10-KPeriod: FY2012

ESSEX PROPERTY TRUST, INC. Annual Report, Year Ended Dec 31, 2012

Filed February 25, 2013For Securities:ESS

Summary

Essex Property Trust, Inc. (ESS) reported its annual results for the fiscal year ending December 31, 2012. The company is a real estate investment trust (REIT) focused on acquiring, developing, and managing apartment communities primarily along the West Coast of the United States, with significant concentrations in Southern California, the San Francisco Bay Area, and the Seattle metropolitan area. During 2012, ESS demonstrated growth through strategic acquisitions, investing approximately $801.9 million in fifteen communities. The company also actively managed its portfolio by selling underperforming assets and reinvesting capital. Development and redevelopment activities remained a key focus, with a substantial pipeline of new projects aimed at enhancing future revenue streams and asset value. Financially, Essex Property Trust maintained a solid position, supported by strong operational performance and prudent capital management. The company expanded its credit facilities and issued new unsecured bonds, reflecting confidence from rating agencies with an upgrade from BBB to BBB+ by Fitch Ratings. The company also successfully raised capital through equity offerings, using the proceeds to strengthen its balance sheet and fund growth initiatives. Investors can note the consistent dividend payments and a recent increase announced in early 2013, underscoring the company's commitment to shareholder returns.

Financial Highlights

33 data points
Beta

Revenue

$535.15M

Net Income

$125.28M

23.4% Net Margin

EPS (Diluted)

$3.41

Total Assets

$4.85B

Cash & Equivalents

$18.61M

Free Cash Flow

$267.50M

Financial Statements
Beta
Revenue$535.15M
Operating Expenses$368.13M
Operating Income$167.03M
Interest Expense$111.89M
Net Income$125.28M
EPS (Basic)$3.42
EPS (Diluted)$3.41
Shares Outstanding (Basic)35.03M
Shares Outstanding (Diluted)35.12M

Key Highlights

  • 1Acquired 15 apartment communities for $801.9 million in 2012, expanding its West Coast portfolio.
  • 2Reported stable financial occupancy rates of 96.3% across its stabilized communities for 2012.
  • 3Increased its unsecured line of credit capacity to $600 million in January 2013.
  • 4Issued $300 million in senior unsecured bonds in August 2012 with a coupon rate of 3.625%.
  • 5Fitch Ratings upgraded the company's credit rating to BBB+ with a stable outlook.
  • 6Issued approximately 2.4 million shares of common stock in 2012, raising $357.7 million for debt reduction, acquisitions, and development.
  • 7Announced a $0.44 per share increase to the annualized cash dividend in February 2013, setting it at $4.84 per common share.

Frequently Asked Questions

Essex Property Trust, Inc. (ESS) is a self-administered and self-managed REIT that primarily owns, operates, develops, and redevelops apartment communities. Its strategic focus is on the West Coast of the United States, with a significant presence in Southern California, the San Francisco Bay Area, and the Seattle metropolitan area.

In 2012, Essex Property Trust significantly expanded its portfolio by acquiring 15 apartment communities for a total of $801.9 million. Concurrently, the company strategically divested two apartment communities for $28.3 million, generating a gain of $10.9 million. This active portfolio management aims to enhance the quality and returns of its real estate holdings.

Essex Property Trust focuses on maintaining a strong balance sheet and access to capital. In 2012, the company paid off $237.7 million in secured debt while issuing $200 million in unsecured bonds privately and $300 million in senior unsecured bonds publicly. They also increased their unsecured line of credit capacity and entered into interest rate swap contracts to manage interest rate risk, aiming for a mix of fixed and variable rate debt with favorable terms.

Key risks identified include dependence on key personnel, capital and credit market conditions affecting access to capital, inherent risks of debt financing (including refinancing challenges and covenant compliance), rising interest rates impacting borrowing costs, general real estate investment risks (economic downturns, local market conditions, competition), geographic concentration in California and Seattle, potential delays or underperformance in development/redevelopment projects, and environmental liabilities. The company also notes risks related to potential conflicts of interest with its Chairman and the influence of significant stockholders.