10-Q

Table Of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended August 27, 2016

OR

[   ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from                     to

Commission file number: 001-09225

H.B. FULLER COMPANY

(Exact name of registrant as specified in its charter)

Minnesota	41-0268370
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
1200 Willow Lake Boulevard, St. Paul, Minnesota	55110-5101
(Address of principal executive offices)	(Zip Code)

(651) 236-5900

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer [X]	Accelerated filer [  ]
Non-accelerated filer [  ] (Do not check if a smaller reporting company)	Smaller reporting company [  ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes [  ] No [X]

The number of shares outstanding of the Registrant’s Common Stock, par value $1.00 per share, was 50,342,974 as of September 16, 2016.

H.B. Fuller Company

Quarterly Report on Form 10-Q

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS (Unaudited)	1
	Condensed Consolidated Statements of Income for the three and nine months ended August 27, 2016 and August 29, 2015	1
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended August 27, 2016 and August 29, 2015	2
	Condensed Consolidated Balance Sheets as of August 27, 2016 and August 29, 2015	3
	Condensed Consolidated Statements of Total Equity as of August 27, 2016 and August 29, 2015	4
	Condensed Consolidated Statements of Cash Flows for the nine months ended August 27, 2016 and August 29, 2015	5
	Notes to Condensed Consolidated Financial Financial Statements	6
ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	23
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	36
ITEM 4.	CONTROLS AND PROCEDURES	38
PART II.	OTHER INFORMATION	38
ITEM 1.	LEGAL PROCEEDINGS	38
ITEM 1A.	RISK FACTORS	40
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	40
ITEM 6.	EXHIBITS	41
SIGNATURES		42

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

H.B. FULLER COMPANY AND SUBSIDIARIES

Condensed Consolidated Statements of Income

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended						Nine Months Ended
	August 27,			August 29,			August 27,			August 29,
	2016			2015			2016			2015
Net revenue	$	512,858		$	524,133		$	1,519,698		$	1,535,556
Cost of sales		(366,737	)		(377,293	)		(1,077,716	)		(1,123,573	)
Gross profit		146,121			146,840			441,982			411,983
Selling, general and administrative expenses		(97,692	)		(98,297	)		(301,143	)		(293,712	)
Special charges, net		2,807			(1,297	)		2,024			(4,592	)
Other income (expense), net		(956	)		(1,040	)		(7,603	)		(1,246	)
Interest expense		(6,809	)		(6,448	)		(19,714	)		(18,765	)
Income from continuing operations before income taxes and income from equity method investments		43,471			39,758			115,546			93,668
Income taxes		(12,513	)		(14,372	)		(35,563	)		(34,528	)
Income from equity method investments		1,840			1,500			5,172			4,157
Income from continuing operations		32,798			26,886			85,155			63,297
Loss from discontinued operations, net of tax		-			-			-			(1,300	)
Net income including non-controlling interests		32,798			26,886			85,155			61,997
Net income attributable to non-controlling interests		(53	)		(79	)		(161	)		(308	)
Net income attributable to H.B. Fuller	$	32,745		$	26,807		$	84,994		$	61,689
Earnings per share attributable to H.B. Fuller common stockholders:
Basic1
Income from continuing operations		0.65			0.53			1.70			1.25
Loss from discontinued operations		-			-			-			(0.03	)
Basic	$	0.65		$	0.53		$	1.70		$	1.23
Diluted1
Income from continuing operations		0.64			0.52			1.66			1.22
Loss from discontinued operations		-			-			-			(0.03	)
Diluted	$	0.64		$	0.52		$	1.66		$	1.20
Weighted-average common shares outstanding:
Basic		50,261			50,421			50,122			50,318
Diluted		51,453			51,530			51,234			51,460
Dividends declared per common share	$	0.14		$	0.13		$	0.41		$	0.38

¹ Income per share amounts may not add due to rounding.

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

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H.B. FULLER COMPANY AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Loss)

(In thousands)

(Unaudited)

	Three Months Ended					Nine Months Ended
	August 27,		August 29,			August 27,			August 29,
	2016		2015			2016			2015
Net income including non-controlling interests	$	32,798	$	26,886		$	85,155		$	61,997
Other comprehensive income (loss)
Foreign currency translation		3,368		(10,719	)		3,860			(48,639	)
Defined benefit pension plans adjustment, net of tax		1,677		1,527			5,032			4,582
Interest rate swaps, net of tax		10		10			30			30
Cash-flow hedges, net of tax		35		-			(156	)		(25	)
Other comprehensive income (loss)		5,090		(9,182	)		8,766			(44,052	)
Comprehensive income		37,888		17,704			93,921			17,945
Less: Comprehensive income (loss) attributable to non-controlling interests		53		(19	)		161			294
Comprehensive income attributable to H.B. Fuller	$	37,835	$	17,723		$	93,760		$	17,651

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

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H.B. FULLER COMPANY AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except share and per share amounts)

	(Unaudited)
	August 27,			November 28,
	2016			2015
Assets
Current assets:
Cash and cash equivalents	$	133,102		$	119,168
Trade receivables (net of allowances of $12,814 and $11,893, as of August 27,2016 and November 28, 2015, respectively)		344,305			364,704
Inventories		261,363			248,504
Other current assets		64,992			68,675
Total current assets		803,762			801,051
Property, plant and equipment		1,156,171			1,111,987
Accumulated depreciation		(638,068	)		(599,127	)
Property, plant and equipment, net		518,103			512,860
Goodwill		393,251			354,204
Other intangibles, net		201,164			212,993
Other assets		164,113			161,144
Total assets	$	2,080,393		$	2,042,252
Liabilities, redeemable non-controlling interest and total equity
Current liabilities:
Notes payable	$	36,818		$	30,757
Current maturities of long-term debt		78,581			22,500
Trade payables		160,836			177,864
Accrued compensation		46,425			52,079
Income taxes payable		7,815			8,970
Other accrued expenses		53,250			57,355
Total current liabilities		383,725			349,525
Long-term debt, excluding current maturities		596,171			669,606
Accrued pension liabilities		68,067			76,324
Other liabilities		71,174			69,272
Total liabilities		1,119,137			1,164,727
Commitments and contingencies
Redeemable non-controlling interest		4,412			4,199
Equity:
H.B. Fuller stockholders' equity:
Preferred stock (no shares outstanding) shares authorized – 10,045,900		-			-
Common stock, par value $1.00 per share, shares authorized – 160,000,000, shares outstanding – 50,331,880 and 50,074,310, as of August 27, 2016 and November 28, 2015, respectively		50,332			50,074
Additional paid-in capital		65,777			55,522
Retained earnings		1,058,847			994,608
Accumulated other comprehensive loss		(218,518	)		(227,284	)
Total H.B. Fuller stockholders' equity		956,438			872,920
Non-controlling interests		406			406
Total equity		956,844			873,326
Total liabilities, redeemable non-controlling interest and total equity	$	2,080,393		$	2,042,252

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

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H.B. FULLER COMPANY AND SUBSIDIARIES

Condensed Consolidated Statements of Total Equity

(In thousands)

(Unaudited)

	H.B. Fuller Company Shareholders
	Common Stock			Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Non- Controlling Interests			Total
Balance at November 29, 2014	$	50,311		$	53,269		$	933,819		$	(147,352	)	$	403		$	890,450
Comprehensive income (loss)		-			-			86,680			(79,932	)		400			7,148
Dividends		-			-			(25,891	)		-			-			(25,891	)
Stock option exercises		234			4,397			-			-			-			4,631
Share-based compensation plans other, net		83			15,159			-			-			-			15,242
Tax benefit on share-based compensation plans		-			1,433			-			-			-			1,433
Repurchases of common stock		(554	)		(18,736	)		-			-			-			(19,290	)
Non-controlling interest assumed		-			-			-			-			14,197			14,197
Recognition of non-controlling interest redemption liability		-			-			-			-			(11,773	)		(11,773	)
Purchase of non-controlling interest		-			-			-			-			(2,424	)		(2,424	)
Non-controlling interest		-			-			-			-			(76	)		(76	)
Redeemable non-controlling interest		-			-			-			-			(321	)		(321	)
Balance at November 28, 2015		50,074			55,522			994,608			(227,284	)		406			873,326
Comprehensive income		-			-			84,994			8,766			161			93,921
Dividends		-			-			(20,755	)		-			-			(20,755	)
Stock option exercises		465			9,295			-			-			-			9,760
Share-based compensation plans other, net		111			11,081			-			-			-			11,192
Tax benefit on share-based compensation plans		-			1,462			-			-			-			1,462
Repurchases of common stock		(318	)		(11,583	)		-			-			-			(11,901	)
Redeemable non-controlling interest		-			-			-			-			(161	)		(161	)
Balance at August 27, 2016	$	50,332		$	65,777		$	1,058,847		$	(218,518	)	$	406		$	956,844

