,808 $ 2,837 $ 177

(1) As part of the merger between GRP I and GRP II, the total remaining value of our GRP II investment of $ 5.1 million was contributed to GRP I, and the result of this transaction was an increase in our GRP I investment of $ 5.1 million.

OTHER ASSETS, NET

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Deferred financing expenses (1)

13,971 13,971

Office equipment, ROU assets, and other 21,578 19,430

Corporate intangible assets 6,804 4,883

Total depreciable and amortizable assets 84,017 77,022

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Accounts receivable, net (2)

46,893 46,125

Accounts receivable - affiliates 543 728

Deferred rent receivable, net (3)

32,298 29,291

Derivative asset — 2,728

Investment in affiliates

Prepaids and other

Prepaid expense and other 8,694 7,851

Total other assets, net $ 126,470 $ 128,690

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

(2) Net of $ 8.9 million and $ 6.9 million of general reserves for uncollectible amounts as of December 31, 2020 and 2019, respectively.

Receivables that were removed for tenants considered to be non-creditworthy were $ 22.8 million and $ 6.2 million as of December 31, 2020 and 2019, respectively.

(3) Net of $ 4.4 million and $ 0.7 million of adjustments as of December 31, 2020 and 2019, respectively, for straight-line rent removed for tenants considered to be non-creditworthy.

DEBT OBLIGATIONS

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Interest Rate (1)

Revolving credit facility

Revolving credit facility LIBOR + 1.4 %

Term loans (2)

1.4 % - 4.6 %

1,622,500 1,652,500

Secured loan facilities 3.4 % - 3.5 %

395,000 395,000

Mortgages and other

Mortgages 3.5 % - 7.2 %

290,022 324,578

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Deferred financing expenses, net ( 13,538 ) ( 17,204 )

Total $ 2,292,605 $ 2,354,099

(1) Interest rates are as of December 31, 2020.

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While most of the rates are fixed through the use of swaps, there is a portion of these loans that are not subject to a swap, and thus are still indexed to LIBOR .

Revolving Credit Facility —We have a revolving credit facility of $500 million with availability of $489.8 million , which is net of current issued letters of credit, as of December 31, 2019 .

Revolving Credit Facility —We have a $ 500 million revolving credit facility with availability of $ 490.4 million, which is net of current issued letters of credit, as of December 31, 2020.

The maturity date is October 2021, with additional options to extend the maturity to October 2022.

We pay a fee of 0.25 % on the unused portion of the facility if our borrowings are less than 50% of our capacity or a fee of 0.15 % if our borrowings are greater than 50%, but less than 100%, of our capacity.

The gross borrowings under our revolving credit facility were $122.6 million , $475.4 million , and $437.0 million during the years ended December 31, 2019 , 2018 , and 2017 , respectively.

The gross payments were $196.0 million , $463.6 million , and $552.4 million during the years ended December 31, 2019 , 2018 , and 2017 , respectively.

Term Loans —We have seven unsecured term loans with maturities ranging from 2021 to 2025.

In April 2020, we borrowed $ 200 million on our revolving credit facility to meet our operating needs for a sustained period due to the COVID-19 pandemic.

Our rent and recovery collections during the second quarter, combined with other cost saving initiatives, sufficiently funded our short term operating needs and provided enough stability to allow us to repay in full the outstanding balance on our revolving credit facility in June 2020.

Term Loans —We have six unsecured term loans with maturities ranging from 2022 to 2025.

Our term loans have interest rates of LIBOR plus interest rate spreads based on our leverage ratios.

We have utilized interest rate swaps to fix the rates on the majority of our term loans, with $ 580.5 million in term loans not fixed through such swaps.

In May 2019, we exercised a $60 million delayed draw feature on one of our term loans.

We used the proceeds from this draw

to pay down our revolving credit facility.

In September 2019, we repriced a $200 million term loan, lowering the interest rate

spread from 1.75% over LIBOR to 1.25% over LIBOR, while maintaining the current maturity of September 2024.

2019, we repriced a $175 million term loan from a spread of 1.75% over LIBOR to 1.25% over LIBOR, while maintaining the

current maturity of October 2024.

In December 2019, we paid down $265.9 million in term loan debt primarily with the proceeds from a secured loan as well as the proceeds from property dispositions.

An additional $30.0 million of term loan debt was repaid in January 2020.

In 2018, as a part of the Merger we assumed three term loans with a fair value of $361.7 million .

Additionally, at the closing of the Merger, we established two term loans for $300 million and $100 million maturing in November 2023 and May 2024, respectively.

We also exercised an accordion feature on an existing term loan maturing in May 2025, adding $157.5 million in new debt, with an additional $60 million available through a delayed draw feature which we exercised in May 2019 as described previously.

As of December 31, 2019 and 2018 , the weighted-average interest rate on our term loans was 3.2% and 3.5% , respectively.

In January 2020, we made the final $ 30 million payment on our term loan maturing in 2021.

In May 2019, we exercised a $ 60 million delayed draw feature on one of our term loans, and we used the proceeds from this draw to pay down our revolving credit facility.

In September 2019, we repriced a $ 200 million term loan, lowering the interest rate spread from 1.75 % over LIBOR to 1.25 % over LIBOR, while maintaining the current maturity of September 2024.

In October 2019, we repriced a $ 175 million term loan from a spread of 1.75 % over LIBOR to 1.25 % over LIBOR, while maintaining the current maturity of October 2024.

Finally, in December 2019, we paid down $ 265.9 million in term loan debt primarily with the proceeds from a secured loan as well as the proceeds from property dispositions.

As of December 31, 2020 and 2019, the weighted-average interest rate, including the impact of swaps, on our term loans was 2.7 % and 3.2 %, respectively.

Secured Debt —Our secured debt includes two facilities secured by certain properties in our portfolio, mortgage loans secured by individual properties, and finance leases.

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Variable-rate debt 580,500 250,500

Total $ 2,307,686 $ 2,372,521

As to collateralization:

Unsecured debt $ 1,622,500 $ 1,652,500

Secured debt 685,186 720,021

Total $ 2,307,686 $ 2,372,521

Weighted-average interest rate (1)

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Maturity Schedule — Below is our maturity schedule with the respective principal payment obligations, excluding finance lease liabilities, market debt adjustments, and deferred financing expenses (in thousands):

2021 2022 2023 2024 2025 Thereafter Total

Term loans $ — $ 375,000 $ 300,000 $ 475,000 $ 472,500 $ — $ 1,622,500

Secured debt 62,589 61,898 79,569 28,162 27,881 424,923 685,022

Total $ 62,589 $ 436,898 $ 379,569 $ 503,162 $ 500,381 $ 424,923 $ 2,307,522

DERIVATIVES AND HEDGING ACTIVITIES

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Amounts reported in AOCI related to these derivatives will be reclassified to Interest Expense, Net as interest payments are made on the variable-rate debt.

During the next twelve months, we estimate that an additional $5.9 million will be reclassified from Other Comprehensive (Loss) Income as an increase to Interest Expense, Net.

During the next twelve months, we estimate that an additional $ 19.1 million will be reclassified from AOCI as an increase to Interest Expense, Net.

The following is a summary of our interest rate swaps that were designated as cash flow hedges of interest rate risk as of December 31, 2020 and 2019 (notional amounts in thousands):

Notional amount $ 1,042,000 $ 1,402,000

Fixed LIBOR 1.3 % - 2.9 %

0.8 % - 2.9 %

Maturity date 2021 - 2025

We assumed five hedges with a notional amount of $570 million as a part of the Merger, and also entered into one new hedge

in November 2018 with a notional amount of $125 million .

We assumed five hedges with a notional amount of $ 570 million as a part of the Merger.

The fair value of the five hedges assumed was $ 14.7 million and is amortized over the remaining lives of the respective hedges and recorded in Interest Expense, Net in the consolidated statements of operations.

The table below details the nature of the gain or loss recognized on interest rate derivatives designated as cash flow hedges in the consolidated statements of operations for the years ended December 31, 2019 , 2018 , and 2017 (in thousands):

Amount of (loss) gain recognized on OCI derivatives

Amount of (loss) gain reclassified from AOCI into interest expense

The net unamortized amount remaining as of December 31, 2020 was $5.0 million.

The table below details the nature of the loss recognized on interest rate derivatives designated as cash flow hedges in the consolidated statements of operations for the years ended December 31, 2020, 2019, and 2018 (in thousands):

2020 2019 2018

Amount of loss recognized in Other Comprehensive (Loss) Income

$ 50,552 $ 35,865 $ 895

Amount of loss reclassified from AOCI into interest expense

16,732 2,409 3,261

Credit-risk-related Contingent Features —We have agreements with our derivative counterparties that contain provisions where, if we default, or are capable of being declared in default, on any of our indebtedness, we could also be declared to be in default on our derivative obligations.

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If we had breached any of these provisions, we could have been required to settle our obligations under the agreements at their termination value of $ 54.8 million.

We have elected to be taxed as a REIT under the IRC.

General —We have elected to be taxed as a REIT under the IRC.

To qualify as a REIT, we must meet a number of organization and operational requirements, including a requirement to annually distribute to our stockholders at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding net capital gains.

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federal excise taxes if we engage in certain types of transactions.

Deferred income taxes are accounted for under the asset and liability method.

Income tax benefits from uncertain tax positions are recognized in the consolidated financial statements only if we believe it is more likely than not that the uncertain tax position will be sustained based solely on the technical merits of the tax position and consideration of the relevant taxing authority's widely understood administrative practices and precedents.

We do not believe that we have any uncertain tax positions at December 31, 2020 and 2019.

The statute of limitations for the federal income tax returns remain open for the 2017 through 2019 tax years.

The statute of limitations for state income tax returns remain open in accordance with each state's statute.

Our accounting policy is to classify interest and penalties as a component of income tax expense.

We accrued no interest or penalties as of December 31, 2020 and 2019.

Deferred Tax Assets and Liabilities —Deferred income taxes are accounted for under the asset and liability method.

Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

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Accrued compensation $ 3,250 $ 3,912

Accrued expenses

Accrued expenses and reserves 89 70

Net operating loss (“NOL”) carryforward 2,787 2,885

Other 306 362

Gross deferred tax assets 6,432 7,229

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Deferred tax liabilities:

Depreciation and amortization

Prepaid expenses

Real estate assets and other capitalized assets ( 3,236 ) ( 3,546 )

Other ( 13 ) ( 22 )

Total deferred tax liabilities ( 3,249 ) ( 3,568 )

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As of December 31, 2020, the TRS entities have state NOL carryforwards of $ 5.0 million, which will expire as determined under each state's statute.

Differences between the net income or loss presented on the consolidated statements of operations and taxable income are primarily related to the timing of the recognition of gain on the sale of investment properties for financial reporting purposes and tax reporting, the recognition of impairment expense for financial reporting purposes which is not deductible for tax reporting purposes, and the differences in recognition of revenues and expenses, primarily depreciation and amortization expense, for both financial reporting and tax reporting.

The following table reconciles Net (Loss) Income Attributable to Stockholders to REIT taxable income before the dividends paid deduction for the years ended December 31, 2019 , 2018 and 2017 (in thousands):

Net (loss) income attributable to stockholders

Net loss (income) from TRS

Net (loss) income attributable to REIT operations

Differences between the net income or loss presented on the consolidated statements of operations and taxable income are primarily related to the timing of the recognition of gain on the sale of investment properties for financial reporting purposes and tax reporting, the recognition of impairment expense for financial reporting purposes which is not deductible for tax reporting purposes, and differences in recognition of rental income and depreciation and amortization expense for both financial reporting and tax reporting.

Distributions — The following table reconciles Net Income (Loss) Attributable to Stockholders to REIT taxable income before the dividends paid deduction for the years ended December 31, 2020, 2019 and 2018 (in thousands):

2020 2019 2018

Net income (loss) attributable to stockholders $ 4,772 $ ( 63,532 ) $ 39,138

Net (income) loss from TRS ( 702 ) 5,346 ( 1,171 )

Net income (loss) attributable to REIT operations 4,070 ( 58,186 ) 37,967

Book/tax differences 63,846 153,047 33,858

REIT taxable income subject to 90% dividend requirement $ 67,916 $ 94,861 $ 71,825

The Company's distributions to its stockholders for the years ended December 31, 2019 , 2018 and 2017 , respectively, have exceeded 100% of the REIT taxable income.

For tax purposes, total gross distributions to our stockholders for the year ended December 31, 2020 were approximately $ 64.7 million.

As permitted under the IRC, we will utilize approximately $ 3.2 million of our January 2021 distribution to offset our 2020 REIT taxable income.

Our distributions to stockholders for the years ended December 31, 2019 and 2018, respectively, have exceeded 100% of the REIT taxable income.

The tax characterization of our distributions declared for the years ended December 31, 2020 and 2019 was as follows:

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Total distributions per share 100.0 % 100.0 %

We do not believe that we have any uncertain tax positions at December 31, 2019 and 2018 .

The statute of limitations for the federal income tax returns remain open for the 2016 through 2018 tax years.

The statute of limitations for state income tax returns remain open in accordance with each state's statute.

Interest and penalties related to income taxes are immaterial to the consolidated financial statements.

Our accounting policy is to classify interest and penalties as a component of income tax expense.

No interest and penalties were accrued by the Company at December 31, 2019 and 2018 .

COMMITMENTS AND CONTINGENCIES

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We are not aware of any environmental matters which we believe are reasonably likely to have a material effect on our consolidated financial statements.

Captive Insurance —As part of the PELP transaction, we acquired a captive insurance company, Silver Rock Insurance, Inc.

(“Silver Rock”), from PELP.

