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Item 1A. Risk Factors

2026-02-10 compared with 2025-02-11 · 139 added, 203 removed, 440 unchanged (44% of the section changed)

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Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business, operating results, financial condition, and cash flows.

Summary of Risk Factors

An investment in our common stock involves risks.

You should carefully consider the risks summarized here and described more fully below.

Risks Related to Our Business and Operations

• Our revenues and cash flows will be affected by the success and economic viability of our anchor Neighbors.

• A significant percentage of our revenues is derived from non-anchor Neighbors, and our net income and ability to make distributions to stockholders may be adversely affected if these Neighbors are not successful.

• We may be unable to sell shopping centers when desired, at an attractive price, or at all, and the sale of a property could cause significant tax payments.

• We face competition and other risks in pursuing acquisition opportunities that could increase the cost of such acquisitions and/or limit our ability to grow, and we may not be able to generate expected returns or successfully integrate completed acquisitions into our existing operations.

• We share ownership of our unconsolidated joint ventures and do not have exclusive decision-making power, and as such, we are unable to ensure that our objectives will be pursued.

• Our real estate assets may decline in value and be subject to significant impairment losses, which may reduce our net income.

• We actively reinvest in our portfolio in the form of development and redevelopment projects, which have inherent risks that could adversely affect our financial condition, cash flows, and results of operations.

• The continued shift in retail sales towards e-commerce may adversely affect our financial condition, cash flows, and results of operations.

• Actual incremental unlevered yields for our development and redevelopment projects may vary from our underwritten incremental unlevered yield range.

• Pandemics, epidemics, or other health crises may have a negative effect on our and our Neighbors’ businesses, financial condition, results of operations, cash flows, and liquidity.

• We use artificial intelligence technologies in our business, and the use of these technologies involve technological and legal risk.

Risks Related to Our Indebtedness and Liquidity

• We have substantial indebtedness, and we may need to incur additional indebtedness, including recourse debt, in the future, which could adversely affect our business, financial condition, and ability to make distributions to our stockholders.

Risks Related to Our Corporate Structure and Organization

• We and our consolidated subsidiary, the Operating Partnership, entered into tax protection agreements with certain protected partners, which may limit the Operating Partnership’s ability to sell or otherwise dispose of certain shopping centers and may require the Operating Partnership to maintain certain debt levels that otherwise would not be required to operate its business.

Risks Related to Our REIT Status and Other Tax Risks

• Failure to qualify as a REIT would cause us to be taxed as a regular C corporation, which would substantially reduce funds available for distributions to stockholders.

• If the Operating Partnership fails to qualify as a partnership for U.S.

federal income tax purposes, we would fail to qualify as a REIT and would suffer adverse consequences.

• Complying with REIT requirements may cause us to forgo otherwise attractive opportunities or liquidate otherwise attractive investments.

Risks Related to Business Continuity

• We and our Neighbors face risks relating to cybersecurity attacks, which could cause loss of confidential information and other disruptions to business operations, and compliance with new laws and regulations regarding cybersecurity and privacy may result in substantial costs and may decrease cash available for distributions.

Risks Related to Our Common Stock

• The market price and trading volume of shares of our common stock may be volatile.

• The number of shares of our common stock available for future issuance or sale could adversely affect the market price of our common stock.

PHILLIPS EDISON & COMPANY

DECEMBER 31, 2024 FORM 10-K

Risks Related to Our Business and Operations

Our revenues and cash flows will be affected by the success and economic viability of our anchor Neighbors.

Anchor Neighbors (a Neighbor occupying 10,000 or more square feet) occupy large stores in our shopping centers, pay a significant portion of the total rent at a property, and contribute to the success of other Neighbors by attracting shoppers to the property.

Our revenues and cash flows may be adversely affected by the loss of revenues and additional costs in the event a significant anchor Neighbor:

(i) becomes bankrupt or insolvent;

(ii) experiences a downturn in its business;

(iii) defaults on its lease;

(iv) decides not to renew its lease as it expires;

(v) renews its lease at lower rental rates and/or requires tenant improvements;

or (vi) renews its lease but reduces its store size, which results in down-time and additional tenant improvement costs to us to re-lease the space.

Some anchors have the right to vacate their space and may prevent us from re-tenanting by continuing to comply and pay rent in accordance with their lease agreement.

Vacated anchor space, including space owned by the anchor, can reduce rental revenues generated by the shopping center in other spaces because of the loss of the departed anchor's customer drawing power.

In the event that we are unable to re-lease the vacated space to a new anchor Neighbor in such situations, we may incur additional expenses in order to re-model the space to be able to re-lease the space to more than one Neighbor.

If a significant Neighbor vacates a property, co-tenancy clauses in select lease contracts may allow other Neighbors to modify or terminate their rent or lease obligations.

Co-tenancy clauses have several variants:

(i) they may allow a Neighbor to postpone a store opening if certain other Neighbors fail to open their stores;

(ii) they may allow a Neighbor to close its store prior to lease expiration if another Neighbor closes its store prior to lease expiration;

or (iii) they may allow a Neighbor to pay reduced levels of rent until a certain number of Neighbors open their stores within the same shopping center.

The leases of some anchor Neighbors may permit the anchor Neighbor to transfer its lease to another retailer.

The transfer to a new anchor Neighbor could cause customer traffic in the shopping center to decrease and thereby reduce the potential income generated by that shopping center.

A lease transfer to a new anchor Neighbor could also allow other Neighbors to make reduced rental payments or to terminate their leases.

A significant percentage of our revenues is derived from non-anchor Neighbors, and our net income and ability to make distributions to stockholders may be adversely affected if these Neighbors are not successful.

A significant percentage of our revenues is derived from non-anchor Neighbors, some of which may be more vulnerable to negative economic conditions as they typically have more limited resources than anchor Neighbors.

Significant Neighbor distress across our portfolio could adversely affect our financial condition, results of operations, and cash flows, and our ability to service our debt and make distributions to our stockholders.

A property may incur vacancies either by the expiration of a Neighbor lease, the continued default of a Neighbor under its lease, or the early termination of a lease by a Neighbor.

In order to maintain occupancy, we may have to offer inducements, such as free rent and tenant improvements, to compete for the right type or mix of non-anchor Neighbors in our shopping centers.

In addition, if we are unable to attract additional or replacement Neighbors, the resale value of the property could be diminished, even below our acquisition costs, because the market value of a particular property depends principally upon the value of the cash flows generated by the leases associated with that property.

We face considerable competition in the leasing market and may be unable to renew leases or re-lease space as leases expire.

