Earning Per Share and Earnings Per Unit

Equity Residential

The following tables set forth the computation of net income per share – basic and net income per share – diluted for the Company (amounts in thousands except per share amounts):



	Six Months Ended June 30,						Quarter Ended June 30,
	2012			2011			2012			2011
Numerator for net income per share – basic:
Income from continuing operations	$	52,759		$	5,256		$	36,558		$	15,126
Allocation to Noncontrolling Interests – Operating Partnership, net	(1,990		)	43			(1,481		)	(544		)
Net (income) attributable to Noncontrolling Interests – Partially Owned Properties	(769		)	(31		)	(319		)	(71		)
Preferred distributions	(6,933		)	(6,933		)	(3,467		)	(3,467		)
Income (loss) from continuing operations available to Common Shares, net of Noncontrolling Interests	43,067			(1,665		)	31,291			11,044
Discontinued operations, net of Noncontrolling Interests	198,563			677,987			68,506			541,413
Numerator for net income per share – basic	$	241,630		$	676,322		$	99,797		$	552,457
Numerator for net income per share – diluted (1):
Income from continuing operations	$	52,759					$	36,558		$	15,126
Net (income) attributable to Noncontrolling Interests – Partially Owned Properties	(769		)				(319		)	(71		)
Preferred distributions	(6,933		)				(3,467		)	(3,467		)
Income from continuing operations available to Common Shares	45,057						32,772			11,588
Discontinued operations, net	207,723						71,757			566,627
Numerator for net income per share – diluted (1)	$	252,780		$	676,322		$	104,529		$	578,215
Denominator for net income per share – basic and diluted (1):
Denominator for net income per share – basic	299,499			293,784			300,193			294,663
Effect of dilutive securities:
OP Units	13,634						14,062			13,291
Long-term compensation shares/units	3,324						3,393			4,245
Denominator for net income per share – diluted (1)	316,457			293,784			317,648			312,199
Net income per share – basic	$	0.81		$	2.30		$	0.33		$	1.88
Net income per share – diluted	$	0.80		$	2.30		$	0.33		$	1.85
Net income per share – basic:
Income (loss) from continuing operations available to Common Shares, net of Noncontrolling Interests	$	0.144		$	(0.006	)	$	0.104		$	0.038
Discontinued operations, net of Noncontrolling Interests	0.663			2.308			0.228			1.837
Net income per share – basic	$	0.807		$	2.302		$	0.332		$	1.875
Net income per share – diluted (1):
Income (loss) from continuing operations available to Common Shares	$	0.142		$	(0.006	)	$	0.103		$	0.037
Discontinued operations, net	0.657			2.308			0.226			1.815
Net income per share – diluted	$	0.799		$	2.302		$	0.329		$	1.852


(1)	Potential common shares issuable from the assumed conversion of OP Units and the exercise/vesting of long-term compensation shares/units are automatically anti-dilutive and therefore excluded from the diluted earnings per share calculation as the Company had a loss from continuing operations for the six months ended June 30, 2011.

The effect of the Common Shares that could ultimately be issued upon the conversion/exchange of the Company’s $650.0 million exchangeable senior notes ($482.5 million outstanding were redeemed on August 18, 2011) was not included in the computation of diluted earnings per share because the effects would be anti-dilutive.

ERP Operating Limited Partnership

The following tables set forth the computation of net income per Unit – basic and net income per Unit – diluted for the Operating Partnership (amounts in thousands except per Unit amounts):



	Six Months Ended June 30,						Quarter Ended June 30,
	2012			2011			2012			2011
Numerator for net income per Unit – basic and diluted (1):
Income from continuing operations	$	52,759		$	5,256		$	36,558		$	15,126
Net (income) attributable to Noncontrolling Interests – Partially Owned Properties	(769		)	(31		)	(319		)	(71		)
Allocation to Preference Units	(6,933		)	(6,933		)	(3,467		)	(3,467		)
Income (loss) from continuing operations available to Units	45,057			(1,708		)	32,772			11,588
Discontinued operations, net	207,723			709,563			71,757			566,627
Numerator for net income per Unit – basic and diluted (1)	$	252,780		$	707,855		$	104,529		$	578,215
Denominator for net income per Unit – basic and diluted (1):
Denominator for net income per Unit – basic	313,133			307,106			314,255			307,954
Effect of dilutive securities:
Dilution for Units issuable upon assumed exercise/vesting of the Company’s long-term compensation shares/units	3,324						3,393			4,245
Denominator for net income per Unit – diluted (1)	316,457			307,106			317,648			312,199
Net income per Unit – basic	$	0.81		$	2.30		$	0.33		$	1.88
Net income per Unit – diluted	$	0.80		$	2.30		$	0.33		$	1.85
Net income per Unit – basic:
Income (loss) from continuing operations available to Units	$	0.144		$	(0.006	)	$	0.104		$	0.038
Discontinued operations, net	0.663			2.308			0.228			1.837
Net income per Unit – basic	$	0.807		$	2.302		$	0.332		$	1.875
Net income per Unit – diluted (1):
Income (loss) from continuing operations available to Units	$	0.142		$	(0.006	)	$	0.103		$	0.037
Discontinued operations, net	0.657			2.308			0.226			1.815
Net income per Unit – diluted	$	0.799		$	2.302		$	0.329		$	1.852


(1)	Potential Units issuable from the assumed exercise/vesting of the Company’s long-term compensation shares/units are automatically anti-dilutive and therefore excluded from the diluted earnings per Unit calculation as the Operating Partnership had a loss from continuing operations for the six months ended June 30, 2011.

The effect of the Common Shares/OP Units that could ultimately be issued upon the conversion/exchange of the Company’s $650.0 million exchangeable senior notes ($482.5 million outstanding were redeemed on August 18, 2011) was not included in the computation of diluted earnings per Unit because the effects would be anti-dilutive.