Captive Insurance —Our captive insurance company, Silver Rock Insurance, Inc.

(“Silver Rock”) provides general liability insurance, wind, reinsurance, and other coverage to us and certain related-party joint ventures.

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Premiums paid to Silver Rock may be reimbursed by tenants pursuant to specific lease terms.

As of December 31, 2019 , we had four cash collateralized letters of credit outstanding totaling approximately $8.6 million to provide security for our obligations under our insurance and reinsurance contracts.

As of December 31, 2020, we had four letters of credit outstanding totaling approximately $ 8.0 million to provide security for our obligations under our insurance and reinsurance contracts.

The following is a summary of the activities in the liability for unpaid losses, which is recorded in Accounts Payable and Other Liabilities on our consolidated balance sheets, for the years ended December 31, 2020 and 2019 (in thousands):

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Incurred related to:

Current year 1,943 1,792

Prior years 2,249 1,248

Total incurred 4,192 3,040

Paid related to:

Current year 36 78

Prior years 2,791 2,399

Total paid 2,827 2,477

Liabilities for unpaid losses as of December 31 $ 7,386 $ 6,021

General — The holders of common stock are entitled to one vote per share on all matters voted on by stockholders, including election of the Board.

COVID-19 —As of December 31, 2020, we were not aware of any significant liabilities or obligations to waive rent that we have incurred under force majeure or co-tenancy clauses in tenant leases.

Development and Redevelopment —As of December 31, 2020, we had approximately $ 7.6 million in an active anchor redevelopment project that we have agreed to perform, of which $ 6.1 million is expected to be funded in 2021.

General — The holders of common stock are entitled to one vote per share on all matters voted on by stockholders, including one vote per nominee in the election of the Board.

Our charter does not provide for cumulative voting in the election of directors.

On May 8, 2019, our Board increased the EVPS of our common stock to $11.10 based substantially on the estimated market value of our portfolio of real estate properties and our third-party investment management business as of March 31, 2019.

On May 6, 2020, our Board decreased the EVPS of our common stock to $ 8.75 based substantially on the estimated market value of our portfolio of real estate properties and our third-party investment management business as of March 31, 2020.

The decrease was primarily driven by the negative impact of the COVID-19 pandemic on our non-grocery tenants resulting from social distancing and “stay-at-home” guidelines and the uncertainty of the duration and full effect on the overall economy.

We engaged a third-party valuation firm to provide a calculation of the range in EVPS of our common stock as of March 31, 2020, which reflected certain balance sheet assets and liabilities as of that date.

Previously, on May 9, 2018, our Board increased the EVPS of our common stock to $11.05 from $11.00 based substantially on the estimated market value of our portfolio of real estate properties and our third-party investment management business as of March 31, 2018.

Previously, the EVPS of our common stock was set at $ 11.10 , based substantially on the estimated market value of our portfolio of real estate properties and our third-party investment management business as of March 31, 2019.

Distributions —On March 27, 2020, our Board suspended stockholder distributions, effective after the payment of the March 2020 distribution on April 1, 2020, as a result of the uncertainty surrounding the COVID-19 pandemic.

On November 4, 2020,

our Board authorized distributions for the month of December 2020, for stockholders of record at the close of business on December 28, 2020, equal to a monthly amount of $ 0.02833333 per share of common stock, or $0.34 annualized.

On December 14, 2020, our Board announced that the date of record for December distributions was moved to December 31, 2020.

OP unit holders received distributions at the same rate as common stockholders.

We paid this distribution on January 12, 2021.

Dividend Reinvestment Plan —The DRIP allows stockholders to invest distributions in additional shares of our common stock, subject to certain limits.

Stockholders who elect to participate in the DRIP may choose to invest all or a portion of their cash distributions in shares of our common stock at a price equal to our most recent estimated value per share.

Stockholders who elect to participate in the DRIP may choose to invest all or a portion of their cash distributions in shares of our common stock at a price equal to our most recent EVPS.

Stockholders who elect to participate in the DRIP, and who are subject to U.S.

federal income taxation laws, will incur a tax liability on an amount equal to the fair value on the relevant distribution date of the shares of our common stock purchased with reinvested distributions, even though such stockholders have elected not to receive the distributions in cash.

On March 27, 2020, the DRIP was suspended, and the March 2020 distribution was paid in all cash on April 1, 2020.

On November 4, 2020, our Board reinstated the DRIP, which became effective beginning with the December 2020 distribution paid in January 2021.

Tender Offer —On November 4, 2020, our Board approved a voluntary tender offer that commenced on November 10, 2020 (the “Tender Offer”) for up to 4.5 million shares of our outstanding common stock at a price of $5.75 per share, for a total value of approximately $ 26 million.

On December 14, 2020, the Tender Offer was amended to extend the expiration date to December 29, 2020, and the offer to purchase shares was increased to approximately 17.4 million shares, for a total value of approximately $ 100 million.

All of the other terms and conditions of the Tender Offer remained unchanged.

In connection with the Tender Offer, we repurchased 13.5 million shares of common stock for a total value of $77.6 million, which includes the issuance of 2.8 million common shares in redemption of 2.8 million OP units converted at the time of repurchase.

The $77.6 million due to shareholders who tendered their shares was not yet paid as of December 31, 2020, and is recorded as Accounts Payable and Other Liabilities on our consolidated balance sheets.

The amount was subsequently paid on January 5, 2021.

Share Repurchase Program —Our SRP provides an opportunity for stockholders to have shares of common stock repurchased, subject to certain restrictions and limitations.

The Board reserves the right, in its sole discretion, at any time and from time to time, to reject any request for repurchase.

On August 7, 2019, the Board suspended the SRP with respect to standard repurchases.

We will continue to fulfill repurchases sought upon a stockholder’s death, “qualifying disability,” or “determination of incompetence” in accordance with the terms of the SRP.

The SRP for death, qualifying disability, or determination of incompetence (“DDI”) was suspended effective March 27, 2020, in response to the uncertainty of COVID-19.

Both the SRP with respect to standard repurchases and the SRP for DDI remains suspended as of December 31, 2020.

On January 8, 2021, the Board adopted the Fourth Amended and Restated Share Repurchase Program (“Fourth Amended SRP”), effective January 14, 2021.

Under the Fourth Amended SRP, share repurchases for DDI have been reinstated at $5.75 per share, and as of March 1, 2021, we have repurchased 0.1 million shares for a total value of $ 0.4 million.

The SRP with respect to standard repurchases remains suspended.

Convertible Noncontrolling Interests —As of December 31, 2020 and 2019, we had approximately 39.8 million and 42.7 million outstanding OP units, respectively.

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These are included in the outstanding unvested award totals disclosed in Note 14.

As part of the PELP transaction, we issued 39.4 million OP units that are classified as noncontrolling interests.

Prior to the PELP transaction, the Operating Partnership also issued limited partnership units that were designated as Class B units for asset management services provided by an affiliate of PELP.

In connection with the PELP transaction, Class B units were no longer issued for asset management services subsequent to September 2017.

Upon closing of the PELP transaction and termination of the advisory agreement, we determined the economic hurdle required for vesting had been met, and all outstanding Class B units vested and were converted to OP units.

As such, we recorded a $24.0 million expense on our consolidated statements of operations as Vesting of Class B Units, which included the $27.6 million vesting of Class B units previously issued for asset management services and the reclassification of historical distributions on those units to Noncontrolling Interests.

Under the terms of the Fourth Amended and Restated Agreement of Limited Partnership, OP unit holders may elect to exchange OP units.

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As the form of redemption for OP units is within our control, the OP units outstanding as of December 31, 2020 and 2019, are classified as Noncontrolling Interests within permanent equity on our consolidated balance sheets.

During the year ended December 31, 2019 , 1.9 million OP units were converted into shares of our common stock at a one-to-one ratio.

During the year ended December 31, 2020 and 2019, 3.0 million and 1.9 million OP units were converted into shares of our common stock at a 1:1 ratio, respectively.

Of the OP units converted in 2020, 2.8 million were converted and repurchased as part of the Tender Offer.

The $ 8.3 million and $ 30.4 million of distributions for the years ended December 31, 2020 and 2019, respectively, that have been paid on OP units are included in Distributions to Noncontrolling Interests on the consolidated statements of equity.

In September 2017, we entered into an agreement with a third party to terminate all remaining contractual and economic relationships between us.

In exchange for a payment of $9.6 million , the third party sold their OP units, unvested Class B Units, and their special limited partnership interests back to us, terminating all fee-sharing arrangements between the third party and PELP.

The 0.4 million OP unit repurchase was recorded at a value of $4.2 million on the consolidated statements of equity.

The $5.4 million value of the unvested Class B units, special limited partnership interests, and value of fee-sharing arrangements is recorded on the consolidated statement of operations.

Nonconvertible Noncontrolling Interests —In addition to partnership units of the Operating Partnership, Noncontrolling Interests also includes a 25% minority-owned interest held by a third party in a consolidated partnership, which was not significant to our results in 2019 and has ceased operations.

Independent Director Stock Plan— The Board approves restricted stock awards pursuant to our Amended and Restated 2010 Independent Director Stock Plan.

The awards are granted to our independent directors and vest based upon the completion of a service period (“service-based awards”).

As of December 31, 2019 and 2018 , there were approximately 38,000 and 32,000 outstanding unvested awards granted to independent directors, respectively.

Employee Long Term Incentive Plan— Beginning in 2018, service-based restricted stock awards and performance-based awards are granted to employees under our Amended and Restated 2010 Long-Term Incentive Plan.

Awards to employees under our Amended and Restated 2010 Long-Term Incentive Plan are typically granted and vest during

the first quarter of each year.

Nonconvertible Noncontrolling Interests —In addition to partnership units of the Operating Partnership, Noncontrolling Interests also includes a 25 % minority-owned interest held by a third party in a consolidated partnership, which was not significant to our results in 2020 or 2019 and ceased a majority of its operations in 2019.

Employee Long Term Incentive Plan— We issue stock awards that vest based upon the completion of a service period (“service-based awards”), as well as awards that vest based upon the achievement of certain performance metrics (“performance-based awards”) under our 2020 Omnibus Incentive Plan (“2020 Incentive Plan”), which became effective in June 2020.

The 2020 Incentive Plan replaces the Amended and Restated 2010 Long-Term Incentive Plan, which expired in August 2020.

Awards to employees under our 2020 Incentive Plan are typically granted and vest during the first quarter of each year.

Service-based awards typically follow a four-year graded vesting schedule and will vest in the form of common stock or OP units.

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For each annual performance-based award, 50% of the shares earned vest at the end of the three-year period and 50% of the shares earned vest following an additional year of service.

Vesting of these performance awards is in the form of common stock, or certain awards may vest in the form of OP Units at the election of the recipient.

In connection with the PELP transaction, we assumed employee awards of phantom stock units.

Substantially all phantom stock awards granted by PELP contained either a five-year cliff vesting provision or a four-year graded vesting provision.

The value of the awards changes in direct relation to the change in estimated value per share of our common stock, but the value is paid in cash rather than in common stock.

As such, certain units classified as nonvested performance stock awards as of period-end may have met the performance-based requirements for vesting and are now only subject to an additional year of service-based vesting.

Vesting of performance awards is in the form of common stock, or certain awards may vest in the form of OP units at the election of the recipient.

We recognize expense for awards with graded vesting under the accelerated recognition method, whereby each vesting is treated as a separate award with expense for each vesting recognized ratably over the requisite service period.

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The awards are valued according to the EVPS for our common stock at the date of grant.

Holders of unvested service-based and performance-based awards that are not phantom stock units are entitled to dividend and distribution rights, but are not entitled to voting rights.

Holders of phantom stock units are entitled to receive distributions, which are recorded as expense when declared, but are not entitled to voting rights.

Holders of unvested service-based and performance-based awards are entitled to dividend and distribution rights, but are not entitled to voting rights.

In March 2019, the Compensation Committee of the Company’s Board of Directors (the “Committee”) approved a new form of award agreement under the Company’s Amended and Restated 2010 Long-Term Incentive Plan for performance-based long term incentive units (“Performance LTIP Units”) and made one-time grants of Performance LTIP Units to certain of our executives.

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Dividends will accrue on the Performance LTIP Units until the measurement date, subject to a quarterly distribution of 10% of the regular quarterly distributions.

All share-based compensation awards, regardless of the form of payout upon vesting, are presented in the following table, which summarizes our stock-based award activity.

Independent Director Stock Plan— The Board approves restricted stock awards pursuant to our Amended and Restated 2010 Independent Director Stock Plan.

The awards are granted to our independent directors as service-based awards.

As of December 31, 2020 and 2019, there were approximately 50,000 and 38,000 outstanding unvested awards granted to independent directors, respectively.

Share-Based Compensation Award Activity— All share-based compensation awards, regardless of the form of payout upon vesting, are presented in the following table, which summarizes our stock-based award activity.

For performance-based awards, the number of shares deemed to be issued per the table below reflects the number of units at target performance.

Performance-based awards contain terms which dictate that the number of award units to be issued will vary based upon actual performance compared to the respective plan’s performance metrics, with the potential for certain awards to earn additional shares beyond target performance (number of

units in thousands):

Restricted Stock Awards (1)

Performance Stock Awards (1)

Phantom Stock Units

Weighted-Average Grant-Date Fair Value (2)

Nonvested at December 31, 2016

Phantom Stock Units Weighted-Average Grant-Date Fair Value (2)

Nonvested at January 1, 2018

18 — 2,446 $ 10.20

Granted 811 199 — 11.00

Vested ( 5 ) — ( 1,394 ) 10.20

Forfeited ( 16 ) — ( 54 ) 10.38

Nonvested at December 31, 2018

808 199 998 10.60

Granted 470 2,293 — 11.05

Vested ( 196 ) — ( 769 ) 10.36

Forfeited ( 103 ) ( 8 ) ( 47 ) 10.77

Nonvested at December 31, 2019

979 2,484 182 11.00

Granted 437 259 — 10.94

Vested ( 304 ) — ( 176 ) 10.71

Forfeited ( 70 ) ( 25 ) ( 6 ) 11.00

Nonvested at December 31, 2020

The maximum number of award units that could be issued under all outstanding grants, excluding phantom stock units as they are settled in cash, was 3.9 million as of December 31, 2019 .

The number of award units expected to vest, excluding phantom units, was 2.3 million as of December 31, 2019 .

1,042 2,718 — $ 11.02

(1) The maximum number of award units that could be issued under all outstanding grants was 4.4 million as of December 31, 2020.

The number of award units expected to vest was 2.3 million as of December 31, 2020.

(2) On an annual basis, we engage an independent third-party valuation advisory consulting firm to estimate the EVPS of our common stock.

The weighted-average grant-date fair value calculated herein reflects the EVPS on the grant date.

The expense for all stock-based awards, including phantom stock units, during the years ended December 31, 2019 , 2018 , and 2017 was $10.1 million , $10.4 million , and $3.4 million , respectively.

We had $15.3 million of unrecognized compensation costs related to these awards that we expect to recognize over a weighted average period of approximately 4.0 years .

The expense for all stock-based awards during the years ended December 31, 2020, 2019, and 2018 was $ 6.3 million, $ 10.1 million, and $ 10.4 million, respectively.

We had $ 11.8 million of unrecognized compensation costs related to these awards that we expect to recognize over a weighted average period of approximately three years .

The fair value at the vesting date for stock-based awards that vested during the year ended December 31, 2020 was $ 5.0 million.

Because the phantom stock units are settled in cash rather than shares, we record a liability in Accounts Payable and Other Liabilities in the consolidated balance sheets for these awards.

The amount of this liability, including related payroll tax accruals, was $1.7 million and $8.7 million as of December 31, 2019 and 2018 , respectively.

401(k) Plan —We sponsor a 401(k) plan that provides benefits for qualified employees.

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

Phantom stock units are not considered to be participating securities, as they are not convertible into common stock.

The impact of these OP units on basic and diluted EPS has been calculated using the two-class method whereby earnings are allocated to the OP units based on dividends declared and the OP units’ participation rights in undistributed earnings.

The effects of the two-class method on basic and diluted EPS were immaterial to the consolidated financial statements as of December 31, 2019 , 2018 , and 2017 .

The impact of these outstanding OP units on basic and diluted EPS has been calculated using the two-class method whereby earnings are allocated to the OP units based on dividends declared and the OP units’ participation rights in undistributed earnings.

The effects of the two-class method on basic and diluted EPS were immaterial to the consolidated financial statements for the years ended December 31, 2020, 2019, and 2018.

The following table provides a reconciliation of the numerator and denominator of the earnings per share calculations for the years ended December 31, 2020, 2019, and 2018 (in thousands, except per share amounts):

Net (loss) income attributable to stockholders - basic

Net (loss) income attributable to convertible OP units (1)

Net (loss) income - diluted

2020 2019 2018

Net income (loss) attributable to stockholders - basic

$ 4,772 $ ( 63,532 ) $ 39,138

Net income (loss) attributable to convertible OP units (1)

690 ( 9,583 ) 8,136

Net income (loss) - diluted

$ 5,462 $ ( 73,115 ) $ 47,274

Weighted-average shares - basic 290,280 283,909 196,602

Effect of dilutive restricted stock awards (2)

42,764 43,208 44,453

Dilutive restricted stock awards 422 — 312

Adjusted weighted-average shares - diluted 333,466 327,117 241,367

Earnings per common share:

Basic and diluted

OP units include units previously issued for asset management services provided under our former advisory agreement (see Note 17 ), as well as units issued as part of the PELP transaction (see Note 5 ), all of which are convertible into common shares.

The Operating Partnership income (loss) attributable to these OP units, which is included as a component of Net (Loss) Income Attributable to Noncontrolling Interests on the consolidated statements of operations, has been added back in the numerator because these OP units were included in the denominator for all years presented.

Includes the dilutive impact of unvested restricted share awards using the treasury stock method.

Outstanding restricted stock awards were dilutive in 2018 , and thus are included in the calculation above.

As of December 31, 2019 and 2017 , approximately 3.5 million and 18,000 restricted stock and performance awards were outstanding, respectively.

These securities were anti-dilutive and, as a result, were excluded from the weighted-average common shares used to calculate diluted EPS.

Basic and diluted income (loss) per share

$ 0.02 $ ( 0.22 ) $ 0.20

(1) OP units include units that are convertible into common stock or cash, at the Operating Partnership’s option.

The Operating Partnership income or loss attributable to these OP units, which is included as a component of Net Income (Loss) Attributable to Noncontrolling Interests on the consolidated statements of operations, has been added back in the numerator as these OP units were included in the denominator for all years presented.

Approximately 1.0 million time-based and 2.5 million performance-based unvested stock units were outstanding as of December 31, 2019.

These securities were anti-dilutive for the year ended December 31, 2019, and as a result, their impact was excluded from the weighted-average common shares used to calculate diluted EPS for that period.

Outstanding restricted stock awards were dilutive for the years ended December 31, 2020 and 2018, and thus are included in the calculation above.

REVENUE RECOGNITION AND RELATED PARTY TRANSACTIONS

Revenue —Summarized below are amounts included in Fee and Management Income.

Revenue —We have entered into agreements with the Managed Funds related to certain advisory, management, and administrative services we provide to their real estate assets in exchange for fees and reimbursement of certain expenses.

Summarized below are amounts included in Fee and Management Income.

The revenue includes the fees and reimbursements earned by us from the Managed Funds during the years ended December 31, 2020, 2019, and 2018, and also includes other revenues that are not in the scope of ASC 606, but are included in this table for the purpose of disclosing all related party revenues (in thousands):

2020 2019 2018

Recurring fees (1)

$ 4,801 $ 6,362 $ 21,036

Transactional revenue and reimbursements (2)

2,633 3,329 9,817

Insurance premiums (3)

2,386 1,989 2,073

Total fees and management income $ 9,820 $ 11,680 $ 32,926

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

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

Insurance premium income includes amounts for reinsurance from third parties not affiliated with us in the amount of $1.9 million and $1.7 million for the years ended December 31, 2019 and 2018 , respectively.

Accounts Receivable-Affiliates —Under the terms of one of our Management Agreements, we incurred organization and offering costs related to REIT III since 2017.

As of December 31, 2018 , we had a receivable for these organization and offering costs of $4.5 million which was recorded in Other Assets, Net on our consolidated balance sheets.

In June 2019, REIT III’s Board of Directors approved the suspension of the public offering, effective June 14, 2019.

In connection with the suspension, we reduced our organization and offering cost receivable to the contractually obligated amount as of June 30, 2019, which resulted in a reduction of $2.3 million to Other Assets, Net on our consolidated balance sheets.

This receivable was settled when we merged with REIT III on October 31, 2019.

We had receivables related to Management Agreements with related parties of $0.7 million and $0.6 million as of December 31, 2019 and 2018 , respectively.

These amounts are recorded in Other Assets, Net on the consolidated balance sheets.

Other Related Party Matters —Griffin Capital Company, LLC (“Griffin sponsor”) owns a 25% interest, and we own a 75% interest, in the REIT III advisor.

A portion of organization and offering costs was incurred by the Griffin sponsor.

As such, of the receivable we had from REIT III as of December 31, 2018 , $1.2 million was reimbursable to the Griffin sponsor and was recorded in Accounts Payable and Other Liabilities on the consolidated balance sheets.

In connection with the suspension of REIT III’s public offering, we reduced our organization and offering cost payable to the contractually obligated amount as of June 30, 2019, which resulted in a $0.4 million reduction in the second quarter of 2019 to Accounts Payable and Other Liabilities on our consolidated balance sheets.

This reduction, coupled with the $2.3 million reduction to Other Assets, Net as described previously, resulted in a net increase in expense of $1.9 million recorded in Other (Expense) Income, Net in our consolidated statements of operations.

The remaining payable was settled when we merged with REIT III on October 31, 2019, and is included in the transaction price.

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

During the year ended December 31, 2019, we recognized a net charge of $ 1.9 million in Other Income (Expense), Net on our consolidated statement of operations.

The charge was related to a reduction in our related party accounts receivable and organization and offering costs payable for amounts incurred in connection with the REIT III public offering.

Remaining accounts receivable and organization and offering costs payable that were outstanding as of September 30, 2019 related to REIT III were settled when we merged with REIT III in October 2019.

Other Related Party Matters —We are the limited guarantor for up to $ 190 million, capped at $ 50 million in most instances, of debt for our NRP joint venture.

As of December 31, 2020, we were also the limited guarantor of a $ 175 million mortgage loan for GRP I.

Our guaranty in both cases is limited to being the non-recourse carveout guarantor and the environmental indemnitor.

We are also party to a separate agreement with Northwestern Mutual in which any potential liability under our guaranty for GRP I will be apportioned between us and Northwestern Mutual based on our respective ownership percentages in GRP I.

We have no liability recorded on our consolidated balance sheets for either guaranty as of December 31, 2020 and 2019.

PECO Air L.L.C.

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Edison, our Chairman and Chief Executive Officer, owns a 50% interest, owns an airplane that we use for business purposes in the course of our operations.

We paid approximately $1.0 million and $0.8 million to PECO Air for use of its airplane for the years ended December 31, 2019 and 2018 , respectively.

Upon completion of the PELP transaction, we assumed PELP’s obligation as the limited guarantor for up to $200 million , capped at $50 million in most instances, of NRP’s debt.

Our guarantee is limited to being the non-recourse carveout guarantor and the environmental indemnitor.

As a part of the GRP I Joint Venture, GRP I assumed from us a $175 million mortgage loan for which we assumed the obligation of limited guarantor.

Our guarantee is limited to being the non-recourse carveout guarantor and the environmental indemnitor.

We entered into a separate agreement with Northwestern Mutual in which we agree to apportion any potential liability under this guaranty between us and them based on our ownership percentages.

Related Party Expenses —Prior to October 2017, a PELP affiliate was entitled to specified fees and expenditure reimbursements for certain services, including managing our day-to-day activities and implementing our investment strategy under advisory agreements, as follows:

Asset management and subordinated participation fees paid out monthly in cash and/or Class B units;

Acquisition fee based on the cost of investments acquired/originated;

Acquisition expenses reimbursed related to selecting, evaluating, and acquiring assets;

Disposition fee paid for substantial assistance in connection with the sale of property.

As we no longer pay the fees listed below and had no outstanding unpaid amounts related to those fees as of December 31, 2019 and 2018 , summarized below are the fees incurred and the expenses reimbursable for the year ended December 31, 2017 (in thousands):

Acquisition fees (1)

Acquisition expenses (1)

Asset management fees (2)

OP units distribution (3)

Class B unit distribution (2)

Disposition fees (4)

The majority of acquisition and due diligence fees are capitalized and allocated to the related investment in real estate assets on the consolidated balance sheets based on the acquisition-date fair values of the respective assets and liabilities acquired.

Amounts are presented in General and Administrative on the consolidated statements of operations.

Distributions are presented as Distributions to Noncontrolling Interests on the consolidated statements of equity.

Disposition fees are presented as Other (Expense) Income, Net on the consolidated statements of operations.

Prior to the completion of the PELP transaction in October 2017, all of our real properties were managed and leased by a PELP affiliate and Phillips Edison & Company Ltd.

(the “Property Manager”), which was wholly-owned by PELP.

The Property Manager was entitled to the following specified fees and expenditure reimbursements:

Property management fee based on monthly gross cash receipts from the properties managed;

Leasing commissions paid for leasing services rendered with respect to a particular property;

Construction management costs paid for construction management services rendered with respect to a particular property;

Other expenses and reimbursement incurred by the Property Manager on our behalf.

We no longer pay the fees listed below and had no outstanding unpaid amounts related to those fees as of December 31, 2019 and 2018 .

Summarized below are the fees earned by and the expenses reimbursable to the Property Manager for the year ended December 31, 2017 (in thousands):

Property management fees (1)

Leasing commissions (2)

Construction management fees (2)

Other fees and reimbursements (3)

The property management fees are included in Property Operating on the consolidated statements of operations.

Leasing commissions paid for leases with terms less than one year were expensed immediately and included in Depreciation and Amortization on the consolidated statements of operations.

Leasing commissions paid for leases with terms greater than one year and construction management fees were capitalized and amortized over the life of the related leases or assets.

Other fees and reimbursements are included in Property Operating and General and Administrative on the consolidated statements of operations based on the nature of the expense.

We paid approximately $ 1.0 million to PECO Air for use of its airplane, and per the terms of our contractual agreements, for the years ended December 31, 2020 and 2019, and $ 0.8 million for the year ended December 31, 2018.

FAIR VALUE MEASUREMENTS

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Recorded Principal Balance (1)

Revolving credit facility

Fair Value Recorded Principal Balance (1)

Term loans 1,610,204 1,621,902 1,636,470 1,656,765

Secured portfolio loan facilities 391,131 404,715 390,780 399,054

Mortgages (2)

291,270 303,647 326,849 337,614

Total $ 2,292,605 $ 2,330,264 $ 2,354,099 $ 2,393,433

(1) Recorded principal balances include net deferred financing expenses of $ 13.5 million and $ 17.2 million as of December 31, 2020 and 2019, respectively.