Consequently, we may be required to make rent or other concessions and/or incur significant capital expenditures to retain and attract Neighbors, which could adversely affect our financial condition, cash flows, and results of operations.

There are numerous shopping venues, including other shopping centers and e-commerce, that compete with our portfolio in attracting and retaining retailers.

This competition may hinder our ability to attract and retain Neighbors, leading to increased vacancy rates, reduced rents, and/or increased capital investments.

For leases that renew, rental rates upon renewal may be lower than current rates.

For those leases that do not renew, we may not be able to promptly re-lease the space on favorable terms or with reasonable capital investments, or at all.

In these situations, our financial condition, cash flows, and results of operations could be adversely affected.

We may be unable to collect balances due from Neighbors in bankruptcy.

The bankruptcy or insolvency of a significant Neighbor or a number of smaller Neighbors may adversely affect our financial condition, cash flows and results of operations, and our ability to pay distributions to our stockholders.

Generally, under bankruptcy law, a debtor Neighbor has the legal right to reject any or all of their leases and close related stores.

If the Neighbor rejects the lease, we will have a claim against the Neighbor’s bankruptcy estate.

Although rent owing for the period between filing for bankruptcy and rejection of the lease may be afforded administrative expense priority and paid in full, pre-bankruptcy arrears and amounts owing under the remaining term of the lease will be afforded general unsecured claim status (absent collateral securing the claim).

General unsecured claims are the last claims paid in a bankruptcy, and, therefore, funds may not be available to pay such claims in full.

Moreover, amounts owing under the remaining term of the lease will be capped.

As a result, it is likely that we would recover substantially less than the full value of any unsecured claims we hold.

Additionally, we may incur significant expense to recover our claim and to re-lease the vacated space.

In the event that a Neighbor with a significant number of leases in our shopping centers files bankruptcy and rejects its leases, we may experience a significant reduction in our revenues and may not be able to collect all pre-petition amounts owed by the bankrupt Neighbor.

We may be restricted from leasing space to certain retailers.

Some of our leases contain provisions that give a specific retailer the exclusive right to sell particular types of goods or services within that shopping center.

These provisions may limit the number and types of prospective retailers to which we are able to lease space in a particular shopping center, which may result in increased costs to find a permissible retailer and decreased revenues if one or more spaces sit vacant or we have to accept lower rental rates or a less qualified retailer to fill the space.

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Our financial performance depends on the stability and success of our Neighbors, and the loss, failure, departure or bankruptcy of significant Neighbors – including major anchor stores – or a high volume of smaller Neighbors, could adversely affect our revenues, occupancy, and results of operations.

Our anchor Neighbors (generally those occupying 10,000 square feet or more) pay a significant portion of the total rent at a property and draw customer traffic to other stores.

If a major anchor Neighbor ceases or downsizes operations – whether due to bankruptcy, insolvency, business downturn, lease default, or a decision not to renew its lease – we would lose a primary income source and traffic driver.

This could also trigger co-tenancy provisions in other Neighbors’ leases allowing them to pay reduced rent or terminate their leases, further eroding our rental income.

If an anchor “goes dark” (stops operating but continues to pay rent), the lack of an active anchor can significantly diminish shopper traffic, impairing sales for other Neighbors.

Re-leasing a vacated anchor space can be challenging and costly because anchor spaces may require substantial capital investments or reconfiguration (for example, subdividing into smaller units) to attract new Neighbors, and prolonged downtime is likely during this repositioning.

In some cases, an anchor’s lease may allow it to assign or transfer the space to a new retailer not originally anticipated, which could change the center’s draw and potentially reduce foot traffic, or give other Neighbors the right to renegotiate or exit their leases.

A significant portion of our revenue comes from non-anchor Neighbors, some of which may have more limited financial resources than anchor Neighbors and could be vulnerable in an adverse economic climate.

If a large number of these smaller Neighbors experience financial distress, default on their leases, or choose to close their businesses, our occupancy levels and rental income would decline.

We may need to offer rent concessions, reduced rental rates, or fund additional tenant improvements and inducements to attract or retain replacement Neighbors, which would increase our costs and reduce cash flows.

Competitive pressures – including from other shopping centers or e-commerce alternatives – can make it difficult to backfill vacant space on favorable terms, leading to extended vacancies or the acceptance of lower-paying or less creditworthy Neighbors.

High vacancy or a suboptimal tenant mix at a given property can also diminish the property’s overall resale value.

In addition, certain lease provisions can restrict our re-leasing flexibility.

Some Neighbors have exclusive-use rights preventing us from leasing other space in the center to competitors or to users of certain product categories.

These clauses can limit the pool of replacement tenants for a vacant unit (especially if the departed tenant had such protection or if existing Neighbors hold exclusive rights that constrain new leases), potentially resulting in longer vacancy periods or the need to accept a less optimal tenant at a lower rent.

Similarly, co-tenancy clauses may reduce what remaining Neighbors are obligated to pay (or allow them to terminate their leases) until we satisfy certain conditions (such as securing a replacement anchor or achieving a specified occupancy threshold), prolonging the financial impact of an anchor loss.

Furthermore, if Neighbors file for bankruptcy, they may exercise their legal right to reject leases, resulting in termination of rental obligations and leaving us with vacant space and unrecoverable past due rent.

Our claims for unpaid rent in a tenant’s bankruptcy are typically general unsecured claims, for which recovery, if any, is usually limited and obtained only after lengthy proceedings.

A bankruptcy by a major Neighbor (or multiple Neighbors) with locations across several of our centers could abruptly eliminate significant rental streams, and we may incur legal and re-leasing expenses while trying to mitigate the loss.

Even in cases of a single-store bankruptcy, we may face delays and costs re-leasing that space, and any gap in occupancy reduces property revenue.

If our Neighbors – whether large anchors or smaller shop tenants – fail to perform, downsize, or depart our centers in significant numbers, our rental income and occupancy rates would decline, we could incur substantial costs to attract new tenants or adapt our properties, and the value of our shopping centers could be negatively affected.

Any such developments could have a material adverse effect on our business, financial condition, cash flows, and results of operations, including our ability to service debt and make distributions to stockholders.

We may be unable to sell shopping centers when desired, at an attractive price, or at all, and the sale of a property could cause significant tax payments.

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We intend to utilize tax-deferred exchanges under Section 1031 of the Internal Revenue Code of 1986, as amended (the “IRC”) to mitigate taxable income (“Section 1031 Exchanges”);

however, there can be no assurance that we will identify exchange shopping centers that meet our investment objectives for acquisitions.

however, there can be no assurance that we will identify replacement shopping centers that meet our investment objectives for acquisitions.

