10. 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,
	2014			2013			2014			2013
Numerator for net income per share – basic:
Income (loss) from continuing operations	$	183,987		$	(223,850	)	$	102,307		$	(58,511	)
Allocation to Noncontrolling Interests – Operating Partnership, net	(7,475		)	9,078			(4,422		)	2,231
Net gain on sales of real estate properties	14,903			—			14,903			—
Net (income) loss attributable to Noncontrolling Interests – Partially Owned Properties	(1,092		)	790			(588		)	815
Preferred distributions	(2,072		)	(2,072		)	(1,036		)	(1,036		)
Income (loss) from continuing operations available to Common Shares, net of Noncontrolling Interests	188,251			(216,054		)	111,164			(56,501		)
Discontinued operations, net of Noncontrolling Interests	1,502			1,556,427			490			380,224
Numerator for net income per share – basic	$	189,753		$	1,340,373		$	111,654		$	323,723
Numerator for net income per share – diluted (1):
Income from continuing operations	$	183,987					$	102,307
Net gain on sales of real estate properties	14,903						14,903
Net (income) attributable to Noncontrolling Interests – Partially Owned Properties	(1,092		)				(588		)
Preferred distributions	(2,072		)				(1,036		)
Income from continuing operations available to Common Shares	195,726						115,586
Discontinued operations, net	1,562						510
Numerator for net income per share – diluted (1)	$	197,288		$	1,340,373		$	116,096		$	323,723
Denominator for net income per share – basic and diluted (1):
Denominator for net income per share – basic	360,641			348,654			360,809			359,653
Effect of dilutive securities:
OP Units	13,736						13,742
Long-term compensation shares/units	2,403						2,567
Denominator for net income per share – diluted (1)	376,780			348,654			377,118			359,653
Net income per share – basic	$	0.53		$	3.84		$	0.31		$	0.90
Net income per share – diluted	$	0.52		$	3.84		$	0.31		$	0.90
Net income per share – basic:
Income (loss) from continuing operations available to Common Shares, net of Noncontrolling Interests	$	0.522		$	(0.620	)	$	0.308		$	(0.157	)
Discontinued operations, net of Noncontrolling Interests	0.004			4.464			0.001			1.057
Net income per share – basic	$	0.526		$	3.844		$	0.309		$	0.900
Net income per share – diluted (1):
Income (loss) from continuing operations available to Common Shares	$	0.520		$	(0.620	)	$	0.307		$	(0.157	)
Discontinued operations, net	0.004			4.464			0.001			1.057
Net income per share – diluted	$	0.524		$	3.844		$	0.308		$	0.900


(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 and quarter ended June 30, 2013.

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,
	2014			2013			2014			2013
Numerator for net income per Unit – basic and diluted (1):
Income (loss) from continuing operations	$	183,987		$	(223,850	)	$	102,307		$	(58,511	)
Net gain on sales of real estate properties	14,903			—			14,903			—
Net (income) loss attributable to Noncontrolling Interests – Partially Owned Properties	(1,092		)	790			(588		)	815
Allocation to Preference Units	(2,072		)	(2,072		)	(1,036		)	(1,036		)
Income (loss) from continuing operations available to Units	195,726			(225,132		)	115,586			(58,732		)
Discontinued operations, net	1,562			1,621,616			510			395,243
Numerator for net income per Unit – basic and diluted (1)	$	197,288		$	1,396,484		$	116,096		$	336,511
Denominator for net income per Unit – basic and diluted (1):
Denominator for net income per Unit - basic	374,377			362,390			374,551			373,403
Effect of dilutive securities:
Dilution for Units issuable upon assumed exercise/vesting of the Company’s long-term compensation shares/units	2,403						2,567
Denominator for net income per Unit – diluted (1)	376,780			362,390			377,118			373,403
Net income per Unit – basic	$	0.53		$	3.84		$	0.31		$	0.90
Net income per Unit – diluted	$	0.52		$	3.84		$	0.31		$	0.90
Net income per Unit – basic:
Income (loss) from continuing operations available to Units	$	0.522		$	(0.620	)	$	0.308		$	(0.157	)
Discontinued operations, net	0.004			4.464			0.001			1.057
Net income per Unit – basic	$	0.526		$	3.844		$	0.309		$	0.900
Net income per Unit – diluted (1):
Income (loss) from continuing operations available to Units	$	0.520		$	(0.620	)	$	0.307		$	(0.157	)
Discontinued operations, net	0.004			4.464			0.001			1.057
Net income per Unit – diluted	$	0.524		$	3.844		$	0.308		$	0.900


(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 and quarter ended June 30, 2013.