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

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H.B. FULLER COMPANY AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Nine Months Ended
	August 27, 2016			August 29, 2015
Cash flows from operating activities:
Net income including non-controlling interests	$	85,155		$	61,997
Loss from discontinued operations, net of tax		-			1,300
Adjustments to reconcile net income including non-controlling interests to net cash provided by operating activities:
Depreciation		36,730			35,696
Amortization		20,509			20,046
Deferred income taxes		3,785			4,775
Income from equity method investments		(5,172	)		(4,157	)
(Gain) loss on sale of assets		(2,794	)		327
Share-based compensation		9,469			10,325
Excess tax benefit from share-based compensation		(1,462	)		(1,321	)
Non-cash charge for the sale of inventories revalued at the date of acquisition		528			2,416
Change in assets and liabilities, net of effects of acquisitions:
Trade receivables, net		25,646			15,860
Inventories		(6,165	)		(19,955	)
Other assets		1,790			2,241
Trade payables		(1,365	)		10,557
Accrued compensation		(6,715	)		(4,617	)
Other accrued expenses		(4,858	)		4,705
Income taxes payable		(1,415	)		1,714
Accrued / prepaid pensions		(2,072	)		(6,565	)
Other liabilities		(9,889	)		(3,262	)
Other		4,199			20,962
Net cash provided by operating activities		145,904			153,044
Cash flows from investing activities:
Purchased property, plant and equipment		(49,569	)		(48,638	)
Purchased businesses, net of cash acquired		(51,298	)		(217,572	)
Proceeds from sale of property, plant and equipment		4,403			1,529
Net cash used in investing activities		(96,464	)		(264,681	)
Cash flows from financing activities:
Proceeds from long-term debt		-			357,000
Repayment of long-term debt		(16,875	)		(207,500	)
Net proceeds from notes payable		6,639			(2,114	)
Dividends paid		(20,570	)		(19,174	)
Proceeds from stock options exercised		9,760			4,342
Excess tax benefit from share-based compensation		1,462			1,321
Repurchases of common stock		(11,901	)		(2,214	)
Net cash provided by (used in) financing activities		(31,485	)		131,661
Effect of exchange rate changes		(4,021	)		(6,478	)
Net change in cash and cash equivalents		13,934			13,546
Cash used in operating activities of discontinued operations		-			(5,294	)
Net change in cash and cash equivalents		13,934			8,252
Cash and cash equivalents at beginning of period		119,168			77,569
Cash and cash equivalents at end of period	$	133,102		$	85,821
Supplemental disclosure of cash flow information:
Dividends paid with company stock	$	185		$	153
Cash paid for interest, net of amount capitalized of $556 and $91 for the periods ended August 27, 2016 and August 29, 2015, respectively	$	20,436		$	19,735
Cash paid for income taxes, net of refunds	$	33,428		$	23,748

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

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H.B. FULLER COMPANY AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Amounts in thousands, except share and per share amounts)

(Unaudited)

Note 1: Basis of Presentation

The accompanying unaudited interim Condensed Consolidated Financial Statements of H.B. Fuller Company and Subsidiaries have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information necessary for a fair presentation of results of operations, comprehensive income, financial position, and cash flows in conformity with U.S. generally accepted accounting principles. In our opinion, the unaudited interim Condensed Consolidated Financial Statements reflect all adjustments of a normal recurring nature considered necessary for the fair presentation of the results for the periods presented. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures at the date of the financial statements and during the reporting period. Actual results could differ from these estimates. These unaudited interim Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in our Annual Report on Form 10-K for the year ended November 28, 2015 as filed with the Securities and Exchange Commission.

As of the beginning of the first quarter ending February 27, 2016, we created a new global operating segment named Engineering Adhesives, which includes the electronics, automotive and Tonsan and Cyberbond businesses from around the world. We also began reporting our Construction Products business on a global basis by combining our Europe, India, Middle East and Africa (EIMEA) and Asia Pacific construction businesses with our Construction Products operating segment. We now have five reportable segments: Americas Adhesives, EIMEA, Asia Pacific, Construction Products and Engineering Adhesives.

New Accounting Pronouncements

In August 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force). This ASU requires changes in the presentation of certain items including but not limited to debt prepayment or debt extinguishment costs; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies and distributions received from equity method investees. Our effective date for adoption of this guidance is our fiscal year beginning December 2, 2018. We are currently evaluating the effect that this guidance will have on our Consolidated Financial Statements.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Statements. This ASU requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. Our effective date for adoption of this guidance is our fiscal year beginning November 29, 2020. We are currently evaluating the effect that this guidance will have on our Consolidated Financial Statements.

In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting. This ASU provides simplification in the accounting for share-based payment transactions including the accounting for income taxes, forfeitures, statutory tax withholding requirements and classification in the statement of cash flows. Our effective date for adoption of this guidance is our fiscal year beginning December 3, 2017.We are currently evaluating the effect that this guidance will have on our Consolidated Financial Statements.

In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606), Principal versus Agent Considerations (Reporting Revenue Gross versus Net).  This ASU provides guidance on recording revenue on a gross basis versus a net basis based on the determination of whether an entity is a principal or an agent when another party is involved in providing goods or services to a customer.  The amendments in this ASU affect the guidance in ASU No. 2014-09 and are effective in the same timeframe as ASU No. 2014-09 as discussed below.

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In February 2016, the FASB issued ASU No. 2016-05, Derivatives and Hedging (Topic 815). The amendments in this guidance clarify that a change in the counterparty to a derivative instrument that has been designated as a hedging instrument under Topic 815 does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. Our effective date for adoption of this guidance is our fiscal year beginning December 4, 2016. We have evaluated the effect that this guidance will have on our Consolidated Financial Statements and related disclosures and determined it will not have a material impact.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Subtopic 842). This guidance changes accounting for leases and requires lessees to recognize the assets and liabilities arising from all leases, including those classified as operating leases under previous accounting guidance, on the balance sheet and requires disclosure of key information about leasing arrangements to increase transparency and comparability among organizations. Our effective date for adoption of this guidance is our fiscal year beginning December 1, 2019 with early adoption permitted. The new guidance must be adopted using a modified retrospective transition approach, and provides for certain practical expedients. We are currently evaluating the impact that the new guidance will have on our Consolidated Financial Statements.

In June 2014, the FASB issued ASU No. 2014-12, Compensation - Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award That a Performance Target Could Be Achieved after the Requisite Service Period, which requires a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award and compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. Our effective date for adoption of this guidance is our fiscal year beginning December 4, 2016, however we elected to early adopt this guidance as of our first quarter ended February 27, 2016. The adoption of this guidance did not have a material impact on our Consolidated Financial Statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This guidance will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017 (as stated in ASU No. 2015-14 which defers the effective date and was issued in August 2015) and is now effective for our fiscal year beginning December 2, 2018. Early application as of the original effective date is permitted under ASU 2015-14. The standard permits the use of either the retrospective or cumulative effect transition method. We are evaluating the effect that this guidance will have on our Consolidated Financial Statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting.

Note 2: Acquisitions

Cyberbond

On June 8, 2016, we acquired Cyberbond, L.L.C., heaquartered in Batavia, Illinois, which is a provider of industrial adhesives for the electronics, medical, audio equipment, automotive and structural markets. The acquisition will help us to broaden our global position and accelerate our growth in the high margin, high growth Engineering Adhesives segment. The purchase price of $42,516 was funded through existing cash and was recorded in our Engineering Adhesives operating segment. We incurred acquisition related costs of approximately $558, which were recorded as selling, general and administrative expenses in the Condensed Consolidated Statements of Income.

The acquisition fair value measurement was preliminary as of August 27, 2016, subject to the completion of the valuation of Cyberbond and further management reviews and assessment of the preliminary fair values of the assets acquired and liabilities assumed. We expect the fair value measurement process to be completed in the fourth quarter of 2016.

