Net Income Per Common Share and Net Income Per Common Unit

3 Months Ended

Mar. 31, 2020

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 March 31, 2020					Three Months Ended March 31, 2019
	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	$	315,006	66,043,831	$	4.77	$	118,858	65,702,788	$	1.81
Effect of Dilutive Securities:
Stock options	—		57,337			—		81,081
DownREIT units	196		94,247			—		—
Diluted:
Net income available to common stockholders	$	315,202	66,195,415	$	4.76	$	118,858	65,783,869	$	1.81

The table above excludes from the calculations of diluted earnings per share weighted average convertible OP Units of 2,300,181 and 2,305,064, 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 March 31, 2020 and 2019, respectively, because they were anti-dilutive. The related income allocated to these convertible OP Units aggregated $11.0 million and $4.2 million for the three months ended March 31, 2020 and 2019, respectively. Additionally, the table excludes all DownREIT 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.

Stock options of 116,380 and 106,029 for the three months ended March 31, 2020 and 2019, respectively, were excluded from the calculation of diluted earnings per share because the assumed proceeds per share of such options plus the average unearned

compensation were greater than the average market price of the common stock for the periods ended and, therefore, were anti-dilutive.

Essex Portfolio, L.P.



	Three Months Ended March 31, 2020					Three Months Ended March 31, 2019
	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	$	325,992	68,344,012	$	4.77	$	123,029	68,007,852	$	1.81
Effect of Dilutive Securities:
Stock options	—		57,337			—		81,081
DownREIT units	196		94,247			—		—
Diluted:
Net income available to common unitholders	$	326,188	68,495,596	$	4.76	$	123,029	68,088,933	$	1.81

Stock options of 116,380 and 106,029 for the three months ended March 31, 2020 and 2019, 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 period ended and, therefore, were anti-dilutive. Additionally, the table excludes all DownREIT 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.