4302003 8K Exhibit 99-1

EX-99.1 4 exh99-1.htm EX-99.1 4302003 8K Exhibit 99-1 Exhibit 99.1

FOR IMMEDIATE RELEASE

Michael J. Schall, Chief Financial Officer, (650) 849-1600

Mary C. Jensen, Director of Investor Relations, (650) 849-1656

Essex Announces First Quarter 2003 Results

4.4% Decrease in FFO Per Share

Palo Alto, California-April 30, 2003-Essex Property Trust, Inc. (NYSE:ESS), a Real Estate Investment Trust (REIT) with apartment communities located in targeted West Coast markets, today reported operating results for the first quarter 2003. Net Income for the quarter ended March 31, 2003 totaled $10.2 million, or $0.48 per diluted share, as compared with $11.3 million, or $0.61 per diluted share for the quarter ended March 31, 2002, representing a 9.4 percent decrease in net income or 21.3 percent decrease in net income per share.

Funds From Operations (FFO) for the quarter ended March 31, 2003 amounted to $25.3 million, or $1.08 per diluted share, compared to $23.7 million, or $1.13 per diluted share, for the quarter ended March 31, 2002, representing a 6.8% increase in FFO and a 4.4 percent reduction in FFO per share. FFO was negatively impacted by a $446,000 decrease in miscellaneous non-recurring income, which decreased from $688,000, or $0.03 per diluted share in the quarter ended March 31, 2002 to $242,000 or $0.01 per diluted share in the quarter ended March 31, 2003.

FFO is a supplemental financial measurement used by real estate investment trusts to measure and compare operating performance. A reconciliation of FFO to net income (the most directly comparable GAAP measure) is included in the financial data accompanying this press release. For a more comprehensive definition of FFO please refer the last page of this press release.

The Company's financial results are summarized as follows:

                                       Quarter Ended March 31,
                             ------------------------------------------------
                                                                 Percent
                                    2003             2002         Change
                             ------------------------------------------------
                             (Dollars in thousands, except per share amounts)

Revenues                     $     58,995      $    49,412            19.4%
Funds From Operations (FFO)  $     25,298      $    23,683             6.8%
Net Income                   $     10,231      $    11,296            -9.4%
Per Diluted Share:
  FFO Per Share              $      1.08       $     1.13             -4.4%
  Net Income Per Share       $      0.48       $     0.61            -23.1%

Portfolio Composition

The following table compares Essex's regional concentrations for its multifamily portfolio as of March 31, 2003 and March 31, 2002.



                                 As of                   As of
                                March 31, 2003          March 31, 2002
                           ------------------------------------------------
                               Number of               Number of
                            Apartment Homes    %    Apartment Homes    %
                           ------------------------------------------------
Southern California          13,654        57        11,295        54
San Francisco Bay Area        4,293        18         4,023        19
Seattle Metro. Area           4,073        17         4,073        20
Portland Metro. Area          1,371         6         1,371         7
Other                           578         2           -           -
                           ------------------------------------------------
Total                        23,969        100       20,762        100
                           ================================================

Property Operations

The following operating results omit properties in development or lease-up, properties owned less than a year, and properties that are accounted for under the equity method of accounting.

A breakdown of the same-property net operating income results compared to the quarter ended March 31, 2002 for Essex's multifamily properties is as follows:
Quarter Ended March 31, 2003

	Revenues	Operating Expenses	Net Operating Income
Southern California	7.2%	4.3%	8.4%
San Francisco Bay Area	-10.2%	13.2%	-17.0%
Pacific Northwest	-3.0%	7.6%	-7.9%
Same-Property Average	-1.5%	7.8%	-5.1%

A breakdown of the same-property financial occupancies for Essex's multifamily properties is as follows:

	For the Quarters Ended

	3/31/2003	12/31/2002	3/31/2002
Southern California	95.2%	96.0%	92.0%
San Francisco Bay Area	95.8%	96.5%	95.2%
Pacific Northwest	94.5%	93.8%	90.8%
Same-Property Average	95.2%	95.6%	92.8%

A breakdown of same-property concessions for Essex's multifamily properties is as follows:

	For the Quarters Ended
	(in thousands)
	3/31/2003	12/31/2002	3/31/2002
Southern California	$ 125.3	$ 146.3	$ 407.3
San Francisco Bay Area	176.6	198.4	255.3
Pacific Northwest	297.1	323.2	312.7
Same-Property Average	$ 599.0	$ 667.9	$ 975.3

Total concessions, for the Company's consolidated portfolio, increased to $801,800 for the quarter ended March 31, 2003, as compared to $741,600 for the quarter ended December 31, 2002. Total concessions for the quarter ended March 31, 2002 were $1,023,400.