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The following table summarizes the preliminary fair value measurement of the assets acquired and liabilities assumed as of the date of acquisition:

	August 27, 2016
Current assets	$	4,410
Property, plant and equipment		1,460
Goodwill		38,152
Other assets		673
Current liabilities		(1,526	)
Long-term liabilities		(653	)
Total purchase price	$	42,516

We have preliminarily allocated the entire excess purchase price to goodwill in the amount of $38,152 pending completion of the valuation of other identified intangible assets. Such goodwill is not deductible for tax purposes. The goodwill was assigned to our Engineering Adhesives operating segment. The Cyberbond acquisition does not represent a material business combination, therefore pro forma financial information is not provided.

Advanced Adhesives

On April 29, 2016, we acquired Advanced Adhesives Pty Limited and the business assets of Advanced Adhesives (New Zealand) Limited (Advanced Adhesives), providers of industrial adhesives in Australia and New Zealand. The acquisition will help us to strengthen our industrial adhesives market position and leverage a broader technology portfolio in both Australia and New Zealand. The combined purchase price of $10,365 was funded through existing cash and was recorded in our Asia Pacific operating segment. We incurred acquisition related costs of approximately $670, which were recorded as selling, general and administrative expenses in the Condensed Consolidated Statements of Income.

During the third quarter of 2016, the Company substantially completed its procedures related to the working capital accounts and obtained a preliminary valuation of the identified intangible assets in order to allocate the purchase price to the assets acquired and liabilities assumed. The outcome of these procedures are reflected in the adjustments in the table below. The acquisition fair value measurement as of August 27, 2016, is subject to the completion of the final assessment of the fair values of the assets acquired and liabilities assumed, specifically related to the identified intangible assets. We expect the fair value measurement process to be completed in the fourth quarter of 2016.

The following table summarizes the fair value measurement of the assets acquired and liabilities assumed as of the date of acquisition:

	May 28, 2016			Adjustments			August 27, 2016
Current assets	$	6,197		$	(663	)	$	5,534
Property, plant and equipment		751			(167	)		584
Customer relationships		-			7,639			7,639
Trademarks		-			146			146
Goodwill		4,546			(4,546	)		-
Current liabilities		(2,371	)		(288	)		(2,659	)
Long-term liabilities		-			(879	)		(879	)
Total purchase price	$	9,123		$	1,242		$	10,365

The expected lives of the acquired intangible assets are 15 years for customer relationships and one year for trademarks.

Continental Products Limited 

On February 3, 2015, we acquired the equity of Continental Products Limited, a provider of industrial adhesives, based in Nairobi, Kenya. The purchase price of $1,647, net of cash acquired of $371, was funded through existing cash.

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Tonsan Adhesive, Inc.

On February 2, 2015, we acquired 95 percent of the equity of Tonsan Adhesive, Inc., an independent engineering adhesives provider based in Beijing, China. The purchase price was 1.4 billion Chinese renminbi, or approximately $215,925, net of cash acquired of $7,754, which was financed with the proceeds from our October 31, 2014 term loan, drawn in conjunction with the acquisition.

Concurrent with the acquisition, we entered into an agreement to acquire the remaining 5 percent of Tonsan’s equity beginning February 1, 2019 for 82 million Chinese renminbi or approximately $13,038. In addition, the agreement requires us to pay up to 418 million Chinese renminbi or approximately $66,848 in contingent consideration based upon a formula related to Tonsan’s gross profit in fiscal 2018. The fair values of the agreement to purchase the remaining equity and the contingent consideration based upon a discounted cash flow model as of the date of acquisition were $11,773 and $7,714, respectively. See Note 14 for further discussion of the fair value of the contingent consideration.

The following table summarizes the fair value measurement of the assets acquired and liabilities assumed as of the date of acquisition:

	Amount
Current assets	$	49,839
Property, plant and equipment		59,142
Goodwill		125,790
Other intangibles
Developed technology		18,600
Customer relationships		25,700
Trademarks/trade names		11,000
Current liabilities		(38,068	)
Other liabilities		(24,305	)
Redeemable non-controlling interests		(11,773	)
Total purchase price	$	215,925

Note 3: Accounting for Share-Based Compensation

Overview 

We have various share-based compensation programs, which provide for equity awards including stock options, incentive stock options, restricted stock shares, restricted stock units, performance awards and deferred compensation. These equity awards fall under several plans and are described in detail in our Annual Report on Form 10-K for the year ended November 28, 2015.

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Grant-Date Fair Value 

We use the Black-Scholes option pricing model to calculate the grant-date fair value of an award. There were no options granted during the third quarter of 2015. The fair value of options granted during the three months ended August 27, 2016 and nine months ended August 27, 2016 and August 29, 2015 were calculated using the following weighted average assumptions: 

	Three Months Ended			Nine Months Ended
	August 27, 2016			August 27, 2016			August 29, 2015
Expected life (in years)		4.75			4.74			4.61
Weighted-average expected volatility		26.77%			28.96%			30.91%
Expected volatility	25.71%	-	27.10%	25.71%	-	29.23%	25.50%	-	31.67%
Risk-free interest rate		0.98%			1.43%			1.26%
Expected dividend yield		1.26%			1.54%			1.17%
Weighted-average fair value of grants		$9.38			$7.72			$10.21

Expected life – We use historical employee exercise and option expiration data to estimate the expected life assumption for the Black-Scholes grant-date valuation. We believe that this historical data is currently the best estimate of the expected term of a new option. We use a weighted-average expected life for all awards.

Expected volatility – Volatility is calculated using our historical volatility for the same period of time as the expected life. We have no reason to believe that our future volatility will differ materially from historical volatility.

Risk-free interest rate – The rate is based on the U.S. Treasury yield curve in effect at the time of the grant for the same period of time as the expected life.

Expected dividend yield – The calculation is based on the total expected annual dividend payout divided by the average stock price.

Expense Recognition

We use the straight-line attribution method to recognize share-based compensation expense for option awards, restricted stock shares and restricted stock units with graded and cliff vesting. Incentive stock options and performance awards are based on certain performance-based metrics and the expense is adjusted quarterly, based on our projections of the achievement of those metrics. The amount of share-based compensation expense recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest.

Total share-based compensation expense of $2,501 and $3,006 was included in our Condensed Consolidated Statements of Income for the third quarter ended August 27, 2016 and August 29, 2015, respectively. Total share-based compensation expense of $9,469 and $10,325 was included in our Condensed Consolidated Statements of Income for the nine months ended August 27, 2016 and August 29, 2015, respectively. All share-based compensation expense was recorded as selling, general and administrative expense. For the third quarter ended August 27, 2016 and August 29, 2015 there was $870 and $411 of excess tax benefit recognized, respectively. For the nine months ended August 27, 2016 and August 29, 2015 there was $1,462 and $1,321 of excess tax benefit recognized, respectively.

As of August 27, 2016, there was $8,059 of unrecognized compensation costs related to unvested stock option awards, which is expected to be recognized over a weighted-average period of 1.2 years. Unrecognized compensation costs related to unvested restricted stock shares was $194 which is expected to be recognized over a weighted-average period of 0.4 years. Unrecognized compensation costs related to unvested restricted stock units was $9,120 which is expected to be recognized over a weighted-average period of 1.3 years.

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Share-based Activity

A summary of option activity as of August 27, 2016 and changes during the nine months then ended is presented below:

				Weighted-
				Average
	Options			Exercise Price
Outstanding at November 28, 2015		2,912,073		$	33.37
Granted		844,033			33.86
Exercised		(539,165	)		24.05
Forfeited or cancelled		(164,337	)		39.37
Outstanding at August 27, 2016		3,052,604		$	34.82

There were no options granted during the third quarter ended August 29, 2015. The total fair value of options granted during the third quarter ended August 27, 2016 was $47. Total intrinsic value of options exercised during the third quarter ended August 27, 2016 and August 29, 2015 was $3,365 and $1,565, respectively. Intrinsic value is the difference between our closing stock price on the respective trading day and the exercise price, multiplied by the number of options exercised. The total fair value of options granted during the nine months ended August 27, 2016 and August 29, 2015 was $6,509 and $7,189, respectively. Total intrinsic value of options exercised during the nine months ended August 27, 2016 and August 29, 2015 was $10,641 and $5,114, respectively. Proceeds received from option exercises during the third quarter ended August 27, 2016 and August 29, 2015 were $2,676 and $391, respectively, and $9,759 and $4,342 during the nine months ended August 27, 2016 and August 29, 2015, respectively.

