What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-02-11 compared with 2024-02-12 · 127 added, 138 removed, 492 unchanged (35% of the section changed)

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

• 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.

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

• 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:

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Our Neighbors are a mix of national, regional, and local retailers that primarily provide necessity-based goods and services.

As of December 31, 2023, we owned equity interests in 301 shopping centers, including 281 wholly-owned shopping centers and 20 shopping centers owned through one unconsolidated joint venture, which comprised approximately 34.4 million square feet in 31 states.

As of December 31, 2024, we owned equity interests in 316 shopping centers, including 294 wholly-owned shopping centers and 22 shopping centers owned through three unconsolidated joint ventures, which comprised approximately 35.7 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 our unconsolidated joint ventures and one private fund (collectively, the “Managed Funds”).

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

• Reverse Stock Split —On July 2, 2021, our 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 split of its outstanding 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).

• Recapitalization —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”).

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

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.

AT-THE-MARKET OFFERING (“ATM”) —In February 2022, we entered into a sales agreement relating to the potential sale of shares of common stock pursuant to a continuous offering program, allowing up to $250 million in offerings.

During the year ended December 31, 2024, prior to the entry into the new program described below, 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 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 this ATM program for net proceeds of $147.6 million, after approximately $1.5 million in commissions.

In February 2024, we 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 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.

During the three months and year ended December 31, 2024, we issued 1.9 million shares of our common stock at a gross weighted average price of $39.23 under this ATM program for net proceeds of $72.1 million, after approximately $0.7 million in commissions.

As of December 31, 2024, approximately $177 million of common stock remained available for issuance under the current ATM program.

PORTFOLIO AND LEASING STATISTICS —Below are statistical highlights of our wholly-owned portfolio as of December 31, 2024 and 2023 (dollars and square feet in thousands):

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(1) The average remaining lease term in years excludes future options to extend the term of the lease.

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

FINANCIAL HIGHLIGHTS —Owning, operating, and managing well-occupied omni-channel grocery-anchored real estate is the core part of our business strategy, and as of December 31, 2024, 95.7% of our ABR was derived from omni-channel grocery-anchored shopping centers.

As of December 31, 2024, total leased occupancy improved 30 basis points to 97.7% and inline occupancy improved 30 basis points to 95.0%, when compared to December 31, 2023.

Our financial performance highlights during 2024 are as follows:

• 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.

• Net income of $69.7 million, an increase of $5.9 million from a year ago, primarily due to strong operating performance attributable to our same-center portfolio and the impact of our 2024 acquisition activity.

• Core FFO per diluted share improved by $0.09 to $2.43, primarily due to our strong operating performance.

• Same-Center NOI improved 3.8% to $430.4 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.

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.

• Acquired $294.0 million in wholly-owned assets and $11.6 million in unconsolidated joint venture assets, executing our external growth strategy.

• 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 August 2024, and increased monthly distributions to $0.1025 per common share and OP unit, or $1.23 annualized, for the remainder of 2024.

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

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We believe these initiatives will result in long-term growth and value creation to all of our stakeholders.

PHILLIPS EDISON & COMPANY

DECEMBER 31, 2024 FORM 10-K

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

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 access to equity and debt capital allows us, in part, to grow our portfolio of assets.

Highlights of our asset composition and acquisitions are as follows:

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Grocer sales per square foot have increased approximately 37% since 2019.

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

• Approximately 69% of our ABR was derived from Neighbors providing necessity-based goods and services.

• The average PECO space, excluding anchors, is approximately 2,400 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.

• For the year ended December 31, 2024, we acquired twelve properties and four outparcels for a net cash outlay of $296.3 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, 2024 are as follows:

• 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.

• Leased occupancy for our wholly-owned portfolio improved 30 basis points to 97.7% as of December 31, 2024, and inline occupancy improved 30 basis points to 95.0%, when compared to December 31, 2023.

• Total ABR PSF for executed new leases improved 3.6% to $22.53, and inline ABR PSF for executed new leases improved 8.4% to $28.16 during the year ended December 31, 2024.

• For the year ended December 31, 2024, we completed 15 development and redevelopment projects encompassing a total of 0.3 million square feet with a total investment of $35.8 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.

• As of December 31, 2024, we have 14 development and redevelopment projects in process, which we estimate will have a total investment of approximately $41 million.