Recorded principal balances also include assumed market debt adjustments of $1.5 million and $1.2 million as of December 31, 2020 and 2019, respectively.

There are deferred financing expenses related to our revolving credit facility that are in an asset position and thus are not included in these balances.

We have recorded deferred financing expenses related to our revolving credit facility, which are not included in these balances, in Other Assets, Net on our consolidated balance sheets.

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

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Fair value measurements that occurred as of and during the years ended December 31, 2020 and 2019 were as follows (in thousands):

Level 1 Level 2 Level 3 Level 1 Level 2 Level 3

Derivative assets (1)

$ — $ — $ — $ — $ 2,728 $ —

Derivative liability (1)

— ( 54,759 ) — — ( 20,974 ) —

Earn-out liability — — ( 22,000 ) — — ( 32,000 )

Impaired real estate assets, net (2)

— 19,350 — — 280,593 —

Impaired corporate intangible asset, net (3)

— — — — — 4,401

Impaired corporate ROU asset, net — 537 — — — —

(1) We record derivative assets in Other Assets, Net and derivative liabilities in Derivative Liability on our consolidated balance sheets.

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

The carrying value of our impaired corporate intangible asset, net has subsequently decreased after the measurement date due to amortization as well as through derecognition as part of the merger with REIT III.

The following table presents a reconciliation of the change in the liability measured at fair value on a recurring basis using Level 3 inputs (in thousands):

Earn-Out Liability

Balance at December 31, 2018

Change in fair value recognized in Other Income (Expense), Net

Balance at December 31, 2019

(3) The carrying value of our impaired in-place management contracts subsequently decreased after the measurement date, attributable to regular amortization as well as derecognition as part of the merger with REIT III.

Derivative Instruments —As of December 31, 2020 and 2019, we had interest rate swaps that fixed LIBOR on portions of our unsecured term loan facilities.

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The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves.

To comply with the provisions of ASC 820, we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements.

To comply with the provisions of ASC Topic 820, Fair Value Measurement , we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements.

In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.

2 unchanged sentences

As a result, we have determined that our derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

Earn-out —In connection with the PELP transaction, we entered into a contribution agreement (the “Contribution Agreement”), dated as of May 18, 2017, with the Operating Partnership and the contributors listed therein.

The Contribution Agreement established an earn-out structure by which PELP was given the opportunity to earn a maximum of 12.5 million additional OP units if certain milestones related to (i) fundraising in the investment management business, and (ii) the timing and valuation related to a liquidity event for PECO, were achieved by certain dates.

The liquidity event earn-out provisions provided, in relevant part, that the contributors would have the right to receive a minimum of three million and a maximum of five million OP units as contingent consideration if a “liquidity event” (as defined in the Contribution Agreement) was successfully achieved by the Company by December 31, 2019.

On March 12, 2019, the Company entered into an amendment to the Contribution Agreement (“Amendment”).

Pursuant to the terms of the Amendment, the initial liquidity earn-out term has been extended by two years through December 31, 2021 and the threshold for the maximum payout of five million OP units has been raised to $11.20 per share from $10.20 per share.

Additionally, pursuant to the terms of the Amendment, if a liquidity event is achieved after December 31, 2023, the contributors will not receive any OP units.

PELP may no longer earn additional OP units related to the investment management fundraising milestone as a result of this provision expiring in December 2019.

We estimate the fair value of this liability using weighted-average probabilities of likely outcomes.

These estimates require us to make various assumptions about future share prices, timing of liquidity events, equity raise projections, and other items that are unobservable and are considered Level 3 inputs in the fair value hierarchy.

Earn-out —As part of our acquisition of PELP in 2017, an earn-out structure was established which gave PELP the opportunity to earn additional OP units based upon the potential achievement of certain performance targets subsequent to the acquisition.

After the expiration of certain provisions in 2019, PELP is now eligible to earn between three million and five million OP units based on the timing and valuation of a liquidity event for PECO.

The liquidity event can occur no later than December 31, 2021 for the maximum shares to be awarded, but can occur as late as December 31, 2023.

We estimate the fair value of this liability on a quarterly basis using the Monte Carlo method.

This method requires us to make assumptions about future dividend yields, volatility, and timing and pricing of liquidity events, which are unobservable and are considered Level 3 inputs in the fair value hierarchy.

A change in these inputs to a different amount might result in a significantly higher or lower fair value measurement at the reporting date.

In calculating the fair

value of this liability, we have determined that the most likely range of potential outcomes includes a possibility of no additional OP units issued as well as up to a maximum of five million units being issued.

In calculating the fair value of this liability as of December 31, 2020, we have determined that the most likely range of potential outcomes includes a possibility of no additional OP units issued as well as up to a maximum of five million units being issued.

We recognized income of $ 10.0 million and $ 7.5 million related to changes in the fair value of the earn-out liability for the years ended December 31, 2020 and 2019, respectively.

These changes in fair value have been and will continue to be recognized in Other Income (Expense), Net in the consolidated statements of operations.

Real Estate Asset Impairment —Our real estate assets are measured and recognized at fair value on a nonrecurring basis dependent upon when we determine an impairment has occurred.

In 2019 and 2018 , we impaired assets that were under contract or actively marketed for sale at a disposition price that was less than carrying value, or had other operational impairment indicators.

The valuation technique used for the fair value of all impaired real estate assets was the expected net sales proceeds.

We determined that valuation to fall under Level 2 of the fair value hierarchy.

During the year ended December 31, 2019 , we recorded impairments of $87.4 million .

During the year ended December 31, 2018 , we recorded impairments of $40.8 million .

We recorded no impairments during the year ended December 31, 2017 .

Corporate Intangible Asset Impairment —In connection with the PELP transaction, we acquired a corporate intangible asset consisting of in-place management contracts.

During the years ended December 31, 2020, 2019, and 2018, we impaired assets that were under contract or actively marketed for sale at a disposition price that was less than carrying value, or that had other operational impairment indicators.

The valuation technique used for the fair value of all impaired real estate assets was the expected net sales proceeds, which we consider to be a Level 2 input in the fair value hierarchy.

We recorded the following expense upon impairment of real estate assets for the years ended December 31, 2020, 2019, and 2018 (in thousands):

2020 2019 2018

Impairment of real estate assets $ 2,423 $ 87,393 $ 40,782

Corporate Intangible Asset Impairment —In connection with our acquisition of PELP, we acquired a corporate intangible asset consisting of in-place management contracts.

We evaluate our corporate intangible asset for impairment when a triggering event occurs, or circumstances change, that indicate the carrying value may not be recoverable.

In June 2019, the suspension of the REIT III public offering constituted a triggering event for further review of the corporate intangible asset’s fair value compared to its carrying value.

We estimated the fair value of the corporate intangible asset using a discounted cash flow model, leveraging certain Level 3 inputs.

We estimated the fair value of the corporate intangible asset using a discounted cash flow model which leveraged certain Level 3 inputs.

The evaluation of corporate intangible assets for potential impairment required management to exercise significant judgment and to make certain assumptions.

The assumptions utilized in the evaluation included future cash flows and a discount rate.

For our most recent impairment test for the corporate intangible asset during the three months ended June 30, 2019, we used a discount rate of 19% in our discounted cash flow model.

Based on this analysis, we concluded the carrying value exceeded the estimated fair value of the corporate intangible asset, and an impairment charge of $7.8 million was recorded in Other (Expense) Income, Net on the consolidated statements of operations in the second quarter of 2019.

The assumptions utilized in the evaluation included projected future cash flows and a discount rate of 19 %.

Based on this analysis, we concluded the carrying value exceeded the estimated fair value of the corporate intangible asset, and an impairment charge of $ 7.8 million was recorded in Other Income (Expense), Net on the consolidated statements of operations in the second quarter of 2019.

QUARTERLY FINANCIAL DATA (UNAUDITED)

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We believe that all necessary adjustments, consisting only of normal recurring adjustments, have been included in the amounts stated below to present fairly, and in accordance with GAAP, the selected quarterly information (in thousands, except per share amounts):

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

First Quarter Second Quarter Third Quarter Fourth Quarter

Total revenue $ 131,523 $ 119,040 $ 126,695 $ 120,759

Net (loss) income attributable to stockholders

Net (loss) income per share - basic and diluted

First Quarter

Second Quarter

Third Quarter

Fourth Quarter (1)

Net income (loss) attributable to stockholders 9,769 ( 5,588 ) 11,784 ( 11,193 )

Net income (loss) per share - basic and diluted 0.03 ( 0.02 ) 0.04 ( 0.04 )

First Quarter Second Quarter Third Quarter Fourth Quarter

Total revenue $ 132,769 $ 132,581 $ 136,009 $ 135,347

1 unchanged sentence

Net (loss) income per share - basic and diluted ( 0.02 ) ( 0.13 ) ( 0.09 ) 0.02

The increase in net income for the fourth quarter was primarily associated with the gain as a result of the contribution of properties to GRP I.

Net income and revenue were also impacted by the Merger.

Our decrease in revenue beginning in the second quarter of 2020 is mainly attributed to the effects of the COVID-19 pandemic.

SUBSEQUENT EVENTS

Distributions —Distributions paid to stockholders and OP unit holders of record subsequent to December 31, 2020 were as follows (in thousands):

Date of Record

Monthly Distribution Rate

Date Distribution Paid

Gross Amount of Distribution Paid

Distribution Reinvested through the DRIP

Net Cash Distribution

Month Date of Record Monthly Distribution Rate Date Distribution Paid Gross Amount of Distribution Paid Distribution Reinvested Through the DRIP Net Cash Distribution

December 12/28/2020 $ 0.02833333 1/12/2021 $ 9,001 $ 2,461 $ 6,540

January 1/15/2021 $ 0.02833333 2/1/2021 9,042 2,455 6,587

February 2/15/2021 $ 0.02833333 3/1/2021 9,051 2,453 6,598

On March 10, 2021, our Board authorized distributions for March 2021 to the stockholders of record at the close of business on March 19, 2021 equal to a monthly amount of $ 0.02833333 per share of common stock.

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We pay distributions to stockholders and OP unit holders based on monthly record dates, and we expect to pay the March 2021 distributions on April 1, 2021.

Dispositions —Subsequent to December 31, 2019 , we sold the following real estate assets, one of which was classified as held for sale as of December 31, 2019 (dollars in thousands):

Property Name

Anchor Tenant

Square Footage

Disposition Date

Gleneagles Court

Timberlake Station

Lynchburg, VA

Central Virginia Flooring

Cactus Village

Sam Ash Megastores

SCHEDULE III—REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION

1 unchanged sentence

(in thousands)

Costs Capitalized Subsequent to Acquisition (3)

Initial Cost Costs Capitalized Subsequent to Acquisition (2)

Gross Amount Carried at End of Period (3)

Property Name

Encumbrances (2)

Land and Improvements

Buildings and Improvements

Land and Improvements

Buildings and Improvements

Accumulated Depreciation

Date Constructed/ Renovated

Date Acquired

Lakeside Plaza

Snow View Plaza

Charles Plaza

Davenport, FL

Burwood Village Center

Glen Burnie, MD

Southampton Village

Cureton Town Center

Tramway Crossing

Westin Centre

Fayetteville, NC

Village At Glynn Place

Brunswick, GA

Meadowthorpe Manor Shoppes

Lexington, KY

New Windsor Marketplace

Brentwood Commons

Bensenville, IL

Sidney Towne Center

Broadway Plaza

Glen Ellyn, IL

New Prague Commons

New Prague, MN

Brook Park Plaza

Brook Park, OH

Heron Creek Towne Center

North Port, FL

Quartz Hill Towne Centre

Lancaster, CA

Village One Plaza

Hilfiker Shopping Center

Fairview Oaks

Ellenwood, GA

Grassland Crossing

Alpharetta, GA

Hamilton Ridge

Mableton Crossing

Shops at Westridge

McDonough, GA

Fairlawn Town Centre

Macland Pointe

Kleinwood Center

Murray Landing

Vineyard Shopping Center

Tallahassee, FL

Lutz Lake Crossing

Property Name City, State Encumbrances (1)

Land and Improvements Buildings and Improvements Land and Improvements Buildings and Improvements Total Accumulated Depreciation Date Constructed/ Renovated Date Acquired

Lakeside Plaza Salem, VA $ — $ 3,344 $ 5,247 $ 732 $ 3,491 $ 5,832 $ 9,323 $ 2,754 1988 11/23/2011

Snow View Plaza Parma, OH — 4,104 6,432 1,171 4,326 7,381 11,707 3,767 1981 11/23/2011

Charles Plaza Davenport, FL — 4,090 4,399 571 4,228 4,832 9,060 2,828 2007 11/23/2011

Burwood Village Center Glen Burnie, MD — 5,448 10,167 553 5,737 10,431 16,169 4,956 1971 11/23/2011

Centerpoint Easley, SC — 2,404 4,361 1,426 2,986 5,205 8,191 2,422 2002 11/23/2011

Southampton Village Tyrone, GA — 2,670 5,176 965 2,901 5,910 8,811 2,669 2003 11/23/2011

Cureton Town Center Waxhaw, NC — 6,569 6,197 2,632 5,926 9,472 15,398 4,188 2006 12/29/2011

Tramway Crossing Sanford, NC — 2,016 3,071 886 2,492 3,481 5,973 1,944 1996 2/23/2012

Westin Centre Fayetteville, NC — 2,190 3,499 741 2,449 3,981 6,430 2,029 1996/1999 2/23/2012

Village At Glynn Place Brunswick, GA — 5,202 6,095 625 5,309 6,612 11,922 3,805 1992 4/27/2012

Meadowthorpe Manor Shoppes Lexington, KY — 4,093 4,185 613 4,562 4,330 8,892 2,252 1989/2008 5/9/2012

