Company: EGP
Filing Date: 2025-07-23
Form Type: 10-Q
Source: 0000049600-25-000100
Chunk: 26

Company: EASTGROUP PROPERTIES INC
Filing Date: 2025-07-23
Form: 10-Q
Item: Part I, Item 1
Chunk 26
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 of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the term of the agreements without exchange of the underlying notional amount.  As of June 30, 2025, the Company had five interest rate swaps outstanding, all of which are used to hedge the variable cash flows associated with unsecured loans.  All of the Company’s interest rate swaps convert the related loans’ Term SOFR rate components to effectively fixed interest rates, and the Company has concluded that each of the hedging relationships is highly effective.   The changes in the fair value of derivatives designated and qualifying as cash flow hedges are recorded in Other comprehensive income (loss) and are subsequently reclassified into earnings through Interest expense as interest payments are made or received on the Company’s variable-rate debt in the period that the hedged forecasted transaction affects earnings.  The Company estimates that an additional $8,033,000 will be reclassified from Other comprehensive income (loss) as a decrease to Interest expense over the next twelve months.The Company’s valuation methodology for over-the-counter (“OTC”) derivatives is to discount cash flows based on SOFR market data. Uncollateralized or partially-collateralized trades include appropriate economic adjustments for funding costs and credit risk. The Company calculates its derivative valuations using mid-market prices.As of June 30, 2025 and December 31, 2024, the Company had the following outstanding interest rate derivatives that are designated as cash flow hedges of interest rate risk:NOTIONAL VALUE OF INTEREST RATE DERIVATIVESJune 30,2025December 31,2024(In thousands)Interest Rate Swap$100,000 100,000 Interest Rate Swap100,000 100,000 Interest Rate Swap— 50,000 Interest Rate Swap100,000 100,000 Interest Rate Swap75,000 75,000 Interest Rate Swap100,000 100,000 The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024.  See Note 18 for additional information on the fair value of the Company’s interest rate swaps.   FAIR VALUE OF DERIVATIVES DESIGNATED AS CASH FLOW HEDGESJune 30,2025December 31,2024(In thousands)    Interest rate swap assets (1)$13,227 21,953