Essex Property Trust (ESS) 8-K Results of Operations and Financial Condition

Exhibit 99.1

Financial Information

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
(Dollars in thousands, except per share amounts)		March 31,
		2007		2006
Revenues:
	Rental and other property	$	92,154	$	82,233
	Management and other fees from affiliates		1,040		824
			93,194		83,057
Expenses:
	Property operating, excluding real estate taxes		23,120		21,660
	Real estate taxes		7,712		7,170
	Depreciation and amortization		21,677		19,320
	Interest		18,266		18,412
	Amortization of deferred financing costs		677		696
	General and administrative		6,096		4,899
	Other expenses		-		970
			77,548		73,127
Earnings from operations			15,646		9,930
Interest and other income			2,182		2,394
Equity income (loss) co-investments			1,982		(442)
Minority interests			(5,307)		(4,807)
Income before discontinued operations and
	income tax provision		14,503		7,075
Income tax provision			-		(37)
Income before discontinued operations			14,503		7,038
Income and gain from discontinued operations,
	net of minority interests		23,043		3,284
Net income			37,546		10,322
Dividends to preferred stockholders			(2,243)		(488)
Net income available to common stockholders		$	35,303	$	9,834
Net income per share - basic		$	1.51	$	0.43
Net income per share - diluted		$	1.46	$	0.43

FUNDS FROM OPERATIONS

Funds from Operations (“FFO”), as defined by the National Association of Real Estate Investment Trusts (“NAREIT”) is generally considered by industry analysts as an appropriate measure of performance of an equity REIT. Generally, FFO adjusts the net income of equity REITs for non-cash charges such as depreciation and amortization of rental properties, gains/losses on sales of real estate and extraordinary items. Management considers FFO to be a useful financial performance measurement of an equity REIT because, together with net income and cash flows, FFO provides investors with an additional basis to evaluate the performance and ability of a REIT to incur and service debt and to find acquisitions and other capital expenditures.

FFO does not represent net income or cash flows from operations as defined by generally accepted accounting principles (“GAAP”) and is not intended to indicate whether cash flows will be sufficient to fund cash needs. It should not be considered as an alternative to net income as an indicator of the REIT’s operating performance or to cash flows as a measure of liquidity. FFO does not measure whether cash flow is sufficient to fund all cash needs including principal amortization, capital improvements and distributions to shareholders. FFO also does not represent cash flows generated from operating, investing or financing activities as defined under GAAP. Management has consistently applied the NAREIT definition of FFO to all periods presented. However, there is a judgment involved and other REITs in calculating FFO may vary from the NAREIT definition for this measure, and thus their disclosure of FFO may not be comparable to Essex’s calculation.

The following table sets forth the Company’s calculation of FFO for the three months ended March 31, 2007 and 2006.

				Three Months Ended March 31,
Funds from operations				2007		2006
Net income available to common stockholders			$	35,303	$	9,834
Adjustments:
	Depreciation and amortization			21,718		20,091
	Gains not included in FFO (1)			(14,040)		( 3,062)
	Minority interests and co-investments (2)			2,406		2,054
		Funds from operations	$	45,387	$	28,917
		FFO per share-diluted	$	1.70	$	1.13

(1)   Amount includes net gain from sale of City Heights and the equivalent to accumulated depreciation on Peregrine Point condominium sales.

(2)   Amount includes the following 2007 adjustments: (i) minority interest related to Operating Partnership units totaling $3.8 million, (ii) depreciation add back and preferred interest for co-investments not recognized for GAAP totaling $0.9 million, and (iii) less adjustments to income from Waterstone at Fremont and City Heights not recognized for FFO totaling $2.3 million.

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)
				March 31, 2007		December 31, 2006
Real Estate:
	Land and land improvements		$	577,223	$	560,880
	Buildings and improvements			2,173,605		2,108,307
				2,750,828		2,669,187
	Less: accumulated depreciation			(486,134)		(465,015)
				2,264,694		2,204,172
Real estate - held for sale, net				-		41,221
Real estate under development				152,248		103,487
Investments				64,221		60,451
				2,481,163		2,409,331
Cash and cash equivalents				25,815		23,610
Marketable securities				5,784		-
Other assets				51,093		40,036
Deferred charges, net				12,476		12,863
		Total assets	$	2,576,331	$	2,485,840
Mortgage notes payable			$	1,092,407	$	1,060,704
Mortgage notes payable - held for sale				-		32,850
Exchangeable bonds				225,000		225,000
Lines of credit				158,374		93,000
Other liabilities				90,434		77,852
Deferred gain				2,193		2,193
		Total liabilities		1,568,408		1,491,599
Minority interests				230,259		236,120
Series G cumulative convertible preferred stock, liquidation value				145,912		145,912
Stockholders' Equity:
	Common stock			2		2
	Series F cumulative redeemable preferred stock, liquidation value			25,000		25,000
	Additional paid-in-capital			690,467		686,937
	Distributions in excess of accumulated earnings			( 83,985)		(97,457)
	Accumulated other comprehensive income (loss)			268		(2,273)
		Total stockholders' equity		631,752		612,209
		Total liabilities and stockholders' equity	$	2,576,331	$	2,485,840