What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-04-25 compared with 2024-10-25 · 131 added, 230 removed, 425 unchanged (46% of the section changed)

9 unchanged sentences

We intend for all such forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in the Acts.

Such forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “can,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” “possible,” “initiatives,” “focus,” “seek,” “objective,” “goal,” “strategy,” “plan,” “potential,” “potentially,” “preparing,” “projected,” “future,” “long-term,” “once,” “should,” “could,” “would,” “might,” “uncertainty,” or other similar words.

Such forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” “seek,” “objective,” “goal,” “strategy,” “plan,” “focus,” “priority,” “should,” “could,” “potential,” “possible,” “look forward,” “optimistic” or other similar words.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this report is filed with the SEC.

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(xix) to the extent we are seeking to dispose of properties, our ability to do so at attractive prices or at all;

and (xx) the impact of inflation on us and on our tenants.

and (xx) the impact of tariffs and global trade disruptions on us, our tenants, and consumers, including the impact on inflation, supply chains, and consumer sentiment.

Additional important factors that could cause actual results to differ are described in the filings made from time to time by the Company with the SEC and include the risk factors and other risks and uncertainties described in our 2024 Annual Report on Form 10-K, filed with the SEC on February 11, 2025, as updated from time to time in our periodic and/or current reports filed with the SEC, which are accessible on the SEC’s website at www.sec.gov.

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Other REITs may use different methodologies for calculating similar non-GAAP measures, and accordingly, our non-GAAP measures may not be comparable to other REITs.

PHILLIPS EDISON & COMPANY

SEPTEMBER 30, 2024 FORM 10-Q

Our KPIs and terminology can be grouped into three key areas:

PHILLIPS EDISON & COMPANY

MARCH 31, 2025 FORM 10-Q

PORTFOLIO —Portfolio metrics help management to gauge the health of our centers overall and individually.

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(ii) other impairment charges;

(iii) amortization of basis differences in our investments in our unconsolidated joint ventures;

(iii) adjustments related to our investments in unconsolidated joint ventures;

(iv) transaction and acquisition expenses;

4 unchanged sentences

(ii) changes in the fair value of the earn-out liability;

(iii) amortization of unconsolidated joint venture basis differences;

(iii) adjustments related to our investments in unconsolidated joint ventures;

(iv) gains or losses on the extinguishment or modification of debt and other;

12 unchanged sentences

PHILLIPS EDISON & COMPANY

SEPTEMBER 30, 2024 FORM 10-Q

• 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.

MARCH 31, 2025 FORM 10-Q

• 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 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.

As of March 31, 2025, we owned equity interests in 321 shopping centers, including 298 wholly-owned shopping centers and 23 shopping centers owned through three unconsolidated joint ventures, which comprised approximately 36.0 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.

2024 SENIOR NOTE ISSUANCES —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 at an issue price of 98.458% in an underwritten offering.

The 2024 senior note issuances are fully and unconditionally guaranteed by us.

PORTFOLIO AND LEASING STATISTICS —Below are statistical highlights of our wholly-owned portfolio as of September 30, 2024 and 2023 (dollars and square feet in thousands):

September 30, 2024 September 30, 2023

PORTFOLIO AND LEASING STATISTICS —Below are statistical highlights of our wholly-owned portfolio as of March 31, 2025 and 2024 (dollars and square feet in thousands):

March 31, 2025 March 31, 2024

Number of properties 298 284

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PHILLIPS EDISON & COMPANY

SEPTEMBER 30, 2024 FORM 10-Q

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):

September 30, 2024

MARCH 31, 2025 FORM 10-Q

The following table details information for our unconsolidated joint ventures as of March 31, 2025, which is the basis for determining the prorated information included in the subsequent tables (dollars and square feet in thousands):

March 31, 2025

Joint Venture Ownership Percentage Number of Properties ABR GLA

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NRV 20% 2 5,679 263

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:

NGCF 31% 1 1,044 49

LEASE EXPIRATIONS —The following chart shows the aggregate scheduled lease expirations for our over 3,500 unique Neighbors, excluding our Neighbors who are occupying space on a temporary basis, after March 31, 2025 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:

Our ability to create rental rate growth generally depends on our leverage during new and renewal lease negotiations with prospective and existing Neighbors, which typically occurs when occupancy at our centers is high or during periods of economic growth and recovery.

