EX-99.2 3 s001525x1_ex99-2.htm EXHIBIT 99.2

Exhibit 99.2
 

Q4 2016 Supplemental
Table of Contents

 
Page(s)
Consolidated Operating Results
S-1 – S-2
Consolidated Funds From Operations
S-3
Consolidated Balance Sheets
S-4
Debt Summary – December 31, 2016
S-5
Capitalization Data, Public Bond Covenants, Credit Ratings, and Selected Credit Ratios – December 31, 2016
S-6
Portfolio Summary by County – December 31, 2016
S-7
Operating Income by Quarter – December 31, 2016
S-8
Same-Property Revenue Results by County – Quarters ended December 31, 2016 and 2015, and September 30, 2016
S-9
Same-Property Revenue Results by County – Years ended December 31, 2016 and 2015
S-9.1
Same-Property Operating Expenses
S-10
Development Pipeline – December 31, 2016
S-11
Redevelopment Pipeline – December 31, 2016
S-12
Capital Expenditures – December 31, 2016
S-12.1
Co-Investments – December 31, 2016
S-13
Assumptions for 2017 FFO Guidance Range
S-14
Summary of Apartment Community Acquisitions and Dispositions Activity
S-15
2017 MSA Level Forecast: Supply, Jobs and Apartment Market Conditions
S-16
Reconciliations of Non-GAAP Financial Measures and Other Terms
S-17.1 – S-17.4


 
E S S E X  P R O P E R T Y  T R U S T, I N C.
 
Consolidated Operating Results
 
Three Months Ended
   
Twelve Months Ended
 
(Dollars in thousands, except share and per share amounts)
 
December 31,
   
December 31,
 
   
2016
   
2015
   
2016
   
2015
 
                         
Revenues:
                       
Rental and other property
 
$
326,905
   
$
308,646
   
$
1,285,723
   
$
1,185,498
 
Management and other fees
   
2,133
     
2,100
     
8,278
     
8,909
 
     
329,038
     
310,746
     
1,294,001
     
1,194,407
 
                                 
Expenses:
                               
Property operating
   
98,997
     
92,141
     
388,927
     
363,508
 
Depreciation and amortization
   
111,835
     
116,477
     
441,682
     
453,423
 
General and administrative
   
12,224
     
8,867
     
40,751
     
40,090
 
Merger and integration expenses
   
-
     
-
     
-
     
3,798
 
Acquisition and investment related costs
   
462
     
1,057
     
1,841
     
2,414
 
     
223,518
     
218,542
     
873,201
     
863,233
 
Earnings from operations
   
105,520
     
92,204
     
420,800
     
331,174
 
 
                               
Interest expense, net (1)
   
(52,291
)
   
(50,771
)
   
(207,938
)
   
(199,172
)
Interest and other income
   
7,745
     
4,323
     
27,305
     
19,143
 
Equity income from co-investments
   
9,766
     
5,899
     
48,698
     
21,861
 
Loss on early retirement of debt
   
(395
)
   
(6,114
)
   
(606
)
   
(6,114
)
Gain on sale of real estate and land
   
134,303
     
40,221
     
154,561
     
47,333
 
Deferred tax expense on gain on sale of real estate and land
   
(131
)
   
-
     
(4,410
)
   
-
 
Gain on remeasurement of co-investment
   
-
     
-
     
-
     
34,014
 
Net income
   
204,517
     
85,762
     
438,410
     
248,239
 
Net income attributable to noncontrolling interest
   
(8,948
)
   
(4,824
)
   
(23,431
)
   
(16,119
)
Net income attributable to controlling interest
   
195,569
     
80,938
     
414,979
     
232,120
 
Dividends to preferred stockholders
   
-
     
(1,314
)
   
(1,314
)
   
(5,255
)
Excess of redemption value of preferred stock over the carrying value
   
-
     
-
     
(2,541
)
   
-
 
Net income available to common stockholders
 
$
195,569
   
$
79,624
   
$
411,124
   
$
226,865
 
 
                               
Net income per share - basic
 
$
2.98
   
$
1.22
   
$
6.28
   
$
3.50
 
                                 
Shares used in income per share - basic
   
65,520,788
     
65,336,773
     
65,471,540
     
64,871,717
 
 
                               
Net income per share - diluted
 
$
2.98
   
$
1.22
   
$
6.27
   
$
3.49
 
 
                               
