8-K
EASTGROUP PROPERTIES INC (EGP)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): July 27, 2021
EASTGROUP PROPERTIES, INC.
(Exact Name of Registrant as Specified in its Charter)
| Maryland | 1-07094 | 13-2711135 |
|---|---|---|
| (State or Other Jurisdiction<br>of Incorporation) | (Commission File Number) | (IRS Employer<br>Identification No.) |
400 W. Parkway Place, Suite 100, Ridgeland, MS 39157
(Address of Principal Executive Offices, including zip code)
(601) 354-3555
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common stock, $0.0001 par value per share | EGP | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
| Emerging growth company | ☐ |
|---|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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ITEM 2.02. Results of Operations and Financial Condition
On July 27, 2021, EastGroup Properties, Inc. (the "Company") furnished the following documents: (i) a press release relating to its results of operations for the quarter ended June 30, 2021 and related matters; and (ii) quarterly supplemental financial information for the fiscal quarter ended June 30, 2021. A copy of the press release as well as a copy of the supplemental financial information are made available on the Company's website and are attached hereto as Exhibits 99.1 and 99.2, respectively, and are incorporated by reference herein.
The information furnished in this Item 2.02 and in the attached Exhibits 99.1 and 99.2 is deemed to be "furnished" and shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that Section and shall not be deemed incorporated by reference into any filing under the Exchange Act or the Securities Act of 1933, as amended, regardless of any general incorporation language in such filing.
ITEM 9.01. Financial Statements and Exhibits
(d) Exhibits.
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release dated July 27, 2021. |
| 99.2 | Quarterly Supplemental Information for the Quarter Ended June 30, 2021. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: July 27, 2021
| EASTGROUP PROPERTIES, INC. |
|---|
| By: /s/ BRENT W. WOOD |
| Brent W. Wood<br>Executive Vice President, Chief Financial Officer and Treasurer |
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Document
| Exhibit 99.1 | ||
|---|---|---|
| Contact: | ||
| --- | --- | --- |
| Marshall Loeb, President and CEO | ||
| Brent Wood, CFO | ||
| EastGroup Properties Announces | (601) 354-3555 | |
| Second Quarter 2021 Results |
Second Quarter 2021 Results
•Net Income Attributable to Common Stockholders of $0.69 Per Diluted Share for Second Quarter 2021 Compared to $0.60 Per Diluted Share for Second Quarter 2020
•Funds from Operations of $1.47 Per Share for Second Quarter 2021 Compared to $1.33 Per Share for Second Quarter 2020, an Increase of 10.5%
•Same Property Net Operating Income for the Same Property Pool Excluding Income From Lease Terminations Increased 5.6% on a Cash Basis and 5.9% on a Straight-Line Basis for Second Quarter 2021 Compared to the Same Period in 2020
•98.3% Leased and 96.8% Occupied as of June 30, 2021; Average Occupancy of 96.8% for Second Quarter 2021
•Rental Rates on New and Renewal Leases Increased an Average of 31.2% on a Straight-Line Basis
•Acquired 79,000 Square Feet of Operating Properties for $9 Million and 264,000 Square Feet of Value-Add Properties for $20 Million
•Started Construction of Five Development Projects Containing 972,000 Square Feet with Projected Total Costs of $134 Million
•Transferred Six 100% Leased Development and Value-Add Projects (926,000 Square Feet) to the Real Estate Portfolio
•Development and Value-Add Program Consisted of 16 Projects in 12 Cities (3.0 Million Square Feet) at June 30, 2021 with a Projected Total Investment of $329 Million
•Declared 166th Consecutive Quarterly Cash Dividend: $0.79 Per Share
•Closed on $125 Million of Senior Unsecured Notes With a Fixed Interest Rate of 2.74%
•Expanded Borrowing Capacity of Unsecured Bank Credit Facilities from $395 Million to $475 Million with Full Capacity Available as of June 30, 2021; Added a Sustainability Metric to the Credit Agreement
•Issued 370,177 Shares of Common Stock Pursuant to the Company’s Continuous Common Equity Offering Program at an Average Price of $162.08 Per Share for Aggregate Net Proceeds of $59 Million
JACKSON, MISSISSIPPI, July 27, 2021 - EastGroup Properties, Inc. (NYSE: EGP) (the “Company”, “we”, “us” or “EastGroup”) announced today the results of its operations for the three and six months ended June 30, 2021.
Commenting on EastGroup’s performance, Marshall Loeb, CEO, stated, “Our team and portfolio continue to exceed our projections. Year-to-date we’re pleased with our performance, and given the demand we’re seeing, we don’t foresee a disruption to this momentum. In short, we like where we stand today, and longer term, we remain bullish on the growth prospects of our shallow bay last mile Sunbelt market portfolio.”
EARNINGS PER SHARE
Three Months Ended June 30, 2021
On a diluted per share basis, earnings per common share (“EPS”) were $0.69 for the three months ended June 30, 2021, compared to $0.60 for the same period of 2020. The Company’s property net operating income (“PNOI”)
400 W. Parkway Place, Suite 100, Ridgeland, MS 39157 | TEL: 601-354-3555 | FAX: 601-352-1441 | EastGroup.net
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increased by $7,379,000 ($0.18 per share) for the three months ended June 30, 2021, as compared to the same period of 2020. Depreciation and amortization expense increased by $2,779,000 ($0.07 per share) during the three months ended June 30, 2021, as compared to the same period of 2020.
Six Months Ended June 30, 2021
Diluted EPS for the six months ended June 30, 2021 were $1.37 compared to $1.20 for the same period of 2020. PNOI increased by $14,747,000 ($0.37 per share) for the six months ended June 30, 2021, as compared to the same period of 2020. Depreciation and amortization expense increased by $5,200,000 ($0.13 per share) during the six months ended June 30, 2021, as compared to the same period of 2020.
FUNDS FROM OPERATIONS AND PROPERTY NET OPERATING INCOME
Three Months Ended June 30, 2021
For the three months ended June 30, 2021, funds from operations attributable to common stockholders (“FFO”) were $1.47 per share compared to $1.33 per share during the same period of 2020, an increase of 10.5%.
PNOI increased by $7,379,000, or 11.5%, during the three months ended June 30, 2021, compared to the same period of 2020. PNOI increased $3,615,000 from same property operations (based on the same property pool), $3,417,000 from newly developed and value-add properties, and $642,000 from 2020 and 2021 acquisitions; PNOI decreased $310,000 from operating properties sold in 2020.
The same property pool PNOI Excluding Income from Lease Terminations increased 5.9% on a straight-line basis for the three months ended June 30, 2021, compared to the same period of 2020; on a cash basis (excluding straight-line rent adjustments and amortization of above/below market rent intangibles), Same PNOI increased 5.6%.
On a straight-line basis, rental rates on new and renewal leases (5.2% of total square footage) increased an average of 31.2% during the three months ended June 30, 2021.
Six Months Ended June 30, 2021
FFO for the six months ended June 30, 2021, was $2.92 per share compared to $2.65 per share during the same period of 2020, an increase of 10.2%.
PNOI increased by $14,747,000, or 11.6%, during the six months ended June 30, 2021, compared to the same period of 2020. PNOI increased $7,529,000 from same property operations (based on the same property pool), $6,474,000 from newly developed and value-add properties, and $1,285,000 from 2020 and 2021 acquisitions; PNOI decreased $544,000 from operating properties sold in 2020.
The same property pool PNOI Excluding Income from Lease Terminations increased 6.1% on a straight-line basis for the six months ended June 30, 2021, compared to the same period of 2020; on a cash basis (excluding straight-line rent adjustments and amortization of above/below market rent intangibles), Same PNOI increased 5.8%.
On a straight-line basis, rental rates on new and renewal leases (11.0% of total square footage) increased an average of 28.3% during the six months ended June 30, 2021.
The same property pool for the three and six months ended June 30, 2021 includes properties which were included in the operating portfolio for the entire period from January 1, 2020 through June 30, 2021; this pool is comprised of properties containing 41,305,000 square feet.
FFO, PNOI and Same PNOI are non-GAAP financial measures, which are defined under Definitions later in this release. Reconciliations of Net Income to PNOI and Same PNOI, and Net Income Attributable to EastGroup Properties, Inc. Common Stockholders to FFO are presented in the attached schedule “Reconciliations of GAAP to Non-GAAP Measures.”
400 W. Parkway Place, Suite 100, Ridgeland, MS 39157 | TEL: 601-354-3555 | FAX: 601-352-1441 | EastGroup.net
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As of July 26, 2021, the Company had collected 99.4% of its rental income charges for January through July 2021. Also as of July 26, 2021, the Company had collected 97.7% of amounts due through June 30, 2021 pursuant to deferral agreements with tenants.
ACQUISITIONS
In May, EastGroup purchased Access Point 2, a recently constructed 159,000 square foot building, for $10.7 million. The property, which was 29% leased as of July 26, 2021, is adjacent to the Company’s recently acquired Access Point 1 property in the I-385 South submarket in Greenville, South Carolina and is currently in the lease-up phase of the development and value-add portfolio.
During June, EastGroup acquired Southpark Distribution Center 2 in Phoenix, Arizona for $9.2 million. The 79,000 square foot distribution building is 100% occupied. This acquisition increased the Company’s ownership in the Chandler submarket of Phoenix to 834,000 square feet, all of which are currently 100% leased.
Also in June, EastGroup purchased Cherokee 75 Business Center 2, another recently constructed distribution facility which is 100% leased and contains 105,000 square feet, for $8.8 million. The property is located within the Northwest submarket of Atlanta, where the Company’s recently acquired Cherokee 75 1 and Northpoint 200 properties are located, and is currently in the lease-up phase of the development and value-add portfolio.
In June, the Company acquired 15.1 acres of development land in the I-20 West submarket of Atlanta for $289,000. This site is contiguous to the 11.4 acre parcel known as Blairs Bridge land acquired in December 2020. The two parcels will be combined, and EastGroup has increased the originally planned 120,000 square foot building to a 155,000 square foot building on the site.
DEVELOPMENT AND VALUE-ADD PROPERTIES
During the second quarter of 2021, EastGroup began construction of five new development projects in four different cities. The buildings will contain a total of 972,000 square feet and have projected total costs of $134.0 million.
The development projects started during the first six months of 2021 are detailed in the table below:
| Development Projects Started in 2021 | Location | Size | Anticipated Conversion Date | Projected Total Costs | |
|---|---|---|---|---|---|
| (Square feet) | (In thousands) | ||||
| Speed Distribution Center | San Diego, CA | 519,000 | 01/2022 | $ | 88,600 |
| Grand Oaks 75 3 | Tampa, FL | 136,000 | 07/2022 | 12,000 | |
| Horizon West 2 & 3 | Orlando, FL | 210,000 | 09/2022 | 18,200 | |
| CreekView 9 & 10 | Dallas, TX | 145,000 | 12/2022 | 17,200 | |
| Tri-County Crossing 5 | San Antonio, TX | 105,000 | 01/2023 | 10,300 | |
| SunCoast 12 | Fort Myers, FL | 79,000 | 02/2023 | 8,000 | |
| Tri-County Crossing 6 | San Antonio, TX | 124,000 | 05/2023 | 9,900 | |
| Total Development Projects Started | 1,318,000 | $ | 164,200 |
At June 30, 2021, EastGroup’s development and value-add program consisted of 16 projects (3,013,000 square feet) in 12 cities. The projects, which were collectively 53% leased as of July 26, 2021, have a projected total cost of $329.0 million, of which $134.0 million remained to be spent as of June 30, 2021.
During the second quarter of 2021, EastGroup transferred six projects to the real estate portfolio (at the earlier of 90% occupancy or one year after completion/value-add acquisition date). The projects, which are located in Austin, San Antonio, Houston, Phoenix, Miami and Fort Myers, contain 926,000 square feet and were 100% leased as of July 26, 2021.
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The development and value-add properties transferred to the real estate portfolio during the first six months of 2021 are detailed in the table below:
| Development and Value-Add Properties Transferred to the Real Estate Properties Portfolio in 2021 | Location | Size | Conversion Date | Cumulative Cost as of 6/30/21 | Percent Leased as of 7/26/21 | |
|---|---|---|---|---|---|---|
| (Square feet) | (In thousands) | |||||
| Gilbert Crossroads A & B | Phoenix, AZ | 140,000 | 01/2021 | $ | 16,969 | 100% |
| CreekView 7 & 8 | Dallas, TX | 137,000 | 03/2021 | 17,691 | 100% | |
| Hurricane Shoals 3 | Atlanta, GA | 101,000 | 03/2021 | 10,342 | 100% | |
| Northpoint 200 (1) | Atlanta, GA | 79,000 | 03/2021 | 6,881 | 100% | |
| Rancho Distribution Center (1) | Los Angeles, CA | 162,000 | 03/2021 | 27,375 | 100% | |
| World Houston 44 | Houston, TX | 134,000 | 05/2021 | 9,018 | 100% | |
| Gateway 4 | Miami, FL | 197,000 | 06/2021 | 23,366 | 100% | |
| Interstate Commons 2 (1) | Phoenix, AZ | 142,000 | 06/2021 | 12,299 | 100% | |
| Settlers Crossing 3 & 4 | Austin, TX | 173,000 | 06/2021 | 19,982 | 100% | |
| SunCoast 7 | Fort Myers, FL | 77,000 | 06/2021 | 7,659 | 100% | |
| Tri-County Crossing 3 & 4 | San Antonio, TX | 203,000 | 06/2021 | 15,715 | 100% | |
| Total Projects Transferred | 1,545,000 | $ | 167,297 | 100% | ||
| Projected Stabilized Yield (2) | 7.0% |
(1) These value-add projects were acquired by EastGroup.
(2) Weighted average yield based on estimated annual property net operating income on a straight-line basis at 100% occupancy divided by
projected total costs.
Subsequent to quarter-end, EastGroup began construction of Americas Ten 2 in El Paso, Texas, which will contain 168,000 square feet and has a projected total cost of $14.1 million.
DIVIDENDS
EastGroup declared a cash dividend of $0.79 per share in the second quarter of 2021. The second quarter dividend, which was paid on July 15, 2021, was the Company’s 166th consecutive quarterly cash distribution to shareholders. The Company has increased or maintained its dividend for 28 consecutive years and has increased it 25 years over that period, including increases in each of the last nine years. The annualized dividend rate of $3.16 per share yielded 1.8% on the closing stock price of $175.80 on July 26, 2021.
FINANCIAL STRENGTH AND FLEXIBILITY
EastGroup continues to maintain a strong and flexible balance sheet. Debt-to-total market capitalization was 16.6% at June 30, 2021. The Company’s interest and fixed charge coverage ratio was 8.21x for the second quarter of 2021 and 8.09x for the six months ended June 30, 2021. The Company’s ratio of debt to earnings before interest, taxes, depreciation and amortization for real estate (“EBITDAre”) was 4.90x and 4.94x for the three and six months ended June 30, 2021, respectively. EBITDAre is a non-GAAP financial measure defined under Definitions later in this release. A reconciliation of Net Income to EBITDAre is presented in the attached schedule “Reconciliations of GAAP to Non-GAAP Measures.”
During the second quarter, EastGroup issued and sold 370,177 shares of common stock under its continuous common equity offering program at an average price of $162.08 per share, providing aggregate net proceeds to the Company of approximately $59 million. During the six months ended June 30, 2021, EastGroup issued and sold 687,715 shares of common stock under its continuous common equity program at an average price of $152.68 per share, providing aggregate net proceeds to the Company of approximately $104 million.
400 W. Parkway Place, Suite 100, Ridgeland, MS 39157 | TEL: 601-354-3555 | FAX: 601-352-1441 | EastGroup.net
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As previously announced, the Company and a group of lenders agreed to terms on the private placement of $125 million of senior unsecured notes with a fixed interest rate of 2.74% and a 10-year term. The notes dated April 8, 2021, were issued and sold on June 10, 2021 and require interest-only payments. The notes will not be and have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.
Also in June, EastGroup amended and restated its unsecured revolving credit facilities which previously were scheduled to mature in July 2022 and now mature in July 2025. The capacity on the Company’s $350 million revolving credit facility was increased to $425 million with a group of nine banks. The capacity on EastGroup’s $45 million working cash line of credit facility was increased to $50 million. The interest rate was reduced from LIBOR plus 100 basis points to an initial rate of LIBOR plus 77.5 basis points, and the annual facility fee was reduced from 20 basis points to an initial rate of 15 basis points on both facilities. The margin and facility fee are subject to changes in the Company’s credit ratings. The facility also includes a sustainability-linked pricing component pursuant to which, if the Company meets certain sustainability performance targets, the applicable interest margin will be reduced by one basis point.
OUTLOOK FOR 2021
EPS for 2021 is now estimated to be in the range of $2.65 to $2.75. Estimated FFO per share attributable to common stockholders for 2021 is now estimated to be in the range of $5.83 to $5.93. The table below reconciles projected net income attributable to common stockholders to projected FFO. The Company is providing a projection of estimated net income attributable to common stockholders solely to satisfy the disclosure requirements of the U.S. Securities and Exchange Commission.
EastGroup’s projections are based on management’s current beliefs and assumptions about our business, the industry and the markets in which we operate; there are known and unknown risks and uncertainties associated with these projections. The Company assumes no obligation to update publicly any forward-looking statements, including its outlook for 2021, whether as a result of new information, future events or otherwise. Please refer to the “Forward-Looking Statements” disclosures included in this earnings release and “Risk Factors” disclosed in our annual and quarterly reports filed with the Securities and Exchange Commission for more information.
| Low Range | High Range | ||||
|---|---|---|---|---|---|
| Q3 2021 | Y/E 2021 | Q3 2021 | Y/E 2021 | ||
| (In thousands, except per share data) | |||||
| Net income attributable to common stockholders | $ | 26,366 | 106,827 | 27,986 | 110,857 |
| Depreciation and amortization | 32,611 | 128,239 | 32,611 | 128,239 | |
| Funds from operations attributable to common stockholders | $ | 58,977 | 235,066 | 60,597 | 239,096 |
| Diluted shares | 40,521 | 40,308 | 40,521 | 40,308 | |
| Per share data (diluted): | |||||
| Net income attributable to common stockholders | $ | 0.65 | 2.65 | 0.69 | 2.75 |
| Funds from operations attributable to common stockholders | 1.46 | 5.83 | 1.50 | 5.93 |
400 W. Parkway Place, Suite 100, Ridgeland, MS 39157 | TEL: 601-354-3555 | FAX: 601-352-1441 | EastGroup.net
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The following assumptions were used for the mid-point:
| Metrics | Revised Guidance for Year 2021 | April Earnings Release Guidance for Year 2021 | Actual for Year 2020 |
|---|---|---|---|
| FFO per share | $5.83 - $5.93 | $5.74 - $5.84 | $5.38 |
| FFO per share increase over prior year | 9.3% | 7.6% | 8.0% |
| Same PNOI growth: cash basis(1) | 4.7% - 5.7%(2) | 3.9% - 4.9%(2) | 3.2% |
| Average month-end occupancy | 96.3% - 97.3% | 96.1% - 97.1% | 96.7% |
| Lease termination fee income | $850,000 | $800,000 | $709,000 |
| Reserves for uncollectible rent<br><br>(No identified bad debts for remainder of year) | $950,000 | $1.1 million | $2.8 million |
| Development starts: | |||
| Square feet | 2.4 million | 2.1 million | 851,000 |
| Projected total investment | $275 million | $210 million | $91 million |
| Value-add property acquisitions (Projected total investment) | $35 million | $35 million | $29 million |
| Operating property acquisitions | $10 million | $10 million | $49 million |
| Operating property dispositions<br><br>(Potential gains on dispositions are not included in the projections) | $60 million | $60 million | $21 million |
| Unsecured debt closing in period | $250 million at 2.58% weighted<br>average interest rate | $250 million at 2.58% weighted<br>average interest rate | $275 million at 2.56% weighted average interest rate |
| Common stock issuances | $185 million | $140 million | $94 million |
| General and administrative expense | $17.1 million | $17.8 million | $14.4 million |
(1) Excludes straight-line rent adjustments, amortization of market rent intangibles for acquired leases and income from lease terminations.
(2) Includes properties which have been in the operating portfolio since 1/1/20 and are projected to be in the operating portfolio through 12/31/21; includes 40,832,000 square feet.
DEFINITIONS
The Company’s chief decision makers use two primary measures of operating results in making decisions: (1) funds from operations attributable to common stockholders (“FFO”) and (2) property net operating income (“PNOI”), as defined below.
FFO is computed in accordance with standards established by the National Association of Real Estate Investment Trusts, Inc. (“Nareit”). Nareit’s guidance allows preparers an option as it pertains to whether gains or losses on sale, or impairment charges, on real estate assets incidental to a real estate investment trust’s (“REIT’s”) business are excluded from the calculation of FFO. EastGroup has made the election to exclude activity related to such assets that are incidental to our business. FFO is calculated as net income (loss) attributable to common stockholders computed in accordance with U.S. generally accepted accounting principles (“GAAP”), excluding gains and losses from sales of real estate property (including other assets incidental to the Company’s business) and impairment losses, adjusted for real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures.
PNOI is defined as Income from real estate operations less Expenses from real estate operations (including market-based internal management fee expense) plus the Company’s share of income and property operating expenses from its less-than-wholly-owned real estate investments. EastGroup sometimes refers to PNOI from Same Properties as “Same PNOI” in this press release and the accompanying reconciliation; the Company also presents Same PNOI Excluding Income from Lease Terminations. The Company presents Same PNOI and Same PNOI Excluding
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Income from Lease Terminations as a property-level supplemental measure of performance used to evaluate the performance of the Company’s investments in real estate assets and its operating results on a same property basis. The Company believes it is useful to evaluate Same PNOI Excluding Income from Lease Terminations on both a straight-line and cash basis. The straight-line basis is calculated by averaging the customers’ rent payments over the lives of the leases; GAAP requires the recognition of rental income on a straight-line basis. The cash basis excludes adjustments for straight-line rent and amortization of market rent intangibles for acquired leases; cash basis is an indicator of the rents charged to customers by the Company during the periods presented and is useful in analyzing the embedded rent growth in the Company’s portfolio. “Same Properties” is defined as operating properties owned during the entire current period and prior year reporting period. Operating properties are stabilized real estate properties (land including building and improvements) that make up the Company’s operating portfolio. Properties developed or acquired are excluded from the same property pool until held in the operating portfolio for both the current and prior year reporting periods. Properties sold during the current or prior year reporting periods are also excluded.
FFO and PNOI are supplemental industry reporting measurements used to evaluate the performance of the Company’s investments in real estate assets and its operating results. The Company believes that the exclusion of depreciation and amortization in the industry’s calculations of PNOI and FFO provides supplemental indicators of the properties’ performance since real estate values have historically risen or fallen with market conditions. PNOI and FFO as calculated by the Company may not be comparable to similarly titled but differently calculated measures for other REITs. Investors should be aware that items excluded from or added back to FFO are significant components in understanding and assessing the Company’s financial performance.
The Company’s chief decision makers also use Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (“EBITDAre”) in making decisions. EBITDAre is computed in accordance with standards established by Nareit and defined as Net Income, adjusted for gains and losses from sales of real estate investments, non-operating real estate and other assets incidental to the Company’s business, interest expense, income tax expense, depreciation and amortization. EBITDAre is a non-GAAP financial measure used to measure the Company’s operating performance and its ability to meet interest payment obligations and pay quarterly stock dividends on an unleveraged basis.
EastGroup’s chief decision makers also use its Debt-to-EBITDAre ratio, a non-GAAP financial measure calculated by dividing the Company’s debt by its EBITDAre, in analyzing the financial condition and operating performance of the Company relative to its leverage.
The Company’s interest and fixed charge coverage ratio is a non-GAAP financial measure calculated by dividing the Company’s EBITDAre by its interest expense. This ratio provides a basis for analysis of the Company’s leverage, operating performance and its ability to service the interest payments due on its debt.
CONFERENCE CALL
EastGroup will host a conference call and webcast to discuss the results of its second quarter and review the Company’s current operations on Wednesday, July 28, 2021, at 11:00 a.m. Eastern Time. A live broadcast of the conference call is available by dialing 1-877-240-5772 (conference ID: EastGroup) or by webcast through a link on the Company’s website at www.eastgroup.net. If you are unable to listen to the live conference call, a telephone and webcast replay will be available until Wednesday, August 4, 2021. The telephone replay can be accessed by dialing 1-877-344-7529 (access code 10158233), and the webcast replay can be accessed through a link on the Company’s website at www.eastgroup.net.
SUPPLEMENTAL INFORMATION
Supplemental financial information is available under Quarterly Results in the Investor Relations section of the Company’s website at www.eastgroup.net or upon request by calling the Company at 601-354-3555.
400 W. Parkway Place, Suite 100, Ridgeland, MS 39157 | TEL: 601-354-3555 | FAX: 601-352-1441 | EastGroup.net
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COMPANY INFORMATION
EastGroup Properties, Inc. (NYSE: EGP), an S&P MidCap 400 company, is a self-administered equity real estate investment trust focused on the development, acquisition and operation of industrial properties in major Sunbelt markets throughout the United States with an emphasis in the states of Florida, Texas, Arizona, California and North Carolina. The Company’s goal is to maximize shareholder value by being a leading provider in its markets of functional, flexible and quality business distribution space for location sensitive customers (primarily in the 15,000 to 70,000 square foot range). The Company’s strategy for growth is based on ownership of premier distribution facilities generally clustered near major transportation features in supply-constrained submarkets. EastGroup’s portfolio, including development projects and value-add acquisitions in lease-up and under construction, currently includes approximately 48.7 million square feet. EastGroup Properties, Inc. press releases are available on the Company’s website at www.eastgroup.net.
FORWARD-LOOKING STATEMENTS
The statements and certain other information contained in this press release, which can be identified by the use of forward-looking terminology such as “may,” “will,” “seek,” “expects,” “anticipates,” “believes,” “targets,” “intends,” “should,” “estimates,” “could,” “continue,” “assume,” “projects” or “plans” and variations of such words or similar expressions or the negative of such words, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbors created thereby. These forward-looking statements reflect the Company’s current views about its plans, intentions, expectations, strategies and prospects, which are based on the information currently available to the Company and on assumptions it has made. Although the Company believes that its plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, the Company can give no assurance that such plans, intentions, expectations or strategies will be attained or achieved. Furthermore, these forward-looking statements should be considered as subject to the many risks and uncertainties that exist in the Company’s operations and business environment. Such risks and uncertainties could cause actual results to differ materially from those projected. These uncertainties include, but are not limited to:
•international, national, regional and local economic conditions;
•the duration and extent of the impact of the coronavirus (“COVID-19”) pandemic, including as a result of any COVID-19 variants or as affected by the rate and efficacy of COVID-19 vaccines, and any related orders or other formal recommendations for social distancing on our business operations or the business operations of our tenants (including their ability to timely make rent payments) and the economy generally;
•disruption in supply and delivery chains;
•the general level of interest rates and ability to raise equity capital on attractive terms;
•financing risks, including the risks that our cash flows from operations may be insufficient to meet required payments of principal and interest, and we may be unable to refinance our existing debt upon maturity or obtain new financing on attractive terms or at all;
•the competitive environment in which the Company operates;
•fluctuations of occupancy or rental rates;
•potential defaults (including bankruptcies or insolvency) on or non-renewal of leases by tenants, or our ability to lease space at current or anticipated rents, particularly in light of the significant uncertainty as to when and the conditions under which current or potential tenants will be able to operate physical locations in the future;
•potential changes in the law or governmental regulations and interpretations of those laws and regulations, including changes in real estate laws or REIT or corporate income tax laws, and potential increases in real property tax rates;
•our ability to maintain our qualification as a REIT;
•acquisition and development risks, including failure of such acquisitions and development projects to perform in accordance with projections;
400 W. Parkway Place, Suite 100, Ridgeland, MS 39157 | TEL: 601-354-3555 | FAX: 601-352-1441 | EastGroup.net
Page 8
•natural disasters such as fires, floods, tornadoes, hurricanes and earthquakes;
•pandemics, epidemics or other public health emergencies, such as the outbreak of COVID-19;
•the terms of governmental regulations that affect us and interpretations of those regulations, including the costs of compliance with those regulations, changes in real estate and zoning laws and increases in real property tax rates;
•credit risk in the event of non-performance by the counterparties to our interest rate swaps;
•lack of or insufficient amounts of insurance;
•litigation, including costs associated with prosecuting or defending claims and any adverse outcomes;
•our ability to retain key personnel;
•the consequences of future terrorist attacks or civil unrest; and
•environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of properties presently owned or previously owned by us.
All forward-looking statements should be read in light of the risks identified in Part I, Item 1A. Risk Factors within the Company’s most recent Annual Report on Form 10-K and in its subsequent Quarterly Reports on Form 10-Q.
The Company assumes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
400 W. Parkway Place, Suite 100, Ridgeland, MS 39157 | TEL: 601-354-3555 | FAX: 601-352-1441 | EastGroup.net
Page 9
| EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES | |||||
|---|---|---|---|---|---|
| CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME | |||||
| (IN THOUSANDS, EXCEPT PER SHARE DATA) | |||||
| (UNAUDITED) | |||||
| Three Months Ended | Six Months Ended | ||||
| June 30, | June 30, | ||||
| 2021 | 2020 | 2021 | 2020 | ||
| REVENUES | |||||
| Income from real estate operations | $ | 99,562 | 89,500 | 197,479 | 178,077 |
| Other revenue | 13 | 215 | 27 | 266 | |
| 99,575 | 89,715 | 197,506 | 178,343 | ||
| EXPENSES | |||||
| Expenses from real estate operations | 28,057 | 25,351 | 55,877 | 51,180 | |
| Depreciation and amortization | 31,349 | 28,570 | 61,662 | 56,462 | |
| General and administrative | 4,486 | 4,025 | 8,522 | 7,306 | |
| Indirect leasing costs | 134 | 166 | 464 | 274 | |
| 64,026 | 58,112 | 126,525 | 115,222 | ||
| OTHER INCOME (EXPENSE) | |||||
| Interest expense | (8,181) | (8,346) | (16,457) | (16,803) | |
| Other | 210 | 230 | 411 | 467 | |
| NET INCOME | 27,578 | 23,487 | 54,935 | 46,785 | |
| Net income attributable to noncontrolling interest in joint ventures | (20) | (3) | (38) | (4) | |
| NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS | 27,558 | 23,484 | 54,897 | 46,781 | |
| Other comprehensive income (loss) - interest rate swaps | (1,263) | (1,824) | 6,951 | (17,614) | |
| TOTAL COMPREHENSIVE INCOME | $ | 26,295 | 21,660 | 61,848 | 29,167 |
| BASIC PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS | |||||
| Net income attributable to common stockholders | $ | 0.69 | 0.60 | 1.38 | 1.20 |
| Weighted average shares outstanding | 40,068 | 39,007 | 39,871 | 38,945 | |
| DILUTED PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS | |||||
| Net income attributable to common stockholders | $ | 0.69 | 0.60 | 1.37 | 1.20 |
| Weighted average shares outstanding | 40,165 | 39,077 | 39,965 | 39,019 | |
| EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES | |||||
| --- | --- | --- | --- | --- | |
| RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES | |||||
| (IN THOUSANDS, EXCEPT PER SHARE DATA) | |||||
| (UNAUDITED) | |||||
| Six Months Ended | |||||
| June 30, | |||||
| 2020 | 2021 | 2020 | |||
| NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS | 27,558 | 23,484 | 54,897 | 46,781 | |
| Depreciation and amortization | 28,570 | 61,662 | 56,462 | ||
| Company’s share of depreciation from unconsolidated investment | 34 | 68 | 69 | ||
| Depreciation and amortization from noncontrolling interest | (37) | — | (79) | ||
| FUNDS FROM OPERATIONS (“FFO”) ATTRIBUTABLE TO COMMON STOCKHOLDERS | 52,051 | 116,627 | 103,233 | ||
| Gain on casualties and involuntary conversion | (161) | — | (161) | ||
| FFO EXCLUDING GAIN ON CASUALTIES AND INVOLUNTARY CONVERSION | 58,941 | 51,890 | 116,627 | 103,072 | |
| NET INCOME | 27,578 | 23,487 | 54,935 | 46,785 | |
| Interest expense (1) | 8,346 | 16,457 | 16,803 | ||
| Depreciation and amortization | 28,570 | 61,662 | 56,462 | ||
| Company’s share of depreciation from unconsolidated investment | 34 | 68 | 69 | ||
| EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (“EBITDA”) | 60,437 | 133,122 | 120,119 | ||
| Gain on sales of real estate investments and non-operating real estate | — | — | — | ||
| EBITDA FOR REAL ESTATE (“EBITDAre”) | 67,142 | 60,437 | 133,122 | 120,119 | |
| Debt | 1,316,129 | 1,232,564 | 1,316,129 | 1,232,564 | |
| Debt-to-EBITDAre ratio | 5.10 | 4.94 | 5.13 | ||
| DILUTED PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS | |||||
| Net income attributable to common stockholders | 0.69 | 0.60 | 1.37 | 1.20 | |
| FFO attributable to common stockholders | 1.47 | 1.33 | 2.92 | 2.65 | |
| FFO Excluding Gain on Casualties and Involuntary Conversion attributable to common stockholders | 1.47 | 1.33 | 2.92 | 2.64 | |
| Weighted average shares outstanding for EPS and FFO purposes | 39,077 | 39,965 | 39,019 | ||
| (1) Net of capitalized interest of 2,157 and 2,623 for the three months ended June 30, 2021 and 2020, respectively; and 4,394 and 5,184 for the six months ended June 30, 2021 and 2020, respectively. |
All values are in US Dollars.
| EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES | ||||
|---|---|---|---|---|
| RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES (Continued) | ||||
| (IN THOUSANDS) | ||||
| (UNAUDITED) | ||||
| Six Months Ended | ||||
| June 30, | ||||
| 2020 | 2021 | 2020 | ||
| NET INCOME | 27,578 | 23,487 | 54,935 | 46,785 |
| Interest income | (21) | (4) | (50) | |
| Other revenue | (215) | (27) | (266) | |
| Indirect leasing costs | 166 | 464 | 274 | |
| Depreciation and amortization | 28,570 | 61,662 | 56,462 | |
| Company’s share of depreciation from unconsolidated investment | 34 | 68 | 69 | |
| Interest expense (1) | 8,346 | 16,457 | 16,803 | |
| General and administrative expense (2) | 4,025 | 8,522 | 7,306 | |
| Noncontrolling interest in PNOI of consolidated joint ventures | (41) | (31) | (84) | |
| PROPERTY NET OPERATING INCOME (“PNOI”) | 64,351 | 142,046 | 127,299 | |
| PNOI from 2020 and 2021 acquisitions | (130) | (1,456) | (171) | |
| PNOI from 2020 and 2021 development and value-add properties | (2,832) | (11,317) | (4,843) | |
| PNOI from 2020 operating property dispositions | (310) | — | (544) | |
| Other PNOI | 57 | 101 | 104 | |
| SAME PNOI (Straight-Line Basis) | 61,136 | 129,374 | 121,845 | |
| Net lease termination fee income from same properties | (25) | (594) | (469) | |
| SAME PNOI EXCLUDING INCOME FROM LEASE TERMINATIONS (Straight-Line Basis) | 61,111 | 128,780 | 121,376 | |
| Straight-line rent adjustments for same properties | (147) | (1,268) | (468) | |
| Acquired leases - market rent adjustment amortization for same properties | (363) | (425) | (735) | |
| SAME PNOI EXCLUDING INCOME FROM LEASE TERMINATIONS (Cash Basis) | 64,019 | 60,601 | 127,087 | 120,173 |
| (1) Net of capitalized interest of 2,157 and 2,623 for the three months ended June 30, 2021 and 2020, respectively; and 4,394 and 5,184 for the six months ended June 30, 2021 and 2020, respectively. | ||||
| (2) Net of capitalized development costs of 1,591 and 1,761 for the three months ended June 30, 2021 and 2020, respectively; and 3,280 and 3,605 for the six months ended June 30, 2021 and 2020, respectively. |
All values are in US Dollars.
supplementalinformation_
2021 SECOND QUARTER Conference Call 877-240-5772 | ID – EastGroup July 28, 2021 11:00 a.m. Eastern Time webcast available at EastGroup.net Supplemental Information 400 W. Parkway Place, Suite 100, Ridgeland, MS 39157 | TEL: 601-354-3555 | FAX: 601-352-1441 | EastGroup.net June 30, 2021
Page 2 of 24 Table of Contents Financial Information: Consolidated Balance Sheets ..................................................................................... 3 Consolidated Statements of Income and Comprehensive Income ............................ 4 Reconciliations of GAAP to Non-GAAP Measures .................................................. 5 Consolidated Statements of Cash Flows.................................................................... 7 Same Property Portfolio Analysis ............................................................................. 8 Additional Financial Information .............................................................................. 9 Financial Statistics ..................................................................................................... 10 Capital Deployment: Development and Value-Add Properties Summary .................................................. 11 Development and Value-Add Properties Transferred to Real Estate Properties ....... 12 Acquisitions and Dispositions ................................................................................... 13 Real Estate Improvements and Leasing Costs ........................................................... 14 Property Information: Leasing Statistics and Occupancy Summary ............................................................. 15 Core Market Operating Statistics............................................................................... 16 Lease Expiration Summary ........................................................................................ 17 Top 10 Customers by Annualized Base Rent ............................................................ 18 Capitalization: Debt and Equity Market Capitalization ..................................................................... 19 Continuous Common Equity Program....................................................................... 20 Debt-to-EBITDAre Ratios ......................................................................................... 21 Other Information: Outlook for 2021 ........................................................................................................ 22 Glossary of REIT Terms ............................................................................................ 23 FORWARD-LOOKING STATEMENTS The statements and certain other information contained herein, which can be identified by the use of forward-looking terminology such as “may,” “will,” “seek,” “expects,” “anticipates,” “believes,” “targets,” “intends,” “should,” “estimates,” “could,” “continue,” “assume,” “projects” or “plans” and variations of such words or similar expressions or the negative of such words, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbors created thereby. These forward-looking statements reflect the Company’s current views about its plans, intentions, expectations, strategies and prospects, which are based on the information currently available to the Company and on assumptions it has made. Although the Company believes that its plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, the Company can give no assurance that such plans, intentions, expectations or strategies will be attained or achieved. Furthermore, these forward-looking statements should be considered as subject to the many risks and uncertainties that exist in the Company’s operations and business environment. Such risks and uncertainties could cause actual results to differ materially from those projected. These uncertainties include, but are not limited to: international, national, regional and local economic conditions; the duration and extent of the impact of the coronavirus (“COVID-19”) pandemic, including as a result of any COVID-19 variants or as affected by the rate and efficacy of COVID-19 vaccines, and any related orders or other formal recommendations for social distancing on our business operations or the business operations of our tenants (including their ability to timely make rent payments) and the economy generally; disruption in supply and delivery chains; the general level of interest rates and ability to raise equity capital on attractive terms; financing risks, including the risks that our cash flows from operations may be insufficient to meet required payments of principal and interest, and we may be unable to refinance our existing debt upon maturity or obtain new financing on attractive terms or at all; the competitive environment in which the Company operates; fluctuations of occupancy or rental rates; potential defaults (including bankruptcies or insolvency) on or non-renewal of leases by tenants, or our ability to lease space at current or anticipated rents, particularly in light of the significant uncertainty as to when and the conditions under which current or potential tenants will be able to operate physical locations in the future; potential changes in the law or governmental regulations and interpretations of those laws and regulations, including changes in real estate laws or REIT or corporate income tax laws, and potential increases in real property tax rates; our ability to maintain our qualification as a REIT; acquisition and development risks, including failure of such acquisitions and development projects to perform in accordance with projections; natural disasters such as fires, floods, tornadoes, hurricanes and earthquakes; pandemics, epidemics or other public health emergencies, such as the outbreak of COVID-19; the terms of governmental regulations that affect us and interpretations of those regulations, including the costs of compliance with those regulations, changes in real estate and zoning laws and increases in real property tax rates; credit risk in the event of non-performance by the counterparties to our interest rate swaps; lack of or insufficient amounts of insurance; litigation, including costs associated with prosecuting or defending claims and any adverse outcomes; our ability to retain key personnel; the consequences of future terrorist attacks or civil unrest; and environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of properties presently owned or previously owned by us. All forward-looking statements should be read in light of the risks identified in Part I, Item 1A. Risk Factors within the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, and in its subsequent Quarterly Reports on Form 10-Q. The Company assumes no obligation to update publicly any forward-looking statements, including its Outlook for 2021, whether as a result of new information, future events or otherwise.
Page 3 of 24 Consolidated Balance Sheets (In thousands, except share and per share data) (Unaudited) June 30, 2021 December 31, 2020 ASSETS Real estate properties 3,336,219$ 3,159,497 Development and value-add properties 320,005 359,588 3,656,224 3,519,085 Less accumulated depreciation (1,004,428) (955,328) 2,651,796 2,563,757 Unconsolidated investment 7,353 7,446 Cash 38,565 21 Other assets 157,908 149,579 TOTAL ASSETS 2,855,622$ 2,720,803 LIABILITIES AND EQUITY LIABILITIES Unsecured bank credit facilities, net of debt issuance costs (2,437)$ 124,194 Unsecured debt, net of debt issuance costs 1,282,438 1,107,708 Secured debt, net of debt issuance costs 36,128 78,993 Accounts payable and accrued expenses 101,912 69,573 Other liabilities 64,250 69,817 Total Liabilities 1,482,291 1,450,285 EQUITY Stockholders' Equity: Common shares; $0.0001 par value; 70,000,000 shares authorized; 40,396,180 shares issued and outstanding at June 30, 2021 and 39,676,828 at December 31, 2020 4 4 Excess shares; $0.0001 par value; 30,000,000 shares authorized; no shares issued - - Additional paid-in capital 1,714,661 1,610,053 Distributions in excess of earnings (338,423) (329,667) Accumulated other comprehensive loss (3,801) (10,752) Total Stockholders' Equity 1,372,441 1,269,638 Noncontrolling interest in joint ventures 890 880 Total Equity 1,373,331 1,270,518 TOTAL LIABILITIES AND EQUITY 2,855,622$ 2,720,803
Page 4 of 24 Consolidated Statements of Income and Comprehensive Income (In thousands, except per share data) (Unaudited) 2021 2020 2021 2020 REVENUES Income from real estate operations 99,562$ 89,500 197,479 178,077 Other revenue 13 215 27 266 99,575 89,715 197,506 178,343 EXPENSES Expenses from real estate operations 28,057 25,351 55,877 51,180 Depreciation and amortization 31,349 28,570 61,662 56,462 General and administrative 4,486 4,025 8,522 7,306 Indirect leasing costs 134 166 464 274 64,026 58,112 126,525 115,222 OTHER INCOME (EXPENSE) Interest expense (8,181) (8,346) (16,457) (16,803) Other 210 230 411 467 NET INCOME 27,578 23,487 54,935 46,785 Net income attributable to noncontrolling interest in joint ventures (20) (3) (38) (4) NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS 27,558 23,484 54,897 46,781 Other comprehensive income (loss) - interest rate swaps (1,263) (1,824) 6,951 (17,614) TOTAL COMPREHENSIVE INCOME 26,295$ 21,660 61,848 29,167 BASIC PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS Net income attributable to common stockholders 0.69$ 0.60 1.38 1.20 Weighted average shares outstanding 40,068 39,007 39,871 38,945 DILUTED PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS Net income attributable to common stockholders 0.69$ 0.60 1.37 1.20 Weighted average shares outstanding 40,165 39,077 39,965 39,019 Six Months Ended June 30,June 30, Three Months Ended
Page 5 of 24 Reconciliations of GAAP to Non-GAAP Measures (In thousands, except per share data) (Unaudited) 2021 2020 2021 2020 NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS 27,558$ 23,484 54,897 46,781 Depreciation and amortization 31,349 28,570 61,662 56,462 Company's share of depreciation from unconsolidated investment 34 34 68 69 Depreciation and amortization from noncontrolling interest - (37) - (79) FUNDS FROM OPERATIONS ("FFO") ATTRIBUTABLE TO COMMON STOCKHOLDERS 58,941 52,051 116,627 103,233 Gain on casualties and involuntary conversion - (161) - (161) FFO EXCLUDING GAIN ON CASUALTIES AND INVOLUNTARY CONVERSION 58,941$ 51,890 116,627 103,072 NET INCOME 27,578$ 23,487 54,935 46,785 Interest expense (1) 8,181 8,346 16,457 16,803 Depreciation and amortization 31,349 28,570 61,662 56,462 Company's share of depreciation from unconsolidated investment 34 34 68 69 EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION ("EBITDA") 67,142 60,437 133,122 120,119 Gain on sales of real estate investments and non-operating real estate - - - - EBITDA FOR REAL ESTATE ("EBITDAre") 67,142$ 60,437 133,122 120,119 DILUTED PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS Net income attributable to common stockholders 0.69$ 0.60 1.37 1.20 FFO attributable to common stockholders 1.47$ 1.33 2.92 2.65 FFO Excluding Gain on Casualties and Involuntary Conversion attributable to common stockholders 1.47$ 1.33 2.92 2.64 Weighted average shares outstanding for EPS and FFO purposes 40,165 39,077 39,965 39,019 June 30, (1) Net of capitalized interest of $2,157 and $2,623 for the three months ended June 30, 2021 and 2020, respectively; and $4,394 and $5,184 for the six months ended June 30, 2021 and 2020, respectively. Three Months Ended June 30, Six Months Ended
Page 6 of 24 Reconciliations of GAAP to Non-GAAP Measures (Continued) (In thousands) (Unaudited) 2021 2020 2021 2020 NET INCOME 27,578$ 23,487 54,935 46,785 Interest income (3) (21) (4) (50) Other revenue (13) (215) (27) (266) Indirect leasing costs 134 166 464 274 Depreciation and amortization 31,349 28,570 61,662 56,462 Company's share of depreciation from unconsolidated investment 34 34 68 69 Interest expense (1) 8,181 8,346 16,457 16,803 General and administrative expense (2) 4,486 4,025 8,522 7,306 Noncontrolling interest in PNOI of consolidated joint ventures (16) (41) (31) (84) PROPERTY NET OPERATING INCOME ("PNOI") 71,730 64,351 142,046 127,299 PNOI from 2020 and 2021 acquisitions (772) (130) (1,456) (171) PNOI from 2020 and 2021 development and value-add properties (6,249) (2,832) (11,317) (4,843) PNOI from 2020 operating property dispositions - (310) - (544) Other PNOI 42 57 101 104 SAME PNOI (Straight-Line Basis) 64,751 61,136 129,374 121,845 Net lease termination fee income from same properties (18) (25) (594) (469) SAME PNOI EXCLUDING INCOME FROM LEASE TERMINATIONS (Straight-Line Basis) 64,733 61,111 128,780 121,376 Straight-line rent adjustments for same properties (477) (147) (1,268) (468) Acquired leases — market rent adjustment amortization for same properties (237) (363) (425) (735) SAME PNOI EXCLUDING INCOME FROM LEASE TERMINATIONS (Cash Basis) 64,019$ 60,601 127,087 120,173 Six Months Ended June 30, June 30, (1) Net of capitalized interest of $2,157 and $2,623 for the three months ended June 30, 2021 and 2020, respectively; and $4,394 and $5,184 for the six months ended June 30, 2021 and 2020, respectively. (2) Net of capitalized development costs of $1,591 and $1,761 for the three months ended June 30, 2021 and 2020, respectively; and $3,280 and $3,605 for the six months ended June 30, 2021 and 2020, respectively. Three Months Ended
Page 7 of 24 Consolidated Statements of Cash Flows (In thousands) (Unaudited) 2021 2020 OPERATING ACTIVITIES Net income 54,935$ 46,785 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 61,662 56,462 Stock-based compensation expense 4,011 3,421 Gain on casualties and involuntary conversion on real estate assets - (161) Changes in operating assets and liabilities: Accrued income and other assets (3,430) 570 Accounts payable, accrued expenses and prepaid rent 19,783 8,460 Other 714 1,145 NET CASH PROVIDED BY OPERATING ACTIVITIES 137,675 116,682 INVESTING ACTIVITIES Development and value-add properties (111,378) (104,863) Purchases of real estate (9,177) (6,231) Real estate improvements (18,094) (18,167) Leasing commissions (16,813) (8,075) Proceeds from casualties and involuntary conversion on real estate assets - 242 Repayments on mortgage loans receivable - 14 Changes in accrued development costs 13,126 (181) Changes in other assets and other liabilities 526 (9,400) NET CASH USED IN INVESTING ACTIVITIES (141,810) (146,661) FINANCING ACTIVITIES Proceeds from unsecured bank credit facilities 195,137 318,115 Repayments on unsecured bank credit facilities (320,137) (363,787) Proceeds from unsecured debt 175,000 100,000 Repayments on secured debt (42,924) (4,465) Debt issuance costs (2,475) (584) Distributions paid to stockholders (not including dividends accrued) (63,403) (59,157) Proceeds from common stock offerings 105,745 44,381 Other (4,264) (4,644) NET CASH PROVIDED BY FINANCING ACTIVITIES 42,679 29,859 INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 38,544 (120) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 21 224 CASH AND CASH EQUIVALENTS AT END OF PERIOD 38,565$ 104 SUPPLEMENTAL CASH FLOW INFORMATION Cash paid for interest, net of amounts capitalized of $4,394 and $5,184 for 2021 and 2020, respectively 15,760$ 16,161 Cash paid for operating lease liabilities 751 719 NON-CASH OPERATING ACTIVITY Operating lease liabilities arising from obtaining right of use assets 348$ 495 Six Months Ended June 30,
Page 8 of 24 Same Property Portfolio Analysis (In thousands) (Unaudited) 2021 2020 % Change 2021 2020 % Change Same Property Portfolio (1) Square feet as of period end 41,305 41,305 41,305 41,305 Average occupancy 97.3% 96.8% 0.5% 97.4% 96.8% 0.6% Occupancy as of period end 97.4% 97.1% 0.3% 97.4% 97.1% 0.3% Same Property Portfolio Analysis (Cash Basis) (1) Income from real estate operations 89,562$ 84,795 5.6% 178,916$ 169,764 5.4% Less cash received for lease terminations (18) (25) (691) (481) Income excluding lease termination income 89,544 84,770 5.6% 178,225 169,283 5.3% Expenses from real estate operations (25,525) (24,169) 5.6% (51,138) (49,110) 4.1% PNOI excluding income from lease terminations 64,019$ 60,601 5.6% 127,087$ 120,173 5.8% Same Property Portfolio Analysis (Straight-Line Basis) (1) Income from real estate operations 90,276$ 85,305 5.8% 180,512$ 170,955 5.6% Less cash received for lease terminations (18) (25) (691) (481) Add straight-line rent write-offs for lease terminations - - 97 12 Income excluding lease termination income 90,258 85,280 5.8% 179,918 170,486 5.5% Expenses from real estate operations (25,525) (24,169) 5.6% (51,138) (49,110) 4.1% PNOI excluding income from lease terminations 64,733$ 61,111 5.9% 128,780$ 121,376 6.1% (1) Includes properties which were included in the operating portfolio for the entire period of 1/1/20 through 6/30/21. June 30, June 30, Three Months Ended Six Months Ended
Page 9 of 24 Additional Financial Information (In thousands) (Unaudited) 2021 2020 2021 2020 SELECTED INCOME STATEMENT INFORMATION Straight-line rent income adjustment 2,102$ 1,540 3,969 2,830 Recoveries (reserves) for uncollectible straight-line rent 62 (528) 262 (895) Net straight-line rent adjustment 2,164 1,012 4,231 1,935 Cash received for lease terminations 18 25 691 481 Less straight-line rent write-offs - - (97) (12) Net lease termination fee income 18 25 594 469 (Reserves) for uncollectible cash rent (50) (197) (172) (325) Stock-based compensation expense (2,414) (2,195) (4,011) (3,421) Debt issuance costs amortization (301) (355) (642) (691) Indirect leasing costs (134) (166) (464) (274) Gain on casualties and involuntary conversion (1) - 161 - 161 Acquired leases - market rent adjustment amortization 245 372 474 746 2021 2020 2021 2020 WEIGHTED AVERAGE COMMON SHARES Weighted average common shares 40,068 39,007 39,871 38,945 BASIC SHARES FOR EARNINGS PER SHARE ("EPS") 40,068 39,007 39,871 38,945 Potential common shares: Unvested restricted stock 97 70 94 74 DILUTED SHARES FOR EPS AND FFO 40,165 39,077 39,965 39,019 (1) Included in Other revenue on the Consolidated Statements of Income and Comprehensive Income; included in FFO. June 30, Three Months Ended Three Months Ended June 30, Six Months Ended June 30, Six Months Ended June 30, (Items below represent increases or (decreases) in FFO)
Page 10 of 24 Financial Statistics ($ in thousands, except per share data) (Unaudited) Quarter Ended 6/30/2021 2020 2019 2018 2017 ASSETS/MARKET CAPITALIZATION Assets 2,855,622$ 2,720,803 2,546,078 2,131,705 1,953,221 Equity Market Capitalization 6,643,152 5,477,783 5,164,306 3,348,269 3,071,927 Total Market Capitalization (Debt and Equity) (1) 7,964,314 6,791,879 6,350,438 4,458,037 4,183,620 Shares Outstanding - Common 40,396,180 39,676,828 38,925,953 36,501,356 34,758,167 Price per share 164.45$ 138.06 132.67 91.73 88.38 FFO CHANGE FFO per diluted share (2) 1.47$ 5.38 4.98 4.66 4.25 Change compared to same period prior year 10.5% 8.0% 6.9% 9.6% 6.3% COMMON DIVIDEND PAYOUT RATIO Dividend distribution 0.79$ 3.08 2.94 2.72 2.52 FFO per diluted share (2) 1.47 5.38 4.98 4.66 4.25 Dividend payout ratio 54% 57% 59% 58% 59% COMMON DIVIDEND YIELD Dividend distribution 0.79$ 3.08 2.94 2.72 2.52 Price per share 164.45 138.06 132.67 91.73 88.38 Dividend yield 1.92% 2.23% 2.22% 2.97% 2.85% FFO MULTIPLE FFO per diluted share (2) 1.47$ 5.38 4.98 4.66 4.25 Price per share 164.45 138.06 132.67 91.73 88.38 Multiple 27.97 25.66 26.64 19.68 20.80 INTEREST & FIXED CHARGE COVERAGE RATIO EBITDAre 67,142$ 245,669 221,517 200,788 180,214 Interest expense 8,181 33,927 34,463 35,106 34,775 Interest and fixed charge coverage ratio 8.21 7.24 6.43 5.72 5.18 DEBT-TO-EBITDAre RATIO Debt 1,316,129$ 1,310,895 1,182,602 1,105,787 1,108,282 EBITDAre 67,142 245,669 221,517 200,788 180,214 Debt-to-EBITDAre ratio 4.90 5.34 5.34 5.51 6.15 Adjusted debt-to-pro forma EBITDAre ratio 4.19 4.43 3.92 4.73 5.45 DEBT-TO-TOTAL MARKET CAPITALIZATION (1) 16.6% 19.3% 18.7% 24.9% 26.6% ISSUER RATINGS (3) Issuer Rating Outlook Moody's Investors Service Baa2 Stable (1) Before deducting unamortized debt issuance costs. (3) A security rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating agency. Years Ended (2) In connection with the Company's adoption of the Nareit Funds from Operations White Paper - 2018 Restatement, the Company now excludes from FFO the gains and losses on sales of non-operating real estate and assets incidental to the Company's business and therefore, adjusted the prior years' results to conform to the updated definition of FFO.
Page 11 of 24 Development and Value-Add Properties Summary ($ in thousands) (Unaudited) Anticipated 2nd Qtr Cumulative Projected Conversion % Leased Square Feet (SF) 2021 at 6/30/21 Total Costs Date (1) 7/26/21 Lease-up Cherokee 75 Business Center 2 (2) Atlanta, GA 105,000 8,972$ 8,972 11,000 07/21 100% Northwest Crossing 1-3 Houston, TX 278,000 493 23,496 25,900 09/21 53% Ridgeview 1 & 2 San Antonio, TX 226,000 830 18,473 21,000 10/21 90% LakePort 1-3 Dallas, TX 194,000 810 20,822 25,300 12/21 90% Access Point 1 (2) Greenville, SC 156,000 1,246 11,952 12,600 01/22 70% Access Point 2 (2) Greenville, SC 159,000 10,803 10,803 12,400 05/22 29% Total Lease-up 1,118,000 23,154 94,518 108,200 70% Wgt Avg % Lease-Up: Projected Stabilized Yield (3) 7.0% Under Construction Gilbert Crossroads C & D Phoenix, AZ 178,000 5,446 16,436 21,900 12/21 100% Speed Distribution Center San Diego, CA 519,000 32,218 32,218 88,600 01/22 100% Grand Oaks 75 3 Tampa. FL 136,000 3,909 8,823 12,000 07/22 50% Steele Creek X Charlotte, NC 162,000 1,587 10,190 12,600 07/22 35% Horizon West 2 & 3 Orlando, FL 210,000 4,407 14,322 18,200 09/22 0% CreekView 9 & 10 Dallas, TX 145,000 5,486 5,486 17,200 12/22 0% Tri-County Crossing 5 San Antonio, TX 105,000 1,603 1,603 10,300 01/23 0% Basswood 1 & 2 Fort Worth, TX 237,000 1,093 8,416 22,100 02/23 0% SunCoast 12 Fort Myers, FL 79,000 1,210 1,210 8,000 02/23 0% Tri-County Crossing 6 San Antonio, TX 124,000 1,749 1,749 9,900 05/23 0% Total Under Construction 1,895,000 58,708 100,453 220,800 43% Wgt Avg % Under Construction: Projected Stabilized Yield (3) 7.2% 53% Wgt Avg % Development: Projected Stabilized Yield (3) 7.1% Value-Add: Projected Stabilized Yield (3) 6.9% Prospective Development Acres Projected SF San Diego, CA (4) 0 - (19,541) - Fort Myers, FL (4) 42 543,000 (441) 7,564 Miami, FL 34 376,000 248 20,793 Orlando, FL 107 1,278,000 1,427 24,432 Tampa, FL 17 213,000 554 4,138 Atlanta, GA 26 155,000 398 1,803 Jackson, MS 3 28,000 - 706 Charlotte, NC 30 313,000 68 4,438 Dallas, TX (4) 51 556,000 (3,554) 19,853 El Paso, TX 13 168,000 66 2,885 Fort Worth, TX 50 652,000 132 14,938 Houston, TX 84 1,223,000 300 21,356 San Antonio, TX (4) 12 143,000 (2,797) 2,128 Total Prospective Development 469 5,648,000 (23,140) 125,034 Total Development and Value-Add Properties 469 8,661,000 58,722$ 320,005 (1) Development properties will transfer to the operating portfolio at the earlier of 90% occupancy or one year after shell completion. Value-Add properties will transfer at the earlier of 90% occupancy or one year after acquisition. (2) These value-add projects were acquired by EastGroup. (3) Weighted average yield based on estimated annual property net operating income on a straight-line basis at 100% occupancy divided by projected total costs. (4) Negative amounts represent land inventory costs transferred to Under Construction. Costs Incurred
Page 12 of 24 Development and Value-Add Properties Transferred to Real Estate Properties ($ in thousands) (Unaudited) 2nd Qtr Cumulative Conversion % Leased Square Feet (SF) 2021 at 6/30/21 Date 7/26/21 1st Quarter Gilbert Crossroads A & B Phoenix, AZ 140,000 (13)$ 16,969 01/21 100% CreekView 7 & 8 Dallas, TX 137,000 34 17,691 03/21 100% Hurricane Shoals 3 Atlanta, GA 101,000 572 10,342 03/21 100% Northpoint 200 (1) Atlanta, GA 79,000 20 6,881 03/21 100% Rancho Distribution Center (1) Los Angeles, CA 162,000 8 27,375 03/21 100% 619,000 621 79,258 2nd Quarter World Houston 44 Houston, TX 134,000 650 9,018 05/21 100% Gateway 4 Miami, FL 197,000 890 23,366 06/21 100% Interstate Commons 2 (1) Phoenix, AZ 142,000 27 12,299 06/21 100% Settlers Crossing 3 & 4 Austin, TX 173,000 850 19,982 06/21 100% SunCoast 7 Fort Myers, FL 77,000 165 7,659 06/21 100% Tri-County Crossing 3 & 4 San Antonio, TX 203,000 495 15,715 06/21 100% 926,000 3,077 88,039 Total Transferred to Real Estate Properties 1,545,000 3,698$ 167,297 Projected Stabilized Yield (2) 7.0% 100% Wgt Avg % (1) These value-add projects were acquired by EastGroup. (2) Weighted average yield based on estimated annual property net operating income on a straight-line basis at 100% occupancy divided by projected total costs. Costs Incurred
Page 13 of 24 Acquisitions and Dispositions Through June 30, 2021 ($ in thousands) (Unaudited) Date Property Name Location Size Purchase Price (1) 1st Quarter 01/15/21 Access Point 1 Greenville, SC 156,000 SF 10,501$ (2) 01/21/21 Northpoint 200 Atlanta, GA 79,000 SF 6,516 (3) 2nd Quarter 05/19/21 Access Point 2 Greenville, SC 159,000 SF 10,743 (2) 06/03/21 Blairs Bridge Phase 2 Land Atlanta, GA 15.1 Acres 289 06/10/21 Southpark Distribution Center 2 Phoenix, AZ 79,000 SF 9,177 06/17/21 Cherokee 75 Business Center 2 Atlanta, GA 105,000 SF 8,837 (2) 578,000 SF Total Acquisitions 15.1 Acres 46,063$ Date Property Name Location Size Gross Sales Price 1st Quarter None 2nd Quarter None (3) Value-add property acquisition at date of purchase. During the first quarter, the property became 100% occupied and therefore, transferred to Real estate properties . DISPOSITIONS ACQUISITIONS (2) Value-add property acquisition; included in Development and value-add properties on the Consolidated Balance Sheets. (1) Represents acquisition price plus closing costs. Realized Gain
Page 14 of 24 Real Estate Improvements and Leasing Costs (In thousands) (Unaudited) REAL ESTATE IMPROVEMENTS 2021 2020 2021 2020 Upgrade on Acquisitions 109$ 141 154 165 Tenant Improvements: New Tenants 2,525 2,712 5,167 5,756 Renewal Tenants 1,507 676 2,184 2,005 Other: Building Improvements 1,621 772 3,404 1,990 Roofs 3,047 2,645 6,062 3,582 Parking Lots 169 313 431 349 Other 532 6 693 353 TOTAL REAL ESTATE IMPROVEMENTS (2) 9,510$ 7,265 18,095 14,200 CAPITALIZED LEASING COSTS (Principally Commissions) (1)(3) Development and Value-Add 4,731$ 754 7,559 2,517 New Tenants 2,808 1,194 7,155 2,221 Renewal Tenants 1,586 809 3,540 3,742 TOTAL CAPITALIZED LEASING COSTS 9,125$ 2,757 18,254 8,480 (1) Included in Other Assets on the Consolidated Balance Sheets. (2) Reconciliation of Total Real Estate Improvements to Real Estate Improvements on the Consolidated Statements of Cash Flows: 2021 2020 Total Real Estate Improvements 18,095$ 14,200 Change in Real Estate Property Payables 735 178 Change in Construction in Progress (736) 3,789 18,094$ 18,167 (3) Reconciliation of Total Capitalized Leasing Costs to Leasing Commissions on the Consolidated Statements of Cash Flows: 2021 2020 Total Capitalized Leasing Costs 18,254$ 8,480 Change in Leasing Commissions Payables (1,441) (405) 16,813$ 8,075 June 30, Real Estate Improvements on the Consolidated Statements of Cash Flows June 30, Six Months EndedThree Months Ended June 30, Six Months Ended Six Months Ended June 30, Leasing Commissions on the Consolidated Statements of Cash Flows
Page 15 of 24 Leasing Statistics and Occupancy Summary (Unaudited) Three Months Ended Number of Square Feet Weighted Rental Change Rental Change PSF Tenant PSF Leasing PSF Total June 30, 2021 Leases Signed Signed Average Term Straight-Line Basis Cash Basis Improvement (1) Commission (1) Leasing Cost (1) (In Thousands) (In Years) New Leases (2) 45 958 5.8 42.8% 22.9% 2.93$ 3.03$ 5.96$ Renewal Leases 64 1,421 4.0 23.3% 11.5% 0.84 1.45 2.29 Total/Weighted Average 109 2,379 4.7 31.2% 16.2% 1.69$ 2.09$ 3.78$ Per Year 0.36$ 0.45$ 0.81$ Weighted Average Retention (3) 63.8% Six Months Ended Number of Square Feet Weighted Rental Change Rental Change PSF Tenant PSF Leasing PSF Total June 30, 2021 Leases Signed Signed Average Term Straight-Line Basis Cash Basis Improvement (1) Commission (1) Leasing Cost (1) (In Thousands) (In Years) New Leases (2) 92 2,246 6.1 36.7% 22.9% 3.90$ 3.36$ 7.26$ Renewal Leases 114 2,764 4.1 21.4% 10.5% 0.95 1.43 2.38 Total/Weighted Average 206 5,010 5.0 28.3% 16.1% 2.27$ 2.30$ 4.57$ Per Year 0.45$ 0.46$ 0.91$ Weighted Average Retention (3) 61.5% 06/30/21 03/31/21 12/31/20 09/30/20 06/30/20 Percentage Leased 98.3% 98.3% 98.0% 97.8% 97.5% Percentage Occupied 96.8% 97.2% 97.3% 96.4% 97.0% (1) Per square foot (PSF) amounts represent total amounts for the life of the lease, except as noted for the Per Year amounts. (2) Does not include leases with terms less than 12 months and leases for first generation space on properties acquired or developed by EastGroup. (3) Calculated as square feet of renewal leases signed during the quarter / square feet of leases expiring during the quarter (not including early terminations or bankruptcies).
Page 16 of 24 Core Market Operating Statistics June 30, 2021 (Unaudited) Total Square Feet % Annualized % % Straight-Line Cash Straight-Line Cash Straight-Line Cash Straight-Line Cash of Properties of Total Base Rent (1) Leased Occupied 2021 (2) 2022 Basis Basis (4) Basis Basis (4) Basis Basis (4) Basis Basis (4) Florida Tampa 4,496,000 9.9% 9.3% 98.5% 98.5% 368,000 713,000 7.8% 7.8% 7.4% 7.0% 22.7% 10.9% 25.1% 13.9% Orlando 3,685,000 8.1% 8.5% 97.9% 96.9% 134,000 725,000 -0.6% 0.3% 0.6% 1.0% 20.7% 9.1% 21.5% 11.3% Jacksonville 2,273,000 5.0% 4.1% 99.8% 99.7% 183,000 528,000 11.1% 11.4% 10.0% 9.5% 22.2% 12.2% 21.2% 11.5% Miami/Fort Lauderdale 1,656,000 3.6% 4.0% 98.2% 87.5% 40,000 105,000 3.0% 4.5% 1.3% 3.0% 22.0% 12.0% 23.0% 13.1% Fort Myers 626,000 1.4% 1.5% 100.0% 100.0% - 74,000 1.8% 3.1% 1.7% 5.4% N/A N/A 18.2% 6.3% 12,736,000 28.0% 27.4% 98.6% 96.9% 725,000 2,145,000 4.7% 5.3% 4.6% 4.8% 22.1% 11.1% 22.8% 12.4% Texas Houston 5,930,000 13.0% 12.3% 96.5% 94.1% 295,000 1,040,000 -3.9% -1.3% -1.1% 2.3% 10.1% -4.2% -4.9% -12.3% Dallas 3,912,000 8.6% 7.9% 99.9% 99.1% 155,000 725,000 7.5% 7.0% 5.8% 4.9% 23.0% 22.8% 15.4% 6.9% San Antonio 3,867,000 8.5% 8.7% 95.3% 93.9% 171,000 497,000 6.6% 3.8% 3.7% 2.4% 15.4% 6.2% 12.1% 4.0% El Paso 957,000 2.1% 1.6% 100.0% 100.0% 22,000 118,000 9.8% 7.6% 10.0% 8.6% 20.6% 9.9% 21.9% 11.2% Austin 1,126,000 2.5% 3.2% 100.0% 97.7% 59,000 145,000 10.0% 11.2% 12.7% 16.2% 53.5% 44.8% 53.5% 44.8% Fort Worth 794,000 1.7% 1.5% 100.0% 87.2% - 41,000 8.5% 10.9% 10.0% 7.4% N/A N/A N/A N/A 16,586,000 36.4% 35.2% 97.6% 95.5% 702,000 2,566,000 3.0% 3.3% 3.4% 4.3% 22.6% 12.8% 10.7% 2.3% California Los Angeles (5) 2,484,000 5.5% 7.4% 100.0% 99.1% 77,000 539,000 21.6% 8.5% 28.7% 11.5% 64.9% 33.7% 58.9% 38.8% San Francisco 1,045,000 2.3% 3.4% 100.0% 100.0% - 202,000 27.2% 39.0% 31.7% 32.6% 19.3% 10.7% 19.3% 10.7% San Diego 867,000 1.9% 2.1% 100.0% 98.6% 53,000 22,000 0.0% -6.4% -6.2% -4.0% 47.8% 38.4% 52.2% 39.0% Fresno 398,000 0.9% 0.6% 99.0% 94.0% 87,000 78,000 -3.0% -1.6% -2.5% 1.4% 30.3% 14.6% 21.8% 9.8% 4,794,000 10.6% 13.5% 99.9% 98.8% 217,000 841,000 17.0% 11.7% 19.9% 12.4% 53.4% 28.5% 53.0% 35.6% Arizona Phoenix 2,862,000 6.3% 6.3% 97.8% 96.6% 206,000 520,000 13.1% 11.1% 14.5% 14.9% 9.6% -0.2% 15.2% 4.3% Tucson 848,000 1.9% 1.8% 100.0% 100.0% 5,000 21,000 2.7% 3.4% -0.7% -6.5% 0.0% 0.0% 1.1% -3.8% 3,710,000 8.2% 8.1% 98.3% 97.4% 211,000 541,000 10.2% 9.1% 10.2% 9.1% 9.2% -0.2% 12.6% 2.8% Other Core Charlotte 3,407,000 7.5% 6.5% 98.4% 97.9% 157,000 884,000 -1.1% 2.8% -1.0% 1.2% 20.7% 5.3% 19.3% 6.9% Atlanta 1,156,000 2.5% 2.3% 100.0% 100.0% 21,000 91,000 31.5% 14.7% 13.4% 4.4% 19.6% 7.0% 14.9% 5.4% Denver 886,000 1.9% 2.4% 91.2% 91.2% 62,000 211,000 -1.2% 5.3% -0.7% 5.9% N/A N/A 54.0% 28.9% Las Vegas 754,000 1.7% 1.9% 100.0% 100.0% 146,000 115,000 -0.6% 0.5% -1.2% 0.8% 30.1% 18.0% 24.5% 14.5% 6,203,000 13.6% 13.1% 97.9% 97.6% 386,000 1,301,000 2.9% 4.6% 1.0% 2.5% 23.6% 9.5% 22.6% 10.2% Total Core Markets 44,029,000 96.8% 97.3% 98.2% 96.7% 2,241,000 7,394,000 5.9% 5.6% 6.1% 5.7% 31.4% 16.3% 28.8% 16.6% Total Other Markets 1,448,000 3.2% 2.7% 99.4% 99.4% 50,000 177,000 5.8% 5.7% 6.1% 9.0% 18.0% 10.8% 16.2% 3.6% Total Operating Properties 45,477,000 100.0% 100.0% 98.3% 96.8% 2,291,000 7,571,000 5.9% 5.6% 6.1% 5.8% 31.2% 16.2% 28.3% 16.1% (1) Based on the Annualized Base Rent as of the reporting period for occupied square feet (without S/L Rent). (2) Square Feet expiring during the remainder of the year, including month-to-month leases. (3) Does not include leases with terms less than 12 months and leases for first generation space on properties acquired or developed by EastGroup. (4) Excludes straight-line rent adjustments and amortization of above/below market rent intangibles. (5) Includes the Company's share of its less-than-wholly-owned real estate investments. in Square Feet QTR YTD QTR YTDLease Expirations Rental Change (excluding income from lease terminations) New and Renewal Leases (3) Same Property PNOI Change
Page 17 of 24 Lease Expiration Summary Total Square Feet of Operating Properties Based On Leases Signed Through June 30, 2021 ($ in thousands) (Unaudited) Annualized Current % of Total Base Rent of Base Rent of Square Footage of % of Leases Expiring Leases Expiring LEASE EXPIRATION Leases Expiring Total SF (without S/L Rent) (without S/L Rent) Vacancy 784,000 1.7% -$ 0.0% 2021 - remainder of year (1) 2,291,000 5.1% 16,852 5.8% 2022 7,571,000 16.7% 48,817 16.9% 2023 6,795,000 15.0% 43,766 15.2% 2024 7,750,000 17.0% 49,981 17.3% 2025 5,965,000 13.1% 40,909 14.2% 2026 6,201,000 13.6% 37,331 12.9% 2027 2,693,000 5.9% 18,930 6.6% 2028 2,084,000 4.6% 13,088 4.5% 2029 1,063,000 2.3% 7,008 2.4% 2030 and beyond 2,280,000 5.0% 11,960 4.2% TOTAL 45,477,000 100.0% 288,642$ 100.0% (1) Includes month-to-month leases.
Page 18 of 24 Top 10 Customers by Annualized Base Rent As of June 30, 2021 (Unaudited) % of Total # of % of Total Annualized Customer Leases Location Portfolio Base Rent (1) 1 Starship Logistics LLC 1 Los Angeles, CA 262,000 0.6% 1.1% 2 The Chamberlain Group 2 Tucson, AZ 350,000 1 Charlotte, NC 11,000 0.8% 0.9% 3 Amazon 1 San Diego, CA 191,000 1 San Antonio, TX 57,000 1 Tucson, AZ 10,000 0.6% 0.8% 4 FedEx Corp. 1 Dallas, TX 157,000 1 Fort Myers, FL 63,000 1 Fort Lauderdale, FL 50,000 1 San Diego, CA 22,000 1 Jackson, MS 6,000 0.7% 0.8% 5 Novolex Holdings LLC (2) 1 Los Angeles, CA 286,000 0.6% 0.8% 6 Essendant Co. 1 Orlando, FL 404,000 0.9% 0.8% 7 Mattress Firm 1 Houston, TX 202,000 1 Tampa, FL 109,000 1 Jacksonville, FL 49,000 1 Fort Myers, FL 25,000 0.8% 0.8% 8 Oceaneering International, Inc. 3 Orlando, FL 259,000 0.6% 0.7% 9 Pacific Asiana LLC 1 Los Angeles, CA 183,000 0.4% 0.6% 10 Agility 2 Houston, TX 246,000 0.5% 0.6% 24 2,942,000 6.5% 7.9% (1) Calculation: Customer Annualized Base Rent as of 06/30/21 (without S/L Rent) / Total Annualized Base Rent (without S/L Rent). (2) Formerly WNA Comet West, Inc. Leased Total SF
Page 19 of 24 Debt and Equity Market Capitalization June 30, 2021 ($ in thousands, except per share data) (Unaudited) Remainder of 2021 2022 2023 2024 2025 2026 and Beyond Total Average Years to Maturity Unsecured debt (fixed rate) (1) 40,000$ 75,000 115,000 120,000 145,000 790,000 1,285,000 5.9 Weighted average interest rate 2.34% 3.03% 2.96% 3.47% 3.12% 3.08% 3.08% Secured debt (fixed rate) Balloon payments - 32,655 - - - 1,549 34,204 Amortization 1,350 115 119 122 128 124 1,958 1,350 32,770 119 122 128 1,673 36,162 0.8 Weighted average interest rate 4.08% 4.09% 3.85% 3.85% 3.85% 3.85% 4.08% Total unsecured debt and secured debt 41,350$ 107,770 115,119 120,122 145,128 791,673 1,321,162 5.8 Weighted average interest rate 2.39% 3.35% 2.96% 3.47% 3.12% 3.08% 3.11% Unsecured debt and secured debt (fixed rate) 1,321,162$ Unsecured bank credit facilities (variable rate) $50MM Line - 0.876% - matures 7/30/2025 - $425MM Line - 0.876% - matures 7/30/2025 - Total carrying amount of debt 1,321,162$ Total unamortized debt issuance costs (5,033) Total debt, net of unamortized debt issuance costs 1,316,129$ Equity market capitalization Shares outstanding - common 40,396,180 Price per share at quarter end 164.45$ Total equity market capitalization 6,643,152$ Total market capitalization (debt and equity) (2) 7,964,314$ Total debt / total market capitalization (2) 16.6% (1) These loans have a fixed interest rate or an effectively fixed interest rate due to interest rate swaps (2) Before deducting unamortized debt issuance costs
Page 20 of 24 Continuous Common Equity Program Through June 30, 2021 ($ in thousands, except per share data) (Unaudited) Shares Issued and Sold (1) Average Sales Price (Per Share) Gross Proceeds Offering-Related Fees and Expenses Net Proceeds 1st Quarter 317,538 141.72$ 45,000$ (515)$ 44,485$ 2nd Quarter 370,177 162.08 60,000 (682) 59,318 TOTAL 2021 687,715 152.68$ 105,000$ (1,197)$ 103,803$ (1) As of July 27, 2021, the Company had common shares with an aggregate gross sales price of $551.1 million authorized and remaining for issuance under its continuous common equity program.
Page 21 of 24 Debt-to-EBITDAre Ratios ($ in thousands) (Unaudited) Quarter Ended Years Ended December 31, June 30, 2021 2020 2019 2018 2017 EBITDAre 67,142$ 245,669$ 221,517 200,788 180,214 Debt 1,316,129 1,310,895 1,182,602 1,105,787 1,108,282 DEBT-TO-EBITDAre RATIO 4.90 5.34 5.34 5.51 6.15 EBITDAre 67,142$ 245,669$ 221,517 200,788 180,214 Adjust for acquisitions as if owned for entire period 120 1,906 5,590 1,909 859 Adjust for development and value-add properties in lease-up or under construction (355) (1,327) (2,072) (304) (679) Adjust for properties sold during the period - (1,081) (3,812) (474) (1,031) Pro Forma EBITDAre 66,907$ 245,167$ 221,223 201,919 179,363 Debt 1,316,129$ 1,310,895$ 1,182,602 1,105,787 1,108,282 Subtract development and value-add properties in lease-up or under construction (194,971) (225,964) (315,794) (149,860) (130,505) Adjusted Debt 1,121,158$ 1,084,931$ 866,808 955,927 977,777 ADJUSTED DEBT-TO-PRO FORMA EBITDAre RATIO 4.19 4.43 3.92 4.73 5.45
Page 22 of 24 Outlook for 2021 (Unaudited) Q3 2021 Y/E 2021 Q3 2021 Y/E 2021 Net income attributable to common stockholders 26,366$ 106,827 27,986 110,857 Depreciation and amortization 32,611 128,239 32,611 128,239 Funds from operations attributable to common stockholders 58,977$ 235,066 60,597 239,096 Diluted shares 40,521 40,308 40,521 40,308 Per share data (diluted): Net income attributable to common stockholders 0.65$ 2.65 0.69 2.75 Funds from operations attributable to common stockholders 1.46 5.83 1.50 5.93 The following assumptions were used for the mid-point: Metrics FFO per share $5.83 - $5.93 $5.74 - $5.84 $5.38 FFO per share increase over prior year 9.3% 7.6% 8.0% Same PNOI growth: cash basis (1) 4.7% - 5.7%(2) 3.9% - 4.9%(2) 3.2% Average month-end occupancy 96.3% - 97.3% 96.1% - 97.1% 96.7% Lease termination fee income $850,000 $800,000 $709,000 Reserves for uncollectible rent (No identified bad debts for remainder of year) $950,000 $1.1 million $2.8 million Development starts: Square feet 2.4 million 2.1 million 851,000 Projected total investment $275 million $210 million $91 million Value-add property acquisitions (Projected total investment) $35 million $35 million $29 million Operating property acquisitions $10 million $10 million $49 million Operating property dispositions (Potential gains on dispositions are not included in the projections) $60 million $60 million $21 million Unsecured debt closing in period $250 million at 2.58% weighted average interest rate $250 million at 2.58% weighted average interest rate $275 million at 2.56% weighted average interest rate Common stock issuances $185 million $140 million $94 million General and administrative expense $17.1 million $17.8 million $14.4 million Low Range High Range (In thousands, except per share data) Revised Guidance for Year 2021 Release Guidance for Year 2021 Actual for Year 2020 (2) Includes properties which have been in the operating portfolio since 1/1/20 and are projected to be in the operating portfolio through 12/31/21; includes 40,832,000 square feet. (1) Excludes straight-line rent adjustments, amortization of market rent intangibles for acquired leases, and income from lease terminations.
Page 23 of 24 Glossary of REIT Terms Listed below are definitions of commonly used real estate investment trust (“REIT”) industry terms. For additional information on REITs, please see the National Association of Real Estate Investment Trusts (“Nareit”) web site at www.reit.com. Adjusted Debt-to-Pro Forma EBITDAre Ratio: A ratio calculated by dividing a company’s adjusted debt by its pro forma EBITDAre. Debt is adjusted by subtracting the cost of development and value-add properties in lease-up or under construction. EBITDAre is further adjusted by adding an estimate of NOI for significant acquisitions as if the acquired properties were owned for the entire period, and by subtracting NOI from development and value-add properties in lease-up or under construction and from properties sold during the period. The Adjusted Debt-to-Pro Forma EBITDAre Ratio is a non-GAAP financial measure used to analyze the Company’s financial condition and operating performance relative to its leverage, on an adjusted basis, so as to normalize and annualize property changes during the period. Cash Basis: The Company adjusts its GAAP reporting to exclude straight-line rent adjustments and amortization of market rent intangibles for acquired leases. The cash basis is an indicator of the rents charged to customers by the Company during the periods presented and is useful in analyzing the embedded rent growth in the Company’s portfolio. Debt-to-EBITDAre Ratio: A ratio calculated by dividing a company’s debt by its EBITDAre; this non-GAAP measure is used to analyze the Company’s financial condition and operating performance relative to its leverage. Debt-to-Total Market Capitalization Ratio: A ratio calculated by dividing a company’s debt by the total amount of a company’s equity (at market value) and debt. Earnings Before Interest Taxes Depreciation and Amortization for Real Estate (“EBITDAre”): In accordance with standards established by Nareit, EBITDAre is computed as Earnings, defined as Net Income, excluding gains or losses from sales of real estate investments and non-operating real estate, plus interest, taxes, depreciation and amortization. EBITDAre is a non- GAAP financial measure used to measure the Company’s operating performance and its ability to meet interest payment obligations and pay quarterly stock dividends on an unleveraged basis. Funds From Operations (“FFO”): FFO is the most commonly accepted reporting measure of a REIT’s operating performance, and the Company computes FFO in accordance with standards established by Nareit in the Nareit Funds from Operations White Paper — 2018 Restatement. It is equal to a REIT’s net income (loss) attributable to common stockholders computed in accordance with generally accepted accounting principles (“GAAP”), excluding gains and losses from sales of real estate property (including other assets incidental to the Company’s business) and impairment losses, adjusted for real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. FFO is a non-GAAP financial measure used to evaluate the performance of the Company’s investments in real estate assets and its operating results. FFO Excluding Gain on Casualties and Involuntary Conversion: A reporting measure calculated as FFO (as defined above), adjusted to exclude gain on casualties and involuntary conversion. The Company believes that the exclusion of gain on casualties and involuntary conversion presents a more meaningful comparison of operating performance. Industrial Properties: Generally consisting of four concrete walls tilted up on a slab of concrete. An internal office component is then added. Business uses include warehousing, distribution, light manufacturing and assembly, research and development, showroom, office, or a combination of some or all of the aforementioned. Leases Expiring and Renewal Leases Signed of Expiring Square Feet: Includes renewals during the period with terms commencing during the period and after the end of the period. Operating Land: Land with no buildings or improvements that generates income from leases with tenants; included in Real estate properties on the Consolidated Balance Sheets. Operating Properties: Stabilized real estate properties (land including buildings and improvements) in the Company’s operating portfolio; included in Real estate properties on the Consolidated Balance Sheets. Percentage Leased: The percentage of total leasable square footage for which there is a signed lease, including month-to-month leases, as of the close of the reporting period. Space is considered leased upon execution of the lease.
Page 24 of 24 Glossary of REIT Terms (Continued) Percentage Occupied: The percentage of total leasable square footage for which the lease term has commenced as of the close of the reporting period. Property Net Operating Income (“PNOI”): Income from real estate operations less Expenses from real estate operations (including market-based internal management fee expense) plus the Company’s share of income and property operating expenses from its less-than-wholly-owned real estate investments. PNOI is a non-GAAP, property-level supplemental measure of performance used to evaluate the performance of the Company’s investments in real estate assets and its operating results. Real Estate Investment Trust: A company that owns and, in most cases, operates income-producing real estate such as apartments, shopping centers, offices, hotels and warehouses. Some REITs also engage in financing real estate. The shares of most REITs are freely traded, usually on a major stock exchange. To qualify as a REIT, a company must distribute at least 90 percent of its taxable income to its stockholders annually. A company that qualifies as a REIT is permitted to deduct dividends paid to its stockholders from its corporate taxable income. As a result, most REITs remit at least 100 percent of their taxable income to their stockholders and therefore owe no corporate federal income tax. Taxes are paid by stockholders on the dividends received. Most states honor this federal treatment and also do not require REITs to pay state income tax. Rental changes on new and renewal leases: Rental changes are calculated as the difference, weighted by square feet, of the annualized base rent due the first month of the new lease’s term and the annualized base rent of the rent due the last month of the former lease’s term. If free rent is given, then the first positive full rent value is used. Rental amounts exclude base stop amounts, holdover rent, and premium or discounted rent amounts. This calculation excludes leases with terms less than 12 months and leases for first generation space on properties acquired or developed by EastGroup. Same Properties: Operating properties owned during the entire current and prior year reporting periods. Properties developed or acquired are excluded until held in the operating portfolio for both the current and prior year reporting periods. Properties sold during the current or prior year reporting periods are excluded. The Same Property Pool includes properties which were included in the operating portfolio for the entire period from January 1, 2020 through June 30, 2021. Same Property Net Operating Income (“Same PNOI”): Income from real estate operations less Expenses from real estate operations (including market-based internal management fee expense), plus the Company’s share of income and property operating expenses from its less-than-wholly-owned real estate investments, for the same properties owned by the Company during the entire current and prior year reporting periods. Same PNOI is a non-GAAP, property-level supplemental measure of performance used to evaluate the performance of the Company’s investments in real estate assets and its operating results on a same property basis. Same PNOI Excluding Income from Lease Terminations: Same PNOI (as defined above), adjusted to exclude income from lease terminations. The Company believes it is useful to evaluate Same PNOI Excluding Income from Lease Terminations on both a straight-line and cash basis. The straight-line basis is calculated by averaging the customers’ rent payments over the lives of the leases; GAAP requires the recognition of rental income on the straight-line basis. The cash basis excludes adjustments for straight-line rent and amortization of market rent intangibles for acquired leases; the cash basis is an indicator of the rents charged to customers by the Company during the periods presented and is useful in analyzing the embedded rent growth in the Company’s portfolio. Straight-Lining: The process of averaging the customer’s rent payments over the life of the lease. GAAP requires real estate companies to “straight-line” rents. Total Return: A stock’s dividend income plus capital appreciation/depreciation over a specified period as a percentage of the stock price at the beginning of the period. Value-Add Properties: 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 acquisition date based on near term lease roll), or (2) 20% or greater of the acquisition cost will be spent to redevelop the property.