Phillips Edison Company Inc

Previous wording

As of June 30, 2024, we owned equity interests in 306 shopping centers, including 286 wholly-owned shopping centers and 20 shopping centers owned through one unconsolidated joint venture, which comprised approximately 34.8 million square feet in 31 states. In addition to managing our shopping centers, our third-party investment management business provides comprehensive real estate management services to the Managed Funds.

Current wording

As of September 30, 2024, we owned equity interests in 311 shopping centers, including 290 wholly-owned shopping centers and 21 shopping centers owned through two unconsolidated joint ventures, which comprised approximately 35.2 million square feet in 31 states. In addition to managing our shopping centers, our third-party investment management business provides comprehensive real estate management services to the Managed Funds.

Previous wording

The following table details information for our unconsolidated joint venture as of June 30, 2024, which is the basis for determining the prorated information included in the subsequent tables (dollars and square feet in thousands):

Current wording

The following table details information for our unconsolidated joint ventures as of September 30, 2024, which is the basis for determining the prorated information included in the subsequent tables (dollars and square feet in thousands):

Previous wording

LEASE EXPIRATIONS—The following chart shows the aggregate scheduled lease expirations for our over 3,000 Neighbors, excluding our Neighbors who are occupying space on a temporary basis, after June 30, 2024 for each of the next ten years and thereafter for our wholly-owned properties and the prorated portion of those owned through our unconsolidated joint venture:

Current wording

LEASE EXPIRATIONS—The following chart shows the aggregate scheduled lease expirations for our over 3,000 Neighbors, excluding our Neighbors who are occupying space on a temporary basis, after September 30, 2024 for each of the next ten years and thereafter for our wholly-owned properties and the prorated portion of those owned through our unconsolidated joint ventures:

Previous wording

PORTFOLIO TENANCY—We define national Neighbors as those Neighbors that operate in at least three states. Regional Neighbors are defined as those Neighbors that have at least three locations in fewer than three states. The following charts present the composition of our portfolio, including our wholly-owned properties and the prorated portion of those owned through our unconsolidated joint venture, by Neighbor type as of June 30, 2024:

Current wording

PORTFOLIO TENANCY—We define national Neighbors as those Neighbors that operate in at least three states. Regional Neighbors are defined as those Neighbors that have at least three locations in fewer than three states. The following charts present the composition of our portfolio, including our wholly-owned properties and the prorated portion of those owned through our unconsolidated joint ventures, by Neighbor type as of September 30, 2024:

Previous wording

NECESSITY-BASED GOODS AND SERVICES—We define “necessity-based goods and services” as goods and services that are indispensable, necessary, or common for day-to-day living, or that tend to be inelastic (i.e., those for which the demand does not change based on a consumer’s income level). We estimate that approximately 70% of our ABR, including the pro rata portion attributable to properties owned through our unconsolidated joint venture, is generated from Neighbors providing necessity-based goods and services.

Current wording

NECESSITY-BASED GOODS AND SERVICES—We define “necessity-based goods and services” as goods and services that are indispensable, necessary, or common for day-to-day living, or that tend to be inelastic (i.e., those for which the demand does not change based on a consumer’s income level). We estimate that approximately 70% of our ABR, including the pro rata portion attributable to properties owned through our unconsolidated joint ventures, is generated from Neighbors providing necessity-based goods and services.

Previous wording

TOP 20 NEIGHBORS—The following table presents our top 20 Neighbors by ABR, including our wholly-owned properties and the prorated portion of those owned through our unconsolidated joint venture, as of June 30, 2024 (dollars and square feet in thousands):

Current wording

TOP 20 NEIGHBORS—The following table presents our top 20 Neighbors by ABR, including our wholly-owned properties and the prorated portion of those owned through our unconsolidated joint ventures, as of September 30, 2024 (dollars and square feet in thousands):

