Phillips Edison & Company Reports Fourth Quarter and Full Year 2024 Results
Phillips Edison & Company (PECO) reported strong financial results for Q4 and full year 2024. The company achieved Q4 net income of $18.1 million ($0.15 per share) and full-year net income of $62.7 million ($0.51 per share). Core FFO grew 10.2% to $85.8 million ($0.62 per share) in Q4, and 6.8% to $331.8 million ($2.43 per share) for the full year.
Notable operational highlights include a 6.5% increase in Q4 same-center NOI to $110.4 million and strong portfolio metrics with 97.7% leased occupancy. The company executed impressive lease spreads with 30.2% for new leases and 20.8% for renewals in Q4. PECO acquired fourteen shopping centers and four land parcels for $305.7 million in 2024.
The company maintains a strong balance sheet with $747.6 million in total liquidity and 93% fixed-rate debt. PECO successfully upsized its revolving credit facility to $1.0 billion with maturity extended to January 2029.
Phillips Edison & Company (PECO) ha riportato risultati finanziari solidi per il quarto trimestre e per l'intero anno 2024. L'azienda ha raggiunto un reddito netto nel Q4 di 18,1 milioni di dollari (0,15 dollari per azione) e un reddito netto annuale di 62,7 milioni di dollari (0,51 dollari per azione). Il Core FFO è cresciuto del 10,2% a 85,8 milioni di dollari (0,62 dollari per azione) nel Q4, e del 6,8% a 331,8 milioni di dollari (2,43 dollari per azione) per l'intero anno.
Tra i principali risultati operativi si evidenzia un aumento del 6,5% nell'NOI dello stesso centro nel Q4, raggiungendo i 110,4 milioni di dollari, e metriche del portafoglio robuste con un'occupazione del 97,7%. L'azienda ha realizzato spread di affitto impressionanti con il 30,2% per i nuovi contratti e il 20,8% per i rinnovi nel Q4. PECO ha acquisito quattordici centri commerciali e quattro appezzamenti di terra per 305,7 milioni di dollari nel 2024.
L'azienda mantiene un solido bilancio con 747,6 milioni di dollari di liquidità totale e il 93% di debito a tasso fisso. PECO ha aumentato con successo la sua linea di credito revolving a 1,0 miliardi di dollari, con scadenza estesa a gennaio 2029.
Phillips Edison & Company (PECO) informó sobre sólidos resultados financieros para el cuarto trimestre y el año completo 2024. La compañía logró un ingreso neto de $18.1 millones ($0.15 por acción) en el Q4 y un ingreso neto total de $62.7 millones ($0.51 por acción) para el año completo. El Core FFO creció un 10.2% a $85.8 millones ($0.62 por acción) en el Q4, y un 6.8% a $331.8 millones ($2.43 por acción) en el año completo.
Entre los aspectos operativos más destacados se incluye un aumento del 6.5% en el NOI del mismo centro en el Q4, alcanzando los $110.4 millones y métricas de cartera sólidas con una ocupación arrendada del 97.7%. La compañía ejecutó márgenes de arrendamiento impresionantes con un 30.2% para nuevos arrendamientos y un 20.8% para renovaciones en el Q4. PECO adquirió catorce centros comerciales y cuatro terrenos por $305.7 millones en 2024.
La empresa mantiene un sólido balance con $747.6 millones en liquidez total y el 93% de la deuda a tasa fija. PECO amplió con éxito su línea de crédito revolving a $1.0 mil millones, con vencimiento extendido a enero de 2029.
필립스 에디슨 & 컴퍼니 (PECO)는 2024년 4분기 및 연간 재무 실적이 강세를 보였다고 보고했습니다. 회사는 4분기에 1,810만 달러(주당 0.15달러)의 순이익을 달성했으며, 연간 순이익은 6,270만 달러(주당 0.51달러)에 달했습니다. 코어 FFO는 4분기에 10.2% 증가하여 8,580만 달러(주당 0.62달러)에 도달했고, 연간으로는 6.8% 증가하여 3억 3,180만 달러(주당 2.43달러)에 달했습니다.
주목할만한 운영 하이라이트로는 4분기 동일 센터 NOI가 6.5% 증가하여 1억 1,040만 달러에 이르렀고, 임대율 97.7%를 기록하며 강력한 포트폴리오 지표를 보였습니다. 회사는 4분기 신규 임대 계약에서 30.2%, 갱신 계약에서 20.8%의 인상률을 기록했습니다. PECO는 2024년에 14개의 쇼핑 센터와 4개의 토지 구획을 3억 5,570만 달러에 인수했습니다.
