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Section 1: 8-K (8-K 02.06.2019)

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):   February 6, 2019

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 2 Pages





ITEM 2.02.                      Results of Operations and Financial Condition

On February 6, 2019, EastGroup Properties, Inc. (the "Company") furnished the following documents: (i) a press release relating to its results of operations for the quarter and year ended December 31, 2018 and related matters; and (ii) quarterly supplemental financial information for the fiscal quarter ended December 31, 2018. 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 set forth 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. The information set forth in this Item 2.02, including Exhibits 99.1 and 99.2, 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
 
 
 
 
 
Press Release dated February 6, 2019.
 
Quarterly Supplemental Information for the Quarter Ended December 31, 2018.



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:         February 6, 2019

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
















Page 2 of 2 Pages

(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1 02.06.2019)

Exhibit
 
 Exhibit 99.1



396646173_egpressreleasetemplata04.gif
 
 
 
Contact:
Marshall Loeb, President and CEO
 
Brent Wood, CFO
EastGroup Properties Announces
(601) 354-3555
 
Fourth Quarter and Year 2018 Results
 
 

Fourth Quarter 2018 Results
Net Income Attributable to Common Stockholders of $0.51 Per Share (Same as the Fourth Quarter of 2017)
Funds from Operations of $1.18 Per Share Compared to $1.14 Per Share for the Fourth Quarter of 2017, an Increase of 3.5%
Same Property Net Operating Income (PNOI) for the Annual Same Property Pool (Excluding Income From Lease Terminations) for Fourth Quarter 2018 Increased 2.5% on a Straight-Line Basis and 3.7% on a Cash Basis Compared to Fourth Quarter 2017
97.3% Leased, 96.8% Occupied as of December 31, 2018; Average Occupancy of 96.5% for the Quarter
Rental Rates on New and Renewal Leases Increased an Average of 16.6%
Acquired a 45,000 Square Foot Operating Property in Austin for $4 Million
Acquired 53 Acres of Development Land in Phoenix and San Antonio for $10 Million
Started Construction of a Development Project Comprised of Two Buildings Containing 139,000 Square Feet in Dallas with Projected Total Costs of $15 Million
Transferred Four 100% Leased Development Projects (381,000 Square Feet) to the Real Estate Portfolio
Declared 156th Consecutive Quarterly Cash Dividend: $0.72 Per Share
Issued 460,589 Shares of Common Stock at an Average Price of $98.77 During the Quarter with Gross Proceeds of $45.5 Million

Year 2018 Results
Net Income Attributable to Common Stockholders of $2.49 Per Share Compared to $2.44 Per Share for 2017
Funds from Operations of $4.67 Per Share Compared to $4.26 Per Share Last Year, an Increase of 9.6%
Same PNOI (Excluding Income From Lease Terminations) for 2018 Increased 3.8% on a Straight-Line Basis and 4.3% on a Cash Basis Compared to Full Year 2017
Average Occupancy of 96.1% for the Year
Rental Rates on New and Renewal Leases Increased an Average of 15.8% During 2018
Acquired 512,000 Square Feet of Operating Properties, a 115,000 Square Foot Value-Add Property, and 83 Acres of Land for $87 Million
Started Construction of 12 Development Projects Totaling 1.7 Million Square Feet with Projected Total Costs of $148 Million
Transferred 14 Development Projects Totaling 1.7 Million Square Feet (Currently 97% Leased) to the Real Estate Portfolio
Development and Value-Add Program Consisted of 17 Projects (2.3 Million Square Feet) at December 31, 2018 with a Projected Total Investment of $206 Million
Sold 339,000 Square Feet of Operating Properties and 11 Acres of Land for $25 Million
Expanded Borrowing Capacity Under Unsecured Bank Credit Facilities to $395 Million from $335 Million
Closed $60 Million of Senior Unsecured Private Placement Notes with a Fixed Interest Rate of 3.93%
Repaid a $50 Million Unsecured Term Loan with a Fixed Interest Rate of 3.91%
Issued 1,706,474 Shares of Common Stock at an Average Price of $93.26 During the Year with Gross Proceeds of $159 Million

JACKSON, MISSISSIPPI, February 6, 2019 - EastGroup Properties, Inc. (NYSE: EGP) (the "Company") announced today the results of its operations for the three and twelve months ended December 31, 2018.


400 W. Parkway Place, Suite 100, Ridgeland, MS 39157 | TEL: 601-354-3555 | FAX: 601-352-1441 | EastGroup.net




Commenting on EastGroup’s performance, Marshall Loeb, CEO, stated, “Our strong fourth quarter and full year results are a reflection of the strength and depth of our team, the quality of our portfolio and the health and vitality of the broad industrial market. We continue to reap the rewards of a strong economy and the favorable evolution within the last mile logistics market. The advancing shift for distribution to be closer to the consumer is an affirmation of our in-fill, shallow bay, Sunbelt operating strategy."

EARNINGS PER SHARE
On a diluted per share basis, earnings per common share (EPS) was $0.51 for both the three months ended December 31, 2018 and 2017. The Company's property net operating income (PNOI) increased by $4,802,000 ($0.13 per share) for the three months ended December 31, 2018, as compared to the same period of 2017. The increase in PNOI was offset by increases in depreciation and amortization expense and interest expense.

Diluted EPS for the twelve months ended December 31, 2018, was $2.49 compared to $2.44 for 2017. PNOI increased by $18,992,000 ($0.53 per share) for the twelve months ended December 31, 2018, as compared to 2017. EastGroup recognized net gains on sales of real estate investments and non-operating real estate of $14,359,000 ($0.40 per share) during the year ended December 31, 2018, compared to $22,148,000 ($0.65 per share) during 2017. During the year ended December 31, 2018, EastGroup recognized gain on casualties and involuntary conversion of $1,245,000 ($0.04 per share), compared to zero during 2017.

FUNDS FROM OPERATIONS

Three Months Ended December 31, 2018
For the quarter ended December 31, 2018, funds from operations attributable to common stockholders (FFO) was $1.18 per share compared to $1.14 per share for the same quarter of 2017, an increase of 3.5%.

PNOI increased by $4,802,000, or 9.5%, during the quarter ended December 31, 2018, compared to the same period of 2017. PNOI increased $3,301,000 from newly developed and value-add properties, $1,031,000 from same property operations (based on the annual same property pool) and $778,000 from 2017 and 2018 acquisitions; PNOI decreased $335,000 from operating properties sold in 2017 and 2018.

The annual same property pool PNOI (excluding income from lease terminations) increased 2.5% for the quarter ended December 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 3.7%. The annual same property pool for the fourth quarter of 2018 includes properties which were included in the operating portfolio for the entire period from January 1, 2017 through December 31, 2018; this pool is comprised of properties containing 34,220,000 square feet.

The quarterly same property pool PNOI (excluding income from lease terminations) increased 3.4% for the quarter ended December 31, 2018, compared to the same quarter in 2017; on a cash basis, same PNOI increased 5.5%. The quarterly same property pool for the fourth quarter of 2018 includes properties which were included in the operating portfolio for the entire period from October 1, 2017 through December 31, 2018; this pool is comprised of properties containing 36,713,000 square feet.

Rental rates on new and renewal leases (4.6% of total square footage) increased an average of 16.6% for the fourth quarter.

Twelve Months Ended December 31, 2018
FFO for the twelve months ended December 31, 2018, was $4.67 per share compared to $4.26 per share during the same period of 2017, an increase of 9.6%.

PNOI increased by $18,992,000, or 9.8%, during the twelve months ended December 31, 2018, compared to the same period of 2017. PNOI increased $11,900,000 from newly developed and value-add properties, $6,712,000 from same


400 W. Parkway Place, Suite 100, Ridgeland, MS 39157 | TEL: 601-354-3555 | FAX: 601-352-1441 | EastGroup.net




property operations and $2,134,000 from 2017 and 2018 acquisitions; PNOI decreased $1,831,000 from operating properties sold in 2017 and 2018.

The annual same property pool PNOI (excluding income from lease terminations) increased 3.8% for the twelve months ended December 31, 2018, compared to 2017; on a cash basis, same PNOI increased 4.3%. Rental rates on new and renewal leases (18.8% of total square footage) increased an average of 15.8% for the twelve months ended December 31, 2018. Excluding leases signed during the second quarter of 2018 at University Business Center, a research and development building complex in Santa Barbara, rental rates on new and renewal leases increased an average of 16.3%.

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.”

ACQUISITIONS AND DISPOSITIONS
During October, the Company acquired 29 acres of land in San Antonio for $3.3 million. The land, which is located in the city's northeast submarket, is expected to accommodate the future development of Ridgeview 35, a four-building park totaling approximately 370,000 square feet.

Also during October, EastGroup purchased 24 acres of land in Phoenix for $6.5 million. The Company anticipates developing a four-building business distribution park known as Gilbert Crossroads which will contain approximately 315,000 square feet.

In December, EastGroup acquired Greenhill Distribution Center, a 45,000 square foot property in Austin, Texas. The 100% leased building, which was purchased for $4.2 million, is located near the Company's Settlers Crossing development project in the Round Rock submarket of Austin.

In total for the year 2018, EastGroup acquired operating properties containing 512,000 square feet, a value-add property containing 115,000 square feet, and 83 acres of land for $86.6 million.

Total sales for the year, which include 339,000 square feet of operating properties and 11 acres of land, generated gross proceeds of $25.4 million. The gains on sales of operating properties of $14,273,000 are included in Gain on sales of real estate investments; these gains from sales of depreciable real estate investments are excluded from FFO. The gain on sale of land of $86,000 is included in Other on the Consolidated Statements of Income and Comprehensive Income; the gain on sale of land is included in FFO.

Subsequent to year-end, EastGroup completed the sale of World Houston 5 for $3.8 million. The 51,000 square foot, single-tenant building was constructed in 1993. The Company expects to recognize a gain on the sale in the first quarter of 2019 which will be included in Gain on sales of real estate investments; this gain from the sale of depreciable real estate property will be excluded from FFO.















400 W. Parkway Place, Suite 100, Ridgeland, MS 39157 | TEL: 601-354-3555 | FAX: 601-352-1441 | EastGroup.net




DEVELOPMENT AND VALUE-ADD PROPERTIES
During the fourth quarter, EastGroup began construction of CreekView 121 5 & 6, a two-building development project containing 139,000 square feet in Dallas with a projected total investment of $15 million.

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

 
11/2018
 
$
5,300

 
Gateway 1
 
Miami, FL
 
200,000

 
05/2019
 
25,000

 
Broadmoor 2
 
Atlanta, GA
 
111,000

 
11/2019
 
7,400

 
Horizon XI
 
Orlando, FL
 
135,000

 
01/2020
 
10,400

 
SunCoast 5
 
Ft. Myers, FL
 
81,000

 
01/2020
 
7,700

 
Parc North 5
 
Dallas, TX
 
100,000

 
02/2020
 
9,200

 
Steele Creek V
 
Charlotte, NC
 
54,000

 
03/2020
 
5,800

 
Horizon VI
 
Orlando, FL
 
148,000

 
04/2020
 
12,700

 
Ten West Crossing 8
 
Houston, TX
 
132,000

 
04/2020
 
10,900

 
Tri-County Crossing 1 & 2
 
San Antonio, TX
 
203,000

 
04/2020
 
14,600

 
Eisenhauer Point 7 & 8
 
San Antonio, TX
 
336,000

 
05/2020
 
24,500

 
CreekView 121 5& 6
 
Dallas, TX
 
139,000

 
07/2020
 
14,900

 
   Total Development Projects Started
 
 
 
1,697,000

 
 
 
$
148,400

 

At December 31, 2018, EastGroup’s development and value-add program consisted of 17 projects (2,264,000 square feet) in 11 cities. The projects, which were collectively 44% leased as of February 5, 2019, have a projected total cost of $206 million.

During the fourth quarter, EastGroup transferred (at the earlier of 90% occupied or one year after completion) four development projects, Eisenhauer Point 5 and 6 in San Antonio, Horizon XII in Orlando and West Road 5 in Houston, to the real estate portfolio. The 100% leased projects contain a total of 381,000 square feet.

The development and value-add properties transferred to the real estate portfolio during the year 2018 are detailed in the table below.


400 W. Parkway Place, Suite 100, Ridgeland, MS 39157 | TEL: 601-354-3555 | FAX: 601-352-1441 | EastGroup.net




Development and Value-Add Properties Transferred to Real Estate Properties in 2018
 
Location
 
Size
 
Conversion Date
 
Cumulative Cost as of 12/31/18
 
Percent Leased as of 02/05/19
 
 
 
 
(Square feet)
 
 
 
(In thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
Alamo Ridge IV
 
San Antonio, TX
 
97,000

 
03/2018
 
$
7,816

 
100%
Oak Creek VII
 
Tampa, FL
 
116,000

 
03/2018
 
7,136

 
100%
Weston
 
Ft. Lauderdale, FL
 
134,000

 
03/2018
 
15,805

 
100%
Progress Center 1 & 2
 
Atlanta, GA
 
132,000

 
04/2018
 
10,521

 
61%
Horizon X
 
Orlando, FL
 
104,000

 
05/2018
 
7,446

 
100%
SunCoast 4
 
Ft. Myers, FL
 
93,000

 
05/2018
 
9,270

 
100%
Country Club V
 
Tucson, AZ
 
305,000

 
06/2018
 
24,518

 
100%
Eisenhauer Point 3
 
San Antonio, TX
 
71,000

 
06/2018
 
6,672

 
100%
Kyrene 202 III, IV & V
 
Phoenix, AZ
 
166,000

 
09/2018
 
12,928

 
100%
Steele Creek VII
 
Charlotte, NC
 
120,000

 
09/2018
 
9,143

 
100%
Eisenhauer Point 6
 
San Antonio, TX
 
85,000

 
10/2018
 
5,428

 
100%
Horizon XII
 
Orlando, FL
 
140,000

 
10/2018
 
11,988

 
100%
Eisenhauer Point 5
 
San Antonio, TX
 
98,000

 
11/2018
 
7,835

 
100%
West Road 5
 
Houston, TX
 
58,000

 
11/2018
 
4,851

 
100%
   Total Projects Transferred
 
 
 
1,719,000

 
 
 
$
141,357

 
97%

Subsequent to quarter-end, the Company began construction of three development projects: World Houston 45 (100% pre-leased, 160,000 square foot building in Houston with a projected total cost of $18 million), Gateway 5 (187,000 square foot building in Miami with a projected total cost of $22 million), and Steele Creek 9 (125,000 square foot building in Charlotte with a projected total cost of $10 million).

DIVIDENDS
EastGroup declared cash dividends of $0.72 per share in the fourth quarter of 2018. The fourth quarter dividend, which was paid on January 15, 2019, was the Company’s 156th consecutive quarterly cash distribution to shareholders.  The Company has increased or maintained its dividend for 26 consecutive years and has increased it 23 years within that period, including increases in each of the last seven years.  The Company’s payout ratio of dividends to FFO was 58% for the year.  The annualized dividend rate of $2.88 per share yielded 2.7% on the closing stock price of $105.93 on February 5, 2019.

FINANCIAL STRENGTH AND FLEXIBILITY
EastGroup continues to maintain a strong and flexible balance sheet.  Debt-to-total market capitalization was 24.9% at December 31, 2018.  The Company had interest and fixed charge coverage ratios of 5.84x for the fourth quarter and 5.73x for the year, and a debt to earnings before interest, taxes, depreciation and amortization for real estate (EBITDAre) ratio of 5.35x for the fourth quarter and 5.49x for the year.

During the fourth quarter, EastGroup issued and sold 460,589 shares of common stock under its continuous equity program at an average price of $98.77 per share, providing gross proceeds to the Company of $45.5 million. For the year ended December 31, 2018, the Company issued and sold 1,706,474 shares of common stock at an average price of $93.26 per share, providing gross proceeds to the Company of $159.1 million.

During the year 2018, the Company closed $60 million of senior unsecured private placement notes at a fixed interest rate of 3.93% and repaid a $50 million unsecured term loan with an interest rate of 3.91%. In addition, EastGroup amended and restated its unsecured revolving credit facilities which previously were scheduled to mature in July 2019 and now mature in July 2022. The total capacity of the facilities was expanded from $335 million to $395 million.

Subsequent to year end, EastGroup executed a commitment letter for $80 million of senior unsecured private placement notes with an insurance company. The notes, which are expected to close in March 2019, have a 10-year term and a


400 W. Parkway Place, Suite 100, Ridgeland, MS 39157 | TEL: 601-354-3555 | FAX: 601-352-1441 | EastGroup.net




fixed interest rate of 4.27% 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 2019
EPS for 2019 is estimated to be in the range of $2.17 to $2.27.  Estimated FFO per share attributable to common stockholders for 2019 is estimated to be in the range of $4.79 to $4.89. The table below reconciles projected net income attributable to common stockholders to projected FFO.
 
 
Low Range
 
High Range
 
 
Q1 2019
 
Y/E 2019
 
Q1 2019
 
Y/E 2019
 
 
(In thousands, except per share data)
 
 
 
 
 
 
 
 
 
Net income attributable to common stockholders
 
$
18,729

 
79,887

 
19,459

 
83,567

Depreciation and amortization
 
24,059

 
96,233

 
24,059

 
96,233

Funds from operations attributable to common stockholders
 
$
42,788

 
176,120

 
43,518

 
179,800

 
 
 
 
 
 
 
 
 
Diluted shares
 
36,522

 
36,806

 
36,522

 
36,806

 
 
 
 
 
 
 
 
 
Per share data (diluted):
 
 

 
 

 
 

 
 

   Net income attributable to common stockholders
 
$
0.51

 
2.17

 
0.53

 
2.27

   Funds from operations attributable to common stockholders
 
1.17

 
4.79

 
1.19

 
4.89


The following assumptions were used for the mid-point:
Metrics
 
 
Initial Guidance for Year 2019
 
Actual for Year 2018
FFO per share
 
 
$4.79 - $4.89
 
$4.67
FFO per share increase over prior year period
 
 
3.6%
 
9.6%
Same PNOI growth (excluding income from lease terminations):
 
 
 
 
 
  Straight-line basis — annual same property pool
 
 
2.4% - 3.4% (1)
 
3.8%
  Cash basis — annual same property pool (2)
 
 
3.5% - 4.5% (1)
 
4.3%
Average month-end occupancy
 
 
96.2%
 
96.1%
Lease termination fee income
 
 
$450,000
 
$294,000
Bad debt expense (No identified bad debts for 2019)
 
 
$900,000
 
$784,000
Development starts:
 
 
 
 
 
     Square feet
 
 
1.5 million
 
1.7 million
     Projected total investment
 
 
$141 million
 
$148 million
Value-add property acquisitions
 
 
None
 
$14 million
Operating property acquisitions
 
 
$50 million
 
$57 million
Operating property dispositions
     (Potential gains on dispositions are not included in the projections)
 
 
$47 million
 
$23 million
Unsecured debt closing in period
 
 
$140 million at 4.8% weighted
average interest rate
 
$60 million at 3.93%
Common stock issuances
 
 
$60 million
 
$159 million
General and administrative expense
 
 
$14 million
 
$14 million

(1) Includes properties which have been in the operating portfolio since 1/1/18 and are projected to be in the operating portfolio through 12/31/19 (annual same property pool); includes 36,762,000 square feet.

(2) Cash basis excludes straight-line rent adjustments and amortization of above/below market rent intangibles.




400 W. Parkway Place, Suite 100, Ridgeland, MS 39157 | TEL: 601-354-3555 | FAX: 601-352-1441 | EastGroup.net




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 and losses from sales of depreciable real estate property and impairment losses, adjusted for 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 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. 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 Company's chief decision makers use Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (EBITDAre) in making decisions. EBITDAre is defined as Net Income, adjusted for gains and losses from sales of depreciable real estate property, 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 ratios are non-GAAP financial measures calculated by dividing the Company's EBITDAre by its interest expense. These ratios provide a basis for analysis of the Company's leverage, operating performance, and its ability to service the interest payments due on its debt.

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 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 2019 included in this earnings release are based on the revised methodologies.



400 W. Parkway Place, Suite 100, Ridgeland, MS 39157 | TEL: 601-354-3555 | FAX: 601-352-1441 | EastGroup.net




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 and value-add properties to the operating portfolio at the earlier of 90% occupancy or one year after shell completion/value-add vacancy occurrence. 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 fourth quarter and review the Company’s current operations on Thursday, February 7, 2019, at 11:00 a.m. Eastern Time.  A live broadcast of the conference call is available by dialing 1-877-876-9173 (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 Thursday, February 14, 2019.  The telephone replay can be accessed by dialing 1-800-677-7085, 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.

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 and value-add acquisitions in lease-up and under construction, currently includes approximately 41.7 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 "believes," "expects," "may," "should," "intends," "plans," "estimates" or "anticipates" 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:
 
changes in general economic conditions;
the extent of customer defaults or of any early lease terminations;


400 W. Parkway Place, Suite 100, Ridgeland, MS 39157 | TEL: 601-354-3555 | FAX: 601-352-1441 | EastGroup.net




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;
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; and
other risks detailed in the sections of the Company's most recent Forms 10-K and 10-Q filed with the SEC titled "Risk Factors."

The Company assumes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
 
 
 
 
 
 
 
Three Months Ended
 
Twelve Months Ended
 
 
December 31,
 
December 31,
 
 
2018
 
2017
 
2018
 
2017
REVENUES
 
 
 
 
 
 
 
 
Income from real estate operations
 
$
77,872

 
71,327

 
299,018

 
274,031

Other revenue
 
106

 
29

 
1,374

 
119

 
 
77,978

 
71,356

 
300,392

 
274,150

EXPENSES
 
 

 
 

 
 
 
 
Expenses from real estate operations
 
22,547

 
20,748

 
86,394

 
80,108

Depreciation and amortization
 
24,241

 
21,773

 
91,704

 
83,874

General and administrative
 
3,475

 
3,386

 
13,738

 
14,972

 
 
50,263

 
45,907

 
191,836

 
178,954

OPERATING INCOME
 
27,715

 
25,449

 
108,556

 
95,196

OTHER INCOME (EXPENSE)
 
 

 
 

 
 
 
 
Interest expense
 
(8,853
)
 
(8,370
)
 
(35,106
)
 
(34,775
)
Gain on sales of real estate investments
 

 

 
14,273

 
21,855

Other
 
(279
)
 
588

 
913

 
1,313

NET INCOME
 
18,583

 
17,667

 
88,636

 
83,589

Net income attributable to noncontrolling interest in joint ventures
 
(27
)
 
(77
)
 
(130
)
 
(406
)
NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS
 
18,556

 
17,590

 
88,506

 
83,183

Other comprehensive income (loss) - cash flow hedges
 
(3,992
)
 
2,703

 
1,353

 
3,353

TOTAL COMPREHENSIVE INCOME
 
$
14,564

 
20,293

 
89,859

 
86,536

 
 
 
 
 
 
 
 
 
BASIC PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS
 
 
 
 
 
 
 
 
Net income attributable to common stockholders
 
$
0.51

 
0.51

 
2.50

 
2.45

Weighted average shares outstanding
 
36,135

 
34,406

 
35,439

 
33,996

DILUTED PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS
 
 
 
 
 
 
 
 
Net income attributable to common stockholders
 
$
0.51

 
0.51

 
2.49

 
2.44

Weighted average shares outstanding
 
36,232

 
34,505

 
35,506

 
34,047

 
 
 
 
 
 
 
 
 


400 W. Parkway Place, Suite 100, Ridgeland, MS 39157 | TEL: 601-354-3555 | FAX: 601-352-1441 | EastGroup.net




EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Twelve Months Ended
 
 
December 31,
 
December 31,
 
 
2018
 
2017
 
2018
 
2017
 
 
 
 
 
 
 
 
 
NET INCOME
 
$
18,583

 
17,667

 
88,636

 
83,589

(Gain) on sales of real estate investments
 

 

 
(14,273
)
 
(21,855
)
Net (gain) on sales of non-operating real estate
 

 
(333
)
 
(86
)
 
(293
)
Net loss on other
 
497

 

 
70

 

Interest income
 
(34
)
 
(62
)
 
(156
)
 
(247
)
Other revenue
 
(106
)
 
(29
)
 
(1,374
)
 
(119
)
Depreciation and amortization
 
24,241

 
21,773

 
91,704

 
83,874

Company's share of depreciation from unconsolidated investment
 
33

 
31

 
128

 
124

Interest expense (1)
 
8,853

 
8,370

 
35,106

 
34,775

General and administrative expense (2)
 
3,475

 
3,386

 
13,738

 
14,972

Noncontrolling interest in PNOI of consolidated 80% joint ventures
 
(77
)
 
(140
)
 
(314
)
 
(633
)
PROPERTY NET OPERATING INCOME (PNOI)
 
$
55,465

 
50,663

 
213,179

 
194,187

 
 
 
 
 
 
 
 
 
NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS
 
$
18,556

 
17,590

 
88,506

 
83,183

Depreciation and amortization
 
24,241

 
21,773

 
91,704

 
83,874

Company's share of depreciation from unconsolidated investment
 
33

 
31

 
128

 
124

Depreciation and amortization from noncontrolling interest
 
(49
)
 
(64
)
 
(182
)
 
(224
)
(Gain) on sales of real estate investments
 

 

 
(14,273
)
 
(21,855
)
FUNDS FROM OPERATIONS (FFO) ATTRIBUTABLE TO COMMON STOCKHOLDERS
 
$
42,781

 
39,330

 
165,883

 
145,102

 
 
 
 
 
 
 
 
 
NET INCOME
 
$
18,583

 
17,667

 
88,636

 
83,589

Interest expense (1)
 
8,853

 
8,370

 
35,106

 
34,775

Depreciation and amortization
 
24,241

 
21,773

 
91,704

 
83,874

Company's share of depreciation from unconsolidated investment
 
33

 
31

 
128

 
124

EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA)
 
51,710

 
47,841

 
215,574

 
202,362

(Gain) on sales of real estate investments
 

 

 
(14,273
)
 
(21,855
)
EBITDA for Real Estate (EBITDAre)
 
$
51,710

 
47,841

 
201,301

 
180,507

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

 
 

 
 
 
 
Net income attributable to common stockholders
 
$
0.51


0.51


2.49


2.44

Funds from operations (FFO) attributable to common stockholders
 
$
1.18


1.14


4.67


4.26

Weighted average shares outstanding for EPS and FFO purposes
 
36,232


34,505


35,506


34,047

 
 
 
 
 
 
 
 
 
(1)  Net of capitalized interest of $1,789 and $1,523 for the three months ended December 31, 2018 and 2017, respectively; and $6,334 and $5,765 for the twelve months ended December 31, 2018 and 2017, respectively.
 
 
 
 
 
 
 
 
 
(2) Net of capitalized development costs of $1,192 and $1,104 for the three months ended December 31, 2018 and 2017, respectively; and $4,696 and $4,754 for the twelve months ended December 31, 2018 and 2017, respectively.
 
 
 
 
 
 
 
 
 

(Back To Top)

Section 3: EX-99.2 (EXHIBIT 99.2 02.06.2019)

supplementalinformation2
Table of Contents Conference Call 877-876-9173 | ID – EastGroup February 7, 201 9 | 11:00 a.m. Eastern Time 2018 webcast available at FOURTH QUARTER EastGroup.net Supplemental Information December 31, 2018 400 W. Parkway Place, Suite 100, Ridgeland, MS 39157 | TEL: 601-354-3555 | FAX: 601-352-1441 | EastGroup.net Page 1 of 24


 
Table of Contents 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 ..................................................... 6 Same Property Portfolio Analysis ............................................................... 7 Additional Financial Information ................................................................ 8 Development and Value-Add Properties Summary .................................... 9 Development and Value-Add Properties Transferred to Real Estate Properties ... 10 Debt and Equity Market Capitalization ....................................................... 11 Continuous Equity Program ........................................................................ 12 Adjusted Debt-to-Pro Forma EBITDAre Reconciliation ............................ 13 Acquisitions and Dispositions ..................................................................... 14 Real Estate Improvements and Leasing Costs ............................................ 15 Leasing Statistics and Occupancy Summary .............................................. 16 Core Market Operating Statistics ................................................................ 17 Lease Expiration Summary ......................................................................... 18 Top 10 Customers by Annualized Base Rent .............................................. 19 Unconsolidated Investment Information ..................................................... 20 Financial Statistics ....................................................................................... 21 Outlook for 2019 ......................................................................................... 22 Glossary of REIT Terms ............................................................................. 23 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 "believes," "expects," "may," "should," "intends," "plans," "estimates" or "anticipates" 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: 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; 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; and other risks detailed in the sections of the Company's most recent Forms 10-K and 10-Q filed with the SEC titled "Risk Factors." The Company assumes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Page 2 of 24


 
Consolidated Balance Sheets (In thousands, except share and per share data) (Unaudited) December 31, 2018 December 31, 2017 ASSETS Real estate properties $ 2,553,481 2,336,734 Development and value-add properties 263,664 242,014 2,817,145 2,578,748 Less accumulated depreciation (814,915) (749,601) 2,002,230 1,829,147 Unconsolidated investment 7,870 8,029 Cash 374 16 Other assets 121,231 116,029 TOTAL ASSETS $ 2,131,705 1,953,221 LIABILITIES AND EQUITY LIABILITIES Unsecured bank credit facilities $ 193,926 195,709 Unsecured debt 723,400 713,061 Secured debt 188,461 199,512 Accounts payable and accrued expenses 86,563 64,967 Other liabilities 34,652 28,842 Total Liabilities 1,227,002 1,202,091 EQUITY Stockholders' Equity: Common stock; $.0001 par value; 70,000,000 shares authorized; 36,501,356 shares issued and outstanding at December 31, 2018 and 34,758,167 at December 31, 2017 4 3 Excess shares; $.0001 par value; 30,000,000 shares authorized; no shares issued - - Additional paid-in capital 1,222,547 1,061,153 Distributions in excess of earnings (326,193) (317,032) Accumulated other comprehensive income 6,701 5,348 Total Stockholders' Equity 903,059 749,472 Noncontrolling interest in joint ventures 1,644 1,658 Total Equity 904,703 751,130 TOTAL LIABILITIES AND EQUITY $ 2,131,705 1,953,221 Page 3 of 24


 
Consolidated Statements of Income and Comprehensive Income (In thousands, except per share data) (Unaudited) Three Months Ended Twelve Months Ended December 31, December 31, 2018 2017 2018 2017 REVENUES Income from real estate operations $ 77,872 71,327 299,018 274,031 Other revenue 106 29 1,374 119 77,978 71,356 300,392 274,150 EXPENSES Expenses from real estate operations 22,547 20,748 86,394 80,108 Depreciation and amortization 24,241 21,773 91,704 83,874 General and administrative 3,475 3,386 13,738 14,972 50,263 45,907 191,836 178,954 OPERATING INCOME 27,715 25,449 108,556 95,196 OTHER INCOME (EXPENSE) Interest expense (8,853) (8,370) (35,106) (34,775) Gain on sales of real estate investments - - 14,273 21,855 Other (279) 588 913 1,313 NET INCOME 18,583 17,667 88,636 83,589 Net income attributable to noncontrolling interest in joint ventures (27) (77) (130) (406) NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS 18,556 17,590 88,506 83,183 Other comprehensive income (loss) - cash flow hedges (3,992) 2,703 1,353 3,353 TOTAL COMPREHENSIVE INCOME $ 14,564 20,293 89,859 86,536 BASIC PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS Net income attributable to common stockholders $ 0.51 0.51 2.50 2.45 Weighted average shares outstanding 36,135 34,406 35,439 33,996 DILUTED PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS Net income attributable to common stockholders $ 0.51 0.51 2.49 2.44 Weighted average shares outstanding 36,232 34,505 35,506 34,047 Page 4 of 24


 
Reconciliations of GAAP to Non-GAAP Measures (In thousands, except per share data) (Unaudited) Three Months Ended Twelve Months Ended December 31, December 31, 2018 2017 2018 2017 NET INCOME $ 18,583 17,667 88,636 83,589 (Gain) on sales of real estate investments - - (14,273) (21,855) Net (gain) on sales of non-operating real estate - (333) (86) (293) Net loss on other 497 - 70 - Interest income (34) (62) (156) (247) Other revenue (106) (29) (1,374) (119) Depreciation and amortization 24,241 21,773 91,704 83,874 Company's share of depreciation from unconsolidated investment 33 31 128 124 Interest expense (1) 8,853 8,370 35,106 34,775 General and administrative expense (2) 3,475 3,386 13,738 14,972 Noncontrolling interest in PNOI of consolidated 80% joint ventures (77) (140) (314) (633) PROPERTY NET OPERATING INCOME (PNOI) $ 55,465 50,663 213,179 194,187 NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS $ 18,556 17,590 88,506 83,183 Depreciation and amortization 24,241 21,773 91,704 83,874 Company's share of depreciation from unconsolidated investment 33 31 128 124 Depreciation and amortization from noncontrolling interest (49) (64) (182) (224) (Gain) on sales of real estate investments - - (14,273) (21,855) FUNDS FROM OPERATIONS (FFO) ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 42,781 39,330 165,883 145,102 NET INCOME $ 18,583 17,667 88,636 83,589 Interest expense (1) 8,853 8,370 35,106 34,775 Depreciation and amortization 24,241 21,773 91,704 83,874 Company's share of depreciation from unconsolidated investment 33 31 128 124 EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA) 51,710 47,841 215,574 202,362 (Gain) on sales of real estate investments - - (14,273) (21,855) EBITDA for Real Estate (EBITDAre) $ 51,710 47,841 201,301 180,507 DILUTED PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS Net income attributable to common stockholders $ 0.51 0.51 2.49 2.44 Funds from operations (FFO) attributable to common stockholders $ 1.18 1.14 4.67 4.26 Weighted average shares outstanding for EPS and FFO purposes 36,232 34,505 35,506 34,047 (1) Net of capitalized interest of $1,789 and $1,523 for the three months ended December 31, 2018 and 2017, respectively; and $6,334 and $5,765 for the twelve months ended December 31, 2018 and 2017, respectively. (2) Net of capitalized development costs of $1,192 and $1,104 for the three months ended December 31, 2018 and 2017, respectively; and $4,696 and $4,754 for the twelve months ended December 31, 2018 and 2017, respectively. Page 5 of 24


 
Consolidated Statements of Cash Flows (In thousands) (Unaudited) Twelve Months Ended December 31, 2018 2017 OPERATING ACTIVITIES Net income $ 88,636 83,589 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 91,704 83,874 Stock-based compensation expense 5,283 5,521 Net gain on sales of real estate investments and non-operating real estate (14,359) (22,148) Gain on casualties and involuntary conversion (1,245) - Changes in operating assets and liabilities: Accrued income and other assets (4,091) (5,034) Accounts payable, accrued expenses and prepaid rent (2,682) 8,333 Other 1,485 879 NET CASH PROVIDED BY OPERATING ACTIVITIES 164,731 155,014 INVESTING ACTIVITIES Development and value-add properties (167,667) (124,938) Purchases of real estate properties (57,152) (55,195) Real estate improvements (37,502) (27,385) Net proceeds from sales of real estate investments and non-operating real estate 24,508 42,710 Proceeds from casualties and involuntary conversion 1,635 - Repayments on mortgage loans receivable 1,987 171 Changes in accrued development costs 5,711 (144) Changes in other assets and other liabilities (12,955) (14,645) NET CASH USED IN INVESTING ACTIVITIES (241,435) (179,426) FINANCING ACTIVITIES Proceeds from unsecured bank credit facilities 448,100 391,617 Repayments on unsecured bank credit facilities (448,709) (387,298) Proceeds from unsecured debt 60,000 60,000 Repayments on unsecured debt (50,000) - Repayments on secured debt (11,289) (58,209) Debt issuance costs (1,922) (380) Distributions paid to stockholders (not including dividends accrued) (71,294) (86,725) Proceeds from common stock offerings 157,319 109,207 Proceeds from dividend reinvestment plan 221 228 Other (5,364) (4,534) NET CASH PROVIDED BY FINANCING ACTIVITIES 77,062 23,906 INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 358 (506) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 16 522 CASH AND CASH EQUIVALENTS AT END OF YEAR $ 374 16 SUPPLEMENTAL CASH FLOW INFORMATION Cash paid for interest, net of amounts capitalized of $6,334 and $5,765 for 2018 and 2017, respectively $ 33,458 33,634 Page 6 of 24


 
Same Property Portfolio Analysis (In thousands) (Unaudited) Three Months Ended Twelve Months Ended December 31, December 31, Annual Same Property Portfolio Analysis (Straight-Line Basis) (1) 2018 2017 % Change 2018 2017 % Change Square feet as of period end 34,220 34,220 34,220 34,220 Average occupancy 97.2% 97.5% -0.3% 96.9% 96.6% 0.3% Occupancy as of period end 97.3% 97.6% -0.3% 97.3% 97.6% -0.3% Income from real estate operations $ 68,099 66,137 3.0% $ 266,465 256,668 3.8% Less cash received for lease terminations (126) (292) (323) (507) Add straight-line rent write-offs for lease terminations 5 22 29 39 Income excluding lease termination income 67,978 65,867 3.2% 266,171 256,200 3.9% Expenses from real estate operations (20,103) (19,172) 4.9% (77,293) (74,215) 4.1% PNOI excluding income from lease terminations $ 47,875 46,695 2.5% $ 188,878 181,985 3.8% Annual Same Property Portfolio Analysis (Cash Basis) (1) Income from real estate operations $ 67,896 65,663 3.4% $ 265,037 254,661 4.1% Less cash received for lease terminations (126) (292) (323) (507) Income excluding lease termination income 67,770 65,371 3.7% 264,714 254,154 4.2% Expenses from real estate operations (19,809) (19,121) 3.6% (76,790) (74,006) 3.8% PNOI excluding income from lease terminations $ 47,961 46,250 3.7% $ 187,924 180,148 4.3% Three Months Ended December 31, Quarterly Same Property Portfolio Analysis (Straight-Line Basis) (2) 2018 2017 % Change Square feet as of period end 36,713 36,713 Average occupancy 97.1% 96.7% 0.4% Occupancy as of period end 97.3% 97.0% 0.3% Income from real estate operations $ 73,134 70,401 3.9% Less cash received for lease terminations (126) (292) Add straight-line rent write-offs for lease terminations 5 22 Income excluding lease termination income 73,013 70,131 4.1% Expenses from real estate operations (21,494) (20,301) 5.9% PNOI excluding income from lease terminations $ 51,519 49,830 3.4% Quarterly Same Property Portfolio Analysis (Cash Basis) (2) Income from real estate operations $ 72,791 69,317 5.0% Less cash received for lease terminations (126) (292) Income excluding lease termination income 72,665 69,025 5.3% Expenses from real estate operations (21,199) (20,250) 4.7% PNOI excluding income from lease terminations $ 51,466 48,775 5.5% (1) Includes properties which were included in the operating portfolio for the entire period from 1/1/17 through 12/31/18. (2) Includes properties which were included in the operating portfolio for the entire period from 10/1/17 through 12/31/18. Page 7 of 24


 
Additional Financial Information (In thousands) (Unaudited) Three Months Ended Twelve Months Ended December 31, December 31, 2018 2017 2018 2017 SELECTED INCOME STATEMENT INFORMATION (Items below represent increases or (decreases) in FFO) Straight-line (S/L) rent income adjustment $ 1,166 1,049 5,116 3,723 Bad debt expense on S/L rent (295) (51) (504) (209) Net straight-line rent adjustment 871 998 4,612 3,514 Cash received for lease terminations 126 292 323 507 Less S/L rent write-offs (5) (22) (29) (39) Net lease termination fee income 121 270 294 468 Bad debt expense (excluding S/L rent bad debt) (207) (116) (280) (290) Gain on casualties and involuntary conversion (1) 95 - 1,245 - Stock-based compensation expense (1,250) (1,255) (5,283) (5,521) Debt issuance costs amortization (346) (307) (1,352) (1,250) Acquired leases - above/below market rent adjustment amortization 190 123 667 529 Assumed mortgages - fair value adjustment amortization 6 8 27 31 Three Months Ended Twelve Months Ended December 31, December 31, 2018 2017 2018 2017 WEIGHTED AVERAGE COMMON SHARES Weighted average common shares 36,135 34,406 35,439 33,996 BASIC SHARES FOR EARNINGS PER SHARE (EPS) 36,135 34,406 35,439 33,996 Potential common shares: Unvested restricted stock 97 99 67 51 DILUTED SHARES FOR EPS AND FFO 36,232 34,505 35,506 34,047 (1) Included in Other revenue on the Consolidated Statements of Income and Comprehensive Income; included in FFO. Page 8 of 24


 
Development and Value-Add Properties Summary ($ in thousands) (Unaudited) Costs Incurred Anticipated 4th Qtr Cumulative Projected Conversion % Leased Square Feet (SF) 2018 at 12/31/18 Total Costs Date (1) 2/5/19 Lease-up Siempre Viva San Diego, CA 115,000 $ 141 14,075 14,400 01/19 100% CreekView 121 3 & 4 Dallas, TX 158,000 1,074 13,800 16,200 03/19 100% Falcon Field Phoenix, AZ 96,000 325 8,232 9,400 05/19 57% Gateway 1 Miami, FL 200,000 2,090 20,241 25,000 05/19 100% Broadmoor 2 Atlanta, GA 111,000 692 6,414 7,400 11/19 0% Total Lease-up 680,000 4,322 62,762 72,400 78% Wgt Avg % (2) Projected Stabilized Yield 7.1% Under Construction Horizon XI Orlando, FL 135,000 1,364 8,723 10,400 01/20 0% Settlers Crossing 1 Austin, TX 77,000 707 6,260 7,400 01/20 0% Settlers Crossing 2 Austin, TX 83,000 1,206 7,115 8,400 01/20 41% SunCoast 5 Ft Myers, FL 81,000 1,308 6,535 7,700 01/20 0% Airport Commerce Center 3 Charlotte, NC 96,000 2,419 5,793 7,300 02/20 36% Parc North 5 Dallas, TX 100,000 2,109 6,953 9,200 02/20 58% Steele Creek V Charlotte, NC 54,000 1,540 3,314 5,800 03/20 56% Horizon VI Orlando, FL 148,000 3,827 8,225 12,700 04/20 84% Ten West Crossing 8 Houston, TX 132,000 2,598 6,590 10,900 04/20 38% Tri-County Crossing 1 & 2 San Antonio, TX 203,000 2,608 8,895 14,600 04/20 10% Eisenhauer Point 7 & 8 San Antonio, TX 336,000 5,419 13,090 24,500 05/20 33% CreekView 121 5 & 6 Dallas, TX 139,000 5,605 5,605 14,900 07/20 0% Total Under Construction 1,584,000 30,710 87,098 133,800 29% Wgt Avg % (2) Projected Stabilized Yield 7.6% 44% Wgt Avg % Prospective Development Acres Projected SF Phoenix, AZ 24 315,000 6,809 6,809 Ft Myers, FL 35 488,000 1,515 13,322 Miami, FL 52 650,000 2,277 36,331 Orlando, FL 13 214,000 124 5,719 Tampa, FL 8 32,000 - 1,560 Atlanta, GA 10 100,000 93 726 Jackson, MS 3 28,000 - 706 Charlotte, NC 50 600,000 763 7,209 Austin, TX 15 180,000 181 3,742 Dallas, TX (3) 46 612,000 (2,790) 12,192 Houston, TX 83 1,123,000 529 16,439 San Antonio, TX 59 908,000 3,741 9,049 Total Prospective Development 398 5,250,000 13,242 113,804 398 7,514,000 $ 48,274 263,664 (1) Will transfer from Development and value-add properties to the operating portfolio at the earlier of 90% occupancy or one year after shell completion/value-add vacancy occurrence. (2) Weighted average yield based on property net operating income at 100% occupancy and rents computed on a straight-line basis. (3) Negative amount represents land inventory costs transferred to Under Construction. Page 9 of 24


 
Development and Value-Add Properties Transferred to Real Estate Properties ($ in thousands) (Unaudited) Costs Incurred 4th Qtr Cumulative % Leased Square Feet (SF) 2018 at 12/31/18 2/5/19 1st Quarter SF Alamo Ridge IV San Antonio, TX 97,000 $ 2 7,816 100% Oak Creek VII Tampa, FL 116,000 12 7,136 100% Weston Ft Lauderdale, FL 134,000 26 15,805 100% 347,000 40 30,757 2nd Quarter Country Club V Tucson, AZ 305,000 26 24,518 100% Eisenhauer Point 3 San Antonio, TX 71,000 2 6,672 100% Horizon X Orlando, FL 104,000 14 7,446 100% Progress Center 1 & 2 Atlanta, GA 132,000 - 10,521 61% SunCoast 4 Ft Myers, FL 93,000 5 9,270 100% 705,000 47 58,427 3rd Quarter Kyrene 202 III, IV & V Phoenix, AZ 166,000 (16) 12,928 100% Steele Creek VII Charlotte, NC 120,000 (13) 9,143 100% 286,000 (29) 22,071 4th Quarter Eisenhauer Point 5 San Antonio, TX 98,000 343 7,835 100% Eisenhauer Point 6 San Antonio, TX 85,000 25 5,428 100% Horizon XII Orlando, FL 140,000 47 11,988 100% West Road 5 Houston, TX 58,000 316 4,851 100% 381,000 731 30,102 Total Transferred to Real Estate Properties 1,719,000 $ 789 141,357 (1) Projected Stabilized Yield 8.1% 97% Wgt Avg % (1) Weighted average yield based on property net operating income at 100% occupancy and rents computed on a straight-line basis. Page 10 of 24


 
Debt and Equity Market Capitalization December 31, 2018 ($ in thousands, except per share data) (Unaudited) Average 2024 and Years to 2019 2020 2021 2022 2023 Beyond Total Maturity Unsecured debt (fixed rate) $ 75,000 105,000 40,000 75,000 115,000 315,000 725,000 4.6 Weighted average interest rate 2.85% 3.55% 2.34% 3.03% 2.96% 3.74% 3.34% Secured debt (fixed rate): Balloon payments 45,725 - 85,601 32,655 - 1,549 165,530 Amortization 9,842 9,096 3,962 114 119 375 23,508 55,567 9,096 89,563 32,769 119 1,924 189,038 1.8 Weighted average interest rate 7.01% 4.43% 4.55% 4.09% 3.85% 3.85% 5.18% Total unsecured debt and secured debt $ 130,567 114,096 129,563 107,769 115,119 316,924 914,038 4.0 Weighted average interest rate 4.62% 3.62% 3.86% 3.35% 2.96% 3.74% 3.72% Unsecured debt and secured debt (fixed rate) $ 914,038 Unsecured bank credit facilities (variable rate) $45MM Line - 3.503% - matures 7/30/2022 8,730 $350MM Line - 3.508% - matures 7/30/2022 187,000 Total carrying amount of debt $ 1,109,768 Total unamortized debt issuance costs (3,981) Total debt net of unamortized debt issuance costs $ 1,105,787 Equity market capitalization Shares outstanding - common 36,501,356 Price per share at quarter end $ 91.73 Total equity market capitalization $ 3,348,269 (1) Total market capitalization (debt and equity) $ 4,458,037 (1) Total debt / total market capitalization 24.9% (1) Before deducting unamortized debt issuance costs Page 11 of 24


 
Continuous Equity Program ($ in thousands, except per share data) (Unaudited) Average Shares Issued Sales Price Offering-Related and Sold (1) (Per Share) Gross Proceeds Fees and Expenses Net Proceeds 1st Quarter 2018 179,501 $ 82.68 $ 14,842 $ (240) $ 14,602 2nd Quarter 2018 750,282 91.01 68,281 (728) 67,553 3rd Quarter 2018 316,102 96.56 30,523 (353) 30,170 4th Quarter 2018 460,589 98.77 45,492 (498) 44,994 TOTAL 2018 1,706,474 $ 93.26 $ 159,138 $ (1,819) $ 157,319 (1) As of February 5, 2019, the Company had 4,694,866 shares authorized and remaining for issuance under its continuous equity program. Page 12 of 24


 
Adjusted Debt-to-Pro Forma EBITDAre Reconciliation ($ in thousands) (Unaudited) Three Months Ended Twelve Months Ended December 31, 2018 December 31, 2018 EBITDAre for the period $ 51,710 201,301 Adjust PNOI for acquisitions as if owned for entire period 55 1,909 Adjust PNOI for development and value-add properties in lease-up or under construction (144) (304) Adjust PNOI for properties sold during the period - (474) Pro Forma EBITDAre $ 51,621 202,432 PRO FORMA EBITDAre – ANNUALIZED $ 206,484 202,432 Debt at December 31, 2018 $ 1,105,787 1,105,787 Subtract development and value-add properties in lease-up or under construction (149,860) (149,860) Adjusted Debt $ 955,927 955,927 ADJUSTED DEBT-TO-PRO FORMA EBITDAre RATIO 4.63 4.72 Page 13 of 24


 
Acquisitions and Dispositions Through December 31, 2018 ($ in thousands) (Unaudited) ACQUISITIONS Purchase Date Property Name Location Size Price (1) 1st Quarter None 2nd Quarter 04/24/18 Gwinnett 316 Atlanta, GA 65,000 SF $ 4,356 06/20/18 Eucalyptus Distribution Center Chino, CA 182,000 SF 23,304 3rd Quarter 07/12/18 Siempre Viva Distribution Center (2) San Diego, CA 115,000 SF 14,033 08/13/18 LakePort 2499 Land Dallas, TX 30.4 Acres 5,700 08/29/18 Allen Station I & II Dallas, TX 220,000 SF 25,175 4th Quarter 10/15/18 Ridgeview 35 Land San Antonio, TX 29.4 Acres 3,273 10/26/18 Gilbert Crossroads Land Phoenix, AZ 23.6 Acres 6,534 12/04/18 Greenhill Distribution Center Austin, TX 45,000 SF 4,218 83.4 Acres Total Acquisitions 627,000 SF $ 86,593 DISPOSITIONS Date Property Name Location Size Gross Sales Price Realized Gain 1st Quarter 01/26/18 World Houston 18 Houston, TX 33,000 SF $ 2,460 1,078 (3) 03/20/18 56 Commerce Park Tampa, FL 181,000 SF 12,450 9,144 (3) 03/28/18 Lee Road Land Houston, TX 10.7 Acres 2,577 86 (4) 2nd Quarter None 3rd Quarter 07/26/18 35th Avenue Distribution Center Phoenix, AZ 125,000 SF 7,941 4,051 (3) 4th Quarter None 10.7 Acres Total Sales 339,000 SF $ 25,428 14,359 (1) Represents acquisition price plus closing costs. (2) Value-add property acquisition; land, building and tenant improvements are included in Development and value-add properties on the Consolidated Balance Sheets. (3) Included in Gain on sales of real estate investments on the Consolidated Statements of Income and Comprehensive Income; not included in FFO. (4) Included in Other on the Consolidated Statements of Income and Comprehensive Income; included in FFO. Page 14 of 24


 
Real Estate Improvements and Leasing Costs (In thousands) (Unaudited) Three Months Ended Twelve Months Ended December 31, December 31, REAL ESTATE IMPROVEMENTS 2018 2017 2018 2017 Upgrade on Acquisitions $ 120 4 294 161 Tenant Improvements: New Tenants 2,682 3,224 12,896 11,413 Renewal Tenants 692 625 2,926 3,357 Other: Building Improvements 2,455 1,230 9,012 3,362 Roofs 2,172 2,776 9,053 6,197 Parking Lots 766 241 2,878 1,880 Other 96 168 861 1,101 TOTAL REAL ESTATE IMPROVEMENTS (2) $ 8,983 8,268 37,920 27,471 CAPITALIZED LEASING COSTS (Principally Commissions) (1) Development and Value-Add $ 1,086 1,947 4,843 5,571 New Tenants 938 518 5,880 5,782 Renewal Tenants 1,950 981 5,038 4,907 TOTAL CAPITALIZED LEASING COSTS $ 3,974 3,446 15,761 16,260 (1) Included in Other Assets . (2) Reconciliation of Total Real Estate Improvements to Real Estate Improvements on the Consolidated Statements of Cash Flows: Twelve Months Ended December 31, 2018 2017 Total Real Estate Improvements $ 37,920 27,471 Change in Real Estate Property Payables 581 (1,313) Change in Construction in Progress (999) 1,227 Real Estate Improvements on the Consolidated Statements of Cash Flows $ 37,502 27,385 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 December 31, 2018 Leases Signed Signed Average Term Straight-Line Basis Cash Basis Improvement (1) Commission (1) Leasing Cost (1) (In Thousands) (In Years) New Leases (2) 32 428 4.6 11.8% 6.4% $ 6.31 $ 2.26 $ 8.57 Renewal Leases 58 1,386 4.6 18.7% 8.5% 0.55 1.23 1.78 Total/Weighted Average 90 1,814 4.6 16.6% 7.9% $ 1.91 $ 1.47 $ 3.38 Per Year $ 0.42 $ 0.32 $ 0.74 Weighted Average Retention (3) 80.8% Twelve Months Ended Number of Square Feet Weighted Rental Change Rental Change PSF Tenant PSF Leasing PSF Total December 31, 2018 Leases Signed Signed Average Term Straight-Line Basis Cash Basis Improvement (1) Commission (1) Leasing Cost (1) (In Thousands) (In Years) New Leases (2) 147 2,147 5.4 11.1% 2.2% $ 5.49 $ 2.40 $ 7.89 Renewal Leases 246 5,218 3.9 18.1% 8.3% 0.68 1.01 1.69 Total/Weighted Average 393 7,365 4.3 15.8% 6.3% $ 2.08 $ 1.42 $ 3.50 Per Year $ 0.48 $ 0.33 $ 0.81 Weighted Average Retention (3) 77.6% Excluding leases signed in Q2 2018 at R&D property in Santa Barbara: Twelve Months Ended Number of Square Feet Weighted Rental Change Rental Change PSF Tenant PSF Leasing PSF Total December 31, 2018 Leases Signed Signed Average Term Straight-Line Basis Cash Basis Improvement (1) Commission (1) Leasing Cost (1) (In Thousands) (In Years) New Leases (2) 143 2,112 5.4 12.4% 3.9% $ 4.24 $ 2.34 $ 6.58 (4) Total/Weighted Average 389 7,330 4.3 16.3% 6.9% $ 1.71 $ 1.40 $ 3.11 Per Year $ 0.40 $ 0.32 $ 0.72 12/31/18 09/30/18 06/30/18 03/31/18 12/31/17 Percentage Leased 97.3% 97.1% 97.0% 97.0% 97.0% Percentage Occupied 96.8% 95.7% 96.4% 96.4% 96.4% (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). (4) Includes Renewal Leases, which were not impacted by leases signed at R&D property in Santa Barbara. Page 16 of 24


 
Core Market Operating Statistics December 31, 2018 (Unaudited) Same Property PNOI Change Rental Change (excluding income from lease terminations) New and Renewal Leases (3) Total Lease Expirations QTR YTD QTR YTD Square Feet % Annualized % % in Square Feet Straight-Line Cash Straight-Line Cash Straight-Line Cash Straight-Line Cash of Properties of Total Base Rent (1) Leased Occupied 2019 (2) 2020 Basis Basis (4) Basis Basis (4) Basis Basis (4) Basis Basis (4) Florida Tampa 4,177,000 10.7% 9.8% 95.9% 95.7% 509,000 966,000 -0.1% -0.7% 1.2% 0.5% 15.4% 8.0% 20.9% 9.8% Orlando 3,372,000 8.6% 9.3% 99.4% 99.4% 311,000 598,000 2.2% 2.3% 2.3% -1.0% 16.7% 2.6% 20.1% 6.8% Jacksonville 2,273,000 5.8% 4.3% 97.7% 92.7% 416,000 503,000 -2.9% -6.1% 0.2% 0.8% 20.0% 10.8% 21.7% 11.0% Ft. Lauderdale 1,071,000 2.7% 3.4% 98.0% 97.8% 86,000 297,000 -2.0% -2.0% 2.4% 4.2% 19.0% 8.3% 15.1% 5.0% Ft. Myers 311,000 0.8% 1.0% 100.0% 100.0% 53,000 15,000 11.1% 10.5% 8.7% 6.6% N/A N/A 18.6% 9.6% 11,204,000 28.6% 27.8% 97.6% 96.5% 1,375,000 2,379,000 0.2% -0.5% 1.7% 0.6% 17.1% 7.1% 19.6% 8.4% Texas Dallas 3,570,000 9.1% 7.9% 98.4% 97.8% 219,000 602,000 1.5% 6.0% 3.3% 7.5% 22.8% 12.0% 21.7% 13.0% Houston 5,548,000 14.1% 14.8% 96.6% 96.6% 561,000 547,000 6.1% 9.6% 9.0% 12.2% 10.4% 1.1% 8.1% -1.2% San Antonio 3,042,000 7.8% 8.8% 98.2% 97.7% 445,000 464,000 3.7% 3.7% 4.2% 3.0% 16.1% 9.4% 10.0% 2.3% Austin 743,000 1.9% 2.2% 100.0% 100.0% 150,000 91,000 6.2% 5.4% -4.7% -5.9% 2.8% 0.0% 6.1% 6.4% El Paso 958,000 2.4% 1.7% 98.5% 98.5% 110,000 162,000 5.5% 2.0% 4.5% 1.7% 26.9% 19.3% 19.2% 8.8% 13,861,000 35.3% 35.4% 97.7% 97.5% 1,485,000 1,866,000 4.6% 6.9% 5.6% 7.4% 12.5% 4.4% 12.0% 3.9% California San Francisco 1,045,000 2.7% 3.2% 100.0% 100.0% 260,000 140,000 5.2% 14.4% 6.9% 9.4% 152.3% 105.8% 107.1% 86.2% Los Angeles (5) 2,323,000 5.9% 7.4% 100.0% 100.0% 110,000 190,000 2.7% 6.2% 4.8% 8.5% 30.1% 17.2% 23.5% 14.0% Santa Barbara (5) 211,000 0.5% 1.5% 93.6% 88.7% 110,000 23,000 14.5% 13.7% -2.9% -4.9% N/A N/A -10.9% -24.7% Fresno 398,000 1.0% 0.8% 100.0% 100.0% 114,000 126,000 14.0% 17.2% 4.6% 3.9% N/A N/A 8.0% 3.6% San Diego 465,000 1.2% 1.0% 90.6% 90.6% 52,000 15,000 9.4% -20.9% 17.0% -9.2% 73.7% 53.2% 41.4% 27.6% 4,442,000 11.3% 13.9% 98.7% 98.5% 646,000 494,000 5.7% 6.7% 5.8% 5.3% 92.3% 65.4% 27.2% 14.9% Arizona Phoenix 2,404,000 6.1% 6.3% 99.0% 99.0% 303,000 404,000 -3.2% 8.8% 5.9% 13.3% 26.0% 14.7% 10.8% 0.6% Tucson 1,055,000 2.7% 2.5% 100.0% 100.0% 19,000 237,000 2.9% -13.3% -0.4% -7.2% N/A N/A 20.0% 9.1% 3,459,000 8.8% 8.8% 99.3% 99.3% 322,000 641,000 -1.8% 3.5% 4.4% 8.1% 26.0% 14.7% 11.9% 1.7% North Carolina Charlotte 3,131,000 8.0% 7.0% 100.0% 99.6% 270,000 628,000 2.4% 4.1% 4.1% 4.8% 22.1% 11.9% 20.7% 7.6% 3,131,000 8.0% 7.0% 100.0% 99.6% 270,000 628,000 2.4% 4.1% 4.1% 4.8% 22.1% 11.9% 20.7% 7.6% Georgia Atlanta 779,000 2.0% 1.0% 61.4% 61.4% 87,000 23,000 N/A N/A N/A N/A N/A N/A 11.9% 10.6% 779,000 2.0% 1.0% 61.4% 61.4% 87,000 23,000 N/A N/A N/A N/A N/A N/A 11.9% 10.6% Total Core Markets 36,876,000 94.0% 93.9% 97.4% 96.9% 4,185,000 6,031,000 2.7% 4.0% 4.2% 4.8% 19.4% 9.7% 16.9% 6.9% Total Other Markets 2,355,000 6.0% 6.1% 96.0% 94.7% 244,000 212,000 -0.6% -1.8% -2.7% -3.3% 6.7% 1.6% 6.1% 0.4% Total Operating Properties 39,231,000 100.0% 100.0% 97.3% 96.8% 4,429,000 6,243,000 2.5% 3.7% 3.8% 4.3% 16.6% 7.9% 15.8% 6.3% (1) Based on the Annualized Base Rent as of the reporting period for occupied square feet (without S/L Rent). (2) Includes 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. Page 17 of 24


 
Lease Expiration Summary Total Square Feet of Operating Properties Based On Leases Signed Through Dec ember 31, 2018 ($ in thousands) (Unaudited) Annualized Current % of Total (Unaudited) 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 1,058,000 2.7% $ - 0.0% 2019 (1) 4,429,000 11.3% 28,660 12.6% 2020 6,243,000 15.9% 37,247 16.3% 2021 7,340,000 18.7% 44,134 19.3% 2022 5,618,000 14.3% 34,081 14.9% 2023 4,544,000 11.6% 27,361 12.0% 2024 4,180,000 10.7% 22,504 9.9% 2025 2,057,000 5.2% 12,329 5.4% 2026 1,054,000 2.7% 6,295 2.8% 2027 848,000 2.2% 5,790 2.5% 2028 and beyond 1,860,000 4.7% 9,891 4.3% TOTAL 39,231,000 100.0% $ 228,292 100.0% (1) Includes month-to-month leases. Page 18 of 24


 
Top 10 Customers by Annualized Base Rent As of December 31, 2018 (Unaudited) % of Total # of Total SF % of Total Annualized Customer Leases Location Leased Portfolio Base Rent(Unaudited) (1) 1 The Chamberlain Group 2 Tucson, AZ 350,000 0.9% 1.1% 2 WNA Comet West, Inc. 1 Los Angeles, CA 411,000 1.0% 1.1% 3 Essendant Co. 1 Orlando, FL 404,000 1.0% 1.0% 4 Mattress Firm 1 Houston, TX 202,000 1 Tampa, FL 109,000 1 Jacksonville, FL 49,000 1 Ft. Myers, FL 25,000 1.0% 0.9% 5 Price Transfer 1 Los Angeles, CA 262,000 0.7% 0.8% 6 Kuehne & Nagel, Inc. 2 Houston, TX 172,000 2 Charlotte, NC 106,000 0.7% 0.8% 7 Iron Mountain Information 2 Tampa, FL 184,000 Management, Inc. 2 Phoenix, AZ 59,000 1 Ft. Lauderdale, FL 45,000 1 Jacksonville, FL 40,000 0.8% 0.7% 8 Medtronic Inc. 1 Santa Barbara, CA 82,000 0.2% 0.7% 9 Arizona Nutritional 2 Phoenix, AZ 228,000 0.6% 0.6% Supplements LLC 10 U.S. Postal Service 1 Houston, TX 110,000 1 New Orleans, LA 99,000 2 Tampa, FL 59,000 0.7% 0.6% 26 2,996,000 7.6% 8.3% (1) Calculation: Customer Annualized Base Rent as of 12/31/18 (without S/L Rent) / Total Annualized Base Rent (without S/L Rent). Page 19 of 24


 
Unconsolidated Investment Information ($ in thousands) (Unaudited) Property Industry Distribution Center II (Unaudited) Acquisition Date November 23, 2004 Percent Leased 100% Total Square Feet (100%) 309,000 Company Ownership 50% EastGroup's Basis in 50% Selected Financial Information Ownership Balance Sheet Information as of December 31, 2018 ASSETS Real estate properties $ 9,364 Less accumulated depreciation (1,842) 7,522 Other assets 422 TOTAL ASSETS $ 7,944 LIABILITIES AND EQUITY Other liabilities $ 74 Equity 7,870 TOTAL LIABILITIES AND EQUITY $ 7,944 EastGroup's Net Investment at December 31, 2018 $ 7,870 (1) EastGroup's 50% Ownership Three Months Ended Twelve Months Ended December 31, December 31, 2018 2017 2018 2017 Income Statement Information Property NOI $ 217 224 869 897 Depreciation Expense (33) (31) (128) (124) (2) Equity in Earnings $ 184 193 741 773 Funds From Operations $ 217 224 869 897 (1) Presented as Unconsolidated investment on the Consolidated Balance Sheets. (2) Included in Other on the Consolidated Statements of Income and Comprehensive Income. Page 20 of 24


 
Financial Statistics ($ in thousands, except per share data) (Unaudited) Years Ended 2018 2017 2016 2015 2014 (Unaudited) ASSETS/MARKET CAPITALIZATION Assets $ 2,131,705 1,953,221 1,825,764 1,661,904 1,572,112 Equity Market Capitalization 3,348,269 3,071,927 2,461,251 1,802,957 2,040,967 (1) Total Market Capitalization (Debt and Equity) 4,458,037 4,183,620 3,566,865 2,835,194 2,974,144 Shares Outstanding - Common 36,501,356 34,758,167 33,332,213 32,421,460 32,232,587 Price per share $ 91.73 88.38 73.84 55.61 63.32 FFO CHANGE FFO per diluted share $ 4.67 4.26 4.02 3.67 3.47 Change compared to same period prior year 9.6% 6.0% 9.5% 5.8% 7.4% COMMON DIVIDEND PAYOUT RATIO Dividend distribution $ 2.72 2.52 2.44 2.34 2.22 FFO per diluted share 4.67 4.26 4.02 3.67 3.47 Dividend payout ratio 58% 59% 61% 64% 64% COMMON DIVIDEND YIELD Dividend distribution $ 2.72 2.52 2.44 2.34 2.22 Price per share 91.73 88.38 73.84 55.61 63.32 Dividend yield 2.97% 2.85% 3.30% 4.21% 3.51% FFO MULTIPLE FFO per diluted share $ 4.67 4.26 4.02 3.67 3.47 Price per share 91.73 88.38 73.84 55.61 63.32 Multiple 19.64 20.75 18.37 15.15 18.25 INTEREST & FIXED CHARGE COVERAGE RATIOS EBITDAre $ 201,301 180,507 167,196 153,574 145,461 Interest expense 35,106 34,775 35,213 34,666 35,728 Interest and fixed charge coverage ratios 5.73 5.19 4.75 4.43 4.07 DEBT-TO-EBITDAre RATIO Debt $ 1,105,787 1,108,282 1,101,333 1,027,909 929,465 EBITDAre 201,301 180,507 167,196 153,574 145,461 Debt-to-EBITDAre ratio 5.49 6.14 6.59 6.69 6.39 Adjusted debt-to-pro forma EBITDAre ratio 4.72 5.44 6.03 6.11 5.74 DEBT-TO-TOTAL MARKET CAPITALIZATION (1) 24.9% 26.6% 31.0% 36.4% 31.4% ISSUER RATINGS (2) Issuer Rating Outlook Moody's Investors Service Baa2 Stable (1) Before deducting unamortized debt issuance costs. (2) 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. Page 21 of 24


 
Outlook for 2019 (Unaudited) Low Range High Range Q1 2019 Y/E 2019 Q1 2019 Y/E 2019 (In thousands, except per share data) (Unaudited) Net income attributable to common stockholders $ 18,729 79,887 19,459 83,567 Depreciation and amortization 24,059 96,233 24,059 96,233 Funds from operations attributable to common stockholders $ 42,788 176,120 43,518 179,800 Diluted shares 36,522 36,806 36,522 36,806 Per share data (diluted): Net income attributable to common stockholders $ 0.51 2.17 0.53 2.27 Funds from operations attributable to common stockholders 1.17 4.79 1.19 4.89 The following assumptions were used for the mid-point: Initial Guidance Actual for Metrics for Year 2019 Year 2018 FFO per share $4.79 - $4.89 $4.67 FFO per share increase over prior year period 3.6% 9.6% Same PNOI growth (excluding income from lease terminations): Straight-line basis — annual same property pool 2.4% - 3.4% (1) 3.8% Cash basis — annual same property pool (2) 3.5% - 4.5% (1) 4.3% Average month-end occupancy 96.2% 96.1% Lease termination fee income $450,000 $294,000 Bad debt expense (No identified bad debts for 2019) $900,000 $784,000 Development starts: Square feet 1.5 million 1.7 million Projected total investment $141 million $148 million Value-add property acquisitions None $14 million Operating property acquisitions $50 million $57 million Operating property dispositions (Potential gains on dispositions are not included in the projections) $47 million $23 million Unsecured debt closing in period $140 million at $60 million at 4.8% weighted 3.93% average interest rate Common stock issuances $60 million $159 million General and administrative expense $14 million $14 million (1) Includes properties which have been in the operating portfolio since 1/1/18 and are projected to be in the operating portfolio through 12/31/19 (annual same property pool); includes 36,762,000 square feet. (2) Cash basis excludes straight-line rent adjustments and amortization of above/below market rent intangibles. Page 22 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 (Unaudited) 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. Cash Basis: The Company adjusts its GAAP reporting to exclude straight-line rent adjustments and amortization of above/below market rent intangibles. Debt-to-EBITDAre Ratio: A ratio calculated by dividing a company’s debt by its EBITDAre; this ratio 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): Earnings, defined as Net Income, excluding gains or losses from sales of depreciable real estate property, 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. 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 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. 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. 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. 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. 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 financial measure used to evaluate the performance of the Company’s investments in real estate assets and its operating results. Page 23 of 24


 
Glossary of REIT Terms (Continued) 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(Unaudited) 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. • Quarterly Same Property Pool: Includes properties which were included in the operating portfolio for the entire period from October 1, 2017 through December 31, 2018. • Annual Same Property Pool: Includes properties which were included in the operating portfolio for the entire period from January 1, 2017 through December 31, 2018. 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 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. Page 24 of 24


 
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