A summary of nonvested restricted stock as of August 27, 2016 and changes during the nine months then ended is presented below:

												Weighted-
										Weighted-		Average
										Average		Remaining
										Grant		Contractual
										Date Fair		Life
	Units			Shares			Total			Value		(in Years)
Nonvested at November 28, 2015		237,013			110,160			347,173		$	42.17		0.8
Granted		243,628			-			243,628			35.32		1.6
Vested		(104,051	)		(70,428	)		(174,479	)		41.88		-
Forfeited		(31,337	)		(179	)		(31,516	)		38.34		1.7
Nonvested at August 27, 2016		345,253			39,553			384,806		$	38.33		1.2

Total fair value of restricted stock vested during the third quarter ended August 27, 2016 and August 29, 2015 was $25 and $57, respectively. Total fair value of restricted stock vested during the nine months ended August 27, 2016 and August 29, 2015 was $6,101 and $6,121, respectively. The total fair value of nonvested restricted stock at August 27, 2016 was $14,934.

We repurchased 189 and 193 restricted stock shares during the third quarter ended August 27, 2016 and August 29, 2015, respectively and 67,742 and 54,196 during the nine months ended August 27, 2016 and August 29, 2015, respectively. The repurchases relate to statutory minimum tax withholding.

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We have a Directors’ Deferred Compensation plan that allows non-employee directors to defer all or a portion of their directors’ compensation in a number of investment choices, including units representing shares of our common stock. We also have a Key Employee Deferred Compensation Plan that allows key employees to defer a portion of their eligible compensation in a number of investment choices, including units, representing shares of our common stock. We provide a 10 percent match on deferred compensation invested into units, representing shares of our common stock. A summary of deferred compensation units as of August 27, 2016, and changes during the nine months then ended is presented below:

	Non-employee
	Directors			Employees			Total
Units outstanding November 28, 2015		380,170			45,906			426,076
Participant contributions		35,678			4,379			40,057
Company match contributions		3,568			438			4,006
Payouts		(301	)		(7,834	)		(8,135	)
Units outstanding August 27, 2016		419,115			42,889			462,004

Deferred compensation units are fully vested at the date of contribution.

Note 4: Earnings Per Share

A reconciliation of the common share components for the basic and diluted earnings per share calculations is as follows:

	Three Months Ended				Nine Months Ended
	August 27,		August 29,		August 27,		August 29,
(Shares in thousands)	2016		2015		2016		2015
Weighted-average common shares - basic		50,261		50,421		50,122		50,318
Equivalent shares from share-based compensations plans		1,192		1,109		1,112		1,142
Weighted-average common and common equivalent shares - diluted		51,453		51,530		51,234		51,460

Basic earnings per share is calculated by dividing net income attributable to H.B. Fuller by the weighted-average number of common shares outstanding during the applicable period. Diluted earnings per share is based upon the weighted-average number of common and common equivalent shares outstanding during the applicable period. The difference between basic and diluted earnings per share is attributable to share-based compensation awards. We use the treasury stock method to calculate the effect of outstanding shares, which computes total employee proceeds as the sum of (a) the amount the employee must pay upon exercise of the award, (b) the amount of unearned share-based compensation costs attributed to future services and (c) the amount of tax benefits, if any, that would be credited to additional paid-in capital assuming exercise of the award. Share-based compensation awards for which total employee proceeds exceed the average market price over the applicable period have an antidilutive effect on earnings per share, and accordingly, are excluded from the calculation of diluted earnings per share.

Options to purchase 386,496 and 1,533,690 shares of common stock at a weighted-average exercise price of $48.57 and $42.88 for the quarters ended August 27, 2016 and August 29, 2015, respectively, were excluded from the diluted earnings per share calculations because they were antidilutive. Options to purchase 762,509 and 416,544 shares of common stock at a weighted-average exercise price of $44.86 and $48.89 for the nine months ended August 27, 2016 and August 29, 2015, respectively, were excluded from the diluted earnings per share calculations because they were antidilutive.

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Note 5: Accumulated Other Comprehensive Income (Loss)

The following table provides details of total comprehensive income (loss):

	Three Months Ended August 27, 2016									Three Months Ended August 29, 2015
	H.B. Fuller Stockholders							Non- controlling Interests		H.B. Fuller Stockholders									Non- controlling Interests
	Pretax		Tax			Net		Net		Pretax			Tax			Net			Net
Net income including non-controlling interests		-		-		$	32,745	$	53		-			-		$	26,807		$	79
Foreign currency translation adjustment¹	$	3,368		-			3,368		-	$	(10,621	)		-			(10,621	)		(98	)
Reclassification to earnings:
Defined benefit pension plans adjustment²		2,585	$	(908	)		1,677		-		2,325		$	(798	)		1,527			-
Interest rate swap³		16		(6	)		10		-		15			(5	)		10			-
Cash-flow hedges³		56		(21	)		35		-		-			-			-			-
Other comprehensive income (loss)	$	6,025	$	(935	)		5,090		-	$	(8,281	)	$	(803	)		(9,084	)		(98	)
Comprehensive income (loss)						$	37,835	$	53							$	17,723		$	(19	)

	Nine Months Ended August 27, 2016											Nine Months Ended August 29, 2015
	H.B. Fuller Stockholders									Non- controlling Interests		H.B. Fuller Stockholders									Non- controlling Interests
	Pretax			Tax			Net			Net		Pretax			Tax			Net			Net
Net income including non-controlling interests		-			-		$	84,994		$	161		-			-		$	61,689		$	308
Foreign currency translation adjustment¹	$	3,860			-			3,860			-	$	(48,625	)		-			(48,625	)		(14	)
Reclassification to earnings:
Defined benefit pension plans adjustment²		7,755		$	(2,723	)		5,032			-		6,976		$	(2,394	)		4,582			-
Interest rate swap³		45			(15	)		30			-		37			(7	)		30			-
Cash-flow hedges³		(252	)		96			(156	)		-		(31	)		6			(25	)		-
Other comprehensive income (loss)	$	11,408		$	(2,642	)		8,766			-	$	(41,643	)	$	(2,395	)		(44,038	)		(14	)
Comprehensive income (loss)							$	93,760		$	161							$	17,651		$	294

¹ Income taxes are not provided for foreign currency translation relating to permanent investments in international subsidiaries.

² Loss reclassified from accumulated other comprehensive income (AOCI) into earnings as part of net periodic cost related to pension and other postretirement benefit plans is reported in cost of sales, selling, general and administrative and special charges, net.

³ Loss reclassified from AOCI into earnings is reported in other income (expense), net.

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The components of accumulated other comprehensive loss is as follows:

	August 27, 2016
	Total			H.B. Fuller Stockholders			Non- controlling Interests
Foreign currency translation adjustment	$	(47,732	)	$	(47,694	)	$	(38	)
Defined benefit pension plans adjustment, net of taxes of $90,289		(169,368	)		(169,368	)		-
Interest rate swap, net of taxes of ($10)		17			17			-
Cash-flow hedges, net of taxes of $907		(1,473	)		(1,473	)		-
Accumulated other comprehensive loss	$	(218,556	)	$	(218,518	)	$	(38	)

	November 28, 2015
	Total			H.B. Fuller Stockholders			Non- controlling Interests
Foreign currency translation adjustment	$	(51,592	)	$	(51,554	)	$	(38	)
Defined benefit pension plans adjustment, net of taxes of $93,012		(174,400	)		(174,400	)		-
Interest rate swap, net of taxes of $5		(13	)		(13	)		-
Cash-flow hedges, net of taxes of $811		(1,317	)		(1,317	)		-
Accumulated other comprehensive loss	$	(227,322	)	$	(227,284	)	$	(38	)

Note 6: Special Charges, net

The integration of the industrial adhesives business we acquired in March 2012 involved a significant amount of restructuring and capital investment to optimize the new combined entity. In addition, we have taken a series of actions in our existing EIMEA operating segment to improve the profitability and future growth prospects of this operating segment. We combined these two initiatives into a single project which we refer to as the “Business Integration Project”. During the third quarter ended August 27, 2016 and August 29, 2015, we incurred special charges, net of $(2,807) and $1,297, respectively, for costs related to the Business Integration Project. During the nine months ended August 27, 2016 and August 29, 2015, we incurred special charges, net of $(2,024) and $4,592, respectively, for costs related to the Business Integration Project. Included in facility exit costs for the three and nine months ended August 27, 2016 is a $3.6 million gain on the sale of our production facility located in Wels, Austria, which closed during the third quarter of 2016.