In the event that we do not utilize Section 1031 Exchanges, we may be required to distribute the gain proceeds to stockholders or pay income tax, which may reduce our cash flows available to fund our commitments and distributions to stockholders.

Moreover, it is possible that future legislation could be enacted that could modify or repeal the laws with respect to Section 1031 Exchanges, which could make it more difficult or impossible for us to dispose of shopping centers on a tax-deferred basis.

Moreover, it is possible that future legislation could be enacted that could

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modify or repeal the laws with respect to Section 1031 Exchanges, which could make it more difficult or impossible for us to dispose of shopping centers on a tax-deferred basis.

We face competition and other risks in pursuing acquisition opportunities that could increase the cost of such acquisitions and/or limit our ability to grow, and we may not be able to generate expected returns or successfully integrate completed acquisitions into our existing operations.

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These key assumptions are subjective in nature and may differ materially from actual results.

Changes in our disposition strategy or changes in the marketplace may alter the holding period of an asset or asset group, which may result in an impairment loss and such loss may be material to

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our financial condition or operating performance.

Changes in our disposition strategy or changes in the marketplace may alter the holding period of an asset or asset group, which may result in an impairment loss and such loss may be material to our financial condition or operating performance.

To the extent that the carrying value of the asset exceeds the estimated undiscounted cash flows, an impairment loss is recognized equal to the excess of carrying value over fair value.

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Accordingly, there can be no assurance that we will not record impairment charges in the future related to our assets.

We actively reinvest in our portfolio in the form of development and redevelopment projects, which have inherent risks that could adversely affect our financial condition, cash flows, and results of operations.

We actively pursue opportunities for outparcel development and existing property redevelopment.

Development and redevelopment activities require various government and other approvals for entitlements and any delay in or failure to receive such approvals may significantly delay this process or prevent us from recovering our investment.

We are subject to other risks associated with these activities, including the following:

• we may be unable to lease developments and redevelopments to full occupancy on a timely basis;

• the occupancy rates and rents of a completed project may not be sufficient to make the project profitable;

• actual costs of a project may exceed original estimates, possibly making the project unprofitable;

• delays in the development or construction process may increase our costs;

• construction cost increases may reduce investment returns on development and redevelopment opportunities;

• we may abandon redevelopment opportunities and lose our investment due to adverse market conditions;

• the size of our development and redevelopment pipeline may strain our labor or capital capacity to complete projects within targeted timelines and may reduce our investment returns;

• a reduction in the demand for new retail space may reduce our future development and redevelopment activities, which in turn may reduce our net operating income; and/or

• changes in the level of future development activity may adversely impact our results from operations by reducing the amount of internal general overhead costs that may be capitalized.

Inflationary pressures, rising interest rates, supply chain disruptions, and labor shortages may exacerbate certain of these risks.

If we fail to reinvest in our portfolio or maintain its attractiveness to retailers and consumers, if our capital improvements are not successful, or if retailers or consumers perceive that shopping at other venues (including e-commerce) is more convenient, cost-effective, or otherwise more compelling, our financial condition, cash flows, and results of operations could be adversely affected.

Our development and redevelopment projects involve inherent risks and may not achieve their underwritten returns, which could adversely affect our financial condition, cash flows, and results of operations.

We actively pursue opportunities to develop outparcels and redevelop existing properties;

however, these activities require various government and other approvals, and any delay or failure in obtaining necessary entitlements can significantly postpone or even prevent a project, jeopardizing our ability to recover our investment.

Development and redevelopment projects are subject to numerous risks, including (i) difficulties in leasing new or renovated spaces on the expected timeline or at projected rental rates (resulting in occupancy levels or rents that may be insufficient to make the project profitable);

(ii) cost overruns and construction delays that cause actual project costs to exceed original estimates and reduce expected returns;

(iii) the potential abandonment of projects mid-stream due to adverse market conditions, which would result in the loss of our invested capital;

and (iv) strain on our personnel and capital resources from managing a large pipeline of projects, which could impair our ability to complete developments on schedule and on budget, further pressuring investment returns.

Moreover, fluctuations in the level of our development activity can impact our results of operations by limiting the amount of

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internal overhead costs we are able to capitalize.

External economic factors — such as inflationary cost pressures, rising interest rates, increases in the cost of construction materials due to tariffs or trade disputes, supply chain disruptions, and labor shortages — can exacerbate many of these challenges by driving costs higher or causing additional delays.

As a result of these factors, the actual incremental unlevered yields (i.e., the return on our investment at project stabilization, excluding financing effects) for development and redevelopment projects may fall short of our underwritten incremental unlevered yield targets, which are based solely on our estimates, using data available to us in our development and redevelopment underwriting processes.

The total cost to complete a project might ultimately be substantially higher than initially budgeted, and the incremental net operating income realized at stabilization can be lower than anticipated, due to a number of factors, including slower lease-up, lower-than-expected rental rates or occupancy, inability to collect anticipated rents, or Neighbors (tenants) vacating or defaulting (for example, through bankruptcy).

If we fail to successfully reinvest in our portfolio through development and redevelopment or if our projects encounter significant delays, cost overruns, or fail to achieve the anticipated financial performance, our business, financial condition, cash flows, and results of operations could be adversely affected.

Adverse economic, regulatory, market, and real estate conditions may adversely affect our financial condition, cash flows, and results of operations.

Our portfolio is predominantly comprised of omni-channel neighborhood grocery-anchored shopping centers, and during the year ended December 31, 2024, our holdings in Florida, California, and Texas accounted for 12.2%, 10.6%, and 10.1%, respectively, of our ABR (including our wholly-owned portfolio as well as the prorated portion of shopping centers owned through our joint ventures).

Our portfolio is predominantly comprised of omni-channel neighborhood grocery-anchored shopping centers, and during the year ended December 31, 2025, our holdings in Florida and California accounted for 12.3% and 10.5%, respectively, of our ABR (including our wholly-owned portfolio as well as the prorated portion of shopping centers owned through our joint ventures).

Therefore, our performance is subject to risks associated with owning and operating neighborhood omni-channel grocery-anchored shopping centers, and may be further subject to additional risk as a result of the geographic concentration noted above.

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and (xii) changes in laws and governmental regulations, including those governing usage, zoning, the environment, and taxes.

Such risks also include, but are not limited to, those that could impact the financial stability of our Neighbors, including their ability to pay rent and expense reimbursements, such as supply chain disruptions and constraints, inflationary pressures throughout the supply chain, labor shortages and inflationary pressures on wages, increases in retail theft, and other risks and uncertainties described elsewhere in this "Risk Factors" section.

