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):



	Nine Months Ended September 30,						Quarter Ended September 30,
	2012			2011			2012			2011
Numerator for net income per share – basic:
Income from continuing operations	$	181,227		$	33,721		$	132,681		$	30,217
Allocation to Noncontrolling Interests – Operating Partnership, net	(7,477		)	(1,018		)	(5,750		)	(1,142		)
Net (income) loss attributable to Noncontrolling Interests – Partially Owned Properties	(457		)	(418		)	312			(387		)
Preferred distributions	(9,319		)	(10,399		)	(2,386		)	(3,466		)
Premium on redemption of Preferred Shares	(5,150		)	—			(5,150		)	—
Income from continuing operations available to Common Shares, net of Noncontrolling Interests	158,824			21,886			119,707			25,222
Discontinued operations, net of Noncontrolling Interests	301,409			758,818			98,896			79,160
Numerator for net income per share – basic	$	460,233		$	780,704		$	218,603		$	104,382
Numerator for net income per share – diluted:
Income from continuing operations	$	181,227		$	33,721		$	132,681		$	30,217
Net (income) loss attributable to Noncontrolling Interests – Partially Owned Properties	(457		)	(418		)	312			(387		)
Preferred distributions	(9,319		)	(10,399		)	(2,386		)	(3,466		)
Premium on redemption of Preferred Shares	(5,150		)	—			(5,150		)	—
Income from continuing operations available to Common Shares	166,301			22,904			125,457			26,364
Discontinued operations, net	315,578			794,075			103,642			82,760
Numerator for net income per share – diluted	$	481,879		$	816,979		$	229,099		$	109,124
Denominator for net income per share – basic and diluted:
Denominator for net income per share – basic	300,116			294,474			301,336			295,831
Effect of dilutive securities:
OP Units	13,816			13,231			14,177			13,053
Long-term compensation shares/units	3,333			4,203			3,260			3,960
Denominator for net income per share – diluted	317,265			311,908			318,773			312,844
Net income per share – basic	$	1.53		$	2.65		$	0.73		$	0.35
Net income per share – diluted	$	1.52		$	2.62		$	0.72		$	0.35
Net income per share – basic:
Income from continuing operations available to Common Shares, net of Noncontrolling Interests	$	0.529		$	0.074		$	0.397		$	0.085
Discontinued operations, net of Noncontrolling Interests	1.005			2.577			0.328			0.268
Net income per share – basic	$	1.534		$	2.651		$	0.725		$	0.353
Net income per share – diluted:
Income from continuing operations available to Common Shares	$	0.524		$	0.073		$	0.394		$	0.084
Discontinued operations, net	0.995			2.546			0.325			0.265
Net income per share – diluted	$	1.519		$	2.619		$	0.719		$	0.349

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):



	Nine Months Ended September 30,						Quarter Ended September 30,
	2012			2011			2012			2011
Numerator for net income per Unit – basic and diluted:
Income from continuing operations	$	181,227		$	33,721		$	132,681		$	30,217
Net (income) loss attributable to Noncontrolling Interests – Partially Owned Properties	(457		)	(418		)	312			(387		)
Allocation to Preference Units	(9,319		)	(10,399		)	(2,386		)	(3,466		)
Allocation to premium on redemption of Preference Units	(5,150		)	—			(5,150		)	—
Income from continuing operations available to Units	166,301			22,904			125,457			26,364
Discontinued operations, net	315,578			794,075			103,642			82,760
Numerator for net income per Unit – basic and diluted	$	481,879		$	816,979		$	229,099		$	109,124
Denominator for net income per Unit – basic and diluted:
Denominator for net income per Unit - basic	313,932			307,705			315,513			308,884
Effect of dilutive securities:
Dilution for Units issuable upon assumed exercise/vesting of the Company's long-term compensation shares/units	3,333			4,203			3,260			3,960
Denominator for net income per Unit – diluted	317,265			311,908			318,773			312,844
Net income per Unit – basic	$	1.53		$	2.65		$	0.73		$	0.35
Net income per Unit – diluted	$	1.52		$	2.62		$	0.72		$	0.35
Net income per Unit – basic:
Income from continuing operations available to Units	$	0.529		$	0.074		$	0.397		$	0.085
Discontinued operations, net	1.005			2.577			0.328			0.268
Net income per Unit – basic	$	1.534		$	2.651		$	0.725		$	0.353
Net income per Unit – diluted:
Income from continuing operations available to Units	$	0.524		$	0.073		$	0.394		$	0.084
Discontinued operations, net	0.995			2.546			0.325			0.265
Net income per Unit – diluted	$	1.519		$	2.619		$	0.719		$	0.349

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.