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PHILLIPS EDISON & COMPANY

SEPTEMBER 30, 2024 FORM 10-Q

MARCH 31, 2025 FORM 10-Q

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:

The following charts present the composition of our portfolio by Neighbor industry as of September 30, 2024:

The following charts present the composition of our portfolio by Neighbor industry as of March 31, 2025:

PHILLIPS EDISON & COMPANY

SEPTEMBER 30, 2024 FORM 10-Q

MARCH 31, 2025 FORM 10-Q

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 71% 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.

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):

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 March 31, 2025 (dollars and square feet in thousands):

ABR % of ABR Leased Square Feet % of Leased Square Feet Number of Locations (2)

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Giant Eagle 7,390 1.4 % 759 2.3 % 10

Sprouts Farmers Market 6,732 1.3 % 421 1.3 % 14

TJX Companies 7,280 1.4 % 603 1.8 % 21

Sprouts Farmers Market 6,205 1.2 % 389 1.2 % 13

Raley's 4,607 0.9 % 288 0.9 % 5

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UNFI (SuperValu) 3,476 0.7 % 336 1.0 % 5

Trader Joe's 2,798 0.6 % 122 0.4 % 9

Planet Fitness 2,986 0.6 % 231 0.7 % 11

Subway Group 2,899 0.6 % 97 0.3 % 67

Pet Supplies Plus 2,809 0.5 % 180 0.5 % 23

Trader Joe's 2,798 0.5 % 122 0.4 % 9

United Parcel Service 2,735 0.5 % 93 0.3 % 74

H-E-B 2,492 0.5 % 164 0.5 % 2

H&R Block, Inc.

Great Clips, Inc.

2,630 0.5 % 88 0.3 % 77

Lowe's 2,469 0.5 % 369 1.1 % 4

Anytime Fitness, Inc.

2,542 0.5 % 140 0.4 % 29

Total $ 163,058 31.3 % 14,900 45.2 % 621

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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 —Adverse economic conditions, including slower economic growth and the potential for a recession, could have an adverse effect on us and our Neighbors, including a negative impact on the consumer’s willingness to spend.

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.

Additionally, rapid changes in trade policy, new or increased tariffs, retaliatory tariffs, and global trade disruptions could negatively affect us and our Neighbors, including by further aggravating inflation, increasing costs, and disrupting supply chains.

PHILLIPS EDISON & COMPANY

SEPTEMBER 30, 2024 FORM 10-Q

SUMMARY OF OPERATING ACTIVITIES FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

MARCH 31, 2025 FORM 10-Q

SUMMARY OF OPERATING ACTIVITIES FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024

Three Months Ended

September 30, Favorable (Unfavorable)

March 31, Favorable (Unfavorable)

(Dollars in thousands) 2025 2024 $ % (1)

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(25,672) (23,335) (2,337) (10.0) %

(Loss) gain on disposal of property, net (19) 53 (72) (135.8) %

Gain (loss) on disposal of property, net 5,609 (5) 5,614 NM

Other expense, net

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$ 26,309 $ 17,670 $ 8,639 48.9 %

(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.

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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, 2023, which includes one property disposed of and 18 properties acquired.

Below are explanations of the significant fluctuations in the results of operations for the three months ended September 30, 2024 and 2023:

Below are explanations of the significant fluctuations in the results of operations for the three months ended March 31, 2025 and 2024:

Rental Income increased $16.1 million primarily as follows:

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▪ $4.3 million increase primarily due to a $0.43 increase in average minimum rent PSF;

partially offset by

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

• $8.8 million increase primarily related to our acquisition activity, net of dispositions.

