Earnings Per Share

3 Months Ended

Mar. 31, 2013

Earnings Per Share

6. Basic earnings per unit are calculated by dividing net income attributable to unitholders, adjusted for non-forfeitable distributions paid out to unvested restricted unitholders and Fund II preferred shareholders, by the weighted average units outstanding during the period. Diluted earnings per unit are calculated by dividing net income attributable to unitholders, adjusted for non-forfeitable distributions paid out to unvested restricted unitholders and Fund II preferred shareholders, by the weighted average units outstanding during the period plus additional units that would have been outstanding assuming the exercise of in-the-money unit equivalents using the treasury stock method, unless the assumed exercise is antidilutive.

The following table shows how we arrived at basic and diluted income per unit:

	Quarters Ended
	March 31,
(in thousands)	2013			2012
Net income attributable to Pope Resources' unitholders	$	3,484		$	1,206
Less:
Net income attributable to unvested restricted unitholders		(150	)		(21	)
Dividends paid to Fund II preferred shareholders		(4	)		(4	)
Net income for calculation of EPS	$	3,330		$	1,181
Weighted average units outstanding (in thousands):
Basic		4,366			4,345
Dilutive effect of unit equivalents		-			2
Diluted		4,366			4,347
Earnings per unit: Basic	$	0.76		$	0.27
Earnings per unit: Diluted	$	0.76		$	0.27

As of March 31, 2013 there were no outstanding unexercised options and, as such, the Partnership does not expect there to be a dilutive impact on earnings per unit on a go-forward basis. Options to purchase 4,500 units at a weighted price $17.40 per unit were outstanding as of March 31, 2012. There were no out-of-the money options to exclude from the calculation of dilutive unit equivalents for the quarter ended March 31, 2012.