Net Income Per Common Share and Net Income Per Common Unit

6 Months Ended

Jun. 30, 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 June 30, 2020					Three Months Ended June 30, 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	$	84,458	65,412,407	$	1.29	$	92,275	65,718,806	$	1.40
Effect of Dilutive Securities:
Stock options	—		15,528			—		103,009
Diluted:
Net income available to common stockholders	$	84,458	65,427,935	$	1.29	$	92,275	65,821,815	$	1.40



	Six Months Ended June 30, 2020					Six Months Ended June 30, 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	$	399,464	65,728,119	$	6.08	$	211,133	65,710,842	$	3.21
Effect of Dilutive Securities:
Stock options	—		32,981			—		91,575
DownREIT units	392		94,247			—		—
Diluted:
Net income available to common stockholders	$	399,856	65,855,347	$	6.07	$	211,133	65,802,417	$	3.21

The table above excludes from the calculations of diluted earnings per share weighted average convertible OP Units of 2,295,750 and 2,299,284, 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 June 30, 2020 and 2019, respectively, and 2,297,966 and 2,302,158 for the six months ended June 30, 2020 and 2019, respectively, because they were anti-dilutive. The related income allocated to these convertible OP Units aggregated $3.0 million and $3.2 million for the three months ended June 30, 2020 and 2019, respectively, and $14.0 million and $7.4 million for the six months ended June 30, 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 431,253 and zero for the three months ended June 30, 2020 and 2019, and 290,570 and 106,029 for the six months ended June 30, 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 June 30, 2020					Three Months Ended June 30, 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	$	87,422	67,708,157	$	1.29	$	95,503	68,018,090	$	1.40
Effect of Dilutive Securities:
Stock options	—		15,528			—		103,009
Diluted:
Net income available to common unitholders	$	87,422	67,723,685	$	1.29	$	95,503	68,121,099	$	1.40



	Six Months Ended June 30, 2020					Six Months Ended June 30, 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	$	413,414	68,026,084	$	6.08	$	218,532	68,012,999	$	3.21
Effect of Dilutive Securities:
Stock options	—		32,981			—		91,575
DownREIT units	392		94,247			—		—
Diluted:
Net income available to common unitholders	$	413,806	68,153,312	$	6.07	$	218,532	68,104,574	$	3.21

Stock options of 431,253 and zero for the three months ended June 30, 2020 and 2019, respectively, and 290,570 and 106,029 for the six months ended June 30, 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.