The documents show **0.00 [USD, thousands]** for Q4 2023 operating cash flows from operating leases  **[0000920522-24-000092_ess-20240930.htm:19]** , but they do not provide any explanation as to why this figure is zero. While another document discusses the operating cash flows from operating leases in Q4 2023 showing a result of **$1,803 thousand** (compared to **$1,762 thousand** in Q4 2022)  **[0000920522-24-000045_ess-20240331.htm:9]** **[0000920522-24-000045_ess-20240331.htm:14]** , there is no additional clarification on the causes or reasons behind the zero figure reported in document.  **[0000920522-24-000092_ess-20240930.htm:19]** 

Why were Operating Cash Flows from Operating Leases zero in Q4 2023?

The dramatic increase in capital expenditures in Q1 2024 was primarily driven by Essex Property Trust acquiring its joint venture partner's **49.9% interest in four apartment communities** for a total gross purchase price of **$505.0 million**. This significant transaction led to an increase of capital expenditures to **$355,309,000** for the quarter.  **[0000920522-24-000045_ess-20240331.htm:8]** **[0001140361-24-023399_ef20027783_ex99-1.htm:0]** 

What drove the dramatic increase in capital expenditures in Q1 2024?

The surge in cash outflow for Investing Activities in Q1 2024 was mainly driven by **substantial acquisitions of real estate and related capital expenditures**, with ESS spending **$(355,309) thousand** on these acquisitions, whereas no such spending was recorded in the previous period. Additionally, ESS saw **lower proceeds from dispositions of real estate**, with Q1 2023 benefiting from **$99,388 thousand** in sale proceeds compared to none in Q1 2024. Moreover, there were higher redevelopment and capital expenditures on rental properties in Q1 2024, further contributing to the overall increase in cash outflow.  **[0000920522-24-000045_ess-20240331.htm:13]** 

Why did the cash outflow from Investing Activities surge in Q1 2024?

The steep decline in end-of-period cash in Q2 2024 was primarily driven by **significant cash outflows from financing activities**, including **net cash used of $247,643 thousand** which stemmed largely from **common stock dividends paid of $305,660 thousand** and **distributions to noncontrolling interest of $16,544 thousand**. Additionally, **cash outflows in operating and investing activities** further contributed to the reduction, even though specific details for these flows were not provided. Although the company recognized **$42.5 million** in gain contingencies from legal settlements, this gain was only reflected in income and did not directly offset the cash outflows.  **[0000920522-24-000075_ess-20240630.htm:11]** **[0000920522-24-000075_ess-20240630.htm:24]** 

What caused the steep decline in end-of-period cash in Q2 2024?

a27da7352500f292d7fe05aa22faa7d41d7b87a880176835e0e9c5d1c315e605

The documents indicate that the **unrestricted cash and cash equivalents** dropped sharply from **$391,749 thousand** as of December 31, 2023, to **$55,223 thousand** as of June 30, 2024. However, they do not provide specific details explaining this drop. It is common for such fluctuations to result from factors like **operational cash flows**, **investment activities**, **financing actions**, or **strategic decisions** such as acquisitions or debt repayments.  **[0000920522-24-000075_ess-20240630.htm:12]** 

Why did Cash and cash equivalents-unrestricted drop so sharply in Q2 2024?

The spike in Q2 2024 was primarily driven by the company's **utilization of its unsecured lines of credit**. Specifically, the lines of credit increased from **$0** as of December 31, 2023, to **$129,391,000** as of June 30, 2024, due to the use of two unsecured facilities aggregating to **$1.24 billion**. This included an outstanding balance of **$105.0 million** on the **$1.2 billion** unsecured line of credit and **$24.4 million** on the **$35.0 million** working capital line of credit, as part of the firm's overall financial strategy to manage liquidity and capital resources.  **[0001140361-24-034917_ef20033063_ex99-1.htm:12]** **[0000920522-24-000075_ess-20240630.htm:31]** **[0000920522-24-000075_ess-20240630.htm:42]** 

What drove the spike in Lines of credit in Q2 2024?

The jump in **Total liabilities** in Q1 2024 was driven by multiple factors. **Unsecured debt, net** increased from **$5,318,531** to **$5,666,604** largely due to the issuance of **$350.0 million** in senior unsecured notes. Additionally, increases in **accounts payable and accrued liabilities** (from **$176,401** to **$216,536**), **dividends payable** (from **$155,695** to **$165,208**), and **other liabilities** (from **$46,175** to **$48,321**) collectively contributed to the overall increase in total liabilities.  **[0001140361-24-023399_ef20027783_ex99-1.htm:12]** **[0000920522-24-000045_ess-20240331.htm:26]** **[0000920522-24-000045_ess-20240331.htm:10]** 

What caused Total liabilities to jump in Q1 2024?

Real estate held for sale was first reported in Q3 2024 because certain real estate assets were reclassified as held for sale during that period, resulting in a significant increase from **$0** at the end of 2023 to **$74,148 thousand** as of September 30, 2024. However, the documents do not provide additional specifics regarding the reclassification details or the properties involved.  **[0001140361-24-044545_ef20037625_ex99-1.htm:14]** **[0000920522-24-000092_ess-20240930.htm:12]** **[0000920522-24-000092_ess-20240930.htm:5]** **[0000920522-24-000092_ess-20240930.htm:35]** 

Why was Real estate held for sale first reported in Q3 2024?

In Q1 2024, **Essex Property Trust**’s total assets increased primarily due to **four factors**: a significant rise in **net real estate assets** (which increased by approximately **$401,184 thousand** driven by larger investments in land and buildings), an improvement in **cash and cash equivalents** (up by about **$107,536 thousand**), a boost in **notes and other receivables** (an increase of **$8,419 thousand**), and a modest growth in **marketable securities** (rising by **$3,500 thousand**).  **[0001140361-24-023399_ef20027783_ex99-1.htm:12]** **[0000920522-24-000045_ess-20240331.htm:28]** **[0000920522-24-000045_ess-20240331.htm:10]** **[0000920522-24-000045_ess-20240331.htm:5]** 

What factors led to the rise in Total assets in Q1 2024?

d3e1e4dff680e73d5f15e91fb14f86f30bc7b28a341450a55596531d1c41039b

The **lower net income in Q4 2023** was mainly due to several factors: first, the absence of **gains on the sale of real estate** which had boosted net income in Q4 2022; second, an **impairment loss from unconsolidated co-investments** of **$33.7 million**, a significant increase compared to **$2.1 million** in Q4 2022; and third, the recording of a **casualty loss of $433,000**, which further contributed to the decline.  **[0001140361-24-005882_ef20020636_ex99-1.htm:1]** **[0001140361-24-005882_ef20020636_ex99-1.htm:14]** 

Why was Net income so low in Q4 2023?

The **General and Administrative (G&A) expenses** spiked in Q3 2024 to **$29,067K** from **$14,611K** in Q3 2023—a **98.9% increase**. However, the documents do not provide specific reasons for this large increase.  **[0000920522-24-000092_ess-20240930.htm:13]** **[0000920522-24-000092_ess-20240930.htm:6]** 

What drove the spike in General and administrative Expenses in Q3 2024?

The large gain on remeasurement of co-investment in Q1 2024, totaling **$138,326 thousand**, was mainly driven by Essex Property Trust acquiring its joint venture partner's **49.9% interest** in the BEXAEW portfolio. This strategic acquisition led to the consolidation of the communities in the financial statements and a remeasurement of its previously owned co-investment interest, where the gain reflects the difference between the **fair value** and the **carrying value** of that interest.  **[0001140361-24-023399_ef20027783_ex99-1.htm:0]** **[0001140361-24-023399_ef20027783_ex99-1.htm:1]** **[0000920522-24-000045_ess-20240331.htm:18]** 

What factors contributed to the large gain on remeasurement of co-investment in Q1 2024?

The significant increase in Interest and other income in Q3 2024 was primarily driven by a **$10.3 million rise in realized and unrealized gains on marketable securities, net**, which more than offset a **$3.8 million decline in interest income**.  **[0000920522-24-000092_ess-20240930.htm:42]** 

What led to the significant increase in Interest and other income in Q3 2024?

b9276ccb1eb63f5fdb4c829f4d36d0c92a296f565701760df234a4d0fec4dbed

020ebe36e26c666a9a8c43812e67c89283f803baa66da01542d2492210ed3e88

Rental and other property Revenues (USD, thousands)

Management and other fees from affiliates Revenues (USD, thousands)

Total Revenues (USD, thousands)

Property operating, excluding real estate taxes Expenses (USD, thousands)

Real estate taxes Expenses (USD, thousands)

Corporate-level property management expenses (USD, thousands)

Depreciation and amortization Expenses (USD, thousands)

General and administrative Expenses (USD, thousands)

Expensed acquisition and investment related costs Expenses (USD, thousands)

Total Expenses (USD, thousands)

Gain on sale of real estate and land (USD, thousands)

Earnings from operations (USD, thousands)

Interest expense (USD, thousands)

Interest and other income (USD, thousands)

Equity income from co-investments (USD, thousands)

Tax benefit (expense) on unconsolidated co-investments (USD, thousands)

Gain on remeasurement of co-investment (USD, thousands)

Net income (USD, thousands)

Net income attributable to noncontrolling interest (USD, thousands)

Net income available to common unitholders (USD, thousands)

e60cd9a1c9fb05935325f4509815f4cbc34378e118dc9575dfdcb238a3232f4c

dfc38f6820294c13d1cf099ec79ecf0f23ef61b5e4a2ec041d865b9a97a88fee

Adjustments for Non-Cash Items [USD, Thousands]

Stock-Based Compensation [USD, Thousands]

Changes in Working Capital [USD, Thousands]

Capital Expenditures (CapEx) [USD, Thousands]

Proceeds from / Repayments of Debt [USD, Thousands]

Share Repurchases [USD, Thousands]

Dividend Payments [USD, Thousands]

Net Change in Cash [USD, Thousands]

78eb01c7758ded7b46498b9cf0439b62f2ac357ebcee931206ae6cca7ced3046

3b3712a5c2769c88824e56906960cbcd1aa988c6dab0220692a61b91554e6846

Number of operating apartment communities (communities)

Number of apartment homes (apartment homes)

Average financial occupancy for Same-Property portfolio (percentage)

Average financial occupancy for Southern California Same-Property (percentage)

Average financial occupancy for Northern California Same-Property (percentage)

Average financial occupancy for Seattle Metro Same-Property (percentage)

Cash delinquencies as a percentage of scheduled rental income (percentage)

Average monthly rental rate for Same-Property portfolio (USD per apartment home)

19b91d72c20c23a089155b3cdaeecbd659323992816394c6e429676187cc915e

Southern California

- Same-Property

Northern California

Seattle Metro

Other Real Estate Assets

Total Revenue

20c6a0b2df0606ac343fb6bfe2913c5ab3ffb3f7993b750749e86d1a751daa80

Rental and Other Property Revenue

- Rental Income

- Other Property

Management and Other Fees

8c4bd8db384fb7dda53fc31452eae5f919529ae27968fb34dacb212b2fccdbe9

ESSEX PROPERTY TRUST (ESS)

Financials