The following table provides detail of special charges, net:

	Three Months Ended						Nine Months Ended
	August 27, 2016			August 29, 2015			August 27, 2016			August 29, 2015
Acquisition and transformation related costs	$	55		$	48		$	242		$	595
Workforce reduction costs		-			216			(1	)		2
Facility exit costs		(2,862	)		1,043			(2,455	)		3,683
Other related costs		-			(10	)		190			312
Special charges, net	$	(2,807	)	$	1,297		$	(2,024	)	$	4,592

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Note 7: Components of Net Periodic Cost (Benefit) related to Pension and Other Postretirement Benefit Plans

	Three Months Ended August 27, 2016 and August 29, 2015
													Other
	Pension Benefits												Postretirement
	U.S. Plans						Non-U.S. Plans						Benefits
Net periodic cost (benefit):	2016			2015			2016			2015			2016			2015
Service cost	$	27		$	27		$	519		$	467		$	84		$	112
Interest cost		3,768			4,082			1,343			1,471			479			510
Expected return on assets		(6,078	)		(6,421	)		(2,435	)		(2,590	)		(1,341	)		(1,377	)
Amortization:
Prior service cost		7			7			(1	)		(1	)		(10	)		(626	)
Actuarial loss		1,292			1,407			788			775			532			607
Net periodic (benefit) cost	$	(984	)	$	(898	)	$	214		$	122		$	(256	)	$	(774	)

	Nine Months Ended August 27, 2016 and August 29, 2015
													Other
	Pension Benefits												Postretirement
	U.S. Plans						Non-U.S. Plans						Benefits
Net periodic cost (benefit):	2016			2015			2016			2015			2016			2015
Service cost	$	81		$	80		$	1,480		$	1,447		$	252		$	336
Interest cost		11,303			12,242			4,076			4,448			1,439			1,531
Expected return on assets		(18,232	)		(19,262	)		(7,400	)		(7,830	)		(4,025	)		(4,132	)
Amortization:
Prior service cost		21			22			(3	)		(3	)		(30	)		(1,878	)
Actuarial loss		3,878			4,221			2,293			2,387			1,596			1,823
Net periodic (benefit) cost	$	(2,949	)	$	(2,697	)	$	446		$	449		$	(768	)	$	(2,320	)

Note 8: Inventories

The composition of inventories is as follows:

	August 27,			November 28,
	2016			2015
Raw materials	$	125,421		$	121,545
Finished goods		148,829			142,195
LIFO reserve		(12,887	)		(15,236	)
Total inventories	$	261,363		$	248,504

Note 9: Financial Instruments

Foreign Currency Derivative Instruments

As a result of being a global enterprise, our earnings, cash flows and financial position are exposed to foreign currency risk from foreign currency denominated receivables and payables. These items are denominated in various foreign currencies, including the Euro, British pound sterling, Canadian dollar, Chinese renminbi, Japanese yen, Australian dollar, Argentine peso, Brazilian real, Colombian peso, Mexican peso, Turkish lira, Egyptian pound, Indian rupee and Malaysian ringgit.

Our objective is to balance, where possible, local currency denominated assets to local currency denominated liabilities to have a natural hedge and minimize foreign exchange impacts. We take steps to minimize risks from foreign currency exchange rate fluctuations through normal operating and financing activities and, when deemed appropriate, through the use of derivative instruments. We do not enter into any speculative positions with regard to derivative instruments.

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We enter into derivative contracts with a group of investment grade multinational commercial banks. We evaluate the credit quality of each of these banks on a periodic basis as warranted.

Effective October 7, 2015, we entered into three cross-currency swap agreements to convert a notional amount of $134,736 of foreign currency denominated intercompany loans into US dollars. The first swap matures in 2017, the second swap matures in 2018 and the third swap matures in 2019. As of August 27, 2016, the combined fair value of the swaps was a liability of $2,048 and was included in other liabilities in the Condensed Consolidated Balance Sheets. The swaps were designated as cash-flow hedges for accounting treatment. The lesser amount between the cumulative change in the fair value of the actual swaps and the cumulative change in the fair value of hypothetical swaps is recorded in accumulated other comprehensive income (loss) in the Condensed Consolidated Balance Sheets. The difference between the cumulative change in the fair value of the actual swaps and the cumulative change in the fair value of hypothetical swaps are recorded as other income (expense), net in the Condensed Consolidated Statements of Income. In a perfectly effective hedge relationship, the two fair value calculations would exactly offset each other. Any difference in the calculation represents hedge ineffectiveness. The ineffectiveness calculations as of August 27, 2016 resulted in additional pre-tax gain of $40 for the nine months ended August 27, 2016 as the change in fair value of the cross-currency swaps was less than the change in the fair value of the hypothetical swaps. The amount in accumulated other comprehensive income (loss) related to cross-currency swaps was a loss of $1,473 as of August 27, 2016. The estimated net amount of the existing loss that is reported in accumulated other comprehensive income (loss) as of August 27, 2016 that is expected to be reclassified into earnings within the next twelve months is $827. As of August 27, 2016, we do not believe any gains or losses will be reclassified into earnings as a result of the discontinuance of these cash flow hedges because the original forecasted transaction will not occur.

The following table summarizes the cross-currency swaps outstanding as of August 27, 2016:

	Fiscal Year of Expiration	Interest Rate		Notional Value		Fair Value
Pay EUR	2017		3.05%	$	44,912	$	(342	)
Receive USD			3.9145%
Pay EUR	2018		3.45%	$	44,912	$	(689	)
Receive USD			4.5374%
Pay EUR	2019		3.80%	$	44,912	$	(1,017	)
Receive USD			5.0530%
Total				$	134,736	$	(2,048	)

Except for the cross-currency swap agreements listed above, foreign currency derivative instruments outstanding are not designated as hedges for accounting purposes. The gains and losses related to mark-to-market adjustments are recognized as other income or expense in the Condensed Consolidated Statements of Income during the periods in which the derivative instruments are outstanding. See Note 14 for fair value amounts of these derivative instruments.

As of August 27, 2016, we had forward foreign currency contracts maturing between September 12, 2016 and February 24, 2017. The mark-to-market effect associated with these contracts, on a net basis, was a loss of $4,570 at August 27, 2016. These losses were largely offset by the underlying transaction gains and losses resulting from the foreign currency exposures for which these contracts relate.

Interest Rate Swaps

We have interest rate swap agreements to convert $75,000 of our senior notes to variable interest rates. The change in fair value of the senior notes, attributable to the change in the risk being hedged, was a liability of $2,284 at August 27, 2016 and was included in long-term debt and current maturities of long-term debt in the Condensed Consolidated Balance Sheets. The combined fair value of the swaps were an asset of $2,337 at August 27, 2016 and $3,395 at November 28, 2015 and were included in other assets in the Condensed Consolidated Balance Sheets. The swaps were designated for hedge accounting treatment as fair value hedges.

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The changes in the fair value of the swap and the fair value of the senior notes attributable to the change in the risk being hedged are recorded as other income (expense), net in the Condensed Consolidated Statements of Income. In a perfectly effective hedge relationship, the two fair value calculations would exactly offset each other. Any difference in the calculation represents hedge ineffectiveness. For the nine months ended August 27, 2016 and August 29, 2015, a pretax gain of $14 and $62, respectively, was recorded as the fair value of the senior notes decreased by more than the change in the fair value of the interest rate swaps attributable to the change in the risk being hedged.

Concentrations of credit risk with respect to trade accounts receivable are limited due to the large number of entities in the customer base and their dispersion across many different industries and countries. As of August 27, 2016, there were no significant concentrations of credit risk.

Note 10: Commitments and Contingencies

Environmental Matters 

From time to time, we become aware of compliance matters relating to, or receive notices from, federal, state or local entities regarding possible or alleged violations of environmental, health or safety laws and regulations. We review the circumstances of each individual site, considering the number of parties involved, the level of potential liability or our contribution relative to the other parties, the nature and magnitude of the hazardous substances involved, the method and extent of remediation, the estimated legal and consulting expense with respect to each site and the time period over which any costs would likely be incurred. Also, from time to time, we are identified as a potentially responsible party (PRP) under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) and/or similar state laws that impose liability for costs relating to the clean up of contamination resulting from past spills, disposal or other release of hazardous substances. We are also subject to similar laws in some of the countries where current and former facilities are located. Our environmental, health and safety department monitors compliance with applicable laws on a global basis. To the extent we can reasonably estimate the amount of our probable liabilities for environmental matters, we establish a financial provision. 

Currently we are involved in various environmental investigations, clean up activities and administrative proceedings and lawsuits. In particular, we are currently deemed a PRP in conjunction with numerous other parties, in a number of government enforcement actions associated with landfills and/or hazardous waste sites. As a PRP, we may be required to pay a share of the costs of investigation and clean up of these sites. In addition, we are engaged in environmental remediation and monitoring efforts at a number of current and former operating facilities. While uncertainties exist with respect to the amounts and timing of the ultimate environmental liabilities, based on currently available information, we have concluded that these matters, individually or in the aggregate, will not have a material adverse effect on our results of operations, financial condition or cash flow.

