Organization and Basis of Presentation (Tables)

3 Months Ended

Mar. 31, 2014

Organization and Basis of Presentation [Abstract]

Components of Marketable Securities

As of March 31, 2014 and December 31, 2013, marketable securities consisted primarily of investment-grade unsecured bonds, common stock, investments in mortgage backed securities and investment funds that invest in U.S. treasury or agency securities.  As of March 31, 2014 and December 31, 2013, the Company classified its investments in mortgage backed securities, which mature in November 2019 and September 2020, as held to maturity, and accordingly, these securities are stated at their amortized cost.  As of March 31, 2014 and December 31, 2013 marketable securities consist of the following ($ in thousands):

	March 31, 2014
	Cost/		Gross
	Amortized		Unrealized
	Cost		Gain (Loss)		Carrying Value
Available for sale:
Investment-grade unsecured bonds	$	11,772	$	96	$	11,868
Investment funds - US treasuries		5,017		5		5,022
Common stock		22,103		710		22,813
Held to maturity:
Mortgage backed securities		60,645		-		60,645
Total	$	99,537	$	811	$	100,348

	December 31, 2013
	Cost/		Gross
	Amortized		Unrealized
	Cost		Gain (Loss)			Carrying Value
Available for sale:
Investment-grade unsecured bonds	$	15,446	$	509		$	15,955
Investment funds - US treasuries		3,675		3			3,678
Common stock		13,104		(1,304	)		11,800
Held to maturity:
Mortgage backed securities		58,651		-			58,651
Total	$	90,876	$	(792	)	$	90,084

Changes in Accumulated Other Comprehensive Loss, Net by Component

Changes in Accumulated Other Comprehensive Loss, Net by Component

Essex Property Trust, Inc.

				Unrealized
	Change in fair			gains/(losses) on
	value and amortization			available for sale
	of derivatives			securities			Total
Balance at December 31, 2013	$	(59,724	)	$	(748	)	$	(60,472	)
Other comprehensive income (loss) before reclassification		472			1,914			2,386
Amounts reclassified from accumulated other comprehensive loss		2,093			(402	)		1,691
Net other comprehensive income (loss)		2,565			1,512			4,077
Balance at March 31, 2014	$	(57,159	)	$	764		$	(56,395	)

Essex Portfolio, L.P.

				Unrealized
	Change in fair			gains/(losses) on
	value and amortization			available for sale
	of derivatives			securities			Total
Balance at December 31, 2013	$	(58,148	)	$	(792	)	$	(58,940	)
Other comprehensive income (loss) before reclassification		627			2,030			2,657
Amounts reclassified from accumulated other comprehensive loss		2,093			(427	)		1,666
Net other comprehensive income (loss)		2,720			1,603			4,323
Balance at March 31, 2014	$	(55,428	)	$	811		$	(54,617	)

Preliminary Fair Values of Assets and Liabilities Acquired

As previously discussed in Note 1, the merger with BRE closed on April 1, 2014 and 14 of the BRE properties were acquired on March 31, 2013.  The preliminary fair value of the assets acquired on March 31, 2014 in exchange for $1.4 billion of OP units was substantially all attributable to rental properties which included land, buildings and improvements, and real estate under development and approximately $19 million attributable to acquired in-place lease value  which is classified within prepaid expenses and other assets in the accompanying condensed consolidated balance sheets.  With regards to the BRE merger that closed on April 1, 2014, a summary of the preliminary fair value of the assets and liabilities acquired on April 1, 2014 in exchange for the total consideration of approximately $4.3 billion were as follows (includes the 14 properties acquired on March 31, 2014 as the OP units issued were retired on April 1, 2014) (in millions):

Rental properties, excluding co-investments	$	5,808
Co-investments		206
In-place lease value		97
Other assets		96
Secured and unsecured debt		(1,736	)
Other liabilities		(129	)
	$	4,342

Pro Forma Information

The unaudited pro forma financial information set forth below is based on Essex’s historical condensed consolidated statement of operations and comprehensive income for the quarters ended March 31, 2014 and March 31, 2013, adjusted to give effect to the merger with BRE including the 14 BRE properties contributed on March 31, 2014, as if they occurred on January 1, 2013. The pro forma adjustments primarily relate to merger expenses, depreciation expense on acquired buildings and improvements, amortization of acquired intangibles, and estimated interest expense related to assumed debt.

Essex Property Trust, Inc.

	Pro forma (unaudited)
	three months ended March 31
	(in thousands, except per share data)
	2014		2013
Total revenue	$	247,801	$	228,721
Net income available to common shareholders (1) (2)	$	130,506	$	(16,956	)
Earnings per share, diluted (1)	$	2.08	$	(0.28	)

Essex Portfolio, L.P.

	Pro forma (unaudited)
	three months ended March 31
	(in thousands, except per unit data)
	2014		2013
Total revenue	$	247,801	$	228,721
Net income available to common unitholders (1) (2)	$	131,923	$	(15,455	)
Earnings per unit, diluted (1)	$	2.08	$	(0.25	)

(1) 2014 supplemental pro forma net income available to common stockholders were adjusted to exclude $16,059 of merger related costs incurred by Essex  during the three-months ended March 31, 2014. 2013 supplemental pro forma net income available to common stockholders were adjusted to include these charges plus an additional approximately $29,000 of merger expenses estimated to be incurred by Essex .  2014 and 2013 supplemental proforma earnings per share, diluted, were adjusted accordingly.

(2) 2014 supplemental pro forma net income available to common stockholders includes approximately $105 million from discontinued operations related to the sale of three BRE properties that are non-recurring transactions.