What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2024-02-12 compared with 2023-02-21 · 147 added, 150 removed, 483 unchanged (38% of the section changed)

45 unchanged sentences

We use EBITDA re and Adjusted EBITDA re as additional measures of operating performance which allow us to compare earnings independent of capital structure and evaluate debt leverage and fixed cost coverage.

• Core Funds From Operations (“FFO”)—To arrive at Core FFO, we adjust Nareit FFO Attributable to Stockholders and OP Unit Holders, as defined below, to exclude certain recurring and non-recurring items including, but not limited to:

• Core Funds From Operations Attributable to Stockholders and OP Unit Holders (“Core FFO”)—To arrive at Core FFO, we adjust Nareit FFO, as defined below, to exclude certain recurring and non-recurring items including, but not limited to:

(i) depreciation and amortization of corporate assets;

15 unchanged sentences

• Equity Market Capitalization—We calculate equity market capitalization as the total dollar value of all outstanding shares using the closing price for the applicable date.

• Nareit FFO—Nareit defines FFO as net income (loss) computed in accordance with GAAP, excluding:

• Nareit FFO Attributable to Stockholders and OP Unit Holders (“Nareit FFO”)—Nareit defines Funds From Operations (“FFO”) as net income (loss) computed in accordance with GAAP, excluding:

(i) gains (or losses) from sales of property and gains (or losses) from change in control;

19 unchanged sentences

DECEMBER 31, 2023 FORM 10-K

In May 2022, we sold the final property in our joint venture with Necessity Retail Partners (“NRP”), in which we own a 20% interest.

For the years ended December 31, 2022 and 2021, we recognized income of $2.7 million and $0.7 million, respectively, related to NRP’s achievement of certain performance targets, which is included in Fees and Management Income in our consolidated statements of operations and comprehensive income (loss) (“consolidated statements of operations”).

UNDERWRITTEN INITIAL PUBLIC OFFERING —On July 19, 2021, we closed our underwritten IPO, through which we issued 19.6 million shares, including the underwriters’ overallotment election, of a new class of common stock, $0.01 par value per share, at an initial price to the public of $28.00 per share.

As a result of the underwritten IPO, we received gross proceeds of $547.4 million.

BASIS OF PRESENTATION —The basis of presentation of our shares of common stock is described as follows:

9 unchanged sentences

We no longer have Class B common stock authorized for issue.

2021 BOND OFFERING —In October 2021, the Operating Partnership completed the registered offering of $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 2021 Bond Offering resulted in gross proceeds of $345.4 million.

The notes are fully and unconditionally guaranteed by us.

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.

No shares were issued under the ATM program during the fourth quarter of 2022.

During the year ended December 31, 2022, we issued 2.6 million shares of our common stock under the ATM program for net proceeds of $89.2 million, after approximately $0.9 million in commissions.

As of December 31, 2022, $159.9 million of common stock remained available for issuance under the ATM program.

During the three months ended December 31, 2023, we issued 2.2 million shares of our common stock at a gross weighted average price of $35.92 per share under the ATM program for net proceeds of $77.5 million, after approximately $0.8 million in commissions.

During the year ended December 31, 2023, we issued 4.2 million shares of our common stock at a gross weighted average price of $35.76 per share under the ATM program for net proceeds of $147.6 million, after approximately $1.5 million in commissions.

During the three months ended December 31, 2022, no shares were issued under the ATM program.

During the year ended December 31, 2022, we issued 2.6 million shares of our common stock at a gross weighted average price of $34.23 per share under the ATM program for net proceeds of $89.2 million, after approximately $0.9 million in commissions.

As of December 31, 2023, approximately $10.8 million of common stock remained available for issuance under the ATM program.

Subsequent to December 31, 2023, we issued approximately 46,000 additional shares of our common stock at a gross weighted average price of $37.05 per share under the ATM program for net proceeds of $1.7 million, after approximately $17,000 in commissions.

PORTFOLIO AND LEASING STATISTICS —Below are statistical highlights of our wholly-owned portfolio as of December 31, 2023 and 2022 (dollars and square feet in thousands):

11 unchanged sentences

FINANCIAL HIGHLIGHTS —Owning, operating, and managing well-occupied omni-channel grocery-anchored real estate is a core part of our business strategy, and as of December 31, 2023, 97.2% of our ABR was derived from omni-channel grocery-anchored shopping centers.

As of December 31, 2022, total leased occupancy improved 1.1% to 97.4% and inline occupancy improved 1.1% to 93.8%, when compared to December 31, 2021.

As of December 31, 2023, total leased occupancy remained high at 97.4% and inline occupancy improved 0.9% to 94.7%, when compared to December 31, 2022.

Our financial performance highlights during 2023 are as follows:

• Net income of $54.5 million, an increase of $37.3 million from a year ago, primarily due to positive operating results attributable to our Same-Center portfolio, the net impact of our 2022 acquisition and disposition activity, and the final settlement of the earn-out liability with the issuance of 1.6 million OP units in January 2022.

PHILLIPS EDISON & COMPANY

DECEMBER 31, 2022 FORM 10-K

• Core FFO per diluted share improved by $0.08 to $2.27, primarily due to increased rental income and lower interest expense.

• Net income of $63.8 million, an increase of $9.2 million from a year ago, primarily due to strong operating performance attributable to our Same-Center portfolio and the net impact of our 2023 acquisition and disposition activity.

• Core FFO per diluted share improved by $0.07 to $2.34, primarily due to our strong operating performance.

• Same-Center NOI improved 4.2% to $396.6 million.

• Acquired $278.5 million and disposed of $6.3 million of assets, executing our external growth strategy while improving portfolio quality with our dispositions.

• Declared and paid monthly distributions of $0.09 per share, or $1.08 annualized, through August 2022, and increased monthly distributions to $0.0933 per share, or $1.12 annualized, for the remainder of 2022.

