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):



	2017				2016				2015
	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	433,059	65,829,155	$	6.58	411,124	65,471,540	$	6.28	226,865	64,871,717	$	3.50
Effect of Dilutive Securities
Stock options	—	69,100			—	116,276			—	189,968
Diluted:
Net income available to common stockholders	433,059	65,898,255	$	6.57	411,124	65,587,816	$	6.27	226,865	65,061,685	$	3.49

The table above excludes from the calculations of diluted earnings per share weighted average convertible OP Units of 2,252,575, 2,224,100, and 2,182,467, 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, 2017, 2016 and 2015, respectively, because they were anti-dilutive. The related income allocated to these convertible OP Units aggregated $14.8 million, $14.1 million, and $7.8 million for the years ended December 31, 2017, 2016, and 2015, respectively. Additionally, the table excludes all DownREIT limited partnership 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 154,793, 252,334, and 54,100, for the years ended December 31, 2017, 2016, and 2015, 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 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 and 2015, 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):



	2017					2016					2015
	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	$	447,884	68,081,730	$	6.58	$	425,213	67,695,640	$	6.28	$	234,689	67,054,184	$	3.50
Effect of Dilutive Securities
Stock options	—		69,100			—		116,276			—		189,968
Diluted:
Net income available to common unitholders	$	447,884	68,150,830	$	6.57	$	425,213	67,811,916	$	6.27	$	234,689	67,244,152	$	3.49

Stock options of 154,793, 252,334, and 54,100, for the years ended December 31, 2017, 2016, and 2015, 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 years ended and, therefore, were anti-dilutive. Additionally, the table excludes all DownREIT limited partnership 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.

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