10-QPeriod: Q2 FY2020

ESSEX PROPERTY TRUST, INC. Quarterly Report for Q2 Ended Jun 30, 2020

Filed August 5, 2020For Securities:ESS

Summary

Essex Property Trust, Inc. (ESS) reported its second-quarter 2020 results, highlighting resilience amidst the COVID-19 pandemic. Total revenues for the quarter increased to $370.5 million, up from $361.6 million in the prior year's second quarter. Net income available to common stockholders was $84.5 million, or $1.29 per diluted share, compared to $92.3 million, or $1.40 per diluted share, in the same period last year. The company's balance sheet remained robust, with total assets of $13.2 billion as of June 30, 2020. Debt management was a focus, with significant unsecured debt issuances and repayments demonstrating proactive capital allocation. Despite the economic uncertainties brought on by the pandemic, Essex maintained a strong liquidity position and access to capital markets, underpinning its ability to continue operations and manage its portfolio effectively.

Financial Highlights

33 data points
Beta

Revenue

$370.50M

Net Income

$84.46M

22.8% Net Margin

EPS (Diluted)

$1.29

Total Assets

$13.18B

Cash & Equivalents

$246.20M

Free Cash Flow

$159.18M

Financial Statements
Beta
Revenue$370.50M
Operating Expenses$267.36M
Operating Income$119.74M
Interest Expense$54.45M
Net Income$84.46M
EPS (Basic)$1.29
EPS (Diluted)$1.29
Shares Outstanding (Basic)65.41M
Shares Outstanding (Diluted)65.43M

Key Highlights

  • 1Total revenues for Q2 2020 were $370.5 million, an increase from $361.6 million in Q2 2019.
  • 2Net income available to common stockholders was $84.5 million for Q2 2020, a slight decrease from $92.3 million in Q2 2019.
  • 3Diluted Earnings Per Share (EPS) for Q2 2020 was $1.29, down from $1.40 in Q2 2019.
  • 4Total assets grew to $13.2 billion as of June 30, 2020, compared to $12.7 billion at December 31, 2019.
  • 5The company repurchased approximately $20.1 million of its common stock during Q2 2020.
  • 6Essex issued $500 million in senior unsecured notes due 2032 in February 2020 and an additional $150 million in June 2020, indicating strong access to debt markets.
  • 7Same-Property revenues decreased by 3.8% in Q2 2020 compared to Q2 2019, primarily due to increased delinquencies and a decrease in financial occupancy, reflecting the impact of the COVID-19 pandemic.

Frequently Asked Questions

The COVID-19 pandemic had a noticeable impact on Essex's Same-Property portfolio, leading to a decrease in revenues. This was primarily due to a 3.0% increase in delinquencies as a percentage of scheduled rent and a 1.7% decrease in financial occupancy, which fell to 94.9% from 96.6% in the prior year's quarter. The company implemented various measures to support residents, including payment plans and waiving late fees, and adapted its operational practices to ensure safety.

Essex maintained a strong liquidity position, with $246.2 million in unrestricted cash and cash equivalents and $154.4 million in marketable securities as of June 30, 2020. The company also had access to $1.24 billion in unsecured lines of credit, with no amounts outstanding on its primary credit facility at that time. This robust financial standing provided sufficient resources to meet anticipated cash needs and demonstrated continued access to capital markets.

Essex actively managed its debt. During the first six months of 2020, the company issued $650 million in senior unsecured notes (split between February and June) and obtained a $200 million unsecured term loan in April. Simultaneously, it repaid significant amounts of existing debt. This strategy aimed to optimize its capital structure, extend debt maturities, and ensure sufficient liquidity.

Yes, in January 2020, Essex acquired CPPIB's 45.0% interest in six communities and a land parcel for $1.0 billion, resulting in a gain on remeasurement of co-investment of $234.7 million. In June 2020, the company completed a portfolio sale of two apartment communities in San Jose, CA, for $232.0 million, recognizing a $16.6 million gain on sale.