• Created $1.4 million of incremental ABR in 2024 as a result of development and redevelopment projects completed in 2023.

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As of December 31, 2024, we had $747.6 million of total liquidity, comprised of $8.6 million of cash, cash equivalents, and restricted cash, plus $738.9 million of borrowing capacity available on our $800 million revolving credit facility.

On January 9, 2025, we amended our senior unsecured revolving credit facility.

The amendment increases the aggregate borrowing capacity of the facility to $1 billion and extends the maturity date to January 2029, with options to extend the maturity for two additional six-month periods.

Our balance sheet management highlights as of and for the year ended December 31, 2024 are as follows:

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

• We issued 1.9 million shares of our common stock under our ATM programs for net proceeds of $73.8 million.

• In May 2024, we issued $350 million of 5.750% senior notes due 2034 at an issue price of 98.576% in an underwritten offering.

In September 2024, we issued $350 million of 4.950% senior notes due 2035 an an issue price of 98.458% in an underwritten offering.

The 2024 senior notes are fully and unconditionally guaranteed by us.

These issuances improved the flexibility of our balance sheet by extending our debt maturity profile.

• Our current investment grade ratings are Baa2 (Outlook:

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

Positive) with S&P Global Ratings.

Stable) with S&P Global Ratings.

• As of December 31, 2024, our wholly-owned properties were approximately 86% unencumbered.

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DECEMBER 31, 2024 FORM 10-K

• 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) :

• Following our activity this year, our outstanding debt had a weighted-average maturity of 5.6 years excluding all extension options as of December 31, 2024.

As of December 31, 2024, our debt maturity profile with the respective principal payment obligations was as follows (including the impact of derivatives on weighted-average interest rates and excluding all extension options) (1) :

(1) As of December 31, 2024, our outstanding debt had a weighted-average maturity of 5.8 years including all extension options.

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ABR (in thousands) $ 71,602 $ 58,529 $ 36,561 $ 35,311

ABR PSF $ 16.07 $ 13.96 $ 25.96 $ 24.04

ABR PSF prior to renewals $ 14.50 $ 12.77 $ 22.44 $ 21.18

Percentage increase in ABR PSF 10.8 % 9.3 % 15.7 % 13.4 %

ABR PSF (all leases) $ 15.46 $ 16.07 $ 27.84 $ 25.96

ABR PSF prior to renewals (all leases) $ 13.94 $ 14.50 $ 23.87 $ 22.44

Percentage increase in ABR PSF (comparable leases only) 11.3 % 10.8 % 16.6 % 15.7 %

Cost PSF of executing renewals and options $ 0.38 $ 0.52 $ 0.67 $ 0.91

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RESULTS OF OPERATIONS

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.

KNOWN TRENDS AND UNCERTAINTIES —Although certain indicators have suggested that inflation has made downward progress, the economy continues to be impacted by elevated inflation rates and faces further inflation risk.

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 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.

However, elevated inflation rates, including their impact on operating and construction costs, may nevertheless negatively impact us and some of our Neighbors.

Our business and financial results, as well as the results of our Neighbors, could also be adversely impacted by elevated interest rate levels arising from the Federal Reserve’s response to inflation.

In addition, slower economic growth and a potential for a recession could have an adverse effect on us and our Neighbors, including negatively impacting consumer sentiment and consumer willingness to spend.

PHILLIPS EDISON & COMPANY

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Depreciation and amortization 253,016 236,443 (16,573) (7.0) %

Impairment of real estate assets — 322 322 NM

Total operating expenses 488,944 455,928 (33,016) (7.2) %

Interest expense, net (96,990) (84,232) (12,758) (15.1) %

Gain on disposal of property, net

1,110 7,517 (6,407) (85.2) %

(Loss) gain on disposal of property, net (30) 1,110 (1,140) (102.7) %

Other expense, net

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$ 62,685 $ 56,848 $ 5,837 10.3 %

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

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, 2021, which includes five properties disposed of and 18 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, 2022, which includes one property disposed of and 23 properties acquired.

Below are explanations of the significant fluctuations in the results of operations for the years ended December 31, 2024 and 2023:

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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 $1.9 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.

▪ $2.6 million decrease primarily due to the impact of straight-line rent adjustments.

• $30.7 million increase primarily related to our net acquisition activity.

Property Operating Expenses increased $10.3 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.

