PresentationWelcome to the Phillips Edison roundtable. Jeff, I'll turn it over to you, maybe you can introduce the team and also provide some opening remarks.Great. Well, first of all, thank you, everyone, for being here today. We appreciate your time. And I'm Jeff Edison, one of the founders of Phillips Edison & Company. With me are John and Bob, you guys want to give a little... .John CaulfieldCFO, Executive VP & Treasurer My name is John Caulfield. I'm the CFO. I've been in the company for 11 years. I th ...

PresentationWelcome to the Phillips Edison roundtable. Jeff, I'll turn it over to you, maybe you can introduce the team and also provide some opening remarks.Great. Well, first of all, thank you, everyone, for being here today. We appreciate your time. And I'm Jeff Edison, one of the founders of Phillips Edison & Company. With me are John and Bob, you guys want to give a little... .John CaulfieldCFO, Executive VP & Treasurer My name is John Caulfield. I'm the CFO. I've been in the company for 11 years. I th ...

Phillips Edison & Company (NasdaqGS:PECO) 2025 Conference September 10, 2025 03:00 PM ET Company ParticipantsJeffrey Edison - Chairman & CEORobert Myers - PresidentJohn Caulfield - CFO, Executive VP & TreasurerNoneLet me get started here. Welcome to the Phillips Edison & Company Roundtable. You know, Jeff, I'll turn it over to you. Maybe you can introduce the team and also provide some opening remarks.Jeffrey EdisonGreat. First of all, thank you, everyone, for being here today. We appreciate your time. I'm ...

Core Viewpoint - Phillips Edison & Company, Inc. announced a 5.7% increase in monthly dividend distributions, reflecting strong operational performance and cash flow growth [1][3]. Dividend Distribution - The Board approved a monthly dividend rate of $0.1083 per share, which annualizes to $1.30 per share, up from the previous $1.23 per share [2]. - This marks the fifth consecutive annual increase in dividend distributions and the second consecutive increase exceeding 5% [3]. Company Performance - Jeff Edison, Chairman and CEO, highlighted the company's ability to deliver solid growth through various economic cycles, emphasizing the favorable balance of defense, offense, and growing cash flow for shareholders [3]. - As of June 30, 2025, the company managed 327 shopping centers, including 303 wholly-owned centers totaling 34.0 million square feet across 31 states [4]. Company Overview - Phillips Edison & Company is one of the largest owners and operators of grocery-anchored neighborhood shopping centers in the U.S., focusing on necessity-based goods and services [4]. - The company features a mix of national and regional retailers, with top grocery anchors including Kroger, Publix, Albertsons, and Ahold Delhaize [4].

Core Viewpoint - Phillips Edison & Company, Inc. (PECO) is set to present at the BofA Securities 2025 Global Real Estate Conference on September 10, 2025, highlighting its position as a leading owner and operator of grocery-anchored neighborhood shopping centers [1][2]. Company Overview - PECO is one of the largest owners and operators of high-quality, grocery-anchored neighborhood shopping centers in the United States, founded in 1991 [3]. - The company has a vertically-integrated operating platform and a national footprint, managing 327 shopping centers, including 303 wholly-owned centers totaling 34.0 million square feet across 31 states [3]. - PECO's grocery anchors include major retailers such as Kroger, Publix, Albertsons, and Ahold Delhaize, providing necessity-based goods and services [3]. Event Details - The presentation at the BofA Securities 2025 Global Real Estate Conference will feature Chairman and CEO Jeff Edison, President Bob Myers, and CFO John Caulfield [2]. - The event is scheduled for September 10, 2025, at 3:00 p.m. Eastern Time, with a live webcast available [2].

Core Insights - The Zacks REIT and Equity Trust - Retail industry is well-positioned to leverage favorable market conditions, with strong consumer spending and limited new development supporting healthy fundamentals [1] - The industry is experiencing a rebound driven by renewed consumer interest in in-store shopping, despite facing challenges from e-commerce expansion and macroeconomic pressures [2][5] Industry Overview - The industry comprises REITs that own, develop, manage, and lease various retail properties, including regional malls and grocery-anchored shopping venues [2] - Key demand drivers include geographic location and demographics, with a positive shift in the retail landscape noted [2] Future Trends - Experiential retail and omnichannel integration are revitalizing the sector, with physical stores transforming into immersive destinations that enhance customer engagement [3] - Solid leasing demand from consumer service providers and cross-border entrants is diversifying the tenant base and driving long-term occupancy stability [3] Supply and Demand Dynamics - Retail REITs benefit from a constrained supply pipeline, with limited new construction due to high building costs and labor shortages, leading to historically tight national vacancy rates [4] - Many REITs are redeveloping underperforming assets and adding non-traditional tenants, enhancing portfolio durability [4] Macroeconomic Challenges - High interest rates, inflation, and tariff changes are pressuring retailers, leading to delayed leasing decisions and increased store closures [5] - E-commerce penetration is dampening demand for traditional retail space, particularly in commodity-driven segments [5] Industry Performance - The Zacks REIT and Equity Trust - Retail industry has underperformed the broader Zacks Finance sector and the S&P 500 over the past year, declining 5.5% compared to the S&P 