Shares used in income per share - diluted
   
65,829,180
     
65,519,438
     
65,587,816
     
65,061,685
 
                                                                                                                                                
(1)
Refer to page S-17.2, the section titled “Interest Expense, Net” for additional information.
See Company’s 10-K and 10-Q for additional disclosures
S-1

 
E S S E X  P R O P E R T Y  T R U S T, I N C.
Consolidated Operating Results
 
Three Months Ended
   
Twelve Months Ended
 
Selected Line Item Detail
 
December 31,
   
December 31,
 
(Dollars in thousands)
 
2016
   
2015
   
2016
   
2015
 
 
                       
Rental and other property
                       
Rental
 
$
305,220
   
$
288,119
   
$
1,201,995
   
$
1,108,758
 
Other property
   
21,685
     
20,527
     
83,728
     
76,740
 
Rental and other property
 
$
326,905
   
$
308,646
   
$
1,285,723
   
$
1,185,498
 
 
                               
Property operating expenses
                               
Real estate taxes
 
$
34,622
   
$
30,734
   
$
139,162
   
$
128,555
 
Administrative and insurance
   
19,954
     
18,765
     
78,887
     
74,868
 
Maintenance and repairs
   
20,385
     
20,352
     
76,258
     
73,002
 
Utilities
   
16,518
     
15,988
     
64,354
     
62,196
 
Property management
   
7,518
     
6,302
     
30,266
     
24,887
 
Property operating expenses
 
$
98,997
   
$
92,141
   
$
388,927
   
$
363,508
 
 
                               
 
                               
Interest and other income
                               
Marketable securities and other interest income
 
$
4,353
   
$
4,323
   
$
16,996
   
$
14,475
 
Gain on sale of marketable securities and other investments
   
2,843
     
-
     
5,719
     
598
 
Insurance reimbursements, legal settlements and other
   
549
     
-
     
4,590
     
4,070
 
Interest and other income
 
$
7,745
   
$
4,323
   
$
27,305
   
$
19,143
 
 
                               
Equity income from co-investments
                               
Equity income from co-investments
 
$
4,458
   
$
3,541
   
$
19,269
   
$
9,716
 
Income from preferred equity investments
   
5,308
     
2,358
     
16,383
     
9,999
 
Gain on sale of co-investment communities
   
-
     
-
     
13,046
     
-
 
Co-investment promote income
   
-
     
-
     
-
     
192
 
Income from early redemption of preferred equity investments
   
-
     
-
     
-
     
1,954
 
Equity income from co-investments
 
$
9,766
   
$
5,899
   
$
48,698
   
$
21,861
 
 
                               
Noncontrolling interest
                               
Limited partners of Essex Portfolio, L.P.
 
$
6,632
   
$
2,710
   
$
14,089
   
$
7,824
 
DownREIT limited partners’ distributions
   
1,423
     
1,297
     
5,705
     
5,191
 
Third-party ownership interest
   
893
     
817
     
3,637
     
3,104
 
Noncontrolling interest
 
$
8,948
   
$
4,824
   
$
23,431
   
$
16,119
 

See Company’s 10-K and 10-Q for additional disclosures
S-2

 
E S S E X  P R O P E R T Y  T R U S T, I N C.
Consolidated Funds From Operations (1)
 
Three Months Ended
         
Twelve Months Ended
       
(Dollars in thousands, except share and per share amounts and in footnotes)
 
December 31,
         
December 31,
       
 
 
2016
   
2015
   
% Change
   
2016
   
2015
   
% Change
 
                                     
Funds from operations attributable to common stockholders and unitholders (FFO)
                                   
Net income available to common stockholders
 
$
195,569
   
$
79,624
         
$
411,124
   
$
226,865
       
Adjustments:
                                           
Depreciation and amortization
   
111,835
     
116,477
           
441,682
     
453,423
       
Gains not included in FFO
   
(134,303
)
   
(40,221
)
         
(167,607
)
   
(81,347
)
     
Deferred tax expense on gain on sale of real estate and land - Taxable REIT Subsidiary activity
   
131
     
-
           
4,410
     
-
       
Depreciation add back from unconsolidated co-investments
   
13,619
     
13,004
           
50,956
     
49,826
       
Noncontrolling interest related to Operating Partnership units
   
6,632
     
2,710
           
14,089
     
7,824
       
Insurance reimbursements (2)
   
-
     
-
           
-
     
(1,751
)
     
Depreciation attributable to third party ownership and other (3)
   