• $6.0 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;

• $4.4 million increase primarily due to our net acquisition activity.

Real Estate Tax Expenses:

• 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.

• The $4.9 million increase in real estate tax expenses is primarily due to our net acquisition activity.

General and Administrative Expenses:

• The $1.2 million increase in general and administrative expenses is primarily due to higher share-based compensation expense.

PHILLIPS EDISON & COMPANY

DECEMBER 31, 2024 FORM 10-K

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 $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.

• The $12.8 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):

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(1) Includes defeasance fees related to early repayments of debt

Gain on Disposal of Property, Net:

• 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:

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Equity in net income of unconsolidated investments

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

Other 1,429 (274)

Other income 996 1,429

Other expense, net

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See “Key Performance Indicators and Defined Terms” above for additional information related to the following non-GAAP measures.

PHILLIPS EDISON & COMPANY

DECEMBER 31, 2024 FORM 10-K

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.

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For the years ended December 31, 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.

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.

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253,016 236,443

Impairment of real estate assets

Interest expense, net

96,990 84,232

Gain on disposal of property, net

(1,110) (7,517)

Loss (gain) on disposal of property, net

Other expense, net

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Total Same-Center NOI $ 430,444 $ 414,579

Period-end Same-Center Leased Occupancy % 97.8 % 97.8 %

(1) Includes straight-line rent adjustments for Neighbors for whom revenue is being recorded on a cash basis.

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

PHILLIPS EDISON & COMPANY

DECEMBER 31, 2024 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.

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

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.

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Impairment of real estate assets — — 322

Gain on disposal of property, net

Loss (gain) on disposal of property, net

30 (1,110) (7,517)

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Interest expense, net 96,990 84,232 71,196

Gain on disposal of property, net (1,110) (7,517) (30,421)

Loss (gain) on disposal of property, net 30 (1,110) (7,517)

Impairment of real estate assets — — 322

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• borrowings from our unsecured revolving credit facility and proceeds from debt financings;

• proceeds from any ATM offering activities;

• proceeds from any equity offering activities;

• proceeds received from the disposition of properties;

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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, 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.

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

ATM —In February 2022, we entered into a sales agreement relating to the potential sale of shares of common stock pursuant to a continuous offering program, allowing up to $250 million in offerings.

In February 2024, we 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.

As of December 31, 2024, approximately $177 million of common stock remained available for issuance under the current ATM program.

PHILLIPS EDISON & COMPANY

DECEMBER 31, 2024 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, 2024 and 2023 (dollars in thousands):

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738,904 606,550

(1) The revolving credit facility matures in January 2026, extendable at our option to January 2027.

In addition, the 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) As of December 31, 2024, the revolving credit facility was set to mature in January 2026, extendable at our option to January 2027.

In addition, the revolving credit facility also included an accordion feature that permitted us to increase our aggregate borrowing capacity to $1 billion.

On January 9, 2025, we amended our senior unsecured revolving credit facility.

The amendment increases the aggregate borrowing capacity of the facility to $1.0 billion and extends the maturity date to January 2029, with options to extend the maturity for two additional six-month periods.

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

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.

Debt Activity —During the years ended December 31, 2024 and 2023, we took steps to appropriately ladder and extend our debt maturities and diversify debt sources available to us for future investment activity.

Our debt activity during the year ended December 31, 2024 was as follows:

• 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.

• In May 2024, we issued $350 million of 5.750% senior notes due 2034 at an issue price of 98.576% in an underwritten offering.

The offering resulted in gross proceeds of $345.0 million, which were used to pay down $202 million of our revolving credit facility and $135 million of our $240 million term loan that was set to mature in November 2025.

• In September 2024, we issued $350 million of 4.950% senior notes due 2035 an an issue price of 98.458% in an underwritten offering.

The offering resulted in gross proceeds of $344.6 million, which were used to pay down $90 million of our revolving credit facility and $140 million of our $240 million term loan that is set to mature in July 2026.

Additionally, we paid in full our $105 million term loan that was set to mature in November 2025.

• During the year ended December 31, 2024, we repaid $28.1 million in mortgage debt.

Our debt activity during the year ended December 31, 2023 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.

The unsecured revolving credit facility is scheduled to mature in January 2026, extendable at our option to January 2027.