PHILLIPS EDISON & COMPANY

DECEMBER 31, 2023 FORM 10-K

• Declared and paid monthly distributions of $0.0933 per share, or $1.12 annualized, for each month beginning January 2023 through August 2023, and increased monthly distributions to $0.0975 per share, or $1.17 annualized, for the remainder of 2023.

EXECUTING OUR STRATEGY —Our performance for the year is linked to our key initiatives:

2 unchanged sentences

Differentiated and Focused Strategy —We actively monitor the commercial real estate sector for shopping centers that meet our investment objectives.

Capital raised through our underwritten IPO combined with our effective shelf registration statement and ATM program allow us to access equity and debt capital that we intend to use, in part, to grow our portfolio of assets.

Our effective shelf registration statement and ATM program allow us to access equity and debt capital that we intend to use, in part, to grow our portfolio of assets.

Highlights of our asset composition and acquisitions are as follows:

• 97.2% of our ABR was derived from omni-channel grocery-anchored shopping centers as of December 31, 2023.

• Our grocer health ratio, or occupancy cost, remains strong at 2.3% at December 31, 2023, which is favorable compared to the national grocer average occupancy cost.

• In 2023, our grocer sales increased 6% year-over-year to $681 per square foot.

Grocer sales per square foot have increased approximately 30% since 2019.

• 70.4% of our ABR was derived from Neighbors providing necessity-based goods and services.

• Acquired seven properties and four outparcels for a net cash outlay of $282.0 million, adding 0.8 million of GLA to our portfolio.

• The average PECO space, excluding anchors, is approximately 2,300 square feet.

This size is attractive to many retailers, whereas large box format retailers are fewer and demand is thinner.

• Acquired eleven properties and three outparcels for a net cash outlay of $270.3 million, adding 1.1 million of GLA to our portfolio.

Internal Growth Through Our Integrated Operating Platform —We have focused on improving our occupancy through leasing vacant spaces, increasing lease revenue through rent growth, and executing development and redevelopment opportunities.

Highlights of our wholly-owned operational activity as of and for the year ended December 31, 2023 are as follows:

• Leased occupancy for our wholly-owned portfolio improved to 97.4% as of December 31, 2022, compared to 96.3% as of December 31, 2021.

• Total ABR per leased square foot for executed new leases improved 12.9% to $19.31, and inline ABR per leased square foot for executed new leases improved 17.9% to $24.33 during the year ended December 31, 2022.

• For the year ended December 31, 2022, we completed 17 development and redevelopment projects with a total investment of $37.3 million.

• As of December 31, 2022, we have 14 development and redevelopment projects in process, which we estimate will have a total investment of $50.3 million.

• Leased occupancy for our wholly-owned portfolio remained high at 97.4% as of December 31, 2023, and inline occupancy improved 0.9% to 94.7%, when compared to December 31, 2022.

• Total ABR PSF for executed new leases improved 12.6% to $21.75, and inline ABR PSF for executed new leases improved 6.8% to $25.98 during the year ended December 31, 2023.

• For the year ended December 31, 2023, we completed 13 development and redevelopment projects encompassing a total of 0.2 million square feet with a total investment of $34.1 million.

• As of December 31, 2023, we have nine development and redevelopment projects in process, which we estimate will have a total investment of $33.7 million.

• Created $2.7 million of incremental ABR in 2023 as a result of development and redevelopment projects completed in 2022.

Balance Sheet Management Positioned for External Growth —Our management team has executed strategies to improve the flexibility of our balance sheet, including gaining access to additional forms of liquidity through our effective shelf registration statement and ATM program.

This execution well-positions us to maintain our investment grade rating, fund distributions to our stockholders, and invest in our targeted acquisitions.

Balance Sheet Management Positioned for External Growth —Our balance sheet has a leverage profile that well-positions us to maintain and improve our investment grade rating, fund distributions to our stockholders, and invest in our targeted acquisitions.

As of December 31, 2023, we had $615.4 million of total liquidity, comprised of $8.9 million of cash, cash equivalents, and restricted cash, plus $606.6 million of borrowing capacity available on our $800 million revolving credit facility.

1 unchanged sentence

• We issued 4.2 million shares of our common stock under the ATM program for net proceeds of $147.6 million.

• Our investment grade ratings were reaffirmed by Moody’s Investors Services (Baa3) and S&P Global Ratings (BBB-).

• We amended our credit facility to increase the total amount available under our unsecured revolving credit facility from $500 million to $800 million.

• We amended three senior unsecured term loans with a total notional amount of $475 million scheduled to mature during 2024.

The three senior unsecured term loans, as amended, have a total notional amount of $484.8 million and are scheduled to mature between 2026 (extendable with two one-year options to 2028) and 2027.

• Our current investment grade ratings are Baa3 (Outlook:

Stable) with Moody’s Investors Services and BBB- (Outlook:

Positive) with S&P Global Ratings.

• As of December 31, 2023, our wholly-owned properties were approximately 84% unencumbered.

• Our ratio of net debt to Adjusted EBITDA re was 5.1x as of December 31, 2023, as compared to 5.3x as of December 31, 2022 (see “Liquidity and Capital Resources - Financial Leverage Ratios” below for a discussion and calculation).

1 unchanged sentence

DECEMBER 31, 2023 FORM 10-K

• As of December 31, 2022, our debt maturity profile with the respective principal payment obligations is as follows (including the impact of derivatives on weighted-average interest rates):

• As of December 31, 2023, our outstanding debt had a weighted-average maturity of 3.9 years excluding all extension options.

As of December 31, 2023, our debt maturity profile with the respective principal payment obligations is as follows (including the impact of derivatives on weighted-average interest rates and excluding all extension options) (1) :

(1) As of December 31, 2023, our outstanding debt had a weighted-average maturity of 4.1 years including all extension options.

