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, 2018					Three Months Ended September 30, 2017
	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	$	80,975	66,052,108	$	1.23	$	79,723	65,994,896	$	1.21
Effect of Dilutive Securities:
Stock options	—		51,704			—		83,387
Diluted:
Net income available to common stockholders	$	80,975	66,103,812	$	1.22	$	79,723	66,078,283	$	1.21



	Nine Months Ended September 30, 2018					Nine Months Ended September 30, 2017
	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	$	272,333	66,047,990	$	4.12	$	329,446	65,759,450	$	5.01
Effect of Dilutive Securities:
Stock options	—		45,014			—		77,515
Diluted:
Net income available to common stockholders	$	272,333	66,093,004	$	4.12	$	329,446	65,836,965	$	5.00

The table above excludes from the calculations of diluted earnings per share weighted average convertible OP Units of 2,272,983 and 2,251,112, which include vested 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, 2018 and 2017, respectively, and 2,273,163 and 2,251,673 for the nine months ended September 30, 2018 and 2017, respectively, because they were anti-dilutive. The related income allocated to these convertible OP Units aggregated $2.8 million and $2.7 million for the three months ended September 30, 2018 and 2017, respectively, and $9.4 million and $11.3 million for the nine months ended September 30, 2018 and 2017, 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 150,852 and zero for the three months ended September 30, 2018 and 2017, respectively, and 160,252 and 2,352 for the nine months ended September 30, 2018 and 2017 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, 2018					Three Months Ended September 30, 2017
	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	$	83,764	68,325,091	$	1.23	$	82,444	68,246,008	$	1.21
Effect of Dilutive Securities:
Stock options	—		51,704			—		83,387
Diluted:
Net income available to common unitholders	$	83,764	68,376,795	$	1.23	$	82,444	68,329,395	$	1.21



	Nine Months Ended September 30, 2018					Nine Months Ended September 30, 2017
	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	$	281,714	68,321,153	$	4.12	$	340,735	68,011,123	$	5.01
Effect of Dilutive Securities:
Stock options	—		45,014			—		77,515
Diluted:
Net income available to common unitholders	$	281,714	68,366,167	$	4.12	$	340,735	68,088,638	$	5.00

Stock options of 150,852 and zero for the three months ended September 30, 2018 and 2017, respectively, and 160,252 and 2,352 for the nine months ended September 30, 2018 and 2017, 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 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.