• In July 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 was the Secured Overnight Financing Rate (“SOFR”) plus 1.35% at issuance, and is scheduled to mature in January 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 was SOFR plus 1.35% at issuance, and mature in January 2027.

• During 2023, we repaid $47.3 million in mortgage debt.

Future Debt Obligations —As of December 31, 2024, including the impact of our swap agreements, our future contractual debt obligations were $129.3 million of debt principal and interest payments during 2025, and $2.5 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.

At December 31, 2023, 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.

The average annual maturities of our outstanding debt over the next four years as of December 31, 2024 was approximately $221 million.

Debt Obligation Guarantees —At December 31, 2024, the Operating Partnership had issued and outstanding its unsecured senior notes due 2031, 2034, and 2035, all issued under effective registration statements.

The obligations of the Operating Partnership to pay principal, premiums, if any, and interest on the unsecured senior notes due 2031, 2034, and 2035 are, and on any future debt securities of the Operating Partnership registered under an effective registration statement will be, 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:

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Covenants —Credit agreements for our unsecured revolving credit facility and unsecured term loans contain customary financial covenants, including a leverage ratio of 60% or less, with a surge to 65% or less following a material acquisition, and require the fixed-charge ratio to be 1.5:1 or greater.

Our unsecured senior notes due 2031 are also subject to customary financial covenants, including a leverage ratio of 65% or less, and require the fixed-charge ratio to be 150% or greater.

Our unsecured senior notes due 2031, 2034, and 2035 are also subject to customary financial covenants, including a leverage ratio of 65% or less, and require the fixed-charge ratio to be 150% or greater.

As of December 31, 2024, we were in compliance with the restrictive covenants of our outstanding debt obligations, and we expect to continue to meet the requirements of these covenants over the next twelve months.

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As of December 31, 2024, our future contractual obligations as a lessee included operating lease obligations of $0.4 million during 2025, and $6.9 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.

As of December 31, 2024, our future contractual finance lease obligations were not significant.

We have an off-balance sheet arrangement that includes being the limited guarantor of a $174.0 million mortgage loan secured by properties owned by our unconsolidated joint venture, Grocery Retail Partners I LLC (“GRP I”).

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

Further, we are also party to an agreement with our institutional joint venture partner in which any potential liability under such guarantee will be apportioned between us and our joint venture partner based on our respective ownership percentage in the joint venture.

Further, we are also party to an agreement with GRP I in which any potential liability under such guaranty will be apportioned between us and GRP I based on our respective ownership percentage in the joint venture.

As of December 31, 2024, GRP I had an outstanding debt balance of $174.0 million.

We also have an off-balance sheet arrangement that includes being the limited guarantor of a $23.2 million mortgage loan secured by a property owned by our unconsolidated joint venture, Necessity Retail Venture LLC (“NRV”).

Our guaranty for the NRV debt is limited to being the non-recourse carveout guarantor and the environmental indemnitor.

Further, we are also party to an agreement with NRV in which any potential liability under such guaranty will be apportioned between us and NRV based on our respective ownership percentage in the joint venture.

As of December 31, 2024, NRV had an outstanding debt balance of $23.2 million.

Additionally, our off-balance sheet arrangements include the notional amount of our interest rate swaps which we use to hedge a portion of our exposure to interest rate fluctuations.

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We intend to fund our interest rate swap payments utilizing cash flows from operations.

As of December 31, 2023, the notional amount of our interest rate swaps was $0.7 billion.

As of December 31, 2023, our future interest rate swap recoverables are $15.8 million during 2024 and $11.3 million thereafter.

As of December 31, 2024, the notional amount of our interest rate swaps was $475 million.

As of December 31, 2024, our future interest rate swap recoverables were $6.1 million during 2025 and $2.7 million thereafter.

FINANCIAL LEVERAGE RATIOS —We believe our net debt to Adjusted EBITDA re , net debt to total enterprise value, and debt covenant compliance as of December 31, 2024 allow us access to future borrowings as needed in the near term.

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See “Non-GAAP Measures - EBITDA re and Adjusted EBITDA re” above for a reconciliation to Net Income.

PHILLIPS EDISON & COMPANY

DECEMBER 31, 2024 FORM 10-K

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.

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Below is a summary of our capital spending activity, excluding leasing commissions, on a cash basis for the years ended December 31, 2024 and 2023 (in thousands):

PHILLIPS EDISON & COMPANY

DECEMBER 31, 2023 FORM 10-K

Capital expenditures for real estate:

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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 average between 9%-12%.

