Executive Summary

Q4 2024 delivered solid growth: total revenues rose to $0.173B, GAAP diluted EPS was $0.15, Nareit FFO/share $0.61 and Core FFO/share $0.62; same‑center NOI increased 6.5% YoY to $110.4M, with portfolio leased occupancy at 97.7% .
Leasing remained a standout: comparable new lease spreads were 30.2% and renewals 20.8% in Q4, with inline spreads of 26.5% (new) and 19.8% (renewal), supporting strong rent re‑marking into 2025 .
2025 guidance calls for 5.7% YoY Nareit FFO/share growth at the midpoint ($2.47–$2.54), Core FFO/share up 5.1% ($2.52–$2.59), and same‑center NOI growth of 3.0%–3.5%; gross acquisitions planned at $350–$450M and net interest expense guided to $111–$121M .
Management highlighted a larger acquisition pipeline (over $150M under or in negotiation for Q1/early Q2), disciplined re‑merchandising (accepting modest near‑term occupancy/economic occupancy drag), and continued balance sheet strength (~5.0x net debt/Adj. EBITDAre; 93% fixed‑rate) as key catalysts .

What Went Well and What Went Wrong

What Went Well
- “Market‑leading operating metrics” with strong lease spreads and high occupancy underpin cash flow quality; Core FFO/share grew 6.9% YoY in Q4 and Nareit FFO/share 8.9% YoY per CFO remarks .
- New and renewal spreads were robust (30.2%/20.8%), with embedded annual bumps of ~2–3% on Q4 in‑line leases, reinforcing forward rent growth visibility .
- Acquisition execution accelerated: ~$95M of Q4 acquisitions and >$150M pipeline for early 2025; expanded revolver to $1.0B and extended to 2029, boosting liquidity .
What Went Wrong
- Economic occupancy showed a ~100 bps signed‑not‑open gap exiting 2024 due to anchor box transitions; management expects this to normalize toward ~50 bps over 2025 as tenants open .
- Same‑center NOI growth expected to moderate to 3.0%–3.5% in 2025 as merchandising upgrades (replacing weaker tenants) create a slight growth headwind near‑term .
- Interest expense remains a headwind; 2025 net interest expense guided to $111–$121M despite 93% fixed‑rate debt, implying limited near‑term relief from rates .

Financial Results

Metric	Q4 2023	Q3 2024	Q4 2024
Total Revenues ($USD Billions)	$0.154	$0.166	$0.173
GAAP Diluted EPS ($)	$0.11	$0.09	$0.15
Nareit FFO per Diluted Share ($)	$0.56	$0.60	$0.61
Core FFO per Diluted Share ($)	$0.58	$0.62	$0.62
Same‑Center NOI ($USD Millions)	$103.7	$107.7	$110.4
Same‑Center NOI Margin (%)	72.0%	N/A	72.2%

KPI	Q4 2023	Q3 2024	Q4 2024
Leased Portfolio Occupancy (%)	97.4%	97.8%	97.7%
Leased Inline Occupancy (%)	94.7%	95.0%	95.0%
Leased Anchor Occupancy (%)	98.9%	99.4%	99.1%
ABR PSF – Anchor ($/sf)	$10.12	$10.25	$10.38
ABR PSF – Inline ($/sf)	$24.66	$25.48	$25.79
Comparable New Lease Spread (%)	21.9%	55.0%	30.2%
Comparable Renewal Spread (%)	14.2%	19.8%	20.8%
Retention Rate (%)	93.3%	N/A	88.1%

Note on estimates: Wall Street consensus (S&P Global) was unavailable at time of request due to data access limits; comparisons vs estimates are therefore not shown.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Income per Share ($)	FY 2025	Unchanged vs preliminary Dec. business update (values consistent)	$0.54 – $0.59	Maintained
Nareit FFO per Share ($)	FY 2025	Unchanged vs preliminary Dec. business update (values consistent)	$2.47 – $2.54	Maintained
Core FFO per Share ($)	FY 2025	Unchanged vs preliminary Dec. business update (values consistent)	$2.52 – $2.59	Maintained
Same‑Center NOI Growth (%)	FY 2025	Unchanged vs preliminary Dec. business update (values consistent)	3.00% – 3.50%	Maintained
Gross Acquisitions ($MM)	FY 2025	Unchanged vs preliminary Dec. business update (values consistent)	$350 – $450	Maintained
Net Interest Expense ($MM)	FY 2025	Unchanged vs preliminary Dec. business update (values consistent)	$111 – $121	Maintained
G&A Expense ($MM)	FY 2025	Unchanged vs preliminary Dec. business update (values consistent)	$45 – $49	Maintained
Non‑cash Revenue Items ($MM)	FY 2025	Unchanged vs preliminary Dec. business update (values consistent)	$18 – $20	Maintained
Adjustments for Collectibility ($MM)	FY 2025	Unchanged vs preliminary Dec. business update (values consistent)	$4 – $8	Maintained
Dividend Policy	Ongoing	Monthly dividend program remains in place (Q4 2024 period also included regular declarations)	Not explicitly revised in Q4 release; ongoing monthly dividends continue	Maintained

Earnings Call Themes & Trends

Topic	Q2 2024 (Prior)	Q3 2024 (Prior)	Q4 2024 (Current)	Trend
Acquisition Pace & Pipeline	Reaffirmed 2024 guidance; JV with CNSREIT launched; $59.5M Q2 acquisitions and additional post‑quarter deals	$95.7M Q3 acquisitions; raised 2024 acquisitions guidance to $275–$325M	~$94.6M Q4 acquisitions; >$150M under/negotiation early 2025; 2025 gross $350–$450M	Accelerating
Leasing Spreads & Rent Bumps	New 34.4%, renewal 20.5%; embedded annual bumps rising	Record new 55.0%, renewal 19.8%	New 30.2%, renewal 20.8%; in‑line bumps ~2–3%	Strong/stable
Occupancy & Economic Occupancy	Leased occupancy 97.5%; same‑center 97.8%	Leased occupancy 97.8%; same‑center 97.9%	Leased 97.7%; signed‑not‑open gap ~100 bps likely normalizes toward ~50 bps in 2025	Slight near‑term headwind; normalizing
Balance Sheet & Liquidity	91.4% fixed; net debt/Adj. EBITDAre ~5.1x; senior notes due 2034	93.2% fixed; senior notes due 2035; net debt/Adj. EBITDAre ~5.1x	93% fixed; revolver extended/upsized to $1.0B (2029); net debt/Adj. EBITDAre ~5.0x	Improving flexibility
Macro/Tariffs & Bad Debt	N/A in Q2 release	N/A in Q3 release	Bad debt ~45 bps in Q4; ~75 bps in 2024; tariffs being monitored by grocers with expectation of pass‑throughs	Manageable

Management Commentary

CEO: “The PECO team delivered solid core FFO per share growth in 2024 despite significant interest expense headwinds… we are focused on delivering accelerated Core FFO per share growth in 2025” .
CFO: “Our official 2025 guidance is unchanged… NAREIT FFO $2.47–$2.54, Core FFO $2.52–$2.59, same‑center NOI growth 3%–3.5%; liquidity ~$1.0B revolver extended to 2029” .
President: “Comparable renewal rent spreads of 20.8%… in‑line renewals at 19.8%… average annual rent bumps of ~2–3% are an important contributor to long‑term growth” .

Q&A Highlights

Acquisition pipeline and funding: Over $150M under or in negotiation for early 2025; dispositions used selectively to recycle into higher‑return assets; JV structures expected to be ~10% of acquisition activity .
Retention and re‑merchandising: Intentional replacement of weaker stores may modestly pressure occupancy/retention near‑term but improves long‑term cash flows and spreads; renewal IRRs meaningfully higher given low TI spend ($0.87/sf in Q4 renewals) .
Bad debt and tariffs: 2024 bad debt ~75 bps; Q4 ~45 bps; wider guidance range set to plan conservatively; grocers monitoring tariffs with confidence in pass‑through capability .
Signed‑not‑open (SNO): ~100 bps SNO gap exiting 2024 primarily from anchor boxes; expected to normalize toward ~50 bps over 2025 as openings occur .

Estimates Context

Wall Street consensus (S&P Global) for EPS/revenue was unavailable due to data access limits at time of request; as a result, “vs. estimates” comparisons are not shown. The company’s Q4 reported metrics (EPS $0.15, Nareit FFO/share $0.61, Core FFO/share $0.62; revenues $0.173B) are provided above with source documents .

Key Takeaways for Investors

Durable growth engine: Strong rent re‑marking and embedded annual escalators, combined with high occupancy, support mid‑single‑digit FFO/share growth in 2025 and beyond .
Acquisition upside: A larger, active pipeline (> $150M near‑term) plus two JVs broadens sourcing and supports $350–$450M gross acquisitions in 2025; expect lumpy but accretive deployment .
Temporary occupancy economics headwind: Signed‑not‑open and anchor transitions may modestly depress economic occupancy near‑term, but should normalize as tenants open and re‑merchandising yields improved center economics .
Balance sheet flexibility: 93% fixed‑rate debt, revolver extended to 2029 and a ~5.0x net debt/Adj. EBITDAre provide capacity to fund growth while maintaining prudent leverage .
Rate sensitivity: Interest expense remains a headwind (2025 net interest $111–$121M); stable rates would aid FFO translation but strategy assumes prudent growth under current conditions .
Edge in necessity retail: Grocery‑anchored focus with top‑tier anchors (Kroger, Publix, Albertsons, Ahold) and suburban demographics underpins traffic and tenant health, lowering beta across cycles .
Trading/PM implication: Watch early‑2025 acquisition closings, leasing spread sustainability, and progress on anchor box openings; beats/misses likely tied to timing of deployment and SNO conversion given estimates were unavailable in this cycle .

Additional Data (From Primary Sources)

Q4 revenues detail: rental income $169.5M; total revenues $173.0M; GAAP net income $18.1M; same‑center NOI $110.4M; Adjusted EBITDAre $111.9M .
Portfolio metrics: total ABR $510.0M; ABR PSF $15.68; top grocery anchors include Kroger (5.7% of ABR), Publix (5.2%), Albertsons (3.8%), Ahold Delhaize (3.5%) .

Sources: Q4 2024 press release and exhibits (Form 8‑K, supplemental), and Q4 2024 earnings call transcript .

Phillips Edison & Company, Inc. (PECO)·Q4 2024 Earnings Summary