Property Operating Expenses increased $3.3 million primarily as follows:

• $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;

• $1.2 million increase primarily due to our acquisition activity, net of dispositions.

PHILLIPS EDISON & COMPANY

SEPTEMBER 30, 2024 FORM 10-Q

Interest Expense, Net:

• 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):

Three Months Ended September 30,

Interest on unsecured term loans and senior notes, net $ 16,008 $ 12,216

Interest on secured debt 4,252 4,536

Interest on revolving credit facility, net 1,255 2,212

Non-cash amortization and other 2,252 2,183

Loss on extinguishment or modification of debt and other, net (1)

Interest expense, net

$ 24,998 $ 21,522

Weighted-average interest rate as of end of period 4.4 % 4.1 %

Weighted-average term (in years) as of end of period 5.9 4.2

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

Other Expense, Net:

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

Three Months Ended September 30,

Transaction and acquisition expenses $ (1,181) $ (580)

Impairment of investment in third parties — (3,000)

Federal, state, and local income tax expense (446) (120)

Equity in net (loss) income of unconsolidated investments

Other income (loss)

Other expense, net

$ (1,068) $ (4,883)

PHILLIPS EDISON & COMPANY

SEPTEMBER 30, 2024 FORM 10-Q

SUMMARY OF OPERATING ACTIVITIES FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

Nine Months Ended

September 30, Favorable (Unfavorable)

(Dollars in thousands) 2024 2023 $ %

Rental income $ 478,134 $ 446,274 $ 31,860 7.1 %

Fees and management income 7,943 7,192 751 10.4 %

Other property income 2,267 2,209 58 2.6 %

Total revenues 488,344 455,675 32,669 7.2 %

Operating Expenses:

Property operating 81,461 74,010 (7,451) (10.1) %

Real estate taxes 57,897 55,481 (2,416) (4.4) %

General and administrative 34,060 33,604 (456) (1.4) %

Depreciation and amortization 189,706 176,871 (12,835) (7.3) %

Total operating expenses 363,124 339,966 (23,158) (6.8) %

Interest expense, net

(71,954) (61,663) (10,291) (16.7) %

(Loss) gain on disposal of property, net

(34) 1,070 (1,104) (103.2) %

Other expense, net

(3,717) (6,542) 2,825 43.2 %

49,515 48,574 941 1.9 %

Net income attributable to noncontrolling interests

(4,972) (5,259) 287 5.5 %

Net income attributable to stockholders

$ 44,543 $ 43,315 $ 1,228 2.8 %

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:

Rental Income increased $31.9 million as follows:

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

▪ $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

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

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

• $21.9 million increase primarily related to our acquisition activity, net of dispositions.

▪ $1.5 million increase primarily due to lease buyout income;

▪ $1.1 million increase primarily due to an increase in recoverable income attributed to an increase in real estate taxes and common area maintenance spending;

▪ $0.7 million increase primarily due to a decrease in amounts reserved for Neighbors identified as credit risks.

• $8.2 million increase primarily related to our net acquisition activity.

Property Operating Expenses increased $3.4 million primarily as follows:

• $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;

• $2.9 million increase primarily due to our acquisition activity, net of dispositions.

• $2.2 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;

• $1.2 million increase primarily due to our net acquisition activity.

Real Estate Tax Expenses:

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

• The $2.2 million increase in real estate tax expenses is primarily due to our net acquisition activity.

PHILLIPS EDISON & COMPANY

SEPTEMBER 30, 2024 FORM 10-Q

MARCH 31, 2025 FORM 10-Q

Interest Expense, Net:

• The $10.3 million increase was primarily due to increased interest rates and debt outstanding in 2024.

• The $2.3 million increase was primarily due to increased debt outstanding in 2025.