Other Legal Proceedings 

From time to time and in the ordinary course of business, we are a party to, or a target of, lawsuits, claims, investigations and proceedings, including product liability, personal injury, contract, patent and intellectual property, environmental, health and safety, tax and employment matters. While we are unable to predict the outcome of these matters, we have concluded, based upon currently available information, that the ultimate resolution of any pending matter, individually or in the aggregate, including the asbestos litigation described in the following paragraphs, will not have a material adverse effect on our results of operations, financial condition or cash flow.

We have been named as a defendant in lawsuits in which plaintiffs have alleged injury due to products containing asbestos manufactured more than 30 years ago. The plaintiffs generally bring these lawsuits against multiple defendants and seek damages (both actual and punitive) in very large amounts. In many cases, plaintiffs are unable to demonstrate that they have suffered any compensable injuries or that the injuries suffered were the result of exposure to products manufactured by us. We are typically dismissed as a defendant in such cases without payment. If the plaintiff presents evidence indicating that compensable injury occurred as a result of exposure to our products, the case is generally settled for an amount that reflects the seriousness of the injury, the length, intensity and character of exposure to products containing asbestos, the number and solvency of other defendants in the case, and the jurisdiction in which the case has been brought.

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A significant portion of the defense costs and settlements in asbestos-related litigation is paid by third parties, including indemnification pursuant to the provisions of a 1976 agreement under which we acquired a business from a third party. Currently, this third party is defending and paying settlement amounts, under a reservation of rights, in most of the asbestos cases tendered to the third party.

In addition to the indemnification arrangements with third parties, we have insurance policies that generally provide coverage for asbestos liabilities, including defense costs.  Historically, insurers have paid a significant portion of our defense costs and settlements in asbestos-related litigation. However, certain of our insurers are insolvent.  We have entered into cost-sharing agreements with our insurers that provide for the allocation of defense costs and settlements and judgments in asbestos-related lawsuits.  These agreements require, among other things, that we fund a share of settlements and judgments allocable to years in which the responsible insurer is insolvent

A summary of the number of and settlement amounts for asbestos-related lawsuits and claims is as follows:

	Nine Months Ended				3 Years Ended
($ in thousands)	August 27, 2016		August 29, 2015		November 28, 2015
Lawsuits and claims settled		9		6		25
Settlement amounts	$	978	$	463	$	2,072
Insurance payments received or expected to be received	$	645	$	373	$	1,648

We do not believe that it would be meaningful to disclose the aggregate number of asbestos-related lawsuits filed against us because relatively few of these lawsuits are known to involve exposure to asbestos-containing products that we manufactured. Rather, we believe it is more meaningful to disclose the number of lawsuits that are settled and result in a payment to the plaintiff. To the extent we can reasonably estimate the amount of our probable liabilities for pending asbestos-related claims, we establish a financial provision and a corresponding receivable for insurance recoveries. 

Based on currently available information, we have concluded that the resolution of any pending matter, including asbestos-related litigation, individually or in the aggregate, will not have a material adverse effect on our results of operations, financial condition or cash flow. 

Note 11: Operating Segments

We are required to report segment information in the same way that we internally organize our business for assessing performance and making decisions regarding allocation of resources. We evaluate the performance of each of our operating segments based on segment operating income, which is defined as gross profit less selling, general and administrative expenses. Segment operating income excludes special charges, net. Corporate expenses are fully allocated to each operating segment. Inter-segment revenues are recorded at cost plus a markup for administrative costs. Operating results of each segment are regularly reviewed by our chief operating decision maker to make decisions about resources to be allocated to the segments and assess their performance.

Through the fourth quarter of 2015, our business was reported in four operating segments: Americas Adhesives, EIMEA, Asia Pacific and Construction Products. Changes in our management reporting structure during the first quarter of 2016 required us to conduct an operating segment assessment in accordance with ASC Topic 280, Segment Reporting, to determine our reportable segments. As a result of this assessment, we now have five reportable segments: Americas Adhesives, EIMEA, Asia Pacific, Construction Products and Engineering Adhesives. Prior period segment information has been recast retrospectively to reflect our new operating segments.

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The table below provides certain information regarding net revenue and segment operating income for each of our operating segments:

	Three Months Ended
	August 27, 2016						August 29, 2015
	Trade Revenue		Inter- Segment Revenue		Segment Operating Income		Trade Revenue		Inter- Segment Revenue		Segment Operating Income
Americas Adhesives	$	198,957	$	4,096	$	31,900	$	206,623	$	4,725	$	33,617
EIMEA		130,619		4,056		8,430		133,512		4,513		5,325
Asia Pacific		57,488		1,540		2,510		54,645		1,137		2,749
Construction Products		64,402		185		2,093		72,404		119		3,421
Engineering Adhesives		61,392		-		3,496		56,949		-		3,431
Total	$	512,858			$	48,429	$	524,133			$	48,543

	Nine Months Ended
	August 27, 2016						August 29, 2015
	Trade Revenue		Inter- Segment Revenue		Segment Operating Income		Trade Revenue		Inter- Segment Revenue		Segment Operating Income
Americas Adhesives	$	588,422	$	11,821	$	94,043	$	618,172	$	16,428	$	91,021
EIMEA		394,807		13,821		25,620		405,044		12,174		8,303
Asia Pacific		171,467		3,801		9,299		167,541		8,570		8,838
Construction Products		192,111		340		5,412		206,690		541		10,790
Engineering Adhesives		172,891		-		6,465		138,109		-		(681	)
Total	$	1,519,698			$	140,839	$	1,535,556			$	118,271

Reconciliation of segment operating income to income before income taxes and income from equity method investments:

	Three Months Ended						Nine Months Ended
	August 27, 2016			August 29, 2015			August 27, 2016			August 29, 2015
Segment operating income	$	48,429		$	48,543		$	140,839		$	118,271
Special charges, net		2,807			(1,297	)		2,024			(4,592	)
Other income (expense), net		(956	)		(1,040	)		(7,603	)		(1,246	)
Interest expense		(6,809	)		(6,448	)		(19,714	)		(18,765	)
Income before income taxes and income from equity method investments	$	43,471		$	39,758		$	115,546		$	93,668

Note 12: Income Taxes

As of August 27, 2016, we had a liability of $4,508 recorded under FASB ASC 740, Income Taxes, for gross unrecognized tax benefits (excluding interest), compared to $5,124 as of November 28, 2015. As of August 27, 2016, we had accrued $639 of gross interest relating to unrecognized tax benefits. For the quarter ended August 27, 2016, our recorded liability for gross unrecognized tax benefits decreased by $652.

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Note 13: Goodwill and Other Intangible Assets

A summary of goodwill activity as of August 27, 2016 and changes during the nine months then ended is presented below:

	Americas Adhesives		EIMEA		Asia Pacific		Construction Products		Engineering Adhesives			Total
Balance at November 28, 2015	$	59,706	$	100,638	$	17,329	$	22,668	$	153,863		$	354,204
Acquisitions		-		-		-		-		38,852	1		38,852
Currency impact		116		3,885		812		97		(4,715	)		195
Balance at August 27, 2016	$	59,822	$	104,523	$	18,141	$	22,765	$	188,000		$	393,251

¹ Preliminary goodwill balance as of August 27, 2016.

As discussed in Note 11, during the first quarter of fiscal year 2016, we changed our operating segments as a result of a change in our management reporting structure. This resulted in a change in our reporting units. We allocated goodwill to our new reporting units using the relative fair value approach.

Balances of amortizable identifiable intangible assets, excluding goodwill and other non-amortizable intangible assets are as follows:

	August 27, 2016
Amortizable Intangible Assets	Purchased Technology & Patents			Customer Relationships			All Other			Total
Original cost	$	70,237		$	243,017		$	49,776		$	363,030
Accumulated amortization		(23,727	)		(110,258	)		(28,343	)		(162,328	)
Net identifiable intangibles	$	46,510		$	132,759		$	21,433		$	200,702

	November 28, 2015
Amortizable Intangible Assets	Purchased Technology & Patents			Customer Relationships			All Other			Total
Original cost	$	69,792		$	234,995		$	49,563		$	354,350
Accumulated amortization		(17,613	)		(99,405	)		(24,801	)		(141,819	)
Net identifiable intangibles	$	52,179		$	135,590		$	24,762		$	212,531

Amortization expense with respect to amortizable intangible assets was $20,509 and $20,046 for the nine months ended August 27, 2016 and August 29, 2015, respectively.

