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Section 1: 8-K (8-K 04.19.2018)

Document


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):   April 19, 2018

EASTGROUP PROPERTIES, INC.
(Exact Name of Registrant as Specified in its Charter)


 
Maryland
 
1-07094
 
13-2711135
 
(State or Other Jurisdiction
of Incorporation)
 
(Commission File Number)
 
(IRS Employer
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)

Not applicable
(Former name or former address, if changed since last report)

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):

o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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).
o

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. o
        
 

 

Page 1 of 3 Pages





ITEM 2.02.                      Results of Operations and Financial Condition

On April 19, 2018, the Company issued a press release, which sets forth its results of operations for the quarter ended March 31, 2018.  A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.  

The information set forth in Items 2.02, 7.01 and 9.01 of this Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not incorporated by reference into any filing of the company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.


ITEM 7.01.                      Regulation FD Disclosure

Following the issuance of the press release on April 19, 2018, announcing the Company's results for the first quarter ended March 31, 2018, EastGroup made available supplemental financial information. A copy of the Company's Supplemental Information as of March 31, 2018, is available by accessing the report in the Investor Relations section (Quarterly Results) of the Company's website at eastgroup.net or upon request by calling the Company at 601-354-3555.
 

ITEM 9.01.                      Financial Statements and Exhibits

(d)  Exhibits.

A list of exhibits is set forth in the Exhibit Index which immediately precedes such Exhibits and is incorporated herein by reference.


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:         April 19, 2018

 
EASTGROUP PROPERTIES, INC.
 
 
 
By: /s/ BRENT W. WOOD
 
Brent W. Wood
Executive Vice President, Chief Financial Officer and Treasurer






Page 2 of 3 Pages






Exhibit Index


Exhibit No.
 
Description
 
 
 
 
 
Press Release dated April 19, 2018.










Page 3 of 3 Pages

(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1 04.19.2018)

Exhibit


 
 EXHIBIT 99.1
FOR MORE INFORMATION, CONTACT:
Marshall Loeb, President and Chief Executive Officer
Brent Wood, Chief Financial Officer
(601) 354-3555


EASTGROUP PROPERTIES ANNOUNCES
FIRST QUARTER 2018 RESULTS



Net Income Attributable to Common Stockholders of $.83 Per Share Compared to $.38 Per Share for the Same Quarter of 2017 (2018 Includes Gains on Sales of Real Estate Investments and Non-Operating Real Estate of $.30 Per Share)
Funds from Operations of $1.16 Per Share Compared to $.99 Per Share for the Same Quarter Last Year, an Increase of 17.2%
Same Property Net Operating Income (PNOI) Growth of 4.3%
97.0% Leased, 96.4% Occupied as of March 31, 2018; Average Occupancy of 96.3% for the Quarter
Rental Rates on New and Renewal Leases Increased an Average of 18.7%
Started Construction of Two Development Projects Totaling 169,000 Square Feet in Atlanta and Houston with Projected Total Costs of $12 Million
Transferred Three 100% Leased Development Projects Totaling 347,000 Square Feet to the Real Estate Portfolio
Development Program Consisted of 17 Projects (2.0 Million Square Feet) at March 31, 2018 with a Projected Total Investment of $165 Million
Sold 214,000 Square Feet of Operating Properties and 11 Acres of Land for $17.5 Million
Paid 153rd Consecutive Quarterly Cash Dividend: $.64 Per Share
Issued 179,501 Shares of Common Stock at an Average Price of $82.68 During the Quarter with Gross Proceeds of $15 Million



JACKSON, MISSISSIPPI, April 19, 2018 - EastGroup Properties, Inc. (NYSE: EGP) announced today the results of its operations for the three months ended March 31, 2018.

Commenting on EastGroup’s performance, Marshall Loeb, CEO, stated, “Our first quarter results demonstrate the strength and resilience we are experiencing across the industrial market. It is a strong start to the year and was a quarter when the majority of things that could fall into place thankfully did. Our unique in-fill, shallow bay, Sunbelt high growth market strategy further positions us to capitalize on the market. The 17.2% increase in quarterly FFO over prior year means that we’ve now beaten the preceding corresponding quarter in every quarter over the past seven years save one a long term testament to our operating strategy.”

EARNINGS PER SHARE

On a diluted per share basis, earnings per common share (EPS) was $.83 for the three months ended March 31, 2018, compared to $.38 for the same period of 2017. The Company's property net operating income (PNOI) increased by $4,439,000 ($.13 per share) for the three months ended March 31, 2018, as compared to the same period of 2017. EastGroup recognized net gains on sales of real estate investments and non-operating real estate of $10,308,000 ($.30 per share) in the first quarter of 2018 compared to a net loss of $40,000 (less than $.01 per share) in the first quarter of 2017.

FUNDS FROM OPERATIONS

For the quarter ended March 31, 2018, funds from operations attributable to common stockholders (FFO) was $1.16 per share compared to $.99 per share for the same quarter of 2017, an increase of 17.2%. PNOI increased by $4,439,000, or 9.4%, during the quarter ended March 31, 2018, compared to the same period of 2017. PNOI increased $2,634,000 from newly developed and redeveloped properties, $1,924,000 from same property operations and $506,000 from 2017 acquisitions; PNOI decreased $628,000 from operating properties sold in 2017 and 2018.


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400 W. PARKWAY PLACE, SUITE 100 – RIDGELAND, MS 39157 – TEL. 601-354-3555 – FAX 601-352-1441




Same PNOI increased 4.3% for the quarter ended March 31, 2018, compared to the same quarter in 2017; on a cash basis (excluding straight-line rent adjustments and amortization of above/below market rent intangibles), same PNOI increased 4.4%. Rental rates on new and renewal leases (5.0% of total square footage) increased an average of 18.7% for the quarter.

FFO and PNOI are non-GAAP financial measures, which are defined under Definitions later in this release.  Reconciliations of Net Income to 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.”

SALES

During the first quarter, EastGroup sold 11 acres of land in Houston for $2.6 million. The sale generated a gain of $86,000 which was recognized in Other on the Consolidated Statements of Income and Comprehensive Income; the gain was included in FFO.

Also during the first quarter, the Company sold two operating properties containing 214,000 square feet in Houston and Tampa for $14.9 million. EastGroup recognized gains on the sales of $10,222,000 which are included in Gain on sales of real estate investments; these gains from sales of depreciable real estate investments are excluded from FFO.

DEVELOPMENT

During the first quarter, EastGroup began construction of West Road 5, a 58,000 square foot, multi-tenant business distribution building in Houston. This is the last building in the Company's West Road Business Park; the other four buildings are currently 100% occupied.

Also in the first quarter, the Company initiated construction of Broadmoor 2 in Atlanta. The multi-tenant business distribution building will contain 111,000 square feet and is located adjacent to the Company's 100% leased Broadmoor 1 property, which was acquired by EastGroup in 2017.

The development projects started in the first quarter are detailed in the table below:
Development Properties Started in 2018
 
Location
 
Size
 
Anticipated Conversion Date
 
Projected Total Costs
 
 
 
 
 
(Square feet)
 
 
 
(In thousands)
 
 
 
 
 
 
 
 
 
 
 
West Road 5
 
Houston, TX
 
58,000

 
07/2019
 
$
4,700

 
Broadmoor 2
 
Atlanta, GA
 
111,000

 
10/2019
 
7,400

 
   Total Development Properties Started
 
 
 
169,000

 
 
 
$
12,100

 

At March 31, 2018, EastGroup’s development program consisted of 17 projects (1,988,000 square feet). The projects, which were collectively 51% leased as of April 18, 2018, have a projected total cost of $165 million.

During 2018, EastGroup transferred (at the earlier of 90% occupied or one year after completion) three development properties to the real estate portfolio as detailed in the table below.
Development Properties Transferred to
Real Estate Portfolio in 2018
 
Location
 
Size
 
Conversion Date
 
Cumulative Cost as of 3/31/18
 
Percent Leased as of 4/18/18
 
 
 
 
(Square feet)
 
 
 
(In thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
Alamo Ridge IV
 
San Antonio, TX
 
97,000

 
03/2018
 
$
7,814

 
100%
Oak Creek VII
 
Tampa, FL
 
116,000

 
03/2018
 
7,122

 
100%
Weston
 
Ft. Lauderdale, FL
 
134,000

 
03/2018
 
15,751

 
100%
   Total Properties Transferred
 
 
 
347,000

 
 
 
$
30,687

 
100%

Subsequent to quarter-end, the Company began construction of Gateway Commerce Park 1 in Miami. The $23 million property will contain 200,000 square feet and is the first building underway at Gateway Commerce Park, which is expected to include a total of five buildings containing 850,000 square feet upon future development.