500's rise of 19.4% [10] - The industry is currently trading at a forward 12-month price-to-FFO of 14.62X, below the S&P 500's forward P/E of 22.54X [13] Stock Recommendations - **Brixmor Property Group Inc. (BRX)** focuses on open-air shopping centers with a balanced tenant base, currently has a Zacks Rank 2, and its FFO per share estimate has been revised upward to $2.23, indicating a 4.7% year-over-year increase [17][19] - **Phillips Edison & Company, Inc. (PECO)** specializes in grocery-anchored shopping centers, managing 327 centers with a Zacks Rank 2, and its FFO per share estimate for 2025 has been revised to $2.58, reflecting a bullish outlook [21][24] - **Urban Edge Properties (UE)** operates in densely populated regions with a focus on essential retailers, holding a Zacks Rank 2, and its FFO per share estimate has been raised to $1.40, indicating a 3.7% year-over-year increase [26][28]

Core Insights - The company reported a 4.2% growth in Same Center Net Operating Income (NOI) for Q2 2025, leading to an increase in full-year guidance [2][11] - Core Funds From Operations (FFO) per share rose 8.5% to $0.64, while NAREIT FFO per diluted share increased 8.8% year-over-year to $0.62 [3][11] - Total portfolio occupancy reached 97.4%, with anchor occupancy at 98.9%, reflecting strong demand for grocery-anchored locations [3][29] Leasing and Retention - Comparable renewal rent spreads were 19.1%, and new leasing rent spreads reached 34.6%, indicating significant pricing power [4][28] - Neighbor retention rate was 94%, which minimizes downtime and capital expenditure for tenant improvements [4][32] Acquisition and Development - The company completed $133 million in acquisitions during Q2 2025, totaling $287 million year-to-date, with a full-year acquisition guidance of $350 million to $450 million [5][11] - There are 21 active development projects with estimated yields of 9%-12%, and nine projects have stabilized, contributing approximately $3.7 million in annual incremental NOI [5][10] Financial Position - As of Q2 2025, liquidity stood at $972 million, with a net debt to trailing twelve-month annualized adjusted EBITDAR ratio of 5.4 times [6][34] - 95% of total debt was fixed rate, with a weighted average interest rate of 4.4% and a maturity of 5.7 years [6][36] Guidance and Market Outlook - The company raised its guidance for same center NOI growth to 3.1%-3.6% for 2025, with NAREIT FFO per share growth expected at 6.3% at the midpoint [7][37] - Approximately 85% of neighbors are expected to experience limited impact from tariffs, with 70% of ABR attributed to necessity-based goods and services [8][20] Portfolio Characteristics - The three-mile trade area averages a population of 68,000 and a median household income of $92,000, which is 15% above the US median [8][30] - The top 10 "watch list" tenants represent only about 2% of ABR, indicating low concentration risk [9][31]

Group 1 - The recent market sell-off has led to quality stocks being undervalued, presenting potential investment opportunities for income-focused investors [2] - The focus is on defensive stocks with a medium- to long-term investment horizon, which can provide durable income [2] - iREIT+HOYA Capital emphasizes sustainable portfolio income, diversification, and inflation hedging through income-producing asset classes [1] Group 2 - The service offers a free two-week trial for investors to explore exclusive income-focused portfolios [1] - The current market anxiety can be leveraged to identify undervalued stocks that may rebound [2]

Core Viewpoint - Growth stocks are appealing due to their potential for above-average financial growth, but identifying strong candidates involves navigating inherent risks and volatility [1] Group 1: Company Overview - Phillips Edison & Company, Inc. (PECO) is highlighted as a recommended growth stock with a favorable Growth Score and a top Zacks Rank [2] - The company has a historical EPS growth rate of 4.7%, with projected EPS growth of 5.8% this year, surpassing the industry average of 4.1% [4] Group 2: Financial Metrics - Cash flow growth for Phillips Edison & Company stands at 7.3% year-over-year, exceeding the industry average of 3.3% [5] - The company's annualized cash flow growth rate over the past 3-5 years is 12.9%, compared to the industry average of 4.1% [6] Group 3: Earnings Estimates - Current-year earnings estimates for Phillips Edison & Company have been revised upward, with a 0.7% increase in the Zacks Consensus Estimate over the past month [7] - The combination of a Zacks Rank 2 and a Growth Score of B positions Phillips Edison & Company as a potential outperformer for growth investors [9]

[PART I. Financial Information](index=2&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [ITEM 1. Financial Statements (Condensed and Unaudited)](index=2&type=section&id=ITEM%201.%20Financial%20Statements%20(Condensed%20and%20Unaudited)) This section presents the company's condensed and unaudited consolidated financial statements, including balance sheets, statements of operations and comprehensive income, statements of equity, and statements of cash flows, along with detailed notes providing context and breakdowns of key financial accounts and activities [Consolidated Balance Sheets](index=3&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS%20AS%20OF%20JUNE%2030%2C%202025%20AND%20DECEMBER%2031%2C%202024) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific points in time Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :------------------ | | Total Assets | $5,269,448 | $5,046,223 | | Total Liabilities | $2,675,226 | $2,412,238 | | Total Equity | $2,594,222 | $2,633,985 | | Net Investment in Real Estate Assets | $4,960,706 | $4,781,456 | | Debt