Estimated aggregate amortization expense based on the current carrying value of amortizable intangible assets for the next five fiscal years are as follows:

Fiscal Year	Remainder 2016		2017		2018		2019		2020		Thereafter
Amortization Expense	$	7,023	$	25,901	$	25,444	$	23,506	$	22,527	$	96,301

Non-amortizable intangible assets as of August 27, 2016 are $462 and are related to trademarks and trade names.

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Note 14: Fair Value Measurements

Estimates of fair value for financial assets and liabilities are based on the framework established in the accounting guidance for fair value measurements. The framework defines fair value, provides guidance for measuring fair value and requires certain disclosures. The framework discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow) and the cost approach (cost to replace the service capacity of an asset or replacement cost). The framework utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

● Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

● Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly.  These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

● Level 3: Unobservable inputs that reflect management’s assumptions, and include situations where there is little, if any, market activity for the asset or liability.

Balances Measured at Fair Value on a Recurring Basis

The following table presents information about our financial assets and liabilities that are measured at fair value on a recurring basis as of August 27, 2016 and November 28, 2015, and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value.

	August 27,		Fair Value Measurements Using:
Description	2016		Level 1		Level 2		Level 3
Assets:
Marketable securities	$	1,816	$	1,816	$	-	$	-
Derivative assets		2,931		-		2,931		-
Interest rate swaps		2,337		-		2,337		-
Liabilities:
Derivative liabilities	$	7,501	$	-	$	7,501	$	-
Contingent consideration liability		10,192		-		-		10,192
Cash-flow hedges		2,048		-		2,048		-

	November 28,		Fair Value Measurements Using:
Description	2015		Level 1		Level 2		Level 3
Assets:
Marketable securities	$	1,698	$	1,698	$	-	$	-
Derivative assets		15,185		-		15,185		-
Interest rate swaps		3,395		-		3,395		-
Cash-flow hedges		5,384		-		5,384		-
Liabilities:
Derivative liabilities	$	4,744	$	-	$	4,744	$	-
Contingent consideration liability		10,854		-		-		10,854

We use the income approach in calculating the fair value of our contingent consideration liabilities using a real option model with Level 3 inputs. The expected cash flows are affected by various significant judgments and assumptions, including revenue growth rates, profit margin percentages, volatility and discount rate, which are sensitive to change. Estimates of fair value are inherently uncertain and represent only management’s reasonable expectation regarding future developments. These estimates and the judgments and assumptions upon which the estimates are based will, in all likelihood, differ in some respects from actual future results. The valuation of the contingent consideration liability related to the acquisition of Tonsan Adhesive, Inc. resulted in a fair value of $10,221 as of August 27, 2016 and a $2,018 mark to market adjustment recorded as a credit to selling, general and administrative in the Condensed Consolidated Statement of Income as of August 27, 2016.

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Contingent consideration liabilities
Level 3 balance November 28, 2015	$	10,854
Opening balance sheet adjustment		700
Mark to market adjustment		(2,055	)
Foreign currency translation adjustment		693
Level 3 balance August 27, 2016	$	10,192

Note 15: Share Repurchase Program

On September 30, 2010, the Board of Directors authorized a share repurchase program of up to $100,000 of our outstanding common shares. Under the program, we are authorized to repurchase shares for cash on the open market, from time to time, in privately negotiated transactions or block transactions, or through an accelerated repurchase agreement. The timing of such repurchases is dependent on price, market conditions and applicable regulatory requirements. Upon repurchase of the shares, we reduced our common stock for the par value of the shares with the excess being applied against additional paid-in capital.

Under this program, we repurchased shares with an aggregate value of $5,326 during the third quarter of 2016. During the nine months ended August 27, 2016, we repurchased shares under this program with an aggregate value of $9,536. Of this amount, $250 reduced common stock and $9,286 reduced additional paid-in capital. We did not repurchase any shares during the nine months ended August 29, 2015.

Note 16: Redeemable Non-Controlling Interest

We account for the non-controlling interest in H.B. Fuller Kimya Sanayi Ticaret A.S. (HBF Kimya) as a redeemable non-controlling interest because both the non-controlling shareholder and H.B. Fuller have an option, exercisable beginning August 1, 2018, to require the redemption of the shares owned by the non-controlling shareholder at a price determined by a formula based on 24 months trailing EBITDA. Since the option makes the redemption of the non-controlling ownership shares of HBF Kimya outside of our control, these shares are classified as a redeemable non-controlling interest in temporary equity in the Condensed Consolidated Balance Sheets. The non-controlling shareholder is entitled to increase his ownership by 1 percent per year for 5 years up to a maximum of 13 percent ownership based on the achievement of profitability targets in each year. The option is subject to a minimum price of €3,500. The redemption value of the option, if it were currently redeemable, is estimated to be €3,500.

The results of operations for the HBF Kimya non-controlling interest is consolidated in our financial statements. Both the non-controlling interest and the accretion adjustment to redemption value are included in net income attributable to non-controlling interests in the Condensed Consolidated Statements of Income and in the carrying value of the redeemable non-controlling interest on the Condensed Consolidated Balance Sheets. HBF Kimya’s functional currency is the Turkish lira and changes in exchange rates will affect the reported amount of the redeemable non-controlling interest.

	Redeemable Non-Controlling Interest
Balance at November 28, 2015	$	4,199
Net income (loss) attributed to redeemable non-controlling interest		161
Foreign currency translation adjustment		52
Balance at August 27, 2016	$	4,412

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Overview

The Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) should be read in conjunction with the MD&A included in our Annual Report on Form 10-K for the year ended November 28, 2015 for important background information related to our business.

As of the beginning of the first quarter ending February 27, 2016, we created a new global operating segment named Engineering Adhesives, which includes the electronics, automotive and Tonsan and Cyberbond businesses from around the world. We also began reporting our Construction Products business on a global basis by combining our EIMEA and Asia Pacific construction businesses with our Construction Products operating segment. We now have five reportable segments: Americas Adhesives, EIMEA, Asia Pacific, Construction Products and Engineering Adhesives.

Net revenue in the third quarter of 2016 decreased 2.2 percent from the third quarter of 2015. Sales volume increased 0.9 percent and product pricing decreased 2.1 percent compared to the third quarter of 2015. A weaker Chinese renminbi, Egyptian pound, Turkish lira, Indian rupee and Malaysian ringgit, partially offset by a stronger Euro compared to the U.S. dollar, for the third quarter of 2016 compared to the third quarter of 2015 were the main drivers of a negative 1.0 percent currency effect. Gross profit margin increased 50 basis points primarily due to lower raw material costs.

Net revenue in the first nine months of 2016 decreased 1.0 percent from the first nine months of 2015. Sales volume increased 2.5 percent and product pricing decreased 1.3 percent compared to the first nine months of 2015. A weaker Chinese renminbi, Euro, Turkish lira, Canadian dollar, and Egyptian pound compared to the U.S. dollar, for the first nine months of 2016 compared to the first nine months of 2015 were the main drivers of a negative 2.2 percent currency effect. Gross profit margin increased 230 basis points primarily due to lower raw material costs.

Net income attributable to H.B. Fuller in the third quarter of 2016 was $32.7 million as compared to $26.8 million in the third quarter of 2015. On a diluted earnings per share basis, the third quarter of 2016 was $0.64 per share as compared to $0.52 per share for the third quarter of 2015.

Net income attributable to H.B. Fuller in the first nine months of 2016 was $85.0 million as compared to $61.7 million in the first nine months of 2015. On a diluted earnings per share basis, the first nine months of 2016 was $1.66 per share as compared to $1.20 per share for the same period of 2015.

