Net Income Per Common Share and Net Income Per Common Unit

Essex Property Trust, Inc.

Basic and diluted income per share is calculated as follows for the years ended December 31 ($ in thousands, except share and per share amounts):



	2016				2015				2014
	Income	Weighted- average Common Shares	Per Common Share Amount		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	411,124	65,471,540	$	6.28	226,865	64,871,717	$	3.50	116,859	56,546,959	$	2.07
Effect of Dilutive Securities ⁽¹⁾	—	116,276			—	189,968			—	149,566
Diluted:
Net income available to common stockholders	411,124	65,587,816	$	6.27	226,865	65,061,685	$	3.49	116,859	56,696,525	$	2.06

⁽¹⁾

Weighted average convertible limited partnership units of 2,224,100, 2,182,467, and 2,224,707, which include vested Series Z Incentive Units, Series Z-1 Incentive Units, 2014 Long-Term Incentive Plan Units, and 2015 Long-Term Incentive Plan Units, for the years ended December 31, 2016, 2015 and 2014, respectively, were not included in the determination of diluted earnings per share calculation because they were anti-dilutive. The related income allocated to these convertible limited partnership units aggregated $14.1 million, $7.8 million, and $4.9 million for the years ended December 31, 2016, 2015, and 2014, respectively. Additionally, excludes all DownREIT units as they are anti-dilutive.

Stock options of 252,334, 54,100, and 10,843, for the years ended December 31, 2016, 2015, and 2014, respectively, were not included in the diluted earnings per share calculation because the assumed proceeds per share of these options plus the average unearned compensation were greater than the average market price of the common stock for the years ended and, therefore, were anti-dilutive.

All shares of cumulative convertible Series H preferred interest have been excluded from diluted earnings per share for the years ended December 31, 2016, 2015, and 2014 respectively, as the effect was anti-dilutive. All shares of cumulative convertible Series G preferred interest have been excluded from diluted earnings per share for the year ended December 31, 2014 as the effect was anti-dilutive.

Essex Portfolio, L.P.

Basic and diluted income per unit is calculated as follows for the years ended December 31 ($ in thousands, except unit and per unit amounts):



	2016					2015					2014
	Income		Weighted- average Common Units	Per Common Unit Amount		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	$	425,213	67,695,640	$	6.28	$	234,689	67,054,184	$	3.50	$	121,726	58,771,666	$	2.07
Effect of Dilutive Securities ⁽¹⁾	—		116,276			—		189,968			—		149,566
Diluted:
Net income available to common unitholders	$	425,213	67,811,916	$	6.27	$	234,689	67,244,152	$	3.49	$	121,726	58,921,232	$	2.07

⁽¹⁾

Stock options of 252,334, 54,100, and 10,843, for the years ended December 31, 2016, 2015, and 2014, respectively, were not included in the diluted earnings per unit calculation because the assumed proceeds per share of these options plus the average unearned compensation were greater than the average market price of the common shares for the years ended and, therefore, were anti-dilutive. Additionally, excludes all DownREIT units as they are anti-dilutive.

The cumulative convertible Series H preferred interest have been excluded from diluted earnings per unit for the years ended December 31, 2016, 2015, and 2014 respectively, as the effect was anti-dilutive. The cumulative convertible Series G preferred interest have been excluded from diluted earnings per unit for the year ended December 31, 2014 as the effect was anti-dilutive.