Our related debt maturities at December 31, 2023 including extension options were as follows:

2024 - $28.1 million;

2025 - $277.6 million;

2026 - $241.9 million;

2027 - $704.6 million;

2028 - $179.1 million;

2029 - $0.8 million;

2030 - $200.8 million;

and 2031 - $353.4 million.

PHILLIPS EDISON & COMPANY

28 unchanged sentences

RESULTS OF OPERATIONS

KNOWN TRENDS AND UNCERTAINTIES —The COVID-19 pandemic resulted in reduced revenues beginning with the second quarter of 2020 and continuing through early 2021.

Our collections returned to pre-COVID levels during the second half of 2021 and have remained strong throughout 2022.

As of December 31, 2022, our Neighbors currently being accounted for on a cash basis represented approximately 4% of portfolio ABR.

We believe our collections have stabilized, which has reduced volatility in our earnings during 2022 as compared to 2021.

Due to changing economic conditions, rising interest rates, labor shortages, and supply chain limitations, there has been an increase in wages and costs for materials.

The resulting increased inflation may negatively impact some of our Neighbors and increase our operating and construction costs.

KNOWN TRENDS AND UNCERTAINTIES —The economy continues to face inflation risk, which may negatively impact some of our Neighbors and increase our operating and construction costs.

Substantially all of our leases contain provisions designed to mitigate the adverse effect of inflation, including requirements for Neighbors to pay their allocable share of operating expenses that includes common area maintenance, utilities, real estate taxes, insurance, and certain capital expenditures.

Additionally, many of our leases are for terms of less than ten years, which allows us to target increased rents to current market rates upon renewal.

In addition to inflation, macroeconomic and geopolitical risks may create challenges that cause current market conditions in the United States to worsen.

The policies implemented to address these risks, including raising interest rates, could result in adverse impacts on the United States economy, including a slowing of growth or potentially a recession.

In addition to inflation, macroeconomic and geopolitical risks may create challenges that could negatively impact market conditions in the United States.

Additionally, the policies implemented to address these risks, including raising interest rates, could result in adverse impacts on the United States economy, including a slowing of growth or potentially a recession.

PHILLIPS EDISON & COMPANY

12 unchanged sentences

Depreciation and amortization 236,443 236,224 (219) (0.1) %

Impairment of real estate assets 322 6,754 6,432 95.2 %

Impairment of real estate assets — 322 322 NM

Total operating expenses 455,928 445,004 (10,924) (2.5) %

4 unchanged sentences

(7,312) (12,160) 4,848 39.9 %

54,529 17,233 37,296 NM

63,762 54,529 9,233 16.9 %

Net income attributable to noncontrolling interests

(6,206) (2,112) (4,094) NM

(6,914) (6,206) (708) (11.4) %

Net income attributable to stockholders

$ 48,323 $ 15,121 $ 33,202 NM

$ 56,848 $ 48,323 $ 8,525 17.6 %

(1) Line items that result in a percent change that exceed certain limitations are considered not meaningful (“NM”) and indicated as such.

1 unchanged sentence

We define our same-center portfolio as the 262 properties that were owned and operational prior to January 1, 2022.

We define our non-same-center portfolio as those properties that were not fully owned and operational in both periods owing to real estate asset activity occurring after December 31, 2020, which includes 27 properties disposed of and 16 properties acquired.

We define our non-same-center portfolio as those properties that were not fully owned and operational in both periods owing primarily to real estate asset activity occurring after December 31, 2021, which includes five properties disposed of and 18 properties acquired.

Below are explanations of the significant fluctuations in the results of operations for the years ended December 31, 2023 and 2022:

Rental Income increased $37.0 million as follows:

• $20.2 million increase related to our same-center portfolio as follows:

▪ $17.9 million increase primarily due to a $0.39 increase in average minimum rent per square foot due to a 1.3% improvement in average occupancy;

▪ $4.5 million increase owing largely to an increase in recoverable income attributed to an increase in common area maintenance spending and lower collection reserves as compared to 2021 and the 1.3% improvement in average occupancy;

▪ $2.1 million decrease primarily due to the recovery of prior year income in 2021 and the reversal of reserves for uncollectibility from 2020 in 2021 resulting from the recovery of our portfolio in the wake of the COVID-19 pandemic.

• $19.3 million increase related to our same-center portfolio primarily as follows:

▪ $16.6 million increase primarily due to a $0.41 increase in average minimum rent PSF and a 1.1% improvement in average occupancy;

▪ $7.3 million increase primarily due to an increase in recoverable income attributed to an increase in real estate taxes, common area maintenance spending, and insurance costs as well as a 1.1% improvement in average occupancy;

partially offset by

▪ $2.2 million decrease primarily due to collections in 2022 of amounts previously reserved;

▪ $1.3 million decrease primarily due to lower lease buyout income.

• $17.7 million increase primarily related to our acquisition activity, net of dispositions.

Fees and Management Income:

• The $1.2 million increase in fees and management income was primarily due to the achievement of certain performance targets related to our joint venture with NRP, partially offset by the reduction in revenue as result of our joint venture with NRP fully liquidating its assets.

Property Operating Expenses:

• The $2.4 million increase is primarily due to our acquisition activity, net of dispositions.

• The $1.9 million decrease in fees and management income was primarily due to $0.1 million realized performance income in 2023 compared to $2.7 million in 2022 for the achievement of certain performance targets related to our Necessity Retail Partners (“NRP”) joint venture.

Property Operating Expenses increased $6.9 million primarily as follows:

• $4.3 million increase from our same-center portfolio and corporate operating activities primarily due to increases in recoverable expenses attributable to higher common area maintenance spending, along with higher insurance and compensation costs;

• $2.6 million increase primarily due to our acquisition activity, net of dispositions.

Real Estate Tax Expenses:

• The $2.5 million increase in real estate tax expenses was primarily due to our acquisition activity, net of dispositions.