(6
)
   
(28
)
         
(9
)
   
(781
)
     
Funds from operations attributable to common stockholders and unitholders
 
$
193,477
   
$
171,566
         
$
754,645
   
$
654,059
       
FFO per share-diluted
 
$
2.85
   
$
2.53
     
12.6%
 
 
$
11.12
   
$
9.72
     
14.4%
 
                                                 
Components of the change in FFO
                                               
Non-core items:
                                               
Merger and integration expenses
 
$
-
   
$
-
           
$
-
   
$
3,798
         
Acquisition and investment related costs
   
462
     
1,057
             
1,841
     
2,414
         
Gain on sale of marketable securities and other investments
   
(2,843
)
   
-
             
(5,719
)
   
(598
)
       
Interest rate hedge ineffectiveness (4)
   
(250
)
   
-
             
(250
)
   
-
         
Loss on early retirement of debt
   
395
     
6,114
             
606
     
6,114
         
Co-investment promote income
   
-
     
-
             
-
     
(192
)
       
Income from early redemption of preferred equity investments
   
-
     
-
             
-
     
(1,954
)
       
Excess of redemption value of preferred stock over the carrying value
   
-
     
-
             
2,541
     
-
         
Insurance reimbursements, legal settlements, and other, net
   
(429
)
   
(444
)
           
(4,470
)
   
(2,970
)
       
Core funds from operations attributable to common stockholders and unitholders
   
190,812
     
178,293
             
749,194
     
660,671
         
Core FFO per share-diluted
 
$
2.81
   
$
2.63
     
6.8%
 
 
$
11.04
   
$
9.82
     
12.4%
 
                                                 
Changes in core items:
                                               
Same-property NOI
 
$
13,202
                   
$
58,192
                 
Non-same property NOI
   
(1,799
)
                   
17,364
                 
Management and other fees, net
   
33
                     
(256
)
               
FFO from co-investments
   
4,482
                     
16,899
                 
Interest and other income
   
150
                     
2,641
                 
Interest expense
   
(1,270
)
                   
(8,516
)
               
General and administrative
   
(2,913
)
                   
(217
)
               
Other items, net
   
634
                     
2,416
                 
   
$
12,519
                   
$
88,523
                 
                                                 
Weighted average number of shares outstanding diluted (5)
   
67,915,332
     
67,785,975
             
67,889,505
     
67,310,148
         
 
(1)
Refer to page S-17.1, the section titled “Funds from Operations (“FFO”)” for additional information on the Company’s definition and use of FFO and Core FFO.
(2)
Insurance reimbursements for replacement costs related to a flood at one of our properties.
(3)
The Company consolidates Hidden Valley and Hillsdale Garden Apartments. Noncontrolling interest’s share of net operating income in these investments for the three and twelve months ended December 31, 2016 was $1.1 million and $4.2 million respectively.
(4)
Interest rate swaps generally are adjusted to fair value through other comprehensive income (loss). However, because certain of our interest rate swaps do not have a 0% LIBOR floor, while related hedged debt in these cases is subject to a 0% LIBOR floor, the portion of the change in fair value of these interest rate swaps attributable to this mismatch is recorded as noncash interest rate hedge ineffectiveness through interest expense.
(5)
Assumes conversion of all outstanding operating partnership interests in the Operating Partnership and excludes all DownREIT units for which the Operating Partnership has the ability and intention to redeem the DownREIT limited partnership units for cash and does not consider them to be common stock equivalents.

See Company’s 10-K and 10-Q for additional disclosures
S-3

 
E S S E X  P R O P E R T Y  T R U S T, I N C.
Consolidated Balance Sheets
           
(Dollars in thousands)
           
 
 
December 31, 2016
   
December 31, 2015
 
             
Real Estate:
           
Land and land improvements
 
$
2,559,743
   
$
2,522,842
 
Buildings and improvements
   
10,116,563
     
9,808,627
 
     
12,676,306
     
12,331,469
 
Less:  accumulated depreciation
   
(2,311,546
)
   
(1,949,892
)
     
10,364,760
     
10,381,577
 
Real estate under development
   
190,505
     
242,326
 
Co-investments
   
1,161,275
     
1,036,047
 
Real estate held for sale, net
   
101,957
     
26,879
 
     
11,818,497
     
11,686,829
 
Cash and cash equivalents, including restricted
   
170,302
     
123,055
 
Marketable securities
   
139,189
     
137,485
 
Notes and other receivables
   
40,970
     
19,285
 
Prepaid expenses and other assets (1)
   
