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 net operating income ("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 NOI are management and other fees from affiliates and interest and other income. Non-segment revenues and NOI 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, real estate held for sale, net, cash and cash equivalents, marketable securities, notes and other receivables, and prepaid expenses and other assets.

The revenues and NOI for each of the reportable operating segments are summarized as follows for the three and six months ended June 30, 2017 and 2016 ($ in thousands):



	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Revenues:
Southern California	$	147,784		$	139,108		$	294,883		$	275,002
Northern California	126,550			113,035			249,858			223,443
Seattle Metro	57,087			53,576			113,279			105,649
Other real estate assets	5,345			13,843			11,914			27,646
Total property revenues	$	336,766		$	319,562		$	669,934		$	631,740
Net operating income:
Southern California	$	101,790		$	95,205		$	203,195		$	187,859
Northern California	92,543			81,821			180,206			160,834
Seattle Metro	38,126			35,975			77,059			71,664
Other real estate assets	6,042			10,482			11,696			20,814
Total net operating income	238,501			223,483			472,156			441,171
Management and other fees from affiliates	2,296			2,028			4,532			4,052
Depreciation and amortization	(117,939		)	(109,673		)	(233,442		)	(219,380		)
General and administrative	(10,337		)	(9,698		)	(20,938		)	(18,880		)
Acquisition and investment related costs	(274		)	(267		)	(830		)	(1,095		)
Interest expense	(56,812		)	(55,568		)	(111,395		)	(108,034		)
Total return swap income	2,531			2,814			5,115			5,937
Interest and other income	5,362			9,409			12,126			14,617
Equity income from co-investments	10,308			14,296			21,207			29,364
Gain on sale of real estate and land	—			—			26,174			20,258
Deferred tax expense on gain on sale of real estate and land	—			—			—			(4,279		)
Gain on remeasurement of co-investment	2,159			—			88,641			—
Net income	$	75,795		$	76,824		$	263,346		$	163,731

Total assets for each of the reportable operating segments are summarized as follows as of June 30, 2017 and December 31, 2016 ($ in thousands):



	June 30, 2017		December 31, 2016
Assets:
Southern California	$	4,854,134	$	4,924,792
Northern California	4,266,100		3,791,549
Seattle Metro	1,544,364		1,570,340
Other real estate assets	56,459		78,079
Net reportable operating segment - real estate assets	10,721,057		10,364,760
Real estate under development	263,284		190,505
Co-investments	1,081,084		1,161,275
Real estate held for sale, net	3,015		101,957
Cash and cash equivalents, including restricted cash	199,876		170,302
Marketable securities	151,995		139,189
Notes and other receivables	54,660		40,970
Prepaid expenses and other assets	49,980		48,450
Total assets	$	12,524,951	$	12,217,408