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 nine months ended September 30, 2017 and 2016 ($ in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Revenues:
Southern California	$	150,413		$	142,112		$	445,296		$	417,114
Northern California	127,673			115,318			377,531			338,761
Seattle Metro	58,285			55,543			171,564			161,192
Other real estate assets	5,603			14,105			17,517			41,751
Total property revenues	$	341,974		$	327,078		$	1,011,908		$	958,818
Net operating income:
Southern California	$	102,699		$	96,486		$	305,894		$	284,345
Northern California	91,018			83,042			271,224			243,876
Seattle Metro	39,674			37,688			116,733			109,352
Other real estate assets	4,446			10,501			16,142			31,315
Total net operating income	237,837			227,717			709,993			668,888
Management and other fees from affiliates	2,395			2,093			6,927			6,145
Depreciation and amortization	(117,451		)	(110,467		)	(350,893		)	(329,847		)
General and administrative	(9,788		)	(9,647		)	(30,726		)	(28,527		)
Acquisition and investment related costs	(324		)	(284		)	(1,154		)	(1,379		)
Interest expense	(55,938		)	(56,693		)	(167,333		)	(164,727		)
Total return swap income	2,538			3,143			7,653			9,080
Interest and other income	5,790			4,943			17,916			19,560
Equity income from co-investments	19,727			9,568			40,934			38,932
Loss on early retirement of debt	—			(211		)	—			(211		)
Gain on sale of real estate and land	249			—			26,423			20,258
Deferred tax expense on gain on sale of real estate and land	—			—			—			(4,279		)
Gain on remeasurement of co-investment	—			—			88,641			—
Net income	$	85,035		$	70,162		$	348,381		$	233,893

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



	September 30, 2017		December 31, 2016
Assets:
Southern California	$	4,822,941	$	4,924,792
Northern California	4,241,460		3,791,549
Seattle Metro	1,532,784		1,570,340
Other real estate assets	56,079		78,079
Net reportable operating segment - real estate assets	10,653,264		10,364,760
Real estate under development	313,825		190,505
Co-investments	1,124,577		1,161,275
Real estate held for sale, net	—		101,957
Cash and cash equivalents, including restricted cash	63,273		170,302
Marketable securities	184,574		139,189
Notes and other receivables	121,557		40,970
Prepaid expenses and other assets	51,453		48,450
Total assets	$	12,512,523	$	12,217,408