Previous wording

Our basis for analyzing significant fluctuations in our results of operations generally includes review of the results of our same-center portfolio, non-same-center portfolio, and revenues and expenses from our management activities. We define our same-center portfolio as the 270 properties that were owned and operational prior to January 1, 2023. 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, 2022, which includes one property disposed of and 15 properties acquired. Below are explanations of the significant fluctuations in the results of operations for the three months ended June 30, 2024 and 2023:

Current wording

Our basis for analyzing significant fluctuations in our results of operations generally includes review of the results of our same-center portfolio, non-same-center portfolio, and revenues and expenses from our management activities. We define our same-center portfolio as the 270 properties that were owned and operational prior to January 1, 2023. 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, 2022, which includes one property disposed of and 19 properties acquired. Below are explanations of the significant fluctuations in the results of operations for the three months ended September 30, 2024 and 2023:

Previous wording

•$2.7 million increase primarily related to our same-center portfolio as follows:

Current wording

•$3.4 million increase primarily related to our same-center portfolio as follows:

Previous wording

▪$9.3 million increase primarily due to a $0.48 increase in average minimum rent PSF and a 0.3% improvement in average occupancy; partially offset by

Current wording

▪$4.8 million increase primarily due to a $0.47 increase in average minimum rent PSF; partially offset by

Previous wording

▪$1.3 million decrease due to the impact of lease straight-line rent adjustments;

Current wording

▪$0.9 million decrease due to the impact of straight-line rent adjustments.

Previous wording

•$1.9 million increase from our same-center portfolio and corporate operating activities primarily due to higher compensation and insurance costs and an increase in common area maintenance spending; and

Current wording

•$2.1 million increase from our same-center portfolio and corporate operating activities primarily due to an increase in common area maintenance spending and higher compensation and insurance costs; and

Previous wording

•The $6.8 million increase was primarily due to higher interest rates in 2024. Interest Expense, Net was comprised of the following (dollars in thousands):

Current wording

•The $3.5 million increase was primarily due to increased debt outstanding and higher interest rates in 2024. Interest Expense, Net was comprised of the following (dollars in thousands):

Previous wording

For details surrounding our basis for analyzing significant fluctuations in our results of operations as well as definitions related to our portfolio of real estate assets, please see “Summary of Operating Activities for the Three Months Ended June 30, 2024 and 2023” above. Below are explanations of the significant fluctuations in the results of operations for the six months ended June 30, 2024 and 2023:

Current wording

For details surrounding our basis for analyzing significant fluctuations in our results of operations as well as definitions related to our portfolio of real estate assets, please see “Summary of Operating Activities for the Three Months Ended September 30, 2024 and 2023” above. Below are explanations of the significant fluctuations in the results of operations for the nine months ended September 30, 2024 and 2023:

Previous wording

Rental Income increased $19.6 million as follows:

Current wording

Rental Income increased $31.9 million as follows:

Previous wording

•$6.5 million increase related to our same-center portfolio primarily as follows:

Current wording

•$10.0 million increase related to our same-center portfolio primarily as follows:

Previous wording

▪$4.6 million increase primarily due to a $0.45 increase in average minimum rent PSF and a 0.1% improvement in average occupancy; partially offset by

Current wording

▪$14.1 million increase primarily due to a $0.47 increase in average minimum rent PSF and a 0.2% improvement in average occupancy; partially offset by

Previous wording

▪$1.6 million decrease due to the impact of lease straight-line rent adjustments;

Current wording

▪$2.3 million decrease due to the impact of straight-line rent adjustments; and

Previous wording

▪$1.7 million decrease primarily due to an increase in amounts reserved for Neighbors identified as credit risks.

Current wording

▪$1.8 million decrease primarily due to an increase in amounts reserved for Neighbors identified as credit risks.

Previous wording

•$2.5 million increase from our same-center portfolio and corporate operating activities primarily due to higher compensation costs and an increase in common area maintenance spending; and

Current wording

•$4.5 million increase from our same-center portfolio and corporate operating activities primarily due to higher compensation costs, an increase in common area maintenance spending, and higher insurance costs; and

Previous wording

•The $1.1 million increase in real estate tax expenses is primarily due to our acquisition activity, net of dispositions.