General and Administrative Expenses decreased $3.6 million primarily as follows:

• $2.6 million decrease in compensation expense owing largely to lower performance-based compensation;

• $1.3 million decrease primarily due to lower third-party consultant and custodial costs;

partially offset by

• The $5.0 million increase in real estate tax expenses is primarily due to our acquisition activity, net of dispositions, and less appeal settlement income in 2023 compared to 2022.

PHILLIPS EDISON & COMPANY

DECEMBER 31, 2023 FORM 10-K

• $0.4 million increase due to an increase in directors and officers insurance as a result of our becoming a publicly traded company in July 2021.

Depreciation and Amortization:

• The $14.8 million increase in depreciation and amortization is primarily due to the execution of our acquisition strategy, investment in improvements to our Neighbor spaces, and accelerated depreciation related to damage sustained at our properties as a result of Hurricane Ian.

Impairment of Real Estate Assets:

• The $6.4 million decrease in impairment of real estate assets was due to assets that were sold during 2021 at a disposition price that was less than the carrying value as compared to minimal impairment charges recorded during 2022.

General and Administrative Expenses:

• The $0.9 million decrease in general and administrative expenses is primarily due to a decrease in directors and officers insurance.

Interest Expense, Net:

• The $5.2 million decrease during the year ended December 31, 2022 as compared to the same period in 2021 was primarily due to net repayments of debt outstanding in 2021, partially offset by higher average interest rates in 2022.

• The $13.0 million increase during the year ended December 31, 2023 as compared to the same period in 2022 was primarily due to higher interest rates in 2023 partially offset by lower loss on extinguishment or modification of debt.

Interest Expense, Net was comprised of the following (dollars in thousands):

10 unchanged sentences

Gain on Disposal of Property, Net:

• The $22.9 million decrease was primarily related to the sale of four properties and four outparcels with a net gain of $7.5 million during the year ended December 31, 2022, as compared to the sale of 24 properties and four outparcels (in addition to other property-related miscellaneous disposals and write-offs) with a net gain of $30.4 million during the year ended December 31, 2021 (see Note 4).

• The $6.4 million decrease was primarily related to the sale of land acquired by local authorities, as well as the sale of one property and two outparcels with a net gain of $1.1 million during the year ended December 31, 2023, as compared to the sale of four properties and four outparcels with a net gain of $7.5 million during the year ended December 31, 2022 (see Note 4).

Other Expense, Net:

• The $22.2 million decrease was primarily related to a 2021 charge in connection with the change in the fair value of our earn-out liability, which was settled in January 2022, partially offset by an increase in transaction and acquisition expenses owing largely to the amortization of the restricted stock units awarded at the time of our underwritten IPO combined with costs for activities related to the execution of our growth strategy.

• Other Expense, Net was comprised of the following (in thousands):

Year Ended December 31,

Change in fair value of earn-out liability (see Note 16)

$ (1,809) $ (30,436)

Equity in net income of unconsolidated joint ventures

Transaction and acquisition expenses $ (5,675) $ (10,551)

Impairment of investment in third parties (see Note 15)

Federal, state, and local income tax expense (438) (806)

Equity in net income of unconsolidated investments

Change in fair value of earn-out liability (see Note 16)

Other 1,429 (274)

4 unchanged sentences

Management’s Discussion and Analysis of Financial Condition and Results of Operations ” of our 2022 Annual Report on Form 10-K, filed with the SEC on February 21, 2023.

PHILLIPS EDISON & COMPANY

DECEMBER 31, 2022 FORM 10-K

NON-GAAP MEASURES

3 unchanged sentences

For the years ended December 31, 2023 and 2022, Same-Center NOI represents the NOI for the 262 properties that were wholly-owned and operational for the entire portion of all comparable reporting periods.

PHILLIPS EDISON & COMPANY

DECEMBER 31, 2023 FORM 10-K

Same-Center NOI should not be viewed as an alternative measure of our financial performance as it does not reflect the operations of our entire portfolio, nor does it reflect the impact of general and administrative expenses, depreciation and amortization, interest expense, other income (expense), or the level of capital expenditures and leasing costs necessary to maintain the operating performance of our properties that could materially impact our results from operations.

36 unchanged sentences

Other expense, net

12,160 34,361

Property operating expenses related to fees and management income 2,059 3,046

5 unchanged sentences

(2) Includes operating revenues and expenses from non-same-center properties which includes properties acquired or sold and corporate activities.

PHILLIPS EDISON & COMPANY

DECEMBER 31, 2022 FORM 10-K

NAREIT FFO AND CORE FFO —Nareit FFO is a non-GAAP financial performance measure that is widely recognized as a measure of REIT operating performance.

1 unchanged sentence

We believe that Core FFO is helpful in assisting management and investors with assessing the sustainability of our operating performance in future periods.

Nareit FFO, Nareit FFO Attributable to Stockholders and OP Unit Holders, and Core FFO should not be considered alternatives to net income (loss) under GAAP, as an indication of our liquidity, nor as an indication of funds available to cover our cash needs, including our ability to fund distributions.

PHILLIPS EDISON & COMPANY

DECEMBER 31, 2023 FORM 10-K

Nareit FFO and Core FFO should not be considered alternatives to net income (loss) under GAAP, as an indication of our liquidity, nor as an indication of funds available to cover our cash needs, including our ability to fund distributions.

Core FFO may not be a useful measure of the impact of long-term operating performance on value if we do not continue to operate our business plan in the manner currently contemplated.

Accordingly, Nareit FFO, Nareit FFO Attributable to Stockholders and OP Unit Holders, and Core FFO should be reviewed in connection with other GAAP measurements, and should not be viewed as more prominent measures of performance than net income (loss) or cash flows from operations prepared in accordance with GAAP.