Such risks also include, but are not limited to, those that could impact the financial stability of our Neighbors, including their ability to pay rent and expense reimbursements, such as supply chain disruptions and constraints, inflationary pressures throughout the supply chain, including those due to tariffs, labor shortages, inflationary pressures on wages, increases in retail theft, changes in consumer demand due to macroeconomic conditions or otherwise, and other risks and uncertainties described elsewhere in this "Risk Factors" section.

These and other factors could adversely affect our financial condition, cash flows, and results of operations.

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The continued shift in retail sales towards e-commerce may adversely affect our financial condition, cash flows, and results of operations.

Retailers are increasingly affected by e-commerce and changes in customer buying habits, which were further accelerated as a result of the COVID-19 pandemic, including the delivery or curbside pick-up of items ordered online.

Retailers continue to be affected by e-commerce and changes in customer buying habits, including the delivery or curbside pick-up of items ordered online.

Retailers are considering these e-commerce trends when making decisions regarding their brick and mortar stores and how they will compete and innovate in a rapidly changing e-commerce environment.

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If we are unable to anticipate and respond promptly to trends in the market (such as space for a drive through or curbside pickup), our occupancy levels and rental rates may decline, and our financial condition, cash flows, and results of operations may be adversely impacted.

Actual incremental unlevered yields for our development and redevelopment projects may vary from our underwritten incremental unlevered yield range.

As part of our standard development and redevelopment underwriting process, we analyze the yield for each project and establish a range of target yields (“underwritten incremental unlevered yields”).

Underwritten incremental unlevered yields reflect the yield we target to generate from each project upon expected stabilization and are calculated as the estimated incremental NOI for a project at stabilization divided by its estimated net project investment.

The estimated incremental NOI is the difference between the estimated annualized NOI we target to generate from a project upon stabilization and the estimated annualized NOI without the planned improvements.

Underwritten incremental unlevered yield does not include peripheral impacts, such as lease rollover risk or the impact on the long term value of the property upon sale or disposition.

Underwritten incremental unlevered yields are based solely on our estimates, using data available to us in our development and redevelopment underwriting processes.

The actual total cost to complete a development or redevelopment project may differ substantially from our estimates due to various factors, including unanticipated expenses, delays in the estimated start and/or completion date of planned development projects, and other contingencies.

In addition, the actual incremental NOI from our planned development and redevelopment activities may differ substantially from our estimates based on numerous other factors, including delays and/or difficulties in leasing and stabilizing a development or redevelopment project, failure to obtain estimated occupancy and rental rates, inability to collect anticipated rental revenues, Neighbor bankruptcies, and unanticipated expenses that we cannot pass on to our Neighbors.

Actual incremental unlevered yields may vary from our underwritten incremental unlevered yield range based on the actual total cost to complete a project and its incremental NOI at stabilization.

Pandemics, epidemics, or other health crises may have a negative effect on our and our Neighbors’ businesses, financial condition, results of operations, cash flows, and liquidity.

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Government responses, including quarantines, restrictions on travel, mandatory closures of businesses, or other restrictions, as well as changes in consumer behavior, could negatively impact our tenants and their ability to operate their businesses, which could impact our ability to collect on current or past due rent payments or fully recover amounts due under the terms of a lease agreement in the event of a default by a Neighbor.

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The unpredictable nature of pandemics, epidemics, and other health crises precludes any prediction as to one’s ultimate adverse impact.

A worsening of the economic, political, and social environment as a result presents material risks and uncertainties with respect to our and our Neighbors’ business, financial condition, results of operations, cash flows, liquidity, and ability to satisfy debt service obligations.

Increased scrutiny on metrics and reporting related to Environmental, Social and Governance factors may impose additional costs and expose us to new risks.

Investors and other stakeholders are often focused on understanding how companies address a variety of Corporate Responsibility factors.

When evaluating investment decisions, many investors and shareholders look not only at company Corporate Responsibility disclosures, but also to rating systems that have been developed by third-party groups to allow comparisons between companies.

Although we participate in a number of these ratings systems, and generally score relatively well in those in which we do participate, we do not participate in, and would not necessarily score as well in, all of the available rating systems.

Further, the criteria used in these ratings systems may change frequently, and we cannot guarantee that we will be able to score well as criteria change.

We supplement our participation in ratings systems with corporate disclosure of our Corporate Responsibility activities, but many investors and other stakeholders may look for disclosures that we do not provide.

Additionally, the regulatory environment may create conflicting pressures as policymakers in some jurisdictions advocate for laws to constrain consideration of Corporate Responsibility matters in certain circumstances.

Increased scrutiny on Environmental, Social and Governance factors may impose additional costs and expose us to new risks.

There is continued scrutiny from investors, policymakers, and other stakeholders on how companies address climate change, human capital, and a variety of other corporate responsibility factors.

Although we engage in certain voluntary initiatives, including disclosures, to improve our corporate responsibility profile or respond to stakeholder expectations, such initiatives entail costs and may not have the desired effect.

For example, methodologies, standards, and data regarding corporate responsibility matters continue to evolve, and our approach to such matters may not align with the expectations or preferences of any particular stakeholder.

Stakeholder expectations are not uniform, and may, at times, conflict.

Additionally, the regulatory environment may create conflicting pressures.

While policymakers in some jurisdictions have adopted or are looking at adopting requirements on corporate responsibility matters, policymakers in other jurisdictions advocate for laws to constrain consideration of corporate responsibility matters in certain circumstances.

Additional actions may be taken by both proponents and opponents of corporate responsibility matters.

Failure to participate in certain of the third-party ratings systems, failure to score well in those ratings systems, failure to provide certain Corporate Responsibility disclosures, failure to successfully navigate competing policymaker and stakeholder expectations on Corporate

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Responsibility, or unfavorable comparisons in these areas to other companies, could result in reputational harm when investors or others compare us against similar companies in our industry, could result in investor engagement on our Corporate Responsibility initiatives and disclosures or increased costs relating to Corporate Responsibility initiatives, and could cause certain investors to be unwilling to invest in our stock, which could adversely impact our ability to raise capital.

For example, there have been increased instances of greenwashing or other litigation against companies for alleged failures in disclosure, methodology, or performance.

Failure to successfully navigate competing policymaker and stakeholder expectations on corporate responsibility, including in association with any ratings or disclosures, or unfavorable comparisons in these areas to other companies, could result in reputational harm, loss of tenants or capital availability, investor engagement on our corporate responsibility initiatives and disclosures, increased costs, or other adverse impacts to our business.

