EASTGROUP PROPERTIES INCEGP

EASTGROUP PROPERTIES INC Fair Value Disclosure

10-KFiled Feb 11, 20263 min read
FAIR VALUE OF FINANCIAL INSTRUMENTS
ASC 820, Fair Value Measurement, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  ASC 820 also provides guidance for using fair value to measure financial assets and liabilities.  The FASB Codification requires disclosure of the level within the fair value hierarchy in which the fair value measurements fall, including measurements using quoted prices in active markets for identical assets or liabilities (Level 1), quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active (Level 2), and significant valuation assumptions that are not readily observable in the market (Level 3).
The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments in accordance with ASC 820 at December 31, 2025 and 2024.
 December 31,
20252024
Carrying Amount (1)
Fair Value
Carrying Amount (1)
Fair Value
(In thousands)
Financial Assets:    
Cash and cash equivalents$1,007 1,007 17,529 17,529 
   Interest rate swap assets10,500 10,500 21,953 21,953 
Financial Liabilities:    
Unsecured bank credit facilities — Variable
     rate (2)
18,845 18,883 — — 
Unsecured debt (2)
1,615,000 1,548,414 1,510,000 1,403,754 
Interest rate swap liabilities2,143 2,143 — — 

(1)Carrying amounts shown in the table are included in the Consolidated Balance Sheets under the indicated captions, except as indicated in the notes below.
(2)Carrying amounts and fair values shown in the table exclude debt issuance costs (see Notes 5 and 6 for additional information).

The following methods and assumptions were used to estimate the fair value of each class of financial instruments:

•Cash and cash equivalents:  The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The carrying amounts approximate fair value due to the short maturity of those instruments.

•Interest rate swap assets (included in Other assets, net on the Consolidated Balance Sheets): The instruments are recorded at fair value based on models using inputs, such as interest rate yield curves, SOFR swap curves, observable for substantially the full term of the contract (Level 2 input). See Note 12 for additional information on the Company’s interest rate swaps.

•Unsecured bank credit facilities: The fair value of the Company’s unsecured bank credit facilities is estimated by discounting expected cash flows at current market rates (Level 2 input), excluding the effects of debt issuance costs.

•Unsecured debt: The fair value of the Company’s unsecured debt is estimated by discounting expected cash flows at the rates currently offered to the Company for debt of the same remaining maturities, as advised by the Company’s bankers (Level 2 input), excluding the effects of debt issuance costs.

•Interest rate swap liabilities (included in Other liabilities on the Consolidated Balance Sheets): The instruments are recorded at fair value based on models using inputs, such as interest rate yield curves, SOFR swap curves, observable for substantially the full term of the contract (Level 2 input). See Note 12 for additional information on the Company’s interest rate swaps.

Historical Timeline

Fiscal YearFiled
2025Feb 11, 2026Showing above
2024Feb 12, 2025
2023Feb 14, 2024
2022Feb 15, 2023
2021Feb 16, 2022
2020Feb 17, 2021
2019Feb 13, 2020
2018Feb 14, 2019
2017Feb 14, 2018
2016Feb 15, 2017
2015Feb 17, 2016

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

Other Available Disclosures

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