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400 W. PARKWAY PLACE, SUITE 100 – RIDGELAND, MS 39157 – TEL. 601-354-3555 – FAX 601-352-1441




DIVIDENDS

EastGroup paid cash dividends of $.64 per share in the first quarter of 2018. This was the Company’s 153rd consecutive quarterly cash distribution to shareholders.  EastGroup has increased or maintained its dividend for 25 consecutive years. The Company has increased it 22 years within that period, including increases in each of the last six years.  The Company’s payout ratio of dividends to FFO was 55% for the quarter.  The annualized dividend rate of $2.56 per share yielded 3.0% on the closing stock price of $85.04 on April 18, 2018.

FINANCIAL STRENGTH AND FLEXIBILITY

EastGroup continues to maintain a strong and flexible balance sheet.  Debt-to-total market capitalization was 27.8% at March 31, 2018.  For the first quarter, the Company had interest and fixed charge coverage ratios of 5.68x and a debt to earnings before interest, taxes, depreciation and amortization for real estate (EBITDAre) ratio of 5.69x.

During the first quarter, EastGroup issued and sold 179,501 shares of common stock under its continuous equity program at an average price of $82.68 per share, providing net proceeds to the Company of $14.6 million.

In February, the Company refinanced a $65 million unsecured term loan, resulting in a 55 basis point reduction in the loan's effectively fixed interest rate. The loan, which has a maturity date of April 1, 2023, now has an effectively fixed interest rate of 2.313%. The refinancing will provide a net annual savings to the Company of approximately $340,000.

In mid-April, EastGroup closed $60 million of senior unsecured private placement notes with an insurance company. The notes have a 10-year term and a fixed interest rate of 3.93% with semi-annual interest 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.

OUTLOOK FOR 2018

EPS for 2018 is now estimated to be in the range of $2.33 to $2.43.  Estimated FFO per share attributable to common stockholders for 2018 is now estimated to be in the range of $4.51 to $4.61. The table below reconciles projected net income attributable to common stockholders to projected FFO.
 
 
Low Range
 
High Range
 
 
Q2 2018
 
Y/E 2018
 
Q2 2018
 
Y/E 2018
 
 
(In thousands, except per share data)
 
 
 
 
 
 
 
 
 
Net income attributable to common stockholders
 
$
17,039

 
81,561

 
17,739

 
85,065

Depreciation and amortization
 
21,622

 
86,691

 
21,622

 
86,691

Gain on sales of depreciable real estate investments
 

 
(10,222
)
 

 
(10,222
)
Funds from operations attributable to common stockholders
 
$
38,661

 
158,030

 
39,361

 
161,534

 
 
 
 
 
 
 
 
 
Diluted shares
 
34,986

 
35,047

 
34,986

 
35,047

 
 
 
 
 
 
 
 
 
Per share data (diluted):
 
 

 
 

 
 

 
 

   Net income attributable to common stockholders
 
$
0.49

 
2.33

 
0.51

 
2.43

   Funds from operations attributable to common stockholders
 
1.11

 
4.51

 
1.13

 
4.61

















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400 W. PARKWAY PLACE, SUITE 100 – RIDGELAND, MS 39157 – TEL. 601-354-3555 – FAX 601-352-1441




The following assumptions were used for the mid-point:
Metrics
 
Guidance for Q2 2018
 
Revised Guidance for Year 2018
 
Initial Guidance for Year 2018 (1/31/18 Press Release)
 
Actual for Year 2017
FFO per share
 
$1.11 - $1.13
 
$4.51 - $4.61
 
$4.50
 
$4.26
FFO per share increase over prior year period
 
6.7%
 
7.0%
 
5.6%
 
6.0%
Same Property Net Operating Income (PNOI) growth:
 