Additionally, certain of our stakeholders are subject to similar risks, which may augment or create additional risks relating to such matters, including in ways that we may not be aware of or may be difficult to predict.

We use artificial intelligence technologies in our business, and the use of these technologies involve technological and legal risk.

We currently use artificial intelligence (“AI”) and automated decision-making technologies (collectively, “AI Technologies”), including generative AI Technologies (i.e., AI Technologies that can produce and output new content, software code, data and information) in certain internal business practices.

We expect that increased investment will be required in the future to continuously improve our use of AI Technologies.

As with many technological innovations, there can be no assurance that the usage of or our investments in such technologies will always be beneficial to our business, including our efficiency or profitability.

Technological advances in AI are rapidly evolving, and along with this rapid evolution comes risks and challenges that could negatively impact our business.

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Additionally, we may need to expend additional resources to modify and maintain our use of AI Technologies to comply with applicable law, and failure to do so may lead to regulatory fines or penalties.

We use AI Technologies licensed from third parties in certain internal business practices and our ability to continue to use such technologies at the scale we need may be dependent on access to specific third-party software and infrastructure.

We cannot control the availability or pricing of such third-party AI Technologies, especially in a highly competitive environment, and we may be unable to negotiate favorable economic terms with the applicable providers.

Risks Related to Our Indebtedness and Liquidity

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We have obtained, and may continue to obtain, lines of credit, and other long-term financing that are secured by our shopping centers and other assets.

On December 31, 2024, we had indebtedness of $2.1 billion comprised of $1.7 billion in unsecured debt, $0.4 billion in outstanding secured loan facilities, and $0.1 billion in mortgage loans and finance lease obligations.

On December 31, 2025, we had indebtedness of $2.4 billion comprised of $2.0 billion in unsecured debt, $0.4 billion in outstanding secured loan facilities, and $30.4 million in mortgage loans and finance lease obligations.

In connection with executing our business strategies, we expect to evaluate additional acquisitions and strategic investments, and we may elect to finance these endeavors by incurring additional indebtedness.

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If we mortgage a property and there is a shortfall between the cash flows from that property and the cash flows needed to service mortgage debt on that property, then the amount of cash available for distributions to stockholders may be reduced.

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In addition, incurring mortgage debt increases the risk of loss of a property because defaults on indebtedness secured by a property may result in lenders initiating foreclosure actions.

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requiring the use of a substantial portion of our cash flows for the payment of principal and interest on our debt, thereby limiting the amount of free cash flow available for future operations, acquisitions, distributions, stock repurchases, or other uses;

making us more vulnerable to economic or industry downturns, including interest rate increases;

making us more vulnerable to economic or industry downturns, including elevated or increased interest rates;

and placing us at a competitive disadvantage compared to less leveraged competitors.

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Additionally, changes to our credit ratings could affect our ability to access debt capital, as well as the terms of certain existing and future debt financing we may obtain.

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review of our credit rating that could result in an adverse change, could have a material adverse effect on us.

As we depend, in part, on debt financing to fund the growth of our business and to execute our strategy, an adverse change in our credit rating, including changes in our credit outlook, or the initiation of a review of our credit rating that could result in an adverse change, could have a material adverse effect on us.

Our creditworthiness is rated by nationally recognized credit rating agencies.

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These or other limitations would decrease our operating flexibility and our ability to achieve our operating objectives, which may adversely affect our financial condition and ability to make distributions to our stockholders.

Covenants in certain of our loan agreements specify that certain named individuals must remain a member of management and/or the Board or require certain level of management or Board continuity in connection with a fundamental transaction.

Covenants in certain of our loan agreements specify that certain named individuals must remain a member of management and/or our Board of Directors (the “Board”) or require certain level of management or Board continuity in connection with a fundamental transaction.

Certain of our loan agreements contain covenants that require certain named individuals, including Mr.

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Increases in interest rates would increase our interest expense on any variable rate debt to the extent we have not hedged our exposure to changes in interest rates.

In addition, increases in interest rates will affect the terms under which we refinance our existing debt as it matures, to the extent we have not hedged our exposure to changes in interest rates, resulting in higher interest rates and increased interest expense.

In addition, increases in interest rates will affect the terms under which we refinance our existing debt as it matures, to the extent we have not hedged our exposure to changes in interest rates,

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resulting in higher interest rates and increased interest expense.

Either of these events would reduce our future earnings and cash flows, which may adversely affect our ability to service our debt and meet our other obligations and also may reduce the amount we are able to distribute to stockholders.

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As of December 31, 2025, we would have directly or indirectly controlled approximately 90.8% of the OP units.

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Furthermore, as of December 31, 2025, Mr.

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Murphy, and Mr.

Myers the same protection provided under the 2017 TPA until 2031, so long as (a) Mr.

Myers the same protection provided under the 2017 TPA until October 4, 2031, so long as (a) Mr.

Murphy, or Mr.

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Edison before effecting a significant transaction reasonably likely to result in the recognition of more than one-third of the built-in gain allocated to Mr.

Edison that is protected under the 2017 TPA as of the date that the 2021 TPA is executed, and will consider in good faith any proposal made by Mr.

Edison that is protected under the 2017 TPA as of the date that the 2021 TPA was executed, and will consider in good faith any proposal made by Mr.

Edison relating to structuring such transaction in a manner to avoid or mitigate adverse tax consequences to him.

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As a result, the tax protection agreements could, during their term, restrict our ability to take actions or make decisions that otherwise would be in our best interests.

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Our stockholders have limited control over changes in our policies and operations, which increases the uncertainty and risks our stockholders face.

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In addition, the MGCL permits our Board to implement certain takeover defenses without stockholder approval.

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These and other provisions of our charter, bylaws, and Maryland law could have the effect of delaying, deferring, or preventing a change in control, including an extraordinary transaction (such as a merger, tender offer, or sale of all or substantially all of our assets) that might provide a premium price to holders of our common stock.

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federal income tax purposes, we may be subject to certain U.S.

federal, state, and local taxes on our income and assets, including taxes on any undistributed income, tax on income from some activities conducted as a result of a foreclosure, and state or local income, property, and transfer taxes.

federal, state, and local taxes on our income and assets, including taxes on any undistributed income, tax on income from some activities conducted

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as a result of a foreclosure, and state or local income, property, and transfer taxes.

Any of these taxes would decrease cash available for distributions to stockholders.

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Also, the failure of the Operating Partnership to qualify as a partnership would cause it to become subject to U.S.

federal corporate income tax, which would reduce significantly the amount of its cash available for debt service and for distribution to its partners, including us.

federal corporate income tax, which would significantly reduce the amount of its cash available for debt service and for distribution to its partners, including us.