48,450
     
41,730
 
Total assets
 
$
12,217,408
   
$
12,008,384
 
                 
Unsecured debt, net
 
$
3,246,779
   
$
3,088,680
 
Mortgage notes payable, net
   
2,191,481
     
2,215,077
 
Lines of credit (1)
   
125,000
     
15,000
 
Other liabilities
   
317,227
     
307,152
 
Total liabilities
   
5,880,487
     
5,625,909
 
Redeemable noncontrolling interest
   
44,684
     
45,452
 
Equity:
               
Common stock
   
6
     
6
 
Cumulative redeemable preferred stock, liquidation value
   
-
     
73,750
 
Additional paid-in capital
   
7,029,679
     
7,003,317
 
Distributions in excess of accumulated earnings
   
(805,409
)
   
(797,329
)
Accumulated other comprehensive loss, net
   
(32,098
)
   
(42,011
)
Total stockholders’ equity
   
6,192,178
     
6,237,733
 
Noncontrolling interest
   
100,059
     
99,290
 
Total equity
   
6,292,237
     
6,337,023
 
 
               
Total liabilities and equity
 
$
12,217,408
   
$
12,008,384
 
 
(1)
Lines of credit exclude unamortized debt issuance costs as of December 31, 2016 and 2015, respectively. Such debt issuance costs are included in prepaid expenses and other assets.

See Company’s 10-K and 10-Q for additional disclosures
S-4

 
E S S E X  P R O P E R T Y  T R U S T, I N C.
                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
Debt Summary - December 31, 2016                                                                                                                                                                                                                                         
(Dollars in thousands, except in footnotes)                                                                                                                                                                                                                                                             
                                                                                                                                                                                                                                                                                    

                     
Scheduled principal payments, unamortized premiums (discounts) and (debt issuance costs) are as follows - excludes lines of credit:
 
                                           
                                                       
                                             
Weighted
Average
Interest Rate
   
Percentage
of Total Debt
 
         
Weighted Average
                         
     
Balance
Outstanding
   
Interest
Rate
   
Maturity
in Years
         
Unsecured
   
Secured
   
Total
 
Unsecured Debt, net
                                                     
Bonds private - fixed rate
 
$
315,000
     
4.5
%
   
3.6
     
2017
   
$
340,000
   
$
82,796
   
$
422,796
     
2.7
%
   
7.8
%
Bonds public - fixed rate
   
2,850,000
     
3.5
%
   
6.3
     
2018
     
-
     
301,575
     
301,575
     
5.3
%
   
5.6
%
Term loan (1)
   
100,000
     
2.3
%
   
5.1
     
2019
     
75,000
     
576,954
     
651,954
     
3.6
%
   
12.0
%
Unamortized net premiums and debt issuance costs
   
(18,221
)
   
-
     
-
     
2020
     
-
     
693,868
     
693,868
     
4.8
%
   
12.8
%
     
3,246,779
     
3.5
%
   
6.0
     
2021
     
500,000
     
51,584
     
551,584
     
4.3
%
   
10.2
%
Mortgage Notes Payable, net
                           
2022
     
400,000
     
41,355
     
441,355
     
3.4
%
   
8.2
%
Fixed rate - secured
   
1,866,381
     
4.7
%
   
3.3
     
2023
     
600,000
     
846
     
600,846
     
3.6
%
   
11.1
%
Variable rate - secured (2)
   
281,709
     
1.2
%
   
19.4
     
2024
     
400,000
     
925
     
400,925
     
4.0
%
   
7.4
%
Unamortized premiums and debt issuance costs
   
43,391
     
-
     
-
     
2025
     
500,000
     
14,611
     
514,611
     
3.5
%
   
9.5
%
Total mortgage notes payable
   
2,191,481
     
4.3
%
   
5.4
     
2026
     
450,000
     
53,593
     
503,593
     
3.4
%
   
9.3
%
                             
2027
     
-
     
164,696
     
164,696
     
2.4
%
   
3.0
%
Unsecured Lines of Credit
                         
Thereafter
     
-
     
165,287
     
165,287
     
1.4
%
   
3.1
%
Line of credit (3)
   
125,000
     
1.8
%
         
Subtotal
     
3,265,000
     
2,148,090
     
5,413,090
     
3.8
%
   
100.0
%
Line of credit (4)
   
