12.

Earnings 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,
	2011			2010			2011			2010
Numerator for net income per share — basic:
Income (loss) from continuing operations	$	16,495		$	(29,153	)	$	21,195		$	(9,945	)
Allocation to Noncontrolling Interests — Operating Partnership, net		(457	)		1,725			(814	)		628
Net (income) loss attributable to Noncontrolling Interests — Partially Owned Properties		(31	)		435			(71	)		185
Preferred distributions		(6,933	)		(7,238	)		(3,467	)		(3,618	)


Income (loss) from continuing operations available to Common Shares, net of Noncontrolling Interests		9,074			(34,231	)		16,843			(12,750	)
Discontinued operations, net of Noncontrolling Interests		667,248			92,437			535,614			19,093


Numerator for net income per share — basic	$	676,322		$	58,206		$	552,457		$	6,343


Numerator for net income per share — diluted (1):
Income from continuing operations	$	16,495					$	21,195
Net (income) attributable to Noncontrolling Interests — Partially Owned Properties		(31	)					(71	)
Preferred distributions		(6,933	)					(3,467	)


Income from continuing operations available to Common Shares		9,531						17,657
Discontinued operations, net		698,324						560,558


Numerator for net income per share — diluted (1)	$	707,855		$	58,206		$	578,215		$	6,343


Denominator for net income per share — basic and diluted (1):
Denominator for net income per share — basic		293,784			281,435			294,663			282,217
Effect of dilutive securities:
OP Units		13,322						13,291
Long-term compensation shares/units		4,274						4,245


Denominator for net income per share — diluted (1)		311,380			281,435			312,199			282,217


Net income per share — basic	$	2.30		$	0.21		$	1.88		$	0.02


Net income per share — diluted	$	2.27		$	0.21		$	1.85		$	0.02


Net income per share — basic:
Income (loss) from continuing operations available to Common Shares, net of Noncontrolling Interests	$	0.031		$	(0.121	)	$	0.057		$	(0.045	)
Discontinued operations, net of Noncontrolling Interests		2.271			0.328			1.818			0.067


Net income per share — basic	$	2.302		$	0.207		$	1.875		$	0.022


Net income per share — diluted (1):
Income (loss) from continuing operations available to Common Shares	$	0.031		$	(0.121	)	$	0.057		$	(0.045	)
Discontinued operations, net		2.242			0.328			1.795			0.067


Net income per share — diluted	$	2.273		$	0.207		$	1.852		$	0.022


(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, 2010.

Convertible preferred shares/units that could be converted into 0 and 397,306 weighted average Common Shares for the six months ended June 30, 2011 and 2010, respectively, and 0 and 397,004 weighted average Common Shares for the quarters ended June 30, 2011 and 2010, respectively, were outstanding but were not included in the computation of diluted earnings per share because the effects would be anti-dilutive. In addition, the effect of the Common Shares that could ultimately be issued upon the conversion/exchange of the Company’s $650.0 million ($482.5 million outstanding at June 30, 2011) exchangeable senior notes 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,
	2011			2010			2011			2010
Numerator for net income per Unit — basic and diluted (1):
Income (loss) from continuing operations	$	16,495		$	(29,153	)	$	21,195		$	(9,945	)
Net (income) loss attributable to Noncontrolling Interests — Partially Owned Properties		(31	)		435			(71	)		185
Allocation to Preference Units		(6,933	)		(7,238	)		(3,467	)		(3,618	)


Income (loss) from continuing operations available to Units		9,531			(35,956	)		17,657			(13,378	)
Discontinued operations, net		698,324			97,098			560,558			20,034


Numerator for net income per Unit — basic and diluted (1)	$	707,855		$	61,142		$	578,215		$	6,656


Denominator for net income per Unit — basic and diluted (1):
Denominator for net income per Unit — basic		307,106			295,177			307,954			295,898
Effect of dilutive securities:
Dilution for Units issuable upon assumed exercise/vesting of the Company’s long-term compensation shares/units		4,274						4,245


Denominator for net income per Unit — diluted (1)		311,380			295,177			312,199			295,898


Net income per Unit — basic	$	2.30		$	0.21		$	1.88		$	0.02


Net income per Unit — diluted	$	2.27		$	0.21		$	1.85		$	0.02


Net income per Unit — basic:
Income (loss) from continuing operations available to Units	$	0.031		$	(0.121	)	$	0.057		$	(0.045	)
Discontinued operations, net		2.271			0.328			1.818			0.067


Net income per Unit — basic	$	2.302		$	0.207		$	1.875		$	0.022


Net income per Unit — diluted (1):
Income (loss) from continuing operations available to Units	$	0.031		$	(0.121	)	$	0.057		$	(0.045	)
Discontinued operations, net		2.242			0.328			1.795			0.067


Net income per Unit — diluted	$	2.273		$	0.207		$	1.852		$	0.022


(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, 2010.

Convertible preference interests/units that could be converted into 0 and 397,306 weighted average Common Shares (which would be contributed to the Operating Partnership in exchange for OP Units) for the six months ended June 30, 2011 and 2010, respectively, and 0 and 397,004 weighted average Common Shares (which would be contributed to the Operating Partnership in exchange for OP Units) for the quarters ended June 30, 2011 and 2010, respectively, were outstanding but were not included in the computation of diluted earnings per Unit because the effects would be anti-dilutive. In addition, the effect of the Common Shares/OP Units that could ultimately be issued upon the conversion/exchange of the Company’s $650.0 million ($482.5 million outstanding at June 30, 2011) exchangeable senior notes was not included in the computation of diluted earnings per Unit because the effects would be anti-dilutive.