The following is the sequential percentage change in same-property revenues for the quarter ended March 31, 2003 versus the quarter ended December 31, 2002:

	Revenues
Southern California	-0.1%
San Francisco Bay Area	-1.8%
Pacific Northwest	0.8%
Same-Property Average	-0.4%

Same-property operating expenses increased 7.8 percent compared to the quarter ended March 31, 2002. The Company expects same-property operating expenses for the year to increase in the range of 2.5 to 3.5 percent as previously disclosed.

Development

As of March 31, 2003, the Company had ownership interests in development communities, which have a combined estimated construction cost of approximately $104.0 million. These projects exclude development projects owned by the Essex Apartment Value Fund, L.P., which are described in the following section.

During the quarter, the Company's 270-unit high-rise luxury apartment community - The Essex on Lake Merritt - located on the shores of Lake Merritt in Oakland, California, received the prestigious Pillars of the Industry Award from the National Association of Home Builders' for the "Best High Rise Design, Architecture and Construction". This is the 11^th significant award bestowed upon the Company since it began developing multifamily properties in 1985.

The San Marcos (formerly Vista del Mar) - Construction and leasing activities continue at the Company's 312-unit apartment community located in Richmond, California. Stabilization is anticipated during the third quarter of 2003.

Hidden Valley-Parker Ranch - The initial stages of construction continue on the Company's 324-unit multifamily community located in Simi Valley, California. Initial occupancy is expected to take place during the fourth quarter of 2003. The Company has a 75 percent ownership interest in this development project.

Financing & Other Activities

On June 14, 2000 the Company acquired Waterford Place, a 238-unit apartment community located in San Jose, California for a contract price of $35 million, which excluded a contingent payment to be paid by the Company pursuant to the terms of the agreement. The amount of the contingent payment was disputed, and submitted to binding arbitration. In connection with that arbitration, the Company was directed to issue an additional 109,875 operating partnership units to the seller. As a result, the Company has increased its capitalized acquisition cost of this asset by approximately $6.2 million.

On January 15, 2003, the Company repaid a non-recourse mortgage that matured in the amount of $18.1 million. The interest rate on this loan was 7.60 percent.

Essex Apartment Value Fund, L.P.

The Fund was organized to add value through rental growth and asset appreciation and to utilize the Company's development, redevelopment and asset management capabilities.

The Fund completed its final closing on February 15, 2002 with total equity commitments of approximately $250 million. An affiliate of the Company, Essex VFGP, L.P. ("VFGP"), is the Fund's one percent general partner and is a 20.4 percent limited partner. Essex Portfolio, L.P. (the "Operating Partnership") owns a 99 percent limited partnership interest in VFGP. At March 31, 2003, the Fund has approximately $400 million of investment capacity.

On January 30, 2003, the Fund obtained a non-recourse mortgage on a previously unencumbered property in the amount of $23.2 million, with a 5.16 percent fixed interest rate, which matures in February 2010.

Other Company Information

Essex's total market capitalization at March 31, 2003 was approximately $2.3 billion. The Company's mortgage notes payable had an average maturity of 8.7 years and an average interest rate of 6.8 percent. As of March 31, 2003, the Company's debt-to-total-market-capitalization ratio was 36.0 percent and interest coverage before minority interest for the first quarter of 2003 was 3.6 times EBITDA.

During the quarter, the Company's Board of Directors increased its regular quarterly cash dividend to $0.78 per common share or $3.12 per common share on an annualized basis. The dividend was payable on April 15, 2003 to shareholders of record as of March 31, 2003.

The Company's Annual Meeting of Stockholders is being held on Tuesday, May 13, 2003 at 1:00 p.m. at the Stanford Park Hotel, located at 100 El Camino Real in Menlo Park, California. At the meeting, Keith R. Guericke, President and Chief Executive Officer, and Michael J. Schall, Senior Executive Vice President and Chief Financial Officer will discuss the Company's achievements and operating results for 2002.

The Company reiterates its previous guidance for estimated FFO per diluted share of $4.33 to $4.45 per share for calendar year 2003.

Conference Call with Management

The Company will host an earnings conference call with management, which is scheduled for tomorrow, Thursday, May 1, 2003, at 11:00 a.m. PDT - 2:00 p.m. EDT. The call will be broadcast live via the Internet at www.essexpropertytrust.com, and accessible via phone by dialing (800) 231-9012 - a passcode is not required. A replay of the call is also available via the Internet for two weeks following the live call. You can access the rebroadcast via the Internet at www.essexpropertytrust.com.

This press release and the accompanying supplemental financial information have been filed electronically on Form 8-K and are available on the Company's Web site at www.essexpropertytrust.com. If you are unable to access the information via the Web, please contact the Investor Relations department at investors@essexpropertytrust.com or by calling (650) 849-1600.

Essex Property Trust, Inc., located in Palo Alto, California and traded on the New York Stock Exchange (ESS), is a fully integrated real estate investment trust (REIT) that acquires, develops, redevelops, and manages multifamily residential properties in selected West Coast communities. Essex currently has ownership interests in 113 multifamily properties (23,969 units), and has 1,248 units in various stages of development. Additional information about Essex can be found on the Company's web site at www.essexpropertytrust.com. If you would like to receive future press releases via e-mail-please send a request to investors@essexpropertytrust.com.

Funds from Operations

Funds from Operations, as defined by the National Association of Real Estate Investment Trusts ("NAREIT") is generally considered by industry analysts as an appropriate measure of performance of an equity REIT. Generally, Funds from Operations adjusts the net income of equity REITS for non- cash charges such as depreciation and amortization of rental properties, gains/ losses on sales of real estate and extraordinary items. Management considers Funds from Operations to be a useful financial performance measurement of an equity REIT because, together with net income and cash flows, Funds from Operations provides investors with an additional basis to evaluate the performance of a REIT to incur and service debt and to fund acquisitions and other capital expenditures. Funds from Operations does not represent net income or cash flows from operations as defined by generally accepted accounting principles (GAAP) and is not intended to indicate whether cash flows will be sufficient to fund cash needs. It should not be considered as an alternative to net income as an indicator of the REIT's operating performance or to cash flows as a measure of liquidity. Funds from Operations does not measure whether cash flow is sufficient to fund all cash needs including principal amortization, capital improvements and distributions to shareholders. Funds from Operations also does not represent cash flows generated from operating, investing or financing activities as defined under GAAP. Further, Funds from Operations as disclosed by other REITs may not be comparable to the Company's calculation of Funds from Operations.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:

This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward- looking statements include statements regarding FFO per diluted share estimates, statements regarding expected same-property operating expenses, our portfolio allocations, statements regarding when property developments and redevelopments will be finished and stabilized, statements regarding future leasing activities, statements regarding future construction costs, and statements regarding estimated values of properties. The Company's actual results may differ materially from those projected in such forward-looking statements. Factors that might cause such a difference include, but are not limited to, changes in market demand for rental units and the impact of competition and competitive pricing, changes in economic conditions, unexpected delays in the development and stabilization of development and redevelopment projects, unexpected difficulties in leasing of development and redevelopment projects, total costs of renovation investments exceeding our projections and other risks detailed in the Company's filings with the Securities and Exchange Commission (SEC). The Company assumes no obligation to update this information. For more details relating to risk and uncertainties that could cause actual results to differ materially from those anticipated in our forward-looking statements, and risks to our business in general, please refer to our SEC filings, including our most recent Report on Form 10-K for the year ended December 31, 2002.

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E S S E X P R O P E R T Y T R U S T, I N C.


Operating Results                                                    Three Months Ended
(Dollars in thousands, except per share amounts)                          March 31,
------------------------------------------------------------------------------ ----------------
                                                                    2003             2002
                                                              ---------------- ----------------

Revenues:
  Rental                                                      $        54,162  $        42,119
  Other property                                                        1,734            1,316
                                                              ---------------- ----------------
    Total property revenues                                            55,896           43,435
  Interest and other                                                    3,099            5,977
                                                              ---------------- ----------------
                                                                       58,995           49,412
                                                              ---------------- ----------------
Expenses:
  Property operating                                                   18,447           12,581
  Depreciation and amortization                                        11,609            8,986
  Interest                                                             10,799            8,789
  Amortization of deferred financing costs                                174              148
  General and administrative                                            1,838            1,700
                                                              ---------------- ----------------
    Total expenses                                                     42,867           32,204
                                                              ---------------- ----------------
Income from continuing operations before minority interests
  and discontinued operations                                          16,128           17,208

Minority interests                                                     (5,897)          (6,064)
                                                              ---------------- ----------------
Income from continuing operations                                      10,231           11,144

Discontinued operations (net of minority interests):
  Operating income from real estate sold                                   --              152
                                                              ---------------- ----------------
Net income available to common stockholders                   $        10,231  $        11,296
                                                              ================ ================

Net income per share - basic                                  $          0.49  $          0.61
                                                              ================ ================
Net income per share - diluted                                $          0.48  $          0.61
                                                              ================ ================