Obligations, net | $2,393,114 | $2,109,543 | [Consolidated Statements of Operations and Comprehensive Income](index=4&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20AND%20COMPREHENSIVE%20INCOME%20FOR%20THE%20THREE%20AND%20SIX%20MONTHS%20ENDED%20JUNE%2030%2C%202025%20AND%202024) This section details the company's financial performance over specific periods, presenting revenues, expenses, and net income, along with comprehensive income components Operating Results (Six Months Ended June 30, in thousands, except per share) | Metric | 2025 | 2024 | Change (YoY) | | :----------------------------------- | :--------- | :--------- | :----------- | | Total Revenues | $356,064 | $322,817 | +10.3% | | Total Operating Expenses | $263,101 | $236,585 | +11.2% | | Net Income | $43,145 | $36,612 | +17.8% | | Net Income Attributable to Stockholders | $39,093 | $32,941 | +18.7% | | EPS (Basic and Diluted) | $0.31 | $0.27 | +14.8% | Operating Results (Three Months Ended June 30, in thousands, except per share) | Metric | 2025 | 2024 | Change (YoY) | | :----------------------------------- | :--------- | :--------- | :----------- | | Total Revenues | $177,753 | $161,515 | +10.1% | | Total Operating Expenses | $134,726 | $119,178 | +13.0% | | Net Income | $14,252 | $16,986 | -16.1% | | Net Income Attributable to Stockholders | $12,784 | $15,271 | -16.3% | | EPS (Basic and Diluted) | $0.10 | $0.12 | -16.7% | [Consolidated Statements of Equity](index=5&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20EQUITY%20FOR%20THE%20THREE%20AND%20SIX%20MONTHS%20ENDED%20JUNE%2030%2C%202025%20AND%202024) This section outlines changes in the company's equity over time, reflecting net income, distributions, and other comprehensive income adjustments - Total equity decreased from **$2,633,985 thousand** at January 1, 2025, to **$2,594,222 thousand** at June 30, 2025, primarily due to common distributions declared and changes in unrealized value on interest rate swaps, partially offset by net income[10](index=10&type=chunk)[12](index=12&type=chunk) Key Equity Changes (Six Months Ended June 30, 2025, in thousands) | Item | Amount | | :----------------------------------- | :--------- | | Balance at January 1, 2025 | $2,633,985 | | Change in unrealized value on interest rate swaps | $(2,562) | | Common distributions declared | $(77,486) | | Net income | $43,145 | | Balance at June 30, 2025 | $2,594,222 | [Consolidated Statements of Cash Flows](index=7&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS%20FOR%20THE%20SIX%20MONTHS%20ENDED%20JUNE%2030%2C%202025%20AND%202024) This section details the inflows and outflows of cash from operating, investing, and financing activities, providing insight into the company's liquidity Cash Flow Activities (Six Months Ended June 30, in thousands) | Cash Flow Activity | 2025 | 2024 | Change (YoY) | | :----------------------------------- | :--------- | :--------- | :----------- | | Net cash provided by operating activities | $156,662 | $141,599 | +10.6% | | Net cash used in investing activities | $(329,122) | $(143,236) | -129.8% | | Net cash provided by financing activities | $172,987 | $3,707 | NM (significant increase) | - Investing activities saw a significant increase in cash used, primarily due to higher real estate acquisitions (**$268.1 million**) and capital expenditures (**$59.4 million**) in 2025[14](index=14&type=chunk)[147](index=147&type=chunk) [Notes to the Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=NOTES%20TO%20THE%20UNAUDITED%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section provides detailed explanations and breakdowns of the figures presented in the financial statements, offering crucial context for understanding the company's financial position and performance [Note 1. Organization](index=9&type=section&id=NOTE%201.%20Organization) This note describes the company's business, its focus as a REIT, and its property ownership structure, including wholly-owned and joint venture properties - Phillips Edison & Company, Inc. (PECO) is a REIT focused on omni-channel grocery-anchored shopping centers in the U.S[20](index=20&type=chunk) - As of June 30, 2025, PECO wholly-owned **303 properties** and held partial interests in **24 properties** through three unconsolidated joint ventures[21](index=21&type=chunk) - Subsequent to June 30, 2025, NGCF (a joint venture) acquired one property for **$24.4 million**, with PECO's prorated share being **$7.6 million**[21](index=21&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=9&type=section&id=NOTE%202.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the accounting principles used in preparing the financial statements, confirming adherence to GAAP and the company's single operating segment - The financial statements are prepared in accordance with GAAP for interim financial information; no changes to significant accounting policies occurred during the six months ended June 30, 2025[23](index=23&type=chunk)[24](index=24&type=chunk) - The company operates as a single operating and reportable segment: Real Estate Properties[27](index=27&type=chunk) [Note 3. Leases](index=10&type=section&id=NOTE%203.%20Leases) This note details the company's lease classifications, rental income components, and future fixed contractual lease payment obligations - All company leases are classified as operating leases[29](index=29&type=chunk) Rental Income (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Rental income related to fixed lease payments | $130,485 | $120,199 | $258,020 | $238,282 | | Rental income related to variable lease payments | $40,131 | $35,084 | $81,852 | $73,261 | | Total rental income | $173,467 | $158,286 | $347,650 | $316,354 | - Future fixed contractual lease payments total **$2,511,994 thousand** as of June 30, 2025. Florida, California, and Texas represent **11.7%**, **11.1%**, and **10.4%** of ABR, respectively[29](index=29&type=chunk) [Note 4. Real Estate Activity](index=11&type=section&id=NOTE%204.