Phillips Edison & Company, Inc. 10-K

ITEM 9A. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures 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, 2021. 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, 2021. Management’s Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on our evaluation under the framework in Internal Control - Integrated Framework (2013) issued by the COSO, our management concluded that our internal control over financial reporting was effective as of December 31, 2021. Changes in Internal Control over Financial Reporting During the quarter ended December 31, 2021, there were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K 49 ITEM 9B. OTHER INFORMATION Not applicable. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. w PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE The information required by this Item will be included in our definitive proxy statement to be filed with the SEC within 120 days after December 31, 2021 in connection with the the Company's 2022 Annual Meeting of Stockholders, and is hereby incorporated by reference into this Form 10-K. ITEM 11. EXECUTIVE COMPENSATION The information required by this Item will be included in our definitive proxy statement to be filed with the SEC within 120 days after December 31, 2021 in connection with the the Company's 2022 Annual Meeting of Stockholders, and is hereby incorporated by reference into this Form 10-K. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information required by this Item will be included in our definitive proxy statement to be filed with the SEC within 120 days after December 31, 2021 in connection with the the Company's 2022 Annual Meeting of Stockholders, and is hereby incorporated by reference into this Form 10-K. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information required by this Item will be included in our definitive proxy statement to be filed with the SEC within 120 days after December 31, 2021 in connection with the the Company's 2022 Annual Meeting of Stockholders, and is hereby incorporated by reference into this Form 10-K. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The information required by this Item will be included in our definitive proxy statement to be filed with the SEC within 120 days after December 31, 2021 in connection with the the Company's 2022 Annual Meeting of Stockholders, and is hereby incorporated by reference into this Form 10-K. PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K 50 w PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) Financial Statement Schedules See the Index to Consolidated Financial Statements on page F-1 of this report. (b) Exhibits Ex. Description Reference 2.1 Contribution Agreement, dated as of May 18, 2017, between Phillips Edison Grocery Center REIT I, Inc., Phillips Edison Grocery Center Operating Partnership I, L.P., and the Contributors Listed Therein Form 8-K, filed May 23, 2017, Exhibit 2.1 2.2 Amendment to Contribution Agreement, between Phillips Edison & Company, Inc. (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 Form 10-K, filed March 13, 2019, Exhibit 2.2 3.1 Fifth Articles of Amendment and Restatement of Phillips Edison & Company, Inc., as amended Form 10-Q, filed August 5, 2021, Exhibit 3.1 3.2 Fifth Amended and Restated Bylaws of Phillips Edison & Company, Inc. Form 8-K, filed July 19, 2021, Exhibit 3.1 4.1 Statement regarding restrictions on transferability of shares of common stock (to appear on stock certificate or to be sent upon request and without charge to stockholders issued shares without certificates) Form S-11, filed March 1, 2010, Exhibit 4.2 4.2 Third Amended and Restated Dividend Reinvestment Plan Form S-3, filed October 31, 2019, Exhibit 4.7 4.3 Phillips Edison & Company, Inc. Fourth Amended and Restated Share Repurchase Program, dated January 14, 2021 Form 8-K, filed January 14, 2021, Exhibit 99.1 4.4 Fourth Amended and Restated Agreement of Limited Partnership of Phillips Edison Grocery Center Operating Partnership I, L.P. Form 10-K, filed March 30, 2018, Exhibit 4.4 4.5 Description of Phillip Edison & Company, Inc.’s Securities Registered Under Section 12 of the Securities Exchange Act of 1934 Form 10-K, filed March 12, 2021, Exhibit 4.5 4.6 Indenture, dated as of October 6, 2021, by and among Phillips Edison Grocery Center Operating Partnership I, L.P., as issuer, Phillips Edison & Company, Inc., as guarantor, and U.S. Bank National Association, as trustee Form 8-K, filed October 6, 2021, Exhibit 4.1 4.7 First Supplemental Indenture, dated as of October 6, 2021, by and among Phillips Edison Grocery Center Operating Partnership I, L.P., as issuer, Phillips Edison & Company, Inc., as guarantor, and U.S. Bank National Association, as trustee Form 8-K, filed October 6, 2021, Exhibit 4.2 10.1 Tax Protection Agreement dated as of October 4, 2017 by and among Phillips Edison Grocery Center REIT I, Inc., Phillips Edison Grocery Center Operating Partnership I, L.P. and each Protected Partner identified as a signatory on Schedule I, as amended from time to time Form 8-K, filed October 11, 2017, Exhibit 10.2 10.2 Tax Protection Agreement by and among Phillips Edison & Company, Inc., Phillips Edison Grocery Center Operating Partnership I, L.P., and each Protected Partner identified as a signatory on Schedule I Form 8-K, filed July 19, 2021, Exhibit 10.1 10.3 Equityholder Agreement dated October 4, 2017 by and among Phillips Edison Grocery Center REIT I, Inc., Phillips Edison Grocery Center Operating Partnership I, L.P. and each of the individuals signatory thereto Form 8-K, filed October 11, 2017, Exhibit 10.3 10.4 Credit Agreement among Phillips Edison Grocery Center Operating Partnership II, L.P., Phillips Edison Grocery Center REIT II, Inc., the Lenders and Capital One, National Association, as administrative agent, dated September 25, 2017 Form 10-Q of Phillips Edison Grocery Center REIT II, Inc., filed November 9, 2017, Exhibit 10.3 10.5 First Amendment to Credit Agreement among Phillips Edison Grocery Center Operating Partnership I, L.P., Phillips Edison & Company, Inc., the Lenders and Capital One, National Association, as administrative agent, dated November 16, 2018 Form S-11/A, filed July 7, 2021, Exhibit 10.4 PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K 51 Ex. Description Reference 10.6 Second Amendment to Credit Agreement, by and among Phillips Edison Grocery Center Operating Partnership I, L.P., Phillips Edison & Company, Inc., the Lenders and Capital One, National Association, as administrative agent, dated September 25, 2019 Form 10-Q, filed November 7, 2019, Exhibit 10.1 10.7 Third Amendment to Credit Agreement, by and among Phillips Edison Grocery Center Operating Partnership I, L.P., Phillips Edison & Company, Inc., the lenders party thereto and Capital One, National Association, as administrative agent, dated September 24, 2021 Form 8-K, filed September 28, 2021, Exhibit 10.2 10.8 Credit Agreement among Phillips Edison Grocery Center Operating Partnership I, L.P., Phillips Edison Grocery Center REIT I, Inc., the lenders party thereto and KeyBank National Association, as administrative agent, dated October 4, 2017 Form 10-Q, filed November 9, 2017, Exhibit 10.7 10.9 First Amendment to Credit Agreement, dated as of November 16, 2018, by and among Phillips Edison Grocery Center Operating Partnership I, L.P., Phillips Edison & Company, Inc., the lenders party thereto and KeyBank National Association, as administrative agent Form 8-K, filed November 19, 2018, Exhibit 10.3 10.10 Second Amendment to Credit Agreement, by and among Phillips Edison Grocery Center Operating Partnership I, L.P., Phillips Edison & Company, Inc., the Lenders and KeyBank National Association, as administrative agent, dated October 4, 2019 Form 10-Q, filed November 7, 2019, Exhibit 10.2 10.11 Third Amendment to Credit Agreement, by and among Phillips Edison Grocery Center Operating Partnership I, L.P., Phillips Edison & Company, Inc., the lenders party thereto and KeyBank National Association, as administrative agent, dated September 24, 2021 Form 8-K, filed September 28, 2021, Exhibit 10.3 10.12 Credit Agreement among Phillips Edison Grocery Center Operating Partnership I, L.P., Phillips Edison Grocery Center REIT I, Inc., the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent, dated October 4, 2017 Form 10-Q, filed November 9, 2017, Exhibit 10.8 10.13 First Amendment to Credit Agreement, dated as of November 16, 2018, by and among Phillips Edison Grocery Center Operating Partnership I, L.P., Phillips Edison & Company, Inc., the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent** 10.14 Amended and Restated Credit Agreement among Phillips Edison Grocery Center Operating Partnership I, L.P., Phillips Edison & Company, Inc., the lenders party thereto, and Bank of America, N.A., as administrative agent, dated November 16, 2018 Form 8-K, filed November 19, 2018, Exhibit 10.1 10.15 First Amendment to Amended and Restated Credit Agreement among Phillips Edison Grocery Center Operating Partnership I, L.P., Phillips Edison & Company, Inc., the lenders party thereto and Bank of America, N.A., as administrative agent, dated September 24, 2021 Form 8-K, filed September 28, 2021, Exhibit 10.1 10.16 Credit Agreement among Phillips Edison Grocery Center Operating Partnership I, L.P., Phillips Edison & Company, Inc., the lenders party thereto, and PNC Bank, National Association as administrative agent, dated July 2, 2021 Form 8-K, filed July 2, 2021, Exhibit 10.1 10.17 Loan Agreement by and among the Borrowers and Teachers Insurance and Annuity Association of America, dated October 4, 2017 Form 10-Q, filed November 9, 2017, Exhibit 10.10 10.18 Form of Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing Form 10-Q, filed November 9, 2017, Exhibit 10.11 10.19 Phillips Edison & Company, Inc. 2020 Omnibus Incentive Plan* Schedule 14A, filed April 7, 2020, Appendix A 10.20 First Amendment to Phillips Edison & Company, Inc. 2020 Omnibus Incentive Plan * Schedule 14A, filed April 9, 2021, Appendix A 10.21 Amended and Restated 2010 Independent Director Stock Plan* Form S-11/A, filed August 11, 2010, Exhibit 10.3 10.22 Amended and Restated 2010 Long-Term Incentive Plan* Form 10-Q, filed November 9, 2017, Exhibit 10.14 10.23 Phillips Edison and Company, Inc. Amended & Restated Executive Severance and Change in Control Plan dated March 11, 2020* Form S-11/A, filed July 7, 2021, Exhibit 10.19 10.24 Equity Vesting Agreement with Devin Murphy dated October 2, 2017* Form 10-Q, filed November 9, 2017, Exhibit 10.15 10.25 Participation Agreement for Jeffrey Edison dated October 4, 2017* Form 10-Q, filed November 9, 2017, Exhibit 10.16 PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K 52 Ex. Description Reference 10.26 Participation Agreement for Devin Murphy dated October 4, 2017* Form 10-Q, filed November 9, 2017, Exhibit 10.17 10.27 Participation Agreement for Robert Myers dated October 4, 2017* Form 10-Q, filed November 9, 2017, Exhibit 10.18 10.28 Participation Agreement for Tanya Brady dated March 12, 2019* Form 10-K, filed March 13, 2019, Exhibit 10.23 10.29 Participation Agreement for John Caulfield dated August 7, 2019* Form 10-Q, filed August 12, 2019, Exhibit 10.1 10.30 2019 Performance LTIP Unit Award Agreement for Jeffrey S. Edison, dated March 12, 2019* Form 10-K, filed March 13, 2019, Exhibit 10.26 10.31 Amendment to 2019 Performance LTIP Unit Award Agreement for Jeffrey S. Edison, dated March 11, 2020* Form 10-K, filed March 12, 2020, Exhibit 10.22 10.32 2019 Performance LTIP Unit Award Agreement for Devin I. Murphy, dated March 12, 2019* Form 10-K, filed March 13, 2019, Exhibit 10.27 10.33 Amendment to 2019 Performance LTIP Unit Award Agreement for Devin I. Murphy, dated March 11, 2020* Form 10-K, filed March 12, 2020, Exhibit 10.24 10.34 Form of LTIP Listing Equity Grant* Form S-11/A, filed July 7, 2021, Exhibit 10.32 10.35 Form of LTIP Listing Equity Grant (Murphy)* Form S-11/A, filed July 7, 2021, Exhibit 10.33 10.36 Form of RSU Listing Equity Grant* Form S-11/A, filed July 7, 2021, Exhibit 10.34 10.37 Form of Restricted Stock Listing Equity Grant* Form S-11/A, filed July 7, 2021, Exhibit 10.35 21.1 Subsidiaries of the Company** 22.1 List of Issuers of Guaranteed Securities** 23.1 Consent of Deloitte & Touche LLP** 31.1 Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002** 31.2 Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002** 32.1 Certification of Principal Executive Officer pursuant to 18 U.S.C. 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002*** 32.2 Certification of Principal Financial Officer pursuant to 18 U.S.C. 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002*** 101.1 The following information from the Company’s annual report on Form 10-K for the year ended December 31, 2021, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations and Comprehensive (Loss) Income; (iii) Consolidated Statements of Equity; 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 ITEM 16. FORM 10-K SUMMARY Not applicable. PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K 53 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Financial Statements Page Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34 ) F- 2 Consolidated Balance Sheets as of December 31, 202 1 and 20 20 F- 4 Consolidated Statements of Operations and Comprehensive Income ( Loss) for the Years Ended December 31, 2021, 2020, and 2019 F- 5 Consolidated Statements of Equity for the Years Ended December 31, 202 1 , 20 20 , and 201 9 F- 6 Consolidated Statements of Cash Flows for the Years Ended December 31, 202 1 , 20 20 , and 201 9 F- 7 Notes to Consolidated Financial Statements F- 9 Schedule III - Real Estate Assets and Accumulated Depreciation * F- 34 * All schedules other than the one listed in the index have been omitted as the required information is either not applicable or the information is already presented in the consolidated financial statements or the related notes. PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Phillips Edison & Company, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Phillips Edison & Company, Inc. and subsidiaries (the “Company”) as of December 31, 2021 and 2020, the related consolidated statements of operations and comprehensive income (loss), equity, and cash flows, for each of the three years in the period ended December 31, 2021, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. 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. Allocation of Purchase Price for Investment in Real Estate Assets – Refer to Notes 2 and 4 to the financial statements . Critical Audit Matter Description During the year ended December 31, 2021, the Company acquired nine properties and five outparcels for an aggregate purchase price of $308.4 million. The Company accounted for the acquisitions as asset acquisitions. Accordingly, the purchase price paid for assets acquired and liabilities assumed was allocated, based on their relative fair values, to building and building improvements, land and land improvements, furniture, fixtures, and equipment, in-place leases, and other intangible assets and assumed liabilities. Estimates of fair values were based upon assumptions that the Company believes are similar to those used by independent appraisers and that utilize valuation assumptions such as discount rates, capitalization rates, and estimated future cash flows. Estimated future cash flows include assumptions such as market rent, vacancy and collection loss, and operating expense estimates. We identified the acquisitions as a critical audit matter because of the significant estimates management makes to determine the fair values of assets acquired and liabilities assumed. This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s assumptions. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to allocation of purchase price for investment in real estate assets included the following, among others: • For each acquisition, we obtained and evaluated the third-party purchase price allocation report, along with relevant supporting documentation, such as the executed purchase and sale agreement, in order to corroborate our understanding of the substance of the acquisition obtained through inquiry with the Company’s management, as well as assess the completeness of the assets acquired and liabilities assumed as part of the acquisition. PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-2 • We performed risk assessment procedures to evaluate the fair value estimates allocated to assets acquired and liabilities assumed compared to average historical allocations determined by the Company to identify outliers for further investigation. • With the assistance of our fair value specialists, we: ◦ Evaluated the reasonableness of the valuation methodology, costs to replace certain assets, and significant assumptions used in the cash flow models, including market rent, vacancy and collection loss, operating expense estimates, discount rate, and terminal capitalization rate. ◦ Tested the mathematical accuracy of the calculations and compared the key inputs used in the projections to external market sources. /s/ Deloitte & Touche LLP Cincinnati, Ohio February 16, 2022 We have served as the Company's auditor since 2009. PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-3 PHILLIPS EDISON & COMPANY, INC. CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2021 AND 2020 (In thousands, except per share amounts) 2021 2020 ASSETS Investment in real estate: Land and improvements $ 1,586,993 $ 1,549,362 Building and improvements 3,355,433 3,237,986 In-place lease assets 452,504 441,683 Above-market lease assets 68,736 66,106 Total investment in real estate assets 5,463,666 5,295,137 Accumulated depreciation and amortization ( 1,110,426 ) ( 941,413 ) Net investment in real estate assets 4,353,240 4,353,724 Investment in unconsolidated joint ventures 31,326 37,366 Total investment in real estate assets, net 4,384,566 4,391,090 Cash and cash equivalents 92,585 104,296 Restricted cash 22,944 27,641 Goodwill 29,066 29,066 Other assets, net 138,050 126,470 Real estate investments and other assets held for sale 1,557 — Total assets $ 4,668,768 $ 4,678,563 LIABILITIES AND EQUITY Liabilities: Debt obligations, net $ 1,891,722 $ 2,292,605 Below-market lease liabilities, net 107,526 101,746 Earn-out liability 52,436 22,000 Derivative liabilities 24,096 54,759 Deferred income 19,145 14,581 Accounts payable and other liabilities 97,229 176,943 Liabilities of real estate investments held for sale 288 — Total liabilities 2,192,442 2,662,634 Commitments and contingencies (see Note 11) — — Equity: Preferred stock, $ 0.01 par value per share, 10,000 shares authorized, zero shares issued and outstanding at December 31, 2021 and 2020 — — Common stock, $ 0.01 par value per share, 650,000 shares authorized, 19,550 shares issued and outstanding at December 31, 2021; zero shares authorized, issued, and outstanding at December 31, 2020 196 — Class B common stock, $ 0.01 par value per share, 350,000 shares