The Operating Partnership has a carryover tax basis on certain of its assets as a result of our acquisition of PELP, and our merger with Phillips Edison Grocery Center REIT II, Inc.

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As a result of each of the acquisition of PELP and our merger with REIT II, certain of the Operating Partnership’s shopping centers have carryover tax bases that are lower than the fair market values of these shopping centers at the time of the acquisition.

As a result of this lower aggregate tax basis, the Operating Partnership will recognize higher taxable gain upon the sale of these assets, and the Operating Partnership will be entitled to lower depreciation deductions on these assets than if it had purchased these shopping centers in taxable transactions at the time of the acquisition.

Such lower depreciation deductions and increased gains on sales allocated to us generally will increase the amount of our required distribution under the REIT rules, and will decrease the portion of any distribution that otherwise would have been treated as a “return of capital” distribution.

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As a result of this lower aggregate tax basis, the Operating Partnership may recognize more taxable gain upon the sale of these assets, and the Operating Partnership will be entitled to lower depreciation deductions on these assets than if it had purchased these shopping centers in taxable transactions at the time of the acquisition.

Such lower depreciation deductions and increased gains on sales generally will increase the amount of our required distribution under the REIT rules, and will decrease the portion of any distribution that otherwise would have been treated as a “return of capital” distribution.

Our property taxes could increase due to property tax rate changes or reassessment, which could impact our cash flow.

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Therefore, the amount of property taxes we pay in the future may increase substantially from what we have paid in the past and such increases may not be covered by Neighbors pursuant to our lease agreements.

If the property taxes we pay increase, our financial condition, results of operations, cash flow, per share trading price of our common stock, and ability to satisfy our principal and interest obligations and to make distributions to our stockholders could be adversely affected.

We use taxable REIT subsidiaries, which may cause us to fail to qualify as a REIT.

To qualify as a REIT for U.S.

federal income tax purposes, we hold, and plan to continue to hold, substantially all of our non-qualifying REIT assets and conduct certain of our non-qualifying REIT income activities in or through one or more taxable REIT subsidiary (“TRS”) entities.

If the property taxes we pay increase, our financial condition, results of operations, cash flow, per share trading price of our common stock, ability to satisfy our principal and interest obligations and to make distributions to our stockholders could be adversely affected.

Our use of taxable REIT subsidiary (“TRS”) entities may jeopardize our REIT qualification and expose us to significant tax liabilities.

We may utilize TRS entities to hold non-qualifying REIT assets and to conduct activities that generate non-qualifying REIT income.

A TRS is a corporation other than a REIT in which a REIT directly or indirectly holds stock, and that has made a joint election with such REIT to be treated as a TRS.

A TRS also includes any corporation other than a REIT with respect to which a TRS owns securities possessing more than 35% of the total voting power or value of the outstanding securities of such corporation.

Other than some activities relating to lodging and health care facilities, a TRS may generally engage in any business, including the provision of customary or non-customary services to tenants of its parent REIT.

A TRS is subject to U.S.

federal income tax as a regular C-corporation at a current rate of 21%.

The net income of our TRS entities is not required to be distributed to us, and income that is not distributed to us will generally not be subject to the REIT income distribution requirement.

However, our TRS entities may pay dividends.

Such dividend income should qualify under the 95%, but not the 75%, gross income test.

We will monitor the amount of the dividend and other income from our TRS entities and will take actions intended to keep this income, and any other non-qualifying income, within the limitations of the REIT income tests.

While we expect these actions will prevent a violation of the REIT income tests, we cannot guarantee that such actions will in all cases prevent such a violation.

Our ownership of TRS entities is subject to limitations that could prevent us from growing our management business, and our transactions with our TRS entities could cause us to be subject to a 100% penalty tax on certain income or deductions if those transactions are not conducted on an arm’s-length basis.

No more than 20% of the value of a REIT’s gross assets may consist of interests in TRS entities.

Compliance with this limitation could limit our ability to grow our management business.

The IRC also imposes a 100% excise tax on certain transactions between a TRS and its parent REIT that are not conducted on an arm’s-length basis.

We will monitor the value of investments in our TRS entities in order to ensure compliance with TRS ownership limitations and will structure our transactions with our TRS entities on terms that we believe are arm’s-length to avoid incurring the 100% excise tax described above.

There can be no assurance, however, that we will be able to comply with the TRS ownership limitation or be able to avoid application of the 100% excise tax.

TRS entities are taxed as regular C corporations and may engage in activities our REIT cannot.

Income earned by our TRS entities is not required to be distributed to us, and any dividends received from our TRS entities generally qualify under the 95%, but not the 75%, gross income test.

We monitor TRS income and distributions to comply with REIT income limits, but we cannot guarantee compliance in all cases.

A failure to meet these tests could result in loss of REIT status.

Additionally, no more than 20% of our total asset value (beginning on January 1, 2026 this statutory limitation was increased to 25%) may consist of TRS securities.

This limitation may constrain the growth of our non-REIT businesses.

We monitor TRS valuations to comply with this threshold, but market fluctuations or business expansion could cause inadvertent violations.

Transactions between us and our TRS entities must be conducted on an arm’s-length basis, and while we attempt to structure our intercompany dealings on market terms, we could be subject to a 100% excise tax if the IRS successfully argues that our existing intercompany transactions are not structured on an arm's length basis.

Non-compliance with an arm’s-length standard could result in substantial tax penalties or loss of REIT status, adversely affecting our financial condition and results.

REIT distribution requirements could adversely affect our ability to execute our business plans, including because we may be required to borrow funds to make distributions to stockholders or otherwise depend on external sources of capital to fund such distributions.

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We intend to make distributions to our stockholders to comply with the REIT requirements of the IRC and to avoid corporate income tax and the 4% excise tax.

We may be required to make distributions to our stockholders at times when it would be more advantageous to reinvest cash in the business or when we do not have funds readily available for distribution.

We may be required to make distributions to our stockholders at times when it would be

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more advantageous to reinvest cash in the business or when we do not have funds readily available for distribution.

Thus, compliance with the REIT requirements may hinder our ability to operate solely on the basis of maximizing profits.

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We must also ensure that at the end of each calendar quarter, at least 75% of the value of our assets consists of cash, cash items, U.S.

government securities, and qualified real estate assets, including certain mortgage loans and mortgage-backed

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government securities, and qualified real estate assets, including certain mortgage loans and mortgage-backed securities.

The remainder of our investment in securities (other than U.S.