%20Real%20Estate%20Activity) This note summarizes the company's real estate acquisition and disposition activities, including the number of properties, total prices, and proceeds from sales Real Estate Acquisition Activity (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :-------------------------- | :----- | :----- | | Number of properties acquired | 10 | 4 | | Total price of acquisitions | $268,108 | $116,211 | Real Estate Disposition Activity (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :----------------------------------- | :----- | :----- | | Number of properties sold | 1 | 0 | | Proceeds (payments) from sale of real estate, net | $6,438 | $(8) | | Gain (loss) on disposal of property, net | $5,543 | $(15) | - In 2025, one property was sold for **$24.9 million**, with **$17.4 million** provided as secured financing[32](index=32&type=chunk) [Note 5. Other Assets, Net](index=12&type=section&id=NOTE%205.%20Other%20Assets%2C%20Net) This note provides a breakdown of other assets, including deferred financing expenses and secured loan receivables Other Assets, Net (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :------------------ | | Total other assets, net | $236,756 | $195,328 | | Deferred financing expenses | $16,346 | $9,037 | | Secured loan receivable | $17,395 | — | [Note 6. Debt Obligations](index=13&type=section&id=NOTE%206.%20Debt%20Obligations) This note details the company's debt structure, including total obligations, interest rates, and changes in financing facilities Debt Obligations Summary (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :------------------ | | Debt obligations, net | $2,393,114 | $2,109,543 | | Weighted-average interest rate | 4.4% | 4.3% | | Fixed-rate debt | $2,301,390 | $1,987,586 | | Variable-rate debt | $120,750 | $149,750 | | Unsecured debt | $1,995,750 | $1,674,750 | | Secured debt | $426,390 | $462,586 | - In June 2025, **$350 million** of 5.250% senior notes due 2032 were issued, with proceeds used to pay down the revolving credit facility[35](index=35&type=chunk) - The senior unsecured revolving credit facility was amended in January 2025, increasing borrowing capacity to **$1 billion** and extending maturity to January 2029[36](index=36&type=chunk) [Note 7. Derivatives and Hedging Activities](index=14&type=section&id=NOTE%207.%20Derivatives%20and%20Hedging%20Activities) This note explains the company's use of interest rate swaps for cash flow hedging and their impact on future interest expense - The company uses interest rate swaps as cash flow hedges to manage variable interest rate risk on debt[38](index=38&type=chunk)[39](index=39&type=chunk) Interest Rate Swaps (Cash Flow Hedges) | Metric | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :------------------ | | Count | 3 | 3 | | Notional amount (in thousands) | $475,000 | $475,000 | | Fixed SOFR | 2.8% - 3.4% | 2.8% - 3.4% | | Weighted-average term (in years) | 0.8 | 1.3 | - An estimated **$2.0 million** will be reclassified from AOCI as a decrease to Interest Expense, Net, over the next twelve months[40](index=40&type=chunk) [Note 8. Commitments and Contingencies](index=14&type=section&id=NOTE%208.%20Commitments%20and%20Contingencies) This note addresses the company's involvement in legal proceedings, environmental matters, and outstanding letters of credit, assessing their potential financial impact - The company is involved in various claims and litigation, but does not expect a material adverse effect on financial statements, as many are covered by insurance[42](index=42&type=chunk) - Environmental matters are managed through indemnification and environmental liability insurance, with no material adverse effects currently anticipated[43](index=43&type=chunk)[44](index=44&type=chunk) - As of June 30, 2025, four letters of credit totaling approximately **$26.2 million** were outstanding to secure obligations under the captive insurance company, Silver Rock Insurance, Inc[46](index=46&type=chunk) [Note 9. Equity](index=15&type=section&id=NOTE%209.%20Equity) This note details equity-related activities, including available common stock under the ATM program, monthly distributions, OP unit conversions, and the share repurchase program - As of June 30, 2025, approximately **$177 million** of common stock remained available for issuance under the At-the-Market (ATM) program; no shares were issued under this program during the three and six months ended June 30, 2025 and 2024[49](index=49&type=chunk) - Monthly distributions of **$0.1025 per common share** and Operating Partnership (OP) unit were declared and paid from January to June 2025[50](index=50&type=chunk) OP Unit Activity (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :----------------------------------- | :----- | :----- | | OP units converted into shares of common stock | 406 | 252 | | Distributions declared on OP units | $8,227 | $8,355 | - The company has a Board-approved share repurchase program of up to **$250 million**, but no repurchases have been made to date[52](index=52&type=chunk) [Note 10. Earnings Per Share](index=16&type=section&id=NOTE%2010.%20Earnings%20Per%20Share) This note provides the calculation of basic and diluted earnings per share, clarifying the treatment of OP units in the denominator EPS Calculation (Six Months Ended June 30, in thousands, except per share) | Metric | 2025 | 2024 | | :----------------------------------- | :--------- | :--------- | | Net income attributable to stockholders - basic | $39,093 | $32,941 | | Weighted-average shares - basic | 125,381 | 122,306 | | Basic and diluted income per share | $0.31 | $0.27 | - OP units are included in the diluted EPS denominator but have no dilutive impact on earnings per share of common stock[53](index=53&type=chunk) [Note 11. Related Party Transactions](index=16&type=section&id=NOTE%2011.