authorized, 93,665 and 93,279 shares issued and outstanding at December 31, 2021 and 2020, respectively 936 2,798 Additional paid-in capital (“APIC”) 3,264,038 2,739,358 Accumulated other comprehensive loss (“AOCI”) ( 24,819 ) ( 52,306 ) Accumulated deficit ( 1,090,837 ) ( 999,491 ) Total stockholders’ equity 2,149,514 1,690,359 Noncontrolling interests 326,812 325,570 Total equity 2,476,326 2,015,929 Total liabilities and equity $ 4,668,768 $ 4,678,563 See notes to consolidated financial statements. PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-4 PHILLIPS EDISON & COMPANY, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) FOR THE YEARS ENDED DECEMBER 31, 2021, 2020, AND 2019 (In thousands, except per share amounts) 2021 2020 2019 Revenues: Rental income $ 519,495 $ 485,483 $ 522,270 Fees and management income 10,335 9,820 11,680 Other property income 3,016 2,714 2,756 Total revenues 532,846 498,017 536,706 Operating Expenses: Property operating 92,914 87,490 90,900 Real estate taxes 65,381 67,016 70,164 General and administrative 48,820 41,383 48,525 Depreciation and amortization 221,433 224,679 236,870 Impairment of real estate assets 6,754 2,423 87,393 Total operating expenses 435,302 422,991 533,852 Other: Interest expense, net ( 76,371 ) ( 85,303 ) ( 103,174 ) Gain on disposal of property, net 30,421 6,494 28,170 Other (expense) income, net ( 34,361 ) 9,245 ( 676 ) Net income (loss) 17,233 5,462 ( 72,826 ) Net (income) loss attributable to noncontrolling interests ( 2,112 ) ( 690 ) 9,294 Net income (loss) attributable to stockholders $ 15,121 $ 4,772 $ ( 63,532 ) Earnings per share of common stock: Net income (loss) per share attributable to stockholders - basic and diluted (see Note 14) $ 0.15 $ 0.05 $ ( 0.67 ) Comprehensive income (loss): Net income (loss) $ 17,233 $ 5,462 $ ( 72,826 ) Other comprehensive income (loss): Change in unrealized value on interest rate swaps 32,000 ( 33,820 ) ( 38,274 ) Comprehensive income (loss) 49,233 ( 28,358 ) ( 111,100 ) Net (income) loss attributable to noncontrolling interests ( 2,112 ) ( 690 ) 9,294 Change in unrealized value on interest rate swaps attributable to noncontrolling interests ( 4,500 ) 4,351 5,150 Reallocation of comprehensive loss upon conversion of noncontrolling interests ( 13 ) ( 2,075 ) — Comprehensive income (loss) attributable to stockholders $ 42,608 $ ( 26,772 ) $ ( 96,656 ) See notes to consolidated financial statements. PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-5 PHILLIPS EDISON & COMPANY, INC. CONSOLIDATED STATEMENTS OF EQUITY FOR THE YEARS ENDED DECEMBER 31, 2021, 2020, AND 2019 (In thousands, except per share amounts) Common Stock Class B Common Stock APIC AOCI Accumulated Deficit Total Stockholders’ Equity Noncontrolling Interests Total Equity Shares Amount Shares Amount Balance at January 1, 2019 — $ — 93,268 $ 2,798 $ 2,674,871 $ 12,362 $ ( 692,573 ) $ 1,997,458 $ 414,911 $ 2,412,369 Issuance of common stock for acquisition, net — — 1,505 45 49,891 — — 49,936 — 49,936 Dividend reinvestment plan (“DRIP”) — — 2,029 60 67,367 — — 67,427 — 67,427 Share repurchases — — ( 1,104 ) ( 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, $ 2.01 per share — — — — — — ( 191,147 ) ( 191,147 ) — ( 191,147 ) Distributions to noncontrolling interests — — — — — — — — ( 30,444 ) ( 30,444 ) Share-based compensation — — 22 1 2,051 — — 2,052 5,664 7,716 Conversion of noncontrolling interests — — 629 19 20,880 — — 20,899 ( 20,899 ) — Net loss — — — — — — ( 63,532 ) ( 63,532 ) ( 9,294 ) ( 72,826 ) Balance at December 31, 2019 — — 96,349 2,890 2,779,130 ( 20,762 ) ( 947,252 ) 1,814,006 354,788 2,168,794 DRIP — — 479 14 15,926 — — 15,940 — 15,940 Share repurchases — — ( 4,582 ) ( 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, $ 0.588 per share — — — — — — ( 57,011 ) ( 57,011 ) — ( 57,011 ) Distributions to noncontrolling interests — — — — — — — — ( 8,255 ) ( 8,255 ) Share-based compensation — — 36 2 3,708 — — 3,710 2,151 5,861 Conversion of noncontrolling interests — — 997 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 — — 93,279 2,798 2,739,358 ( 52,306 ) ( 999,491 ) 1,690,359 325,570 2,015,929 Issuance of common stock 19,550 196 — — 547,205 — — 547,401 — 547,401 Offering costs, discounts, and commissions — — — — ( 39,048 ) — — ( 39,048 ) — ( 39,048 ) DRIP — — 280 8 7,360 — — 7,368 — 7,368 Share repurchases — — ( 24 ) — ( 123 ) — — ( 123 ) — ( 123 ) Change in unrealized value on interest rate swaps — — — — — 27,500 — 27,500 4,500 32,000 Common distributions declared, $ 1.035 per share — — — — — — ( 106,467 ) ( 106,467 ) — ( 106,467 ) Distributions to noncontrolling interests — — — — — — — — ( 14,332 ) ( 14,332 ) Share-based compensation — — 102 1 6,753 — — 6,754 9,640 16,394 Conversion of noncontrolling interests — — 28 — 743 — — 743 ( 743 ) — Reallocation of operating partnership interests — — — — ( 52 ) ( 13 ) — ( 65 ) 65 — Impact of reverse stock split — — — ( 1,871 ) 1,871 — — — — — Other — — — — ( 29 ) — — ( 29 ) — ( 29 ) Net income — — — — — — 15,121 15,121 2,112 17,233 Balance at December 31, 2021 19,550 $ 196 93,665 $ 936 $ 3,264,038 $ ( 24,819 ) $ ( 1,090,837 ) $ 2,149,514 $ 326,812 $ 2,476,326 See notes to consolidated financial statements. PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-6 PHILLIPS EDISON & COMPANY, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 AND 2019 (In thousands) 2021 2020 2019 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 17,233 $ 5,462 $ ( 72,826 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization of real estate assets 217,564 218,738 231,023 Impairment of real estate assets 6,754 2,423 87,393 Depreciation and amortization of corporate assets 3,869 5,941 5,847 Net amortization of above- and below-market leases ( 3,581 ) ( 3,173 ) ( 4,185 ) Amortization of deferred financing expenses 4,416 4,975 5,060 Amortization of debt and derivative adjustments 1,846 2,444 7,514 Loss on extinguishment or modification of debt, net 1,996 4 2,238 Gain on disposal of property, net ( 30,421 ) ( 6,494 ) ( 28,170 ) Change in fair value of earn-out liability 30,436 ( 10,000 ) ( 7,500 ) Straight-line rent ( 9,427 ) ( 3,325 ) ( 9,079 ) Share-based compensation 16,394 5,861 7,716 Other impairment charges — 359 9,661 Return on investment in unconsolidated joint ventures 2,696 1,962 3,922 Other ( 883 ) 1,287 540 Changes in operating assets and liabilities: Other assets, net ( 4,498 ) ( 6,945 ) 1,271 Accounts payable and other liabilities 8,508 ( 8,943 ) ( 13,550 ) Net cash provided by operating activities 262,902 210,576 226,875 CASH FLOWS FROM INVESTING ACTIVITIES: Real estate acquisitions ( 308,358 ) ( 41,482 ) ( 71,722 ) Capital expenditures ( 75,035 ) ( 63,965 ) ( 75,492 ) Proceeds from sale of real estate, net 206,377 57,902 223,083 Investment in third parties ( 3,000 ) — — Return of investment in unconsolidated joint ventures 5,039 3,453 5,310 Investment in marketable securities ( 5,514 ) — — Acquisition of REIT III, net of cash acquired — — ( 16,996 ) Net cash (used in) provided by investing activities ( 180,491 ) ( 44,092 ) 64,183 CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from the issuance of common stock 547,401 — — Payment of offering costs ( 39,048 ) — — Repurchases of Class B stock ( 77,765 ) ( 5,267 ) ( 34,675 ) Proceeds from revolving credit facility 9,000 255,000 122,641 Payments on revolving credit facility ( 9,000 ) ( 255,000 ) ( 196,000 ) Proceeds from notes and loans payable 822,018 — 260,000 Payments on mortgages and loans payable ( 1,229,715 ) ( 64,978 ) ( 279,406 ) Distributions paid, net of DRIP ( 106,699 ) ( 49,331 ) ( 123,135 ) Distributions to noncontrolling interests ( 14,982 ) ( 9,435 ) ( 29,679 ) Other ( 29 ) ( 644 ) — Net cash used in financing activities ( 98,819 ) ( 129,655 ) ( 280,254 ) NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH ( 16,408 ) 36,829 10,804 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH: Beginning of year 131,937 95,108 84,304 End of year $ 115,529 $ 131,937 $ 95,108 RECONCILIATION TO CONSOLIDATED BALANCE SHEETS Cash and cash equivalents $ 92,585 $ 104,296 $ 17,820 Restricted cash 22,944 27,641 77,288 Cash, cash equivalents, and restricted cash at end of year $ 115,529 $ 131,937 $ 95,108 PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-7 PHILLIPS EDISON & COMPANY, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 AND 2019 (In thousands) 2021 2020 2019 SUPPLEMENTAL CASH FLOW DISCLOSURE, INCLUDING NON-CASH INVESTING AND FINANCING ACTIVITIES: Cash paid for interest $ 68,092 $ 78,521 $ 89,373 Cash paid for income taxes, net 559 947 589 Obligation for shares tendered pursuant to a tender offer — 77,642 — Right-of-use (“ROU”) assets obtained in exchange for new lease liabilities 902 561 4,772 Accrued capital expenditures 6,443 4,394 6,299 Change in distributions payable ( 7,600 ) ( 8,260 ) 585 Change in distributions payable - noncontrolling interests ( 650 ) ( 1,180 ) 765 Change in accrued share repurchase obligation — ( 2,511 ) 1,288 Distributions reinvested 7,368 15,940 67,427 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: Fair value of equity issued — — 49,936 Net settlement of related party receivables — — 2,246 Derecognition of management contracts intangible asset and related party investment — — 1,601 See notes to consolidated financial statements. PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-8 Phillips Edison & Company, Inc. Notes to Consolidated Financial Statements For the Years Ended December 31, 2021, 2020, and 2019 1. ORGANIZATION Phillips Edison & Company, Inc. (“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. We are a limited partner of the Operating Partnership, and our wholly-owned subsidiary, Phillips Edison Grocery Center OP GP I LLC, is the sole general partner of the Operating Partnership. We are a real estate investment trust (“REIT”) that invests primarily in omni-channel 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 two institutional joint ventures, in which we have 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. As of December 31, 2021, we wholly-owned 268 real estate properties. Additionally, we owned a 20 % equity interest in Necessity Retail Partners (“NRP”), a joint venture that owned one property, and a 14 % interest in GRP I, which owned 20 properties. On June 18, 2021, our stockholders approved an amendment to our charter (the “Articles of Amendment”) that effected a change of each share of our common stock outstanding at the time the amendment became effective into one share of a newly created class of Class B common stock (the “Recapitalization”). The Articles of Amendment became effective upon filing with, and acceptance by, the State Department of Assessments and Taxation of Maryland on July 2, 2021. Unless otherwise indicated, all information in this Form 10-K gives effect to the Recapitalization and references to “shares” and per share metrics refer to our common stock and Class B common stock, collectively. Our Class B common stock automatically converted into our publicly traded common stock on January 18, 2022 (see Note 12). On July 2, 2021, our board of directors (the “Board”) approved an amendment to our charter to effect a one-for-three reverse stock split. Concurrent with the reverse split, the Operating Partnership enacted a one-for-three reverse stock split of its outstanding Operating Partnership units (“OP units”). Unless otherwise indicated, the information in this Form 10-K gives effect to the reverse stock and OP unit splits (see Note 12). On July 19, 2021, we closed our underwritten initial public offering (“underwritten IPO”), through which we offered 17.0 million shares of our common stock, $ 0.01 par value per share, at an initial price to the public of $ 28.00 per share, pursuant to a registration statement filed with the U.S. Securities and Exchange Commission (“SEC”) on Form S-11 (File No. 333-255846), as amended. In connection with the underwritten IPO, the underwriters exercised a 30-day option to purchase additional shares of our common stock to cover overallotments, and, accordingly, on August 2, 2021, we settled the sale of an additional 2.6 million shares at a price of $ 28.00 per share. These shares are listed on the Nasdaq Global Select Market (“Nasdaq”) under the trading symbol “PECO”. The underwritten IPO, including the underwriters’ overallotment election, resulted in gross proceeds of $ 547.4 million. On September 20, 2021, the SEC declared effective our bond offering registration statement as filed on Form S-3 (File Nos. 333-259059 and 333-259059-01) relating to the offer, from time to time, of an unspecified number of debt securities not to exceed a maximum aggregate offering of $ 1 billion (“Bond Registration”). In October 2021, in connection with this Bond Registration, we settled $ 350 million aggregate principal amount of 2.625 % senior notes (“2021 Bond Offering”) priced at 98.692 % of the principal amount and maturing in November 2031. The notes are fully and unconditionally guaranteed by us. Following our underwritten IPO, we are presenting common stock and Class B common stock as separate classes within our consolidated balance sheets and consolidated statements of equity. Any references to “common stock” in this Form 10-K refer to our Nasdaq-listed shares sold through the underwritten IPO, whereas Class B common stock refers to the newly-created class of Class B common stock that is not listed. This applies to all historical periods presented herein. 2. 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. PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-9 Beginning in 2020, the coronavirus (“COVID-19”) pandemic caused significant disruption to our operations. The continuing economic impacts of the COVID-19 pandemic could result in increased permanent store closures, reduce the demand for leasing space in our shopping centers, and/or result in a decline in occupancy and rental revenues in our real estate portfolio. Because of the adverse economic conditions that have occurred as a result of the impacts of the COVID-19 pandemic and any remaining uncertainty related to the pandemic, it is possible that the estimates and assumptions that have been utilized in the preparation of the consolidated financial statements could change significantly. 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). The financial statements of the Operating Partnership are prepared using accounting policies consistent with our accounting policies. All intercompany balances and transactions are eliminated upon consolidation. Debt issued under the Bond Registration is issued by the Operating Partnership and fully and unconditionally guaranteed by us. At December 31, 2021, the Operating Partnership had issued and outstanding its 2.625 % senior notes. The obligations of the Operating Partnership to pay principal, premiums, if any, and interest on the 2.625 % senior notes are fully and unconditionally guaranteed by us on a senior basis. As a result of the amendments to SEC Rule 3-10 of Regulation S-X, subsidiary issuers of obligations guaranteed by the parent are not required to provide separate financial statements, provided that: (i) the subsidiary obligor is consolidated into the parent company’s consolidated financial statements, (ii) the parent guarantee is “full and unconditional”, and (iii) subject to certain exceptions as set forth below, the alternative disclosure required by Rule 13-01 of Regulation S-X is provided, which includes narrative disclosure and summarized financial information. We meet the conditions of this requirement and thus, are not presenting separate financial statements. Furthermore, as permitted under Rule 13-01(a)(4)(vi) of Regulation S-X, we have excluded the summarized financial information for the Operating Partnership because the assets, liabilities, and results of operations of the Operating Partnership are not materially different than the corresponding in our consolidated financial statements, and management believes such summarized financial information would be repetitive and would not provide incremental value to investors. Use of Estimates —The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. 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; valuations of contingent consideration; and other fair value measurement assessments required for the preparation of the consolidated financial statements. Actual results could differ from those estimates. Underwritten IPO Costs —Underwritten IPO costs are offset against underwritten IPO proceeds and included as a component of APIC on the consolidated balance sheets. Other costs and expenses incurred that were related to our underwritten IPO activities but were not directly related to our equity raise, including grants of restricted stock units (“RSUs”), were not capitalized and are included as transaction costs in Other (Expense) Income, Net on our consolidated statements of operations and comprehensive income (loss) (“consolidated statements of operations”). As of December 31, 2021, we had underwritten IPO costs of approximately $ 39.0 million, and we incurred costs and expenses related to our underwritten IPO but not directly related to our equity raise of approximately $ 4.3 million. Partially-Owned Entities —If we determine that we are an owner in a variable-interest entity (“VIE”), and we hold a controlling financial interest, then we will consolidate the entity as the primary beneficiary. For a partially-owned entity determined not to be a VIE, we analyze rights held by each partner to determine which would be the consolidating party. We will generally consolidate entities (in the absence of other factors when determining control) when we have over a 50% ownership interest in the entity. We will assess our interests in VIEs on an ongoing basis to determine whether or not we are the primary beneficiary. However, we will also evaluate who controls the entity even in circumstances in which we have greater than a 50% ownership interest. If we do not control the entity due to the lack of decision-making abilities, we will not consolidate the entity. We have determined that the Operating Partnership is considered a VIE. We are the primary beneficiary of the VIE and our partnership interest is considered a majority voting interest. As such, we have consolidated the Operating Partnership and its wholly-owned subsidiaries. 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, a Section 1031 like-kind exchange (“Section 1031 Exchange”) pursuant to the Internal Revenue Code of 1986, as amended, (the “IRC”), 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. We classify noncontrolling interests within permanent equity on our consolidated balance sheets. The amounts of consolidated net earnings attributable to us and to the noncontrolling interests are presented separately on our consolidated statements of operations. For additional information regarding noncontrolling interests, refer to Note 12. Cash and Cash Equivalents —We consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents may include cash and short-term investments. Short-term investments are stated at cost, which approximates fair value and may consist of investments in money market accounts and money market PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-10 funds. 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, 2021 and 2020, we sold three and two properties, respectively, as part of facilitating a Section 1031 Exchange that remained open at the end of the year. The net proceeds of these sales were held as restricted cash with a qualified intermediary, totaling $ 8.2 million and $ 10.3 million, respectively. 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, our real estate acquisition activity is not generally 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 2021 and 2020 met the definition of a business; therefore, we accounted for all as asset acquisitions. Real estate assets are stated at cost less accumulated depreciation. The majority of acquisition-related costs are capitalized and allocated to the various classes of assets acquired. These costs are then depreciated over the estimated useful lives associated with the assets acquired. Depreciation is computed using the straight-line method. The estimated useful lives for computing depreciation are generally not to exceed 5 - 7 years for furniture, fixtures, and equipment, 15 years for land improvements, and 30 years for buildings and building improvements. Tenant improvements are amortized over the shorter of the respective lease term or the expected useful life of the asset. 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, sales comparison approach, and replacement cost approach) 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. The fair value of tangible assets of an acquired property considers the value of the property as if it were vacant. The fair values of buildings and improvements are determined on an as-if-vacant basis. The estimated fair value of acquired in-place leases is the cost we would have incurred to lease the properties to the occupancy level of the properties at the date of acquisition. Such estimates include leasing commissions, legal costs, and other direct costs that would be incurred to lease the properties to such occupancy levels. Additionally, we evaluate the time period over which such occupancy levels would be achieved. 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 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. 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 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. In estimating carrying costs, management includes real estate taxes, insurance and other operating expenses, and estimates of lost rentals at market rates during the expected lease-up periods. We estimate the fair value of assumed loans payable based upon indications of then-current market pricing for similar types of debt with similar maturities. 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 above- and below-market debt was $ 1.1 million and $ 2.9 million as of December 31, 2021 and 2020, 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. In such an event, a comparison will be made of the projected operating cash flows of each property on an undiscounted basis to the carrying amount of such property. 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 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. We evaluate goodwill for impairment when an event occurs or circumstances change that indicate the carrying value may not be recoverable, or at least annually. Our annual testing date is November 30. The goodwill impairment evaluation is completed using either a qualitative or quantitative approach. Under a qualitative approach, the impairment review for goodwill consists of an assessment of whether it is more-likely-than-not that the reporting unit’s fair value is less than its carrying value, including goodwill. If a qualitative approach indicates it is more likely-than-not that the estimated carrying value of a reporting unit (including goodwill) exceeds its fair value, or if we choose to bypass the qualitative approach for any reporting unit, we perform the quantitative approach described below. PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-11 When we perform a quantitative test of goodwill for impairment, we compare the carrying value of a reporting unit with its fair value. If the fair value of the reporting unit exceeds its carrying amount, we do not consider goodwill to be impaired and no further analysis would be required. If the fair value is determined to be less than its carrying value, the amount of goodwill impairment equals the amount by which the reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. If impairment indicators arise with respect to non-real estate intangible assets with finite useful lives, we evaluate impairment by comparing the carrying amount of the asset to the estimated future undiscounted cash flows expected to be generated by the asset. If estimated future undiscounted cash flows are less than the carrying amount of the asset, then we estimate the fair value of the asset and compare the estimated fair value to the intangible asset’s carrying value. We recognize the shortfall from carrying value as an impairment loss in the current period. Estimates of fair value used in our evaluation of goodwill and intangible assets are based upon discounted future cash flow projections, relevant competitor multiples, or other acceptable valuation techniques. These techniques are based, in turn, upon all available evidence including level three inputs (see fair value measurement policy below), such as revenue and expense growth rates, estimates of future cash flows, capitalization rates, discount rates, general economic conditions and trends, or other available market data. Our ability to accurately predict future operating results and cash flows and to estimate and determine fair values impacts the timing and recognition of impairments. While we believe our assumptions are reasonable, changes in these assumptions may have a material impact on our financial results. Based on the results of our analysis, we concluded that goodwill was not impaired for the years ended December 31, 2021 and 2020. Held for Sale Assets —We consider assets to be held for sale when management believes that a sale is probable within a year. This generally occurs when a sales contract is executed with no substantive contingencies, and the prospective buyer has significant funds at risk. Assets that are classified as held for sale are recorded at the lower of their carrying amount or fair value less cost to sell. For additional information regarding assets held for sale, refer to Note 4. Deferred Financing Expenses —Deferred financing expenses are capitalized and amortized on a straight-line basis over the term of the related financing arrangement, which approximates the effective interest method. Deferred financing expenses related to our term loan facilities and mortgages are in Debt Obligations, Net, while deferred financing expenses related to our revolving credit facility are in Other Assets, Net, on our consolidated balance sheets. The accumulated amortization of deferred financing expenses in Debt Obligations, Net was $ 12.5 million and $ 13.8 million as of December 31, 2021 and 2020, respectively. 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. Fair value is defined by ASC 820 as the price that would be received at sale for an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Depending on the nature of the asset or liability, various techniques and assumptions can be used to estimate the fair value. Assets and liabilities are measured using inputs from three levels of the fair value hierarchy, as follows: Level 1—Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access at the measurement date. An active market is defined as a market in which transactions for the assets or liabilities occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2—Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active (markets with few transactions), inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data correlation or other means (market corroborated inputs). Level 3—Unobservable inputs, only used to the extent that observable inputs are not available, reflect our assumptions about the pricing of an asset or liability. Considerable judgment is necessary to develop estimated fair values of financial and non-financial assets and liabilities. 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 dark 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 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. 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. These investments were initially recorded at cost and are subsequently adjusted for contributions made to and distributions received from the joint ventures. Earnings or losses from our investments are recognized in accordance with the terms of the applicable PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-12 joint venture agreements, generally through a pro rata allocation. 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. When such an excess occurs, the current-period distribution up to this excess is considered a return of investment and classified as cash flows from investing activities. On a periodic basis, management assesses whether there are indicators, including the operating performance of the underlying real estate and general market conditions, that the value of our investments in our unconsolidated joint ventures may be impaired. An investment’s value is impaired only if management’s estimate of the fair value of the investment is less than its carrying value and such difference is deemed to be other-than-temporary. To the extent impairment has occurred, the loss is measured as the excess of the carrying amount of the investment over its estimated fair value. Management’s estimates of fair value are based upon a discounted cash flow model for each specific investment that includes all estimated cash inflows and outflows over a specified holding period. 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. 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. 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 (Expense) Income, Net on our consolidated statements of operations. When a property is sold, the remaining basis difference related to that property is written off. Our investment in NRP differs from our proportionate share of the underlying net assets due to an initial basis difference of $ 6.2 million, of which $ 0.2 million remains unamortized as of December 31, 2021. For additional information regarding our unconsolidated joint ventures, refer to Note 6. Leases —We are party to a number of lease agreements, both as a lessor as well as a lessee of various types of assets. Lessor —The majority of our revenue is lease revenue derived from our real estate assets, which is accounted for under ASC Topic 842, Leases (“ASC 842”). We adopted the accounting guidance contained within ASC 842 on January 1, 2019, the effective date of the standard for public companies. We record lease and lease-related revenue as Rental Income on the consolidated statements of operations, in accordance with ASC 842. We enter into leases primarily as a lessor as part of our real estate operations, and leases represent the majority of our revenue. We lease space in our properties generally in the form of operating leases. Our leases typically provide for reimbursements from tenants for common area maintenance, insurance, and real estate tax expenses. Common area maintenance reimbursements can be fixed, with revenue earned on a straight-line basis over the term of the lease, or variable, with revenue recognized as services are performed for which we will be reimbursed. The lease agreements frequently contain fixed-price renewal options to extend the terms of leases and other terms and conditions as negotiated. In calculating the term of our leases, we consider whether these options are reasonably certain to be exercised. Our determination involves a combination of contract-, asset-, entity-, and market-based factors and involves considerable judgment. We retain substantially all of the risks and benefits of ownership of the real estate assets leased to tenants. Currently, our tenants have no options to purchase at the end of the lease term, although in a small number of leases, a tenant, usually the anchor tenant, may have the right of first refusal to purchase one of our properties if we elect to sell the center. We evaluate whether a lease is an operating, sales-type, or direct financing lease using the criteria established in ASC 842. Leases will be considered either sales-type or direct financing leases if any of the following criteria are met: • if the lease transfers ownership of the underlying asset to the lessee by the end of the term; • if the lease grants the lessee an option to purchase the underlying asset that is reasonably certain to be exercised; • if the lease term is for the major part of the remaining economic life of the underlying asset; or • if the present value of the sum of the lease payments and any residual value guaranteed by the lessee equals or exceeds substantially all of the fair value of the underlying asset. We utilize substantial judgment in determining the fair value of the leased asset, the economic life of the leased asset, and the relevant borrowing rate in performing our lease classification analysis. If none of the criteria listed above are met, the lease is classified as an operating lease. Currently, all of our leases are classified as operating leases, and we expect that the majority, if not all, of our leases will continue to be classified as operating leases based upon our typical lease terms. We commence revenue recognition on our leases based on a number of factors. In most cases, revenue recognition under a lease begins when the lessee takes possession of or controls the physical use of the leased asset. The determination of when revenue recognition under a lease begins, as well as the nature of the leased asset, is dependent upon our assessment of who is the owner, for accounting purposes, of any related tenant improvements. If we are the owner, for accounting purposes, of the tenant improvements, then the leased asset is the finished space, and revenue recognition begins when the lessee takes possession of the finished space, typically when the improvements are substantially complete. If we conclude that we are not the owner, for accounting purposes, of the tenant improvements (i.e., the lessee is the owner), then the leased asset is the unimproved space and any tenant allowances funded under the lease are treated as lease incentives, which reduce revenue recognized over the term of the lease. In these circumstances, we begin revenue recognition when the lessee takes possession of the unimproved space to construct their own improvements. We consider a number of different factors in evaluating whether the lessee or we are the owner of the tenant improvements for accounting purposes. These factors include: PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-13 • whether the lease stipulates how and on what a tenant improvement allowance may be spent; • whether the tenant or landlord retains legal title to the improvements; • the uniqueness of the improvements; • the expected economic life of the tenant improvements relative to the length of the lease; and • who constructs or directs the construction of the improvements. The majority of our leases provide for fixed rental escalations, and we recognize rental income on a straight-line basis over the term of each lease in such instances. The difference between rental income earned on a straight-line basis and the cash rent due under the provisions of the lease agreements is recorded as deferred rent receivable and is included as a component of Other Assets, Net. Due to the impact of the straight-line adjustments, rental income generally will be greater than the cash collected in the early years and will be less than the cash collected in the later years of a lease. Reimbursements from tenants for recoverable real estate taxes and operating expenses that are fixed per the terms of the applicable lease agreements are recorded on a straight-line basis, as described above. The majority of our lease agreements with tenants, however, provide for tenant reimbursements that are variable depending upon the applicable expenses incurred. These reimbursements are accrued as revenue in the period in which the applicable expenses are incurred. We make certain assumptions and judgments in estimating the reimbursements at the end of each reporting period. We do not expect the actual results to materially differ from the estimated reimbursements. Both fixed and variable tenant reimbursements are recorded as Rental Income in the consolidated statements of operations. In certain cases, the lease agreement may stipulate that a tenant make a direct payment for real estate taxes to the relevant taxing authorities. In these cases, beginning on January 1, 2019, we no longer record any revenue or expense related to these tenant expenditures. 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 record such taxes on a net basis in our consolidated statements of operations. Additionally, we record an immaterial amount of variable revenue in the form of percentage rental income. Our policy for percentage rental income is to defer recognition of contingent rental income until the specified target (i.e., breakpoint) that triggers the contingent rental income is achieved. In some instances, as part of our negotiations, we may offer lease incentives to our tenants. 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, 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 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. Under ASC 842, the aforementioned adjustments as well as any reserve for disputed charges are recorded as a reduction of Rental Income on the consolidated statements of operations. As of December 31, 2021 and 2020, the reserve in accounts receivable for uncollectible amounts was $ 3.5 million and $ 8.9 million, respectively. Receivables on our consolidated balance sheets exclude amounts removed related to tenants considered to be non-creditworthy, which were $ 13.9 million and $ 27.2 million as of December 31, 2021 and 2020, respectively. 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. Ground leases typically contain one or more options to renew for additional terms and may include options that grant us, as the lessee, the right to terminate the lease, without penalty, in advance of the full lease term. Our office space leases generally have no renewal options. Office equipment leases typically have options to extend the term for a year or less, but contain minimal termination rights. In calculating the term of our leases, we consider whether we are reasonably certain to exercise renewal and/or termination options. 