Phillips Edison & Company Reports First Quarter 2025 Results and Affirms Full Year Earnings Guidance
Phillips Edison & Company (PECO) reported strong Q1 2025 financial results with net income of $26.3 million ($0.21 per diluted share). The company achieved Nareit FFO of $89.0 million ($0.64 per diluted share) and Core FFO of $90.8 million ($0.65 per diluted share), both representing 11.2% year-over-year growth.
Key highlights include:
- Same-center NOI increased 3.9% to $115.1 million
- Strong leased portfolio occupancy at 97.1%
- Impressive rent spreads with 28.1% for new leases and 20.8% for renewals
- Acquired six shopping centers for $146.4 million and sold one for $24.9 million
PECO affirmed its full-year 2025 guidance with Core FFO projected at $2.52-$2.59 per share and same-center NOI growth of 3.00-3.50%. The company maintains a strong balance sheet with $760 million in total liquidity and a net debt to adjusted EBITDAre ratio of 5.3x.
Phillips Edison & Company (PECO) ha riportato solidi risultati finanziari per il primo trimestre 2025 con un utile netto di 26,3 milioni di dollari (0,21 dollari per azione diluita). La società ha raggiunto un Nareit FFO di 89,0 milioni di dollari (0,64 dollari per azione diluita) e un Core FFO di 90,8 milioni di dollari (0,65 dollari per azione diluita), entrambi con una crescita del 11,2% rispetto all'anno precedente.
I principali punti salienti includono:
- Incremento del NOI degli stessi centri del 3,9%, arrivato a 115,1 milioni di dollari
- Elevata occupazione del portafoglio locato al 97,1%
- Notevoli aumenti dei canoni con spread del 28,1% per i nuovi contratti e del 20,8% per i rinnovi
- Acquisizione di sei centri commerciali per 146,4 milioni di dollari e vendita di uno per 24,9 milioni di dollari
PECO ha confermato le previsioni per l'intero 2025 con un Core FFO stimato tra 2,52 e 2,59 dollari per azione e una crescita del NOI degli stessi centri tra il 3,00% e il 3,50%. L’azienda mantiene un bilancio solido con 760 milioni di dollari di liquidità totale e un rapporto debito netto su EBITDAre rettificato di 5,3x.
Phillips Edison & Company (PECO) reportó sólidos resultados financieros en el primer trimestre de 2025 con un ingreso neto de 26,3 millones de dólares (0,21 dólares por acción diluida). La compañía alcanzó un FFO Nareit de 89,0 millones de dólares (0,64 dólares por acción diluida) y un Core FFO de 90,8 millones de dólares (0,65 dólares por acción diluida), ambos con un crecimiento interanual del 11,2%.
Los aspectos destacados incluyen:
- El NOI de los mismos centros aumentó un 3,9% hasta 115,1 millones de dólares
- Alta ocupación del portafolio arrendado al 97,1%
- Impresionantes diferencias de renta con un 28,1% para nuevos contratos y un 20,8% para renovaciones
- Adquisición de seis centros comerciales por 146,4 millones de dólares y venta de uno por 24,9 millones de dólares
PECO confirmó su guía para todo el año 2025 con un Core FFO proyectado entre 2,52 y 2,59 dólares por acción y un crecimiento del NOI de los mismos centros entre 3,00% y 3,50%. La compañía mantiene un balance sólido con 760 millones de dólares en liquidez total y una relación deuda neta a EBITDAre ajustado de 5,3x.
Phillips Edison & Company (PECO)는 2025년 1분기 강력한 재무 실적을 보고했으며, 순이익은 2,630만 달러(희석 주당 0.21달러)를 기록했습니다. 회사는 Nareit FFO 8,900만 달러(희석 주당 0.64달러)와 Core FFO 9,080만 달러(희석 주당 0.65달러)를 달성했으며, 두 수치 모두 전년 대비 11.2% 성장했습니다.
주요 내용은 다음과 같습니다:
- 동일 센터 순영업소득(NOI)이 3.9% 증가하여 1억 1,510만 달러 달성
- 임대 포트폴리오 점유율 97.1%로 견고함 유지
- 신규 임대 계약 임대료는 28.1%, 갱신 계약은 20.8%의 인상률 기록
- 6개 쇼핑센터를 1억 4,640만 달러에 인수하고 1개를 2,490만 달러에 매각
PECO는 2025년 연간 가이던스를 유지하며 Core FFO를 주당 2.52~2.59달러, 동일 센터 NOI 성장률을 3.00~3.50%로 전망했습니다. 회사는 총 7억 6,000만 달러의 유동성을 보유하고 있으며, 순부채 대비 조정 EBITDAre 비율은 5.3배입니다.
Phillips Edison & Company (PECO) a annoncé de solides résultats financiers pour le premier trimestre 2025 avec un bénéfice net de 26,3 millions de dollars (0,21 dollar par action diluée). La société a réalisé un FFO Nareit de 89,0 millions de dollars (0,64 dollar par action diluée) et un Core FFO de 90,8 millions de dollars (0,65 dollar par action diluée), représentant tous deux une croissance annuelle de 11,2 %.
