Net Income Per Common Share and Net Income Per Common Unit

9 Months Ended

Sep. 30, 2019

Net Income Per Common Share and Net Income Per Common Unit

($ in thousands, except share and unit data):

Essex Property Trust, Inc.



	Three Months Ended September 30, 2019					Three Months Ended September 30, 2018
	Income		Weighted- average Common Shares	Per Common Share Amount		Income		Weighted- average Common Shares	Per Common Share Amount
Basic:
Net income available to common stockholders	$	99,335	65,850,524	$	1.51	$	80,975	66,052,108	$	1.23
Effect of Dilutive Securities:
Stock options	—		122,561			—		51,704
Diluted:
Net income available to common stockholders	$	99,335	65,973,085	$	1.51	$	80,975	66,103,812	$	1.22



	Nine Months Ended September 30, 2019					Nine Months Ended September 30, 2018
	Income		Weighted- average Common Shares	Per Common Share Amount		Income		Weighted- average Common Shares	Per Common Share Amount
Basic:
Net income available to common stockholders	$	310,468	65,757,914	$	4.72	$	272,333	66,047,990	$	4.12
Effect of Dilutive Securities:
Stock options	—		99,746			—		45,014
Diluted:
Net income available to common stockholders	$	310,468	65,857,660	$	4.71	$	272,333	66,093,004	$	4.12

The tables above exclude from the calculations of diluted earnings per share weighted average convertible OP Units of 2,298,389 and 2,272,983, which include vested Series Z-1 Incentive Units, 2014 Long-Term Incentive Plan Units, and 2015 Long-Term Incentive Plan Units for the three months ended September 30, 2019 and 2018, respectively, and 2,300,888 and 2,273,163 for the nine months ended September 30, 2019 and 2018, respectively, because they were anti-dilutive. The related income allocated to these convertible OP Units aggregated $3.5 million and $2.8 million for the three months ended September 30, 2019 and 2018, respectively, and $10.9 million and $9.4 million for the nine months ended September 30, 2019 and 2018, respectively. Additionally, the tables exclude all DownREIT limited partnership units for which the Operating Partnership has the ability and intention to redeem the units for cash and does not consider them to be common stock equivalents.

Essex Portfolio, L.P.



	Three Months Ended September 30, 2019					Three Months Ended September 30, 2018
	Income		Weighted- average Common Units	Per Common Unit Amount		Income		Weighted- average Common Units	Per Common Unit Amount
Basic:
Net income available to common unitholders	$	102,799	68,148,913	$	1.51	$	83,764	68,325,091	$	1.23
Effect of Dilutive Securities:
Stock options	—		122,561			—		51,704
Diluted:
Net income available to common unitholders	$	102,799	68,271,474	$	1.51	$	83,764	68,376,795	$	1.23



	Nine Months Ended September 30, 2019					Nine Months Ended September 30, 2018
	Income		Weighted- average Common Units	Per Common Unit Amount		Income		Weighted- average Common Units	Per Common Unit Amount
Basic:
Net income available to common unitholders	$	321,331	68,058,802	$	4.72	$	281,714	68,321,153	$	4.12
Effect of Dilutive Securities:
Stock options	—		99,746			—		45,014
Diluted:
Net income available to common unitholders	$	321,331	68,158,548	$	4.71	$	281,714	68,366,167	$	4.12

Stock options of zero and 150,852 for the three months ended September 30, 2019 and 2018, respectively, and zero and 160,252 for the nine months ended September 30, 2019 and 2018, respectively, were excluded from the calculation of diluted earnings per unit because the assumed proceeds per unit of these options plus the average unearned compensation were greater than the average market price of the common unit for the periods ended and, therefore, were anti-dilutive. Additionally, the tables exclude all DownREIT limited partnership units for which the Operating Partnership has the ability and intention to redeem the units for cash and does not consider them to be common stock equivalents.