Brentwood Commons Bensenville, IL — 6,105 8,024 2,366 6,306 10,190 16,496 3,991 1981/2001 7/5/2012

Sidney Towne Center Sidney, OH — 1,429 3,802 1,353 2,016 4,568 6,584 2,599 1981/2007 8/2/2012

Broadway Plaza Tucson, AZ 5,614 4,979 7,169 1,951 5,808 8,290 14,099 3,770 1982/1995 8/13/2012

Baker Hill Glen Ellyn, IL — 7,068 13,738 10,013 7,664 23,154 30,818 7,287 1998 9/6/2012

New Prague Commons New Prague, MN — 3,248 6,604 1,908 3,395 8,366 11,761 3,447 2008 10/12/2012

Brook Park Plaza Brook Park, OH — 2,545 7,594 773 2,813 8,099 10,912 3,377 2001 10/23/2012

Heron Creek Towne Center North Port, FL — 4,062 4,082 447 4,163 4,429 8,591 2,181 2001 12/17/2012

Quartz Hill Towne Centre Lancaster, CA 11,740 6,352 13,529 929 6,663 14,147 20,810 5,091 1991/2012 12/27/2012

Village One Plaza Modesto, CA 17,700 5,166 18,752 633 5,255 19,296 24,551 6,308 2007 12/28/2012

Hilfiker Shopping Center Salem, OR — 2,455 4,750 89 2,523 4,771 7,294 1,753 1984/2011 12/28/2012

Butler Creek Acworth, GA — 3,925 6,129 2,931 4,287 8,698 12,985 2,928 1989 1/15/2013

Fairview Oaks Ellenwood, GA 6,430 3,563 5,266 857 3,925 5,761 9,686 2,277 1996 1/15/2013

Grassland Crossing Alpharetta, GA — 3,680 5,791 1,033 3,936 6,568 10,504 2,790 1996 1/15/2013

Hamilton Ridge Buford, GA — 4,772 7,168 823 5,035 7,728 12,763 3,384 2002 1/15/2013

Mableton Crossing Mableton, GA — 4,426 6,413 1,458 4,930 7,367 12,297 3,076 1997 1/15/2013

Shops at Westridge McDonough, GA — 2,788 3,901 2,038 2,835 5,892 8,727 2,104 2006 1/15/2013

Fairlawn Town Centre Fairlawn, OH 20,000 10,398 29,005 3,638 11,611 31,430 43,041 12,819 1962/1996 1/30/2013

Macland Pointe Marietta, GA — 3,493 5,364 1,097 3,878 6,075 9,953 2,649 1992 2/13/2013

Kleinwood Center Spring, TX — 11,478 18,954 1,267 11,850 19,848 31,699 7,809 2003 3/21/2013

Murray Landing Columbia, SC 6,750 3,221 6,856 1,640 3,597 8,120 11,717 2,968 2003 3/21/2013

Vineyard Shopping Center Tallahassee, FL — 2,761 4,221 561 3,028 4,515 7,543 1,886 2002 3/21/2013

Lutz Lake Crossing Lutz, FL — 2,636 6,600 819 2,914 7,142 10,055 2,404 2002 4/4/2013

Publix at Seven Hills Spring Hill, FL — 2,171 5,642 1,055 2,493 6,375 8,868 2,197 1991/2006 4/4/2013

Hartville Centre Hartville, OH — 2,069 3,691 1,785 2,391 5,155 7,546 2,048 1988/2008 4/23/2013

SCHEDULE III—REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION

1 unchanged sentence

(in thousands)

Costs Capitalized Subsequent to Acquisition (3)

Initial Cost Costs Capitalized Subsequent to Acquisition (2)

Gross Amount Carried at End of Period (3)

Property Name

Encumbrances (2)

Land and Improvements

Buildings and Improvements

Land and Improvements

Buildings and Improvements

Accumulated Depreciation

Date Constructed/ Renovated

Date Acquired

Publix at Seven Hills

Spring Hill, FL

Hartville Centre

Hartville, OH

Sunset Shopping Center

Corvallis, OR

Savage Town Square

Glenwood Crossings

Shiloh Square Shopping Center

Pavilions at San Mateo

Albuquerque, NM

Boronda Plaza

Westwoods Shopping Center

Paradise Crossing

Lithia Springs, GA

Contra Loma Plaza

South Oaks Plaza

Yorktown Centre

Millcreek Township, PA

Dyer Town Center

East Burnside Plaza

Red Maple Village

Crystal Beach Plaza

Palm Harbor, FL

CitiCentre Plaza

Duck Creek Plaza

Bettendorf, IA

Inver Grove Heights, MN

Fresh Market Shopping Center

Courthouse Marketplace

Virginia Beach, VA

Hastings Marketplace

Coquina Plaza

Southwest Ranches, FL

Shoppes of Paradise Lakes

Collington Plaza

Golden Town Center

Northstar Marketplace

Bear Creek Plaza

East Side Square

Springfield, OH

Flag City Station

Property Name City, State Encumbrances (1)

Land and Improvements Buildings and Improvements Land and Improvements Buildings and Improvements Total Accumulated Depreciation Date Constructed/ Renovated Date Acquired

Sunset Shopping Center Corvallis, OR 15,410 7,933 14,939 839 8,019 15,692 23,711 5,539 1998 5/31/2013

Savage Town Square Savage, MN 9,000 4,106 9,409 300 4,357 9,458 13,815 3,562 2003 6/19/2013

Glenwood Crossings Kenosha, WI — 1,872 9,914 1,051 2,336 10,500 12,837 3,292 1992 6/27/2013

Shiloh Square Shopping Center Kennesaw, GA — 4,685 8,729 1,978 4,834 10,558 15,392 3,419 1996/2003 6/27/2013

Pavilions at San Mateo Albuquerque, NM — 6,470 18,726 1,701 6,746 20,152 26,897 6,597 1997 6/27/2013

Boronda Plaza Salinas, CA 14,750 9,027 11,870 623 9,231 12,290 21,521 4,174 2003/2006 7/3/2013

Westwoods Shopping Center Arvada, CO — 3,706 11,115 694 4,186 11,328 15,514 3,914 2003 8/8/2013

Paradise Crossing Lithia Springs, GA — 2,204 6,064 868 2,490 6,647 9,136 2,253 2000 8/13/2013

Contra Loma Plaza Antioch, CA — 3,243 3,926 1,779 3,845 5,103 8,948 1,633 1989 8/19/2013

South Oaks Plaza St.

Louis, MO — 1,938 6,634 464 2,112 6,924 9,036 2,294 1969/1987 8/21/2013

Yorktown Centre Millcreek Township, PA — 3,736 15,396 2,173 4,098 17,207 21,305 6,652 1989/2013 8/30/2013

Dyer Town Center Dyer, IN 9,023 6,017 10,214 586 6,283 10,534 16,817 3,759 2004/2005 9/4/2013

East Burnside Plaza Portland, OR — 2,484 5,422 137 2,560 5,484 8,044 1,499 1955/1999 9/12/2013

Red Maple Village Tracy, CA 20,584 9,250 19,466 439 9,408 19,747 29,155 5,542 2009 9/18/2013

Crystal Beach Plaza Palm Harbor, FL 6,360 2,334 7,918 661 2,416 8,498 10,914 2,751 2010 9/25/2013

CitiCentre Plaza Carroll, IA — 770 2,530 364 1,031 2,633 3,664 954 1991/1995 10/2/2013

Duck Creek Plaza Bettendorf, IA — 4,612 13,007 1,683 5,208 14,094 19,302 4,477 2005/2006 10/8/2013

Cahill Plaza Inver Grove Heights, MN — 2,587 5,114 683 2,950 5,433 8,383 1,909 1995 10/9/2013

College Plaza Normal, IL — 4,460 17,772 3,325 5,107 20,450 25,557 4,820 1983/1999 10/22/2013

Courthouse Marketplace Virginia Beach, VA 11,650 6,130 8,061 1,147 6,386 8,952 15,338 2,983 2005 10/25/2013

Hastings Marketplace Hastings, MN — 3,980 10,045 777 4,397 10,404 14,801 3,526 2002 11/6/2013

Coquina Plaza Southwest Ranches, FL 6,192 9,458 11,770 1,117 9,686 12,658 22,345 3,780 1998 11/7/2013

Shoppes of Paradise Lakes Miami, FL 5,057 5,811 6,020 968 6,072 6,726 12,799 2,283 1999 11/7/2013

Collington Plaza Bowie, MD — 12,207 15,142 905 12,394 15,860 28,254 4,876 1996 11/21/2013

Golden Town Center Golden, CO 14,711 7,065 10,166 1,674 7,460 11,446 18,905 3,914 1993/2003 11/22/2013

Northstar Marketplace Ramsey, MN — 2,810 9,204 1,090 2,923 10,182 13,105 3,318 2004 11/27/2013

Bear Creek Plaza Petoskey, MI — 5,677 17,611 1,614 5,782 19,120 24,902 6,231 1998/2009 12/18/2013

East Side Square Springfield, OH — 394 963 120 412 1,065 1,477 372 2007 12/18/2013

Flag City Station Findlay, OH — 4,685 9,630 3,124 4,851 12,588 17,440 3,539 1992 12/18/2013

Hoke Crossing Clayton, OH — 481 1,060 398 509 1,430 1,939 $ 458 2006 12/18/2013

Southern Hills Crossing Kettering, OH — 778 1,481 125 807 1,577 2,384 623 2002 12/18/2013

SCHEDULE III—REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION

1 unchanged sentence

(in thousands)

Costs Capitalized Subsequent to Acquisition (3)

Initial Cost Costs Capitalized Subsequent to Acquisition (2)

Gross Amount Carried at End of Period (3)

Property Name

Encumbrances (2)

Land and Improvements

Buildings and Improvements

Land and Improvements

Buildings and Improvements

Accumulated Depreciation

Date Constructed/ Renovated

Date Acquired

Hoke Crossing

Southern Hills Crossing

Kettering, OH

Town & Country Shopping Center

Noblesville, IN

Sulphur Grove

Huber Heights, OH

Southgate Shopping Center

Des Moines, IA

Sterling Pointe Center

Arcadia Plaza

Stop & Shop Plaza

Fairacres Shopping Center

The Shops of Uptown

Park Ridge, IL

Chapel Hill North Center

Chapel Hill, NC

Coppell Market Center

Winchester Gateway

Winchester, VA

Stonewall Plaza

Winchester, VA

Town Fair Center

Louisville, KY

Villages at Eagles Landing

Stockbridge, GA

Champions Gate Village

Davenport, FL

Towne Centre at Wesley Chapel

Wesley Chapel, FL

Statler Square

Burbank Plaza

Hamilton Village

Chattanooga, TN

Waynesboro Plaza

Waynesboro, VA

Southwest Marketplace

Las Vegas, NV

Hampton Village

Central Station

Louisville, KY

Kirkwood Market Place

Fairview Plaza

New Cumberland, PA

Broadway Promenade

Townfair Center

Johns Commons

Jacksonville, FL

Heath Brook Commons

Property Name City, State Encumbrances (1)

Land and Improvements Buildings and Improvements Land and Improvements Buildings and Improvements Total Accumulated Depreciation Date Constructed/ Renovated Date Acquired

Town & Country Shopping Center Noblesville, IN 13,480 7,361 16,269 458 7,454 16,634 24,088 5,707 1998 12/18/2013

Sulphur Grove Huber Heights, OH — 553 2,142 498 611 2,581 3,192 682 2004 12/18/2013

Southgate Shopping Center Des Moines, IA — 2,434 8,358 892 2,835 8,849 11,684 3,107 1972/2013 12/20/2013

Sterling Pointe Center Lincoln, CA 24,073 7,039 20,822 1,573 7,617 21,816 29,433 6,056 2004 12/20/2013

Arcadia Plaza Phoenix, AZ — 5,774 6,904 2,784 5,946 9,516 15,462 2,821 1980 12/30/2013

Stop & Shop Plaza Enfield, CT — 8,892 15,028 1,157 9,270 15,807 25,077 5,119 1988/1998 12/30/2013

Fairacres Shopping Center Oshkosh, WI — 3,543 5,189 786 3,875 5,643 9,518 2,163 1992/2013 1/21/2014

Savoy Plaza Savoy, IL — 4,304 10,895 857 4,770 11,285 16,056 4,123 1999/2007 1/31/2014

The Shops of Uptown Park Ridge, IL — 7,744 16,884 1,349 7,934 18,043 25,977 4,830 2006 2/25/2014

Chapel Hill North Center Chapel Hill, NC 6,538 4,776 10,189 1,338 4,988 11,315 16,303 3,820 1998 2/28/2014

Coppell Market Center Coppell, TX 11,594 4,870 12,236 246 5,024 12,328 17,352 3,647 2008 3/5/2014

Winchester Gateway Winchester, VA — 9,342 23,468 2,088 9,585 25,313 34,898 7,399 2006 3/5/2014

Stonewall Plaza Winchester, VA — 7,929 16,642 962 7,990 17,544 25,534 5,250 2007 3/5/2014

Town Fair Center Louisville, KY — 8,108 14,411 5,435 8,731 19,223 27,954 5,791 1988/1994 3/12/2014

Villages at Eagles Landing Stockbridge, GA 1,173 2,824 5,515 1,114 3,365 6,089 9,453 2,286 1995 3/13/2014

Champions Gate Village Davenport, FL — 1,814 6,060 266 1,916 6,224 8,140 2,147 2001 3/14/2014

Towne Centre at Wesley Chapel Wesley Chapel, FL — 2,466 5,553 566 2,703 5,882 8,585 1,874 2000 3/14/2014