Les points clés comprennent :
- Le NOI des centres comparables a augmenté de 3,9 % pour atteindre 115,1 millions de dollars
- Un taux d’occupation élevé du portefeuille loué à 97,1 %
- Des écarts de loyers impressionnants avec 28,1 % pour les nouveaux baux et 20,8 % pour les renouvellements
- L’acquisition de six centres commerciaux pour 146,4 millions de dollars et la vente d’un centre pour 24,9 millions de dollars
PECO a confirmé ses prévisions pour l’ensemble de l’année 2025 avec un Core FFO prévu entre 2,52 et 2,59 dollars par action et une croissance du NOI des centres comparables comprise entre 3,00 % et 3,50 %. La société conserve une solide situation financière avec 760 millions de dollars de liquidités totales et un ratio dette nette sur EBITDAre ajusté de 5,3x.
Phillips Edison & Company (PECO) meldete starke Finanzergebnisse für das erste Quartal 2025 mit einem Nettogewinn von 26,3 Millionen US-Dollar (0,21 US-Dollar je verwässerter Aktie). Das Unternehmen erzielte ein Nareit FFO von 89,0 Millionen US-Dollar (0,64 US-Dollar je verwässerter Aktie) und ein Core FFO von 90,8 Millionen US-Dollar (0,65 US-Dollar je verwässerter Aktie), was jeweils einem Wachstum von 11,2 % im Jahresvergleich entspricht.
Wichtige Highlights umfassen:
- Same-Center-NOI stieg um 3,9 % auf 115,1 Millionen US-Dollar
- Hohe Auslastung des vermieteten Portfolios mit 97,1 %
- Beeindruckende Mietspreizungen von 28,1 % bei Neuvermietungen und 20,8 % bei Vertragsverlängerungen
- Erwerb von sechs Einkaufszentren für 146,4 Millionen US-Dollar und Verkauf eines Zentrums für 24,9 Millionen US-Dollar
PECO bestätigte seine Prognose für das Gesamtjahr 2025 mit einem erwarteten Core FFO von 2,52 bis 2,59 US-Dollar je Aktie und einem Wachstum des Same-Center-NOI von 3,00 bis 3,50 %. Das Unternehmen verfügt über eine starke Bilanz mit einer Gesamtkapitalausstattung von 760 Millionen US-Dollar und einem Nettoverschuldungsgrad zum bereinigten EBITDAre von 5,3x.
- 11.2% year-over-year growth in both Nareit FFO and Core FFO
- Strong 3.9% increase in same-center NOI
- High portfolio occupancy rate of 97.1%
- Impressive rent spreads: 28.1% for new leases, 20.8% for renewals
- Successful acquisition of six shopping centers worth $146.4 million
- $760 million total liquidity available
- Net debt to adjusted EBITDAre increased to 5.3x from 5.0x in previous quarter
- Slight decline in leased inline occupancy to 94.6% from 94.8% year-over-year
Insights
PECO's Q1 results show impressive 11.2% FFO growth, strong 3.9% same-center NOI growth, and exceptional rent spreads above 20%.
Phillips Edison's Q1 2025 results demonstrate robust performance across key metrics that matter most for shopping center REITs. The 11.2% year-over-year growth in both Nareit FFO ($0.64/share) and Core FFO ($0.65/share) reflects the company's strong operational execution and strategic positioning.
The 3.9% same-center NOI growth exceeds the company's full-year guidance range of 3.0-3.5%, suggesting potential for outperformance if these trends continue. This internal growth is particularly impressive given the high occupancy baseline PECO maintains.
Leasing metrics tell a compelling story about retailer demand. Portfolio occupancy remains strong at 97.1%, while the company achieved remarkable rent spreads of 28.1% on new leases and 20.8% on renewals. These spreads are significantly above typical shopping center REIT averages and indicate PECO's centers command premium pricing.
The acquisition of six centers for $146.4 million demonstrates PECO's ability to find accretive external growth opportunities despite a competitive investment market. Management's comment that 71% of rents come from necessity-based goods and services highlights the defensive nature of their tenant mix.
From a balance sheet perspective, PECO maintains $760 million in liquidity with a reasonable net debt to EBITDA ratio of 5.3x. While this leverage ratio increased slightly from 5.0x at year-end, it remains within a comfortable range for a retail REIT.
The company's strategic focus on grocery-anchored centers featuring #1 or #2 grocers by market provides both stability and pricing power, enabling the impressive rent spreads reported this quarter. The affirmation of full-year guidance suggests management confidence in their operating model despite broader economic uncertainty.