회사는 7억 4,760만 달러의 총 유동성과 93%의 고정 금리 부채를 보유한 강력한 재무 상태를 유지하고 있습니다. PECO는 10억 달러로 순환 신용 시설을 성공적으로 확대하고 만기도 2029년 1월로 연장했습니다.
Phillips Edison & Company (PECO) a annoncé de solides résultats financiers pour le quatrième trimestre et l'année complète 2024. La société a réalisé un bénéfice net au T4 de 18,1 millions de dollars (0,15 dollar par action) et un bénéfice net de 62,7 millions de dollars (0,51 dollar par action) pour l'année complète. Le Core FFO a augmenté de 10,2 % pour atteindre 85,8 millions de dollars (0,62 dollar par action) au T4, et de 6,8 % pour atteindre 331,8 millions de dollars (2,43 dollars par action) pour l'année entière.
Les points forts opérationnels notables comprennent une augmentation de 6,5 % du NOI du même centre au T4, atteignant 110,4 millions de dollars, ainsi que de solides indicateurs de portefeuille avec un taux d'occupation loué de 97,7 %. L'entreprise a réalisé des spreads de location impressionnants de 30,2 % pour les nouveaux baux et de 20,8 % pour les renouvellements au T4. PECO a acquis quatorze centres commerciaux et quatre parcelles de terrain pour 305,7 millions de dollars en 2024.
L'entreprise maintient un bilan solide avec 747,6 millions de dollars de liquidités totales et 93 % de dettes à taux fixe. PECO a agrandi sa ligne de crédit renouvelable avec succès à 1,0 milliard de dollars, avec une échéance prolongée jusqu'en janvier 2029.
Phillips Edison & Company (PECO) berichtete über starke finanzielle Ergebnisse für das vierte Quartal und das gesamte Jahr 2024. Das Unternehmen erzielte im Q4 einen Nettogewinn von 18,1 Millionen Dollar (0,15 Dollar pro Aktie) und einen Nettogewinn für das Gesamtjahr von 62,7 Millionen Dollar (0,51 Dollar pro Aktie). Der Core FFO wuchs im Q4 um 10,2 % auf 85,8 Millionen Dollar (0,62 Dollar pro Aktie) und im Gesamtjahr um 6,8 % auf 331,8 Millionen Dollar (2,43 Dollar pro Aktie).
Zu den bemerkenswerten operativen Höhepunkten zählt ein Anstieg des NOI im gleichen Center um 6,5 % auf 110,4 Millionen Dollar im Q4 sowie starke Portfoliokennzahlen mit einer Vermietungsquote von 97,7 %. Das Unternehmen erzielte beeindruckende Mietspread-Werte mit 30,2 % für neue Mietverträge und 20,8 % für Verlängerungen im Q4. PECO erwarb 2024 vierzehn Einkaufszentren und vier Grundstücke für 305,7 Millionen Dollar.
Das Unternehmen hat eine starke Bilanz mit 747,6 Millionen Dollar an liquiden Mitteln und 93 % festverzinslichen Schulden. PECO hat seinen revolvierenden Kreditrahmen erfolgreich auf 1,0 Milliarden Dollar erhöht und die Fälligkeit bis Januar 2029 verlängert.
- Core FFO increased 10.2% YoY to $85.8M in Q4 2024
- Same-center NOI grew 6.5% to $110.4M in Q4
- Strong portfolio occupancy at 97.7%
- Impressive lease spreads: 30.2% for new leases, 20.8% for renewals
- Significant acquisition activity: $305.7M in shopping centers and land parcels
- Upsized revolving credit facility to $1.0B
- Net debt to annualized adjusted EBITDAre at 5.0x
- 1.9M share issuance through ATM program causing potential dilution
Insights
Phillips Edison's Q4 and FY2024 results reveal a compelling growth story underpinned by three key drivers: operational excellence, strategic expansion and financial optimization.
The operational metrics are particularly impressive. The
The company's acquisition strategy is equally noteworthy. The
Financial management has been astute. The extension and upsizing of the revolving credit facility to
Looking ahead, the projected
CINCINNATI, Feb. 06, 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 fourth quarter and full year ended December 31, 2024 and provided guidance for 2025. For the fourth quarter and full year ended December 31, 2024, net income attributable to stockholders was
Highlights for the Fourth Quarter, Full Year and Subsequent
- Reported Nareit FFO of
$83.8 million , or$0.61 per diluted share, for the fourth quarter - Reported Core FFO of
$85.8 million , or$0.62 per diluted share, for the fourth quarter - Generated Nareit FFO per share of
$2.37 for the full year, or5.3% growth over 2023 - Generated Core FFO per share of
$2.43 for the full year, or3.8% growth over 2023 - 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
6.5% for the fourth quarter, and increased same-center NOI by3.8% for the full year - Reported strong leased portfolio occupancy of
97.7% and same-center leased portfolio occupancy of97.8% - Increased leased inline occupancy year-over-year to
95.0% , and same-center leased inline occupancy remained strong at94.9% - Executed portfolio comparable new leases at a rent spread of
30.2% and inline comparable new leases at a rent spread of26.5% during the fourth quarter - Executed portfolio comparable renewal leases at a record-high rent spread of
20.8% and inline comparable renewal leases at a rent spread of19.8% during the fourth quarter - Acquired fourteen shopping centers and four land parcels for a total of
$305.7 million for the full year - Full year 2025 gross acquisitions guidance reflects a range of
$350 million to$450 million - For the full year, generated net proceeds of
$73.8 million through the issuance of 1.9 million common shares at a gross weighted average price of$39.18 per common share through PECO’s ATM programs - As previously announced, extended revolving credit facility maturity to January 9, 2029 and upsized to
$1.0 billion , and93.0% of total debt was fixed-rate at year end
Management Commentary
Jeff Edison, Chairman and Chief Executive Officer of PECO stated: “We are pleased with our strong growth delivered in 2024. The quality of PECO’s cash flow growth is reflected in the performance of our high-quality portfolio, which is driven by our experienced team, market-leading pricing power, strong lease spreads and the many advantages of the suburban neighborhoods where we operate our grocery-anchored shopping centers. Looking ahead, the PECO team is focused on delivering accelerated Core FFO per share growth in 2025. We are excited for the growth opportunities ahead, which will be driven by strong internal growth and our expanded acquisition plan.”
Financial Results
Net Income
Fourth quarter 2024 net income attributable to stockholders totaled
For the year ended December 31, 2024, net income attributable to stockholders totaled
Nareit FFO
Fourth quarter 2024 funds from operations attributable to stockholders and operating partnership (“OP”) unit holders as defined by Nareit (“Nareit FFO”) increased
For the year ended December 31, 2024, Nareit FFO increased
Core FFO
Fourth quarter 2024 core funds from operations attributable to stockholders and OP unit holders (“Core FFO”) increased
For the year ended December 31, 2024, Core FFO increased
Same-Center NOI
Fourth quarter 2024 same-center net operating income (“NOI”) increased
For the year ended December 31, 2024, same-center NOI increased
Portfolio Overview
Portfolio Statistics
As of December 31, 2024, PECO’s wholly-owned portfolio consisted of 294 properties, totaling approximately 33.3 million square feet, located in 31 states. This compared to 281 properties, totaling approximately 32.2 million square feet, located in 31 states as of December 31, 2023.
Leased portfolio occupancy remained high at
Leased anchor occupancy increased to
Leasing Activity
During the fourth quarter of 2024, 231 leases were executed totaling approximately 1.4 million square feet. This compared to 217 leases executed totaling approximately 1.1 million square feet during the fourth quarter of 2023.
For the year ended December 31, 2024, 1,021 leases were executed totaling approximately 6.0 million square feet. This compared to 996 leases executed totaling approximately 4.7 million square feet during the same period in 2023.
Comparable rent spreads during the fourth quarter of 2024, which compare the percentage increase of new or renewal leases to the expiring lease of a unit that was occupied within the past twelve months, were
Comparable rent spreads during the year ended December 31, 2024 were
Transaction Activity
During the fourth quarter of 2024, the Company acquired five shopping centers for a total of
- Shops at Cross Creek, a 24,188 square foot shopping center located in a Houston, Texas suburb.
- Harpers Station, a 229,060 square foot shopping center anchored by Fresh Thyme located in a Cincinnati, Ohio suburb.
- Lakeland Village Center, an 83,542 square foot shopping center located in a Houston, Texas suburb.
- Northpark Plaza, a 52,192 square foot shopping center anchored by King Soopers located in a Denver, Colorado suburb.
During the fourth quarter, PECO acquired South Point Plaza, a grocery-anchored shopping center located in a Phoenix, Arizona suburb, with LS BDC Holdings, LLC, a subsidiary of Lafayette Square USA, Inc. (“Lafayette Square”) and The Northwestern Mutual Life Insurance Company (“Northwestern Mutual”). The acquisition was made through a new joint venture, Neighborhood Grocery Catalyst Fund LLC (“NGCF”). South Point Plaza was acquired at PECO’s total prorated share of
During the year ended December 31, 2024, the Company acquired fourteen shopping centers and four land parcels for a total of
Subsequent to quarter end, 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
Also subsequent to quarter end, the Company sold Pavilions at San Mateo, a shopping center anchored by Walmart located in an Albuquerque, New Mexico suburb for
Balance Sheet Highlights
As of December 31, 2024, the Company had approximately
As of December 31, 2024, the Company’s net debt to annualized adjusted EBITDAre was 5.0x. This compared to 5.1x at December 31, 2023. As of December 31, 2024, the Company’s outstanding debt had a weighted-average interest rate of
During the year ended December 31, 2024, the Company generated net proceeds 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
The following guidance is based upon PECO’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) | 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 common share | $ | 0.54 | $ | 0.59 | |
| Depreciation and amortization of real estate assets | 1.90 | 1.92 | |||
| Adjustments related to unconsolidated joint ventures | 0.03 | 0.03 | |||
| Nareit FFO per common 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 common share | $ | 2.52 | $ | 2.59 | |
Conference Call and Webcast Details
PECO will host a conference call and webcast on Friday, February 7, 2025 at 12:00 p.m. Eastern Time to discuss fourth quarter and full year 2024 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.
Fourth Quarter and Full Year 2024 Earnings Conference Call and Webcast Details:
Date: Friday, February 7, 2025
Time: 12:00 p.m. Eastern Time
Toll-Free Dial-In Number: (800) 715-9871
International Dial-In Number: (646) 307-1963
Conference ID: 4551083
Webcast: Fourth Quarter and Full Year 2024 Webcast Link
An audio replay of the webcast will be available approximately one hour after the conclusion of the conference call using the webcast link above.
For more information on the Company’s financial results, please refer to the Company’s 2024 Annual Report on Form 10-K, to be filed with the SEC on or around February 11, 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 December 31, 2024, PECO managed 316 shopping centers, including 294 wholly-owned centers comprising 33.3 million square feet across 31 states and 22 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 DECEMBER 31, 2024 AND 2023
(In thousands, except per share amounts)
| 2024 | 2023 | ||||||
| ASSETS | |||||||
| Investment in real estate: | |||||||
| Land and improvements | $ | 1,867,227 | $ | 1,768,487 | |||
| Building and improvements | 4,085,713 | 3,818,184 | |||||
| In-place lease assets | 523,209 | 495,525 | |||||
| Above-market lease assets | 76,359 | 74,446 | |||||
| Total investment in real estate assets | 6,552,508 | 6,156,642 | |||||
| Accumulated depreciation and amortization | (1,771,052 | ) | (1,540,551 | ) | |||
| Net investment in real estate assets | 4,781,456 | 4,616,091 | |||||
| Investment in unconsolidated joint ventures | 31,724 | 25,220 | |||||
| Total investment in real estate assets, net | 4,813,180 | 4,641,311 | |||||
| Cash and cash equivalents | 4,881 | 4,872 | |||||
| Restricted cash | 3,768 | 4,006 | |||||
| Goodwill | 29,066 | 29,066 | |||||
| Other assets, net | 195,328 | 186,411 | |||||
| Total assets | $ | 5,046,223 | $ | 4,865,666 | |||
| LIABILITIES AND EQUITY | |||||||
| Liabilities: | |||||||
| Debt obligations, net | $ | 2,109,543 | $ | 1,969,272 | |||
| Below-market lease liabilities, net | 116,096 | 108,223 | |||||
| Accounts payable and other liabilities | 163,692 | 116,461 | |||||
| Deferred income | 22,907 | 18,359 | |||||
| Total liabilities | 2,412,238 | 2,212,315 | |||||
| Commitments and contingencies | — | — | |||||
| Equity: | |||||||
| Preferred stock, | — | — | |||||
| Common stock, | 1,251 | 1,220 | |||||
| Additional paid-in capital | 3,646,801 | 3,546,838 | |||||
| Accumulated other comprehensive income | 4,305 | 10,523 | |||||
| Accumulated deficit | (1,332,435 | ) | (1,248,273 | ) | |||
| Total stockholders’ equity | 2,319,922 | 2,310,308 | |||||
| Noncontrolling interests | 314,063 | 343,043 | |||||
| Total equity | 2,633,985 | 2,653,351 | |||||
| Total liabilities and equity | $ | 5,046,223 | $ | 4,865,666 | |||
PHILLIPS EDISON & COMPANY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND YEARS ENDED DECEMBER 31, 2024 AND 2023
(In thousands, except per share amounts)
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Revenues: | |||||||||||||||
| Rental income | $ | 169,455 | $ | 151,227 | $ | 647,589 | $ | 597,501 | |||||||
| Fees and management income | 2,788 | 2,454 | 10,731 | 9,646 | |||||||||||
| Other property income | 805 | 768 | 3,072 | 2,977 | |||||||||||
| Total revenues | 173,048 | 154,449 | 661,392 | 610,124 | |||||||||||
| Operating Expenses: | |||||||||||||||
| Property operating | 31,172 | 28,293 | 112,633 | 102,303 | |||||||||||
| Real estate taxes | 19,787 | 17,335 | 77,684 | 72,816 | |||||||||||
| General and administrative | 11,551 | 10,762 | 45,611 | 44,366 | |||||||||||
| Depreciation and amortization | 63,310 | 59,572 | 253,016 | 236,443 | |||||||||||
| Total operating expenses | 125,820 | 115,962 | 488,944 | 455,928 | |||||||||||
| Other: | |||||||||||||||
| Interest expense, net | (25,036 | ) | (22,569 | ) | (96,990 | ) | (84,232 | ) | |||||||
| Gain (loss) on disposal of property, net | 4 | 40 | (30 | ) | 1,110 | ||||||||||
| Other expense, net | (2,015 | ) | (770 | ) | (5,732 | ) | (7,312 | ) | |||||||
| Net income | 20,181 | 15,188 | 69,696 | 63,762 | |||||||||||
| Net income attributable to noncontrolling interests | (2,039 | ) | (1,655 | ) | (7,011 | ) | (6,914 | ) | |||||||
| Net income attributable to stockholders | $ | 18,142 | $ | 13,533 | $ | 62,685 | $ | 56,848 | |||||||
| Earnings per share of common stock: | |||||||||||||||
| Net income per share attributable to stockholders - basic and diluted | $ | 0.15 | $ | 0.11 | $ | 0.51 | $ | 0.48 | |||||||
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 and years ended December 31, 2024 and 2023, Same-Center NOI represents the NOI for the 270 properties that were wholly-owned and operational for the entire portion of all comparable reporting periods. 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, 2022, 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) amortization of unconsolidated joint venture basis differences; (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) amortization of basis differences in the Company’s investments in its 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 December 31, | Favorable (Unfavorable) | Year Ended December 31, | Favorable (Unfavorable) | ||||||||||||||||||||||||||
| 2024 | 2023 | $ Change | % Change | 2024 | 2023 | $ Change | % Change | ||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||||||||
| Rental income(1) | $ | 113,970 | $ | 109,615 | $ | 4,355 | $ | 452,177 | $ | 433,738 | $ | 18,439 | |||||||||||||||||
| Tenant recovery income | 38,815 | 35,018 | 3,797 | 144,982 | 141,395 | 3,587 | |||||||||||||||||||||||
| Reserves for uncollectibility(2) | (667 | ) | (1,446 | ) | 779 | (4,527 | ) | (3,615 | ) | (912 | ) | ||||||||||||||||||
| Other property income | 748 | 725 | 23 | 2,779 | 2,903 | (124 | ) | ||||||||||||||||||||||
| Total revenues | 152,866 | 143,912 | 8,954 | 6.2 | % | 595,411 | 574,421 | 20,990 | 3.7 | % | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||
| Property operating expenses | 24,274 | 23,068 | (1,206 | ) | 92,442 | 87,305 | (5,137 | ) | |||||||||||||||||||||
| Real estate taxes | 18,179 | 17,182 | (997 | ) | 72,525 | 72,537 | 12 | ||||||||||||||||||||||
| Total operating expenses | 42,453 | 40,250 | (2,203 | ) | (5.5)% | 164,967 | 159,842 | (5,125 | ) | (3.2)% | |||||||||||||||||||
| Total Same-Center NOI | $ | 110,413 | $ | 103,662 | $ | 6,751 | 6.5 | % | $ | 430,444 | $ | 414,579 | $ | 15,865 | 3.8 | % | |||||||||||||
(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 December 31, | Year Ended December 31, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net income | $ | 20,181 | $ | 15,188 | $ | 69,696 | $ | 63,762 | |||||||
| Adjusted to exclude: | |||||||||||||||
| Fees and management income | (2,788 | ) | (2,454 | ) | (10,731 | ) | (9,646 | ) | |||||||
| Straight-line rental income(1) | (3,061 | ) | (2,056 | ) | (9,646 | ) | (10,185 | ) | |||||||
| Net amortization of above- and below-market leases | (1,855 | ) | (1,394 | ) | (6,587 | ) | (5,178 | ) | |||||||
| Lease buyout income | (23 | ) | (206 | ) | (867 | ) | (1,222 | ) | |||||||
| General and administrative expenses | 11,551 | 10,762 | 45,611 | 44,366 | |||||||||||
| Depreciation and amortization | 63,310 | 59,572 | 253,016 | 236,443 | |||||||||||
| Interest expense, net | 25,036 | 22,569 | 96,990 | 84,232 | |||||||||||
| (Gain) loss on disposal of property, net | (4 | ) | (40 | ) | 30 | (1,110 | ) | ||||||||
| Other expense, net | 2,015 | 770 | 5,732 | 7,312 | |||||||||||
| Property operating expenses related to fees and management income | 995 | 384 | 3,323 | 2,059 | |||||||||||
| NOI for real estate investments | 115,357 | 103,095 | 446,567 | 410,833 | |||||||||||
| Less: Non-same-center NOI(2) | (4,944 | ) | 567 | (16,123 | ) | 3,746 | |||||||||
| Total Same-Center NOI | $ | 110,413 | $ | 103,662 | $ | 430,444 | $ | 414,579 | |||||||
(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 December 31, | Year Ended December 31, | |||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||
| Calculation of Nareit FFO Attributable to Stockholders and OP Unit Holders | ||||||||||||||
| Net income | $ | 20,181 | $ | 15,188 | $ | 69,696 | $ | 63,762 | ||||||
| Adjustments: | ||||||||||||||
| Depreciation and amortization of real estate assets | 62,876 | 59,048 | 251,250 | 234,260 | ||||||||||
| (Gain) loss on disposal of property, net | (4 | ) | (40 | ) | 30 | (1,110 | ) | |||||||
| Adjustments related to unconsolidated joint ventures | 740 | 647 | 2,795 | 2,636 | ||||||||||
| Nareit FFO attributable to stockholders and OP unit holders | $ | 83,793 | $ | 74,843 | $ | 323,771 | $ | 299,548 | ||||||
| Calculation of Core FFO Attributable to Stockholders and OP Unit Holders | ||||||||||||||
| Nareit FFO attributable to stockholders and OP unit holders | $ | 83,793 | $ | 74,843 | $ | 323,771 | $ | 299,548 | ||||||
| Adjustments: | ||||||||||||||
| Depreciation and amortization of corporate assets | 434 | 524 | 1,766 | 2,183 | ||||||||||
| Impairment of investment in third parties | — | — | — | 3,000 | ||||||||||
| Transaction and acquisition expenses | 1,492 | 2,496 | 4,993 | 5,675 | ||||||||||
| Loss on extinguishment or modification of debt and other, net | 60 | 2 | 1,290 | 368 | ||||||||||
| Amortization of unconsolidated joint venture basis differences | 5 | 5 | 13 | 17 | ||||||||||
| Realized performance income(1) | — | — | — | (75 | ) | |||||||||
| Core FFO attributable to stockholders and UP unit holders | $ | 85,784 | $ | 77,870 | $ | 331,833 | $ | 310,716 | ||||||
| Nareit FFO/Core FFO Attributable to Stockholders and OP Unit Holders per diluted share | ||||||||||||||
| Weighted-average shares of common stock outstanding - diluted | 137,437 | 134,667 | 136,821 | 132,970 | ||||||||||
| Nareit FFO attributable to stockholders and OP unit holders per share - diluted | $ | 0.61 | $ | 0.56 | $ | 2.37 | $ | 2.25 | ||||||
| Core FFO attributable to stockholders and OP unit holders per share - diluted | $ | 0.62 | $ | 0.58 | $ | 2.43 | $ | 2.34 | ||||||
(1) Realized performance income includes fees received related to the achievement of certain performance targets in the Company’s NRP joint venture.
EBITDAre and Adjusted EBITDAre—The following table presents the Company’s calculation of EBITDAre and Adjusted EBITDAre (in thousands):
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||
| Calculation of EBITDAre | ||||||||||||||
| Net income | $ | 20,181 | $ | 15,188 | $ | 69,696 | $ | 63,762 | ||||||
| Adjustments: | ||||||||||||||
| Depreciation and amortization | 63,310 | 59,572 | 253,016 | 236,443 | ||||||||||
| Interest expense, net | 25,036 | 22,569 | 96,990 | 84,232 | ||||||||||
| (Gain) loss on disposal of property, net | (4 | ) | (40 | ) | 30 | (1,110 | ) | |||||||
| Federal, state, and local tax expense | 774 | 81 | 1,821 | 438 | ||||||||||
| Adjustments related to unconsolidated joint ventures | 1,088 | 919 | 4,025 | 3,721 | ||||||||||
| EBITDAre | $ | 110,385 | $ | 98,289 | $ | 425,578 | $ | 387,486 | ||||||
| Calculation of Adjusted EBITDAre | ||||||||||||||
| EBITDAre | $ | 110,385 | $ | 98,289 | $ | 425,578 | $ | 387,486 | ||||||
| Adjustments: | ||||||||||||||
| Impairment of investment in third parties | — | — | — | 3,000 | ||||||||||
| Transaction and acquisition expenses | 1,492 | 2,496 | 4,993 | 5,675 | ||||||||||
| Amortization of unconsolidated joint venture basis differences | 5 | 5 | 13 | 17 | ||||||||||
| Realized performance income(1) | — | — | — | (75 | ) | |||||||||
| Adjusted EBITDAre | $ | 111,882 | $ | 100,790 | $ | 430,584 | $ | 396,103 | ||||||
(1) Realized performance income includes fees received related to the achievement of certain performance targets in the Company’s NRP joint venture.
Financial Leverage Ratios—The Company believes its net debt to Adjusted EBITDAre, net debt to total enterprise value, and debt covenant compliance as of December 31, 2024 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 December 31, 2024 and 2023 (in thousands):
| 2024 | 2023 | ||||
| Net debt: | |||||
| Total debt, excluding discounts, market adjustments, and deferred financing expenses | $ | 2,166,326 | $ | 2,011,093 | |
| Less: Cash and cash equivalents | 5,470 | 5,074 | |||
| Total net debt | $ | 2,160,856 | $ | 2,006,019 | |
| Enterprise value: | |||||
| Net debt | $ | 2,160,856 | $ | 2,006,019 | |
| Total equity market capitalization(1)(2) | 5,175,286 | 4,955,480 | |||
| Total enterprise value | $ | 7,336,142 | $ | 6,961,499 | |
(1) Total equity market capitalization is calculated as diluted shares multiplied by the closing market price per share, which includes 138.2 million and 135.8 million diluted shares as of December 31, 2024 and 2023, 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 December 31, 2024 and 2023 (dollars in thousands):
| 2024 | 2023 | ||||||
| Net debt to Adjusted EBITDAre - annualized: | |||||||
| Net debt | $ | 2,160,856 | $ | 2,006,019 | |||
| Adjusted EBITDAre- annualized(1) | 430,584 | 396,103 | |||||
| Net debt to Adjusted EBITDAre- annualized | 5.0 | x | 5.1 | x | |||
| Net debt to total enterprise value: | |||||||
| Net debt | $ | 2,160,856 | $ | 2,006,019 | |||
| Total enterprise value | 7,336,142 | 6,961,499 | |||||
| Net debt to total enterprise value | 29.5 | % | 28.8 | % | |||
(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 inflation on the Company and on its tenants. 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 or around 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, Manager of Investor Relations
(513) 824-7122
hharper@phillipsedison.com
FAQ
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