Our Nareit FFO, Nareit FFO Attributable to Stockholders and OP Unit Holders, and Core FFO, as presented, may not be comparable to amounts calculated by other REITs.

The following table presents our calculation of Nareit FFO Attributable to Stockholders and OP Unit Holders and Core FFO for the years ended December 31, 2022, 2021, and 2020 (in thousands, except per share amounts):

Accordingly, Nareit FFO and Core FFO should be reviewed in connection with other GAAP measurements, and should not be viewed as more prominent measures of performance than net income (loss) or cash flows from operations prepared in accordance with GAAP.

Our Nareit FFO and Core FFO, as presented, may not be comparable to amounts calculated by other REITs.

The following table presents our calculation of Nareit FFO and Core FFO for the years ended December 31, 2023, 2022, and 2021 (in thousands, except per share amounts):

2023 2022 2021

7 unchanged sentences

Nareit FFO attributable to stockholders and OP unit holders $ 299,548 $ 280,747 $ 211,202

Calculation of Core FFO

Calculation of Core FFO Attributable to Stockholders and OP Unit Holders

Nareit FFO attributable to stockholders and OP unit holders $ 299,548 $ 280,747 $ 211,202

1 unchanged sentence

Change in fair value of earn-out liability — 1,809 30,436

Impairment of investment in third parties 3,000 — —

Transaction and acquisition expenses 5,675 10,551 5,363

4 unchanged sentences

(75) (2,742) (675)

Other impairment charges — — 359

Core FFO $ 295,263 $ 254,954 $ 220,407

Nareit FFO Attributable to Stockholders and OP Unit Holders/Core FFO per diluted share

Core FFO attributable to stockholders and OP unit holders $ 310,716 $ 295,263 $ 254,954

Nareit FFO/Core FFO Attributable to Stockholders and OP Unit Holders per diluted share

Weighted-average shares of common stock outstanding - diluted 132,970 130,332 116,672

Nareit FFO attributable to stockholders and OP unit holders per share - diluted $ 2.25 $ 2.15 $ 1.81

Core FFO per share - diluted $ 2.27 $ 2.19 $ 1.98

Core FFO attributable to stockholders and OP unit holders per share - diluted $ 2.34 $ 2.27 $ 2.19

(1) Realized performance income includes fees received related to the achievement of certain performance targets in our NRP joint venture.

19 unchanged sentences

$ 387,486 $ 357,547 $ 293,128

Impairment of investment in third parties 3,000 — —

Change in fair value of earn-out liability — 1,809 30,436

3 unchanged sentences

(75) (2,742) (675)

Other impairment charges — — 359

Adjusted EBITDA re

15 unchanged sentences

At this time, we believe our current sources of liquidity are sufficient to meet our short- and long-term cash demands.

IMPACT OF THE UNDERWRITTEN IPO —On July 19, 2021, we closed our underwritten IPO, from which we received gross proceeds of $547.4 million.

See “Overview” above for more details.

The underwritten IPO has allowed us access to forms of capital not previously available to us, as follows:

• In October 2021, we completed the registered offering of $350 million aggregate principal amount of 2.625% senior notes, which resulted in gross proceeds of $345.4 million.

IMPACT OF THE UNDERWRITTEN IPO —On July 19, 2021, we closed our underwritten IPO, through which we issued 19.6 million shares, including the underwriters’ overallotment election, of a new class of common stock, $0.01 par value per share, at an initial price to the public of $28.00 per share.

As a result of the underwritten IPO, we received gross proceeds of $547.4 million.

The underwritten IPO allowed us access to forms of capital not previously available to us, as follows:

• In October 2021, the Operating Partnership completed the registered offering of $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 2021 Bond Offering resulted in gross proceeds of $345.4 million.

The notes are fully and unconditionally guaranteed by us.

• In February 2022, we filed an automatically effective shelf registration statement on Form S-3 providing for the public offering and sale, from time to time, by us of our preferred stock, common stock, debt securities, depository shares, warrants, rights, units, and guarantees of debt securities and by the Operating Partnership of its debt securities, in each case in unlimited amounts.

• In connection with our February 2022 Form S-3 filing, we commenced the ATM program through which we may offer and sell shares of our common stock having an aggregate offering price of up to $250 million.

No shares were issued under the ATM program during the fourth quarter of 2022.

During the year ended December 31, 2022, we issued 2.6 million shares of our common stock under the ATM program for net proceeds of $89.2 million.

As of December 31, 2022, $159.9 million of common stock remained available for issuance under the ATM program.

During the three months ended December 31, 2023, we issued 2.2 million shares of our common stock at a gross weighted average

PHILLIPS EDISON & COMPANY

DECEMBER 31, 2023 FORM 10-K

price of $35.92 per share under the ATM program for net proceeds of $77.5 million, after approximately $0.8 million in commissions.

During the three months ended December 31, 2022, no shares were issued under the ATM program.

As of December 31, 2023, approximately $10.8 million of common stock remained available for issuance under the ATM program.

DEBT —The following table summarizes information about our debt as of December 31, 2023 and 2022 (dollars in thousands):

9 unchanged sentences

(2) Net of any outstanding balance and letters of credit.

Debt Activity —During the years ended December 31, 2022 and 2021, we took steps to increase debt amounts available to us for future investment activity.

Debt Activity —During the years ended December 31, 2023 and 2022, we took steps to appropriately ladder our debt maturities and increase debt amounts available to us for future investment activity.

Our debt activity during the year ended December 31, 2023 was as follows:

• In May 2022, we amended our credit facility agreement (the “Amendment”) to, among other things, increase the total amount available under our unsecured revolving credit facility from $500 million to $800 million.

• On July 31, 2023, we amended three senior unsecured term loans with a total notional amount of $475 million scheduled to mature during 2024.

The three senior unsecured term loans, as amended, have a total notional amount of $484.8 million.