Current wording

•The $2.4 million increase in real estate tax expenses was primarily due to our acquisition activity, net of dispositions.

Previous wording

•The $2.9 million increase was primarily due to increased interest rates in 2024. Interest Expense, Net was comprised of the following (dollars in thousands):

Current wording

•The $10.3 million increase was primarily due to increased interest rates and debt outstanding in 2024. Interest Expense, Net was comprised of the following (dollars in thousands):

Previous wording

Below is a summary of leasing activity for our wholly-owned properties for the six months ended June 30, 2024 and 2023(1):

Current wording

Below is a summary of leasing activity for our wholly-owned properties for the nine months ended September 30, 2024 and 2023(1):

Previous wording

SAME-CENTER NOI—Same-Center NOI is presented as a supplemental measure of our performance, as it highlights operating trends such as occupancy levels, rental rates, and operating costs for our same-center portfolio. Other REITs may use different methodologies for calculating Same-Center NOI, and accordingly, our Same-Center NOI may not be comparable to other REITs. For the three and six months ended June 30, 2024 and 2023, Same-Center NOI represents the NOI for the 270 properties that were wholly-owned and operational for the entire portion of all comparable reporting periods.

Current wording

SAME-CENTER NOI—Same-Center NOI is presented as a supplemental measure of our performance, as it highlights operating trends such as occupancy levels, rental rates, and operating costs for our same-center portfolio. Other REITs may use different methodologies for calculating Same-Center NOI, and accordingly, our Same-Center NOI may not be comparable to other REITs. For the three and nine months ended September 30, 2024 and 2023, Same-Center NOI represents the NOI for the 270 properties that were wholly-owned and operational for the entire portion of all comparable reporting periods.

Previous wording

ATM Program—In February 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 could 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. During the three months ended June 30, 2024, no

Current wording

ATM Program—In February 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 could 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. During the three months ended September 30,

Previous wording

shares of our common stock were issued under this ATM program. During the six months ended June 30, 2024, we issued approximately 46,000 shares of our common stock at a gross weighted average price of $37.05 per share under this ATM program for net proceeds of $1.7 million, after approximately $17,000 in commissions. During the three and six months ended June 30, 2023, no shares of our common stock were issued under this ATM program.

Current wording

2024, no shares of our common stock were issued under this ATM program. During the nine months ended September 30, 2024, we issued approximately 46,000 shares of our common stock at a gross weighted average price of $37.05 per share under this ATM program for net proceeds of $1.7 million, after approximately $17,000 in commissions. During the three and nine months ended September 30, 2023, we issued 2.0 million shares of our common stock under this ATM program for net proceeds of $70.1 million, after approximately $0.7 million in commissions.

Previous wording

In February 2024, we and the Operating Partnership entered into a new sales agreement relating to the potential sale of shares of common stock pursuant to a continuous offering program, which replaced the previous agreement. 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. During the three and six months ended June 30, 2024, we issued no shares of our common stock under this ATM program. As of June 30, 2024, approximately $250 million of common stock remained available for issuance under the current ATM program.

Current wording

In February 2024, we and the Operating Partnership entered into a new sales agreement relating to the potential sale of shares of common stock pursuant to a continuous offering program, which replaced the previous agreement. 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. During the three and nine months ended September 30, 2024, we issued no shares of our common stock under this ATM program. As of September 30, 2024, approximately $250 million of common stock remained available for issuance under the current ATM program.

Previous wording

Debt Obligation Guarantees—At June 30, 2024, the Operating Partnership had issued and outstanding its 2.625% and 5.750% senior notes. The obligations of the Operating Partnership to pay principal, premiums, if any, and interest on the 2.625% and 5.750% 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.

Current wording

Debt Obligation Guarantees—At September 30, 2024, the Operating Partnership had issued and outstanding its 2.625%, 4.950%, and 5.750% senior notes. The obligations of the Operating Partnership to pay principal, premiums, if any, and interest on the 2.625%, 4.950%, and 5.750% 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.

