EARNINGS PER COMMON SHARE

The following table provides details of the calculations of basic and diluted earnings per common share:



	Three Months Ended June 30,					Six Months Ended June 30,
	2014			2013		2014			2013
Income from continuing operations	$	6,056		$	39,631	$	18,340		$	58,659
Less: Net (loss) income from continuing operations attributable to noncontrolling interest	(245		)	727		(328		)	727
Income from continuing operations attributable to Rayonier Inc.	$	6,301		$	38,904	$	18,668		$	57,932

Income from discontinued operations, net, attributable to Rayonier Inc.	$	12,084		$	48,260	$	43,092		$	176,967

Net income attributable to Rayonier Inc.	$	18,385		$	87,164	$	61,760		$	234,899

Shares used for determining basic earnings per common share	126,434,376			126,027,297		126,390,891			125,257,876
Dilutive effect of:
Stock options	293,213			504,321		296,768			519,014
Performance and restricted shares	201,956			386,228		194,995			384,910
Assumed conversion of Senior Exchangeable Notes (a)	2,631,514			2,217,058		2,579,402			2,173,658
Assumed conversion of warrants (a) (b)	2,738,606			1,632,345		2,656,633			2,250,361
Shares used for determining diluted earnings per common share	132,299,665			130,767,249		132,118,689			130,585,819
Basic earnings per common share attributable to Rayonier Inc.:
Continuing operations	$	0.05		$	0.31	$	0.15		$	0.46
Discontinued operations	0.10			0.38		0.34			1.42
Net income	$	0.15		$	0.69	$	0.49		$	1.88
Diluted earnings per common share attributable to Rayonier Inc.:
Continuing operations	$	0.05		$	0.30	$	0.14		$	0.44
Discontinued operations	0.09			0.37		0.33			1.36
Net income	$	0.14		$	0.67	$	0.47		$	1.80



	Three Months Ended June 30,		Six Months Ended June 30,
	2014	2013	2014	2013
Anti-dilutive shares excluded from the computations of diluted earnings per share:
Stock options, performance and restricted shares	507,044	199,245	499,193	207,097
Assumed conversion of exchangeable note hedges (a)	2,631,514	2,217,058	2,579,402	2,173,658
Total	3,138,558	2,416,303	3,078,595	2,380,755

(a) Rayonier will not issue additional shares upon future exchange or maturity of the Senior Exchangeable Notes due 2015 (the “2015 Notes”) due to offsetting hedges. Accounting Standards Codification 260, Earnings Per Share requires the assumed conversion of the 2015 Notes to be included in dilutive shares if the average stock price for the period exceeds the strike price, while the assumed conversion of the hedges is excluded since they are anti-dilutive. As such, the full dilutive effect of the 2015 Notes was included for all periods presented.

The Senior Exchangeable Notes due 2012 (the “2012 Notes”) matured in October 2012; however, no additional shares were issued due to offsetting exchangeable note hedges. The warrants sold in conjunction with the 2012 Notes began maturing on January 15, 2013 and matured ratably through March 27, 2013. As a result, 2,037,303 shares were issued through the end of the first quarter of 2013 and 97,918 shares were issued in the first week of April 2013. The dilutive impact of these warrants was calculated based on the length of time they were outstanding before settlement. Rayonier will distribute additional shares upon maturity of the warrants associated with the 2015 Notes if the stock price exceeds $28.58 per share. The exchange price on the warrants is lower than prior periods as it has been adjusted to reflect the spin-off of the Performance Fibers business. For further information, see Note 13 — Debt in the 2013 Annual Report on Form 10-K and Note 17 — Debt of this Form 10-Q.

(b) The shares used for the assumed conversion of the warrants increased for the current quarter and year-to-date periods due to a lower adjusted exchange price as a result of the spin-off.