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, 2017					Three Months Ended June 30, 2016
	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	$	70,759	65,729,074	$	1.08	$	72,013	65,451,110	$	1.10
Effect of Dilutive Securities:
Stock options	—		90,620			—		124,268
Diluted:
Net income available to common stockholders	$	70,759	65,819,694	$	1.08	$	72,013	65,575,378	$	1.10



	Six Months Ended June 30, 2017					Six Months Ended June 30, 2016
	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	$	249,723	65,639,775	$	3.80	$	149,994	65,428,382	$	2.29
Effect of Dilutive Securities:
Stock options	—		91,515			—		130,429
DownREIT units	738		210,728			—		—
Diluted:
Net income available to common stockholders	$	250,461	65,942,018	$	3.80	$	149,994	65,558,811	$	2.29

The table above excludes from the calculations of diluted earnings per share weighted average convertible OP units of 2,251,687 and 2,223,928, 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 three months ended June 30, 2017 and 2016, respectively, and 2,251,959 and 2,225,897 for the six months ended June 30, 2017 and 2016, respectively, because they were anti-dilutive. The related income allocated to these convertible OP units aggregated $2.5 million and $2.4 million for the three months ended June 30, 2017 and 2016, respectively, and $8.6 million and $5.2 million for the six months ended June 30, 2017 and 2016, respectively. Additionally, the table excludes all DownREIT units for which the Operating Partnership has the ability and intention to redeem the DownREIT units for cash and does not consider them to be common stock equivalents.

Essex Portfolio, L.P.



	Three Months Ended June 30, 2017					Three Months Ended June 30, 2016
	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	$	73,181	67,980,761	$	1.08	$	74,463	67,675,038	$	1.10
Effect of Dilutive Securities:
Stock options	—		90,620			—		124,268
Diluted:
Net income available to common unitholders	$	73,181	68,071,381	$	1.08	$	74,463	67,799,306	$	1.10



	Six Months Ended June 30, 2017					Six Months Ended June 30, 2016
	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	$	258,291	67,891,734	$	3.80	$	155,228	67,654,279	$	2.29
Effect of Dilutive Securities:
Stock options	—		91,515			—		130,429
DownREIT units	738		210,728			—		—
Diluted:
Net income available to common unitholders	$	259,029	68,193,977	$	3.80	$	155,228	67,784,708	$	2.29

Stock options of 8,240 and 87,954 for the three months ended June 30, 2017 and 2016, respectively, and 23,619 and 87,954 for the six months ended June 30, 2017 and 2016, 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 DownREIT units for cash and does not consider them to be common stock equivalents.