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 $41.3 million.

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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):

We are currently targeting acquisitions of $350 million - $450 million annually, inclusive of our investments in our unconsolidated joint ventures.

The following table highlights our wholly-owned property acquisitions during the years ended December 31, 2024 and 2023 (dollars in thousands):

Number of properties acquired 12 11

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

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

(2) During the year ended December 31, 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.

(3) Total price of acquisitions includes closing costs less credits and assumed liabilities.

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.

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Contract price $ — $ 6,250

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

Gain on disposal of property, net (2)

(Payments) proceeds from sale of real estate, net (1)(2)(3)

(Loss) gain on disposal of property, net (2)(3)

(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).

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, 2024 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.

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.

(3) We sold no properties during the year ended December 31, 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.

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

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 August 2024.

In September 2024, the Board authorized a 5.1% increase of our monthly distribution rate to $0.1025 per common share and OP unit.

We declared and paid monthly distributions of $0.1025 per common share and OP unit, or $1.23 annualized, for each month beginning September 2024 through December 2024.

The December 2024 and January 2025 distributions of $0.1025 per common share and OP unit were paid on January 3, 2025 and February 4, 2025, respectively.

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

We declared and paid monthly distributions of $0.0975 per common share and OP unit, or $1.17 annualized, an increase of 4.5%, for each month beginning September 2023 through December 2023.

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).

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

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 —In August 2022, our Board approved a 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.

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(392,944) (353,386) (39,558) (11.2) %

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.

Net cash provided by financing activities 58,005 53,947 4,058 (7.5) %

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

• Property operations and working capital — Most of our operating cash comes from rental and tenant recovery income and is offset by property operating expenses, real estate taxes, and general and administrative costs.

• Property operations and working capital — 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.

The increase in property operations was primarily due to a $15.9 million, or 3.8%, improvement in Same-Center NOI as compared to 2023, and the execution of our acquisition strategy.

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.

During the year ended December 31, 2024, we had a net cash inflow of $9.7 million from changes in working capital as compared to a net cash outlay of $9.4 million during the same period in 2023.

This change was primarily driven by the timing of interest payments resulting from our 2024 senior notes, which now occur semiannually versus primarily monthly in the past.

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

• Real estate acquisitions — During the year ended December 31, 2024, our acquisitions resulted in a total cash outlay of $296.3 million, as compared to a total cash outlay of $270.3 million during the same period in 2023.

• Investment in unconsolidated joint ventures — During the year ended December 31, 2024, we invested $8.4 million in our new investments in NRV and Neighborhood Grocery Catalyst Fund LLC (“NGCF”).

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

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.

During the year ended December 31, 2024, we paid $95.1 million for capital expenditures compared to $95.3 million over the same period in 2023, which included our development and redevelopment activity.

• Real estate dispositions — During the year ended December 31, 2024, we sold no properties, but we had minimal net cash outflows for expenses related to previous and future potential dispositions.

During the year ended December 31, 2023, we sold one property and two outparcels resulting in a net cash inflow of $7.2 million.

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

• Debt borrowings and payments — During the year ended December 31, 2024, we had $133.6 million in net borrowings primarily as a result of our May and September 2024 senior notes, payments on our term loans, and net repayments under our revolving credit facility.

During the year ended December 31, 2023, we had $64.2 million in net borrowings primarily as result of net borrowings under our revolving credit facility.

See “Debt Activity” above for more details.

• 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, 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, 2024 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.

• Issuance of common stock— During the year ended December 31, 2024, we issued 1.9 million shares of our common stock under our ATM programs for net proceeds of $73.8 million.

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.

• Distributions to stockholders and OP unit holders — Cash used for distributions to common stockholders and OP unit holders decreased by $2.6 million during the year ended December 31, 2024 as compared to the same period in 2023, primarily due to the timing of the funding for our December 2024 distribution payment partially offset by the increase in shares of common stock outstanding as a result of issuances under our ATM programs and our distribution increases in both 2023 and 2024.

CRITICAL ACCOUNTING ESTIMATES

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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.

Neighbors who represent approximately 2% of our ABR were on our watchlist for review for collectibility as of December 31, 2024.

However, not all of our watchlist Neighbors had an open receivable balance with us at December 31, 2024.

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.

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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