Company: EGP
Filing Date: 2025-02-12
Form Type: 10-K
Source: 0000049600-25-000019
Chunk: 53

Company: EASTGROUP PROPERTIES INC
Filing Date: 2025-02-12
Form: 10-K
Item: Item 15
Chunk 53
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 2022 are presented in the Company’s Consolidated Statements of Changes in Equity and are summarized below.  See Note 12 for information regarding the Company’s interest rate swaps.Years Ended December 31, 202420232022ACCUMULATED OTHER COMPREHENSIVE INCOME:(In thousands)Balance at beginning of year $24,888 36,371 1,302   Other comprehensive income (loss) - interest rate swaps(2,935)(11,483)35,069 Balance at end of year $21,953 24,888 36,371 

(12) DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

 The Company is exposed to certain risks arising from both its business operations and economic conditions.  The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities.  The Company manages economic risk, including interest rate, liquidity and credit risk primarily by managing the amount, sources and duration of its debt funding and, to a limited extent, the use of derivative instruments.  Specifically, the Company has entered into derivative instruments to manage exposures that arise from business activities that result in the payment of future known and uncertain cash amounts, the value of which are determined by interest rates.  The Company’s derivative instruments, described below, are used to manage differences in the amount, timing and duration of the Company’s known or expected cash payments principally related to certain of the Company’s borrowings.  The Company’s objective in using interest rate derivatives is to change variable interest rates to fixed interest rates by using interest rate swaps.  Interest rate swaps designated as cash flow hedges involve the receipt 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 December 31, 2024, EastGroup had six 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