Segment Information

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Segment Information

Segment Information

The Company's segment disclosures present the measure used by the chief operating decision makers for purposes of assessing each segment's performance. Essex's chief operating decision makers are comprised of several members of its executive management team who use NOI to assess the performance of the business for the Company's reportable operating segments. NOI represents total property revenue less direct property operating expenses.

The executive management team evaluates the Company's operating performance geographically. The Company defines its reportable operating segments as the three geographical regions in which its communities are located: Southern California, Northern California, and Seattle Metro.

Excluded from segment revenues and net operating income are management and other fees from affiliates and interest and other income. Non-segment revenues and net operating income included in the following schedule also consist of revenue generated from commercial properties and properties that have been sold. Other non-segment assets include real estate under development, co-investments, cash and cash equivalents, marketable securities, notes and other receivables, prepaid expenses, and other assets.

The revenues and net operating income for each of the reportable operating segments are summarized as follows for the three and nine months ended September 30, 2016 and 2015 (in thousands):

	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2016			2015			2016			2015
Revenues:
Southern California	$	147,953		$	135,900		$	434,217		$	390,381
Northern California	117,699			106,428			345,793			308,118
Seattle Metro	55,544			51,181			161,192			149,661
Other real estate assets	5,882			9,013			17,616			28,692
Total property revenues	$	327,078		$	302,522		$	958,818		$	876,852
Net operating income:
Southern California	$	100,447		$	90,377		$	295,834		$	261,320
Northern California	84,790			76,327			249,011			219,906
Seattle Metro	37,688			34,484			109,352			101,288
Other real estate assets	4,792			7,215			14,691			22,971
Total net operating income	227,717			208,403			668,888			605,485
Management and other fees from affiliates	2,093			2,104			6,145			6,809
Depreciation and amortization	(110,467		)	(116,308		)	(329,847		)	(336,946		)
General and administrative	(9,647		)	(11,129		)	(28,527		)	(31,223		)
Merger and integration expenses	—			—			—			(3,798		)
Acquisition and investment related costs	(284		)	(381		)	(1,379		)	(1,357		)
Interest expense	(56,693		)	(50,053		)	(164,727		)	(148,401		)
Total return swap income	3,143			—			9,080			—
Interest and other income	4,943			7,367			19,560			14,820
Equity income in co-investments	9,568			7,179			38,932			15,962
Loss on early retirement of debt	(211		)	—			(211		)	—
Gain on sale of real estate and land	—			—			20,258			7,112
Deferred tax expense on gain on sale of real estate and land	—			—			(4,279		)	—
Gain on remeasurement of co-investment	—			—			—			34,014
Net income	$	70,162		$	47,182		$	233,893		$	162,477

Total assets for each of the reportable operating segments are summarized as follows as of September 30, 2016 and December 31, 2015 (in thousands):

	September 30, 2016		December 31, 2015
Assets:
Southern California	$	4,830,293	$	4,912,264
Northern California	3,844,421		3,749,072
Seattle Metro	1,679,303		1,613,175
Other real estate assets	89,895		107,066
Net reportable operating segment - real estate assets	10,443,912		10,381,577
Real estate under development	170,972		242,326
Co-investments	1,122,913		1,036,047
Real estate held for sale, net	—		26,879
Cash and cash equivalents, including restricted cash	211,055		123,055
Marketable securities	153,703		137,485
Notes and other receivables	22,941		19,285
Prepaid expenses and other assets	51,700		38,437
Total assets	$	12,177,196	$	12,005,091