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, 2017					Three Months Ended September 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	$	79,723	65,994,896	$	1.21	$	65,561	65,507,669	$	1.00
Effect of Dilutive Securities:
Stock options	—		83,387			—		109,882
Diluted:
Net income available to common stockholders	$	79,723	66,078,283	$	1.21	$	65,561	65,617,551	$	1.00



	Nine Months Ended September 30, 2017					Nine Months Ended September 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	$	329,446	65,759,450	$	5.01	$	215,555	65,455,004	$	3.29
Effect of Dilutive Securities:
Stock options	—		77,515			—		123,657
Diluted:
Net income available to common stockholders	$	329,446	65,836,965	$	5.00	$	215,555	65,578,661	$	3.29

The table above excludes from the calculations of diluted earnings per share weighted average convertible OP Units of 2,251,112 and 2,220,952, 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 September 30, 2017 and 2016, respectively, and 2,251,673 and 2,224,236 for the nine months ended September 30, 2017 and 2016, respectively, because they were anti-dilutive. The related income allocated to these convertible OP Units aggregated $2.7 million and $2.2 million for the three months ended September 30, 2017 and 2016, respectively, and $11.3 million and $7.5 million for the nine months ended September 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 September 30, 2017					Three Months Ended September 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	$	82,444	68,246,008	$	1.21	$	67,784	67,728,621	$	1.00
Effect of Dilutive Securities:
Stock options	—		83,387			—		109,882
Diluted:
Net income available to common unitholders	$	82,444	68,329,395	$	1.21	$	67,784	67,838,503	$	1.00



	Nine Months Ended September 30, 2017					Nine Months Ended September 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	$	340,735	68,011,123	$	5.01	$	223,012	67,679,240	$	3.30
Effect of Dilutive Securities:
Stock options	—		77,515			—		123,657
Diluted:
Net income available to common unitholders	$	340,735	68,088,638	$	5.00	$	223,012	67,802,897	$	3.29

Stock options of zero and 40,900 for the three months ended September 30, 2017 and 2016, respectively, and 2,352 and 76,054 for the nine months ended September 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.