The $161.8 million unsecured term loan is priced based on a leverage grid, which is currently at the Secured Overnight Financing Rate (“SOFR”) plus 1.35% and is scheduled to mature on January 31, 2026 extendable with two one-year options to 2028.

The $158 million and $165 million unsecured term loans are priced based on a leverage grid, which is currently at SOFR plus 1.35% and mature on January 31, 2027.

• During the year ended December 31, 2023, we repaid $47.3 million in mortgage debt.

Our debt activity during the year ended December 31, 2022 was as follows:

• In May 2022, we amended our credit facility agreement to, among other things, increase the total amount available under our unsecured revolving credit facility from $500 million to $800 million.

The unsecured revolving credit facility also includes an accordion feature that permits us to increase our aggregate borrowing capacity thereunder to up to $1 billion, subject to the satisfaction of certain conditions.

1 unchanged sentence

• During 2022, we repaid $80.1 million in mortgage debt.

Our debt activity during the year ended December 31, 2021 was as follows:

• 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.

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 executed a $150 million partial pay down on a term loan that was set to mature in November 2023 utilizing cash on hand.

• In October 2021, we completed the 2021 Bond Offering priced at 98.692% of the principal amount and maturing in November 2031.

The 2021 Bond Offering resulted in gross proceeds of $345.4 million.

In October 2021, net proceeds were used, in part, to pay down the remaining $150 million balance of the term loan that was set to mature in November 2023.

The notes are fully and unconditionally guaranteed by us.

• During 2021, we executed early repayments of $55.2 million in mortgage debt.

Future Debt Obligations —As of December 31, 2023, including the impact of our swap agreements, our future contractual debt obligations were $115.7 million of debt principal and interest payments during 2024, and $2.2 billion of debt principal and interest payments thereafter (see Note 8).

The average annual maturities of our outstanding debt over the next four years as of December 31, 2023 was approximately $313 million including all extension options and approximately $354 million excluding all extension options.

Debt Obligation Guarantees —The 2.625% senior notes issued by the Operating Partnership pursuant to an effective registration statement in October 2021 were, and debt securities of the Operating Partnership registered under our automatically effective shelf registration statement on Form S-3 filed in February 2022 will be, fully and unconditionally guaranteed by us.

16 unchanged sentences

As of December 31, 2023, our future contractual obligations as a lessee included operating lease obligations of $0.7 million during 2024, and $7.3 million thereafter.

As of December 31, 2022, our future contractual finance lease obligations included $0.3 million during 2023, and $0.3 million thereafter.

As of December 31, 2023, our future contractual finance lease obligations included $0.3 million during 2024.

We have an off-balance sheet arrangement that includes being the limited guarantor of a $175 million mortgage loan secured by Grocery Retail Partners I LLC (“GRP I”) properties.

18 unchanged sentences

(1) Total equity market capitalization is calculated as diluted shares multiplied by the closing market price per share, which includes 135.8 million and 131.2 million diluted shares as of December 31, 2023 and 2022, respectively, and the closing market price per share of $36.48 and $31.84 as of December 31, 2023 and 2022, respectively.

(2) Fully diluted shares include common stock and OP units as of December 31, 2022 and Class B common stock, common stock, and OP units as of December 31, 2021.

(2) Fully diluted shares include common stock and OP units.

The following table presents our calculation of net debt to Adjusted EBITDA re and net debt to total enterprise value as of December 31, 2023 and 2022 (dollars in thousands):

11 unchanged sentences

CAPITAL EXPENDITURES AND REDEVELOPMENT ACTIVITY —We make capital expenditures during the course of normal operations, including maintenance capital expenditures and tenant improvements, as well as value-enhancing anchor space repositioning and redevelopment, ground-up outparcel development, and other accretive projects.

During the years ended December 31, 2023 and 2022, we had gross capital spend of $95.3 million and $104.5 million, respectively.

Below is a summary of our capital spending activity, excluding leasing commissions, on a cash basis for the years ended December 31, 2023 and 2022 (in thousands):

PHILLIPS EDISON & COMPANY

DECEMBER 31, 2023 FORM 10-K

During the years ended December 31, 2022 and 2021, we had capital spend of $102.4 million and $75.0 million, respectively.

Below is a summary of our capital spending activity, excluding leasing commissions, on a cash basis for the years ended December 31, 2022 and 2021 (in thousands):

Capital expenditures for real estate:

8 unchanged sentences

(1) Amount includes internal salaries and related benefits of personnel who work directly on capital projects as well as capitalized interest expense.

(2) For the year ended December 31, 2022, amounts reported are net of insurance proceeds for property damage claims.

(2) Amounts reported are net of insurance proceeds of $2.6 million and $2.1 million for property damage claims for the years ended December 31, 2023 and 2022, respectively.

We expect our capital expenditures to reach $100 million - $110 million in 2024, which includes $40 million - $50 million related to development and redevelopment projects.

6 unchanged sentences

REAL ESTATE ACQUISITION ACTIVITY —We actively monitor the commercial real estate market for properties that have future growth potential, are located in attractive demographic markets, and support our business objectives.

We are currently targeting acquisitions of $200 million - $300 million annually.

The following table highlights our property acquisitions during the years ended December 31, 2023 and 2022 (dollars in thousands):

5 unchanged sentences

(1) Outparcels acquired are adjacent to shopping centers that we own.

(2) Total price of acquisitions includes closing costs and credits.

Subsequent to December 31, 2022, we acquired one property for $27.1 million.

(2) Total price of acquisitions includes closing costs less credits and assumed debt obligations.

REAL ESTATE DISPOSITION ACTIVITY —We continually evaluate our portfolio of assets for opportunities to make strategic dispositions of assets that no longer meet our growth and investment objectives or assets that have stabilized in order to capture their value.