Previous wording

(1)Total equity market capitalization is calculated as diluted shares multiplied by the closing market price per share, which includes 136.1 million and 135.8 million diluted shares as of June 30, 2024 and December 31, 2023, respectively, and the closing market price per share of $32.71 and $36.48 as of June 30, 2024 and December 31, 2023, respectively.

Current wording

(1)Total equity market capitalization is calculated as diluted shares multiplied by the closing market price per share, which includes 136.3 million and 135.8 million diluted shares as of September 30, 2024 and December 31, 2023, respectively, and the closing market price per share of $37.71 and $36.48 as of September 30, 2024 and December 31, 2023, respectively.

Previous wording

During the six months ended June 30, 2024 and 2023, we had gross capital spend of $30.9 million and $47.6 million, respectively. Below is a summary of our capital spending activity, excluding leasing commissions, on a cash basis (in thousands):

Current wording

During the nine months ended September 30, 2024 and 2023, we had gross capital spend of $55.6 million and $74.3 million, respectively. Below is a summary of our capital spending activity, excluding leasing commissions, on a cash basis (in thousands):

Previous wording

(2)Amounts reported are net of insurance proceeds of $2.8 million and $1.9 million for property damage claims for the six months ended June 30, 2024 and 2023, respectively.

Current wording

(2)Amounts reported are net of insurance proceeds of $3.2 million and $2.3 million for property damage claims for the nine months ended September 30, 2024 and 2023, respectively.

Previous wording

Generally, we expect our development and redevelopment projects to stabilize within 24 months. Our underwritten incremental unlevered yields on development and redevelopment projects are expected to range between 9%-12%. Our current in process projects represent an estimated total investment of $38.4 million. Actual incremental unlevered yields may vary from our underwritten incremental unlevered yield range based on the actual total cost to complete a project and its actual incremental annual NOI at stabilization. See “Key Performance Indicators and Defined Terms” above for further information.

Current wording

Generally, we expect our development and redevelopment projects to stabilize within 24 months. Our underwritten incremental unlevered yields on development and redevelopment projects are expected to range between 9%-12%. Our current in process projects represent an estimated total investment of $45.6 million. Actual incremental unlevered yields may vary from our underwritten incremental unlevered yield range based on the actual total cost to complete a project and its actual incremental annual NOI at stabilization. See “Key Performance Indicators and Defined Terms” above for further information.

Previous wording

(2)During the six months ended June 30, 2024, we acquired an outparcel adjacent to a property that is owned by our unconsolidated joint venture, GRP I. Therefore, the outparcel is an addition to our total property count.

Current wording

(2)During the nine months ended September 30, 2024, we acquired an outparcel adjacent to a property that is owned by our unconsolidated joint venture, GRP I. Therefore, the outparcel is an addition to our total property count.

Previous wording

Property Dispositions—We sold no properties during the six months ended June 30, 2024, but we recognized a minimal loss on disposal of property due to miscellaneous write-off activity and expenses related to previous and future potential dispositions. During the six months ended June 30, 2023, we sold one property and two outparcels at a contract price of $6.3 million, received $7.1 million in proceeds, and recognized a gain on disposal of property of $1.0 million which was primarily due to land acquired from us by local authorities.

Current wording

REAL ESTATE DISPOSITION ACTIVITY—We sold no properties during the nine months ended September 30, 2024, but we recognized a minimal loss on disposal of property due to miscellaneous write-off activity and expenses related to previous and future potential dispositions. During the nine months ended September 30, 2023, we sold one property and two outparcels at a contract price of $6.3 million, received $7.1 million in proceeds, and recognized a gain on disposal of property of $1.1 million which was primarily due to land acquired from us by local authorities.

Previous wording

DISTRIBUTIONS—In 2024, we declared and paid monthly distributions of $0.0975 per common share and OP unit, or $1.17 annualized, for each month beginning January 2024 through June 2024.

