What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-04-24 compared with 2023-10-25 · 185 added, 290 removed, 505 unchanged (48% of the section changed)

4 unchanged sentences

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

September 30,

2024 December 31,

11 unchanged sentences

Unsecured debt, net of debt issuance costs 1,676,573 1,676,347

Secured debt, net of debt issuance costs — 2,031

Accounts payable and accrued expenses 155,255 146,337

5 unchanged sentences

70,000,000 shares authorized;

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

48,010,613 shares issued

and outstanding at March 31, 2024 and 47,700,432 at December 31, 2023

Excess shares;

14 unchanged sentences

(IN THOUSANDS, EXCEPT PER SHARE DATA)

Three Months Ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

Three Months Ended

Income from real estate operations $ 154,074 133,964

14 unchanged sentences

COMMON STOCKHOLDERS 58,644 44,690

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

Other comprehensive income (loss) — interest rate swaps 5,894 ( 10,262 )

TOTAL COMPREHENSIVE INCOME $ 64,538 34,428

12 unchanged sentences

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

For the nine months ended September 30, 2023:

For the three months ended March 31, 2024:

Common Shares Additional

14 unchanged sentences

— ( 6,125 ) — — — ( 6,125 )

Withheld 46 shares of common stock to satisfy tax withholding obligations in connection with the issuance of common stock

Withheld 68 shares of common stock to

satisfy tax withholding obligations in

connection with the issuance of common

— ( 13 ) — — — ( 13 )

Net distributions to noncontrolling interest — — — — ( 67 ) ( 67 )

Contributions from noncontrolling interest — — — — 62 62

BALANCE, MARCH 31, 2024 $ 5 2,997,210 ( 368,954 ) 30,782 316 2,659,359

Net income — — 43,450 — 15 43,465

Net unrealized change in fair value of interest rate swaps — — — 10,202 — 10,202

Common dividends declared – $ 1.25 per

— — ( 56,762 ) — — ( 56,762 )

Stock-based compensation, net of forfeitures

— 2,771 — — — 2,771

Issuance of 1,065,678 shares of common

stock, common stock offering, net of expenses

— 177,749 — — — 177,749

Net distributions to noncontrolling interest — — — — ( 86 ) ( 86 )

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).

EASTGROUP PROPERTIES, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

For the nine months ended September 30, 2022:

For the three months ended March 31, 2023:

Common Shares Additional

14 unchanged sentences

— ( 4,836 ) — — — ( 4,836 )

Net distributions to noncontrolling interest — — — — ( 58 ) ( 58 )

BALANCE, MARCH 31, 2022 4 1,956,328 ( 300,429 ) 17,130 1,356 1,674,389

Net income — — 46,139 — 26 46,165

Net unrealized change in fair value of interest rate swaps — — — 6,841 — 6,841

Common dividends declared – $ 1.10 per

— — ( 48,034 ) — — ( 48,034 )

Stock-based compensation, net of forfeitures

— 3,062 — — — 3,062

Issuance of 1,868,809 shares of common

stock, net of expenses, in the purchase of real estate

— 303,682 — — — 303,682

Net distributions to noncontrolling interest — — — — ( 31 ) ( 31 )

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

Withheld 46 shares of common stock to

satisfy tax withholding obligations in

connection with the issuance of common

— ( 7 ) — — — ( 7 )

Net distributions to noncontrolling interest — — — — ( 40 ) ( 40 )

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

BALANCE, MARCH 31, 2023 $ 4 2,355,476 ( 345,622 ) 26,109 415 2,036,382

See accompanying Notes to Consolidated Financial Statements (unaudited).

3 unchanged sentences

(IN THOUSANDS)

Nine Months Ended September 30,

Three Months Ended March 31,

OPERATING ACTIVITIES

17 unchanged sentences

Leasing commissions ( 6,295 ) ( 7,921 )

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

Changes in accrued development costs ( 7,204 ) 12,271

12 unchanged sentences

Other ( 6,143 ) ( 4,824 )

NET CASH PROVIDED BY FINANCING ACTIVITIES 89,678 109,458

INCREASE IN CASH AND CASH EQUIVALENTS 318 455

NET CASH USED IN FINANCING ACTIVITIES ( 18,306 ) ( 19,304 )

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ( 24,638 ) 9,334

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 40,263 56

4 unchanged sentences

Cash paid for operating lease liabilities 688 569

Common stock issued in the purchase of real estate — 303,682

Debt assumed in the purchase of real estate — 60,000

NON-CASH OPERATING ACTIVITY

Operating lease liabilities arising from obtaining right of use assets $ — 398

See accompanying Notes to Consolidated Financial Statements (unaudited).

9 unchanged sentences

The financial statements should be read in conjunction with the financial statements contained in the Company’s annual report on Form 10-K for the year ended December 31, 2023 and the notes thereto.

Certain reclassifications have been made in the 2022 consolidated financial statements to conform to the 2023 presentation.

(2) PRINCIPLES OF CONSOLIDATION

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 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.

The Company continues to control and own 100 % of the property.

As of March 31, 2024 and December 31, 2023, EastGroup had a 95 % controlling interest in a joint venture arrangement owning 6.5 acres of land in San Diego, known by the Company as Miramar Land.

During the year ended December 31, 2023, a joint venture, in which EastGroup owns a 99.5 % interest, acquired 29.3 acres of land in Denver, known by the Company as Arista 36 Business Park 1-3.

As of March 31, 2024 and December 31, 2023, EastGroup continued to hold a controlling interest in these two joint venture arrangements.

The Company records 100% of the assets, liabilities, revenues and expenses of the buildings and land held in joint ventures with the noncontrolling interests provided for in accordance with the joint venture agreements.

The equity method of accounting is used for the Company’s 50 % undivided tenant-in-common interest in Industry Distribution Center II.

The equity method of accounting is used for the Company’s 50 % undivided tenant-in-common interest in Industry Distribution Center 2.

All significant intercompany transactions and accounts have been eliminated in consolidation.

3 unchanged sentences

(4) LEASE REVENUE

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 nine months ended September 30, 2023 and 2022:

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

The table below presents the components of Income from real estate operations for the three months ended March 31, 2024 and 2023:

Three Months Ended

September 30, Nine Months Ended September 30,

2023 2022 2023 2022

(In thousands)

7 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

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 three month periods ended March 31, 2024 and 2023, the Company did not identify any impairment charges which should be recorded.

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 $ 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,

Depreciation expense was $ 37,205,000 and $ 33,846,000 for the three months ended March 31, 2024 and 2023, respectively.

The Company’s Real estate properties and Development and value-add properties at March 31, 2024 and December 31, 2023 were as follows:

2024 December 31,

13 unchanged sentences

The related operating lease liabilities for ground leases are included in Other liabilities on the Consolidated Balance Sheets.

(2) Value-add properties are defined in Note 6.

(6) DEVELOPMENT AND VALUE-ADD PROPERTIES

Development and value-add properties consists of properties in lease-up, under construction, and prospective development (primarily land).

Value-add properties are defined as properties that are either acquired but not stabilized or can be converted to a higher and better use.

Acquired properties meeting either of the following two conditions are considered value-add properties:

(1) Less than 75% occupied as of the acquisition date (or will be less than 75% occupied within one year of the acquisition date based on near term lease termination), or (2) 20% or greater of the acquisition cost will be spent to redevelop the property.

(6) DEVELOPMENT AND VALUE-ADD PROPERTIES

For properties under development and value-add properties acquired in the development stage, costs associated with development (i.e., land, construction costs, interest expense, property taxes and other costs associated with development) are aggregated into the total capitalized costs of the property.

(1) Less than 75% leased as of the acquisition date (or will be less than 75% occupied within one year of acquisition date based on near term lease roll), or (2) 20% or greater of the acquisition cost will be spent to redevelop the property.

Costs associated with development (i.e., land, construction costs, interest expense, property taxes and other costs associated with development) are aggregated into the total capitalized costs of the property.

Included in these costs are management’s estimates for the portions of internal costs (primarily personnel costs) deemed related to such development activities.

1 unchanged sentence

As the property becomes occupied, depreciation commences on the occupied portion of the building, and costs are capitalized only for the portion of the building that remains vacant.

The Company transfers properties from the development and value-add program to Real estate properties as follows:

(i) for development properties, at the earlier of 90% occupancy or one year after completion of the shell construction, and (ii) for value-add properties, at the earlier of 90% occupancy or one year after acquisition.

Upon the earlier of 90% occupancy or one year after completion of the shell construction, capitalization of development costs, including interest expense, property taxes and internal personnel costs, ceases and depreciation commences on the entire property (excluding the land).

The Company transfers properties from Development and value-add propertie s to Real estate properties as follows:

(1) for development properties, at the earlier of 90% occupancy or one year after completion of the shell construction, and (2) for value-add properties, at the earlier of 90% occupancy or one year after acquisition.

Upon the earlier of 90% occupancy or one year after completion of the shell construction/value-add acquisition date, capitalization of development costs, including interest expense, property taxes and internal personnel costs, ceases and depreciation commences on the entire property (excluding the land).

(7) REAL ESTATE PROPERTY ACQUISITIONS AND ACQUIRED INTANGIBLES

4 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

EastGroup determined that its real estate property acquisitions in 2023 and the first three months of 2024 are considered to be acquisitions of groups of similar identifiable assets;

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.

10 unchanged sentences

In-place lease intangibles are valued based upon management’s assessment of factors such as an estimate of foregone rents and avoided leasing costs during the expected lease-up periods considering current market conditions and costs to execute similar leases.

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 $ 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

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

Amortization of above and below market lease intangibles, which increased rental income by $ 607,000 and $ 599,000 for the three months ended March 31, 2024 and 2023, respectively, is included in Income from real estate operations .

Amortization expense for in-place lease intangibles, which was $ 1,926,000 and $ 1,962,000 for the three months ended March 31, 2024 and 2023, respectively, is included in Depreciation and amortization .

During the three months ended March 31, 2024, EastGroup acquired the following property:

REAL ESTATE PROPERTY ACQUIRED IN 2024

Location Size Date

1 unchanged sentence

(Square feet) (In thousands)

Operating properties acquired (2)

Craig Corporate Center

Operating property acquired (2)(3)

Spanish Ridge Industrial Park

Las Vegas, NV 231,000 01/23/2024 $ 54,859

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.

(3) Excludes acquired development land as discussed below.

There were no value-add acquisitions during the three months ended March 31, 2024.

EASTGROUP PROPERTIES, INC.

1 unchanged sentence

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.

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 three months ended March 31, 2024.

ACQUIRED ASSETS AND ASSUMED LIABILITIES IN 2024

5 unchanged sentences

In-place lease intangibles (1)

Above market lease intangibles (1)

Below market lease intangibles (2)

1 unchanged sentence

(1) In-place lease intangibles and above market lease intangibles are each included in Other assets on the Consolidated Balance Sheets.

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

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

(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.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

The leases in the property acquired during the three months ended March 31, 2024 had a weighted average remaining lease term at acquisition of approximately 6.2 years.

Also during the three months ended March 31, 2024, EastGroup purchased 34.3 acres of development land in Atlanta for $ 3,302,000 .

During 2023, EastGroup acquired the following properties:

4 unchanged sentences

Operating properties acquired (2)(3)

Cebrian Distribution Center and Reed Distribution

Sacramento, CA 329,000 06/01/2022 $ 49,726

6 th Street Business Center, Benicia Distribution

Center 1-5, Ettie Business Center, Laura

Alice Business Center, Preston

Distribution Center, Sinclair Distribution

Center, Transit Distribution Center and

Whipple Business Center (3)

San Francisco, CA 1,377,000 06/01/2022 309,404

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

McKinney Logistics Center Dallas, TX 193,000 10/02/2023 25,739

Park at Myatt Nashville, TN 171,000 11/03/2023 30,793

Pelzer Point Commerce Center 1 Greenville, SC 213,000 12/21/2023 21,246

Total operating property acquisitions 987,000 $ 165,116

Value-add properties acquired (4)

Cypress Preserve 1 & 2 Houston, TX 516,000 03/28/2022 54,462

Zephyr Distribution Center San Francisco, CA 82,000 04/08/2022 29,017

Mesa Gateway Commerce Center Phoenix, AZ 147,000 04/15/2022 18,315

Access Point 3 Greenville, SC 299,000 07/12/2022 21,127

Total value-add property acquisitions 1,044,000 122,921

Total acquired assets 2,750,000 $ 482,051

(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.

(3) The Company acquired these operating properties along with two land parcels, also in Sacramento, CA and San Francisco, CA, in connection with its acquisition of Tulloch Corporation in June 2022.

Size and cost are presented on an aggregate basis for the properties located in Sacramento, CA and San Francisco, CA, respectively.

In consideration for this acquisition, the Company assumed a $ 60,000,000 loan and issued 1,868,809 shares of the Company’s common stock.

The acquisition date fair value of the loan assumed was $ 60,000,000 , and the acquisition date fair value of the common shares, which was based on the closing share price on the acquisition date, was $ 303,756,000 .

(4) Value-add properties are defined in Note 5.

(3) Excludes acquired development land as discussed below.

There were no value-add acquisitions during the year ended December 31, 2023.

EASTGROUP PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

9 unchanged sentences

(1) In-place lease intangibles and above market lease intangibles are each included in Other assets on the Consolidated Balance Sheets.

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

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

(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.

EASTGROUP PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

The leases in the properties acquired during the year ended December 31, 2023 had a weighted average remaining lease term at acquisition of approximately 8.0 years.

Also during 2022, EastGroup purchased 456.3 acres of development land in 10 markets for $ 123,717,000 .

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

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.

Also during 2023, EastGroup purchased 328.3 acres of development land in seven markets for $ 70,664,000 .

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 nine month periods ended September 30, 2023 and 2022.

No impairment of goodwill or other intangibles existed during the three month periods ended March 31, 2024 and 2023.

(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 September 30, 2023 and December 31, 2022.

The Company did not classify any properties as held for sale as of March 31, 2024 and December 31, 2023.

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 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.

The gains and losses on sales are included in Gain on sales of real estate investments.

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 nine months ended September 30, 2023 and the year ended December 31, 2022 follows:

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

The gains and losses on sales of operating properties are included in Gain on sales of real estate investments.

EASTGROUP PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

A summary of Gain on sales of real estate investments for the three months ended March 31, 2024 and the year ended December 31, 2023 follows:

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

(In square feet) (In thousands)

(Square feet) (In thousands)

Interchange Business Park and

Metro Airport Commerce Center

Jackson, MS 159,000 03/05/2024 $ 13,614 4,863 8,751

World Houston 23 Houston, TX 125,000 03/31/2023 $ 9,327 4,518 4,809

Metro Business Park Phoenix, AZ 189,000 01/06/2022 $ 32,851 5,880 26,971

Cypress Creek Business Park (1)

Fort Lauderdale, FL 56,000 03/31/2022 5,282 1,901 3,381

World Houston 15 East Houston, TX 42,000 05/11/2022 12,873 2,226 10,647

Ettie Business Center San Francisco, CA 29,000 11/20/2023 11,638 8,845 2,793

Los Angeles Corporate Center Los Angeles, CA 77,000 12/29/2023 16,006 5,643 10,363

Total for 2023 231,000 $ 36,971 19,006 17,965

(1) Cypress Creek Business Park is located on a ground lease.

In conjunction with the sale of the property, the Company fully amortized the associated right-of-use asset and liability of $ 1,745,000 .

The table above includes sales of operating properties.

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.

During the three months ended March 31, 2024, the Company also sold 3.9 acres of land in San Francisco for $ 4,000,000 and recognized a gain on the sale of $ 222,000 .

During the year ended December 31, 2023, the Company 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 gains on sales of non-operating real estate are included in Other on the Consolidated Statements of Income and Comprehensive Income.

EASTGROUP PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The Company did not consider its sales in 2024 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.

(9) OTHER ASSETS

A summary of the Company’s Other assets follows:

September 30,

2024 December 31,

13 unchanged sentences

Right of use assets — Office leases (operating) 2,674 2,828

Escrow deposits and prepaid costs for pending transactions 1,981 2,522

Goodwill 990 990

Escrow deposits and prepaid costs for pending transactions 1,219 745

Prepaid insurance 3,462 7,208

3 unchanged sentences

$ 255,298 251,939

EASTGROUP PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The Company’s debt is detailed below:

September 30,

2024 December 31,

7 unchanged sentences

Unsecured debt, net of debt issuance costs 1,676,573 1,676,347

Secured debt - fixed rate, carrying amount (1)

Unamortized debt issuance costs — ( 10 )

Secured debt, net of debt issuance costs — 2,031

Total debt, net of debt issuance costs $ 1,674,371 1,861,744

Total unsecured debt, net of debt issuance costs $ 1,675,292 1,674,827

(1) These loans have a fixed interest rate or an effectively fixed interest rate due to interest rate swaps.

EASTGROUP PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Until January 10, 2023, EastGroup had $ 425,000,000 and $ 50,000,000 unsecured bank credit facilities with margins over London Interbank Offered Rate (“LIBOR”) of 77.5 basis points, facility fees of 15 basis points and maturity dates of July 30, 2025 .

The Company amended and restated these credit facilities effective January 10, 2023, expanding the total capacity on its unsecured bank credit facilities from $ 475,000,000 to $ 675,000,000 and replacing LIBOR with SOFR as the benchmark interest rate.

The Company’s $ 625,000,000 unsecured bank credit facility, which was increased in January 2023 by $ 200,000,000 from $ 425,000,000 , is with a group of 11 banks and has a maturity date of July 30, 2025 .

The Company has a $ 625,000,000 unsecured bank credit facility with a group of 11 banks;

the facility has a maturity date of July 30, 2025 .

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 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 interest rate on each tranche is reset on a monthly basis and as of March 31, 2024, was Secured Overnight Financing Rate (“SOFR”) plus 76.5 basis points with an annual facility fee of 15 basis points.

As of March 31, 2024, the Company had no variable rate borrowings on this unsecured bank credit facility and an interest rate of 6.194 %.

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 a $ 50,000,000 unsecured bank credit facility with 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 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.

The interest rate is reset on a daily basis and as of March 31, 2024, was SOFR plus 77.5 basis points with an annual facility fee of 15 basis points.

As of March 31, 2024, the interest rate was 6.215 % with no outstanding balance.

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

2 unchanged sentences

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 %.

On March 31, 2023, EastGroup repaid a $ 65,000,000 senior unsecured term loan with a total effectively fixed interest rate of 2.31 %.

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

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:

This sustainability metric is evaluated annually and was achieved for the years ended December 31, 2023 and 2022, which allowed for the interest rate reduction in each of the years subsequent to achieving the metric.

The margin was effectively reduced on this unsecured bank credit facility by one basis point, from 77.5 to 76.5 basis points.

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,

2024 December 31,

6 unchanged sentences

Dividends payable 62,076 62,393

Book overdraft (1)

Other payables and accrued expenses 6,796 16,189

1 unchanged sentence

$ 155,255 146,337

(1) Represents checks written before the end of the period which have not cleared the bank;

therefore, the bank has not yet advanced cash to the Company.

When the checks clear the bank, they will be funded through the Company’s working cash line of credit, which is included in the Company’s Unsecured bank credit facilities.

(12) OTHER LIABILITIES

A summary of the Company’s Other liabilities follows:

September 30,

2024 December 31,

11 unchanged sentences

$ 87,099 89,415

EASTGROUP PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(13) COMPREHENSIVE INCOME

3 unchanged sentences

Three Months Ended

September 30, Nine Months Ended September 30,

2023 2022 2023 2022

(In thousands)

1 unchanged sentence

Balance at beginning of period $ 24,888 36,371

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

Other comprehensive income (loss) - interest rate swaps 5,894 ( 10,262 )

Balance at end of period $ 30,782 26,109

EASTGROUP PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(14) DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

5 unchanged sentences

The Company’s objective in using interest rate derivatives is to change variable interest rates to fixed interest rates by using interest rate swaps.

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 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.

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 term of the agreements without exchange of the underlying notional amount.

As of March 31, 2024, 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.

4 unchanged sentences

The Company calculates its derivative valuations using mid-market prices.

On June 30, 2023, LIBOR’s administrator, ICE Benchmark Administration (IBA) ceased publication of the different tenors of USD LIBOR.

This cessation follows an announcement by the IBA’s regulator, the Financial Conduct Authority, in March 2021 that LIBOR would no longer be a representative rate beyond this date.

In the U.S., the Alternative Reference Rates Committee, which was convened by the Federal Reserve Board and the Federal Reserve Bank of New York, recommended SOFR plus a recommended spread adjustment as its preferred alternative to USD-LIBOR.

As a result, all of the Company’s remaining borrowings which were LIBOR-based have been amended to modify the index from LIBOR to SOFR.

Concurrently, the related swaps were amended to reference SOFR rather than LIBOR.

The transition did not have a material impact on the Company’s consolidated financial statements.

EASTGROUP PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting .

ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts.

The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur.

The Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives.

Application of these expedients preserved the presentation of derivatives consistent with past presentation.

In December 2022, the FASB issued ASU 2022-06, Deferral of the Sunset Date of Topic 848 , which was issued to defer the sunset date of Topic 848 to December 31, 2024.

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 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

As of March 31, 2024 and December 31, 2023, the Company had the following outstanding interest rate derivatives that are designated as cash flow hedges of interest rate risk:

Notional Value of Interest Rate Derivatives March 31,

2024 December 31,

(In thousands)

6 unchanged sentences

Interest Rate Swap 100,000 100,000

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 September 30, 2023 and December 31, 2022.

EASTGROUP PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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 March 31, 2024 and December 31, 2023.

See Note 18 for additional information on the fair value of the Company’s interest rate swaps.

As of September 30, 2023

As of March 31, 2024

As of December 31, 2023

4 unchanged sentences

Interest rate swap liabilities Other liabilities 223 Other liabilities 2,478

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:

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 months ended March 31, 2024 and 2023:

Three Months Ended

September 30, Nine Months Ended September 30,

2023 2022 2023 2022

(In thousands)

1 unchanged sentence

Interest Rate Swaps:

Amount of income recognized in Other comprehensive income on derivatives

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

$ 10,640 ( 6,197 )

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

Amount of (income) reclassified from Accumulated other comprehensive income into

Interest expense

( 4,746 ) ( 4,065 )

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

EASTGROUP PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Derivative financial agreements expose the Company to credit risk in the event of non-performance by the counterparties under the terms of the interest rate hedge agreements.

1 unchanged sentence

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.

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.

As of March 31, 2024, 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.

8 unchanged sentences

The Company calculates diluted EPS by dividing Net Income Attributable to EastGroup Properties, Inc.

Common Stockholders by the weighted average number of common shares outstanding plus the dilutive effect of unvested restricted stock.

The dilutive effect of unvested restricted stock is determined using the treasury stock method.

Common Stockholders by the weighted average number of common shares outstanding plus the effect of any dilutive securities including shares issuable under forward equity sale agreements and unvested restricted stock using the treasury stock method.

Any anti-dilutive securities are excluded from the diluted EPS calculation.

EASTGROUP PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Reconciliation of the numerators and denominators in the basic and diluted EPS computations is as follows:

Three Months Ended

September 30, Nine Months Ended September 30,

2023 2022 2023 2022

(In thousands)

7 unchanged sentences

Weighted average shares outstanding — Basic 47,860 43,751

Unvested restricted stock 130 114 94 111

Effect of dilutive securities 101 72

Weighted average shares outstanding — Diluted 47,961 43,823

(16) EQUITY OFFERINGS

Underwriting commissions and offering costs incurred in connection with common stock offerings and at-the-market equity offering programs have been reflected as a reduction of Additional paid-in capital .

Under relevant accounting guidance, sales of common stock under forward equity sale agreements are not deemed to be liabilities, and furthermore, meet the derivatives and hedging guidance scope exception to be accounted for as equity instruments based on the following assessment:

(i) none of the agreements’ exercise contingencies were based on observable markets or indices besides those related to the market for our own stock price and operations;

and (ii) none of the settlement provisions precluded the agreements from being indexed to our own stock.

On October 25, 2023, we established an at-the-market common stock offering program pursuant to which we are able to sell, from time to time, shares of our common stock having an aggregate gross sales price of up to $ 750,000,000 (the “Current 2023 ATM Program”).

The Current 2023 ATM Program replaces our previous $ 750,000,000 ATM program, which was established on December 16, 2022, under which we had sold shares of our common stock having an aggregate gross sales price of $ 464,305,000 through October 25, 2023.

In connection with the Current 2023 ATM Program, we may sell shares of our common stock directly through sales agents or through certain financial institutions acting as forward purchasers whereby, at our discretion, the forward counterparties may borrow from third parties and subsequently sell shares of our common stock.

The use of a forward equity sale agreement allows us to lock in a share price on the sale of shares of our common stock but defer settling and receiving the proceeds from the sale of shares until a later date.

Additionally, the forward price that we expect to receive upon settlement of an agreement will be subject to adjustment for (i) a floating interest rate factor equal to a specified daily rate less a spread, (ii) the forward purchaser’s stock borrowing costs and (iii) scheduled dividends during the term of the agreement.

Direct Common Stock Issuance Activity

The following table presents the common stock issuance activity sold directly through sales agents pursuant to the Company's ATM programs:

Period Common Stock Issued (1)

Weighted Average Price Net Proceeds

(In shares) (Per share) (In thousands)

Three months ended March 31, 2024

Twelve months ended December 31, 2023

4,094,896 170.77 691,478

(1) Excludes shares of common stock sold on a forward basis as described in the following paragraphs.

EASTGROUP PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Forward Equity Offerings

During the three months ended March 31, 2024, EastGroup entered into forward equity sale agreements with certain financial institutions acting as forward purchasers under our Current 2023 ATM Program with respect to 286,671 shares of common stock with an initial weighted average forward price of $ 181.95 per share.

The Company did not receive any proceeds from the sale of common shares by the forward purchasers at the time it entered into forward equity sale agreements.

During the year ended December 31, 2023, EastGroup entered into forward equity sale agreements with respect to 406,041 shares of common stock with an initial weighted average forward price of $ 183.92 per share.

The Company did not receive any proceeds from the sale of common shares by the forward purchasers at the time we entered into forward equity sale agreements.

During the three months ended March 31, 2024, the Company settled outstanding forward equity sale agreements that were previously entered into under our Current 2023 ATM Program by issuing 272,342 shares of common stock in exchange for net proceeds of approximately $ 49,294,000 .

(17) STOCK-BASED COMPENSATION

5 unchanged sentences

For awards with a performance condition, compensation expense is recognized when the performance condition is considered probable of achievement.

EASTGROUP PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The total compensation expense for service and performance based awards is based upon the fair market value of the shares on the grant date.

18 unchanged sentences

The shares are expensed using the graded vesting attribution method which recognizes each separate vesting portion of the award as a separate award on a straight-line basis over the requisite service period (34% vests at the end of the one year performance period and 33% vests in each of the following two years).

Any shares issued pursuant to the individual annual performance goals are determined by the Committee in its discretion following the performance period.

Any shares issued pursuant to the individual annual performance goals are determined by the Committee in its discretion

EASTGROUP PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

following the performance period.

The Company begins recognizing the expense for the shares on the grant date and will expense on a straight-line basis over the remaining service period (34% vests at the end of the one year performance period and 33% vests in each of the following two years).

4 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 $ 2,593,000 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.

Stock-based compensation cost for employees was $ 3,976,000 for the three months ended March 31, 2024, of which $ 640,000 was capitalized as part of the Company’s development costs.

For the three months ended March 31, 2023, stock-based compensation cost for employees was $ 3,252,000 , of which $ 693,000 was capitalized as part of the Company’s development costs.

Stock-based compensation expense for directors was $ 171,000 for the three months ended March 31, 2024, and $ 225,000 for the same period in 2023.

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.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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 .

Of the shares that vested in the three months ended March 31, 2024, the Company withheld 33,381 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 three months ended March 31, 2024 was $ 8,891,000 .

As of the vesting dates, the aggregate fair value of shares that vested during the three months ended March 31, 2024 was $ 14,330,000 .

Award Activity:

Three Months Ended

September 30, 2023 Nine Months Ended September 30, 2023

March 31, 2024

Weighted Average Grant Date Fair Value

Shares Weighted Average Grant Date Fair Value

Unvested at beginning of period 84,564 $ 153.78

11 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 September 30, 2023 and December 31, 2022.

September 30, 2023 December 31, 2022

EASTGROUP PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments in accordance with ASC 820 at March 31, 2024 and December 31, 2023.

March 31, 2024 December 31, 2023

Carrying Amount (1)

5 unchanged sentences

Financial Liabilities:

Unsecured bank credit facilities - variable rate (2)

— — 170,000 169,684

Unsecured debt (2)

1,680,000 1,572,339 1,680,000 1,548,655

Secured debt (2)

— — 2,041 1,918

Interest rate swap liabilities 223 223 2,478 2,478

(1) Carrying amounts shown in the table are included on the Consolidated Balance Sheets under the indicated captions, except as explained in the notes below.

(1) Carrying amounts shown in the table are included on the Consolidated Balance Sheets under the indicated captions, except as explained below.

(2) Carrying amounts and fair values shown in the table exclude debt issuance costs (see Note 10 for additional information).

4 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 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, 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.

Unsecured bank credit facilities:

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:

The fair value of the Company’s unsecured debt is estimated by discounting expected cash flows at the rates currently offered to the Company for debt of the same remaining maturities, as advised by the Company’s bankers (Level 2 input), excluding the effects of debt issuance costs.

Secured debt:

The fair value of the Company’s secured debt is estimated by discounting expected cash flows at the rates currently offered to the Company for debt of the same remaining maturities, as advised by the Company’s bankers (Level 2 input), excluding the effects of debt issuance costs.

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

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

6 unchanged sentences

EastGroup has evaluated all ASUs recently released by the FASB through the date the financial statements were issued and determined that the following ASUs apply to the Company.

ASU 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting , applies to the Company.

Also, in December 2022, the FASB issued ASU 2022-06, Deferral of the Sunset Date of Topic 848 (“ASU 2022-06”) which was issued to defer the sunset date of Topic 848 to December 31, 2024.

ASU 2022-06 is effective immediately for all companies.

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.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

The primary provision of the ASU is to require disclosure of incremental segment information, such as significant segment expenses regularly provided to the Company’s chief decision makers, the title and position of such individuals, and the manner in which the individuals use such information in assessing segment performance and the allocation of resources.

EastGroup has one reportable segment – industrial properties, consistent with the Company’s manner of internal reporting, measurement of operating results and allocation of the Company’s resources.

Entities with a single reportable segment are required to provide the disclosures required by the amendment and existing segment disclosure requirements in accordance with

EASTGROUP PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

Amendments should be applied retrospectively to all prior periods presented in the financial statements.

EastGroup does not expect the adoption to have a material impact on its financial condition, results of operations or disclosures.

(22) SUBSEQUENT EVENTS

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.

Subsequent to March 31, 2024, EastGroup settled outstanding forward equity sale agreements under our Current 2023 ATM Program by issuing 133,699 shares of common stock in exchange for net proceeds of approximately $ 24,496,000 .

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