 
 
 
 
 
 
 
     Straight-line basis
 
5.4% - 5.8%
 
2.5% - 3.5% (1)
 
2.3% (1)
 
2.8%
     Cash basis (2)
 
5.2% - 5.6%
 
3.2% - 4.2% (1)
 
2.7% (1)
 
3.3%
     Average quarterly same PNOI growth -
          Straight-line basis
 
n/a
 
4.0%
 
3.3%
 
3.6%
Average month-end occupancy
 
95.1%
 
95.5%
 
95.2%
 
95.5%
Lease termination fee income
 
$79,000
 
$361,000
 
$300,000
 
$468,000
Bad debt expense
     (No identified bad debts for remainder of 2018)
 
$250,000
 
$840,000
 
$1,000,000
 
$499,000
Development starts:
 
 
 
 
 
 
 
 
     Square feet
 
638,000
 
1.4 million
 
1.4 million
 
1.3 million
     Projected total investment
 
$57 million
 
$120 million
 
$120 million
 
$109 million
Development-stage operating property acquisitions
 
None
 
None
 
None
 
$10 million
Operating property acquisitions
 
$5 million
 
$40 million
 
$50 million
 
$55 million
Operating property dispositions
     (Potential gains on dispositions are not included
     in the projections)
 
None
 
$40 million
 
$50 million
 
$38 million
Gain (loss) on sales of non-operating real estate
 
None
 
$86,000
 
None
 
$293,000
Average variable interest rate on unsecured
     bank credit facilities
 
3.0%
 
3.5%
 
2.9%
 
2.1%
Unsecured debt closing in period
 
$60 million at 3.93%
 
$140 million at
4.3% weighted
average interest
rate

 
$140 million at
4.3% weighted
average interest
rate

 
$60 million at 3.46%
Common stock issuances
 
$12.5 million
 
$50 million
 
$50 million
 
$111 million
General and administrative expense
 
$3.6 million
 
$13.7 million
 
$13.2 million
 
$15.0 million


(1) Includes properties which have been in the operating portfolio since 1/1/17 and are projected to be in the operating portfolio through 12/31/18.

(2) Beginning on 1/1/18, the Cash basis for 2018 and 2017 excludes straight-line rent adjustments and amortization of above/below market rent intangibles. In previous years, this metric excluded straight-line rent adjustments only. See the Definitions section of this press release for additional information about the change in this operating metric.

DEFINITIONS

The Company’s chief decision makers use two primary measures of operating results in making decisions:  (1) property net operating income (PNOI), 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, and (2) funds from operations attributable to common stockholders (FFO).  EastGroup defines FFO consistent with the National Association of Real Estate Investment Trusts’ definition, as net income (loss) attributable to common stockholders computed in accordance with U.S. generally accepted accounting principles (GAAP), excluding gains or losses from sales of depreciable real estate property and impairment losses, plus real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures.

PNOI and FFO 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

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400 W. PARKWAY PLACE, SUITE 100 – RIDGELAND, MS 39157 – TEL. 601-354-3555 – FAX 601-352-1441




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.

EastGroup sometimes refers to PNOI from Same Properties as "Same PNOI" in this press release and the accompanying reconciliation. Same Properties is defined as operating properties owned during the entire current period and prior year reporting period. Development properties are excluded until held in the operating portfolio for both the current and prior year reporting periods.

The Company's chief decision makers also use Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (EBITDAre) in making decisions. EBITDAre is defined as Net Income, excluding gains or losses from sales of depreciable real estate property, plus interest, taxes, depreciation and amortization.

In a press release dated January 17, 2018, the Company, along with a group of other leading industrial REITs (the Industrial REIT Group), announced that the Industrial REIT Group has agreed on a consistent methodology to calculate various non-GAAP property operating metrics. These non-GAAP metrics include common methodologies for determining property stabilization and occupancy as well as reporting of comparative changes in rental rates and tenant retention rates. In addition, the Industrial REIT Group has agreed on the definition of the annual pool of properties (same property pool) used in calculating same property net operating income growth (same property NOI). Specifically, the annual same property pool will only include properties held as of the beginning of the prior calendar year which were stabilized (according to the agreed upon definition) throughout both periods presented.

Beginning in the first quarter of 2018, all members of the Industrial REIT Group have agreed to calculate these non-GAAP metrics based on the agreed upon methodologies. These conforming changes do not have a material impact on EastGroup's non-GAAP metrics for periods prior to 2018. The actual results for 2018 and outlook for 2018 included in this earnings release are based on the revised methodologies.

As a result of the efforts of the Industrial REIT Group, EastGroup made the following conforming changes, effective January 1, 2018:
The Company transfers development properties to the operating portfolio at the earlier of 90% occupancy or one year after shell completion. EastGroup's previous policy was to transfer properties at the earlier of 80% occupancy or one year after shell completion.
The calculation of the Company's rental rate change no longer excludes leases for space which has been vacant for more than 24 months. All leases are now included, with the exception of short-term leases with terms less than 12 months and leases of first generation space in properties acquired or developed by EastGroup.
The calculation of same property NOI on the cash basis excludes straight-line rent adjustments and amortization of above/below market rent intangibles. In prior periods, EastGroup included the amortization of above/below market rent intangibles in its calculation of same property NOI on the cash basis.

CONFERENCE CALL

EastGroup will host a conference call and webcast to discuss the results of its first quarter and review the Company’s current operations on Friday, April 20, 2018, at 11:00 a.m. Eastern Daylight Time.  A live broadcast of the conference call is available by dialing 1-877-876-9177 (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 Friday, April 27, 2018.  The telephone replay can be accessed by dialing 1-800-727-5306, 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.




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COMPANY INFORMATION

EastGroup Properties, Inc. 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 50,000 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 in lease-up and under construction, currently includes approximately 39.7 million square feet.  EastGroup Properties, Inc. press releases are available on the Company’s website at www.eastgroup.net.

FORWARD-LOOKING STATEMENTS

The Company's assumptions and financial projections in this release are based upon "forward-looking" information and are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Words such as “will,” “anticipates,” “expects,” “believes,” “intends,” “plans,” “seeks,” “estimates,” variations of such words and similar expressions are intended to identify such forward-looking statements, which generally are not historical in nature.  All statements that address operating performance, events or developments that the Company expects or anticipates will occur in the future, including statements relating to rent and occupancy growth, development activity, the acquisition or sale of properties, general conditions in the geographic areas where the Company operates and the availability of capital, are forward-looking statements.  Forward-looking statements are inherently subject to known and unknown risks and uncertainties, many of which the Company cannot predict, including, without limitation:
 
changes in general economic conditions;
the extent of customer defaults or of any early lease terminations;
the Company's ability to lease or re-lease space at current or anticipated rents;
the availability of financing;
failure to maintain credit ratings with rating agencies;
changes in the supply of and demand for industrial/warehouse properties;
increases in interest rate levels;
increases in operating costs;
natural disasters, terrorism, riots and acts of war, and the Company's ability to obtain adequate insurance;
changes in governmental regulation, tax rates and similar matters;
attracting and retaining key personnel; and
other risks associated with the development and acquisition of properties, including risks that development projects may not be completed on schedule, development or operating costs may be greater than anticipated or acquisitions may not close as scheduled.

Although the Company believes that the expectations reflected in the forward-looking statements are based upon reasonable assumptions at the time made, the Company can give no assurance that such expectations will be achieved.  The Company assumes no obligation whatsoever to publicly update or revise any forward-looking statements.  See also the information contained in the Company’s reports filed or to be filed from time to time with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended.

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EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
 
 
 
 
 
 
Three Months Ended
 
 
 
March 31,
 
 
 
2018
 
2017
 
REVENUES
 
 
 
 
 
Income from real estate operations
 
$
72,120

 
66,137

 
Other revenue
 
83

 
17

 
 
 
72,203

 
66,154

 
EXPENSES
 
 

 
 

 
Expenses from real estate operations
 
20,676

 
19,007

 
Depreciation and amortization
 
21,685

 
20,225

 
General and administrative
 
3,463

 
5,478

 
 
 
45,824

 
44,710

 
OPERATING INCOME
 
26,379

 
21,444

 
OTHER INCOME (EXPENSE)
 
 

 
 

 
Interest expense
 
(8,607
)
 
(8,686
)
 
Gain on sales of real estate investments
 
10,222

 

 
Other
 
754

 
215

 
NET INCOME
 
28,748

 
12,973

 
Net income attributable to noncontrolling interest in joint ventures
 
(35
)
 
(154
)
 
NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS
 
28,713

 
12,819

 
Other comprehensive income - cash flow hedges
 
3,606

 
1,410

 
TOTAL COMPREHENSIVE INCOME
 
$
32,319

 
14,229

 
BASIC PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS
 
 
 
 
 
Net income attributable to common stockholders
 
$
0.83

 
0.38

 
Weighted average shares outstanding
 
34,689

 
33,361

 
DILUTED PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS
 
 
 
 
 
Net income attributable to common stockholders
 
$
0.83

 
0.38

 
Weighted average shares outstanding
 
34,736

 
33,409

 
 
 
 
 
 
 




EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
 
 
 
 
 
 
 
Three Months Ended
 
 
March 31,
 
 
2018
 
2017
 
 
 
 
 
NET INCOME
 
$
28,748

 
12,973

(Gain) on sales of real estate investments
 
(10,222
)
 

(Gain) loss on sales of non-operating real estate
 
(86
)
 
40

(Gain) on sales of other
 
(427
)
 

Interest income
 
(55
)
 
(62
)
Other revenue
 
(83
)
 
(17
)
Depreciation and amortization
 
21,685

 
20,225

Company's share of depreciation from unconsolidated investment
 
31

 
31

Interest expense (1)
 
8,607

 
8,686

General and administrative expense (2)
 
3,463

 
5,478

Noncontrolling interest in PNOI of consolidated 80% joint ventures
 
(79
)
 
(211
)
PROPERTY NET OPERATING INCOME (PNOI)
 
$
51,582

 
47,143

COMPONENTS OF PNOI:
 
 

 
 

PNOI from Same Properties (3)
 
$
47,003

 
45,079

PNOI from 2017 Acquisitions
 
733

 
227

PNOI from 2017 and 2018 Development and Redevelopment Properties
 
3,728

 
1,094

PNOI from 2017 and 2018 Operating Property Dispositions
 
215

 
843

Other PNOI
 
(97
)
 
(100
)
TOTAL PNOI
 
$
51,582

 
47,143

NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS
 
$
28,713

 
12,819

Depreciation and amortization
 
21,685

 
20,225

Company's share of depreciation from unconsolidated investment
 
31

 
31

Depreciation and amortization from noncontrolling interest
 
(44
)
 
(55
)
(Gain) on sales of real estate investments
 
(10,222
)
 

FUNDS FROM OPERATIONS (FFO) ATTRIBUTABLE TO COMMON STOCKHOLDERS
 
$
40,163

 
33,020

NET INCOME
 
$
28,748

 
12,973

Interest expense (1)
 
8,607

 
8,686

Depreciation and amortization
 
21,685

 
20,225

Company's share of depreciation from unconsolidated investment
 
31

 
31

EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA)
 
59,071

 
41,915

(Gain) on sales of real estate investments
 
(10,222
)
 

EBITDA for Real Estate (EBITDAre)
 
$
48,849

 
41,915

DILUTED PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS
 
 

 
 

Net income attributable to common stockholders
 
$
0.83


0.38

Funds from operations (FFO) attributable to common stockholders
 
$
1.16


0.99

Weighted average shares outstanding for EPS and FFO purposes
 
34,736


33,409

 
 
 
 
 
(1)  Net of capitalized interest of $1,602 and $1,646 for the three months ended March 31, 2018 and 2017, respectively.
 
 
 
 
 
(2) Net of capitalized development costs of $1,123 and $1,244 for the three months ended March 31, 2018 and 2017, respectively.
 
 
 
 
 
(3) Same Properties is defined as operating properties owned during the entire current period and prior year reporting period. Development properties are excluded until held in the operating portfolio for both the current and prior year reporting periods.


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