Current wording

DISTRIBUTIONS—For each month beginning January 2024 through August 2024, we declared and paid monthly distributions of $0.0975 per common share and OP unit. In September 2024, the Board authorized a 5.1% increase of our monthly distribution rate to $0.1025 per common share and OP unit and we declared a monthly distribution of $0.1025 per common share and OP unit for September 2024.

Previous wording

CASH FLOW ACTIVITIES—As of June 30, 2024, we had cash and cash equivalents and restricted cash of $10.9 million, a net cash increase of $2.1 million during the six months ended June 30, 2024.

Current wording

CASH FLOW ACTIVITIES—As of September 30, 2024, we had cash and cash equivalents and restricted cash of $9.3 million, a net cash increase of $0.5 million during the nine months ended September 30, 2024.

Previous wording

•Property operations—Most of our operating cash comes from rental and tenant recovery income received less property operating expenses, real estate taxes, and general and administrative costs paid. Property operations during the six months ended June 30, 2024 were positively impacted by a $5.8 million, or 2.8%, improvement in Same-Center NOI as compared to the same period in 2023. During the six months ended June 30, 2024, we had a net cash outlay of $17.7 million from changes in working capital as compared to a net cash outlay of $19.6 million during the same period in 2023.

Current wording

•Property operations—Most of our operating cash comes from rental and tenant recovery income received less property operating expenses, real estate taxes, and general and administrative costs paid. Property operations during the nine months ended September 30, 2024 were positively impacted by a $9.1 million, or 2.9%, improvement in Same-Center NOI as compared to the same period in 2023. During the nine months ended September 30, 2024, we had a net cash inflow of $8.9 million from changes in working capital as compared to a net cash outlay of $7.0 million during the same period in 2023. This change was primarily driven by the timing of interest payments resulting from our 2024 senior note issuances.

Previous wording

•Real estate acquisitions—During the six months ended June 30, 2024, our acquisitions resulted in a total cash outlay of $116.2 million, as compared to a total cash outlay of $69.5 million during the same period in 2023.

Current wording

•Real estate acquisitions—During the nine months ended September 30, 2024, our acquisitions resulted in a total cash outlay of $205.0 million, as compared to a total cash outlay of $83.1 million during the same period in 2023.

Previous wording

•Capital expenditures—We invest capital into leasing our properties and maintaining or improving the condition of our properties. During the six months ended June 30, 2024, we paid $30.9 million for capital expenditures, a decrease of $16.7 million over the same period in 2023.

Current wording

•Capital expenditures—We invest capital into leasing our properties and maintaining or improving the condition of our properties. During the nine months ended September 30, 2024, we paid $55.6 million for capital expenditures, a decrease of $18.7 million over the same period in 2023.

Previous wording

•Debt borrowings and payments—During the six months ended June 30, 2024, we had $70.7 million in net borrowings primarily as a result of our 2024 Bond Offering, net repayments under our revolving credit facility and our partial pay down of an outstanding term loan. During the six months ended June 30, 2023, we had $43.5 million in net borrowings of debt primarily as a result of our borrowings under our revolving credit facility and early repayments of mortgage loans.

Current wording

•Debt borrowings and payments—During the nine months ended September 30, 2024, we had $130.4 million in net borrowings primarily as a result of our May and September 2024 senior note issuances, payments on our term loans, and net repayments under our revolving credit facility. During the nine months ended September 30, 2023, we had $39.5 million in net repayment of debt primarily as a result of early repayments of mortgage loans.

Previous wording

•Distributions to stockholders and OP unit holders—Cash used for distributions to common stockholders and OP unit holders decreased $7.3 million for the six months ended June 30, 2024 as compared to the same period in 2023, primarily due to the timing of 2024 distribution payments, partially offset by an increase in shares of common stock outstanding as a result of issuances under the ATM program and our distribution rate increase.

Current wording

•Distributions to stockholders and OP unit holders—Cash used for distributions to common stockholders and OP unit holders increased $8.7 million for the nine months ended September 30, 2024 as compared to the same period in 2023, primarily due to an increase in shares of common stock outstanding as a result of issuances under the ATM program and our distribution rate increase.