4 unchanged sentences

Proceeds from sale of real estate, net (1)(2)

52,019 206,377

Gain on sale of property, net (5)

(1) We retained an outparcel for one property sold during the year ended December 31, 2021, and therefore the sale did not result in a reduction in our total property count.

(2) During the year ended December 31, 2021, our outparcel sales included:

(i) the only remaining portion of one of our properties, which resulted in a reduction in our total property count;

and (ii) an undeveloped parcel of land, as well as two outparcels adjacent to two of our centers, none of which 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) Total proceeds from sale of real estate, net includes closing costs and credits.

(5) During the year ended December 31, 2021, Gain on Disposal of Property, Net on the consolidated statements of operations includes miscellaneous write-off activity, which is not included in gain on sale of property, net, presented above.

PHILLIPS EDISON & COMPANY

DECEMBER 31, 2022 FORM 10-K

Gain on disposal of property, net (2)

(1) Total proceeds from sale of real estate, net includes closing costs less credits.

(2) Activity for the year ended December 31, 2023 includes land acquired from us by local authorities.

DISTRIBUTIONS —We elected to be taxed as a REIT for federal income tax purposes commencing with our taxable year ended December 31, 2010.

As a REIT, we have made, and intend to continue to make, distributions each taxable year equal to at least 90% of our taxable income (excluding capital gains and computed without regard to the dividends paid deduction).

We declared and paid 2022 monthly distributions of $0.09 per share, or $1.08 annualized, for each month beginning January 2022 through August 2022.

We declared and paid 2022 monthly distributions of $0.0933 per share, or $1.12 annualized, an increase of 3.7%, for each month beginning September 2022 through December 2022.

In 2023, we declared and paid monthly distributions of $0.0933 per share, or $1.12 annualized, for each month beginning January 2023 through August 2023.

On September 1, 2023, the Board authorized a 4.5% increase of our monthly distribution rate to $0.0975 per common share.

We declared and paid monthly distributions of $0.0975 per share, or $1.17 annualized, for each month beginning September 2023 through December 2023.

PHILLIPS EDISON & COMPANY

DECEMBER 31, 2023 FORM 10-K

The December 2023 and January 2024 distributions of $0.0975 per share were paid on January 2, 2024 and February 1, 2024, respectively.

On February 8, 2023, our Board authorized 2023 distributions for February, March, and April of $0.0933 per share to the stockholders of record at the close of business on February 21, 2023, March 15, 2023, and April 17, 2023, respectively.

OP unit holders will receive distributions at the same rate as common stockholders, subject to certain withholdings.

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.

We declared and paid 2021 monthly distributions of $0.085 per share, or $1.02 annualized, for each month beginning January 2021 through September 2021.

We declared and paid 2021 monthly distributions of $0.09 per share, or $1.08 annualized, for October 2021 through December 2021.

OP unit holders will receive distributions at the same rate as common stockholders, subject to any applicable withholding.

The timing and amount of distributions are determined by our Board and is influenced in part by our intention to comply with REIT requirements of the IRC.

In 2022, we declared and paid monthly distributions of $0.09 per share, or $1.08 annualized, for each month beginning January 2022 through August 2022.

We declared and paid monthly distributions of $0.0933 per share, or $1.12 annualized, an increase of 3.7%, for each month beginning September 2022 through December 2022.

To maintain our qualification as a REIT, we must make aggregate annual distributions to our stockholders of at least 90% of our REIT taxable income (which is computed without regard to the dividends paid deduction or net capital gain, and which does not necessarily equal net income or loss as calculated in accordance with GAAP).

3 unchanged sentences

We have not established a minimum distribution level, and our charter does not require that we make distributions to our stockholders.

DIVIDEND REINVESTMENT PLAN AND SHARE REPURCHASE PROGRAMS —On August 4, 2021, as a result of our underwritten IPO, our Board approved the termination of the DRIP and the original share repurchase program.

On August 3, 2022, our Board approved a new share repurchase program of up to $250 million of common stock.

SHARE REPURCHASE PROGRAM —On August 3, 2022, our Board approved a new share repurchase program of up to $250 million of common stock.

The program may be suspended or discontinued at any time, and does not obligate us to repurchase any dollar amount or particular number of shares.

No share repurchases have been made to date under this program.

CASH FLOW ACTIVITIES —As of December 31, 2022, we had cash and cash equivalents and restricted cash of $17.3 million , a net cash decrease of $98.2 million d uring the year ended December 31, 2022.

CASH FLOW ACTIVITIES —As of December 31, 2023, we had cash and cash equivalents and restricted cash of $8.9 million, a net cash decrease of $8.5 million during the year ended December 31, 2023.

Below is a summary of our cash flow activity for the years ended December 31, 2023 and 2022 (dollars in thousands):

4 unchanged sentences

(353,386) (331,245) (22,141) (6.7) %

Net cash used in financing activities

(57,825) (98,819) 40,994 41.5 %

Net cash provided by (used in) financing activities 53,947 (57,825) 111,772 NM

(1) Line items that result in a percent change that exceed certain limitations are considered not meaningful (“NM”) and indicated as such.

OPERATING ACTIVITIES —Our net cash provided by operating activities was primarily impacted by the following:

1 unchanged sentence

The increase in property operations was primarily due to a $16.2 million, or 4.2%, improvement in Same-Center NOI as compared to 2022, and the execution of our acquisition strategy.

During the year ended December 31, 2022, we had a net cash outlay of $0.2 million from changes in working capital as compared to a net cash inflow of $4.0 million during the same period in 2021.

This change was primarily driven by the timing of receivables and lower performance-based compensation accruals, partially offset by higher real estate tax accruals.

• Fee and management income — We also generate operating cash from our third-party investment management business, pursuant to various management and advisory agreements between us and the Managed Funds.

Our fee and management income was $11.5 million for the year ended December 31, 2022, an increase of $1.2 million as compared to the same period in 2021.

The increase in fees and management income was primarily due to our joint venture with NRP from which we recognized income related to NRP’s achievement of certain performance targets of $2.7 million for the year ended December 31, 2022, compared to income of $0.7 million in 2021.

• Cash paid for interest — During the year ended December 31, 2022, we paid $65.1 million for interest, a decrease of $3.0 million over the same period in 2021, largely due to net repayments of debt outstanding in 2021, partially offset by higher average interest rates in 2022.

PHILLIPS EDISON & COMPANY

DECEMBER 31, 2022 FORM 10-K

During the year ended December 31, 2023, we had a net cash outlay of $9.4 million from changes in working capital as compared to a net cash outlay of $0.2 million during the same period in 2022.

This change was primarily driven by an increase in real estate tax payments.

• Cash paid for interest — During the year ended December 31, 2023, we paid $76.5 million for interest, an increase of $11.4 million over the same period in 2022, largely due to higher interest rates in 2023.

• Fees and management income — We also generate operating cash from our third-party investment management business, pursuant to various management and advisory agreements between us and the Managed Funds.

Our fee and management income was $9.6 million for the year ended December 31, 2023, a decrease of $1.9 million as compared to the same period in 2022.

The decrease in fees and management income was primarily due to our joint venture with NRP from which we recognized income related to NRP’s achievement of certain performance targets of $0.1 million for the year ended December 31, 2023, compared to income of $2.7 million in 2022.

INVESTING ACTIVITIES —Our net cash used in investing activities was primarily impacted by the following:

• Real estate acquisitions — During the year ended December 31, 2023, our acquisitions resulted in a total cash outlay of $270.3 million, as compared to a total cash outlay of $282.0 million during the same period in 2022.

• Real estate dispositions — During the year ended December 31, 2022, our dispositions resulted in a net cash inflow of $52.0 million, as compared to a net cash inflow of $206.4 million during the same period in 2021.

• Capital expenditures — We invest capital into leasing our properties and maintaining or improving the condition of our properties.

During the year ended December 31, 2022, we paid $104.5 million for capital expenditures, an increase of $29.5 million over the same period in 2021, primarily due to an increase in tenant improvements owing largely to an increase in leasing volume as compared to the same period a year ago.

FINANCING ACTIVITIES —Our net cash used in financing activities was primarily impacted by the following:

• Debt borrowings and payments — During the year ended December 31, 2022, we had $1.3 million in net repayment of debt as compared to $402.3 million in net repayment of debt during the same period a year ago.

During the year ended December 31, 2023, we paid $95.3 million for capital expenditures, a decrease of $9.2 million over the same period in 2022.

• Real estate dispositions — During the year ended December 31, 2023, our dispositions resulted in a net cash inflow of $7.2 million, as compared to a net cash inflow of $52.0 million during the same period in 2022.

FINANCING ACTIVITIES —Our net cash provided by (used in) financing activities was primarily impacted by the following:

• Debt borrowings and payments — During the year ended December 31, 2023, we had $64.2 million in net borrowings as compared to $1.3 million in net repayment of debt during the same period a year ago.

See “Debt Activity” above for more details.

• Distributions to stockholders and OP unit holders — Cash used for distributions to common stockholders and OP unit holders increased by $22.3 million during the year ended December 31, 2022 as compared to the same period in 2021, primarily due to an increase in shares of common stock outstanding as a result of our underwritten IPO.

• Issuance of common stock— During the year ended December 31, 2023, we issued 4.2 million shares of our common stock under the ATM program for net proceeds of $147.6 million.

During the year ended December 31, 2021, we had net proceeds from the issuance of common stock of $508.4 million from our underwritten IPO.

• Share repurchases — Cash outflows for share repurchases decreased by $77.8 million for the year ended December 31, 2022 as compared to the same period in 2021, primarily as a result of a tender offer which was settled in January 2021.

During the year ended December 31, 2022, we issued 2.6 million shares of our common stock under the ATM program for net proceeds of $89.2 million.

• Distributions to stockholders and OP unit holders — Cash used for distributions to common stockholders and OP unit holders increased by $7.8 million during the year ended December 31, 2023 as compared to the same period in

PHILLIPS EDISON & COMPANY

DECEMBER 31, 2023 FORM 10-K

2022, primarily due to an increase in shares of common stock outstanding as a result of issuances under the ATM program and our distribution increases in both 2022 and 2023.

CRITICAL ACCOUNTING ESTIMATES

17 unchanged sentences

We will resume recording lease income on an accrual basis for cash-basis Neighbors once we believe the collection of rent for the remaining lease term is probable, which will generally be after a period of regular payments and no remaining unpaid rent for a certain timeframe.

Neighbors who represent approximately 2% of our ABR are on our watchlist for review for collectibility as of December 31, 2023.

However, not all of our watchlist Neighbors have an open receivable balance with us at December 31, 2023.

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 uncollectible tenant receivables, outstanding balances, and the current economic climate.

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.

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 and comprehensive income (“consolidated statements of operations”).

Our revenue collectibility estimates are made based on historical experience, the current economic climate, and other Neighbor-specific factors.

While we do not believe there is a reasonable likelihood of a material change in the estimates or

PHILLIPS EDISON & COMPANY

DECEMBER 31, 2022 FORM 10-K

assumptions that we use to recognize revenue, if actual payment levels were to vary significantly from estimates, we may be exposed to decreases in rental income that could be material or increases of non-cash straight-line income when a cash-basis Neighbor moves back to accrual accounting in accordance with GAAP.

While we do not believe there is a reasonable likelihood of a material change in the estimates or assumptions that we use to recognize revenue, if actual payment levels were to vary significantly from estimates, we may be exposed to decreases in rental income that could be material or increases of non-cash straight-line income when a cash-basis Neighbor moves back to accrual accounting in accordance with GAAP.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis