Company: EGP
Filing Date: 2025-02-12
Form Type: 10-K
Source: 0000049600-25-000019
Chunk: 20

Company: EASTGROUP PROPERTIES INC
Filing Date: 2025-02-12
Form: 10-K
Item: Item 15
Chunk 20
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 from business distribution space.  Minimum rental income from real estate operations is recognized on a straight-line basis, when collectability is probable.  The straight-line rent calculation on leases includes the effects of rent concessions and scheduled rent increases, and the calculated straight-line rent income is recognized over the terms of the individual leases.  The Company assesses the collectability of rent receivables, with a focus on identifying tenant defaults and bankruptcies that could affect collection of outstanding and future receivables.  Management specifically analyzes the age of receivables, the payment history and financial condition of the tenant, on a tenant-by-tenant basis.  If deemed uncollectible, revenue is recognized only when lease payments are received, or until such time that collection of future rent is deemed to be probable in accordance with ASC 842, Leases.  The Company’s primary source of revenue is rental income from business distribution space; as such, the Company is a lessor on a significant number of leases.  The Company applies the principles of ASC 842, Leases.  Initial indirect costs (primarily legal costs related to lease negotiations) are expensed rather than capitalized. EastGroup recorded Indirect leasing costs of $785,000, $582,000 and $546,000 on the Consolidated Statements of Income and Comprehensive Income during the years ended December 31, 2024, 2023 and 2022, respectively. As permitted by ASC 842, Leases, EastGroup made an accounting policy election by class of underlying asset to not separate non-lease components (such as common area maintenance) of a contract from the lease component to which they relate when specific criteria are met.  The Company believes its leases meet the criteria. The table below presents the components of Income from real estate operations for the years ended December 31, 2024, 2023 and 2022:Years Ended December 31,202420232022(In thousands)Lease income — operating leases$477,647 424,063 364,957 Variable lease income (1)160,388 142,116 121,860 Income from real estate operations$638,035 566,179 486,817 (1)Primarily includes tenant reimbursements for real estate taxes, insurance and common area maintenance.Future Minimum Rental Receipts Under Non-Cancelable LeasesThe Company’s leases with its customers may include various provisions such as scheduled rent increases, renewal options and termination options.  The majority