Net Income Per Common Share and Net Income Per Common Unit

9 Months Ended

Sep. 30, 2021

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, 2021					Three Months Ended September 30, 2020
	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	$	118,390	65,048,486	$	1.82	$	73,661	65,232,837	$	1.13
Effect of Dilutive Securities:
Stock options	—		99,295			—		8,591

Diluted:
Net income available to common stockholders	$	118,390	65,147,781	$	1.82	$	73,661	65,241,428	$	1.13


	Nine Months Ended September 30, 2021					Nine Months Ended September 30, 2020
	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	$	351,680	65,013,477	$	5.41	$	473,125	65,561,820	$	7.22
Effect of Dilutive Securities:
Stock options	—		61,697			—		20,026
DownREIT units	—		—			587		94,247
Diluted:
Net income available to common stockholders	$	351,680	65,075,174	$	5.40	$	473,712	65,676,093	$	7.21

The table above excludes from the calculations of diluted earnings per share weighted average convertible OP Units of 2,287,678 and 2,295,510, which include vested 2014 Long-Term Incentive Plan Units, and 2015 Long-Term Incentive Plan Units for the three months ended September 30, 2021 and 2020, respectively, and 2,291,725 and 2,297,141 for the nine months ended September 30, 2021 and 2020, respectively, because they were anti-dilutive. The related income allocated to these convertible OP Units aggregated $4.2 million and $2.6 million for the three months ended September 30, 2021 and 2020, respectively, and $12.4 million and $16.5 million for the nine months ended September 30, 2021 and 2020, 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 zero and 493,567 for the three months ended September 30, 2021 and 2020, respectively, and 116,380 and 299,046 for the nine months ended September 30, 2021 and 2020, 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 September 30, 2021					Three Months Ended September 30, 2020
	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	$	122,558	67,336,164	$	1.82	$	76,254	67,528,346	$	1.13
Effect of Dilutive Securities:
Stock options	—		99,295			—		8,591

Diluted:
Net income available to common unitholders	$	122,558	67,435,459	$	1.82	$	76,254	67,536,937	$	1.13


	Nine Months Ended September 30, 2021					Nine Months Ended September 30, 2020
	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	$	364,083	67,307,259	$	5.41	$	489,668	67,858,961	$	7.22
Effect of Dilutive Securities:
Stock options	—		61,697			—		20,026
DownREIT units	—		—			587		94,247
Diluted:
Net income available to common unitholders	$	364,083	67,368,956	$	5.40	$	490,255	67,973,234	$	7.21

Stock options of 0 and 493,567 for the three months ended September 30, 2021 and 2020, respectively, 116,380 and 299,046 for the nine months ended September 30, 2021 and 2020, 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 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.