Statler Square Staunton, VA 7,096 4,108 9,072 901 4,555 9,525 14,081 3,298 1989 3/21/2014

Burbank Plaza Burbank, IL — 2,972 4,546 3,925 3,580 7,863 11,443 2,352 1972/1995 3/25/2014

Hamilton Village Chattanooga, TN — 12,682 19,103 2,305 12,635 21,455 34,090 7,417 1989 4/3/2014

Waynesboro Plaza Waynesboro, VA — 5,597 8,334 145 5,670 8,406 14,076 2,903 2005 4/30/2014

Southwest Marketplace Las Vegas, NV — 16,019 11,270 2,920 16,102 14,108 30,209 4,600 2008 5/5/2014

Hampton Village Taylors, SC — 5,456 7,254 3,926 5,949 10,688 16,636 3,539 1959/1998 5/21/2014

Central Station Louisville, KY 12,095 6,143 6,932 2,394 6,454 9,014 15,469 2,881 2005/2007 5/23/2014

Kirkwood Market Place Houston, TX — 5,786 9,697 997 5,958 10,522 16,480 3,070 1979/2008 5/23/2014

Fairview Plaza New Cumberland, PA — 2,786 8,500 306 2,955 8,638 11,593 2,346 1992/1999 5/27/2014

Broadway Promenade Sarasota, FL — 3,831 6,795 339 3,911 7,054 10,965 1,972 2007 5/28/2014

Townfair Center Indiana, PA — 7,007 13,233 1,246 7,206 14,281 21,487 4,777 1995/2010 5/29/2014

Johns Commons Jacksonville, FL — 1,599 10,387 643 1,773 10,856 12,629 3,026 2003 5/30/2014

Heath Brook Commons Ocala, FL 6,930 3,470 8,352 772 3,690 8,905 12,595 2,625 2002 5/30/2014

Park View Square Miramar, FL — 5,700 9,304 550 5,819 9,735 15,554 2,876 2003 5/30/2014

The Orchards Yakima, WA — 5,425 8,743 511 5,739 8,940 14,679 2,788 2002 6/3/2014

SCHEDULE III—REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION

1 unchanged sentence

(in thousands)

Costs Capitalized Subsequent to Acquisition (3)

Initial Cost Costs Capitalized Subsequent to Acquisition (2)

Gross Amount Carried at End of Period (3)

Property Name

Encumbrances (2)

Land and Improvements

Buildings and Improvements

Land and Improvements

Buildings and Improvements

Accumulated Depreciation

Date Constructed/ Renovated

Date Acquired

Park View Square

Shaw's Plaza Hanover

Shaw's Plaza Easton

Lynnwood Place

Thompson Valley Towne Center

Lumina Commons

Wilmington, NC

Driftwood Village

French Golden Gate

Orchard Square

Washington Township, MI

Trader Joe's Center

Palmetto Pavilion

North Charleston, SC

Five Town Plaza

Springfield, MA

Fairfield Crossing

Beavercreek, OH

Beavercreek Towne Center

Beavercreek, OH

Grayson Village

Loganville, GA

The Fresh Market Commons

Pawleys Island, SC

Claremont Village

Cherry Hill Marketplace

Nor'Wood Shopping Center

Colorado Springs, CO

Sunburst Plaza

Rivermont Station

Johns Creek, GA

Breakfast Point Marketplace

Panama City Beach, FL

Falcon Valley

Kohl's Onalaska

Coronado Center

West Creek Plaza

Coconut Creek, FL

Northwoods Crossing

Murphy Marketplace

Harbour Village

Jacksonville, FL

Oak Mill Plaza

Property Name City, State Encumbrances (1)

Land and Improvements Buildings and Improvements Land and Improvements Buildings and Improvements Total Accumulated Depreciation Date Constructed/ Renovated Date Acquired

Shaw's Plaza Hanover Hanover, MA — 2,826 5,314 10 2,826 5,324 8,150 1,588 1994/2000 6/23/2014

Shaw's Plaza Easton Easton, MA — 5,520 7,173 621 5,877 7,438 13,315 2,511 1984/2004 6/23/2014

Lynnwood Place Jackson, TN — 3,341 4,826 815 3,620 5,362 8,982 1,881 1986/2013 7/28/2014

Thompson Valley Towne Center Loveland, CO — 5,758 17,387 1,499 6,153 18,492 24,645 5,240 1999 8/1/2014

Lumina Commons Wilmington, NC 7,165 2,008 11,249 1,171 2,093 12,335 14,428 3,036 1974/2007 8/4/2014

Driftwood Village Ontario, CA — 6,811 12,993 1,590 7,451 13,942 21,394 3,859 1985 8/7/2014

French Golden Gate Bartow, FL — 2,599 12,877 1,803 2,856 14,422 17,279 3,771 1960/2011 8/28/2014

Orchard Square Washington Township, MI 5,903 1,361 11,550 549 1,609 11,851 13,460 3,306 1999 9/8/2014

Trader Joe's Center Dublin, OH 6,745 2,338 7,922 1,806 2,757 9,309 12,066 2,713 1986 9/11/2014

Palmetto Pavilion North Charleston, SC — 2,509 8,526 950 3,208 8,777 11,985 2,353 2003 9/11/2014

Five Town Plaza Springfield, MA — 8,912 19,635 6,344 10,029 24,862 34,891 8,480 1970/2013 9/24/2014

Fairfield Crossing Beavercreek, OH — 3,572 10,026 113 3,612 10,099 13,711 2,909 1994 10/24/2014

Beavercreek Towne Center Beavercreek, OH — 14,055 30,799 2,939 14,911 32,883 47,794 9,886 1994 10/24/2014

Grayson Village Loganville, GA — 3,952 5,620 2,052 4,114 7,510 11,624 2,725 2002 10/24/2014

The Fresh Market Commons Pawleys Island, SC — 2,442 4,941 128 2,457 5,054 7,511 1,518 2011 10/28/2014

Claremont Village Everett, WA — 5,635 10,544 1,094 5,854 11,420 17,273 3,189 1994/2012 11/6/2014

Cherry Hill Marketplace Westland, MI — 4,641 10,137 2,740 5,140 12,378 17,518 4,035 1992/2000 12/17/2014

Nor'Wood Shopping Center Colorado Springs, CO — 5,358 6,684 556 5,446 7,152 12,598 2,561 2003 1/8/2015

Sunburst Plaza Glendale, AZ — 3,435 6,041 1,176 3,583 7,069 10,652 2,537 1970 2/11/2015

Rivermont Station Johns Creek, GA — 6,876 8,916 1,888 7,169 10,511 17,680 4,225 1996/2003 2/27/2015

Breakfast Point Marketplace Panama City Beach, FL — 5,578 12,052 791 6,010 12,411 18,421 3,497 2009/2010 3/13/2015

Falcon Valley Lenexa, KS — 3,131 6,873 278 3,375 6,908 10,283 2,150 2008/2009 3/13/2015

Kohl's Onalaska Onalaska, WI — 2,670 5,648 — 2,670 5,648 8,317 1,931 1992/1993 3/13/2015

Coronado Center Santa Fe, NM 11,560 4,396 16,460 3,765 4,687 19,934 24,621 4,471 1964 5/1/2015

West Creek Plaza Coconut Creek, FL 5,529 3,459 6,131 286 3,513 6,362 9,876 1,605 2006/2013 7/10/2015

Northwoods Crossing Taunton, MA — 10,092 14,437 325 10,278 14,576 24,854 5,306 2003/2010 5/24/2016

Murphy Marketplace Murphy, TX — 28,652 33,122 1,451 28,988 34,237 63,225 7,281 2008/2015 6/24/2016

Harbour Village Jacksonville, FL — 5,630 16,727 1,319 6,032 17,644 23,676 3,602 2006 9/22/2016

Oak Mill Plaza Niles, IL 1,059 6,843 13,692 1,192 7,403 14,324 21,726 4,227 1977 10/3/2016

Southern Palms Tempe, AZ 23,207 10,025 24,346 2,078 10,494 25,956 36,450 6,380 1982 10/26/2016

Golden Eagle Village Clermont, FL 7,094 3,746 7,735 329 3,822 7,988 11,810 1,744 2011 10/27/2016

Atwater Marketplace Atwater, CA — 6,116 7,597 526 6,299 7,941 14,240 1,939 2008 2/10/2017

SCHEDULE III—REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION

1 unchanged sentence

(in thousands)

Costs Capitalized Subsequent to Acquisition (3)

Initial Cost Costs Capitalized Subsequent to Acquisition (2)

Gross Amount Carried at End of Period (3)

Property Name

Encumbrances (2)

Land and Improvements

Buildings and Improvements

Land and Improvements

Buildings and Improvements

Accumulated Depreciation

Date Constructed/ Renovated

Date Acquired

Southern Palms

Golden Eagle Village

Atwater Marketplace

Rocky Ridge Town Center

Roseville, CA

Greentree Centre

Sierra Del Oro Towne Centre

Ashland Junction

Barclay Place Shopping Center

Barnwell Plaza

Birdneck Shopping Center

Virginia Beach, VA

Cactus Village

Centre Stage Shopping Center

Springfield, TN

Crossroads Plaza

Dunlop Village

Colonial Heights, VA

Edgecombe Square

Emporia West Plaza

Forest Park Square

Cincinnati, OH

Indianapolis, IN

Goshen Station

The Village Shopping Center

Mooresville, IN

Heritage Oaks

Hickory Plaza

Nashville, TN

Highland Fair

High Point Village

Bellefontaine, OH

Mayfair Village

LaPlata Plaza

Lafayette Square

Lafayette, IN

Landen Square

Maineville, OH

Melbourne Village Plaza

Melbourne, FL

Commerce Square

Brownwood, TX

Upper Deerfield Plaza

Bridgeton, NJ

Monfort Heights

Cincinnati, OH

Property Name City, State Encumbrances (1)

Land and Improvements Buildings and Improvements Land and Improvements Buildings and Improvements Total Accumulated Depreciation Date Constructed/ Renovated Date Acquired

Rocky Ridge Town Center Roseville, CA 20,679 5,449 29,207 677 5,618 29,714 35,333 4,373 1996 4/18/2017

Greentree Centre Racine, WI — 2,955 8,718 1,062 3,444 9,291 12,735 1,680 1989/1994 5/5/2017

Sierra Del Oro Towne Centre Corona, CA 6,849 9,011 17,989 1,382 9,250 19,132 28,382 3,241 1991 6/20/2017

Ashland Junction Ashland, VA — 4,987 6,050 ( 2,982 ) 3,741 4,313 8,055 3 1989 10/4/2017

Barclay Place Shopping Center Lakeland, FL — 1,984 7,174 ( 2,272 ) 1,522 5,364 6,886 416 1989 10/4/2017

Barnwell Plaza Barnwell, SC — 1,190 1,883 18 1,198 1,893 3,091 862 1985 10/4/2017

Birdneck Shopping Center Virginia Beach, VA — 1,900 3,253 602 2,057 3,698 5,755 889 1987 10/4/2017

Crossroads Plaza Asheboro, NC — 1,722 2,720 658 2,101 2,999 5,100 865 1984 10/4/2017

Dunlop Village Colonial Heights, VA — 2,420 4,892 829 2,593 5,549 8,141 1,089 1987 10/4/2017

Edgecombe Square Tarboro, NC — 1,412 2,258 434 1,485 2,620 4,104 1,122 1990 10/4/2017

Emporia West Plaza Emporia, KS — 872 3,409 ( 415 ) 762 3,104 3,865 294 1980/2000 10/4/2017

Forest Park Square Cincinnati, OH — 4,007 5,877 736 4,278 6,343 10,621 1,614 1988 10/4/2017

Goshen Station Goshen, OH 3,605 1,555 4,621 130 1,649 4,657 6,306 1,280 1973/2003 10/4/2017

The Village Shopping Center Mooresville, IN — 2,363 8,325 140 2,098 8,731 10,829 1,262 1965/1997 10/4/2017

Heritage Oaks Gridley, CA 4,839 2,390 7,404 837 2,410 8,221 10,631 1,903 1979 10/4/2017

Hickory Plaza Nashville, TN 4,780 2,927 5,099 1,940 2,961 7,005 9,966 1,110 1974/1986 10/4/2017

Highland Fair Gresham, OR 6,833 3,263 7,979 466 3,350 8,358 11,709 1,334 1984/1999 10/4/2017

High Point Village Bellefontaine, OH — 3,386 7,485 ( 2,392 ) 2,507 5,972 8,479 636 1988 10/4/2017

Mayfair Village Hurst, TX 16,398 15,343 16,522 1,865 15,527 18,202 33,729 3,314 1981/2004 10/4/2017

LaPlata Plaza La Plata, MD 17,860 8,434 22,855 1,954 8,657 24,586 33,243 3,494 2003 10/4/2017

Lafayette Square Lafayette, IN 7,182 5,387 5,636 43 5,373 5,692 11,065 3,062 1963/2001 10/4/2017

Landen Square Maineville, OH — 2,081 3,467 984 2,314 4,218 6,532 1,184 1981/2003 10/4/2017

Melbourne Village Plaza Melbourne, FL — 5,418 7,280 ( 1,343 ) 4,865 6,490 11,355 824 1987 10/4/2017

Commerce Square Brownwood, TX — 6,027 8,341 622 6,287 8,703 14,990 2,141 1969/2007 10/4/2017

Upper Deerfield Plaza Bridgeton, NJ — 5,073 5,882 ( 1,965 ) 3,956 5,034 8,990 834 1977/1994 10/4/2017

Monfort Heights Cincinnati, OH 4,216 2,357 3,545 9 2,357 3,554 5,911 771 1987 10/4/2017

