10-QPeriod: Q2 FY2019

ESSEX PROPERTY TRUST, INC. Quarterly Report for Q2 Ended Jun 30, 2019

Filed July 25, 2019For Securities:ESS

Summary

Essex Property Trust, Inc. (ESS) reported solid financial performance for the six months ended June 30, 2019. Total revenues increased by 3.2% year-over-year to $717.9 million, driven by a 3.3% rise in Same-Property revenues, primarily due to a 3.4% increase in average rental rates across its portfolio. Net income available to common stockholders grew to $211.1 million from $191.4 million in the prior year period, representing a 10.3% increase. The company maintained strong occupancy rates, with Same-Property financial occupancy at 96.8% for the first six months of 2019. The company continues to invest in its development pipeline, with significant costs incurred and remaining for projects aggregating 1,853 apartment homes. Liquidity remains strong, supported by operating cash flows, marketable securities, and available credit lines, ensuring sufficient resources for the next twelve months.

Financial Highlights

33 data points
Beta

Revenue

$361.63M

Net Income

$92.28M

25.5% Net Margin

EPS (Diluted)

$1.40

Total Assets

$12.67B

Cash & Equivalents

$38.17M

Free Cash Flow

$174.07M

Financial Statements
Beta
Revenue$361.63M
Operating Expenses$237.07M
Operating Income$124.56M
Interest Expense$54.11M
Net Income$92.28M
EPS (Basic)$1.40
EPS (Diluted)$1.40
Shares Outstanding (Basic)65.72M
Shares Outstanding (Diluted)65.82M

Key Highlights

  • 1Total revenues for the first six months of 2019 increased to $717.9 million, up 3.2% from $696.0 million in the same period of 2018.
  • 2Net income available to common stockholders rose by 10.3% to $211.1 million for the first six months of 2019, compared to $191.4 million in the prior year.
  • 3Same-Property revenues grew by 3.3% to $677.4 million, driven by a 3.4% increase in average rental rates.
  • 4Same-Property financial occupancy remained strong at 96.8% for the first six months of 2019.
  • 5The company's development pipeline consists of projects aggregating 1,853 apartment homes with total estimated project costs of $1.2 billion.
  • 6Total debt increased to $5.84 billion as of June 30, 2019, with a significant portion being unsecured bonds.
  • 7The company repurchased $57.0 million of its common stock during the six months ended June 30, 2019, and had $250.0 million of purchase authority remaining under its stock repurchase plan.

Frequently Asked Questions

For the first six months of 2019, Essex Property Trust reported a 3.2% increase in total revenues to $717.9 million, compared to $696.0 million in the same period of 2018. Net income available to common stockholders increased by 10.3% to $211.1 million, up from $191.4 million in the prior year period. Same-property revenues saw a 3.3% rise, primarily driven by a 3.4% increase in average rental rates.

As of June 30, 2019, Essex Property Trust's total debt stood at $5.84 billion. The company has access to $1.24 billion in unsecured lines of credit, with $117.0 million outstanding on one line. Liquidity is further supported by $38.2 million in unrestricted cash and $215.4 million in marketable securities. Management believes these resources, along with operating cash flows and potential asset dispositions, are sufficient to meet anticipated cash needs for the next twelve months.

Essex Property Trust has a development pipeline of 1,853 apartment homes with estimated total project costs of $1.2 billion. In March 2019, the company acquired its joint venture partner's interest in One South Market for $80.6 million, resulting in a $31.5 million gain on remeasurement. In June 2019, the company acquired the Brio apartment community for $164.9 million, financed in part by assuming $98.7 million in mortgage debt and issuing DownREIT units.

Essex Property Trust has an active stock repurchase program. During the first six months of 2019, the company repurchased and retired 234,061 shares for $57.0 million. As of June 30, 2019, the company had $250.0 million in remaining purchase authority under its replenished stock repurchase plan.