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 non-lease components which have been deemed not material and are not separated from the leasing component. Beginning January 1, 2019, we evaluate whether a lease is a finance or operating lease using the criteria established in ASC 842. The criteria we use to determine whether a lease is a finance lease are the same as those we use to determine whether a lease is sales-type lease as a lessor. If none of the finance lease criteria is met, we classify the lease as an operating lease. We record ROU assets and liabilities in the consolidated balance sheets based upon the terms and conditions of the applicable lease agreement. We use discount rates to calculate the present value of lease payments when determining lease classification and measuring our lease liability. We use the rate implicit in the lease as our discount rate unless that rate cannot be readily determined, in which case we consider various factors, including our incremental secured borrowing rate, in selecting an PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-14 appropriate discount rate. This requires the application of judgment, and we consider the length of the lease as well as the length and securitization of our outstanding debt agreements in selecting an appropriate rate. Refer to Note 3 for further detail. Revenue Recognition —In addition to our lease-related revenue, we also earn fee revenues by providing services to the Managed Funds. These fees are accounted for within the scope of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), and are recorded as Fees and Management Income on the consolidated statements of operations. We provide services to the Managed Funds, all of which are considered related parties. These services primarily include asset acquisition and disposition services, asset management, operating and leasing of properties, construction management, and other general and administrative responsibilities. These services are currently provided under various combinations of advisory agreements, property management agreements, and other service agreements (the “Management Agreements”). 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. 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. Therefore, when we determine the transaction price for the contracts, we are required to constrain our estimate to an amount that is not probable of significant revenue reversal. For most of these fee types, such as acquisition fees and leasing commissions, compensation only occurs if a transaction takes place and the amount of compensation is dependent upon the terms of the transaction. For our property and asset management fees, due to the large number and broad range of possible consideration amounts, we calculate the amount earned at the end of each month. In addition to the fees listed above, certain of our Management Agreements include the potential for additional revenues if certain market conditions are in place or certain events take place. 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. 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 derecognize 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 Section 1031 Exchange by purchasing another property within a specified time period. For additional information regarding gain on sale of assets, refer to Note 4. Share-Based Compensation —We account for equity awards in accordance with ASC Topic 718, Compensation—Stock Compensation , which requires that all share based payments to employees and non-employee directors be recognized in the consolidated statements of operations over the requisite service period based on their fair value. Prior to our underwritten IPO, fair value was based on the estimated value per share (“EVPS”) of our stock. Subsequent to our underwritten IPO, fair value is based on the Nasdaq closing stock price at the date of the grant. In connection with a 2017 acquisition, we assumed employee awards of phantom stock units. For these share-based awards that were settled in cash and recorded as a liability, the fair value and associated expense was adjusted when the published price of our stock changed. The phantom stock units were fully vested as of December 31, 2020. Share-based compensation expense for all awards is included in General and Administrative and Property Operating in our consolidated statements of operations, excluding the expense related to RSUs awarded in connection with our underwritten IPO, which is included in Other (Expense) Income, Net. For more information about our stock based compensation program, see Note 13. Repurchase of Common Stock —Prior to its termination in August 2021, we offered a share repurchase program (“SRP”) which allowed stockholders who participated to have their shares repurchased subject to approval and certain limitations and restrictions. Shares repurchased pursuant to our SRP were immediately retired upon purchase. Repurchased common stock was reflected as a reduction of stockholders’ equity. Our accounting policy related to share repurchases was to reduce common stock based on the par value of the shares and to reduce capital surplus for the excess of the repurchase price over the par value. Since the inception of the SRP in August 2010, we have had an accumulated deficit balance; therefore, the excess over the par value has been applied to additional paid-in capital. PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-15 Segments —Our principal business is the ownership and operation of community and neighborhood shopping centers. We do not distinguish our principal business, or group our operations, by geography or size for purposes of measuring performance. Accordingly, we have presented our results as a single reportable segment. Income Taxes —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. We intend to continue to adhere to these requirements and to maintain our REIT status. As a REIT, we are entitled to a deduction for some or all of the distributions we pay to our stockholders. Accordingly, we are generally subject to U.S. 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. federal income taxes and may not be able to qualify as a REIT until the fifth subsequent taxable year. Notwithstanding our qualification as a REIT, we may be subject to certain state and local taxes on our income or properties. In addition, our consolidated financial statements include the operations of wholly-owned subsidiaries that have jointly elected to be treated as taxable REIT subsidiary (“TRS”) entities and are subject to U.S. federal, state, and local income taxes at regular corporate tax rates. As a REIT, we may also be subject to certain U.S. 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, 2021, 2020, and 2019 and we retain a full valuation allowance for our net deferred tax asset. All income tax amounts are included in Other (Expense) Income, Net on our consolidated statements of operations. For more information regarding our income taxes, see Note 10. 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”) 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), Derivatives and Hedging (Topic 815) The amendments in this update clarify the interaction between the accounting for equity securities, equity method investments, and certain derivative instruments. This ASU, among other things, clarifies that an entity should consider observable transactions that require a company to either apply or discontinue the equity method of accounting under Topic 323 for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. January 1, 2021 The adoption of this standard did not have a material impact on our consolidated financial statements. ASU 2021-01 Reference Rate Reform (Topic 848): Scope The amendments in this update clarify that certain optional expedients and exceptions in Topic 848, Reference Rate Reform, for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. January 1, 2021 The adoption of this standard did not have a material impact on our consolidated financial statements. 3. LEASES 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 for the years ended December 31, 2021, 2020, and 2019 (in thousands): 2021 2020 2019 Rental income related to fixed lease payments (1) $ 382,667 $ 380,439 $ 385,948 Rental income related to variable lease payments (1)(2) 119,077 125,256 127,790 Straight-line rent amortization (3) 9,005 3,258 9,003 Amortization of lease assets 3,539 3,138 4,138 Lease buyout income 3,485 1,237 1,166 Adjustments for collectibility (4) 1,722 ( 27,845 ) ( 5,775 ) Total rental income $ 519,495 $ 485,483 $ 522,270 (1) Includes rental income related to lease payments before assessing for collectibility. (2) Variable payments are primarily related to tenant recovery income. (3) For the years ended December 31, 2021, 2020, and 2019, includes unfavorable revenue adjustments to straight-line rent for tenants considered non-creditworthy of $ 0.5 million, $ 3.7 million, and $ 0.6 million, respectively. (4) Includes general reserves as well as adjustments for tenants not considered creditworthy for which we are recording revenue on a cash basis, per ASC 842. PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-16 For the year ended December 31, 2021, we had net favorable changes of $ 4.7 million to general reserves. For the years ended 2020 and 2019, we had net unfavorable changes of $ 3.5 million and $ 2.4 million, respectively, to general reserves. Additionally, for the years ended December 31, 2021, 2020, and 2019, we had net unfavorable adjustments of $ 3.0 million, $ 24.4 million, and $ 3.3 million, respectively, related to monthly revenue for tenants that we deemed non-creditworthy and for which we were recording revenue on a cash basis. Approximate future fixed contractual lease payments to be received under non-cancelable operating leases in effect as of December 31, 2021, 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): Year Amount 2022 $ 393,971 2023 356,827 2024 303,809 2025 248,058 2026 183,695 Thereafter 456,161 Total $ 1,942,521 In response to the COVID-19 pandemic, we executed payment plans with a small subset of our tenants. As of December 31, 2021, we had $ 3.2 million of outstanding payment plans with our tenants and we expect to receive remaining amounts owed to us from these plans over a weighted-average term of approximately nine months. No single tenant comprised 10% or more of our aggregate annualized base rent (“ABR”) as of December 31, 2021. As of December 31, 2021, our wholly-owned real estate investments in Florida and California represented 12.2 % and 10.7 % of our ABR, respectively. 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, 2021 and 2020 (in thousands): Balance Sheet Information Balance Sheet Location 2021 2020 ROU assets, net - operating leases Investment in Real Estate $ 3,946 $ 3,867 ROU assets, net - operating and finance leases Other Assets, Net 1,615 1,438 Operating lease liability Accounts Payable and Other Liabilities 5,311 5,731 Finance lease liability Debt Obligations, Net 766 164 As of December 31, 2021, the weighted-average remaining lease term was approximately three years for finance leases and 23 years for operating leases. The weighted-average discount rate was 3.5 % for finance leases and 4.3 % for operating leases. 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, 2021 (in thousands): Undiscounted Year Operating Finance 2022 $ 823 $ 237 2023 672 295 2024 546 279 2025 317 — 2026 254 — Thereafter 5,678 — Total undiscounted cash flows from leases 8,290 811 Total lease liabilities recorded at present value 5,311 766 Difference between undiscounted cash flows and present value of lease liabilities $ 2,979 $ 45 PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-17 4. REAL ESTATE ACTIVITY Property Dispositions —The following table summarizes our real estate disposition activity for the years ended December 31, 2021, 2020, and 2019 (dollars in thousands): 2021 2020 2019 Number of properties sold (1) 24 7 21 Number of outparcels sold (2)(3) 4 1 1 Proceeds from sale of real estate, net $ 206,377 $ 57,902 $ 223,083 Gain on sale of property, net (4) 34,309 10,117 30,039 (1) We retained one outparcel related to property sales during each of the years ended December 31, 2021 and 2020; therefore, the sales did not result in reductions in our total property count. (2) During the year ended December 31, 2021, one of our outparcel sales included the only remaining portion of a property we previously owned; therefore, the sale resulted in a reduction in our total property count. (3) In addition to the four outparcels sold during the year ended December 31, 2021, a tenant at one of our properties exercised a bargain purchase option to acquire a parcel of land that we previously owned. This generated minimal proceeds for us. (4) The gain on sale of property, 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. Subsequent to December 31, 2021, we sold one property for $ 1.4 million. Acquisitions —The following table summarizes our real estate acquisition activity for the years ended December 31, 2021, 2020, and 2019 (dollars in thousands): 2021 2020 2019 Number of properties acquired (1) 9 2 2 Number of outparcels acquired (2) 5 2 2 Total price of acquisitions $ 308,358 $ 41,482 $ 71,722 (1) Excludes three properties acquired in the merger with Phillips Edison Grocery Center REIT III, Inc. (“REIT III”) in 2019. (2) Outparcels acquired are adjacent to shopping centers that we own. Subsequent to December 31, 2021, we acquired three properties for $ 100.4 million. The aggregate purchase price of the assets acquired during the years ended December 31, 2021 and 2020 were allocated as follows (in thousands): 2021 2020 ASSETS Land and improvements $ 89,569 $ 15,400 Building and improvements 208,515 24,479 In-place leases assets 27,949 3,360 Above-market lease assets 4,507 709 Total assets 330,540 43,948 LIABILITIES Below-market lease liabilities 22,182 2,466 Total liabilities 22,182 2,466 Net assets acquired $ 308,358 $ 41,482 The weighted-average amortization periods for in-place, above-market, and below-market lease intangibles acquired during the years ended December 31, 2021 and 2020 are as follows (in years): 2021 2020 Acquired in-place leases 8 10 Acquired above-market leases 6 4 Acquired below-market leases 15 21 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 6 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 Class B common PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-18 stock with a value of $ 49.9 million; (ii) $ 21.1 million in cash used to pay down REIT III debt and cash paid to REIT III stockholders; (iii) the partial derecognition of a management contract intangible asset in the amount of $ 1.1 million; (iv) transaction costs of $ 0.8 million that were capitalized as part of this asset acquisition; and (v) the settlement of net related party balances of $ 0.5 million. Prior to the close of the merger with REIT III, all of REIT III’s real properties were managed and leased by us, under the terms of various management agreements. As we had contractual relationships with REIT III, 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 REIT III, 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. 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. Property Held for Sale —As of December 31, 2021, there was one property held for sale. As of December 31, 2020, no properties were classified as held for sale. A property classified as held for sale is under contract to sell, with no substantive contingencies, and the prospective buyer has significant funds at risk. Subsequent to December 31, 2021, we sold our one held for sale property. A summary of assets and liabilities for the property held for sale as of December 31, 2021 is below (in thousands): 2021 ASSETS Total investment in real estate assets, net $ 1,554 Other assets, net 3 Total assets $ 1,557 LIABILITIES Below-market lease liabilities, net $ 284 Accounts payable and other liabilities 4 Total liabilities $ 288 5. INTANGIBLE ASSETS AND LIABILITIES Goodwill —During the years ended December 31, 2021, 2020, and 2019, we recorded no impairments to goodwill. Other Intangible Assets and Liabilities — Other intangible assets and liabilities consisted of the following as of December 31, 2021 and 2020, excluding amounts related to other intangible assets and liabilities classified as held for sale (in thousands): 2021 2020 Gross Amount Accumulated Amortization Gross Amount Accumulated Amortization Corporate intangible assets $ 6,706 $ ( 5,284 ) $ 6,804 $ ( 4,922 ) In-place leases 452,504 ( 229,969 ) 441,683 ( 204,698 ) Above-market leases 68,736 ( 46,335 ) 66,106 ( 41,125 ) Below-market lease liabilities ( 162,077 ) 54,551 ( 150,579 ) 48,834 Summarized below is the amortization recorded on other intangible assets and liabilities for the years ended December 31, 2021, 2020, and 2019 (in thousands): 2021 2020 2019 Corporate intangible assets $ 372 $ 2,478 $ 2,735 In-place leases 34,221 36,000 42,902 Above-market leases 6,319 6,890 7,502 Below-market lease liabilities ( 9,900 ) ( 10,063 ) ( 11,687 ) During the year ended December 31, 2019, we recorded an impairment of $ 7.8 million related to the management contracts intangible asset; please refer to Note 16 . 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 had a remaining useful life of one year , which was fully amortized in 2020. PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-19 Estimated future amortization of the respective other intangible assets and liabilities as of December 31, 2021, 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): Corporate Intangible Assets In-Place Leases Above-Market Leases Below-Market Lease Liabilities 2022 $ 365 $ 29,866 $ 5,250 $ ( 9,886 ) 2023 365 25,816 3,870 ( 9,114 ) 2024 328 22,339 2,586 ( 8,506 ) 2025 — 18,970 1,522 ( 7,838 ) 2026 — 16,812 942 ( 7,502 ) 6. INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES Grocery Retail Partners I and II —In November 2018, through our direct and indirect subsidiaries, we entered into a joint venture with Northwestern Mutual. We acquired a 15 % ownership interest in the new joint venture, GRP I, and Northwestern Mutual acquired the remaining 85 % ownership interest. The joint venture is set to expire ten years after the date of the 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 —As of December 31, 2021, we owned 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. We are in the process of disposing and liquidating the final asset of this joint venture as a result of the planned expiration. As of December 31, 2021, we recognized income of $ 0.7 million for NRP’s achievement of certain performance targets, which was recorded to Fees and Management Income on our consolidated statements of operations. PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-20 The following table summarizes balances on the consolidated balance sheets related to our unconsolidated joint ventures as of December 31, 2021 and 2020 (dollars in thousands): 2021 2020 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 % 1 $ 2,700 $ 219 20 % 5 $ 6,304 $ 1,381 GRP I 14 % 20 28,626 — 14 % 20 31,062 — The following table summarizes the activity on the consolidated statements of operations related to our unconsolidated joint ventures as of December 31, 2021, 2020, and 2019 (in thousands): 2021 2020 2019 Distributions to PECO After Formation or Assumption NRP $ 5,137 $ 4,192 $ 7,167 GRP I 2,598 1,047 2,025 GRP II N/A 177 40 Gain (Loss) from Unconsolidated Joint Ventures NRP $ 2,695 $ 2,119 $ 3,989 GRP I 162 ( 309 ) ( 72 ) GRP II N/A 42 6 Amortization and Write-Off of Basis Differences NRP $ 1,162 $ 1,808 $ 2,837 GRP II (1) N/A 879 17 (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. 7. OTHER ASSETS, NET The following is a summary of Other Assets, Net outstanding as of December 31, 2021 and 2020, excluding amounts related to assets classified as held for sale (in thousands): 2021 2020 Other assets, net: Deferred leasing commissions and costs $ 44,968 $ 41,664 Deferred financing expenses (1) 4,898 13,971 Office equipment, including capital lease assets, and other 24,823 21,578 Corporate intangible assets 6,706 6,804 Total depreciable and amortizable assets 81,395 84,017 Accumulated depreciation and amortization ( 41,236 ) ( 45,975 ) Net depreciable and amortizable assets 40,159 38,042 Accounts receivable, net (2) 36,762 46,893 Accounts receivable - affiliates 711 543 Deferred rent receivable, net (3) 40,212 32,298 Prepaid expenses and other 11,655 8,694 Investment in third parties 3,000 — Investment in marketable securities 5,551 — Total other assets, net $ 138,050 $ 126,470 (1) Deferred financing expenses per the above table are related to our revolving credit facility, and as such we have elected to classify them as an asset rather than as a contra-liability. PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-21 (2) Net of $ 3.5 million and $ 8.9 million of general reserves for uncollectible amounts as of December 31, 2021 and 2020, respectively. Receivables that were removed for tenants considered to be non-creditworthy were $ 9.2 million and $ 22.8 million as of December 31, 2021 and 2020, respectively. (3) Net of $ 4.7 million and $ 4.4 million of receivables removed as of December 31, 2021 and 2020, respectively, related to straight-line rent for tenants previously or currently considered to be non-creditworthy. 8. DEBT OBLIGATIONS The following is a summary of the outstanding principal balances and interest rates, which includes the effect of derivative financial instruments, on our debt obligations as of December 31, 2021 and 2020 (dollars in thousands): Interest Rate (1) 2021 2020 Revolving credit facility LIBOR + 1.1 % $ — $ — Term loans (2) 1.3 % - 4.2 % 955,000 1,622,500 Senior unsecured notes due 2031 2.6 % 350,000 — Secured loan facilities 3.4 % - 3.5 % 395,000 395,000 Mortgages 3.5 % - 6.4 % 213,316 290,022 Finance lease liability 766 164 Discount on notes payable ( 7,680 ) — Assumed market debt adjustments, net ( 1,530 ) ( 1,543 ) Deferred financing expenses, net ( 13,150 ) ( 13,538 ) Total $ 1,891,722 $ 2,292,605 Weighted-average interest rate (3) 3.3 % 3.1 % (1) Interest rates are as of December 31, 2021. (2) Our term loans carry an interest rate of LIBOR plus a spread. 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. (3) Includes the effects of derivative financial instruments (see Notes 9 and 16). 2021 Debt Activity —In July 2021, we entered into a new $ 980 million credit facility comprised of a $ 500 million senior unsecured revolving credit facility and two $ 240 million senior unsecured term loan tranches (the “Refinancing”). In connection with the Refinancing, we paid off a $ 472.5 million term loan due in November 2025. The revolving credit facility will mature in January 2026, and the two senior unsecured term loan tranches will mature in November 2025 and July 2026, respectively. Additionally, we used proceeds from the underwritten IPO to retire a $ 375 million term loan that was set to mature in April 2022. In August 2021, we paid down $ 150 million of our $ 300 million term loan that was set to mature in November 2023. In October 2021, in connection with our Bond Registration, we settled the 2021 Bond Offering priced at 98.692 % of the principal amount and maturing in November 2031. This offering resulted in gross proceeds of $ 345.4 million. The notes are fully and unconditionally guaranteed by us. In October 2021, net proceeds from the bond settlement were used, in part, to pay down the remaining $ 150 million outstanding balance of our $ 300 million term loan debt that was set to mature in November 2023, as described above. During 2021, we executed early repayments of $ 55.2 million in mortgage debt. 2020 Debt Activity —In January 2020, we made the final $ 30 million payment on our term loan maturing in 2021. 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. Revolving Credit Facility —We have a $ 500 million senior unsecured revolving credit facility with availability of $ 489.3 million, which is net of current letters of credit, as of December 31, 2021. The maturity date is January 2026 and we pay a facility fee of 0.25 % on the unused portion of the facility. Term Loans —We have five unsecured term loans with maturities ranging from 2024 to 2026. Our term loans have interest rates of LIBOR plus interest rate spreads based on our investment grade rating. We have utilized interest rate swaps to fix the rates on the majority of our term loans, with $ 25.0 million in term loans not fixed through such swaps. As of December 31, 2021 and 2020, the weighted-average interest rate, including the impact of swaps, on our term loans was 3.2 % and 2.7 %, 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. The interest rates on our secured debt are fixed. As of December 31, 2021 and 2020, our weighted average interest rate for our secured debt was 3.9 % and 4.0 %, respectively. PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-22 Debt Allocation — The allocation of total debt between fixed-rate and variable-rate as well as between secured and unsecured, excluding market debt adjustments, discount on senior notes, and deferred financing expenses, net, as of December 31, 2021 and 2020, is summarized below (in thousands): 2021 2020 As to interest rate: Fixed-rate debt $ 1,889,082 $ 1,727,186 Variable-rate debt 25,000 580,500 Total $ 1,914,082 $ 2,307,686 As to collateralization: Unsecured debt $ 1,305,000 $ 1,622,500 Secured debt 609,082 685,186 Total $ 1,914,082 $ 2,307,686 Maturity Schedule — Below is our maturity schedule with the respective principal payment obligations, excluding finance lease liabilities, market debt adjustments, discount on senior notes, and deferred financing expenses, net (in thousands): 2022 2023 2024 2025 2026 Thereafter Total Unsecured debt (1) $ — $ — $ 475,000 $ 240,000 $ 240,000 $ 350,000 $ 1,305,000 Secured debt 60,746 66,657 28,126 27,873 1,908 423,006 608,316 Total $ 60,746 $ 66,657 $ 503,126 $ 267,873 $ 241,908 $ 773,006 $ 1,913,316 (1) Includes our term loans and senior notes. 9. DERIVATIVES AND HEDGING ACTIVITIES Risk Management Objective of Using Derivatives —We are exposed to certain risks arising from both our business operations and economic conditions. We principally manage our exposure to a wide variety of business and operational risks through management of our core business activities. We manage economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of our debt funding, and through the use of derivative financial instruments. Specifically, we enter into interest rate swaps to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. Our derivative financial instruments are used to manage differences in the amount, timing, and duration of our known or expected cash receipts and our known or expected cash payments principally related to our investments and borrowings. Cash Flow Hedges of Interest Rate Risk —Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for our making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The changes in the fair value of derivatives designated, and that qualify, as cash flow hedges are recorded in AOCI and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the years ended December 31, 2021 and 2020, such derivatives were used to hedge the variable cash flows associated with certain variable-rate debt. 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 $ 14.0 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, 2021 and 2020 (notional amounts in thousands): 2021 2020 Count 5 6 Notional amount $ 930,000 $ 1,042,000 Fixed LIBOR 1.3 % - 2.9 % 1.3 % - 2.9 % Maturity date 2022 - 2025 2021 - 2025 Weighted-average term (in years) 1.9 2.8 PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-23 The table below details the nature of the gain and loss recognized on interest rate derivatives designated as cash flow hedges in the consolidated statements of operations for the years ended December 31, 2021, 2020, and 2019 (in thousands): 2021 2020 2019 Amount of gain (loss) recognized in Other Comprehensive Income (Loss) $ 12,501 $ ( 50,552 ) $ ( 35,865 ) Amount of loss reclassified from AOCI into Interest Expense, Net 19,499 16,732 2,409 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. As of December 31, 2021, the fair value of our derivatives in a net liability position, which included accrued interest but excluded any adjustment for nonperformance risk related to these agreements, was approximately $ 24.1 million. As of December 31, 2021, we had not posted any collateral related to these agreements and were not in breach of any agreement provisions. 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 $ 24.1 million. 10. INCOME TAXES 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. We intend to continue to adhere to these requirements and to maintain our REIT status. As a REIT, we are entitled to a deduction for some or all of the distributions we pay to our stockholders. Accordingly, we are generally subject to U.S. 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. federal income taxes and may not be able to qualify as a REIT until the fifth taxable year following the year of disqualification. Notwithstanding our qualification as a REIT, we may be subject to certain state and local taxes on our income or properties. In addition, our consolidated financial statements include the operations of certain wholly-owned entities that have jointly elected to be treated as TRS entities and are subject to U.S. federal, state, and local incomes taxes at regular corporate tax rates. As a REIT, we may also be subject to certain U.S. federal excise taxes if we engage in certain types of transactions. 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, 2021 and 2020. The statute of limitations for the federal income tax returns remain open for the 2018 through 2020 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, 2021 and 2020. 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. Deferred tax assets and liabilities are measured using enacted income tax rates in effect for the year in which these temporary differences are expected to reverse. Deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on consideration of available evidence, including future reversal of existing taxable temporary differences, the magnitude and timing of future projected taxable income, and tax planning strategies. We believe, based on available evidence, it is not more likely than not that our net deferred tax assets will be realized in future periods and, therefore, have recorded a valuation allowance equal to the net deferred tax asset balance. PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-24 The following is a summary of our deferred tax assets and liabilities as of December 31, 2021 and 2020 (in thousands): 2021 2020 Deferred tax assets: Accrued compensation $ 3,875 $ 3,250 Accrued expenses and reserves 124 89 Net operating loss (“NOL”) carryforward 2,404 2,787 Other 309 306 Gross deferred tax asset 6,712 6,432 Less: valuation allowance ( 3,050 ) ( 3,183 ) Total deferred tax asset 3,662 3,249 Deferred tax liabilities: Real estate assets and other capitalized assets ( 3,594 ) ( 3,236 ) Other ( 68 ) ( 13 ) Total deferred tax liabilities ( 3,662 ) ( 3,249 ) Net deferred tax asset $ — $ — Our deferred tax assets and liabilities result from the activities of our TRS entities. The TRS entities have a federal NOL carryforward of approximately $ 10.4 million. The federal NOL carryforward can be carried forward indefinitely. As of December 31, 2021, the TRS entities have state NOL carryforwards of approximately $ 4.7 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 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, 2021, 2020, and 2019 (in thousands): 2021 2020 2019 Net income (loss) attributable to stockholders $ 15,121 $ 4,772 $ ( 63,532 ) Net (income) loss from TRS ( 533 ) ( 702 ) 5,346 Net income (loss) attributable to REIT operations 14,588 4,070 ( 58,186 ) Book/tax differences 69,943 63,846 153,047 REIT taxable income 84,531 67,916 94,861 Less: Capital gains ( 19,765 ) — ( 16,353 ) REIT taxable income subject to 90% dividend requirement $ 64,766 $ 67,916 $ 78,508 Total gross distributions to our stockholders exceeded 100% of REIT taxable income for the years ended December 31, 2021 and 2019. Total gross distributions to our stockholders for the year ended December 31, 2020 were approximately $ 64.7 million. As permitted under the IRC, we utilized approximately $ 3.2 million of our January 2021 distribution to offset our 2020 REIT taxable income. The tax characterization of our distributions declared for the years ended December 31, 2021, 2020, and 2019 was as follows: 2021 2020 2019 Common stock: Ordinary dividends 62.8 % 100.0 % 38.0 % Non-dividend distributions 18.1 % — % 53.4 % Capital gain distributions (1) 19.1 % — % 8.6 % Total distributions per share of common stock 100.0 % 100.0 % 100.0 % (1) Pursuant to U.S. Treasury Regulation §1.1061-6(c) and §1061 of the IRC, the One Year Amounts and Three Year Amounts disclosures are both zero with respect to direct and indirect holders of “applicable partnership interests” for us and our subsidiary REIT, Phillips Edison Institutional REIT, LLC. PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-25 11. COMMITMENTS AND CONTINGENCIES Litigation —We are involved in various claims and litigation matters arising in the ordinary course of business, some of which involve claims for damages. Many of these matters are covered by insurance, although they may nevertheless be subject to deductibles or retentions. Although the ultimate liability for these matters cannot be determined, based upon information currently available, we believe the resolution of such claims and litigation will not have a material adverse effect on our consolidated financial statements. Environmental Matters —In connection with the ownership and operation of real estate, we may potentially be liable for costs and damages related to environmental matters. In addition, we may own or acquire certain properties that are subject to environmental remediation. Depending on the nature of the environmental matter, the seller of the property, a tenant of the property, and/or another third party may be responsible for environmental remediation costs related to a property. Additionally, in connection with the purchase of certain properties, the respective sellers and/or tenants may agree to indemnify us against future remediation costs. We also carry environmental liability insurance on our properties that provides limited coverage for any remediation liability and/or pollution liability for third-party bodily injury and/or property damage claims for which we may be liable. 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 —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. We capitalize Silver Rock in accordance with applicable regulatory requirements. Silver Rock established annual premiums based on the past loss experience of the insured properties. An independent third party was engaged to perform an actuarial estimate of projected future claims, related deductibles, and projected future expenses necessary to fund associated risk management programs. Premiums paid to Silver Rock may be adjusted based on this estimate. Premiums paid to Silver Rock may be reimbursed by tenants pursuant to specific lease terms. As of December 31, 2021, we had four letters of credit outstanding totaling approximately $ 9.0 million to provide security for our obligations under Silver Rock’s insurance and reinsurance contracts. The following is a summary of the activity 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, 2021 and 2020 (in thousands): 2021 2020 Beginning balances $ 7,386 $ 6,021 Incurred related to: Current year 2,676 1,943 Prior years 742 2,249 Total incurred 3,418 4,192 Paid related to: Current year 57 36 Prior years 2,141 2,791 Total paid 2,198 2,827 Liabilities for unpaid losses as of December 31 $ 8,606 $ 7,386 PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-26 12. EQUITY 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. Class B Common Stock —On June 18, 2021, our stockholders approved Articles of Amendment that effected the Recapitalization, wherein each share of our common stock outstanding at the time the amendment became effective was converted into one share of a newly created class of Class B common stock. Our Class B common stock was identical to our common stock, except that it was not listed on a national securities exchange. Per the terms of the Recapitalization, on January 18, 2022, each share of our Class B common stock automatically converted into one share of our listed common stock. Reverse Stock Split —On July 2, 2021, we effected a one-for-three reverse stock split. Concurrent with the reverse split, the Operating Partnership enacted a one-for-three reverse split of its outstanding OP units. Neither the number of authorized shares nor the par value of the common stock were impacted. As a result of the reverse split, every three shares of our common stock or OP units were automatically combined and converted into one issued and outstanding share of common stock or OP unit rounded to the nearest 1/100th share. The reverse stock split impacted all common stock and OP units proportionately and had no impact on any stockholder’s percentage ownership of common stock. In connection with the reverse stock split, the number of shares of common stock and OP units underlying the outstanding share-based awards was also proportionately reduced. All references to shares of common stock, number of OP units, and per share data for all periods presented in our consolidated financial statements and notes have been adjusted to reflect the reverse split on a retroactive basis. Underwritten IPO —On July 19, 2021, we completed an underwritten IPO and issued 17.0 million shares of common stock at an offering price to the public of $ 28.00 per share. We used a portion of the net proceeds to reduce our leverage and used the remaining amount to fund external growth with property acquisitions and for other general corporate uses. As part of the underwritten IPO, underwriters were granted an option exercisable within 30 days from July 14, 2021 to purchase up to an additional 2.6 million shares of common stock at the underwritten IPO price, less underwriting discounts and commissions. On July 29, 2021, the underwriters exercised their option. The underwritten IPO, including the underwriters’ overallotment election, resulted in gross proceeds of $ 547.4 million. At-the-Market Offering (“ATM”) —On February 10, 2022, we and the Operating Partnership entered into a sales agreement relating to the potential sale of shares of common stock pursuant to a continuous offering program. In accordance with the terms of the sales agreement, we may offer and sell shares of our common stock having an aggregate offering price of up to $ 250 million from time to time through our sales agents, or, if applicable, as forward sellers. Distributions — Distributions paid to stockholders and OP unit holders of record subsequent to December 31, 2021 were as follows (dollars in thousands, excluding per share amounts): Month Date of Record Monthly Distribution Rate Date Distribution Paid Net Cash Distribution December 12/15/2021 $ 0.09 1/3/2022 $ 10,189 January 1/19/2022 0.09 2/1/2022 10,207 On February 9, 2022, our Board authorized 2022 distributions for February, March, and April of $ 0.09 per share to the stockholders of record at the close of business on February 15, 2022, March 15, 2022, and April 15, 2022, respectively. OP unit holders will receive distributions at the same rate as common stockholders. The timing and amount of distributions is determined by our Board and is influenced in part by our intention to comply with REIT requirements of the IRC. Dividend Reinvestment Plan and Share Repurchase Program —On August 4, 2021, as a result of our underwritten IPO, our Board approved the termination of the DRIP and the SRP. 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 1.5 million shares of our outstanding Class B common stock at a price of $ 17.25 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 5.8 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 4.5 million shares of common stock for a total value of $ 77.6 million, which includes the issuance of 0.9 million common shares in redemption of 0.9 million OP units converted at the time of repurchase. The $ 77.6 million due to stockholders who tendered their shares was not yet paid as of December 31, 2020, and was recorded as Accounts Payable and Other Liabilities on our consolidated balance sheet. The amount was subsequently paid on January 5, 2021. Convertible Noncontrolling Interests —As of December 31, 2021 and 2020, we had approximately 13.4 million and 13.3 million outstanding OP units, respectively. Additionally, certain of our outstanding restricted share and performance share awards will result in the issuance of OP units upon vesting in future periods. These are included in the outstanding unvested award totals disclosed in Note 13. Under the terms of the Fourth Amended and Restated Agreement of Limited Partnership, OP unit holders may elect to cause the Operating Partnership to redeem their OP units. The Operating Partnership controls the form of the redemption, and may elect to redeem OP units for shares of our common stock, provided that the OP units have been outstanding for at least one PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-27 year, or for cash. As the form of redemption for OP units is within our control, the OP units outstanding as of December 31, 2021 and 2020 are classified as Noncontrolling Interests within permanent equity on our consolidated balance sheets. The table below is a summary of our OP unit activity for the years ended December 31, 2021 and 2020 (dollars and shares in thousands): 2021 2020 OP units converted into shares of common stock (1) 28 997 Distributions paid on OP units (2) $ 14,332 $ 8,255 (1) Prior to our Recapitalization on June 18, 2021, OP units were converted to shares of common stock at a 1 :1 ratio. From the Recapitalization through January 18, 2022, OP units were converted into shares of our Class B common stock at a 1 :1 ratio. On January 18, 2022, each share of our Class B common stock automatically converted into one share of our listed common stock, and going forward, OP units will be converted into shares of our common stock on a 1 :1 ratio. (2) Distributions paid on OP units are included in Distributions to Noncontrolling Interests on the consolidated statements of equity. Of the OP units converted in 2020, 0.9 million were converted and repurchased as part of the Tender Offer. 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. As the consolidated partnership ceased a majority of its operations in 2019, there was no impact to our results in 2020 or 2021. Estimated Value per Share —Prior to our underwritten IPO, on April 29, 2021, our Board increased the EVPS of our common stock to $ 31.65 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, 2021. We engaged a third-party valuation firm to provide a calculation of the range in EVPS of our common stock as of March 31, 2021, which reflected certain balance sheet assets and liabilities as of that date. Previously, our EVPS was $ 26.25 , 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. 13. COMPENSATION Employee Long Term Incentive Plan— We issue stock awards that vest based upon the completion of a service period (“service-based awards”) under our 2020 Omnibus Incentive Plan (“2020 Incentive Plan”), which became effective in June 2020. The 2020 Incentive Plan replaced the Amended and Restated 2010 Long-Term Incentive Plan (the “2010 LTIP”), which expired in August 2020. Awards to employees 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. 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. Expense amounts are recorded in General and Administrative or Property Operating on our consolidated statements of operations. Prior to our underwritten IPO, the awards were valued according to the EVPS for our common stock at the date of grant. Subsequent to our underwritten IPO, awards are valued according to the Nasdaq closing stock price at the date of the grant. Holders of unvested service-based awards are entitled to dividend and distribution rights, but are not entitled to voting rights. Additionally, we issue performance-based awards that 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 awards earned cannot exceed two times the target number. Half of the earned performance-based awards vest when earned at the end of the three-year performance period and half of the earned performance-based awards vest one year later, subject to continued employment. In addition to the applicable performance metrics, a net asset value (“NAV”) modifier will be applied to the calculation of earned performance-based awards if the NAV per share at the end of the performance period is less than the value at issuance. Subsequent to our underwritten IPO, the NAV per share will be measured by the Nasdaq closing stock price at the end of the performance period. Specifically, to the extent performance above the target level is achieved at the end of the performance period, yet our NAV per share at the end of the performance period is less than the value at issuance, 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 target level) may become earned, and thereafter vested, if our NAV per share exceeds the NAV per share at the beginning of the performance period for 20 consecutive trading days up to five years following the completion of the performance period, assuming continued employment on such date. The performance period for the performance-based awards granted in 2018 ended on December 31, 2020. Based on our performance through December 31, 2020, these awards 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 growth becomes positive on or prior to December 31, 2025. While still subject to approval by the Compensation Committee of the Board (the “Committee”), we believe the performance-based awards granted in 2019 have been earned at maximum based on our performance through December 31, 2021, but our NAV per share growth for that same performance period was negative. Based on the performance of common stock closing prices throughout the fourth quarter of 2021, we believe it is more than probable that we will achieve positive NAV per share growth for 20 consecutive trading days prior to December 31, 2025. As such, we recognized approximately $ 4.2 million of expense associated with achieving the maximum award for both of these grants during the year ended December 31, 2021, of which $ 3.2 million was recorded in General and Administrative and $ 1.0 million was recorded in Property Operating on our consolidated statements of operations. In March 2019, the Committee approved a new form of awards under the 2010 LTIP for performance-based long term incentive units (“Performance LTIP Units”) and made one-time grants of Performance LTIP Units to certain of our executives. PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-28 Any amounts earned under the Performance LTIP Unit award agreements will be issued in the form of LTIP Units, which represent OP units that are structured as a profits interest in the Operating Partnership. Dividends will accrue on the Performance LTIP Units until the measurement date, subject to a quarterly distribution of 10 % of the regular quarterly distributions. Underwritten IPO Grants —In connection with our underwritten IPO, we issued a total of 0.5 million RSUs, inclusive of 0.3 million OP units, and restricted stock awards in the form of time-based stock compensation awards with expenses included within Other (Expense) Income, Net on our consolidated statement of operations. Included in the restricted stock awards were 24,000 RSUs granted to our independent directors. The shares have a grant price of $ 28.00 per share and, with the exception of one individual whose award is subject to accelerated vesting provisions, 50 % of the shares will vest after 18 months and the remaining 50 % will vest after 36 months. 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, 2021 and 2020, there were approximately 38,000 and 50,000 outstanding unvested awards granted to independent directors, respectively, in connection with the 2010 Independent Director Stock Plan. 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 January 1, 2019 269 66 332 $ 31.80 Granted 157 764 — 33.15 Vested ( 65 ) — ( 256 ) 31.08 Forfeited ( 34 ) ( 3 ) ( 16 ) 32.31 Nonvested at December 31, 2019 327 827 60 33.00 Granted 146 86 — 32.82 Vested ( 101 ) — ( 58 ) 32.13 Forfeited ( 23 ) ( 8 ) ( 2 ) 33.00 Nonvested at December 31, 2020 349 905 — 33.06 Granted 663 131 — 27.55 Vested ( 151 ) ( 62 ) — 32.52 Forfeited ( 24 ) — — 29.35 Nonvested at December 31, 2021 837 974 — $ 30.71 (1) The maximum number of award units that could be issued under all outstanding grants was 2.0 million as of December 31, 2021. The number of award units expected to vest was 1.3 million as of December 31, 2021. (2) Prior to our underwritten IPO, we engaged an independent third-party valuation advisory consulting firm to estimate the EVPS of our common stock on an annual basis. The weighted-average grant-date fair values calculated herein reflect the EVPS estimates prior to our underwritten IPO and Nasdaq closing stock prices subsequent to our IPO. The expense for all stock-based awards during the years ended December 31, 2021, 2020, and 2019 was $ 16.8 million, $ 6.3 million, and $ 10.1 million, respectively. We had $ 21.1 million of unrecognized compensation costs related to these awards that we expect to recognize over a weighted average period of approximately two years . The fair value at the vesting date for stock-based awards that vested during the year ended December 31, 2021 was $ 6.4 million. 401(k) Plan —We sponsor a 401(k) plan that provides benefits for qualified employees. Our match of the employee contributions is discretionary and has a five-year vesting schedule. The cash contributions to the plan for the years ended December 31, 2021, 2020, and 2019 were approximately $ 1.0 million, $ 0.9 million, and $ 0.9 million, respectively. All employees who have attained the age of 21 are eligible to participate starting the first day of the month following their date of hire. Employees are vested immediately with respect to employee contributions. 14. EARNINGS PER SHARE Basic earnings per share (“EPS”) is computed by dividing Net Income (Loss) Attributable to Stockholders by the weighted-average number of shares of common stock outstanding for the period. Diluted EPS reflects the potential dilution that could occur from share equivalent activity. PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-29 The following table provides a reconciliation of the numerator and denominator of the earnings per share calculations for the years ended December 31, 2021, 2020, and 2019 (in thousands, except per share amounts): 2021 2020 2019 Numerator: Net income (loss) attributable to stockholders - basic $ 15,121 $ 4,772 $ ( 63,532 ) Net income (loss) attributable to convertible OP units (1) 2,112 690 ( 9,583 ) Net income (loss) - diluted $ 17,233 $ 5,462 $ ( 73,115 ) Denominator: Weighted-average shares - basic (2) 102,403 96,760 94,636 OP units (1)(3) 14,071 14,255 14,403 Dilutive restricted stock awards 198 141 — Adjusted weighted-average shares - diluted 116,672 111,156 109,039 Earnings per common share: Basic and diluted income (loss) per share $ 0.15 $ 0.05 $ ( 0.67 ) (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. OP units are allocated income on a consistent basis with the common stockholder and therefore have no dilutive impact to earnings per share of common stock. (2) Includes 93.6 million weighted-average shares of Class B common stock and 8.8 million weighted-average shares of common stock during the year ended December 31, 2021. (3) Includes 0.7 million weighted-average shares of OP units awarded as a result of the earn-out (see Note 16). Approximately 0.3 million time-based and 0.8 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, 2021 and 2020, and thus are included in the calculation above. 15. RELATED PARTY TRANSACTIONS 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 Fees and Management Income. The revenue includes the fees and reimbursements earned by us from the Managed Funds during the years ended December 31, 2021, 2020, and 2019, 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): 2021 2020 2019 Recurring fees (1) $ 5,020 $ 4,801 $ 6,362 Transactional revenue and reimbursements (2) 2,166 2,633 3,329 Insurance premiums (3) 3,149 2,386 1,989 Total fees and management income $ 10,335 $ 9,820 $ 11,680 (1) Recurring fees include asset management fees and property management fees. (2) Transactional revenue includes items such as leasing commissions, construction management fees, and acquisition fees. (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 (Expense) Income, 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. PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-30 Tax Protection Agreement —Through our Operating Partnership, we are currently party to a tax protection agreement (the “2017 TPA”) with certain partners that contributed property to our Operating Partnership on October 4, 2017, among them certain of our executive officers, including Jeffrey S. Edison, our Chairman and Chief Executive Officer, under which the Operating Partnership has agreed to indemnify such partners for tax liabilities that could accrue to them personally related to our potential disposition of certain properties within our portfolio. The 2017 TPA will expire on October 4, 2027. On July 19, 2021, we entered into an additional tax protection agreement (the “2021 TPA”) with certain of our executive officers, including Mr. Edison. The 2021 TPA carries a term of four years and will become effective upon the expiration of the 2017 TPA. As of December 31, 2021, the potential “make-whole amount” on the estimated aggregate amount of built-in gain subject to protection under the agreements is approximately $ 146.8 million. The protection provided under the terms of the 2021 TPA will expire in 2031. We have not recorded any liability related to the 2017 TPA or the 2021 TPA on our consolidated balance sheets for any periods presented, nor recognized any expense since the inception of the 2017 TPA, owing to the fact that any potential liability under the agreements is controlled by us and we believe we will either (i) continue to own and operate the protected properties or (ii) be able to successfully complete Section 1031 Exchanges (unless there is a change in applicable law) or complete other tax-efficient transactions to avoid any liability under the agreements. 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, 2021, the outstanding loan balance related to our NRP joint venture was $ 15.3 million. As of December 31, 2021, we were also the limited guarantor of a $ 175 million mortgage loan secured by GRP I properties. Our guaranty for both the NRP and GRP I debt is limited to being the non-recourse carveout guarantor and the environmental indemnitor. Further, in both cases, we are also party to an agreement with our institutional joint venture partners in which any potential liability under such guaranties will be apportioned between us and our applicable joint venture partner based on our respective ownership percentages in the applicable joint venture. We have no liability recorded on our consolidated balance sheets for either guaranty as of December 31, 2021 and 2020. Additionally, during 2021, we made a cash investment of $ 3.0 million into a third-party company in exchange for preferred shares of their stock. As part of the investment agreement, the third-party company committed to enter into leases at two of our properties. As of December 31, 2021, we had entered into two leases under the terms of the investment agreement, both of which carry a term of ten years , over which period we expect to receive contractual rents of $ 2.6 million in total for both 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 we use for business purposes in the course of our operations. We paid approximately $ 0.8 million, $ 1.0 million, and $ 1.0 million to PECO Air for use of its airplane per the terms of our contractual agreements for the years ended December 31, 2021, 2020, and 2019, respectively. 16. FAIR VALUE MEASUREMENTS The following describes the methods we use to estimate the fair value of our financial and nonfinancial assets and liabilities: Cash and Cash Equivalents, Restricted Cash, Accounts Receivable, and Accounts Payable —We consider the carrying values of these financial instruments to approximate fair value because of the short period of time between origination of the instruments and their expected realization. Real Estate Investments —The purchase prices of the investment properties, including related lease intangible assets and liabilities, are allocated at estimated fair value based on Level 3 inputs, such as discount rates, capitalization rates, comparable sales, replacement costs, income and expense growth rates, and current market rents and allowances as determined by management. Debt Obligations —We estimate the fair value of our term loans, secured portfolio of loans, and mortgages by discounting the future cash flows of each instrument at rates currently offered for similar debt instruments of comparable maturities by our lenders using Level 3 inputs. The discount rates used approximate current lending rates for loans or groups of loans with similar maturities and credit quality, assuming the debt is outstanding through maturity and considering the debt’s collateral (if applicable). We have utilized market information, as available, or present value techniques to estimate the amounts required to be disclosed. We estimate the fair value of our senior unsecured notes by using quoted prices in active markets, which are considered Level 1 inputs. The following is a summary of borrowings as of December 31, 2021 and 2020 (in thousands): 2021 2020 Recorded Principal Balance (1) Fair Value Recorded Principal Balance (1) Fair Value Term loans $ 943,127 $ 955,919 $ 1,610,204 $ 1,621,902 Senior unsecured notes due 2031 342,320 344,099 — — Secured portfolio loan facilities 391,612 394,356 391,131 404,715 Mortgages (2) 214,663 221,741 291,270 303,647 Total $ 1,891,722 $ 1,916,115 $ 2,292,605 $ 2,330,264 (1) As of December 31, 2021 and 2020, respectively, recorded principal balances include; (i) net deferred financing fees of $ 13.2 million and $ 13.5 million; (ii) assumed market debt adjustments of $ 1.5 million and $ 1.5 million; and (iii) notes payable discounts of $ 7.7 million and $ 0 . (2) Our finance lease liability is included in the mortgages line item, as presented. PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-31 Recurring and Nonrecurring Fair Value Measurements —Our marketable securities, earn-out liability, and interest rate swaps are measured and recognized at fair value on a recurring basis, while certain real estate assets and liabilities are measured and recognized at fair value as needed. Fair value measurements that occurred as of and during the years ended December 31, 2021 and 2020 were as follows (in thousands): 2021 2020 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Recurring Marketable securities $ 5,551 $ — $ — $ — $ — $ — Derivative liabilities (1) — ( 24,096 ) — — ( 54,759 ) — Earn-out liability — ( 52,436 ) — — — ( 22,000 ) Nonrecurring Impaired real estate assets, net (2) $ — $ 24,000 $ — $ — $ 19,350 $ — Impaired corporate ROU asset, net — — — — 537 — (1) We record derivative liabilities in Derivative Liabilities 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. Marketable Securities —We estimate the fair value of marketable securities using Level 1 inputs. We utilize unadjusted quoted prices for identical assets in active markets that we have the ability to access. Derivative Instruments —As of December 31, 2021 and 2020, we had interest rate swaps that fixed LIBOR on portions of our unsecured term loan facilities. All interest rate swap agreements are measured at fair value on a recurring basis. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). 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. 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. Although we determined that the significant inputs used to value our derivatives fell within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our counterparties and our own credit risk utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by us and our counterparties. However, as of December 31, 2021 and 2020, we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and have determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives. 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 —As part of our acquisition of Phillips Edison Limited Partnership (“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 was eligible to earn a minimum of 1.0 million and a maximum of approximately 1.7 million OP units as contingent consideration based on the timing and valuation of a liquidity event for PECO. Certain of these performance targets are tied to the post-underwritten IPO trading price of our common stock. The number of OP units awarded vary based on the highest volume weighted average price per share of our common stock over any 30 consecutive trading day period during the 180 days following the underwritten IPO commencement (the “liquidity event price per share”): • if the liquidity event price per share is greater than or equal to $ 33.60 , PELP will receive approximately 1.7 million OP units; • if the liquidity event price per share is less than $ 33.60 but greater than or equal to $ 26.40 , PELP will receive a number of OP units equal to (i) 1.0 million plus (ii) the product of (A) approximately 0.7 million and (B) the quotient obtained by dividing the liquidity event price per share in excess of $ 26.40 by $ 7.20 ; or • if the liquidity event price per share is less than $ 26.40 , PELP will receive 1.0 million OP units. Prior to the second quarter of 2021, we estimated the fair value of this liability on a quarterly basis using the Monte Carlo method. Following our underwritten IPO, the only remaining variable for calculating final amounts to be paid under the earn-out agreement was the liquidity event price per share. Therefore, as of December 31, 2021, we calculated the fair value of the liability related to the earn-out using the number of units earned (approximately 1.6 million) multiplied by the closing market price per share of $ 33.04 . We recognized expense of $ 30.4 million and income of $ 10.0 million related to changes in the fair value of the earn-out liability for the years ended December 31, 2021 and 2020, respectively. The increase in the fair value of the liability as of December 31, 2021 was attributable to the commencement of our underwritten IPO as well as improved market conditions in PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-32 2021. The change in fair value for each year has been recognized in Other (Expense) Income, Net in the consolidated statements of operations. In January 2022, at the end of the 180 -day period following our underwritten IPO commencement, we finalized the fair value of the earn-out liability and issued approximately 1.6 million OP units in full settlement of the liability with a value of $ 54.2 million. Real Estate Asset Impairment —Our real estate assets are measured and recognized at fair value, less costs to sell held-for-sale properties, on a nonrecurring basis dependent upon when we determine an impairment has occurred. During the years ended December 31, 2021, 2020, and 2019, we impaired assets that were under contract 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, 2021, 2020, and 2019 (in thousands): 2021 2020 2019 Impairment of real estate assets $ 6,754 $ 2,423 $ 87,393 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 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 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 (Expense) Income, Net on the consolidated statements of operations in the second quarter of 2019. 17. SUBSEQUENT EVENTS In preparing the audited consolidated financial statements, we have evaluated subsequent events through the filing of this report on Form 10-K for recognition and/or disclosure purposes. Based on this evaluation, we have determined that there were no events that have occurred that require recognition or disclosure, other than certain events and transactions that have been disclosed elsewhere in these consolidated financial statements. PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-33 SCHEDULE III—REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION December 31, 2021 (in thousands) Initial Cost Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at End of Period (3) 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 $ 896 $ 3,491 $ 5,996 $ 9,487 $ 3,011 1988 11/23/2011 Snow View Plaza Parma, OH — 4,104 6,432 1,104 4,326 7,314 11,640 4,100 1981 11/23/2011 St. Charles Plaza Davenport, FL — 4,090 4,399 778 4,397 4,870 9,267 3,078 2007 11/23/2011 Burwood Village Center Glen Burnie, MD — 5,448 10,167 633 5,748 10,500 16,248 5,420 1971 11/23/2011 Centerpoint Easley, SC — 2,404 4,361 1,459 3,007 5,217 8,224 2,677 2002 11/23/2011 Southampton Village Tyrone, GA — 2,670 5,176 1,067 2,901 6,012 8,913 2,937 2003 11/23/2011 Cureton Town Center Waxhaw, NC — 6,569 6,197 2,542 5,932 9,376 15,308 4,608 2006 12/29/2011 Tramway Crossing Sanford, NC — 2,016 3,071 921 2,515 3,493 6,008 2,146 1996 2/23/2012 Village At Glynn Place Brunswick, GA — 5,202 6,095 1,480 5,423 7,354 12,777 4,165 1992 4/27/2012 Meadowthorpe Manor Shoppes Lexington, KY — 4,093 4,185 632 4,562 4,348 8,910 2,476 1989/2008 5/9/2012 Brentwood Commons Bensenville, IL — 6,105 8,024 2,407 6,323 10,213 16,536 4,448 1981/2001 7/5/2012 Sidney Towne Center Sidney, OH — 1,429 3,802 1,508 2,025 4,714 6,739 2,836 1981/2007 8/2/2012 Broadway Plaza Tucson, AZ — 4,979 7,169 2,310 6,010 8,448 14,458 4,233 1982/1995 8/13/2012 Baker Hill Glen Ellyn, IL — 7,068 13,738 10,177 7,686 23,297 30,983 8,702 1998 9/6/2012 New Prague Commons New Prague, MN — 3,248 6,604 2,810 3,415 9,247 12,662 4,259 2008 10/12/2012 Heron Creek Towne Center North Port, FL — 4,062 4,082 589 4,312 4,421 8,733 2,408 2001 12/17/2012 Quartz Hill Towne Centre Lancaster, CA 11,740 6,352 13,529 1,196 6,906 14,171 21,077 5,670 1991/2012 12/27/2012 Village One Plaza Modesto, CA 17,700 5,166 18,752 675 5,255 19,338 24,593 7,115 2007 12/28/2012 Hilfiker Shopping Center Salem, OR — 2,879 4,750 96 2,947 4,778 7,725 1,937 1984/2011 12/28/2012 Butler Creek Acworth, GA — 3,925 6,129 3,185 4,327 8,912 13,239 3,350 1989 1/15/2013 Fairview Oaks Ellenwood, GA 6,430 3,563 5,266 928 3,925 5,832 9,757 2,579 1996 1/15/2013 Grassland Crossing Alpharetta, GA — 3,680 5,791 1,101 3,936 6,636 10,572 2,882 1996 1/15/2013 Hamilton Ridge Buford, GA — 4,772 7,168 882 5,041 7,781 12,822 3,778 2002 1/15/2013 Mableton Crossing Mableton, GA — 4,426 6,413 1,446 4,930 7,355 12,285 3,472 1997 1/15/2013 Shops at Westridge McDonough, GA — 2,788 3,901 1,903 2,835 5,757 8,592 2,287 2006 1/15/2013 Fairlawn Town Centre Fairlawn, OH 20,000 10,398 29,005 3,937 11,636 31,704 43,340 14,142 1962/1996 1/30/2013 Macland Pointe Marietta, GA — 3,493 5,364 1,189 3,905 6,141 10,046 2,982 1992 2/13/2013 Kleinwood Center Spring, TX — 11,478 18,954 1,276 11,775 19,933 31,708 8,707 2003 3/21/2013 Murray Landing Columbia, SC 6,750 3,221 6,856 1,716 3,597 8,196 11,793 3,340 2003 3/21/2013 Vineyard Shopping Center Tallahassee, FL — 2,761 4,221 569 3,034 4,517 7,551 2,149 2002 3/21/2013 Lutz Lake Crossing Lutz, FL — 2,636 6,600 945 2,965 7,216 10,181 2,741 2002 4/4/2013 Publix at Seven Hills Spring Hill, FL — 2,171 5,642 1,133 2,507 6,439 8,946 2,504 1991/2006 4/4/2013 Hartville Centre Hartville, OH — 2,069 3,691 1,817 2,470 5,107 7,577 2,299 1988/2008 4/23/2013 Sunset Shopping Center Corvallis, OR 15,410 7,933 14,939 1,118 8,041 15,949 23,990 6,205 1998 5/31/2013 Savage Town Square Savage, MN 9,000 4,106 9,409 379 4,403 9,491 13,894 4,012 2003 6/19/2013 Glenwood Crossings Kenosha, WI — 1,872 9,914 1,100 2,337 10,549 12,886 3,770 1992 6/27/2013 PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-34 SCHEDULE III—REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION December 31, 2021 (in thousands) Initial Cost Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at End of Period (3) 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 Shiloh Square Shopping Center Kennesaw, GA — 4,685 8,729 2,193 4,840 10,767 15,607 3,890 1996/2003 6/27/2013 Pavilions at San Mateo Albuquerque, NM — 6,470 18,726 1,858 6,786 20,268 27,054 7,470 1997 6/27/2013 Boronda Plaza Salinas, CA 14,750 9,027 11,870 777 9,342 12,332 21,674 4,734 2003/2006 7/3/2013 Westwoods Shopping Center Arvada, CO — 3,706 11,115 897 4,299 11,419 15,718 4,462 2003 8/8/2013 Paradise Crossing Lithia Springs, GA — 2,204 6,064 987 2,501 6,754 9,255 2,554 2000 8/13/2013 Contra Loma Plaza Antioch, CA — 3,243 3,926 1,703 3,811 5,061 8,872 1,807 1989 8/19/2013 South Oaks Plaza St. Louis, MO — 1,938 6,634 563 2,121 7,014 9,135 2,571 1969/1987 8/21/2013 Yorktown Centre Millcreek Township, PA — 3,736 15,396 2,510 4,287 17,355 21,642 7,370 1989/2013 8/30/2013 Dyer Town Center Dyer, IN 8,725 6,017 10,214 810 6,460 10,581 17,041 4,305 2004/2005 9/4/2013 East Burnside Plaza Portland, OR — 2,484 5,422 133 2,560 5,479 8,039 1,681 1955/1999 9/12/2013 Red Maple Village Tracy, CA 20,584 9,250 19,466 506 9,408 19,814 29,222 6,312 2009 9/18/2013 Crystal Beach Plaza Palm Harbor, FL 6,360 2,334 7,918 707 2,433 8,526 10,959 3,155 2010 9/25/2013 CitiCentre Plaza Carroll, IA — 770 2,530 469 1,052 2,717 3,769 1,076 1991/1995 10/2/2013 Duck Creek Plaza Bettendorf, IA — 4,612 13,007 1,668 5,218 14,069 19,287 5,057 2005/2006 10/8/2013 Cahill Plaza Inver Grove Heights, MN — 2,587 5,114 892 2,973 5,620 8,593 2,213 1995 10/9/2013 College Plaza Normal, IL — 4,460 17,772 3,884 5,134 20,982 26,116 5,760 1983/1999 10/22/2013 Courthouse Marketplace Virginia Beach, VA 11,650 6,130 8,061 1,239 6,398 9,032 15,430 3,460 2005 10/25/2013 Hastings Marketplace Hastings, MN — 3,980 10,045 1,051 4,434 10,642 15,076 4,078 2002 11/6/2013 Coquina Plaza Southwest Ranches, FL — 9,458 11,770 1,165 9,686 12,707 22,393 4,317 1998 11/7/2013 Shoppes of Paradise Lakes Miami, FL — 5,811 6,020 1,048 6,116 6,763 12,879 2,581 1999 11/7/2013 Collington Plaza Bowie, MD — 12,207 15,142 1,094 12,499 15,944 28,443 5,601 1996 11/21/2013 Golden Town Center Golden, CO 14,711 7,065 10,166 1,705 7,478 11,458 18,936 4,465 1993/2003 11/22/2013 Northstar Marketplace Ramsey, MN — 2,810 9,204 1,102 2,932 10,184 13,116 3,767 2004 11/27/2013 Bear Creek Plaza Petoskey, MI — 5,677 17,611 1,724 5,891 19,121 25,012 7,076 1998/2009 12/18/2013 East Side Square Springfield, OH — 394 963 127 412 1,072 1,484 425 2007 12/18/2013 Flag City Station Findlay, OH — 4,685 9,630 3,159 4,919 12,555 17,474 4,081 1992 12/18/2013 Town & Country Shopping Center Noblesville, IN 13,480 7,361 16,269 465 7,460 16,635 24,095 6,390 1998 12/18/2013 Sulphur Grove Huber Heights, OH — 553 2,142 753 611 2,837 3,448 811 2004 12/18/2013 Southgate Shopping Center Des Moines, IA — 2,434 8,358 1,223 2,906 9,109 12,015 $ 3,583 1972/2013 12/20/2013 Sterling Pointe Center Lincoln, CA 24,073 7,039 20,822 1,625 7,625 21,861 29,486 6,955 2004 12/20/2013 Arcadia Plaza Phoenix, AZ — 5,774 6,904 2,889 6,004 9,563 15,567 3,298 1980 12/30/2013 Stop & Shop Plaza Enfield, CT — 8,892 15,028 1,328 9,410 15,838 25,248 5,875 1988/1998 12/30/2013 PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-35 SCHEDULE III—REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION December 31, 2021 (in thousands) Initial Cost Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at End of Period (3) 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 Fairacres Shopping Center Oshkosh, WI — 3,543 5,189 1,087 3,895 5,924 9,819 2,471 1992/2013 1/21/2014 Savoy Plaza Savoy, IL — 4,304 10,895 889 4,776 11,312 16,088 4,737 1999/2007 1/31/2014 The Shops of Uptown Park Ridge, IL — 7,744 16,884 1,414 8,135 17,907 26,042 5,511 2006 2/25/2014 Chapel Hill North Center Chapel Hill, NC 6,290 4,776 10,189 1,602 5,123 11,444 16,567 4,384 1998 2/28/2014 Coppell Market Center Coppell, TX — 4,870 12,236 265 5,024 12,347 17,371 4,181 2008 3/5/2014 Winchester Gateway Winchester, VA — 9,342 23,468 2,247 9,642 25,415 35,057 8,556 2006 3/5/2014 Stonewall Plaza Winchester, VA — 7,929 16,642 1,015 8,024 17,562 25,586 6,054 2007 3/5/2014 Town Fair Center Louisville, KY — 8,108 14,411 5,512 8,816 19,215 28,031 6,850 1988/1994 3/12/2014 Villages at Eagles Landing Stockbridge, GA — 2,824 5,515 1,184 3,365 6,158 9,523 2,662 1995 3/13/2014 ChampionsGate Village Davenport, FL — 1,814 6,060 540 2,067 6,347 8,414 2,417 2001 3/14/2014 Towne Centre at Wesley Chapel Wesley Chapel, FL — 2,466 5,553 778 2,730 6,067 8,797 2,116 2000 3/14/2014 Statler Square Staunton, VA 6,900 4,108 9,072 1,003 4,620 9,563 14,183 3,708 1989 3/21/2014 Burbank Plaza Burbank, IL — 2,972 4,546 3,931 3,586 7,863 11,449 2,800 1972/1995 3/25/2014 Hamilton Village Chattanooga, TN — 12,682 19,103 3,546 12,774 22,557 35,331 8,494 1989 4/3/2014 Waynesboro Plaza Waynesboro, VA — 5,597 8,334 268 5,787 8,412 14,199 3,342 2005 4/30/2014 Southwest Marketplace Las Vegas, NV — 16,019 11,270 2,977 16,121 14,145 30,266 5,260 2008 5/5/2014 Hampton Village Taylors, SC — 5,456 7,254 4,219 6,006 10,923 16,929 4,211 1959/1998 5/21/2014 Central Station Louisville, KY 12,095 6,143 6,932 2,492 6,546 9,021 15,567 3,359 2005/2007 5/23/2014 Kirkwood Market Place Houston, TX — 5,786 9,697 1,070 6,054 10,499 16,553 3,535 1979/2008 5/23/2014 Fairview Plaza New Cumberland, PA — 2,786 8,500 539 3,160 8,665 11,825 2,687 1992/1999 5/27/2014 Broadway Promenade Sarasota, FL — 3,831 6,795 626 4,116 7,136 11,252 2,300 2007 5/28/2014 Townfair Center Indiana, PA — 7,007 13,233 1,375 7,334 14,281 21,615 5,571 1995/2010 5/29/2014 Heath Brook Commons Ocala, FL 6,930 3,470 8,352 934 3,725 9,031 12,756 3,043 2002 5/30/2014 The Orchards Yakima, WA — 5,425 8,743 565 5,773 8,960 14,733 3,232 2002 6/3/2014 Shaw's Plaza Hanover Hanover, MA — 2,826 5,314 10 2,826 5,324 8,150 1,798 1994/2000 6/23/2014 Shaw's Plaza Easton Easton, MA — 5,520 7,173 642 5,890 7,445 13,335 2,836 1984/2004 6/23/2014 Lynnwood Place Jackson, TN — 3,341 4,826 892 3,629 5,430 9,059 2,182 1986/2013 7/28/2014 Thompson Valley Towne Center Loveland, CO — 5,758 17,387 1,846 6,362 18,629 24,991 6,068 1999 8/1/2014 Lumina Commons Wilmington, NC 6,741 2,008 11,249 1,517 2,103 12,671 14,774 3,534 1974/2007 8/4/2014 Driftwood Village Ontario, CA — 6,811 12,993 1,635 7,480 13,959 21,439 4,491 1985 8/7/2014 French Golden Gate Bartow, FL — 2,599 12,877 1,955 2,886 14,545 17,431 4,424 1960/2011 8/28/2014 Orchard Square Washington Township, MI — 1,361 11,550 633 1,622 11,922 13,544 3,788 1999 9/8/2014 Trader Joe's Center Dublin, OH 6,745 2,338 7,922 2,669 2,763 10,166 12,929 3,170 1986 9/11/2014 Palmetto Pavilion North Charleston, SC — 2,509 8,526 1,139 3,376 8,798 12,174 2,762 2003 9/11/2014 PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-36 SCHEDULE III—REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION December 31, 2021 (in thousands) Initial Cost Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at End of Period (3) 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 Five Town Plaza Springfield, MA — 8,912 19,635 6,451 10,036 24,962 34,998 9,748 1970/2013 9/24/2014 Fairfield Crossing Beavercreek, OH — 3,572 10,026 250 3,715 10,133 13,848 3,392 1994 10/24/2014 Beavercreek Towne Center Beavercreek, OH — 14,055 30,799 3,229 15,000 33,083 48,083 11,609 1994 10/24/2014 Grayson Village Loganville, GA — 3,952 5,620 2,213 4,114 7,671 11,785 3,194 2002 10/24/2014 The Fresh Market Commons Pawleys Island, SC — 2,442 4,941 128 2,457 5,054 7,511 1,767 2011 10/28/2014 Claremont Village Everett, WA — 5,635 10,544 1,386 6,038 11,527 17,565 3,708 1994/2012 11/6/2014 Cherry Hill Marketplace Westland, MI — 4,641 10,137 2,743 5,292 12,229 17,521 4,677 1992/2000 12/17/2014 Nor'Wood Shopping Center Colorado Springs, CO — 5,358 6,684 556 5,446 7,152 12,598 3,014 2003 1/8/2015 Sunburst Plaza Glendale, AZ — 3,435 6,041 1,313 3,673 7,116 10,789 2,979 1970 2/11/2015 Rivermont Station Johns Creek, GA — 6,876 8,916 2,386 7,011 11,167 18,178 5,024 1996/2003 2/27/2015 Breakfast Point Marketplace Panama City Beach, FL — 5,578 12,052 801 6,026 12,405 18,431 4,119 2009/2010 3/13/2015 Falcon Valley Lenexa, KS — 3,131 6,873 278 3,375 6,907 10,282 2,527 2008/2009 3/13/2015 Kohl's Onalaska Onalaska, WI — 2,670 5,648 300 2,670 5,948 8,618 2,200 1992/1993 3/13/2015 Coronado Center Santa Fe, NM 11,560 4,396 16,460 4,176 4,729 20,303 25,032 5,402 1964 5/1/2015 West Creek Plaza Coconut Creek, FL 5,326 3,459 6,131 445 3,624 6,411 10,035 1,869 2006/2013 7/10/2015 Northwoods Crossing Taunton, MA — 10,092 14,437 330 10,157 14,702 24,859 6,345 2003/2010 5/24/2016 Murphy Marketplace Murphy, TX — 28,652 33,122 4,051 29,042 36,783 65,825 8,920 2008/2015 6/24/2016 Harbour Village Jacksonville, FL — 5,630 16,727 2,225 6,032 18,550 24,582 4,538 2006 9/22/2016 Oak Mill Plaza Niles, IL 992 6,843 13,692 2,321 7,419 15,437 22,856 5,172 1977 10/3/2016 Southern Palms Tempe, AZ 22,744 10,025 24,346 2,515 10,494 26,392 36,886 8,014 1982 10/26/2016 Golden Eagle Village Clermont, FL 6,962 3,746 7,735 500 3,968 8,013 11,981 2,177 2011 10/27/2016 Atwater Marketplace’ (5) Atwater, CA — 6,116 7,597 ( 13,265 ) 417 31 448 62 N/A 2/10/2017 Rocky Ridge Town Center Roseville, CA 20,177 5,449 29,207 687 5,618 29,725 35,343 5,548 1996 4/18/2017 Greentree Centre Racine, WI — 2,955 8,718 1,249 3,474 9,448 12,922 2,193 1989/1994 5/5/2017 Sierra Del Oro Towne Centre Corona, CA 6,576 9,011 17,989 1,756 9,300 19,456 28,756 4,182 1991 6/20/2017 Barclay Place Shopping Center Lakeland, FL — 1,984 7,174 ( 2,090 ) 1,626 5,442 7,068 804 1989 10/4/2017 Birdneck Shopping Center Virginia Beach, VA — 1,900 3,253 902 2,066 3,989 6,055 1,220 1987 10/4/2017 Crossroads Plaza Asheboro, NC — 1,722 2,720 693 2,107 3,028 5,135 1,161 1984 10/4/2017 Dunlop Village Colonial Heights, VA — 2,420 4,892 1,907 2,635 6,584 9,219 1,485 1987 10/4/2017 Edgecombe Square Tarboro, NC — 1,412 2,258 441 1,493 2,618 4,111 1,404 1990 10/4/2017 Forest Park Square Cincinnati, OH — 4,007 5,877 1,179 4,378 6,685 11,063 2,078 1988 10/4/2017 Goshen Station Goshen, OH 3,605 1,555 4,621 149 1,655 4,670 6,325 1,678 1973/2003 10/4/2017 The Village Shopping Center Mooresville, IN — 2,059 8,325 353 1,842 8,895 10,737 1,847 1965/1997 10/4/2017 PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-37 SCHEDULE III—REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION December 31, 2021 (in thousands) Initial Cost Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at End of Period (3) 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 Hickory Plaza Nashville, TN 4,650 2,927 5,099 1,976 2,978 7,024 10,002 1,514 1974/1986 10/4/2017 Highland Fair Gresham, OR 6,652 3,263 7,979 553 3,356 8,439 11,795 1,762 1984/1999 10/4/2017 Mayfair Village Hurst, TX 16,398 15,343 16,522 2,687 15,753 18,799 34,552 4,463 1981/2004 10/4/2017 LaPlata Plaza La Plata, MD 17,860 8,434 22,855 2,039 8,698 24,630 33,328 4,648 2003 10/4/2017 Lafayette Square Lafayette, IN 6,992 5,387 5,636 113 5,422 5,714 11,136 3,761 1963/2001 10/4/2017 Melbourne Village Plaza Melbourne, FL — 5,418 7,280 ( 884 ) 4,874 6,940 11,814 1,615 1987 10/4/2017 Commerce Square Brownwood, TX — 6,027 8,341 ( 2,503 ) 5,060 6,805 11,865 339 1969/2007 10/4/2017 Monfort Heights Cincinnati, OH 4,216 2,357 3,545 9 2,357 3,554 5,911 1,008 1987 10/4/2017 Mountain Park Plaza Roswell, GA 6,169 6,118 6,652 367 6,152 6,985 13,137 1,626 1988/2003 10/4/2017 Nordan Shopping Center Danville, VA — 1,911 6,751 844 2,047 7,459 9,506 2,041 1961/2002 10/4/2017 Northside Plaza Clinton, NC — 1,406 5,471 330 1,449 5,758 7,207 1,599 1982 10/4/2017 Park Place Plaza Port Orange, FL — 2,347 8,458 ( 2,353 ) 1,838 6,614 8,452 931 1984 10/4/2017 Parsons Village Seffner, FL 4,631 3,465 10,864 ( 4,127 ) 2,445 7,757 10,202 1,202 1983/1994 10/4/2017 Hillside - West Hillside, UT — 691 1,739 3,870 4,561 1,739 6,300 535 2006 10/4/2017 South Oaks Shopping Center Live Oak, FL 3,147 1,742 5,119 138 1,800 5,199 6,999 2,373 1976/2000 10/4/2017 Southgate Center Heath, OH — 4,075 21,862 967 4,143 22,761 26,904 5,183 1960/1997 10/4/2017 Summerville Galleria Summerville, SC — 4,104 8,668 728 4,468 9,032 13,500 2,266 1989/2003 10/4/2017 The Oaks Hudson, FL — 3,876 6,668 ( 1,141 ) 3,507 5,896 9,403 1,743 1981 10/4/2017 Riverplace Centre Noblesville, IN 5,175 3,890 4,044 798 4,008 4,724 8,732 1,806 1992 10/4/2017 Town & Country Center Hamilton, OH 2,015 2,268 4,372 340 2,351 4,629 6,980 1,403 1950 10/4/2017 Towne Crossing Shopping Center Mesquite, TX — 5,358 15,584 1,381 5,426 16,897 22,323 3,953 1984 10/4/2017 Village at Waterford Midlothian, VA 4,063 2,702 5,194 597 2,820 5,673 8,493 1,403 1991 10/4/2017 Windsor Center Dallas, NC — 2,488 5,186 457 2,494 5,637 8,131 1,853 1974/1996 10/4/2017 12 West Marketplace Litchfield, MN — 835 3,538 153 988 3,538 4,526 1,515 1989 10/4/2017 Willowbrook Commons Nashville, TN — 5,384 6,002 364 5,480 6,270 11,750 1,749 2005 10/4/2017 Edgewood Towne Center Edgewood, PA — 10,029 22,535 2,227 10,648 24,143 34,791 6,450 1990 10/4/2017 Everson Pointe Snellville, GA 7,734 4,222 8,421 477 4,367 8,753 13,120 2,165 1999 10/4/2017 Village Square of Delafield Delafield, WI 8,257 6,206 6,869 469 6,520 7,024 13,544 1,983 2007 10/4/2017 Shoppes of Lake Village Leesburg, FL — 4,065 3,795 6,416 4,327 9,949 14,276 2,482 1987/1998 2/26/2018 Sierra Vista Plaza Murrieta, CA — 9,824 11,669 2,208 10,372 13,329 23,701 2,125 1991 9/28/2018 Wheat Ridge Marketplace Wheat Ridge, CO 11,085 7,926 8,393 855 8,442 8,732 17,174 1,789 1996 10/3/2018 Atlantic Plaza North Reading, MA — 12,341 12,699 733 12,652 13,121 25,773 2,711 1959/1973 11/9/2018 Staunton Plaza Staunton, VA — 4,818 14,380 43 4,843 14,398 19,241 1,974 2006 11/16/2018 Bethany Village Alpharetta, GA — 6,138 8,355 544 6,152 8,885 15,037 1,482 2001 11/16/2018 Northpark Village Lubbock, TX — 3,087 6,047 122 3,102 6,154 9,256 960 1990 11/16/2018 PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-38 SCHEDULE III—REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION December 31, 2021 (in thousands) Initial Cost Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at End of Period (3) 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 Kings Crossing Sun City Center, FL 10,467 5,654 11,225 251 5,813 11,317 17,130 1,778 2000/2018 11/16/2018 Lake Washington Crossing Melbourne, FL — 4,222 13,553 938 4,276 14,437 18,713 2,703 1987/2012 11/16/2018 Kipling Marketplace Littleton, CO — 4,020 10,405 307 4,056 10,676 14,732 1,912 1983/2009 11/16/2018 MetroWest Village Orlando, FL — 6,841 15,333 639 6,948 15,865 22,813 2,400 1990 11/16/2018 Spring Cypress Village Houston, TX — 9,579 14,567 931 9,759 15,318 25,077 2,347 1982/2007 11/16/2018 Commonwealth Square Folsom, CA 5,698 9,955 12,586 767 9,973 13,335 23,308 2,977 1987 11/16/2018 Point Loomis Milwaukee, WI — 4,171 4,901 1,168 4,171 6,069 10,240 1,740 1965/1991 11/16/2018 Shasta Crossroads Redding, CA — 9,598 18,643 ( 3,830 ) 8,330 16,081 24,411 2,105 1989/2016 11/16/2018 Milan Plaza Milan, MI — 925 1,974 219 942 2,176 3,118 971 1960/1975 11/16/2018 Hilander Village Roscoe, IL — 2,571 7,461 1,032 2,657 8,407 11,064 2,051 1994 11/16/2018 Laguna 99 Plaza Elk Grove, CA — 5,422 16,952 206 5,429 17,151 22,580 2,418 1992 11/16/2018 Southfield Center St. Louis, MO — 5,612 13,643 1,190 5,904 14,541 20,445 2,421 1987 11/16/2018 Waterford Park Plaza Plymouth, MN — 4,935 19,543 256 5,077 19,657 24,734 3,043 1989 11/16/2018 Colonial Promenade Winter Haven, FL — 12,403 22,097 843 12,456 22,887 35,343 4,118 1986/2008 11/16/2018 Willimantic Plaza Willimantic, CT — 3,596 8,859 93 3,621 8,927 12,548 2,101 1968/1990 11/16/2018 Quivira Crossings Overland Park, KS — 7,512 10,729 1,111 7,958 11,394 19,352 2,269 1996 11/16/2018 Spivey Junction Stockbridge, GA — 4,083 10,414 119 4,091 10,525 14,616 1,706 1998 11/16/2018 Plaza Farmington Farmington, NM — 6,322 9,619 170 6,405 9,706 16,111 1,753 2004 11/16/2018 Harvest Plaza Akron, OH — 2,693 6,083 58 2,741 6,093 8,834 1,086 1974/2000 11/16/2018 Oakhurst Plaza Seminole, FL — 2,782 4,506 352 2,867 4,773 7,640 972 1974/2001 11/16/2018 Old Alabama Square Johns Creek, GA — 10,782 17,359 1,133 10,836 18,438 29,274 2,705 2000 11/16/2018 North Point Landing Modesto, CA 20,061 8,040 28,422 641 8,158 28,945 37,103 3,865 1964/2008 11/16/2018 Glenwood Crossing Cincinnati, OH — 4,581 3,922 106 4,602 4,007 8,609 1,101 1999 11/16/2018 Rosewick Crossing La Plata, MD — 8,252 23,507 600 8,290 24,069 32,359 3,442 2008 11/16/2018 Alameda Crossing Avondale, AZ 12,616 7,785 19,875 3,761 8,024 23,397 31,421 3,434 2005 11/16/2018 Vineyard Center Templeton, CA 5,143 1,753 6,406 138 1,776 6,521 8,297 902 2007 11/16/2018 Ocean Breeze Plaza Ocean Breeze, FL — 6,416 9,986 576 6,462 10,516 16,978 1,752 1993/2010 11/16/2018 Central Valley Marketplace Ceres, CA 15,526 6,163 17,535 51 6,187 17,562 23,749 2,451 2005 11/16/2018 51st & Olive Square Glendale, AZ — 2,236 9,038 159 2,321 9,112 11,433 1,472 1975/2007 11/16/2018 West Acres Shopping Center Fresno, CA — 4,866 5,627 342 4,986 5,849 10,835 1,519 1990 11/16/2018 Meadows on the Parkway Boulder, CO — 23,954 32,744 1,116 24,161 33,653 57,814 4,682 1989 11/16/2018 Wyandotte Plaza Kansas City, KS — 5,204 17,566 157 5,240 17,687 22,927 2,576 1961/2015 11/16/2018 Broadlands Marketplace Broomfield, CO — 7,434 9,459 565 7,804 9,654 17,458 1,697 2002 11/16/2018 Village Center Racine, WI — 6,051 26,473 632 6,159 26,997 33,156 4,315 2002/2003 11/16/2018 Shoregate Town Center Willowick, OH — 7,152 16,282 3,601 7,240 19,795 27,035 4,822 1958/2005 11/16/2018 PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-39 SCHEDULE III—REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION December 31, 2021 (in thousands) Initial Cost Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at End of Period (3) 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 Plano Market Street Plano, TX — 14,837 33,178 952 15,099 33,868 48,967 4,458 2009 11/16/2018 Island Walk Shopping Center Fernandina Beach, FL — 8,190 19,992 826 8,279 20,729 29,008 3,519 1987/2012 11/16/2018 Normandale Village Bloomington, MN 11,364 8,390 11,407 1,123 8,864 12,056 20,920 2,914 1973 11/16/2018 North Pointe Plaza North Charleston, SC — 10,232 26,348 538 10,513 26,605 37,118 4,990 1989 11/16/2018 Palmer Town Center Easton, PA — 7,331 23,525 1,092 7,327 24,621 31,948 3,581 2005 11/16/2018 Alico Commons Fort Myers, FL — 4,670 16,557 660 4,897 16,990 21,887 2,400 2009 11/16/2018 Windover Square Melbourne, FL 11,048 4,115 13,309 319 4,195 13,548 17,743 1,937 1984/2010 11/16/2018 Rockledge Square Rockledge, FL — 3,477 4,469 ( 1,137 ) 3,496 3,313 6,809 856 1985 11/16/2018 Fairfield Commons Lakewood, CO — 8,802 29,946 1,333 8,818 31,263 40,081 4,060 1985 11/16/2018 Cocoa Commons Cocoa, FL — 4,838 8,247 726 4,851 8,960 13,811 1,901 1986 11/16/2018 Hamilton Mill Village Dacula, GA — 7,059 9,734 415 7,110 10,098 17,208 1,757 1996 11/16/2018 Sheffield Crossing Sheffield Village, OH — 8,841 10,232 312 9,026 10,359 19,385 2,094 1989 11/16/2018 The Shoppes at Windmill Place Batavia, IL — 8,186 16,005 407 8,234 16,364 24,598 2,728 1991/1997 11/16/2018 Stone Gate Plaza Crowley, TX 7,027 5,261 7,007 1,102 5,269 8,101 13,370 1,278 2003 11/16/2018 Everybody's Plaza Cheshire, CT — 2,520 10,096 290 2,556 10,350 12,906 1,437 1960/2005 11/16/2018 Lakewood City Center Lakewood, OH — 1,593 10,308 299 1,651 10,549 12,200 1,378 1991 11/16/2018 Carriagetown Marketplace Amesbury, MA — 7,084 15,492 723 7,092 16,207 23,299 2,682 2000 11/16/2018 Crossroads of Shakopee Shakopee, MN — 8,869 20,320 1,044 9,025 21,208 30,233 3,768 1998 11/16/2018 Broadway Pavilion Santa Maria, CA — 8,512 20,427 358 8,533 20,764 29,297 3,198 1987 11/16/2018 Sanibel Beach Place Fort Myers, FL — 3,918 7,043 678 4,035 7,604 11,639 1,489 2003 11/16/2018 Shoppes at Glen Lakes Weeki Wachee, FL — 3,118 7,473 510 3,186 7,915 11,101 1,331 2008 11/16/2018 Bartow Marketplace Cartersville, GA 19,305 11,944 24,610 457 12,058 24,953 37,011 5,469 1995 11/16/2018 Bloomingdale Hills Riverview, FL — 4,384 5,179 367 4,437 5,493 9,930 1,308 2002/2012 11/16/2018 University Plaza Amherst, NY — 6,402 9,800 850 6,410 10,642 17,052 2,912 1980/1999 11/16/2018 McKinney Market Street McKinney, TX 1,612 10,941 16,061 1,581 11,002 17,581 28,583 3,028 2003 11/16/2018 Montville Commons Montville, CT — 12,417 11,091 519 12,474 11,553 24,027 2,586 2007 11/16/2018 Shaw's Plaza Raynham Raynham, MA — 8,378 26,829 1,037 8,419 27,825 36,244 4,520 1965/1998 11/16/2018 Suntree Square Southlake, TX 8,798 6,335 15,642 535 6,366 16,146 22,512 2,386 2000 11/16/2018 Green Valley Plaza Henderson, NV — 7,284 16,879 303 7,355 17,111 24,466 2,648 1978/1982 11/16/2018 Crosscreek Village St. Cloud, FL — 3,821 9,604 499 3,901 10,023 13,924 1,632 2008 11/16/2018 Market Walk Savannah, GA — 20,679 31,836 2,717 20,763 34,469 55,232 5,098 2014/2015 11/16/2018 Livonia Plaza Livonia, MI — 4,118 17,037 204 4,156 17,203 21,359 2,758 1988 11/16/2018 Franklin Centre Franklin, WI — 6,353 5,482 462 6,401 5,896 12,297 2,230 1994/2009 11/16/2018 Plaza 23 Pompton Plains, NJ — 11,412 40,144 4,861 11,762 44,655 56,417 5,482 1963/1997 11/16/2018 PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-40 SCHEDULE III—REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION December 31, 2021 (in thousands) Initial Cost Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at End of Period (3) 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 Shorewood Crossing Shorewood, IL — 9,468 20,993 2,631 9,608 23,484 33,092 3,791 2001 11/16/2018 Herndon Place Fresno, CA — 7,148 10,071 ( 804 ) 6,808 9,607 16,415 1,348 2005 11/16/2018 Windmill Marketplace Clovis, CA — 2,775 7,299 ( 317 ) 2,796 6,961 9,757 647 2001 11/16/2018 Riverlakes Village Bakersfield, CA — 8,567 15,242 1,015 8,649 16,175 24,824 2,289 1997 11/16/2018 Evans Towne Centre Evans, GA — 4,018 7,013 292 4,127 7,196 11,323 1,369 1995 11/16/2018 Mansfield Market Center Mansfield, TX — 4,672 13,154 345 4,702 13,469 18,171 1,843 2015 11/16/2018 Ormond Beach Mall Ormond Beach, FL — 4,954 7,006 872 5,039 7,793 12,832 1,516 1967/2010 11/16/2018 Heritage Plaza Carol Stream, IL 8,886 6,205 16,507 362 6,259 16,815 23,074 2,551 1988 11/16/2018 Mountain Crossing Dacula, GA 3,433 6,602 6,835 260 6,683 7,014 13,697 1,328 1997 11/16/2018 Seville Commons Arlington, TX — 4,689 12,602 894 4,845 13,340 18,185 2,003 1987 11/16/2018 Cinco Ranch at Market Center Katy, TX — 5,553 14,063 549 5,739 14,426 20,165 2,021 2007/2008 12/12/2018 Naperville Crossings Naperville, IL 25,380 15,766 30,881 3,961 16,421 34,187 50,608 4,698 2007/2016 4/26/2019 Orange Grove Shopping Center North Fort Myers, FL — 2,637 7,340 414 2,961 7,430 10,391 933 1999 10/31/2019 Sudbury Crossing Sudbury, MA — 6,483 12,933 439 6,504 13,351 19,855 1,331 1984 10/31/2019 Ashburn Farm Market Center Ashburn, VA — 14,035 16,648 295 14,049 16,929 30,978 1,730 2000 10/31/2019 Del Paso Marketplace Sacramento, CA — 5,722 12,242 719 6,105 12,578 18,683 1,250 2006 12/12/2019 Hickory Flat Commons Canton, GA — 6,976 11,786 975 7,249 12,488 19,737 1,101 2008 8/17/2020 Roxborough Marketplace Littleton, CO — 4,105 12,668 1,201 4,688 13,286 17,974 833 2005 10/5/2020 Cinco Ranch Station II Katy, TX — 1,045 — 210 1,045 210 1,255 — N/A 1/26/2021 West Village Center Chanhassen, MN — 10,860 11,281 676 11,031 11,786 22,817 618 1994 2/4/2021 Hickory Creek Plaza Denton, TX — 5,370 2,710 200 5,506 2,774 8,280 165 2007 2/25/2021 Hickory Creek Plaza Outparcel Denton, TX — 5,506 — — 5,506 — 5,506 — 2008 2/25/2021 Foxridge Plaza Centennial, CO — 3,740 11,637 515 4,003 11,889 15,892 223 1983 8/20/2021 Valrico Commons Valrico, FL — 7,522 26,486 786 8,073 26,721 34,794 431 1986/2011 8/25/2021 Market Place at Pabst Farms Oconomowoc, WI — 5,648 17,199 86 5,715 17,218 22,933 235 2005 10/13/2021 Arapahoe Marketplace Greenwood Village, CO — 13,779 49,321 595 13,779 49,916 63,695 483 1977/1989 10/19/2021 Loganville Town Center Loganville, GA — 5,309 7,919 424 5,413 8,239 13,652 1,407 1997 11/5/2021 Town & Country Village Sacramento, CA — 21,895 35,791 81 21,894 35,873 57,767 277 1950/2004 11/12/2021 Sprouts Plaza Las Vegas, NV — 5,104 22,621 10 5,104 22,631 27,735 76 1995/2019 12/3/2021 Rainbow Plaza Las Vegas, NV — 7,158 30,170 12 7,158 30,182 37,340 101 1989/2019 12/3/2021 Northlake Station LLC (5) Cincinnati, OH 7,902 2,327 11,805 790 2,537 12,385 14,922 2,251 1985 10/6/2006 Corporate Adjustments (6) — 6 2,733 ( 6,138 ) ( 2,099 ) ( 1,300 ) ( 3,399 ) 247 Totals $ 608,316 $ 1,536,068 $ 3,139,119 $ 267,239 $ 1,586,993 $ 3,355,433 $ 4,942,426 $ 834,123 (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. PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-41 (3) The aggregate basis of properties for federal income tax purposes is approximately $ 4.8 billion at December 31, 2021. (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 at cost: 2021 2020 Balance at January 1 $ 4,787,348 $ 4,749,324 Additions during the year: Real estate acquisitions 298,084 39,879 Net additions to/improvements of real estate 74,767 57,700 Deductions during the year: Real estate dispositions ( 203,976 ) ( 54,188 ) Impairment of real estate ( 12,332 ) ( 5,367 ) Real estate held for sale ( 1,465 ) — Balance at December 31 $ 4,942,426 $ 4,787,348 Reconciliation of accumulated depreciation: 2021 2020 Balance at January 1 $ 695,591 $ 526,309 Additions during the year: Depreciation expense 177,734 177,860 Deductions during the year: Accumulated depreciation of real estate dispositions ( 33,429 ) ( 5,568 ) Impairment of real estate ( 5,750 ) ( 3,010 ) Accumulated depreciation of real estate held for sale ( 23 ) — Balance at December 31 $ 834,123 $ 695,591 * * * * * PHILLIPS EDISON & COMPANY DECEMBER 31, 2021 FORM 10-K F-42 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized this 16th day of February 2022. PHILLIPS EDISON & COMPANY, INC. By: /s/ JEFFREY S. EDISON Jeffrey S. Edison Chairman of the Board and Chief Executive Officer 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. EDISON Chairman of the Board and Chief Executive Officer (Principal Executive Officer) February 16, 2022 Jeffrey S. Edison /s/ JOHN P. CAULFIELD Executive Vice President, Chief Financial Officer, and Treasurer (Principal Financial Officer) February 16, 2022 John P. Caulfield /s/ JENNIFER L. ROBISON Senior Vice President and Chief Accounting Officer (Principal Accounting Officer) February 16, 2022 Jennifer L. Robison /s/ LESLIE T. CHAO Director February 16, 2022 Leslie T. Chao /s/ ELIZABETH FISCHER Director February 16, 2022 Elizabeth Fischer /s/ PAUL J. MASSEY, JR. Director February 16, 2022 Paul J. Massey, Jr. /s/ STEPHEN R. QUAZZO Director February 16, 2022 Stephen R. Quazzo /s/ JANE SILFEN Director February 16, 2022 Jane Silfen /s/ JOHN A. STRONG Director February 16, 2022 John A. Strong /s/ GREGORY S. WOOD Director February 16, 2022 Gregory S. Wood