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Distributions paid by REITs to non-corporate stockholders generally are taxed at rates lower than ordinary income rates, but those rates are higher than the 20% tax rate on qualified dividend income paid by corporations.

Although this does not adversely affect the taxation of REITs or dividends payable by REITs, to the extent that the preferential rates continue to apply to regular corporate qualified dividends, the more favorable rates for corporate dividends may cause non-corporate investors to perceive that an investment in a REIT is less attractive than an investment in a non-REIT entity that pays dividends, thereby reducing the demand and market price of shares of our common stock.

Although this does not adversely affect the taxation of REITs or dividends payable by REITs, to the extent that the preferential rates continue to

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apply to regular corporate qualified dividends, the more favorable rates for corporate dividends may cause non-corporate investors to perceive that an investment in a REIT is less attractive than an investment in a non-REIT entity that pays dividends, thereby reducing the demand and market price of shares of our common stock.

Legislative or regulatory tax changes could adversely affect us or our stockholders.

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federal income tax law, regulation, or administrative interpretation.

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If our assets are deemed to be plan assets, we may be exposed to liabilities under Title I of the Employee Retirement Income Security Act of 1974 (“ERISA”) and the IRC.

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If that is the case, and if we are exposed to liability under ERISA or the IRC, our performance and results of operations could be adversely affected.

Risks Related to Business Continuity

Risks Related to Business Continuity and Cybersecurity

Uninsured losses relating to real property or excessively expensive premiums for insurance coverage could adversely affect our cash flows and stockholder returns.

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Climate change may adversely affect our business, financial condition, cash flows, and results of operations.

Climate change, including the impact of global warming, creates physical and financial risks.

Climate change, including the impact of global warming, creates physical and transition risks.

Physical risks from climate change include an increase in sea level and changes in weather conditions, such as an increase in storm intensity and severity of weather (e.g.

floods, droughts, tornadoes, or hurricanes) and extreme temperatures.

floods, droughts, wildfires, tornadoes, or hurricanes) and changes in temperatures, water, and other weather patterns.

The occurrence of sea level rise or one or more natural disasters, such as floods, droughts, tornados, hurricanes, tropical storms, wildfires, and earthquakes (whether or not caused by climate change), could cause considerable damage to our shopping centers, disrupt our operations, and negatively affect our financial performance.

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Such codes could require us to make improvements to our existing shopping centers, increase the costs of maintaining or improving our existing shopping centers or developing new shopping centers, or increase taxes and fees assessed on us or our shopping centers.

Changes in investor, customer, and other stakeholder expectations or responses to climate change may also require us to incur costs or otherwise adversely impact our business.

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As an owner and/or operator of real estate, we could become subject to liability for environmental violations, regardless of whether we caused such violations, and our efforts to identify environmental liabilities may not be successful.

We could become subject to liability in the form of fines or damages for noncompliance with environmental laws and regulations.

federal, state, and local laws and regulations relating to the protection of the environment may require us, as a current or previous owner or operator of real property, to investigate and clean up hazardous or toxic substances or petroleum product releases at, on, under, from, or in a property or at impacted neighboring properties, which in our case most typically arise from current or former dry cleaners, gas stations, asbestos usage and historic land use practices.

These costs could be substantial and liability under these laws may attach whether or not the owner or manager knew of, or was responsible for, the presence of such contamination.

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The presence of hazardous or toxic substances, or the failure to remediate the related contamination, may also adversely affect our ability to sell, lease, or redevelop a property or to borrow money using a property as collateral.

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Although we believe that our portfolio is in substantial compliance with U.S.

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or (iv) future uses or conditions (including, without limitation, changes in applicable environmental laws and regulations or the interpretation thereof) will not result in environmental liabilities.

We and our Neighbors face risks relating to cybersecurity attacks, which could cause loss of confidential information and other disruptions to business operations, and compliance with new laws and regulations regarding cybersecurity and privacy may result in substantial costs and may decrease cash available for distributions.

Cybersecurity attacks include attempts to gain unauthorized access to our data and/or computer systems to disrupt operations, corrupt data, or steal confidential information.

We may face such cybersecurity attacks through malware, computer viruses, attachments to e-mails, persons inside our organization or persons with access to systems inside our organization, and other significant disruptions of our information technology (“IT”) systems.

We and our Neighbors face risks relating to cybersecurity attacks.

These attacks could lead to significant disruptions to our and our Neighbor’s business operations, third party lawsuits, and adverse regulatory actions.

Efforts to respond to these attacks and comply with new laws and regulations regarding cybersecurity and privacy may result in substantial costs and may decrease cash available for distributions.

We and our Neighbors face risks from cybersecurity attacks that seek to disrupt business operations, gain unauthorized access to our network, steal sensitive data, and cause similar harm to our business.

We may face such cybersecurity attacks through malware, computer viruses, attachments to e-mails, malicious persons inside our organization, vulnerabilities in our or third party software, or other security issues with our and third party information technology (“IT”) systems.

The risk of a cybersecurity attack, including by computer hackers (individual or hacking organizations), foreign governments, and cyber terrorists, has generally increased as the number, intensity, and sophistication of attempted attacks and intrusions from around the world have increased.

The techniques and sophistication used to conduct cyber attacks and breaches of IT systems, as well as the sources and targets of these attacks, change frequently and are often not recognized until such attacks are launched or have been in place for a period of time.

The techniques and sophistication used to conduct cybersecurity attacks and breaches of IT systems, as well as the sources and targets of these attacks, change frequently and are often not recognized until such attacks are launched or have been in place for a period of time.

Remote and hybrid working arrangements at our company (and at many third party providers) also increase cybersecurity risks due to the challenges associated with managing remote computing assets and security vulnerabilities that are present in many non-corporate and home networks.

The use of artificial intelligence has further enhanced malicious actors’ ability to conduct sophisticated attacks, often at a low cost, including through the use of deepfake and similar social engineering techniques and technologies.

Our IT networks and related systems are essential to the operation of our business and our ability to perform day-to-day operations and, in some cases, may be critical to the operations of certain of our Neighbors.

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Our IT systems and those provided by third parties may contain personal, financial, or other information that is entrusted to us by our Neighbors and associates, as well as proprietary PECO information and other confidential information related to our business.

We and such third parties employ a number of measures to prevent, detect, and mitigate these threats, including password protection, firewalls, backup servers, malware detection, intrusion sensors, threat monitoring, user training, and periodic penetration testing;

however, there is no guarantee that such cybersecurity risk management programs and processes, including our and their policies, controls, and procedures, will be fully implemented, complied with or effective in protecting our and their systems and information.