Mountain Park Plaza Roswell, GA 6,341 6,118 6,652 339 6,152 6,957 13,109 1,227 1988/2003 10/4/2017

Nordan Shopping Center Danville, VA — 1,911 6,751 655 2,018 7,299 9,316 1,600 1961/2002 10/4/2017

Northside Plaza Clinton, NC — 1,406 5,471 291 1,416 5,751 7,168 1,218 1982 10/4/2017

Park Place Plaza Port Orange, FL — 2,347 8,458 ( 2,398 ) 1,838 6,570 8,407 465 1984 10/4/2017

Parkway Station Warner Robins, GA — 3,416 5,309 ( 1,395 ) 2,608 4,722 7,330 596 1982 10/4/2017

Parsons Village Seffner, FL 4,744 3,465 10,864 ( 4,186 ) 2,430 7,713 10,143 716 1983/1994 10/4/2017

Portland Village Portland, TN — 1,408 5,235 1,134 1,474 6,303 7,777 1,150 1984 10/4/2017

SCHEDULE III—REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION

1 unchanged sentence

(in thousands)

Costs Capitalized Subsequent to Acquisition (3)

Initial Cost Costs Capitalized Subsequent to Acquisition (2)

Gross Amount Carried at End of Period (3)

Property Name

Encumbrances (2)

Land and Improvements

Buildings and Improvements

Land and Improvements

Buildings and Improvements

Accumulated Depreciation

Date Constructed/ Renovated

Date Acquired

Mountain Park Plaza

Nordan Shopping Center

Northside Plaza

Park Place Plaza

Port Orange, FL

Parkway Station

Warner Robins, GA

Parsons Village

Portland Village

Quail Valley Shopping Center

Missouri City, TX

Hillside - West

Rolling Hills Shopping Center

South Oaks Shopping Center

East Pointe Plaza

Southgate Center

Summerville Galleria

Summerville, SC

Riverplace Centre

Noblesville, IN

Timberlake Station

Lynchburg, VA

Town & Country Center

Towne Crossing Shopping Center

Village at Waterford

Midlothian, VA

Buckingham Square

Richardson, TX

Western Square Shopping Center

Windsor Center

12 West Marketplace

Litchfield, MN

Orchard Plaza

Willowbrook Commons

Nashville, TN

Edgewood Towne Center

Everson Pointe

Snellville, GA

Village Square of Delafield

Delafield, WI

Shoppes of Lake Village

Property Name City, State Encumbrances (1)

Land and Improvements Buildings and Improvements Land and Improvements Buildings and Improvements Total Accumulated Depreciation Date Constructed/ Renovated Date Acquired

Quail Valley Shopping Center Missouri City, TX — 2,452 11,501 ( 4,209 ) 1,595 8,148 9,743 550 1983 10/4/2017

Hillside - West Hillside, UT — 691 1,739 3,870 4,561 1,739 6,300 389 2006 10/4/2017

Rolling Hills Shopping Center Tucson, AZ 8,336 5,398 11,792 ( 2,733 ) 4,600 9,857 14,458 609 1980/1997 10/4/2017

South Oaks Shopping Center Live Oak, FL 3,220 1,742 5,119 104 1,793 5,172 6,966 1,817 1976/2000 10/4/2017

East Pointe Plaza Columbia, SC — 7,496 11,752 ( 10,072 ) 3,681 5,495 9,176 734 1990 10/4/2017

Southgate Center Heath, OH — 4,246 22,752 462 4,272 23,188 27,460 4,020 1960/1997 10/4/2017

Summerville Galleria Summerville, SC — 4,104 8,668 618 4,449 8,941 13,390 1,723 1989/2003 10/4/2017

The Oaks Hudson, FL — 3,876 6,668 ( 1,192 ) 3,460 5,892 9,352 1,191 1981 10/4/2017

Riverplace Centre Noblesville, IN 5,175 3,890 4,044 770 4,001 4,703 8,704 1,341 1992 10/4/2017

Town & Country Center Hamilton, OH 2,065 2,268 4,372 324 2,345 4,618 6,963 1,051 1950 10/4/2017

Powell Villa Portland, OR — 3,364 7,318 2,768 3,396 10,054 13,450 1,689 1959/1991 10/4/2017

Towne Crossing Shopping Center Mesquite, TX — 5,358 15,584 1,272 5,410 16,803 22,213 2,966 1984 10/4/2017

Village at Waterford Midlothian, VA 4,173 2,702 5,194 541 2,820 5,617 8,437 1,041 1991 10/4/2017

Buckingham Square Richardson, TX — 2,087 6,392 ( 551 ) 1,913 6,015 7,928 377 1978 10/4/2017

Western Square Shopping Center Laurens, SC — 1,013 3,333 ( 2,726 ) 308 1,312 1,620 — 1978/1991 10/4/2017

Windsor Center Dallas, NC — 2,488 5,186 359 2,488 5,545 8,032 1,401 1974/1996 10/4/2017

12 West Marketplace Litchfield, MN — 835 3,538 110 945 3,538 4,483 1,235 1989 10/4/2017

Orchard Plaza Altoona, PA 788 2,537 5,366 ( 3,766 ) 1,321 2,816 4,136 248 1987 10/4/2017

Willowbrook Commons Nashville, TN — 5,384 6,002 293 5,470 6,209 11,678 1,321 2005 10/4/2017

Edgewood Towne Center Edgewood, PA — 10,029 22,535 4,071 10,375 26,261 36,636 5,503 1990 10/4/2017

Everson Pointe Snellville, GA 7,734 4,222 8,421 455 4,360 8,737 13,098 1,727 1999 10/4/2017

Gleneagles Court (4)

Memphis, TN — 3,892 8,157 ( 11,951 ) 98 — 98 — 1988 10/4/2017

Village Square of Delafield Delafield, WI 8,257 6,206 6,869 443 6,511 7,008 13,519 1,502 2007 10/4/2017

Shoppes of Lake Village Leesburg, FL — 4,065 3,795 1,375 4,110 5,125 9,235 1,681 1987/1998 2/26/2018

Sierra Vista Plaza Murrieta, CA — 9,824 11,669 1,370 10,328 12,535 22,863 1,404 1991 9/28/2018

Wheat Ridge Marketplace Wheat Ridge, CO 11,399 7,926 8,393 799 8,442 8,675 17,117 1,213 1996 10/3/2018

Atlantic Plaza North Reading, MA — 12,341 12,699 405 12,607 12,839 25,446 1,831 1959/1973 11/9/2018

Staunton Plaza Staunton, VA — 4,818 14,380 31 4,832 14,396 19,229 1,340 2006 11/16/2018

Bethany Village Alpharetta, GA — 6,138 8,355 321 6,145 8,668 14,813 992 2001 11/16/2018

Northpark Village Lubbock, TX — 3,087 6,047 103 3,102 6,135 9,237 683 1990 11/16/2018

Kings Crossing Sun City Center, FL 10,467 5,654 11,225 152 5,740 11,292 17,031 1,200 2000/2018 11/16/2018

Lake Washington Crossing Melbourne, FL — 4,222 13,553 790 4,264 14,300 18,564 1,822 1987/2012 11/16/2018

SCHEDULE III—REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION

1 unchanged sentence

(in thousands)

Costs Capitalized Subsequent to Acquisition (3)

Initial Cost Costs Capitalized Subsequent to Acquisition (2)

Gross Amount Carried at End of Period (3)

Property Name

Encumbrances (2)

Land and Improvements

Buildings and Improvements

Land and Improvements

Buildings and Improvements

Accumulated Depreciation

Date Constructed/ Renovated

Date Acquired

Sierra Vista Plaza

Wheat Ridge Marketplace

Wheat Ridge, CO

Atlantic Plaza

North Reading, MA

Staunton Plaza

Bethany Village

Alpharetta, GA

Northpark Village

Kings Crossing

Sun City Center, FL

Lake Washington Crossing

Melbourne, FL

Kipling Marketplace

Littleton, CO

MetroWest Village

Spring Cypress Village

Commonwealth Square

Milwaukee, WI

Shasta Crossroads

Hilander Village

Laguna 99 Plaza

Elk Grove, CA

Southfield Center

Waterford Park Plaza

Colonial Promenade

Winter Haven, FL

Willimantic Plaza

Willimantic, CT

Quivira Crossings

Overland Park, KS

Spivey Junction

Stockbridge, GA

Plaza Farmington

Farmington, NM

Harvest Plaza

Oakhurst Plaza

Old Alabama Square

Johns Creek, GA

North Point Landing

Glenwood Crossing

Cincinnati, OH

Rosewick Crossing

Vineyard Center

Templeton, CA

Ocean Breeze Plaza

Ocean Breeze, FL

Property Name City, State Encumbrances (1)

Land and Improvements Buildings and Improvements Land and Improvements Buildings and Improvements Total Accumulated Depreciation Date Constructed/ Renovated Date Acquired

Kipling Marketplace Littleton, CO — 4,020 10,405 215 4,056 10,584 14,640 1,289 1983/2009 11/16/2018

MetroWest Village Orlando, FL — 6,841 15,333 321 6,933 15,561 22,495 1,608 1990 11/16/2018

Spring Cypress Village Houston, TX — 9,579 14,567 465 9,724 14,888 24,612 1,574 1982/2007 11/16/2018

Commonwealth Square Folsom, CA 5,932 9,955 12,586 423 9,973 12,991 22,964 2,000 1987 11/16/2018

Point Loomis Milwaukee, WI — 4,171 4,901 106 4,171 5,007 9,177 1,183 1965/1991 11/16/2018

Shasta Crossroads Redding, CA — 9,598 18,643 ( 3,907 ) 8,330 16,004 24,334 1,260 1989/2016 11/16/2018

Milan Plaza Milan, MI — 925 1,974 180 930 2,149 3,079 762 1960/1975 11/16/2018

Hilander Village Roscoe, IL — 2,571 7,461 537 2,638 7,931 10,568 1,377 1994 11/16/2018

Laguna 99 Plaza Elk Grove, CA — 5,422 16,952 136 5,429 17,080 22,509 1,640 1992 11/16/2018

Southfield Center St.

Louis, MO — 5,612 13,643 872 5,866 14,261 20,127 1,614 1987 11/16/2018

Waterford Park Plaza Plymouth, MN — 4,935 19,543 150 4,971 19,657 24,628 2,062 1989 11/16/2018

Colonial Promenade Winter Haven, FL — 12,403 22,097 286 12,436 22,350 34,786 2,773 1986/2008 11/16/2018

Willimantic Plaza Willimantic, CT — 3,596 8,859 53 3,613 8,895 12,508 1,426 1968/1990 11/16/2018

Quivira Crossings Overland Park, KS — 7,512 10,729 775 7,679 11,336 19,016 1,514 1996 11/16/2018

Spivey Junction Stockbridge, GA — 4,083 10,414 64 4,091 10,470 14,561 1,156 1998 11/16/2018

Plaza Farmington Farmington, NM — 6,322 9,619 59 6,371 9,630 16,000 1,189 2004 11/16/2018

Harvest Plaza Akron, OH — 2,693 6,083 58 2,741 6,093 8,835 737 1974/2000 11/16/2018

Oakhurst Plaza Seminole, FL — 2,782 4,506 268 2,827 4,729 7,556 654 1974/2001 11/16/2018

Old Alabama Square Johns Creek, GA — 10,782 17,359 961 10,790 18,313 29,103 1,809 2000 11/16/2018

North Point Landing Modesto, CA 20,061 8,040 28,422 426 8,152 28,735 36,887 2,616 1964/2008 11/16/2018

Glenwood Crossing Cincinnati, OH — 4,581 3,922 69 4,594 3,978 8,571 743 1999 11/16/2018

Rosewick Crossing La Plata, MD — 8,252 23,507 392 8,284 23,866 32,150 2,321 2008 11/16/2018

Vineyard Center Templeton, CA 5,248 1,753 6,406 43 1,767 6,435 8,202 608 2007 11/16/2018

Ocean Breeze Plaza Ocean Breeze, FL — 6,416 9,986 532 6,452 10,482 16,934 1,177 1993/2010 11/16/2018

Central Valley Marketplace Ceres, CA 15,526 6,163 17,535 41 6,187 17,552 23,739 1,665 2005 11/16/2018

51st & Olive Square Glendale, AZ — 2,236 9,038 80 2,248 9,107 11,354 996 1975/2007 11/16/2018

West Acres Shopping Center Fresno, CA — 4,866 5,627 307 4,980 5,820 10,800 1,022 1990 11/16/2018

Meadows on the Parkway Boulder, CO — 23,954 32,744 813 24,072 33,440 57,512 3,141 1989 11/16/2018

Wyandotte Plaza Kansas City, KS — 5,204 17,566 127 5,240 17,657 22,896 1,749 1961/2015 11/16/2018

Broadlands Marketplace Broomfield, CO — 7,434 9,459 183 7,538 9,538 17,076 1,140 2002 11/16/2018

Village Center Racine, WI — 6,051 26,473 422 6,114 26,832 32,946 2,921 2002/2003 11/16/2018

Shoregate Town Center Willowick, OH — 7,152 16,282 762 7,174 17,022 24,196 3,278 1958/2005 11/16/2018

Plano Market Street Plano, TX — 14,837 33,178 566 15,099 33,482 48,581 2,997 2009 11/16/2018

SCHEDULE III—REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION

1 unchanged sentence

(in thousands)

Costs Capitalized Subsequent to Acquisition (3)

Initial Cost Costs Capitalized Subsequent to Acquisition (2)

Gross Amount Carried at End of Period (3)

Property Name

Encumbrances (2)