CINCINNATI, April 24, 2025 (GLOBE NEWSWIRE) -- Phillips Edison & Company, Inc. (Nasdaq: PECO) (“PECO” or the “Company”), one of the nation’s largest owners and operators of high-quality, grocery-anchored neighborhood shopping centers, today reported financial and operating results for the period ended March 31, 2025 and affirmed full year 2025 earnings guidance. For the three months ended March 31, 2025, net income attributable to stockholders was
Highlights for the First Quarter and Subsequent
- Reported Nareit FFO of
$89.0 million , or$0.64 per diluted share - Reported Core FFO of
$90.8 million , or$0.65 per diluted share - The midpoint of full year 2025 Nareit FFO guidance represents
5.7% year-over-year growth - The midpoint of full year 2025 Core FFO guidance represents
5.1% year-over-year growth - Increased same-center NOI year-over-year by
3.9% - The midpoint of full year 2025 same-center NOI guidance represents
3.25% year-over-year growth - Reported strong leased portfolio occupancy of
97.1% and same-center leased portfolio occupancy of97.2% - Reported strong leased inline occupancy of
94.6% and same-center leased inline occupancy of94.7% - Executed portfolio comparable new leases at a rent spread of
28.1% and inline comparable new leases at a rent spread of27.5% during the quarter - Executed portfolio comparable renewal leases at a rent spread of
20.8% and inline comparable renewal leases at a record-high rent spread of21.7% during the quarter - Acquired six shopping centers for a total of
$146.4 million at PECO’s total prorated share, and sold one shopping center for a total of$24.9 million - Subsequent to quarter end, acquired one shopping center for a total of
$27.8 million - Full year 2025 gross acquisitions guidance reflects a range of
$350 million to$450 million - As previously announced, extended revolving credit facility maturity to January 9, 2029 and upsized to
$1.0 billion
Management Commentary
Jeff Edison, Chairman and Chief Executive Officer of PECO stated: “We are pleased to report another solid quarter of results, driven by strong retailer demand and significant value creation across our grocery-anchored shopping center portfolio. Same-center NOI increased by
Financial Results
Net Income
First quarter 2025 net income attributable to stockholders totaled
Nareit FFO
First quarter 2025 funds from operations attributable to stockholders and operating partnership (“OP”) unit holders as defined by Nareit (“Nareit FFO”) increased
Core FFO
First quarter 2025 core funds from operations attributable to stockholders and OP unit holders (“Core FFO”) increased
Same-Center NOI
First quarter 2025 same-center net operating income (“NOI”) increased
Portfolio Overview
Portfolio Statistics
As of March 31, 2025, PECO’s wholly-owned portfolio consisted of 298 properties, totaling approximately 33.5 million square feet, located in 31 states. This compared to 284 properties, totaling approximately 32.4 million square feet, located in 31 states as of March 31, 2024.
Leased portfolio occupancy was
Leased anchor occupancy was
Leased inline occupancy was
Leasing Activity
During the first quarter of 2025, 234 leases were executed totaling approximately 1.5 million square feet. This compared to 245 leases executed totaling approximately 1.3 million square feet during the first quarter of 2024.
During the first quarter of 2025, comparable rent spreads, which represent the percentage increase of new or renewal leases to the expiring lease of a unit that was occupied within the past twelve months, were
Transaction Activity - Wholly-Owned
During the first quarter of 2025, the Company acquired five shopping centers for a total of
- Irmo Station, a 99,440 square foot shopping center anchored by Kroger located in a Columbia, South Carolina suburb.
- Market at Cross Creek Ranch, a 59,803 square foot shopping center anchored by H-E-B located in a Houston, Texas suburb.
- Foothill Park Plaza, a 43,618 square foot shopping center anchored by Vons located in a Los Angeles, California suburb.
- Broomfield Marketplace, a 114,800 square foot shopping center anchored by King Soopers located in a Denver, Colorado suburb.
- Westgate North Shopping Center, a 74,818 square foot shopping center anchored by Safeway located in a Tacoma, Washington suburb.
Subsequent to quarter end, the Company acquired one shopping center for a total of
- Clayton Station, a 67,424 square foot shopping center anchored by Safeway located in a San Francisco, California suburb.
Transaction Activity - Joint Venture
During the first quarter of 2025, the Company acquired Oak Grove Shoppes, a grocery-anchored shopping center located in an Orlando, Florida suburb, through Necessity Retail Venture LLC for PECO’s total prorated share of
Balance Sheet Highlights
As of March 31, 2025, the Company had approximately
As of March 31, 2025, the Company’s net debt to annualized adjusted EBITDAre was 5.3x. This compared to 5.0x at December 31, 2024. As of March 31, 2025, the Company’s outstanding debt had a weighted-average interest rate of
As previously announced, PECO amended its revolving credit facility to extend its maturity to January 9, 2029 and increased its size to
2025 Guidance
PECO updated its 2025 earnings guidance, as summarized in the table below, which is based upon the Company’s current view of existing market conditions and assumptions for the year ending December 31, 2025. The following statements are forward-looking and actual results could differ materially depending on market conditions and the factors set forth under "Forward-Looking Statements" below.
| (in thousands, except per share amounts) | Q1 2025 YTD | Full Year 2025 Guidance | Previous Full Year 2025 Guidance | ||
| Net income per share | |||||
| Nareit FFO per share | |||||
| Core FFO per share | |||||
| Same-Center NOI growth | |||||
| Portfolio Activity: | |||||
| Acquisitions, gross(1) | |||||
| Other: | |||||
| Interest expense, net | |||||
| G&A expense | |||||
| Non-cash revenue items(2) | |||||
| Adjustments for collectibility |
(1) Includes the prorated portion owned through the Company’s unconsolidated joint ventures.
(2) Represents straight-line rental income and net amortization of above- and below-market leases.
The Company does not provide a reconciliation for same-center NOI estimates on a forward-looking basis because it is unable to provide a meaningful or reasonably accurate calculation or estimation of certain reconciling items which could be significant to the Company’s results without unreasonable effort.
The following table provides a reconciliation of the range of the Company's 2025 estimated net income to estimated Nareit FFO and Core FFO:
| (Unaudited) | Low End | High End | |||||
| Net income per share | $ | 0.58 | $ | 0.63 | |||
| Depreciation and amortization of real estate assets | 1.90 | 1.92 | |||||
| Gain on sale of real estate assets | (0.04 | ) | (0.04 | ) | |||
| Adjustments related to unconsolidated joint ventures | 0.03 | 0.03 | |||||
| Nareit FFO per share | $ | 2.47 | $ | 2.54 | |||
| Depreciation and amortization of corporate assets | 0.01 | 0.01 | |||||
| Transaction costs and other | 0.04 | 0.04 | |||||
| Core FFO per share | $ | 2.52 | $ | 2.59 | |||
Conference Call Details
PECO will host a conference call and webcast on Friday, April 25, 2025 at 12:00 p.m. Eastern Time to discuss first quarter 2025 results and provide further business updates. Chairman and Chief Executive Officer Jeff Edison, President Bob Myers and Chief Financial Officer John Caulfield will host the conference call and webcast. Dial-in and webcast information is below.
First Quarter 2025 Earnings Conference Call Details:
Date: Friday, April 25, 2025
Time: 12:00 p.m. ET
Toll-Free Dial-In Number: (800) 715-9871
International Dial-In Number: (646) 307-1963
Conference ID: 4551083
Webcast: First Quarter 2025 Webcast Link
Replay:
An audio replay will be available approximately one hour after the conclusion of the conference call using the webcast link above. The replay will be archived on PECO’s Investor Relations website under Events & Presentations.
For more information on the Company’s financial results, please refer to the Company’s Form 10-Q for the quarter ended March 31, 2025.
Connect with PECO
For additional information, please visit https://www.phillipsedison.com/
Follow PECO on:
- Twitter at https://twitter.com/PhillipsEdison
- Facebook at https://www.facebook.com/phillipsedison.co
- Instagram at https://www.instagram.com/phillips.edison/; and
- Find PECO on LinkedIn at https://www.linkedin.com/company/phillipsedison&company
About Phillips Edison & Company
Phillips Edison & Company, Inc. (“PECO”) is one of the nation’s largest owners and operators of high-quality, grocery-anchored neighborhood shopping centers. Founded in 1991, PECO has generated strong results through its vertically-integrated operating platform and national footprint of well-occupied shopping centers. PECO’s centers feature a mix of national and regional retailers providing necessity-based goods and services in fundamentally strong markets throughout the United States. PECO’s top grocery anchors include Kroger, Publix, Albertsons and Ahold Delhaize. As of March 31, 2025, PECO managed 321 shopping centers, including 298 wholly-owned centers comprising 33.5 million square feet across 31 states and 23 shopping centers owned in three institutional joint ventures. PECO is focused on creating great omni-channel, grocery-anchored shopping experiences and improving communities, one neighborhood shopping center at a time.
PECO uses, and intends to continue to use, its Investors website, which can be found at https://investors.phillipsedison.com, as a means of disclosing material nonpublic information and for complying with its disclosure obligations under Regulation FD.
| PHILLIPS EDISON & COMPANY, INC. CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2025 AND DECEMBER 31, 2024 (Condensed and Unaudited) (In thousands, except per share amounts) | |||||||
| March 31, 2025 | December 31, 2024 | ||||||
| ASSETS | |||||||
| Investment in real estate: | |||||||
| Land and improvements | $ | 1,904,607 | $ | 1,867,227 | |||
| Building and improvements | 4,165,580 | 4,085,713 | |||||
| In-place lease assets | 530,825 | 523,209 | |||||
| Above-market lease assets | 76,814 | 76,359 | |||||
| Total investment in real estate assets | 6,677,826 | 6,552,508 | |||||
| Accumulated depreciation and amortization | (1,814,416 | ) | (1,771,052 | ) | |||
| Net investment in real estate assets | 4,863,410 | 4,781,456 | |||||
| Investment in unconsolidated joint ventures | 34,746 | 31,724 | |||||
| Total investment in real estate assets, net | 4,898,156 | 4,813,180 | |||||
| Cash and cash equivalents | 5,458 | 4,881 | |||||
| Restricted cash | 2,395 | 3,768 | |||||
| Goodwill | 29,066 | 29,066 | |||||
| Other assets, net | 226,664 | 195,328 | |||||
| Total assets | $ | 5,161,739 | $ | 5,046,223 | |||
| LIABILITIES AND EQUITY | |||||||
| Liabilities: | |||||||
| Debt obligations, net | $ | 2,277,735 | $ | 2,109,543 | |||
| Below-market lease liabilities, net | 118,253 | 116,096 | |||||
| Accounts payable and other liabilities | 123,557 | 163,692 | |||||
| Deferred income | 21,619 | 22,907 | |||||
| Total liabilities | 2,541,164 | 2,412,238 | |||||
| Equity: | |||||||
| Preferred stock, | — | — | |||||
| Common stock, | 1,254 | 1,251 | |||||
| Additional paid-in capital | 3,652,286 | 3,646,801 | |||||
| Accumulated other comprehensive income | 2,706 | 4,305 | |||||
| Accumulated deficit | (1,344,819 | ) | (1,332,435 | ) | |||
| Total stockholders’ equity | 2,311,427 | 2,319,922 | |||||
| Noncontrolling interests | 309,148 | 314,063 | |||||
| Total equity | 2,620,575 | 2,633,985 | |||||
| Total liabilities and equity | $ | 5,161,739 | $ | 5,046,223 | |||
| PHILLIPS EDISON & COMPANY, INC. CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024 (Condensed and Unaudited) (In thousands, except per share amounts) | |||||||
| Three Months Ended March 31, | |||||||
| 2025 | 2024 | ||||||
| Revenues: | |||||||
| Rental income | $ | 174,183 | $ | 158,068 | |||
| Fees and management income | 2,783 | 2,565 | |||||
| Other property income | 1,345 | 669 | |||||
| Total revenues | 178,311 | 161,302 | |||||
| Operating Expenses: | |||||||
| Property operating | 29,936 | 26,534 | |||||
| Real estate taxes | 21,079 | 18,854 | |||||
| General and administrative | 12,086 | 11,813 | |||||
| Depreciation and amortization | 65,274 | 60,206 | |||||
| Total operating expenses | 128,375 | 117,407 | |||||
| Other: | |||||||
| Interest expense, net | (25,672 | ) | (23,335 | ) | |||
| Gain (loss) on disposal of property, net | 5,609 | (5 | ) | ||||
| Other expense, net | (980 | ) | (929 | ) | |||
| Net income | 28,893 | 19,626 | |||||
| Net income attributable to noncontrolling interests | (2,584 | ) | (1,956 | ) | |||
| Net income attributable to stockholders | $ | 26,309 | $ | 17,670 | |||
| Earnings per share of common stock: | |||||||
| Net income per share attributable to stockholders - basic and diluted | $ | 0.21 | $ | 0.14 | |||
Discussion and Reconciliation of Non-GAAP Measures
Same-Center Net Operating Income
The Company presents Same-Center NOI as a supplemental measure of its performance. The Company defines NOI as total operating revenues, adjusted to exclude non-cash revenue items, less property operating expenses and real estate taxes. For the three months ended March 31, 2025 and 2024, Same-Center NOI represents the NOI for the 280 properties that were wholly-owned and operational for the entire portion of all comparable reporting periods. The Company believes Same-Center NOI provides useful information to its investors about its financial and operating performance because it provides a performance measure of the revenues and expenses directly involved in owning and operating real estate assets and provides a perspective not immediately apparent from net income (loss). Because Same-Center NOI excludes the change in NOI from properties acquired or disposed of after December 31, 2023, it highlights operating trends such as occupancy levels, rental rates, and operating costs on properties that were operational for all comparable periods. Other REITs may use different methodologies for calculating Same-Center NOI, and accordingly, PECO’s Same-Center NOI may not be comparable to other REITs.
Same-Center NOI should not be viewed as an alternative measure of the Company’s financial performance as it does not reflect the operations of its entire portfolio, nor does it reflect the impact of general and administrative expenses, depreciation and amortization, interest expense, other income (expense), or the level of capital expenditures and leasing costs necessary to maintain the operating performance of the Company’s properties that could materially impact its results from operations.
Nareit Funds from Operations and Core Funds from Operations
Nareit FFO is a non-GAAP financial performance measure that is widely recognized as a measure of REIT operating performance. The National Association of Real Estate Investment Trusts (“Nareit”) defines FFO as net income (loss) computed in accordance with GAAP, excluding: (i) gains (or losses) from sales of property and gains (or losses) from change in control; (ii) depreciation and amortization related to real estate; and (iii) impairment losses on real estate and impairments of in-substance real estate investments in investees that are driven by measurable decreases in the fair value of the depreciable real estate held by the unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect Nareit FFO on the same basis. The Company calculates Nareit FFO in a manner consistent with the Nareit definition.
Core FFO is an additional financial performance measure used by the Company as Nareit FFO includes certain non-comparable items that affect its performance over time. The Company believes that Core FFO is helpful in assisting management and investors with the assessment of the sustainability of operating performance in future periods, and that it is more reflective of its core operating performance and provides an additional measure to compare PECO’s performance across reporting periods on a consistent basis by excluding items that may cause short-term fluctuations in net income (loss). To arrive at Core FFO, the Company adjusts Nareit FFO to exclude certain recurring and non-recurring items including, but not limited to: (i) depreciation and amortization of corporate assets; (ii) changes in the fair value of the earn-out liability; (iii) adjustments related to our investments in unconsolidated joint ventures; (iv) gains or losses on the extinguishment or modification of debt and other; (v) other impairment charges; (vi) transaction and acquisition expenses; and (vii) realized performance income.
Nareit FFO and Core FFO should not be considered alternatives to net income (loss) under GAAP, as an indication of the Company’s liquidity, nor as an indication of funds available to cover its cash needs, including its ability to fund distributions. Core FFO may not be a useful measure of the impact of long-term operating performance on value if the Company does not continue to operate its business plan in the manner currently contemplated.
Accordingly, Nareit FFO and Core FFO should be reviewed in connection with other GAAP measurements, and should not be viewed as more prominent measures of performance than net income (loss) or cash flows from operations prepared in accordance with GAAP. The Company’s Nareit FFO and Core FFO, as presented, may not be comparable to amounts calculated by other REITs.
Earnings Before Interest, Taxes, Depreciation, and Amortization for Real Estate and Adjusted EBITDAre
Nareit defines Earnings Before Interest, Taxes, Depreciation, and Amortization for Real Estate (“EBITDAre”) as net income (loss) computed in accordance with GAAP before: (i) interest expense; (ii) income tax expense; (iii) depreciation and amortization; (iv) gains or losses from disposition of depreciable property; and (v) impairment write-downs of depreciable property. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect EBITDAre on the same basis.
Adjusted EBITDAre is an additional performance measure used by the Company as EBITDAre includes certain non-comparable items that affect the Company’s performance over time. To arrive at Adjusted EBITDAre, the Company excludes certain recurring and non-recurring items from EBITDAre, including, but not limited to: (i) changes in the fair value of the earn-out liability; (ii) other impairment charges; (iii) adjustments related to our investments in unconsolidated joint ventures; (iv) transaction and acquisition expenses; and (v) realized performance income.
The Company uses EBITDAre and Adjusted EBITDAre as additional measures of operating performance which allow it to compare earnings independent of capital structure, determine debt service and fixed cost coverage, and measure enterprise value. Additionally, the Company believes they are a useful indicator of its ability to support its debt obligations. EBITDAre and Adjusted EBITDAre should not be considered as alternatives to net income (loss), as an indication of the Company’s liquidity, nor as an indication of funds available to cover its cash needs, including its ability to fund distributions. Accordingly, EBITDAre and Adjusted EBITDAre should be reviewed in connection with other GAAP measurements, and should not be viewed as more prominent measures of performance than net income (loss) or cash flows from operations prepared in accordance with GAAP. The Company’s EBITDAre and Adjusted EBITDAre, as presented, may not be comparable to amounts calculated by other REITs.
Same-Center Net Operating Income—The table below compares Same-Center NOI (dollars in thousands):
| Three Months Ended March 31, | Favorable (Unfavorable) | |||||||||||||
| 2025 | 2024 | $ Change | % Change | |||||||||||
| Revenues: | ||||||||||||||
| Rental income(1) | $ | 121,343 | $ | 117,050 | $ | 4,293 | ||||||||
| Tenant recovery income | 38,949 | 37,592 | 1,357 | |||||||||||
| Reserves for uncollectibility(2) | (1,148 | ) | (1,838 | ) | 690 | |||||||||
| Other property income | 1,016 | 658 | 358 | |||||||||||
| Total revenues | 160,160 | 153,462 | 6,698 | 4.4 | % | |||||||||
| Operating expenses: | ||||||||||||||
| Property operating expenses | 25,411 | 24,078 | (1,333 | ) | ||||||||||
| Real estate taxes | 19,655 | 18,657 | (998 | ) | ||||||||||
| Total operating expenses | 45,066 | 42,735 | (2,331 | ) | (5.5 | )% | ||||||||
| Total Same-Center NOI | $ | 115,094 | $ | 110,727 | $ | 4,367 | 3.9 | % | ||||||
(1) Excludes straight-line rental income, net amortization of above- and below-market leases, and lease buyout income.
(2) Includes billings that will not be recognized as revenue until cash is collected or the Neighbor resumes regular payments and/or the Company deems it appropriate to resume recording revenue on an accrual basis, rather than on a cash basis.
Same-Center Net Operating Income Reconciliation—Below is a reconciliation of Net Income to NOI and Same-Center NOI (in thousands):
| Three Months Ended March 31, | |||||||
| 2025 | 2024 | ||||||
| Net income | $ | 28,893 | $ | 19,626 | |||
| Adjusted to exclude: | |||||||
| Fees and management income | (2,783 | ) | (2,565 | ) | |||
| Straight-line rental income(1) | (2,675 | ) | (2,365 | ) | |||
| Net amortization of above- and below-market leases | (1,944 | ) | (1,419 | ) | |||
| Lease buyout income | (1,739 | ) | (246 | ) | |||
| General and administrative expenses | 12,086 | 11,813 | |||||
| Depreciation and amortization | 65,274 | 60,206 | |||||
| Interest expense, net | 25,672 | 23,335 | |||||
| (Gain) loss on disposal of property, net | (5,609 | ) | 5 | ||||
| Other expense, net | 980 | 929 | |||||
| Property operating expenses related to fees and management income | 896 | 1,026 | |||||
| NOI for real estate investments | 119,051 | 110,345 | |||||
| Less: Non-same-center NOI(2) | (3,957 | ) | 382 | ||||
| Total Same-Center NOI | $ | 115,094 | $ | 110,727 | |||
| Period-end Same-Center Leased Occupancy % | 97.2 | % | 97.2 | % | |||
(1) Includes straight-line rent adjustments for Neighbors for whom revenue is being recorded on a cash basis.
(2) Includes operating revenues and expenses from non-same-center properties, which includes properties acquired or sold, and corporate activities.
Nareit FFO and Core FFO—The following table presents the Company’s calculation of Nareit FFO and Core FFO and provides additional information related to its operations (in thousands, except per share amounts):
| Three Months Ended March 31, | |||||||
| 2025 | 2024 | ||||||
| Calculation of Nareit FFO Attributable to Stockholders and OP Unit Holders | |||||||
| Net income | $ | 28,893 | $ | 19,626 | |||
| Adjustments: | |||||||
| Depreciation and amortization of real estate assets | 64,897 | 59,776 | |||||
| (Gain) loss on disposal of property, net | (5,609 | ) | 5 | ||||
| Adjustments related to unconsolidated joint ventures | 867 | 649 | |||||
| Nareit FFO attributable to stockholders and OP unit holders | $ | 89,048 | $ | 80,056 | |||
| Calculation of Core FFO Attributable to Stockholders and OP Unit Holders | |||||||
| Nareit FFO attributable to stockholders and OP unit holders | $ | 89,048 | $ | 80,056 | |||
| Adjustments: | |||||||
| Depreciation and amortization of corporate assets | 377 | 430 | |||||
| Transaction and acquisition expenses | 1,322 | 1,174 | |||||
| Loss on extinguishment or modification of debt and other, net | 1 | — | |||||
| Adjustments related to unconsolidated joint ventures | 25 | 3 | |||||
| Core FFO attributable to stockholders and OP unit holders | $ | 90,773 | $ | 81,663 | |||
| Nareit FFO/Core FFO Attributable to Stockholders and OP Unit Holders per Diluted Share | |||||||
| Weighted-average shares of common stock outstanding - diluted | 138,640 | 136,404 | |||||
| Nareit FFO attributable to stockholders and OP unit holders per share - diluted | $ | 0.64 | $ | 0.59 | |||
| Core FFO attributable to stockholders and OP unit holders per share - diluted | $ | 0.65 | $ | 0.60 | |||
EBITDAre and Adjusted EBITDAre—The following table presents the Company’s calculation of EBITDAre and Adjusted EBITDAre (in thousands):
| Three Months Ended March 31, | Year Ended December 31, | ||||||||||
| 2025 | 2024 | 2024 | |||||||||
| Calculation of EBITDAre | |||||||||||
| Net income | $ | 28,893 | $ | 19,626 | $ | 69,696 | |||||
| Adjustments: | |||||||||||
| Depreciation and amortization | 65,274 | 60,206 | 253,016 | ||||||||
| Interest expense, net | 25,672 | 23,335 | 96,990 | ||||||||
| (Gain) loss on disposal of property, net | (5,609 | ) | 5 | 30 | |||||||
| Federal, state, and local tax expense | 146 | 137 | 1,821 | ||||||||
| Adjustments related to unconsolidated joint ventures | 1,278 | 928 | 4,025 | ||||||||
| EBITDAre | $ | 115,654 | $ | 104,237 | $ | 425,578 | |||||
| Calculation of Adjusted EBITDAre | |||||||||||
| EBITDAre | $ | 115,654 | $ | 104,237 | $ | 425,578 | |||||
| Adjustments: | |||||||||||
| Transaction and acquisition expenses | 1,322 | 1,174 | 4,993 | ||||||||
| Adjustments related to unconsolidated joint ventures | 25 | 3 | 13 | ||||||||
| Adjusted EBITDAre | $ | 117,001 | $ | 105,414 | $ | 430,584 | |||||
Financial Leverage Ratios—The Company believes its net debt to Adjusted EBITDAre, net debt to total enterprise value, and debt covenant compliance as of March 31, 2025 allow it access to future borrowings as needed in the near term. The following table presents the Company’s calculation of net debt and total enterprise value, inclusive of its prorated portion of net debt and cash and cash equivalents owned through its unconsolidated joint ventures, as of March 31, 2025 and December 31, 2024 (in thousands):
| March 31, 2025 | December 31, 2024 | ||||||
| Net debt: | |||||||
| Total debt, excluding discounts, market adjustments, and deferred financing expenses | $ | 2,338,012 | $ | 2,166,326 | |||
| Less: Cash and cash equivalents | 7,058 | 5,470 | |||||
| Total net debt | $ | 2,330,954 | $ | 2,160,856 | |||
| Enterprise value: | |||||||
| Net debt | $ | 2,330,954 | $ | 2,160,856 | |||
| Total equity market capitalization(1)(2) | 5,049,997 | 5,175,286 | |||||
| Total enterprise value | $ | 7,380,951 | $ | 7,336,142 | |||
(1) Total equity market capitalization is calculated as diluted shares multiplied by the closing market price per share, which includes 138.4 million and 138.2 million diluted shares as of March 31, 2025 and December 31, 2024, respectively, and the closing market price per share of
(2) Fully diluted shares include common stock and OP units.
The following table presents the Company’s calculation of net debt to Adjusted EBITDAre and net debt to total enterprise value as of March 31, 2025 and December 31, 2024 (dollars in thousands):
| March 31, 2025 | December 31, 2024 | ||||||
| Net debt to Adjusted EBITDAre- annualized: | |||||||
| Net debt | $ | 2,330,954 | $ | 2,160,856 | |||
| Adjusted EBITDAre- annualized(1) | 442,171 | 430,584 | |||||
| Net debt to Adjusted EBITDAre- annualized | 5.3 | x | 5.0 | x | |||
| Net debt to total enterprise value: | |||||||
| Net debt | $ | 2,330,954 | $ | 2,160,856 | |||
| Total enterprise value | 7,380,951 | 7,336,142 | |||||
| Net debt to total enterprise value | 31.6 | % | 29.5 | % | |||
(1) Adjusted EBITDAre is based on a trailing twelve month period.
Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Phillips Edison & Company, Inc. (the “Company”) intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with the safe harbor provisions. Such forward-looking statements can generally be identified by the Company’s use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” “seek,” “objective,” “goal,” “strategy,” “plan,” “focus,” “priority,” “should,” “could,” “potential,” “possible,” “look forward,” “optimistic,” or other similar words. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this earnings release. Such statements include, but are not limited to: (a) statements about the Company’s plans, strategies, initiatives, and prospects; (b) statements about the Company’s underwritten incremental yields; and (c) statements about the Company’s future results of operations, capital expenditures, and liquidity. Such statements are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially from those projected or anticipated, including, without limitation: (i) changes in national, regional, or local economic climates; (ii) local market conditions, including an oversupply of space in, or a reduction in demand for, properties similar to those in the Company’s portfolio; (iii) vacancies, changes in market rental rates, and the need to periodically repair, renovate, and re-let space; (iv) competition from other available shopping centers and the attractiveness of properties in the Company’s portfolio to its tenants; (v) the financial stability of the Company’s tenants, including, without limitation, their ability to pay rent; (vi) the Company’s ability to pay down, refinance, restructure, or extend its indebtedness as it becomes due; (vii) increases in the Company’s borrowing costs as a result of changes in interest rates and other factors; (viii) potential liability for environmental matters; (ix) damage to the Company’s properties from catastrophic weather and other natural events, and the physical effects of climate change; (x) the Company’s ability and willingness to maintain its qualification as a REIT in light of economic, market, legal, tax, and other considerations; (xi) changes in tax, real estate, environmental, and zoning laws; (xii) information technology security breaches; (xiii) the Company’s corporate responsibility initiatives; (xiv) loss of key executives; (xv) the concentration of the Company’s portfolio in a limited number of industries, geographies, or investments; (xvi) the economic, political, and social impact of, and uncertainty relating to, pandemics or other health crises; (xvii) the Company’s ability to re-lease its properties on the same or better terms, or at all, in the event of non-renewal or in the event the Company exercises its right to replace an existing tenant; (xviii) the loss or bankruptcy of the Company’s tenants; (xix) to the extent the Company is seeking to dispose of properties, the Company’s ability to do so at attractive prices or at all; and (xx) the impact of tariffs and global trade disruptions on the Company, its tenants, and consumers, including the impact on inflation, supply chains, and consumer sentiment. Additional important factors that could cause actual results to differ are described in the filings made from time to time by the Company with the SEC and include the risk factors and other risks and uncertainties described in the Company’s 2024 Annual Report on Form 10-K, filed with the SEC on February 11, 2025, as updated from time to time in the Company’s periodic and/or current reports filed with the SEC, which are accessible on the SEC’s website at www.sec.gov. Therefore, such statements are not intended to be a guarantee of the Company’s performance in future periods. Except as required by law, the Company does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.
Investors:
Kimberly Green, Head of Investor Relations
(513) 692-3399
kgreen@phillipsedison.com
Hannah Harper, Senior Manager of Investor Relations
(513) 824-7122
hharper@phillipsedison.com
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