10-QPeriod: Q3 FY2015

ESSEX PROPERTY TRUST, INC. Quarterly Report for Q3 Ended Sep 30, 2015

Filed November 4, 2015For Securities:ESS

Summary

Essex Property Trust, Inc. (ESS) reported strong performance for the nine months ended September 30, 2015, demonstrating robust revenue growth and effective operational management. The company's rental and other property revenues increased significantly compared to the prior year, driven by higher average rental rates across its key markets in Southern California, Northern California, and the Seattle metropolitan area. This revenue growth, coupled with disciplined expense management, contributed to improved net income and operating results. The balance sheet shows a healthy increase in total assets, primarily due to growth in real estate holdings. While the company's debt levels also increased, largely as a result of strategic acquisitions and the completion of the BRE merger in the prior year, its access to capital markets and existing credit facilities appear sufficient for ongoing operations and strategic initiatives. The company continued to actively manage its portfolio through acquisitions, development, and dispositions, positioning itself for continued growth in its core West Coast markets.

Financial Highlights

33 data points
Beta

Revenue

$304.63M

Net Income

$43.64M

14.3% Net Margin

EPS (Diluted)

$0.65

Total Assets

$12.01B

Cash & Equivalents

$35.67M

Free Cash Flow

$200.86M

Financial Statements
Beta
Revenue$304.63M
Operating Expenses$221.94M
Operating Income$82.69M
Interest Expense$50.05M
Net Income$43.64M
EPS (Basic)$0.65
EPS (Diluted)$0.65
Shares Outstanding (Basic)65.14M
Shares Outstanding (Diluted)65.30M

Key Highlights

  • 1Total revenues for the nine months ended September 30, 2015, increased by 28.0% to $876.9 million compared to $684.8 million in the same period of 2014, indicating significant top-line growth.
  • 2Net income available to common stockholders for the nine months ended September 30, 2015, rose to $147.2 million ($2.27 per diluted share) from $76.7 million ($1.41 per diluted share) in the comparable period of 2014, reflecting improved profitability.
  • 3The company's total assets grew to $12.01 billion as of September 30, 2015, from $11.53 billion at the end of 2014, primarily driven by increases in rental properties.
  • 4Rental properties, net of depreciation, increased to $10.46 billion from $9.68 billion, showcasing continued investment in the core real estate portfolio.
  • 5Total liabilities increased to $5.66 billion from $5.37 billion, with a notable rise in unsecured debt, net, reflecting strategic financing activities.
  • 6The company maintained strong financial occupancy rates, with stabilized apartment communities averaging 96.3% for the nine months ended September 30, 2015.
  • 7Net cash provided by operating activities significantly increased to $487.9 million for the nine months ended September 30, 2015, compared to $358.2 million in the prior year, indicating strong cash generation from core operations.

Frequently Asked Questions

Essex Property Trust, Inc. is a self-administered and self-managed Real Estate Investment Trust (REIT) that acquires, develops, redevelops, and manages apartment communities. Its primary geographic focus is on the West Coast of the United States, specifically in Southern California, Northern California, and the Seattle metropolitan areas.

For the nine months ended September 30, 2015, Essex reported a substantial increase in total revenues to $876.9 million, up from $684.8 million in the same period of 2014. Net income available to common stockholders also saw a significant rise, reaching $147.2 million compared to $76.7 million in the prior year, reflecting strong operational performance and revenue growth.

As of September 30, 2015, Essex had total debt of approximately $5.32 billion, with unsecured debt and mortgage notes payable being the largest components. The company actively manages its debt through borrowings under credit facilities, issuance of unsecured notes, and repayment of existing debt. Its credit ratings from Fitch, Moody's, and S&P indicate a stable to positive outlook on its creditworthiness. The company also utilizes derivative instruments like interest rate swaps to manage interest rate exposure.

The company's total assets grew to $12.01 billion as of September 30, 2015. The primary driver of this growth is the increase in its 'Rental properties' asset class, which rose from $9.68 billion to $10.46 billion (net of depreciation), indicating continued investment in its core real estate portfolio through acquisitions and development.