There is no guarantee that our cybersecurity risk management programs and processes, including our and third parties’ policies, controls, and procedures, will be fully implemented, complied with or effective in protecting our and third party systems and information against cybersecurity attacks.

As have many companies, we and our third party vendors have been impacted by security incidents in the past, and will likely continue to experience security incidents of varying degrees.

While we do not believe these incidents have had a material impact to date, as our reliance on technology has increased, so have the risks posed to our systems, both internal and those we have outsourced.

The primary risks that could directly result from the occurrence of a cyber incident include operational interruption, damage to our relationship with our Neighbors, and private data exposure.

The primary risks that could directly result from the occurrence of a cyber incident include operational interruption, damage to our relationship with our Neighbors, and loss of competitive confidential information.

Our financial results and business operations may be negatively affected by such an incident or the resulting negative media attention.

A cybersecurity attack could:

A cybersecurity attack on our or third party IT systems could also:

(i) disrupt the proper functioning of our networks and systems and therefore our operations and/or those of certain of our Neighbors;

(ii) compromise the confidential or proprietary information of our Neighbors, associates, and vendors, which others could use to compete against us or for disruptive, destructive, or otherwise harmful purposes and outcomes;

(iii) result in our inability to maintain the building systems relied upon by our Neighbors for the efficient use of their leased space;

(ii) compromise the personal information, confidential information, or proprietary information of our Neighbors, associates, and vendors, which others could use to compete against us or for disruptive, destructive, or otherwise harmful purposes and outcomes;

(iii) result in our inability to maintain the building systems relied upon by our Neighbors for the efficient use of their leased space possibly resulting in harm to customers of those neighbors;

(iv) require significant management attention and resources to remedy the damages that result;

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(vii) subject us to claims for breach of contract, damages, credits, penalties, or termination of leases or other agreements or relationships;

(viii) cause reputational damage that adversely affects Neighbor, investor, and associate confidence in us, which could negatively affect our ability to attract and retain Neighbors, investors, and associates;

(viii) cause reputational damage that adversely affects Neighbor, investor, and associate confidence in us, which

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could negatively affect our ability to attract and retain Neighbors, investors, and associates;

(ix) result in significant remediation costs, some or all of which may not be recoverable from our insurance carriers;

and (x) result in increases in the cost of obtaining insurance on favorable terms, or at all, if the attack results in significant insured losses.

Such security breaches also could result in a violation of applicable federal and state privacy and other laws, and subject us to private consumer, business partner, or securities litigation and governmental investigations and proceedings, any of which could result in our exposure to material civil or criminal liability, and we may not be able to recover these expenses from our service providers, responsible parties, or insurance carriers.

Such security incidents could also result in a violation of applicable federal and state privacy and other laws, and subject us to private consumer, business partner, or securities litigation and governmental investigations and proceedings, any of which could result in our exposure to material civil or criminal liability, and we may not be able to recover these expenses from our service providers, responsible parties, or insurance carriers.

Similarly, our Neighbors rely extensively on IT systems to process transactions and manage their businesses and thus are also at risk from and may be adversely affected by cybersecurity attacks.

An interruption in the business operations of our Neighbors or a deterioration in their reputation resulting from a cybersecurity attack, including unauthorized access to customers’ credit card data and other confidential information, could indirectly negatively affect our business and cause lost revenues.

An interruption in the business operations of our Neighbors or a deterioration in their reputation resulting from a cybersecurity attack, including unauthorized access to customers’ information, credit card data, and other confidential information, could indirectly negatively affect our business and cause lost revenues.

Regulatory and Legal Risks

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Compliance with the ADA’s requirements could require the removal of access barriers and noncompliance may result in the imposition of injunctive relief, monetary penalties, or in some cases, an award of damages.

While we attempt to acquire shopping centers that are already in compliance with the ADA or place the burden of compliance on the seller or other third party, such as a Neighbor, we cannot

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assure stockholders that we will be able to acquire shopping centers or allocate responsibilities in this manner.

While we attempt to acquire shopping centers that are already in compliance with the ADA or place the burden of compliance on the seller or other third party, such as a Neighbor, we cannot assure stockholders that we will be able to acquire shopping centers or allocate responsibilities in this manner.

In addition, we are required to operate the shopping centers in compliance with fire and safety regulations, building codes, and other land use regulations, as they may be adopted by governmental entities and become applicable to the shopping centers.

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• the passage of legislation or other regulatory developments that adversely affect us or our industry;

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• speculation in the press or investment community;

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We cannot predict whether future issuances or sales of shares of our common stock or the availability of shares of our common stock for resale in the open market will decrease the market price of our common stock.

The issuance of a substantial number of shares of our common stock in the public market, or upon exchange of common units of limited partnership interest

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in our OP units, or the perception that such issuances might occur, could adversely affect the market price of our common stock.

The issuance of a substantial number of shares of our common stock in the public market, or upon exchange of common units of limited partnership interest in our OP units, or the perception that such issuances might occur, could adversely affect the market price of our common stock.

The exchange of OP units for common stock, including OP units granted to certain directors, executive officers, and other employees under our equity incentive plan, or the issuance of our common stock or OP units in connection with future property, portfolio, or business acquisitions could have an adverse effect on the market price of our common stock.

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and (iv) the amount of distributions that our subsidiaries may distribute to us may be subject to restrictions imposed by state law, state regulators, and/or the terms of any current or future indebtedness that these subsidiaries may incur.

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Stockholders have no contractual or other legal right to distributions that have not been authorized by the Board and declared by the Company.

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One of the factors that may influence the price of shares of our common stock is the dividend distribution rate on our common stock (as a percentage of the price of shares of our common stock) relative to market interest rates.

If market interest rates rise, as has recently been experienced, prospective purchasers of shares of our common stock may expect a higher distribution rate.

If market interest rates rise, as has been experienced in recent years, prospective purchasers of shares of our common stock may expect a higher distribution rate.

Higher interest rates would not, however, result in more funds being available for distribution and, in fact, would likely increase our borrowing costs and might decrease our funds available for distribution.

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If we cannot provide reliable financial reports or prevent fraud, our reputation and operating results would be harmed.

We are required to perform system and

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process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting, and are required to have our independent registered public accounting firm attest to the same, as required by Section 404 of the Sarbanes-Oxley Act of 2002.

We are required to perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting, and are required to have our independent registered public accounting firm attest to the same, as required by Section 404 of the Sarbanes-Oxley Act of 2002.

If a material weakness or significant deficiency was to be identified in our internal control over financial reporting, we may also identify deficiencies in some of our disclosure controls and procedures that we believe require remediation.

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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 1A. Risk Factors