%20Related%20Party%20Transactions) This note discloses fees and management income from managed funds, tax protection agreements, and limited guarantees for mortgage loans Fees and Management Income from Managed Funds (in thousands) | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------------------------- | :--------------------------- | :--------------------------- | | Recurring fees | $2,276 | $1,998 | | Transactional revenue and reimbursements | $1,374 | $1,300 | | Insurance premiums | $2,449 | $1,789 | | Total fees and management income | $6,099 | $5,087 | - The company is party to tax protection agreements with certain partners, including executive officers, with a potential 'make-whole amount' of approximately **$115.2 million** as of June 30, 2025[54](index=54&type=chunk) - The company is a limited guarantor for **$173.8 million**, **$47.5 million**, and **$17.9 million** in mortgage loans secured by GRP I, NRV, and NGCF properties, respectively[55](index=55&type=chunk) [Note 12. Fair Value Measurements](index=17&type=section&id=NOTE%2012.%20Fair%20Value%20Measurements) This note describes the valuation methodologies and inputs used for real estate investments, senior unsecured notes, and derivative instruments, confirming no impairment charges - Real estate investments are valued using Level 3 inputs (e.g., discount rates, capitalization rates), while senior unsecured notes use Level 1 quoted prices[57](index=57&type=chunk)[58](index=58&type=chunk) - Derivative instruments (interest rate swaps) are measured at fair value on a recurring basis using Level 2 inputs, with credit valuation adjustments utilizing Level 3 inputs deemed not significant[60](index=60&type=chunk)[63](index=63&type=chunk) - No real estate asset impairment charges were recorded during the three and six months ended June 30, 2025 and 2024[64](index=64&type=chunk) [Note 13. Reportable Segments](index=18&type=section&id=NOTE%2013.%20Reportable%20Segments) This note confirms the company operates as a single reportable segment, 'Real Estate Properties,' with revenue primarily from operating lease contracts and no single dominant tenant - The company operates as a single operating and reportable segment, 'Real Estate Properties,' as determined by the Chief Operating Decision Maker (CODM)[67](index=67&type=chunk) - Revenue is primarily derived from operating lease contracts, including tenant reimbursements for common area maintenance, insurance, and real estate taxes[68](index=68&type=chunk) - No single tenant comprised **10% or more** of aggregate ABR for the periods presented[68](index=68&type=chunk) [Note 14. Subsequent Events](index=19&type=section&id=NOTE%2014.%20Subsequent%20Events) This note confirms that no events requiring recognition or disclosure have occurred subsequent to the reporting period, beyond those already mentioned - No events requiring recognition or disclosure have occurred subsequent to June 30, 2025, other than those already disclosed[71](index=71&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides a comprehensive analysis of the company's financial performance, liquidity, and capital resources, detailing operating results, leasing activities, non-GAAP financial measures, and capital management strategies for the periods presented [Cautionary Note Regarding Forward-Looking Statements](index=20&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This note advises that the report contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially - The report contains forward-looking statements subject to known and unknown risks and uncertainties that could cause actual results to differ materially[74](index=74&type=chunk) - Key risks include changes in economic climates, local market conditions, tenant financial stability, borrowing costs, environmental matters, and the ability to maintain REIT qualification[74](index=74&type=chunk) [Key Performance Indicators and Defined Terms](index=20&type=section&id=KEY%20PERFORMANCE%20INDICATORS%20AND%20DEFINED%20TERMS) This section outlines the financial and nonfinancial key performance indicators used to measure the company's performance, including definitions of non-GAAP measures - The company uses financial and nonfinancial KPIs to measure performance, grouped into portfolio, leasing, and financial performance metrics[76](index=76&type=chunk)[78](index=78&type=chunk) - Non-GAAP measures are used as supplemental information and should not be considered alternatives to GAAP measures[77](index=77&type=chunk) - Key definitions include ABR, Leased Occupancy, Comparable rent spread, Portfolio retention rate, Adjusted EBITDAre, Core FFO, Nareit FFO, and Same-Center[82](index=82&type=chunk)[86](index=86&type=chunk) [Overview](index=22&type=section&id=OVERVIEW) This section provides a general description of Phillips Edison & Company as a REIT specializing in grocery-anchored shopping centers, including portfolio statistics and tenant composition - Phillips Edison & Company is a REIT specializing in grocery-anchored shopping centers, owning equity interests in **327 centers** (**303 wholly-owned**) across **31 states** as of June 30, 2025[83](index=83&type=chunk)[84](index=84&type=chunk) Wholly-Owned Portfolio Statistics (June 30) | Metric | 2025 | 2024 | | :----------------------------------- | :----- | :----- | | Number of properties | 303 | 286 | | Total square feet (in thousands) | 33,979 | 32,594 | | ABR (in thousands) | $531,544 | $487,536 | | Leased occupancy % (Total portfolio) | 97.4% | 97.5% | | Leased occupancy % (Anchor spaces) | 98.9% | 98.8% | | Leased occupancy % (Inline spaces) | 94.8% | 95.1% | - Approximately **70%** of ABR is generated from necessity-based goods and services. Top 20 Neighbors by ABR include Kroger (**5.6%**), Publix (**4.9%**), and Albertsons (**3.7%**)[97](index=97&type=chunk)[98](index=98&type=chunk) [Results of Operations](index=25&type=section&id=RESULTS%20OF%20OPERATIONS) This section analyzes the company's financial performance, detailing revenue and expense trends, and the impact of acquisitions, redevelopments, and leasing activities on net income - Adverse economic conditions, including slower growth, potential recession, and elevated inflation, could negatively impact the company and its tenants, despite lease provisions designed to mitigate inflation effects[99](index=99&type=chunk) [Summary of Operating Activities (Three Months Ended June 30)](index=26&type=section&id=SUMMARY%20OF%20OPERATING%20ACTIVITIES%20FOR%20THE%20THREE%20MONTHS%20ENDED%20JUNE%2030%2C%202025%20AND%202024) This summary details the company's operating performance for the three months ended June 30, highlighting changes in revenues, expenses, and net income Operating Results (Three Months Ended June 30, in thousands) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :----------------------------------- | :--------- | :--------- | :--------- | :--------- | | Total Revenues | $177,753 | $161,515 | $16,238 | +10.1% | | Total Operating Expenses | $134,726 | $119,178 | $(15,548) | -13.0% | | Net Income | $14,252 | $16,986 | $(2,734) | -16.1% | - Rental income increased by **$15.2 million**, driven by **$11.4 million** from net acquisition activity and **$3.8 million** from the same-center portfolio, which saw a **$0.43** increase in average minimum rent PSF[101](index=101&type=chunk)[103](index=103&type=chunk) - General and administrative expenses rose by **$1.8 million** due to growth initiatives, including increased headcount and performance-based compensation[102](index=102&type=chunk) - Depreciation and amortization increased by **$10.0 million** due to net acquisition activity and redevelopment projects[104](index=104&type=chunk) [Summary of Operating Activities (Six Months Ended June 30)](index=28&type=section&id=SUMMARY%20OF%20OPERATING%20ACTIVITIES%20FOR%20THE%20SIX%20MONTHS%20ENDED%20JUNE%2030%2C%202025%20AND%202024) This summary details the company's operating performance for the six months ended June 30, highlighting changes in revenues, expenses, and net income Operating Results (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :----------------------------------- | :--------- | :--------- | :--------- | :--------- | | Total Revenues | $356,064 | $322,817 | $33,247 | +10.3% | | Total Operating Expenses | $263,101 | $236,585 | $(26,516) | -11.2% | | Net Income | $43,145 | $36,612 | $6,533 | +17.8% | - Rental income increased by **$31.3 million**, with **$19.6 million** from net acquisition activity and **$11.7 million** from the same-center portfolio, driven by a **$0.44** increase in average minimum rent PSF[108](index=108&type=chunk)[109](index=109&type=chunk) - Depreciation and amortization increased by **$15.1 million** due to net acquisition activity and redevelopment[110](index=110&type=chunk) - Interest expense, net, increased by **$6.4 million** due to increased debt outstanding[110](index=110&type=chunk) [Leasing Activity](index=30&type=section&id=LEASING%20ACTIVITY) This section reviews the company's leasing performance, including comparable rent spreads for new leases and renewals, and the portfolio retention rate Leasing Activity Highlights (Wholly-Owned Properties) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | New leases - Comparable rent spread | 34.6% | 34.4% | 31.8% | 31.9% | | Renewals & options - Comparable rent spread | 19.1% | 20.5% | 19.9% | 18.7% | | Portfolio retention rate | 93.6% | 88.7% | 92.4% | 88.2% | - The portfolio retention rate improved significantly for both the three-month (**93.6% vs 88.7%**) and six-month (**92.4% vs 88.2%**) periods ended June 30, 2025, compared to 2024[111](index=111&type=chunk)[112](index=112&type=chunk) [Non-GAAP Measures](index=31&type=section&id=NON-GAAP%20MEASURES) This section presents and reconciles non-GAAP financial measures such as Same-Center NOI, Nareit FFO, Core FFO, EBITDAre, and Adjusted EBITDAre, used to evaluate operational performance - The company uses non-GAAP measures like Same-Center NOI, Nareit FFO, Core FFO, EBITDAre, and Adjusted EBITDAre to assess operational and financial performance, which are not alternatives to GAAP measures[113](index=113&type=chunk)[119](index=119&type=chunk)[123](index=123&type=chunk) [Same-Center NOI](index=31&type=section&id=SAME-CENTER%20NOI) This section analyzes the Same-Center Net Operating Income, a key non-GAAP metric, and its growth drivers for the reported periods Same-Center NOI (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total Same-Center NOI | $114,462 | $109,824 | $229,556 | $220,553 | | % Change | 4.2% | | 4.1% | | | Period-end Same-Center Leased Occupancy % | 97.6% | 97.5% | 97.6% | 97.5% | - Same-Center NOI increased by **4.2%** and **4.1%** for the three and six months ended June 30, 2025, respectively, driven by higher rental and tenant recovery income[117](index=117&type=chunk) [Nareit FFO and Core FFO](index=32&type=section&id=NAREIT%20FFO%20AND%20CORE%20FFO) This section presents Nareit FFO and Core FFO, key non-GAAP metrics for REITs, providing per-share figures for the reported periods Nareit FFO and Core FFO (Six Months Ended June 30, in thousands, except per share) | Metric | 2025 | 2024 | | :----------------------------------- | :--------- | :--------- | | Nareit