-
     
-
           
Debt Issuance Costs
     
(18,090
)
   
(7,422
)
   
(25,512
)
 
NA
   
NA
 
Total lines of credit
   
125,000
     
1.8
%
         
Premiums/(Discounts)
     
(131
)
   
50,813
     
50,682
   
NA
   
NA
 
                           
Total
   
$
3,246,779
   
$
2,191,481
   
$
5,438,260
     
3.8
%
   
100.0
%
Total debt, net
 
$
5,563,260
     
3.8
%
                                                       
 
Capitalized interest for the three and twelve months ended December 31, 2016 was approximately $3.1 million and $12.5 million, respectively.

(1)
The unsecured term loan has a variable interest rate of LIBOR plus 0.95%. The Company has interest rate swap contracts with an aggregate notional amount of $175 million, $150 million of which relates to forward starting swaps. The remaining $25 million effectively converts the interest rate on $25 million of the $100 million of the term loan to a fixed rate of 2.4%.
(2)
$281.7 million of variable rate debt is tax exempt to the note holders. $20.7 million is subject to interest rate cap protection agreements.
(3)
The unsecured line of credit facility aggregates to $1 billion. In January 2017, the line maturity was extended to December 2020 with one 18-month extension, exercisable at the Company’s option. The underlying interest rate on this line is based on a tiered rate structure tied to the Company’s corporate ratings and is currently at LIBOR plus 0.90%.
(4)
The unsecured line of credit facility is $25 million and is scheduled to mature in January 2018. The underlying interest rate on this line is based on a tiered rate structure tied to the Company’s corporate ratings and is currently at LIBOR plus 0.90%.

See Company’s 10-K and 10-Q for additional disclosures
S-5

 
E S S E X  P R O P E R T Y  T R U S T, I N C.
Capitalization Data, Public Bond Covenants, Credit Ratings and Selected Credit Ratios - December 31, 2016                                                                  
(Dollars and shares in thousands, except per share amounts)                                                                                                                                    
 
Capitalization Data
 
 
 
 
 
 
Public Bond Covenants (1)
 
Actual
 
Requirement
Total debt, net
 
 
 
$
5,563,260
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted Debt to Adjusted Total Assets:
 
38%
 
< 65%
Common stock and potentially dilutive securities
 
 
 
 
 
 
 
   
 
 
 
Common stock outstanding
 
 
65,528
 
 
 
 
 
   
 
 
 
Limited partnership units (1)
 
 
2,313
 
 
 
 
 
   
 
 
 
Options-treasury method
 
 
108
 
 
Secured Debt to Adjusted Total Assets:
 
15%
 
< 40%
Total shares of common stock and potentially dilutive securities
 
67,949
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
Common stock price per share as of December 31, 2016
$
232.50
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
Interest Coverage:
 
390%
 
> 150%
Total equity capitalization
 
$
15,798,143
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
Total market capitalization
 
$
21,361,403
 
 
Unsecured Debt Ratio (2):
 
282%
 
> 150%
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
Ratio of debt to total market capitalization
 
 
26.0%
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
Selected Credit Ratios (3)
 
Actual
 
 
Credit Ratings
 
 
 
 
 
 
   
 
 
   
 
 
Rating Agency
 
Rating
Outlook
 
 
 
 
Net Indebtedness Divided by Adjusted EBITDA:
 
5.9
 
 
Fitch
 
BBB+
Stable
 
 
 
 
 
 
 
   
 
 
Moody’s
 
Baa1
Stable
 
 
 
 
Unencumbered NOI to Adjusted Total NOI:
 
67%
 
 
Standard & Poor’s
BBB+
Stable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)
Refer to page S-17.4 for additional information on the Company’s Public Bond Covenants.
(1)
Assumes conversion of all outstanding operating partnership interests in the Operating Partnership into shares of the Company’s common stock.
 
 
(2)
Unsecured Debt Ratio is unsecured assets (excluding investments in co-investments) divided by unsecured indebtedness.
 
 
 
 
(3)
Refer to pages S-17.1 to S-17.4, the section titled “Reconciliations of Non-GAAP Financial Measures and Other Terms” for additional information on the Company’s Selected Credit Ratios.
 
See Company’s 10-K and 10-Q for additional disclosures
S-6

 
E S S E X  P R O P E R T Y  T R U S T, I N C.
                                                                                                                                                                                                                      
Portfolio Summary as of December 31, 2016                                                                                                                                                                                
                                                                                                                                                                                                                                         
 
 
Apartment Homes
   
Average Monthly Rental Rate (1)
   
Percent of NOI (2)
 
Region - County
 
Consolidated (3)
   
Unconsolidated
Co-investments (4)
   
Apartment
Homes in
Development (5)
   
Total
   
Consolidated
   
Unconsolidated
Co-investments (6)
   
Total (7)
   
Consolidated
   
Unconsolidated
Co-investments (6)
   
Total (7)
 
 
                                                           
Southern California
                                                           
Los Angeles County
   
9,657
     
1,418
     
-
     
11,075
   
$
2,317
   
$
2,007
   
$
2,295
     
20.0
%
   
11.8
%
   
19.1
%
Orange County
   
5,553
     
1,379
     
-
     
6,932
     
2,052
     
1,796
     
2,024
     
10.7
%
   
9.1
%
   
10.6
%
San Diego County
   
5,203
     
616
     
-
     
5,819
     
1,814
     
1,652
     
1,805
     
9.1
%
   
4.3
%
   
8.6
%
Ventura County
   
2,577
     
693
     
-
     
3,270
     
1,675
     
1,964
     
1,710
     
4.4
%
   
4.0
%
   
4.4
%
Other Southern CA
   
623
     
249
     
-
     
872
     
1,567
     
1,525
     
1,560
     
0.9
%
   
1.5
%
   
1.0
%
Total Southern California
   
23,613
     
4,355
     
-
     
27,968
     
2,049
     
1,856
     
2,033
     
45.1
%
   
30.7
%
   
43.7
%
 
                                                                               
Northern California
                                                                               
Santa Clara County
   
6,028
     
2,775
     
852
     
9,655
     
2,657
     
2,665
     
2,658
     
16.2
%
   
29.3
%
   
17.4
%
Alameda County
   
2,954
     
1,732
     
251
     
4,937
     
2,457
     
2,335
     
2,428
     
6.7
%
   
14.9
%
   
7.4
%
San Mateo County
   
1,830
     
197
     
320
     
2,347
     
2,790
     
2,846
     
2,793
     
5.2
%
   
2.7
%
   
5.0
%
Contra Costa County
   
2,270
     
49
     
-
     
2,319
     
2,244
     
4,424
     
2,268
     
5.0
%
   
0.5
%
   
4.6
%
San Francisco
   
1,341
     
463
     
545
     
2,349
     
3,045
     
3,328
     
3,090
     
3.7
%
   
7.2
%
   
4.1
%
Other Northern CA
   
96
     
-
     
-
     
96
     
2,739
     
-
     
2,739
     
0.3
%
   
-
     
0.3
%
Total Northern California
   
14,519
     
5,216
     
1,968
     
21,703
     
2,605
     
2,641
     
2,610
     
37.1
%
   
54.6
%
   
38.8
%
 
                                                                               
Seattle Metro
   
10,239
     
1,958
     
-
     
12,197
     
1,724
     
1,602
     
1,713
     
17.8
%
   
14.7
%
   
17.5
%
 
                                                                               
Total
   
48,371
     
11,529
     
1,968
     
61,868
   
$
2,148
   
$
2,179
   
$
2,150
     
100.0
%
   
100.0
%
   
100.0
%
                                                                                                                                                                                                  
(1)
Average monthly rental rate is defined as the total potential monthly rental revenue (actual rent for occupied apartment homes plus market rent for vacant apartment homes) divided by the number of apartment homes.
(2)
Actual NOI for the quarter ended December 31, 2016. See the section titled “Net Operating Income (“NOI”) and Same-Property NOI Reconciliations” on page S-17.3.
(3)
Includes all apartment communities with rents.
(4)
Includes one rental income producing development community in lease-up which consists of 255 apartment homes.
(5)
Includes development communities with no rental income.
(6)
Co-investment amounts weighted for Company’s pro rata share.
(7)
At Company’s pro rata share.

See Company’s 10-K and 10-Q for additional disclosures
S-7

 
E S S E X  P R O P E R T Y  T R U S T, I N C.
                                                               
Operating Income by Quarter (1)                                                                                  
(Dollars in thousands, except in footnotes)                                                                                                      
                                                                                    
 
 
Apartment Homes
   
Q4 ’16
   
Q3 ’16
   
Q2 ’16
   
Q1 ’16
   
Q4 ’15
 
 
                                   
Rental and other property revenues:
                                   
Same-property
   
44,157
   
$
284,266
   
$
283,394
   
$
276,867
   
$
271,822
   
$
268,757
 
Acquisitions (2)
   
2,640
     
18,508
     
17,821
     
17,463
     
15,856
     
12,941
 
Development (3)
   
624
     
7,030
     
7,108
     
6,780
     
6,292
     
5,146
 
Redevelopment
   
680
     
4,621
     
4,649
     
4,609
     
4,406
     
4,293
 
Non-residential/other, net (4)
   
270
     
12,480
     
14,106
     
13,843
     
13,802
     
17,509
 
Total rental and other property revenues
   
48,371
     
326,905
     
327,078
     
319,562
     
312,178
     
308,646
 
 
                                               
Property operating expenses:
                                               
Same-property
           
84,875
     
85,842
     
82,940
     
81,830
   
$
82,568
 
Acquisitions (2)
           
7,143
     
6,367
     
6,013
     
5,575
     
4,312
 
Development (3)
           
2,387
     
2,342
     
2,299
     
2,108
     
1,383
 
Redevelopment
           
1,608
     
1,204
     
1,466
     
1,507
     
1,653
 
Non-residential/other, net (4) (5)
           
2,984
     
3,606
     
3,361
     
3,470
     
2,225
 
Total property operating expenses
           
98,997
     
99,361
     
96,079
     
94,490
     
92,141
 
 
                                               
Net operating income (NOI):
                                               
Same-property
           
199,391
     
197,552
     
193,927
     
189,992
     
186,189
 
Acquisitions (2)
           
11,365
     
11,454
     
11,450
     
10,281
     
8,629
 
Development (3)
           
4,643
     
4,766
     
4,481
     
4,184
     
3,763
 
Redevelopment
           
3,013
     
3,445
     
3,143
     
2,899
     
2,640
 
Non-residential/other, net (4)
           
9,496
     
10,500
     
10,482
     
10,332
     
15,284
 
Total NOI
         
$
227,908
   
$
227,717
   
$
223,483
   
$
217,688
   
$
216,505
 
 
                                               
Same-property metrics
                                               
Operating margin
           
70
%
   
70
%
   
70
%
   
70
%
   
69
%
Annualized turnover (6)
           
47
%
   
63
%
   
56
%
   
45
%
   
45
%
Financial occupancy (7)
           
96.7
%
   
96.5
%
   
96.1
%
   
96.0
%
   
96.0
%
                                                                      
(1)
Includes consolidated communities only.
(2)
Acquisitions include properties acquired which did not have comparable stabilized results as of January 1, 2015.
(3)
Development includes properties developed which did not have comparable stabilized results as of January 1, 2015.
(4)
Other real estate assets consists mainly of retail space, commercial properties, boat slips, held for sale properties, and disposition properties.
(5)
Includes other expenses and intercompany eliminations pertaining to self-insurance. In Q4’15 there were $1.9 million in reductions to operating expenses related to changes in prior period property tax estimates.
(6)
Annualized turnover is defined as the number of apartment homes turned over during the quarter, annualized, divided by the total number of apartment homes.
(7)
Financial occupancy is defined as the percentage resulting from dividing actual rental revenue by total potential rental revenue (actual rent for occupied apartment homes plus market rent for vacant apartment homes).

See Company’s 10-K and 10-Q for additional disclosures
S-8

 
E S S E X  P R O P E R T Y  T R U S T, I N C.
                                                                                                                                                                                                                                                                                       
Same-Property Results by County - Fourth Quarter 2016 vs. Fourth Quarter 2015 and Third Quarter 2016                                                                                                                                                          
(Dollars in thousands, except average monthly rental rates)                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                           
 
             
Average Monthly Rental Rate
   
Financial Occupancy
   
Gross Revenues
   
Sequential Gross Revenues
 
Region - County
 
Apartment
Homes
   
Q4 ’16 %
of Actual
NOI
   
Q4 ’16
   
Q4 ’15
   
% Change
   
Q4 ’16
   
Q4 ’15
   
% Change
   
Q4 ’16
   
Q4 ’15
   
% Change
   
Q3 ’16
   
% Change
 
 
                                                                             
Southern California
                                                                             
Los Angeles County
   
6,984
     
16.8
%
 
$
2,288
   
$
2,188
     
4.6
%
   
96.5
%
   
95.9
%
   
0.6
%
 
$
48,368
   
$
45,853
     
5.5
%
 
$
48,088
     
0.6
%
Orange County
   
5,553
     
11.8
%
   
2,052
     
1,954
     
5.0
%
   
96.8
%
   
96.2
%
   
0.6
%
   
34,630
     
32,770
     
5.7
%
   
34,330
     
0.9
%
San Diego County
   
4,961
     
9.5
%
   
1,798
     
1,709
     
5.2
%
   
96.9
%
   
95.9
%
   
1.0
%
   
27,418
     
25,786
     
6.3
%
   
27,386
     
0.1
%
Ventura County
   
2,577
     
4.9
%
   
1,675
     
1,598
     
4.8
%
   
97.2
%
   
96.2
%
   
1.0
%
   
13,482
     
12,645
     
6.6
%
   
13,300
     
1.4
%
Other Southern CA
   
623
     
1.0
%
   
1,567
     
1,516
     
3.4
%
   
98.4
%
   
99.0
%
   
-0.6
%
   
3,040
     
2,959
     
2.7
%
   
2,766
     
9.9
%
Total Southern California
   
20,698
     
44.0
%
   
2,009
     
1,917
     
4.8
%
   
96.8
%
   
96.1
%
   
0.7
%
   
126,938
     
120,013
     
5.8
%
   
125,870
     
0.8
%
 
                                                                                                       
Northern California
                                                                                                       
Santa Clara County
   
5,742
     
17.1
%
   
2,650
     
2,560
     
3.5
%
   
97.0
%
   
95.9
%
   
1.1
%
   
46,127
     
44,231
     
4.3
%
   
46,414
     
-0.6
%
Alameda County
   
2,730
     
6.7
%
   
2,434
     
2,331
     
4.4
%
   
94.2
%
   
95.0
%
   
-0.8
%
   
19,647
     
19,101
     
2.9
%
   
20,217
     
-2.8
%
San Mateo County
   
1,566
     
4.8
%
   
2,686
     
2,560
     
4.9
%
   
97.4
%
   
96.4
%
   
1.0
%
   
13,067
     
12,242
     
6.7
%
   
13,015
     
0.4
%
Contra Costa County
   
2,270
     
5.5
%
   
2,244
     
2,139
     
4.9
%
   
97.4
%
   
96.6
%
   
0.8
%
   
15,577
     
14,799
     
5.3
%
   
15,668
     
-0.6
%
San Francisco
   
816
     
2.1
%
   
2,464
     
2,394
     
2.9
%
   
96.2
%
   
96.1
%
   
0.1
%
   
6,038
     
5,884
     
2.6
%
   
5,921
     
2.0
%
Other Northern CA
   
96
     
0.3
%
   
2,739
     
2,503
     
9.4
%
   
98.5
%
   
99.5
%
   
-1.0
%
   
806
     
731
     
10.3
%
   
744
     
8.3
%
Total Northern California
   
13,220
     
36.5
%
   
2,529
     
2,429
     
4.1
%
   
96.5
%
   
95.9
%
   
0.6
%
   
101,262
     
96,988
     
4.4
%
   
101,979
     
-0.7
%
 
                                                                                                       
Seattle Metro
   
10,239
     
19.5
%
   
1,724
     
1,599
     
7.8
%
   
96.7
%
   
96.1
%
   
0.6
%
   
56,066
     
51,756
     
8.3
%
   
55,545
     
0.9
%
 
                                                                                                       
Total Same-Property
   
44,157
     
100.0
%
 
$
2,099
   
$
1,997
     
5.1
%
   
96.7
%
   
96.0
%
   
0.7
%
 
$
284,266
   
$
268,757
     
5.8
%
 
$
283,394
     
0.3
%

See Company’s 10-K and 10-Q for additional disclosures
S-9

 
E S S E X  P R O P E R T Y  T R U S T, I N C.
                                                                                                                                                                                                                                           
Same-Property Revenue Results by County - Twelve months ended December 31, 2016 vs. Twelve months ended December 31, 2015                                                                  
(Dollars in thousands, except average monthly rental rates)                                                                                                                                                                                                      
 
 
       
YTD
   
Average Monthly Rental Rate
   
Financial Occupancy
   
Gross Revenues
 
Region - County
 
Apartment
Homes
   
2016 %
of Actual
NOI
   
YTD 2016
   
YTD 2015
   
% Change
   
YTD 2016