Earnings Per Common Share

9 Months Ended

Sep. 30, 2011


2.	EARNINGS PER COMMON SHARE

On July 22, 2011, the Board of Directors authorized a three-for-two stock split in the form of a stock dividend. The additional shares were distributed on August 24, 2011 to shareholders of record on August 10, 2011. The impact of the stock split is reflected for all periods presented in the following table which provides details of the calculations of basic and diluted earnings per common share:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
Net income	$	104,909	$	62,904	$	219,774	$	158,415

Shares used for determining basic earnings per common share	121,790,059		120,394,172		121,665,644		120,057,048
Dilutive effect of:
Stock options	689,643		579,611		716,095		575,294
Performance and restricted shares	1,179,047		1,232,342		1,121,909		1,144,926
Assumed conversion of Senior Exchangeable Notes (a)	1,823,600		—		1,883,270		—
Assumed conversion of warrants	117,260		—		143,182		—
Shares used for determining diluted earnings per common share	125,599,609		122,206,125		125,530,100		121,777,268

Basic earnings per common share	$	0.86	$	0.52	$	1.81	$	1.32

Diluted earnings per common share	$	0.84	$	0.51	$	1.75	$	1.30



	Three Months Ended September 30,		Nine Months Ended September 30,
	2011	2010	2011	2010
Anti-dilutive shares excluded from the computations of
diluted earnings per share:
Stock options, performance and restricted shares	142,135	179,119	198,594	769,699
Assumed conversion of exchangeable note hedges (a)	1,823,600	—	1,883,270	—
Total	1,965,735	179,119	2,081,864	769,699

(a) Upon maturity of the Senior Exchangeable Notes (the "Notes"), Rayonier will not issue additional shares for the Notes due to the offsetting exchangeable note hedges (the "hedges"). However, accounting guidance under Accounting Standards Codification 260, Earnings Per Share requires the assumed conversion of the Notes to be included in dilutive shares, while the assumed conversion of the hedges are excluded since they are anti-dilutive. For additional information on the potential dilutive impact of the Senior Exchangeable Notes, warrants and exchangeable note hedges, see Note 11 - Debt in the 2010 Annual Report on Form 10-K.