FFO attributable to stockholders and OP unit holders | $175,064 | $158,424 | | Core FFO attributable to stockholders and OP unit holders | $178,982 | $161,639 | | Nareit FFO per share - diluted | $1.26 | $1.16 | | Core FFO per share - diluted | $1.29 | $1.18 | [EBITDAre and Adjusted EBITDAre](index=34&type=section&id=EBITDAre%20AND%20ADJUSTED%20EBITDAre) This section provides EBITDAre and Adjusted EBITDAre, non-GAAP measures used to evaluate earnings independent of capital structure and debt service coverage EBITDAre and Adjusted EBITDAre (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :----------------------------------- | :--------- | :--------- | | EBITDAre | $230,494 | $207,424 | | Adjusted EBITDAre | $233,637 | $209,749 | - EBITDAre and Adjusted EBITDAre are used to compare earnings independent of capital structure, determine debt service coverage, and measure enterprise value[123](index=123&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section discusses the company's ability to meet its financial obligations and fund operations, detailing cash demands, liquidity sources, and capital management strategies - The company's principal cash demands include real estate investments, distributions, redevelopment, capital expenditures, and debt payments[126](index=126&type=chunk) - Primary liquidity sources are operating cash flows, borrowings from the unsecured revolving credit facility, equity offerings, property dispositions, and available cash[126](index=126&type=chunk) - Current liquidity sources are deemed sufficient to meet short- and long-term cash demands[126](index=126&type=chunk) [ATM Program](index=34&type=section&id=ATM%20Program) This section describes the At-the-Market (ATM) program for common stock issuance and its utilization status - A new At-the-Market (ATM) program was established in February 2024, allowing for the sale of up to **$250 million** in common stock[129](index=129&type=chunk) - As of June 30, 2025, approximately **$177 million** of common stock remained available under the ATM program; no shares were issued during the three and six months ended June 30, 2025 and 2024[129](index=129&type=chunk) [Debt](index=35&type=section&id=DEBT) This section summarizes the company's debt obligations, including total gross debt, interest rates, and changes to the revolving credit facility Debt Summary (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :------------------ | | Total debt obligations, gross | $2,422,140 | $2,137,336 | | Weighted-average interest rate | 4.4% | 4.3% | | Revolving credit facility capacity | $1,000,000 | $800,000 | | Revolving credit facility availability | $962,771 | $738,904 | - In June 2025, **$350 million** of 5.250% senior notes due 2032 were issued, with proceeds used to pay down the revolving credit facility[130](index=130&type=chunk) - The revolving credit facility's borrowing capacity increased to **$1 billion** and its maturity extended to January 2029[131](index=131&type=chunk) [Financial Leverage Ratios](index=36&type=section&id=FINANCIAL%20LEVERAGE%20RATIOS) This section presents key financial leverage ratios, including net debt to Adjusted EBITDAre and total enterprise value, indicating access to future borrowings Financial Leverage Ratios | Metric | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :------------------ | | Net debt (in thousands) | $2,454,633 | $2,160,856 | | Total enterprise value (in thousands) | $7,303,626 | $7,336,142 | | Net debt to Adjusted EBITDAre - annualized | 5.4x | 5.0x | | Net debt to total enterprise value | 33.6% | 29.5% | - The company's leverage ratios and debt covenant compliance are believed to provide access to future borrowings[134](index=134&type=chunk) [Capital Expenditures and Redevelopment Activity](index=36&type=section&id=CAPITAL%20EXPENDITURES%20AND%20REDEVELOPMENT%20ACTIVITY) This section details the company's capital spending on improvements, tenant enhancements, and redevelopment projects, including expected yields and investment amounts - Gross capital spend for the six months ended June 30, 2025, was **$59.4 million**, an increase from **$30.9 million** in 2024[136](index=136&type=chunk) Capital Spending Activity (Six Months Ended June 30, in thousands) | Category | 2025 | 2024 | | :----------------------------------- | :----- | :----- | | Capital improvements | $10,004 | $4,648 | | Tenant improvements | $15,700 | $13,347 | | Redevelopment and development | $29,798 | $7,348 | | Total capital expenditures for real estate | $55,502 | $25,343 | - Development and redevelopment projects are expected to stabilize within **24 months**, targeting underwritten incremental unlevered yields of **9%-12%**, with current in-process projects representing an estimated **$65.0 million** investment[137](index=137&type=chunk) [Real Estate Acquisition Activity](index=38&type=section&id=REAL%20ESTATE%20ACQUISITION%20ACTIVITY) This section summarizes the number and total price of properties acquired during the reported periods Property Acquisitions (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :-------------------------- | :----- | :----- | | Number of properties acquired | 10 | 4 | | Total price of acquisitions | $268,108 | $116,211 | [Real Estate Disposition Activity](index=38&type=section&id=REAL%20ESTATE%20DISPOSITION%20ACTIVITY) This section summarizes the number of properties sold, net proceeds, and gains or losses from dispositions during the reported periods Property Dispositions (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :----------------------------------- | :----- | :----- | | Number of properties sold | 1 | 0 | | Proceeds (payments) from sale of real estate, net | $6,438 | $(8) | | Gain (loss) on disposal of property, net | $5,543 | $(15) | [Distributions](index=38&type=section&id=DISTRIBUTIONS) This section details the monthly distributions declared and paid, and the requirement to distribute taxable income to maintain REIT qualification - Monthly distributions of **$0.1025 per common share** and OP unit were declared and paid from January to June 2025[139](index=139&type=chunk) - To maintain REIT qualification, the company must distribute at least **90%** of its REIT taxable income annually[140](index=140&type=chunk) [Cash Flow Activities](index=39&type=section&id=CASH%20FLOW%20ACTIVITIES) This section analyzes the net cash provided by operating, investing, and financing activities, highlighting key drivers for changes in cash flows - Net cash provided by operating activities increased by **10.6%** to **$156.7 million** for the six months ended June 30, 2025, driven by a **4.1%** improvement in Same-Center NOI[144](index=144&type=chunk) - Net cash used in investing activities significantly increased by **129.8%** to **$(329.1) million**, primarily due to higher real estate acquisitions (**$268.1 million**) and capital expenditures (**$59.4 million**)[144](index=144&type=chunk)[147](index=147&type=chunk) - Net cash provided by financing activities saw a substantial increase to **$173.0 million**, mainly due to **$273.1 million** in net debt borrowings (from the 2025 bond offering) and increased distributions paid[144](index=144&type=chunk)[147](index=147&type=chunk) [Critical Accounting Estimates](index=39&type=section&id=CRITICAL%20ACCOUNTING%20ESTIMATES) This section confirms that no significant changes have occurred in critical accounting estimates, such as the valuation of real estate assets and rental income, during the current period - No significant changes to critical accounting estimates, such as the valuation of real estate assets and rental income, have occurred during 2025[145](index=145&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that there have been no material changes to the company's quantitative and qualitative disclosures about market risk since its 2024 Annual Report on Form 10-K - No material changes to market risk disclosures have occurred since the 2024 Annual Report on Form 10-K[146](index=146&type=chunk) [ITEM 4. Controls and Procedures](index=39&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, and no material changes in internal control over financial reporting occurred during the quarter - Disclosure controls and procedures were effective as of June 30, 2025, at a reasonable assurance level[148](index=148&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[149](index=149&type=chunk) [PART II. Other Information](index=39&type=section&id=PART%20II.%20OTHER%20INFORMATION) [ITEM 1. Legal Proceedings](index=39&type=section&id=ITEM%201.%20Legal%20Proceedings) The company is involved in various legal proceedings in the ordinary course of business, but none are expected to have a material impact on its financial condition or results of operations, as they are generally covered by liability insurance - No current legal proceedings are expected to have a material adverse impact on financial statements, as they are covered by insurance[150](index=150&type=chunk) [ITEM 1A. Risk Factors](index=39&type=section&id=ITEM%201A.%20Risk%20Factors) This section indicates that there have been no material changes to the risk factors previously disclosed in the company's 2024 Annual Report on Form 10-K - No material changes to risk factors have occurred since the 2024 Annual Report on Form 10-K[151](index=151&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the three months ended June 30, 2025, the company issued approximately 180,000 shares of common stock in redemption of OP units under a Section 4(a)(2) exemption. The company's $250 million share repurchase program has not seen any repurchases to date - Approximately **180,000 shares** of common stock were issued in redemption of OP units during Q2 2025, relying on a Section 4(a)(2) exemption[152](index=152&type=chunk) - The company has a **$250 million** share repurchase program, but no repurchases have been made to date[153](index=153&type=chunk) [ITEM 3. Defaults Upon Senior Securities](index=39&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) This section reports that there have been no defaults upon senior securities - No defaults upon senior securities[154](index=154&type=chunk) [ITEM 4. Mine Safety Disclosures](index=40&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) This section indicates that there are no mine safety disclosures to report - No mine safety disclosures[155](index=155&type=chunk) [ITEM 5. Other Information](index=40&type=section&id=ITEM%205.%20Other%20Information) This section states that there is no other information to disclose - No other information to disclose[156](index=156&type=chunk) [ITEM 6. Exhibits](index=40&type=section&id=ITEM%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including organizational documents, indentures, certifications, and XBRL-related documents - Includes Fifth Articles of Amendment and Restatement, Fifth Amended and Restated Bylaws, Fourth Supplemental Indenture, and various certifications (e.g., Section 302, Section 906)[157](index=157&type=chunk) - XBRL (eXtensible Business Reporting Language) documents are also filed[157](index=157&type=chunk) [Signatures](index=42&type=section&id=SIGNATURES) This section provides the official signatures of the company's key executives, certifying the accuracy and completeness of the report - The report was signed by Jeffrey S. Edison (Chairman of the Board and Chief Executive Officer) and John P. Caulfield (Executive Vice President, Chief Financial Officer, and Treasurer) on July 25, 2025[161](index=161&type=chunk)