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):



	Nine Months Ended September 30,						Quarter Ended September 30,
	2014			2013			2014			2013
Numerator for net income per share – basic:
Income (loss) from continuing operations	$	301,598		$	(237,315	)	$	117,611		$	(13,465	)
Allocation to Noncontrolling Interests – Operating Partnership, net	(16,216		)	9,517			(8,740		)	521
Net gain on sales of real estate properties	128,544			—			113,641			—
Net (income) loss attributable to Noncontrolling Interests – Partially Owned Properties	(1,800		)	1,101			(708		)	311
Preferred distributions	(3,109		)	(3,109		)	(1,037		)	(1,037		)
Income (loss) from continuing operations available to Common Shares, net of Noncontrolling Interests	409,017			(229,806		)	220,767			(13,670		)
Discontinued operations, net of Noncontrolling Interests	1,443			1,946,334			(60		)	389,825
Numerator for net income per share – basic	$	410,460		$	1,716,528		$	220,707		$	376,155
Numerator for net income per share – diluted (1):
Income from continuing operations	$	301,598					$	117,611
Net gain on sales of real estate properties	128,544						113,641
Net (income) attributable to Noncontrolling Interests – Partially Owned Properties	(1,800		)				(708		)
Preferred distributions	(3,109		)				(1,037		)
Income from continuing operations available to Common Shares	425,233						229,507
Discontinued operations, net	1,500						(62		)
Numerator for net income per share – diluted (1)	$	426,733		$	1,716,528		$	229,445		$	376,155
Denominator for net income per share – basic and diluted (1):
Denominator for net income per share – basic	360,900			352,414			361,409			359,811
Effect of dilutive securities:
OP Units	13,726						13,707
Long-term compensation shares/units	2,602						2,838
Denominator for net income per share – diluted (1)	377,228			352,414			377,954			359,811
Net income per share – basic	$	1.14		$	4.87		$	0.61		$	1.05
Net income per share – diluted	$	1.13		$	4.87		$	0.61		$	1.05
Net income per share – basic:
Income (loss) from continuing operations available to Common Shares, net of Noncontrolling Interests	$	1.133		$	(0.652	)	$	0.611		$	(0.038	)
Discontinued operations, net of Noncontrolling Interests	0.004			5.523			—			1.083
Net income per share – basic	$	1.137		$	4.871		$	0.611		$	1.045
Net income per share – diluted (1):
Income (loss) from continuing operations available to Common Shares	$	1.127		$	(0.652	)	$	0.607		$	(0.038	)
Discontinued operations, net	0.004			5.523			—			1.083
Net income per share – diluted	$	1.131		$	4.871		$	0.607		$	1.045


(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 nine months and quarter ended September 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):



	Nine Months Ended September 30,						Quarter Ended September 30,
	2014			2013			2014			2013
Numerator for net income per Unit – basic and diluted (1):
Income (loss) from continuing operations	$	301,598		$	(237,315	)	$	117,611		$	(13,465	)
Net gain on sales of real estate properties	128,544			—			113,641			—
Net (income) loss attributable to Noncontrolling Interests – Partially Owned Properties	(1,800		)	1,101			(708		)	311
Allocation to Preference Units	(3,109		)	(3,109		)	(1,037		)	(1,037		)
Income (loss) from continuing operations available to Units	425,233			(239,323		)	229,507			(14,191		)
Discontinued operations, net	1,500			2,026,798			(62		)	405,182
Numerator for net income per Unit – basic and diluted (1)	$	426,733		$	1,787,475		$	229,445		$	390,991
Denominator for net income per Unit – basic and diluted (1):
Denominator for net income per Unit – basic	374,626			366,150			375,116			373,547
Effect of dilutive securities:
Dilution for Units issuable upon assumed exercise/vesting of the Company’s long-term compensation shares/units	2,602						2,838
Denominator for net income per Unit – diluted (1)	377,228			366,150			377,954			373,547
Net income per Unit – basic	$	1.14		$	4.87		$	0.61		$	1.05
Net income per Unit – diluted	$	1.13		$	4.87		$	0.61		$	1.05
Net income per Unit – basic:
Income (loss) from continuing operations available to Units	$	1.133		$	(0.652	)	$	0.611		$	(0.038	)
Discontinued operations, net	0.004			5.523			—			1.083
Net income per Unit – basic	$	1.137		$	4.871		$	0.611		$	1.045
Net income per Unit – diluted (1):
Income (loss) from continuing operations available to Units	$	1.127		$	(0.652	)	$	0.607		$	(0.038	)
Discontinued operations, net	0.004			5.523			—			1.083
Net income per Unit – diluted	$	1.131		$	4.871		$	0.607		$	1.045


(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 nine months and quarter ended September 30, 2013.