Land and Improvements

Buildings and Improvements

Land and Improvements

Buildings and Improvements

Accumulated Depreciation

Date Constructed/ Renovated

Date Acquired

Central Valley Marketplace

51st & Olive Square

West Acres Shopping Center

Meadows on the Parkway

Wyandotte Plaza

Kansas City, KS

Broadlands Marketplace

Broomfield, CO

Village Center

Shoregate Town Center

Willowick, OH

Plano Market Street

Island Walk Shopping Center

Fernandina Beach, FL

Normandale Village

Bloomington, MN

North Pointe Plaza

North Charleston, SC

Palmer Town Center

Alico Commons

Fort Myers, FL

Windover Square

Melbourne, FL

Rockledge Square

Rockledge, FL

Fairfield Commons

Cocoa Commons

Hamilton Mill Village

Sheffield Crossing

Sheffield Village, OH

The Shoppes at Windmill Place

Stone Gate Plaza

Everybody's Plaza

Lakewood City Center

Carriagetown Marketplace

Crossroads of Shakopee

Broadway Pavilion

Santa Maria, CA

Sanibel Beach Place

Fort Myers, FL

Shoppes at Glen Lakes

Weeki Wachee, FL

Bartow Marketplace

Cartersville, GA

Property Name City, State Encumbrances (1)

Land and Improvements Buildings and Improvements Land and Improvements Buildings and Improvements Total Accumulated Depreciation Date Constructed/ Renovated Date Acquired

Island Walk Shopping Center Fernandina Beach, FL — 8,190 19,992 687 8,267 20,602 28,869 2,358 1987/2012 11/16/2018

Normandale Village Bloomington, MN 11,638 8,390 11,407 898 8,668 12,028 20,695 1,947 1973 11/16/2018

North Pointe Plaza North Charleston, SC — 10,232 26,348 400 10,474 26,506 36,980 3,377 1989 11/16/2018

Palmer Town Center Easton, PA — 7,331 23,525 375 7,327 23,904 31,231 2,402 2005 11/16/2018

Alico Commons Fort Myers, FL — 4,670 16,557 491 4,843 16,875 21,718 1,608 2009 11/16/2018

Windover Square Melbourne, FL 11,048 4,115 13,309 264 4,193 13,495 17,689 1,312 1984/2010 11/16/2018

Rockledge Square Rockledge, FL — 3,477 4,469 409 3,496 4,859 8,355 918 1985 11/16/2018

John Plaza Port St.

John, FL — 3,305 5,636 ( 3,444 ) 1,962 3,535 5,497 289 1986 11/16/2018

Fairfield Commons Lakewood, CO — 8,802 29,946 1,052 8,810 30,991 39,800 2,734 1985 11/16/2018

Cocoa Commons Cocoa, FL — 4,838 8,247 583 4,851 8,817 13,668 1,271 1986 11/16/2018

Hamilton Mill Village Dacula, GA — 7,059 9,734 292 7,087 9,998 17,085 1,186 1996 11/16/2018

Sheffield Crossing Sheffield Village, OH — 8,841 10,232 193 9,026 10,240 19,266 1,411 1989 11/16/2018

The Shoppes at Windmill Place Batavia, IL — 8,186 16,005 352 8,194 16,350 24,544 1,871 1991/1997 11/16/2018

Stone Gate Plaza Crowley, TX 7,185 5,261 7,007 209 5,269 7,207 12,477 825 2003 11/16/2018

Everybody's Plaza Cheshire, CT — 2,520 10,096 268 2,539 10,345 12,884 978 1960/2005 11/16/2018

Lakewood City Center Lakewood, OH — 1,593 10,308 29 1,599 10,332 11,931 923 1991 11/16/2018

Carriagetown Marketplace Amesbury, MA — 7,084 15,492 488 7,092 15,971 23,064 1,782 2000 11/16/2018

Crossroads of Shakopee Shakopee, MN — 8,869 20,320 327 8,933 20,582 29,515 2,517 1998 11/16/2018

Broadway Pavilion Santa Maria, CA — 8,512 20,427 360 8,534 20,765 29,300 2,159 1987 11/16/2018

Sanibel Beach Place Fort Myers, FL — 3,918 7,043 647 4,014 7,594 11,608 995 2003 11/16/2018

Shoppes at Glen Lakes Weeki Wachee, FL — 3,118 7,473 431 3,156 7,866 11,022 892 2008 11/16/2018

Bartow Marketplace Cartersville, GA 19,305 11,944 24,610 288 11,968 24,874 36,841 3,706 1995 11/16/2018

Bloomingdale Hills Riverview, FL — 4,384 5,179 219 4,389 5,393 9,783 867 2002/2012 11/16/2018

University Plaza Amherst, NY — 6,402 9,800 514 6,410 10,306 16,716 2,336 1980/1999 11/16/2018

McKinney Market Street McKinney, TX 2,236 10,941 16,061 1,467 10,969 17,500 28,469 2,034 2003 11/16/2018

Montville Commons Montville, CT — 12,417 11,091 489 12,443 11,554 23,997 1,745 2007 11/16/2018

Shaw's Plaza Raynham Raynham, MA — 7,769 26,829 914 7,789 27,724 35,512 3,027 1965/1998 11/16/2018

Suntree Square Southlake, TX 8,994 6,335 15,642 361 6,350 15,988 22,338 1,625 2000 11/16/2018

Green Valley Plaza Henderson, NV — 7,284 16,879 221 7,329 17,056 24,384 1,789 1978/1982 11/16/2018

Crosscreek Village St.

Cloud, FL — 3,821 9,604 388 3,859 9,953 13,813 1,099 2008 11/16/2018

Market Walk Savannah, GA — 20,679 31,836 1,626 20,750 33,391 54,141 3,406 2014/2015 11/16/2018

Livonia Plaza Livonia, MI — 4,118 17,037 55 4,151 17,059 21,210 1,867 1988 11/16/2018

Franklin Centre Franklin, WI 7,255 6,353 5,482 370 6,357 5,849 12,206 1,491 1994/2009 11/16/2018

SCHEDULE III—REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION

1 unchanged sentence

(in thousands)

Costs Capitalized Subsequent to Acquisition (3)

Initial Cost Costs Capitalized Subsequent to Acquisition (2)

Gross Amount Carried at End of Period (3)

Property Name

Encumbrances (2)

Land and Improvements

Buildings and Improvements

Land and Improvements

Buildings and Improvements

Accumulated Depreciation

Date Constructed/ Renovated

Date Acquired

Bloomingdale Hills

Riverview, FL

University Plaza

McKinney Market Street

Montville Commons

Montville, CT

Shaw's Plaza Raynham

Suntree Square

Southlake, TX

Green Valley Plaza

Henderson, NV

Crosscreek Village

Livonia Plaza

Franklin Centre

Pompton Plains, NJ

Shorewood Crossing

Shorewood, IL

Herndon Place

Windmill Marketplace

Riverlakes Village

Bakersfield, CA

Greenville, NC

Evans Towne Centre

Mansfield Market Center

Mansfield, TX

Ormond Beach Mall

Ormond Beach, FL

Heritage Plaza

Carol Stream, IL

Mountain Crossing

Seville Commons

Arlington, TX

Loganville Town Center

Loganville, GA

Alameda Crossing

Cinco Ranch at Market Center

Naperville Crossings

Naperville, IL

Orange Grove Shopping Center

North Fort Myers, FL

Sudbury Crossing

Ashburn Farm Market Center

Del Paso Marketplace

Sacramento, CA

Property Name City, State Encumbrances (1)

Land and Improvements Buildings and Improvements Land and Improvements Buildings and Improvements Total Accumulated Depreciation Date Constructed/ Renovated Date Acquired

Plaza 23 Pompton Plains, NJ — 11,412 40,144 868 11,664 40,760 52,424 3,721 1963/1997 11/16/2018

Shorewood Crossing Shorewood, IL — 9,468 20,993 2,519 9,569 23,411 32,980 2,477 2001 11/16/2018

Herndon Place Fresno, CA — 7,148 10,071 ( 853 ) 6,808 9,559 16,367 668 2005 11/16/2018

Windmill Marketplace Clovis, CA — 2,775 7,299 ( 485 ) 2,682 6,906 9,588 321 2001 11/16/2018

Riverlakes Village Bakersfield, CA 13,219 8,567 15,242 523 8,608 15,725 24,332 1,523 1997 11/16/2018

Bells Fork Greenville, NC — 2,846 6,455 ( 875 ) 2,612 5,815 8,427 — 2006 11/16/2018

Evans Towne Centre Evans, GA — 4,018 7,013 191 4,058 7,163 11,222 923 1995 11/16/2018

Mansfield Market Center Mansfield, TX — 4,672 13,154 145 4,678 13,292 17,971 1,241 2015 11/16/2018

Ormond Beach Mall Ormond Beach, FL — 4,954 7,006 750 5,008 7,702 12,710 1,004 1967/2010 11/16/2018

Heritage Plaza Carol Stream, IL 9,105 6,205 16,507 309 6,243 16,778 23,022 1,718 1988 11/16/2018

Mountain Crossing Dacula, GA 3,736 6,602 6,835 147 6,650 6,934 13,585 897 1997 11/16/2018

Seville Commons Arlington, TX — 4,689 12,602 858 4,845 13,304 18,149 1,344 1987 11/16/2018

Loganville Town Center Loganville, GA — 4,922 6,625 299 5,027 6,819 11,846 939 1997 11/16/2018

Alameda Crossing Avondale, AZ 12,894 7,785 19,875 2,148 7,834 21,974 29,807 2,245 2005 11/16/2018

Cinco Ranch at Market Center Katy, TX — 5,553 14,063 515 5,679 14,452 20,131 1,342 2007/2008 12/12/2018

Naperville Crossings Naperville, IL 25,380 15,242 30,881 2,303 15,852 32,574 48,426 2,883 2007/2016 4/26/2019

Orange Grove Shopping Center North Fort Myers, FL — 2,637 7,340 269 2,873 7,373 10,245 489 1999 10/31/2019

Sudbury Crossing Sudbury, MA — 6,483 12,933 129 6,490 13,055 19,545 716 1984 10/31/2019

Ashburn Farm Market Center Ashburn, VA — 14,035 16,648 19 14,029 16,673 30,702 919 2000 10/31/2019

Del Paso Marketplace Sacramento, CA — 5,722 12,242 141 5,748 12,357 18,105 637 2006 12/12/2019

Hickory Flat Commons Canton, GA — 6,976 11,786 586 7,173 12,176 19,348 314 2008 8/17/2020

Roxborough Marketplace Littleton, CO — 4,105 12,668 190 4,105 12,858 16,963 155 2005 10/5/2020

Northlake Station LLC (5)

Cincinnati, OH 8,108 2,327 11,806 554 2,526 12,161 14,687 1,760 1985 10/6/2006

Corporate Adjustments (6)

SCHEDULE III—REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION (1)

December 31, 2019

(in thousands)

Costs Capitalized Subsequent to Acquisition (3)

Gross Amount Carried at End of Period (4)

Property Name

Encumbrances (2)

Land and Improvements

Buildings and Improvements

Land and Improvements

Buildings and Improvements

Accumulated Depreciation

Date Constructed/ Renovated

Date Acquired

Assets held for sale are not included in this Schedule III report.

— 6 2,734 ( 6,311 ) ( 1,570 ) ( 2,002 ) ( 3,572 ) ( 11 )

Totals $ 685,022 $ 1,519,458 $ 3,088,652 $ 179,231 $ 1,549,362 $ 3,237,986 $ 4,787,348 $ 695,591

(1) Encumbrances do not include our finance leases.

(2) Reductions to costs capitalized subsequent to acquisition are generally attributable to parcels/outparcels sold, impairments, and assets held-for-sale.

The aggregate cost of properties for federal income tax purposes is approximately $4.8 billion at December 31, 2019 .

(3) The aggregate basis of properties for federal income tax purposes is approximately $ 4.8 billion at December 31, 2020.

(4) The main shopping center at this location was sold and we currently only own an outparcel.

(5) Amounts consist of corporate building and land.

(6) Amounts consist of elimination of intercompany construction management fees charged by the property manager to the real estate assets.

Reconciliation of real estate assets:

Reconciliation of real estate assets at cost:

Balance at January 1 $ 4,749,324 $ 4,848,483

22 unchanged sentences

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature Title Date

/s/ JEFFREY S.

Chairman of the Board and Chief Executive Officer (Principal Executive Officer)

March 11, 2020

Chief Financial Officer, Senior Vice President, and Treasurer (Principal Financial Officer)

March 11, 2020

EDISON Chairman of the Board and Chief Executive Officer (Principal Executive Officer) March 12, 2021

CAULFIELD Chief Financial Officer, Senior Vice President, and Treasurer (Principal Financial Officer) March 12, 2021

/s/ JENNIFER L.

Chief Accounting Officer and Senior Vice President (Principal Accounting Officer)

March 11, 2020

ROBISON Chief Accounting Officer and Senior Vice President (Principal Accounting Officer) March 12, 2021

/s/ LESLIE T.

March 11, 2020

/s/ ELIZABETH FISCHER

March 11, 2020

CHAO Director March 12, 2021

/s/ ELIZABETH FISCHER Director March 12, 2021

Elizabeth Fischer

March 11, 2020

Director March 12, 2021

/s/ STEPHEN R.

March 11, 2020

/s/ JANE SILFEN

March 11, 2020

QUAZZO Director March 12, 2021

/s/ JANE SILFEN Director March 12, 2021

STRONG Director March 12, 2021

/s/ GREGORY S.

March 11, 2020

WOOD Director March 12, 2021

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures