What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-10-25 compared with 2023-07-26 · 134 added, 82 removed, 661 unchanged (25% of the section changed)

4 unchanged sentences

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

September 30,

2023 December 31,

19 unchanged sentences

70,000,000 shares authorized;

45,323,836 shares issued and outstanding at June 30, 2023 and 43,575,539 at December 31, 2022

46,277,057 shares issued and outstanding at September 30, 2023 and 43,575,539 at December 31, 2022

Excess shares;

14 unchanged sentences

(IN THOUSANDS, EXCEPT PER SHARE DATA)

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

15 unchanged sentences

COMMON STOCKHOLDERS 48,896 37,792 137,036 147,511

Other comprehensive income (loss) - interest rate swaps 10,202 6,841 ( 60 ) 22,669

Other comprehensive income - interest rate swaps 5,777 17,157 5,717 39,826

TOTAL COMPREHENSIVE INCOME $ 54,673 54,949 142,753 187,337

12 unchanged sentences

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

For the six months ended June 30, 2023:

For the nine months ended September 30, 2023:

Common Shares Additional

29 unchanged sentences

BALANCE, JUNE 30, 2023 4 2,535,996 ( 358,934 ) 36,311 344 2,213,721

Net income — — 48,896 — 14 48,910

Net unrealized change in fair value of interest rate swaps — — — 5,777 — 5,777

Common dividends declared – $ 1.27 per

— — ( 59,154 ) — — ( 59,154 )

Stock-based compensation, net of forfeitures

— 2,766 — — — 2,766

Issuance of 953,070 shares of common

stock, common stock offering, net of

— 167,315 — — — 167,315

Withheld 74 shares of common stock to satisfy tax withholding obligations in connection with the issuance of common stock

— ( 13 ) — — — ( 13 )

Net distributions to noncontrolling interest — — — — ( 57 ) ( 57 )

BALANCE, SEPTEMBER 30, 2023 $ 4 2,706,064 ( 369,192 ) 42,088 301 2,379,265

See accompanying Notes to Consolidated Financial Statements (unaudited).

3 unchanged sentences

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

For the six months ended June 30, 2022:

For the nine months ended September 30, 2022:

Common Shares Additional

27 unchanged sentences

BALANCE, JUNE 30, 2022 4 2,263,072 ( 302,324 ) 23,971 1,351 1,986,074

Net income — — 37,792 — 25 37,817

Net unrealized change in fair value of interest rate swaps — — — 17,157 — 17,157

Common dividends declared –$ 1.25 per

— — ( 54,531 ) — — ( 54,531 )

Stock-based compensation, net of forfeitures

— 2,855 — — — 2,855

Issuance of 6,368 shares of common

stock, common stock offering, net of

— 1,010 — — — 1,010

Withheld 733 shares of common stock to satisfy tax withholding obligations in connection with the issuance of common stock

— ( 106 ) — — — ( 106 )

Net distributions to noncontrolling interest — — — — ( 90 ) ( 90 )

BALANCE, SEPTEMBER 30, 2022 $ 4 2,266,831 ( 319,063 ) 41,128 1,286 1,990,186

See accompanying Notes to Consolidated Financial Statements (unaudited).

3 unchanged sentences

(IN THOUSANDS)

Six Months Ended June 30,

Nine Months Ended September 30,

OPERATING ACTIVITIES

5 unchanged sentences

Gain on sales of non-operating real estate ( 446 ) —

Gain on casualties and involuntary conversion on real estate assets ( 2,069 ) —

Gain on involuntary conversion and business interruption claims ( 4,187 ) —

Changes in operating assets and liabilities:

9 unchanged sentences

Leasing commissions ( 22,712 ) ( 26,968 )

Proceeds from casualties and involuntary conversion on real estate assets 1,339 —

Proceeds from involuntary conversion on real estate assets 1,339 —

Changes in accrued development costs 26,724 22,141

38 unchanged sentences

The consolidated financial statements include the accounts of EastGroup, its wholly owned subsidiaries and the investee of any joint ventures in which the Company has a controlling interest.

As of June 30, 2023 and December 31, 2022, EastGroup had a 95 % controlling interest in one joint venture arrangement, which owns 6.5 acres of land in San Diego, known by the Company as the Miramar land.

As of December 31, 2022 and September 30, 2023, EastGroup had a 95 % controlling interest in a joint venture arrangement which owns 6.5 acres of land in San Diego, known by the Company as the Miramar land.

During the three months ended September 30, 2023, EastGroup acquired 29.3 acres of land in Denver, known by the Company as Arista 36 Business Park Land.

A joint venture was formed through which EastGroup owns a 99.5 % controlling interest in the property.

As of September 30, 2023, EastGroup continued to hold a controlling interest in two joint venture arrangements.

During the year ended December 31, 2022, EastGroup acquired the 1 % noncontrolling interest in Speed Distribution Center, a 519,000 square foot building in San Diego, in which the Company held a 99 % controlling interest.

8 unchanged sentences

The Company’s primary revenue is rental income from business distribution space.

The table below presents the components of Income from real estate operations for the three and six months ended June 30, 2023 and 2022:

The table below presents the components of Income from real estate operations for the three and nine months ended September 30, 2023 and 2022:

Three Months Ended

June 30, Six Months Ended June 30,

September 30, Nine Months Ended September 30,

2023 2022 2023 2022

8 unchanged sentences

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows (including estimated future expenditures necessary to substantially complete the asset) expected to be generated by the asset.

If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset.

During the six month periods ended June 30, 2023 and 2022, the Company did not identify any impairment charges which should be recorded.

Recoverability of assets to be held and used is measured by a comparison of the

EASTGROUP PROPERTIES, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

carrying amount of an asset to future undiscounted net cash flows (including estimated future expenditures necessary to substantially complete the asset) expected to be generated by the asset.

During the nine month periods ended September 30, 2023 and 2022, the Company did not identify any impairment charges which should be recorded.

Depreciation of buildings and other improvements is computed using the straight-line method over estimated useful lives of generally 40 years for buildings and 3 to 15 years for improvements.

1 unchanged sentence

Significant renovations and improvements that improve or extend the useful life of the assets are capitalized.

Depreciation expense was $ 34,690,000 and $ 68,536,000 for the three and six months ended June 30, 2023, respectively, and $ 30,715,000 and $ 60,107,000 for the same periods in 2022.

The Company’s Real estate properties and Development and value-add properties at June 30, 2023 and December 31, 2022 were as follows:

Depreciation expense was $ 35,031,000 and $ 103,567,000 for the three and nine months ended September 30, 2023, respectively, and $ 32,052,000 and $ 92,159,000 for the same periods in 2022.

The Company’s Real estate properties and Development and value-add properties at September 30, 2023 and December 31, 2022 were as follows:

September 30,

2023 December 31,

30 unchanged sentences

Criteria considered in grouping similar assets include geographic location, market and operational risks and the physical characteristics of the assets.

EastGroup determined that its real estate property acquisitions in 2022 and the first six months of 2023 are considered to be acquisitions of groups of similar identifiable assets;

therefore, the acquisitions are not considered to be acquisitions of a business.

As a result, the Company capitalized acquisition costs related to its 2022 and 2023 acquisitions.

EastGroup determined that its real estate property

EASTGROUP PROPERTIES, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

acquisitions in 2022 and the first nine months of 2023 are considered to be acquisitions of groups of similar identifiable assets;

therefore, the acquisitions are not considered to be acquisitions of a business.

As a result, the Company capitalized acquisition costs related to its 2022 and 2023 acquisitions.

The FASB Codification also provides guidance on how to properly determine the allocation of the purchase price among the individual components of both the tangible and intangible assets based on their respective fair values.

9 unchanged sentences

These intangible assets are included in Other assets on the Consolidated Balance Sheets and are amortized over the remaining term of the existing lease.

Amortization expense for in-place lease intangibles was $ 2,174,000 and $ 4,136,000 for the three and six months ended June 30, 2023, respectively, and $ 2,198,000 and $ 4,663,000 for the same periods in 2022.

Amortization of above and below market lease intangibles increased rental income by $ 696,000 and $ 1,295,000 for the three and six months ended June 30, 2023, respectively, and $ 507,000 and $ 1,352,000 for the same periods in 2022.

During six months ended June 30, 2023, EastGroup acquired the following property:

REAL ESTATE PROPERTY ACQUIRED IN 2023

Amortization expense for in-place lease intangibles was $ 1,895,000 and $ 6,031,000 for the three and nine months ended September 30, 2023, respectively, and $ 2,541,000 and $ 7,204,000 for the same periods in 2022.

Amortization of above and below market lease intangibles increased rental income by $ 560,000 and $ 1,855,000 for the three and nine months ended September 30, 2023, respectively, and $ 605,000 and $ 1,957,000 for the same periods in 2022.

During nine months ended September 30, 2023, EastGroup acquired the following properties:

REAL ESTATE PROPERTIES ACQUIRED IN 2023

Location Size Date

1 unchanged sentence

(Square feet) (In thousands)

Operating property acquired (2)

Operating properties acquired (2)

Craig Corporate Center

Las Vegas, NV 156,000 04/18/2023 $ 34,365

Blue Diamond Business Park Las Vegas, NV 254,000 09/05/2023 52,973

Total operating property acquisitions 410,000 $ 87,338

(1) Cost is calculated in accordance with FASB ASC 805, Business Combinations, and represents the sum of the purchase price, closing costs and capitalized acquisition costs.

1 unchanged sentence

included in Real estate properties on the Consolidated Balance Sheets.

The following table summarizes the allocation of the total consideration for the acquired assets and assumed liabilities in connection with the acquisition identified in the table above which was acquired during the six months ended June 30, 2023.

EASTGROUP PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table summarizes the allocation of the total consideration for the acquired assets and assumed liabilities in connection with the acquisitions identified in the table above which were acquired during the nine months ended September 30, 2023.

ACQUIRED ASSETS AND ASSUMED LIABILITIES IN 2023

5 unchanged sentences

In-place lease intangibles (1)

Below market lease intangibles (2)

Total assets acquired, net of liabilities assumed $ 87,338

1 unchanged sentence

These costs are amortized over the remaining lives of the associated leases in place at the time of acquisition.

The lease in the property acquired during the six months ended June 30, 2023 had a remaining lease term at acquisition of approximately 10.1 years.

Also during the six months ended June 30, 2023, EastGroup purchased 116.7 acres of development land in three markets for $ 17,754,000 .

(2) Below market lease intangibles are included in Other liabilities on the Consolidated Balance Sheets.

These costs are amortized over the remaining lives of the associated leases in place at the time of acquisition.

The leases in the properties acquired during the nine months ended September 30, 2023 had a weighted average remaining lease term at acquisition of approximately 9.0 years.

Also during the nine months ended September 30, 2023, EastGroup purchased 210.1 acres of development land in five markets for $ 44,468,000 .

EASTGROUP PROPERTIES, INC.

52 unchanged sentences

The land acquisitions in San Francisco and Sacramento were acquired in connection with the Company’s acquisition of Tulloch Corporation in June 2022.

Also in the year ended December 31, 2022, the Company acquired the 1 % noncontrolling partnership interest in Speed Distribution Center in San Diego for $ 18,599,000 .

Also during the year ended December 31, 2022, the Company acquired the 1 % noncontrolling partnership interest in Speed Distribution Center in San Diego for $ 18,599,000 .

EastGroup continues to control and own 100 % of the property.

The Company periodically reviews the recoverability of goodwill (at least annually) and the recoverability of other intangibles (on a quarterly basis) for possible impairment.

No impairment of goodwill or other intangibles existed during the three and six month periods ended June 30, 2023 and 2022.

No impairment of goodwill or other intangibles existed during the three and nine month periods ended September 30, 2023 and 2022.

(8) REAL ESTATE SOLD AND HELD FOR SALE

1 unchanged sentence

Real estate properties held for sale are reported at the lower of the carrying amount or fair value less estimated costs to sell and are not depreciated while they are held for sale.

The Company did not classify any properties as held for sale as of June 30, 2023 and December 31, 2022.

The Company did not classify any properties as held for sale as of September 30, 2023 and December 31, 2022.

In accordance with ASC 360 and ASC 205, Presentation of Financial Statements , the Company would report a disposal of a component of an entity or a group of components of an entity in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when the component or group of components meets the criteria to be classified as held for sale or when the component or group of components is disposed of by sale or other than by sale.

1 unchanged sentence

EastGroup performs an analysis of properties sold to determine whether the sales qualify for discontinued operations presentation.

The Company sold one operating property during the six months ended June 30, 2023 and three operating properties during the year ended December 31, 2022, as shown in the table below.

The Company sold one operating property during the nine months ended September 30, 2023 and three operating properties during the year ended December 31, 2022, as shown in the table below.

The results of operations and gains and losses on sales for the properties sold are reported in continuing operations on the Consolidated Statements of Income and Comprehensive Income.

1 unchanged sentence

The Company did not consider its sales in 2022 or 2023 to be disposals of a component of an entity or a group of components of an entity representing a strategic shift that has (or will have) a major effect on the entity’s operations and financial results.

A summary of Gain on sales of real estate investments for the six months ended June 30, 2023 and the year ended December 31, 2022 follows:

A summary of Gain on sales of real estate investments for the nine months ended September 30, 2023 and the year ended December 31, 2022 follows:

REAL ESTATE PROPERTIES SOLD Location Size Date Sold Net Sales Price Basis Recognized Gain

9 unchanged sentences

The table above includes sales of operating properties.

During the six months ended June 30, 2023, the Company also sold 11.9 acres of land in Houston and Fort Worth, for $ 4,750,000 and recognized gains on the sales of $ 446,000 .

During the nine months ended September 30, 2023, the Company also sold 11.9 acres of land in Houston and Fort Worth, for $ 4,750,000 and recognized gains on the sales of $ 446,000 .

The Company did not sell any land during the year ended December 31, 2022.

The gains on sales of non-operating real estate are included in Other on the Consolidated Statements of Income and Comprehensive Income.

4 unchanged sentences

A summary of the Company’s Other assets follows:

September 30,

2023 December 31,

21 unchanged sentences

The Company’s debt is detailed below:

September 30,

2023 December 31,

19 unchanged sentences

The credit facility contains options for two six-month extensions (at the Company's election) and an additional $ 125,000,000 accordion (with agreement by all parties).

The interest rate on each tranche is reset on a monthly basis and as of June 30, 2023, was SOFR plus 76.5 basis points with an annual facility fee of 15 basis points.

As of June 30, 2023, the Company had no variable rate borrowings on this unsecured bank credit facility and a weighted average interest rate of 6.006 %.

The Company has a standby letter of credit of $ 67,000 pledged on this facility, which reduces borrowing capacity under the credit facility.

The interest rate on each tranche is reset on a monthly basis and as of September 30, 2023, was SOFR plus 76.5 basis points with an annual facility fee of 15 basis points.

As of September 30, 2023, the Company had no variable rate borrowings on this unsecured bank credit facility and an interest rate of 6.094 %.

The Company has two standby letters of credit totaling $ 2,655,000 pledged on this facility, which reduces borrowing capacity under the credit facility.

The Company's $ 50,000,000 unsecured bank credit facility has a maturity date of July 30, 2025 , or such later date as designated by the bank;

the Company also has two six-month extensions available if the extension options in the $ 625,000,000 facility are exercised.

The interest rate is reset on a daily basis and as of June 30, 2023, was SOFR plus 76.5 basis points with an annual facility fee of 15 basis points.

As of June 30, 2023, the interest rate was 5.955 % with no outstanding balance.

The interest rate is reset on a daily basis and as of September 30, 2023, was SOFR plus 77.5 basis points with an annual facility fee of 15 basis points.

As of September 30, 2023, the interest rate was 6.185 % with no outstanding balance.

For both facilities, the margin and facility fee are subject to changes in the Company's credit ratings.

1 unchanged sentence

This favorable pricing level will be retained provided that the Company’s consolidated leverage ratio, as defined in the applicable agreements, remains less than 32.5 %.

The facilities also include a sustainability-linked pricing component pursuant to which the applicable interest margin is reduced by one basis point if the Company meets a certain sustainability performance target.

This sustainability metric is evaluated annually and was achieved for the year ended December 31, 2022, which effectively reduced the margin on the unsecured bank credit facilities during 2023 by one basis point from 77.5 to 76.5 basis points.

In January 2023, the Company closed a $ 100,000,000 senior unsecured term loan with a seven -year term and interest only payments, which bears interest at the annual rate of SOFR plus an applicable margin ( 1.35 % as of June 30, 2023) based on the Company’s senior unsecured long-term debt rating.

The $ 625,000,000 facility also includes a sustainability-linked pricing component pursuant to which the applicable interest margin is reduced by one basis point if the Company meets a certain sustainability performance target.

This sustainability metric is evaluated annually and was achieved for the year ended December 31, 2022, which effectively reduced the margin on this unsecured bank credit facility during 2023 by one basis point from 77.5 to 76.5 basis points.

In January 2023, the Company closed a $ 100,000,000 senior unsecured term loan with a term of seven years and interest only payments, which bears interest at the annual rate of SOFR plus an applicable margin ( 1.35 % as of September 30, 2023) based on the Company’s senior unsecured long-term debt rating.

The Company also entered into an interest rate swap agreement to convert the loan’s SOFR rate component to a fixed interest rate for the entire term of the loan providing a total effectively fixed interest rate of 5.27 %.

1 unchanged sentence

The loan, which was scheduled to mature on April 1, 2023, was repaid with no penalty.

Scheduled principal payments on long-term debt, including Unsecured debt, net of debt issuance costs and Secured debt, net of debt issuance costs (not including Unsecured bank credit facilities, net of debt issuance costs ), as of June 30, 2023, are as follows:

In August 2023, the Company made a scheduled $ 50,000,000 principal repayment on its senior unsecured notes with a fixed interest rate of 3.80 %.

In September 2023, EastGroup repaid a mortgage loan with a balance of $ 1,905,000 , an interest rate of 3.85 % and an original maturity date of November 30, 2026 .

Also in September 2023, the Company closed on the refinance of a $ 100,000,000 senior unsecured term loan with five years remaining.

The amended term loan provides for interest only payments currently at an interest rate of SOFR plus 95 basis points, based on the Company’s current credit ratings and consolidated leverage ratio, which is a 45 basis point reduction in the credit spread compared to the original term loan.

The Company has an interest rate swap agreement which converts the loan’s SOFR rate component to a fixed interest rate for the entire term of the loan, providing a total effectively fixed interest rate of 2.61 %.

EASTGROUP PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Scheduled principal payments on long-term debt, including Unsecured debt, net of debt issuance costs (not including Unsecured bank credit facilities, net of debt issuance costs ), as of September 30, 2023, are as follows:

Years Ending December 31, (In thousands)

2 unchanged sentences

Total $ 1,680,000

EASTGROUP PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(11) ACCOUNTS PAYABLE AND ACCRUED EXPENSES

A summary of the Company’s Accounts payable and accrued expenses follows:

September 30,

2023 December 31,

15 unchanged sentences

A summary of the Company’s Other liabilities follows:

September 30,

2023 December 31,

19 unchanged sentences

Three Months Ended

June 30, Six Months Ended June 30,

September 30, Nine Months Ended September 30,

2023 2022 2023 2022

2 unchanged sentences

Balance at beginning of period $ 36,311 23,971 36,371 1,302

Other comprehensive income (loss) - interest rate swaps 10,202 6,841 ( 60 ) 22,669

Other comprehensive income - interest rate swaps 5,777 17,157 5,717 39,826

Balance at end of period $ 42,088 41,128 42,088 41,128

7 unchanged sentences

Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

As of June 30, 2023, the Company had seven interest rate swaps outstanding, all of which are used to hedge the variable cash flows associated with unsecured loans.

As of September 30, 2023, the Company had seven interest rate swaps outstanding, all of which are used to hedge the variable cash flows associated with unsecured loans.

All of the Company’s interest rate swaps convert the related loans’ SOFR rate components to effectively fixed interest rates, and the Company has concluded that each of the hedging relationships is highly effective.

21 unchanged sentences

ASU 2022-06 is effective immediately for all companies.

ASU 2022-06 had no impact on the Company’s consolidated financial statements for the three and six months ended June 30, 2023.

As of June 30, 2023 and December 31, 2022, the Company had the following outstanding interest rate derivatives that are designated as cash flow hedges of interest rate risk:

Interest Rate Derivative Notional Amount as of June 30, 2023

ASU 2022-06 had no impact on the Company’s consolidated financial statements for the three and nine months ended September 30, 2023.

As of September 30, 2023 and December 31, 2022, the Company had the following outstanding interest rate derivatives that are designated as cash flow hedges of interest rate risk:

Interest Rate Derivative Notional Amount as of September 30, 2023

Notional Amount as of December 31, 2022

8 unchanged sentences

Interest Rate Swap $ 100,000 $ 100,000

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022.

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022.

See Note 17 for additional information on the fair value of the Company’s interest rate swaps.

As of June 30, 2023

As of September 30, 2023

As of December 31, 2022

4 unchanged sentences

Interest rate swap liabilities Other liabilities — Other liabilities 1,981

The table below presents the effect of the Company’s derivative financial instruments on the Consolidated Statements of Income and Comprehensive Income for the three and six months ended June 30, 2023 and 2022:

The table below presents the effect of the Company’s derivative financial instruments on the Consolidated Statements of Income and Comprehensive Income for the three and nine months ended September 30, 2023 and 2022:

Three Months Ended

June 30, Six Months Ended June 30,

September 30, Nine Months Ended September 30,

2023 2022 2023 2022

2 unchanged sentences

Interest Rate Swaps:

Amount of income recognized in Other comprehensive income (loss) on derivatives

Amount of income recognized in Other comprehensive income on derivatives

$ 10,463 18,162 18,719 39,517

Amount of (income) loss reclassified from Accumulated other comprehensive income (loss) into Interest expense

Amount of (income) loss reclassified from Accumulated other comprehensive income into Interest expense

( 4,686 ) ( 1,005 ) ( 13,002 ) 309

See Note 13 for additional information on the Company’s Accumulated other comprehensive income (loss) resulting from its interest rate swaps.

See Note 13 for additional information on the Company’s Accumulated other comprehensive income resulting from its interest rate swaps.

EASTGROUP PROPERTIES, INC.

4 unchanged sentences

The Company has an agreement with its derivative counterparties containing a provision stating that the Company could be declared in default on its derivative obligations if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender.

If the Company breached any of these provisions, it would be required to settle its obligations under the agreements at their termination value of $ 36,782,000 as of June 30, 2023.

As of September 30, 2023, we had not posted any collateral related to these agreements and were not in breach of any of the provisions of these agreements.

If the Company had breached any of these provisions, it would be required to settle its obligations under the agreements at their termination value.

(15) EARNINGS PER SHARE

11 unchanged sentences

Three Months Ended

June 30, Six Months Ended June 30,

September 30, Nine Months Ended September 30,

2023 2022 2023 2022

29 unchanged sentences

Restricted stock is granted to executive officers subject to both continued service and the satisfaction of certain annual performance goals and multi-year market conditions as determined by the Committee.

The long-term compensation awards include components based on the Company’s total shareholder return over the upcoming three -year period and the employee’s continued service as of the vesting dates.

The long-term compensation awards include components based on the Company’s total shareholder return over the upcoming three years and the employee’s continued service as of the vesting dates.

The total shareholder return component is subject to bright-line tests that compare the Company’s total shareholder return to the Nareit Equity Index and to the member companies of the Nareit industrial index.

15 unchanged sentences

The Company has adjusted its stock-based compensation expense to accelerate the recognition of expense for retirement-eligible employees.

Stock-based compensation cost for employees was $ 2,579,000 and $ 5,831,000 for the three and six months ended June 30, 2023, of which $ 601,000 and $ 1,294,000 were capitalized as part of the Company’s development costs.

For the three and six months ended June 30, 2022, stock-based compensation cost for employees was $ 2,989,000 and $ 5,550,000 , of which $ 645,000 and $ 1,336,000 were capitalized as part of the Company’s development costs.

Stock-based compensation expense for directors was $ 192,000 and $ 417,000 for the three and six months ended June 30, 2023, respectively, and $ 73,000 and $ 106,000 for the same periods in 2022.

Stock-based compensation cost for employees was $ 2,593,000 and $ 8,424,000 for the three and nine months ended September 30, 2023, respectively, of which $ 886,000 and $ 2,180,000 were capitalized as part of the Company’s development costs.

For the three and nine months ended September 30, 2022, stock-based compensation cost for employees was $ 2,625,000 and $ 8,175,000 , respectively, of which $ 645,000 and $ 1,981,000 were capitalized as part of the Company’s development costs.

Stock-based compensation expense for directors was $ 174,000 and $ 591,000 for the three and nine months ended September 30, 2023, respectively, and $ 230,000 and $ 336,000 for the same periods in 2022.

Following is a summary of the total restricted shares granted, forfeited and delivered (vested) to participants with the related weighted average grant date fair value share prices.

Of the shares that vested in the nine months ended September 30, 2023, the Company withheld 31,254 shares to satisfy the tax obligations for those participants who elected this option as permitted under the applicable equity plan.

As of the grant dates, the fair value of shares that were granted during the nine months ended

EASTGROUP PROPERTIES, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Following is a summary of the total restricted shares granted, forfeited and delivered (vested) to participants with the related weighted average grant date fair value share prices.

Of the shares that vested in the six months ended June 30, 2023, the Company withheld 31,254 shares to satisfy the tax obligations for those participants who elected this option as permitted under the applicable equity plan.

As of the grant dates, the fair value of shares that were granted during the six months ended June 30, 2023 was $ 9,222,000 .

As of the vesting dates, the aggregate fair value of shares that vested during the six months ended June 30, 2023 was $ 12,199,000 .

September 30, 2023 was $ 9,222,000 .

As of the vesting dates, the aggregate fair value of shares that vested during the nine months ended September 30, 2023 was $ 12,208,000 .

Award Activity:

Three Months Ended

June 30, 2023 Six Months Ended June 30, 2023

September 30, 2023 Nine Months Ended September 30, 2023

Weighted Average Grant Date Fair Value

13 unchanged sentences

The FASB Codification requires disclosure of the level within the fair value hierarchy in which the fair value measurements fall, including measurements using quoted prices in active markets for identical assets or liabilities (Level 1), quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active (Level 2) and significant valuation assumptions that are not readily observable in the market (Level 3).

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments in accordance with ASC 820 at June 30, 2023 and December 31, 2022.

June 30, 2023 December 31, 2022

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments in accordance with ASC 820 at September 30, 2023 and December 31, 2022.

September 30, 2023 December 31, 2022

Carrying Amount (1)

19 unchanged sentences

Interest rate swap assets (included in Other assets on the Consolidated Balance Sheets):

The instruments are recorded at fair value based on models using inputs, such as interest rate yield curves, LIBOR or SOFR swap curves, observable for

EASTGROUP PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

substantially the full term of the contract (Level 2 input).

The instruments are recorded at fair value based on models using inputs, such as interest rate yield curves, LIBOR or SOFR swap curves, observable for substantially the full term of the contract (Level 2 input).

See Note 14 for additional information on the Company’s interest rate swaps.

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The fair value of the Company’s unsecured bank credit facilities is estimated by discounting expected cash flows at current market rates (Level 2 input), excluding the effects of debt issuance costs.

EASTGROUP PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Unsecured debt:

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ASU 2022-06 is effective immediately for all companies.

ASU 2022-06 had no impact on the Company’s consolidated financial statements for the six months ended June 30, 2023.

ASU 2022-06 had no impact on the Company’s consolidated financial statements for the nine months ended September 30, 2023.

See Note 14 in the Notes to Consolidated Financial Statements for further evaluation of these ASUs.

(21) SUBSEQUENT EVENTS

On June 29 and 30, 2023, the Company sold 75,016 shares of common stock under its continuous common equity program at a weighted average price of $ 172.42 .

These shares were deemed to be issued and outstanding upon settlement in July 2023.

Subsequent to June 30, 2023, EastGroup closed on the acquisition of 20.3 acres of development land in Dallas, known by the Company as Denton 35 Exchange Land, for approximately $ 5,500,000 .

The site will accommodate the future development of two buildings containing approximately 245,000 square feet.

On September 28 and 29, 2023, the Company sold 53,364 shares of common stock under its continuous common equity program, providing aggregate net proceeds to the Company of $ 8,794,000 .

These shares were deemed to be issued and outstanding upon settlement in October 2023.

Subsequent to September 30, 2023, EastGroup acquired McKinney Logistics Center, a 193,000 square foot business distribution building for approximately $ 26,000,000 .

The building is located in the Northeast submarket of Dallas and is 100% leased.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements