EastGroup Properties : Q2 2021 Financial Supplement

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

June 30, 2021

400 W. Parkway Place, Suite 100, Ridgeland, MS 39157 | TEL: [phone] | FAX: [phone] | EastGroup.net

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.

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Consolidated Balance Sheets

(In thousands, except share and per share data) (Unaudited)

ASSETS		June 30, 2021		December 31, 2020
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

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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
EXPENSES		99,575	89,715	197,506	178,343
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

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Reconciliations of GAAP to Non-GAAP Measures

(In thousands, except per share data) (Unaudited)

			Three Months Ended	Six Months Ended
			June 30,		June 30,
			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

FFO attributable to common stockholders

FFO Excluding Gain on Casualties and Involuntary Conversion attributable to common stockholders Weighted average shares outstanding for EPS and FFO purposes

$	0.69	0.60	1.37	1.20
$	1.47	1.33	2.92	2.65
$	1.47	1.33	2.92	2.64
	40,165	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.

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