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

Nine Months Ended September 30,

Interest on unsecured term loans and senior notes, net $ 44,800 $ 35,046

Three Months Ended March 31,

Interest on senior notes $ 11,659 $ 2,297

Interest on unsecured term loans, net 6,695 11,360

Interest on secured debt 4,055 4,506

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Weighted-average term (in years) as of end of period 5.3 3.6

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

Other Expense, Net:

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

Nine Months Ended September 30,

Three Months Ended March 31,

Transaction and acquisition expenses $ (1,322) $ (1,174)

Impairment of investment in third parties — (3,000)

Federal, state, and local income tax expense (146) (137)

Equity in net (loss) income of unconsolidated investments

Other income (loss) 838 (316)

Equity in net income of unconsolidated investments

Other expense, net

1 unchanged sentence

PHILLIPS EDISON & COMPANY

SEPTEMBER 30, 2024 FORM 10-Q

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

Total Deals Inline Deals

2024 2023 2024 2023

Number of leases 78 82 70 78

Square footage (in thousands) 334 279 157 166

ABR (in thousands) $ 7,437 $ 5,676 $ 4,251 $ 4,473

ABR PSF $ 22.27 $ 20.36 $ 27.05 $ 26.86

Cost PSF of executing new leases $ 34.79 $ 29.01 $ 41.52 $ 36.92

Number of comparable leases 32 43 28 42

Comparable rent spread 55.0 % 26.3 % 28.3 % 25.3 %

Weighted-average lease term (in years) 10.4 10.3 7.4 7.1

Renewals and options:

Number of leases 190 149 168 138

Square footage (in thousands) 1,241 660 390 328

ABR (in thousands) $ 18,219 $ 12,657 $ 10,514 $ 8,688

ABR PSF (all leases) $ 14.68 $ 19.17 $ 26.93 $ 26.47

ABR PSF prior to renewals (all leases) $ 13.28 $ 17.21 $ 23.21 $ 22.84

Percentage increase in ABR PSF (comparable leases only) 10.5 % 11.4 % 16.0 % 15.9 %

Cost PSF of executing renewals and options $ 0.70 $ 0.41 $ 0.68 $ 0.82

Number of comparable leases (2)

136 109 134 107

Comparable rent spread (2)

19.8 % 16.9 % 19.6 % 17.2 %

Weighted-average lease term (in years) 5.2 4.6 4.6 4.3

Portfolio retention rate 91.9 % 93.1 % 81.2 % 87.5 %

(1) PSF amounts may not recalculate exactly based on other amounts presented within the table due to rounding.

(2) Excludes exercise of options.

PHILLIPS EDISON & COMPANY

SEPTEMBER 30, 2024 FORM 10-Q

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

MARCH 31, 2025 FORM 10-Q

LEASING ACTIVITY —Below is a summary of leasing activity for our wholly-owned properties for the three months ended March 31, 2025 and 2024 (1) :

Total Deals Inline Deals

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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.

For the three months ended March 31, 2025 and 2024, Same-Center NOI represents the NOI for the 280 properties that were wholly-owned and operational for the entire portion of all comparable reporting periods.

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.

PHILLIPS EDISON & COMPANY

SEPTEMBER 30, 2024 FORM 10-Q

MARCH 31, 2025 FORM 10-Q

The table below presents our Same-Center NOI (dollars in thousands):

Three Months Ended September 30, Favorable (Unfavorable) Nine Months Ended September 30, Favorable (Unfavorable)

Change 2024 2023 $ Change % Change

Three Months Ended March 31, Favorable (Unfavorable)

2025 2024 $ Change % Change

Rental income (1)

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Same-Center NOI Reconciliation —Below is a reconciliation of Net Income to NOI and Same-Center NOI (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

$ 28,893 $ 19,626

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Interest expense, net 25,672 23,335

Loss (gain) on disposal of property, net

19 (53) 34 (1,070)

(Gain) loss on disposal of property, net

Other expense, net

1,068 4,883 3,717 6,542

Property operating expenses related to fees and management income 896 1,026

1 unchanged sentence

Non-same-center NOI (2)

(4,549) 883 (11,179) 3,179

Total Same-Center NOI $ 115,094 $ 110,727

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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

SEPTEMBER 30, 2024 FORM 10-Q

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

PHILLIPS EDISON & COMPANY

MARCH 31, 2025 FORM 10-Q

The following table presents our calculation of Nareit FFO and Core FFO (in thousands, except per share amounts):

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Calculation of Nareit FFO Attributable to Stockholders and OP Unit Holders

1 unchanged sentence

Depreciation and amortization of real estate assets 64,897 59,776

Loss (gain) on disposal of property, net

19 (53) 34 (1,070)

(Gain) loss on disposal of property, net

Adjustments related to unconsolidated joint ventures 867 649

3 unchanged sentences

Depreciation and amortization of corporate assets 377 430

Impairment of investment in third parties — 3,000 — 3,000

Transaction and acquisition expenses 1,322 1,174

Loss on extinguishment or modification of debt and other, net 1 —

Amortization of unconsolidated joint venture basis differences 3 4 8 12

Realized performance income (1)

Adjustments related to unconsolidated joint ventures 25 3

Core FFO attributable to stockholders and OP unit holders $ 90,773 $ 81,663

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Core FFO attributable to stockholders and OP unit holders per share - diluted $ 0.65 $ 0.60

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

PHILLIPS EDISON & COMPANY

SEPTEMBER 30, 2024 FORM 10-Q

MARCH 31, 2025 FORM 10-Q

EBITDA re AND ADJUSTED EBITDA re —We use EBITDA re and Adjusted EBITDA re as additional measures of operating performance which allow us to compare earnings independent of capital structure, determine debt service and fixed cost coverage, and measure enterprise value.

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The following table presents our calculation of EBITDA re and Adjusted EBITDA re (in thousands):

Three Months Ended September 30, Nine Months Ended September 30, Year Ended December 31,

Three Months Ended March 31, Year Ended December 31,

2025 2024 2024

3 unchanged sentences

Interest expense, net 25,672 23,335 96,990

Loss (gain) on disposal of property, net

19 (53) 34 (1,070) (1,110)

(Gain) loss on disposal of property, net

Federal, state, and local tax expense 146 137 1,821

3 unchanged sentences

$ 115,654 $ 104,237 $ 425,578

Impairment of investment in third parties — 3,000 — 3,000 3,000

Transaction and acquisition expenses 1,322 1,174 4,993

Amortization of unconsolidated joint venture basis differences 3 4 8 12 17

Realized performance income (1)

— — — (75) (75)

Adjustments related to unconsolidated joint ventures 25 3 13

Adjusted EBITDA re

$ 117,001 $ 105,414 $ 430,584

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

LIQUIDITY AND CAPITAL RESOURCES

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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.

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,

ATM Program —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 three months ended March 31, 2024, prior to the entry into the new program described below, we issued approximately 46,000 shares of our common stock

PHILLIPS EDISON & COMPANY

SEPTEMBER 30, 2024 FORM 10-Q

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.

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.

MARCH 31, 2025 FORM 10-Q

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.

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 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.

DEBT —The following table summarizes information about our debt as of September 30, 2024 and December 31, 2023 (dollars in thousands):

September 30, 2024 December 31, 2023

We issued no shares of our common stock under this ATM program during the three months ended March 31, 2025 and 2024.

As of March 31, 2025, approximately $177 million of common stock remained available for issuance under the current ATM program.

DEBT —The following table summarizes information about our debt as of March 31, 2025 and December 31, 2024 (dollars in thousands):

March 31, 2025 December 31, 2024

Total debt obligations, gross $ 2,304,162 $ 2,137,336

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751,771 738,904

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

In addition, the revolving credit facility 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) The revolving credit facility matures in January 2029, with options to extend the maturity for two additional six-month periods.

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

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 at an issue price of 98.458% in an underwritten offering.

The 2024 senior note issuances are fully and unconditionally guaranteed by us.

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.

Revolving Credit Facility —In January 2025, we amended our senior unsecured revolving credit facility.

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

Debt Obligation Guarantees —At March 31, 2025, 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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PHILLIPS EDISON & COMPANY

SEPTEMBER 30, 2024 FORM 10-Q

FINANCIAL LEVERAGE RATIOS —We believe our net debt to Adjusted EBITDA re , net debt to total enterprise value, and debt covenant compliance as of September 30, 2024 allow us access to future borrowings as needed in the near term.

The following table presents our calculation of net debt and total enterprise value, inclusive of our prorated portion of net debt and cash and cash equivalents owned through our unconsolidated joint ventures, as of September 30, 2024 and December 31, 2023 (in thousands):

September 30, 2024 December 31, 2023

MARCH 31, 2025 FORM 10-Q

FINANCIAL LEVERAGE RATIOS —We believe our net debt to Adjusted EBITDA re , net debt to total enterprise value, and debt covenant compliance as of March 31, 2025 allow us access to future borrowings as needed in the near term.

The following table presents our calculation of net debt and total enterprise value, inclusive of our prorated portion of net debt and cash and cash equivalents owned through our unconsolidated joint ventures, as of March 31, 2025 and December 31, 2024 (in thousands):

March 31, 2025 December 31, 2024

Total debt, excluding discounts, market adjustments, and deferred financing expenses $ 2,338,012 $ 2,166,326

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Total enterprise value $ 7,380,951 $ 7,336,142

(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.

(1) Total equity market capitalization is calculated as diluted shares multiplied by the closing market price per share, which includes 138.4 million and 138.2 million diluted shares as of March 31, 2025 and December 31, 2024, respectively, and the closing market price per share of $36.49 and $37.46 as of March 31, 2025 and December 31, 2024, respectively.

(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 September 30, 2024 and December 31, 2023 (dollars in thousands):

September 30, 2024 December 31, 2023

The following table presents our calculation of net debt to Adjusted EBITDA re and net debt to total enterprise value as of March 31, 2025 and December 31, 2024 (dollars in thousands):

March 31, 2025 December 31, 2024

Net debt to Adjusted EBITDA re - annualized :

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PHILLIPS EDISON & COMPANY

SEPTEMBER 30, 2024 FORM 10-Q

During the nine months ended September 30, 2024 and 2023, we had gross capital spend of $55.6 million and $74.3 million, respectively.

MARCH 31, 2025 FORM 10-Q

During the three months ended March 31, 2025 and 2024, we had gross capital spend of $26.4 million and $12.9 million, respectively.

Below is a summary of our capital spending activity, excluding leasing commissions, on a cash basis (in thousands):

Nine Months Ended September 30,

Three Months Ended March 31,

Capital expenditures for real estate:

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

(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.

(2) Amounts reported are net of insurance proceeds of $0.1 million and $1.9 million for property damage claims for the three months ended March 31, 2025 and 2024, respectively.

We anticipate that obligations related to capital improvements, as well as redevelopment and development, in 2025 can be met with cash flows from operations, cash flows from dispositions, or borrowings on our unsecured revolving credit facility.

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See “Key Performance Indicators and Defined Terms” above for further information.

PHILLIPS EDISON & COMPANY

MARCH 31, 2025 FORM 10-Q

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.

The following table highlights our property acquisitions (dollars in thousands):

Nine Months Ended September 30,

Three Months Ended March 31,

Number of properties acquired 5 2

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

(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.

(2) During the three months ended March 31, 2024, we acquired an outparcel adjacent to a property that is owned by our unconsolidated joint venture, GRP I.

Therefore, the outparcel was 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 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.

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.

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.

The following table summarizes our real estate disposition activity for the three months ended March 31, 2025 and 2024 (dollars in thousands):

Three Months Ended March 31,

Number of properties sold 1 —

Number of outparcels sold — —

Contract price $ 24,850 $ —

Proceeds (payments) from sale of real estate, net (1)(2)(3)

Gain (loss) on disposal of property, net (2)

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

(2) We sold no properties during the three months ended March 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 .

(3) During the three months ended March 31, 2025, we sold one property for $24.9 million.

We provided secured financing for this property sale, receiving a note receivable of $17.4 million.

DISTRIBUTIONS —For each month beginning January 2025 through March 2025, we declared and paid monthly distributions of $0.1025 per common share and OP unit.

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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PHILLIPS EDISON & COMPANY

SEPTEMBER 30, 2024 FORM 10-Q

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.

MARCH 31, 2025 FORM 10-Q

CASH FLOW ACTIVITIES —As of March 31, 2025, we had cash and cash equivalents and restricted cash of $7.9 million, a net cash decrease of $0.8 million during the three months ended March 31, 2025.

Below is a summary of our cash flow activity (dollars in thousands):

Nine Months Ended September 30,

Three Months Ended March 31,

2025 2024 $ Change % Change (1)

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(163,556) (66,637) (96,919) (145.4) %

Net cash provided by (used in) financing activities

9,369 (81,759) 91,128 111.5 %

Net cash provided by financing activities

102,218 4,718 97,500 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:

• 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.

Property operations during the three months ended March 31, 2025 were positively impacted by a $4.4 million, or 3.9%, improvement in Same-Center NOI as compared to the same period in 2024.

During the three months ended March 31, 2025, we had a net cash outlay of $27.7 million from changes in working capital as compared to a net cash outlay of $16.2 million during the same period in 2024.

This change was primarily driven by the timing of interest payments resulting from our 2024 senior notes issued subsequent to March 31, 2024.

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

• 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.

• Real estate acquisitions —During the three months ended March 31, 2025, our acquisitions resulted in a total cash outlay of $139.1 million, as compared to a total cash outlay of $56.2 million during the same period in 2024.

• 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.

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

• 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.

• 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.

During the three months ended March 31, 2025, we paid $26.4 million for capital expenditures, an increase of $13.4 million over the same period in 2024.

• Real estate dispositions — During the three months ended March 31, 2025, we sold one property resulting in a net cash inflow of $6.5 million.

During the three months ended March 31, 2024, we sold no properties, but we had minimal net cash outflows for expenses related to previous and future potential dispositions.

• Investment in unconsolidated joint ventures — During the three months ended March 31, 2025, we invested $3.5 million in our investments in NRV and NGCF.

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

• Debt borrowings and payments —During the three months ended March 31, 2025, we had $159.6 million in net borrowings primarily as a result of our net borrowings under our revolving credit facility and payments on our mortgage loans.

During the three months ended March 31, 2024, we had $45.0 million in net borrowings of debt primarily as a result of our net borrowings under our revolving credit facility.

• Distributions to stockholders and OP unit holders —Cash used for distributions to common stockholders and OP unit holders increased $17.1 million for the three months ended March 31, 2025 as compared to the same period in 2024, primarily due to the timing of the funding of our December 2024 distribution payment in January 2025 combined with an increase in shares of common stock outstanding as a result of issuances under the ATM program and our distribution rate increase.

CRITICAL ACCOUNTING ESTIMATES

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There have been no significant changes to our critical accounting estimates during 2025.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes from the quantitative and qualitative disclosures about market risk disclosed in “Part II, Item 7A.

Quantitative and Qualitative Disclosures about Market Risk” of our 2023 Annual Report on Form 10-K filed with the SEC on February 12, 2024.

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-Q

Item 2. Management’s Discussion and Analysis