Results of Operations

Net revenue:

	Three Months Ended							Nine Months Ended
($ in millions)	August 27, 2016		August 29, 2015		2016 vs 2015			August 27, 2016		August 29, 2015		2016 vs 2015
Net revenue	$	512.9	$	524.1		(2.2%	)	$	1,519.7	$	1,535.6		(1.0%	)

We review variances in net revenue in terms of changes related to product pricing, sales volume, changes in foreign currency exchange rates and large acquisitions. The product pricing/sales volume variance and small acquisitions such as Cyberbond, Advanced Adhesives, Tonsan Adhesive, Inc. and Continental Products Limited are viewed as constant currency growth. The following table shows the net revenue variance analysis for the third quarter and first nine months of 2016 compared to the same periods in 2015:

	Three Months Ended August 27, 2016			Nine Months Ended August 27, 2016
	vs August 29, 2015			vs August 29, 2015
Product pricing		(2.1%	)		(1.3%	)
Sales volume		0.9	%		2.5	%
Currency		(1.0%	)		(2.2%	)
Total		(2.2%	)		(1.0%	)

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Constant currency growth was a negative 1.2 percent in the third quarter of 2016 compared to the third quarter of 2015. Sales volume increased 0.9 percent and product pricing decreased 2.1 percent compared to 2015. The negative 1.2 percent constant currency growth in the third quarter of 2016 was driven by 11.8 percent growth in Engineering Adhesives, 9.6 percent growth in Asia Pacific offset by a 2.0 percent decrease in EIMEA, 3.6 percent decrease in Americas Adhesives and a 11.0 percent decrease in Construction Products. The negative 1.0 percent currency impact was primarily driven by the devaluation of the Chinese renminbi, Egyptian pound, Turkish lira, Indian rupee, and Malaysian ringgit, partially offset by a stronger Euro compared to the U.S. dollar.

Constant currency growth was 1.2 percent in the first nine months of 2016 compared to the first nine months of 2015. Sales volume increased 2.5 percent and product pricing decreased 1.3 percent compared to 2015. The 1.2 percent constant currency growth in the first nine months of 2016 was driven by 30.0 percent growth in Engineering Adhesives, 7.7 percent growth in Asia Pacific and 1.1 percent growth in EIMEA, offset by a 4.3 percent decrease in Americas Adhesives and a decrease of 6.6 percent in Construction Products. The negative 2.2 percent currency impact was primarily driven by the devaluation of the Chinese renminbi, Euro, Turkish lira, Canadian dollar, and Egyptian pound compared to the U.S. dollar.

Cost of sales:

	Three Months Ended									Nine Months Ended
($ in millions)	August 27, 2016			August 29, 2015			2016 vs 2015			August 27, 2016			August 29, 2015			2016 vs 2015
Raw materials	$	273.9		$	288.2			(5.0%	)	$	813.4		$	862.2			(5.7%	)
Other manufacturing costs		92.8			89.1			4.2	%		264.3			261.4			1.1	%
Cost of sales	$	366.7		$	377.3			(2.8%	)	$	1,077.7		$	1,123.6			(4.1%	)
Percent of net revenue		71.5	%		72.0	%					70.9	%		73.2	%

Cost of sales in the third quarter of 2016 compared to the third quarter of 2015 decreased 50 basis points as a percentage of net revenue. Raw material cost as a percentage of net revenue decreased 160 basis points compared to last year due to lower raw material costs and sales mix, partially offset by the impact of valuing inventory acquired in the Cyberbond acquisition at fair value. Other manufacturing costs as a percentage of revenue increased 110 basis points compared to the third quarter of last year.

Cost of sales in the first nine months of 2016 compared to the first nine months of 2015 decreased 230 basis points as a percentage of net revenue. Raw material cost as a percentage of net revenue decreased 270 basis points compared to last year due to lower raw material costs, sales mix and the 2015 impact of valuing inventories acquired in the Tonsan Adhesive, Inc. acquisition at fair value. Other manufacturing costs as a percentage of revenue increased 40 basis points compared to last year.

Gross profit:

	Three Months Ended									Nine Months Ended
($ in millions)	August 27, 2016			August 29, 2015			2016 vs 2015			August 27, 2016			August 29, 2015			2016 vs 2015
Gross profit	$	146.1		$	146.8			(0.5%	)	$	442.0		$	412.0			7.3	%
Percent of net revenue		28.5	%		28.0	%					29.1	%		26.8	%

Gross profit in the third quarter of 2016 decreased 0.5 percent and gross profit margin increased 50 basis points compared to the third quarter of 2015. The combined impact of lower revenue, lower raw material costs and higher other manufacturing costs in the third quarter of 2016 resulted in the decrease in gross profit.

Gross profit in the first nine months of 2016 increased $30.0 million or 7.3 percent and gross profit margin increased 230 basis points compared to the first nine months of 2015. Reduced raw material costs, better sales mix and a full nine months of Tonsan in 2016 resulted in the increase in gross profit.

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Selling, general and administrative (SG&A) expenses:

	Three Months Ended									Nine Months Ended
($ in millions)	August 27, 2016			August 29, 2015			2016 vs 2015			August 27, 2016			August 29, 2015			2016 vs 2015
SG&A	$	97.7		$	98.3			(0.6%	)	$	301.1		$	293.7			2.5	%
Percent of net revenue		19.0	%		18.8	%					19.8	%		19.1	%

SG&A expenses for the third quarter of 2016 decreased $0.6 million or 0.6 percent, compared to the third quarter of 2015. The decrease is primarily due to lower variable compensation, offset by incremental expenses related to the Advanced Adhesives and Cyberbond acquisitions and higher personnel costs related to increased head count.

SG&A expenses for the first nine months of 2016 increased $7.4 million or 2.5 percent, compared to the first nine months of 2015. The increase is mainly due to a full nine months of Tonsan for 2016 and incremental expenses coming from newly acquired businesses compared to the first nine months of 2015. This increase is partially offset by lower expenses related to general spending reductions, foreign currency exchange rate benefits on spending outside the U.S. and the net mark to market adjustment related to the Tonsan contingent consideration liability.

We make SG&A expense plans at the beginning of each fiscal year and barring significant changes in business conditions or our outlook for the future, we maintain these spending plans for the entire year. Management routinely monitors our SG&A spending relative to these fiscal year plans for each operating segment and for the company overall. We feel it is important to maintain a consistent spending program in this area as many of the activities within the SG&A category such as the sales force, technology development, and customer service are critical elements of our business strategy. For the current year, we planned SG&A expenses to increase relative to last year by an amount higher than our expected growth in net revenue.

Special charges, net:

	Three Months Ended								Nine Months Ended
($ in millions)	August 27, 2016			August 29, 2015		2016 vs 2015			August 27, 2016			August 29, 2015		2016 vs 2015
Special charges, net	$	(2.8	)	$	1.3		(316.4%	)	$	(2.0	)	$	4.6		(144.1%	)

The following table provides detail of special charges, net:

	Three Months Ended					Nine Months Ended
($ in millions)	August 27, 2016			August 29, 2015		August 27, 2016			August 29, 2015
Acquisition and transformation related costs	$	0.1		$	0.1	$	0.2		$	0.6
Workforce reduction costs		-			0.2		-			-
Facility exit costs		(2.9	)		1.0		(2.4	)		3.7
Other related costs		-			-		0.2			0.3
Special charges, net	$	(2.8	)	$	1.3	$	(2.0	)	$	4.6

The integration of the industrial adhesives business we acquired in March 2012 involved a significant amount of restructuring and capital investment to optimize the new combined entity. In addition to this acquisition, we announced our intentions to take a series of actions in our existing EIMEA operating segment to improve the profitability and future growth prospects of this operating segment. We combined these two initiatives into a single project which we refer to as the “Business Integration Project”. During the third quarter ended August 27, 2016 and August 29, 2015, we incurred special charges, net of $(2.8) million and $1.3 million respectively, and for the nine months ended August 27, 2016 and August 29, 2015, we incurred special charges, net of $(2.0) million and $4.6 million respectively, for costs related to the Business Integration Project. Included in facility exit costs for the three and nine months ended August 27, 2016 is a $3.6 million gain on the sale of our production facility located in Wels, Austria, which closed during the third quarter of 2016.

We present operating segment information consistent with how we organize our business internally, assess performance and make decisions regarding the allocation of resources. Segment operating income is defined as gross profit less selling, general and administrative expenses. Because this definition excludes special charges, we have not allocated special charges to the operating segments or included them in Management’s Discussion and Analysis of operating segment results. The following table provides the special charges, net attributable to each operating segment for the periods presented:

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	Three Months Ended					Nine Months Ended
($ in millions)	August 27, 2016			August 29, 2015		August 27, 2016		August 29, 2015
Americas Adhesives	$	-		$	-	$	-	$	(0.9	)
EIMEA		(2.8	)		1.3		2.0		5.2
Company-wide		-			-		-		0.3
Special Charges, net	$	(2.8	)	$	1.3	$	2.0	$	4.6

We expect total project costs will be approximately $164.0 million. The following table provides detail of costs incurred inception-to-date as of August 27, 2016 for the Business Integration Project:

($ in millions)	Costs Incurred Inception-to-Date as of August 27, 2016
Acquisition and transformation related costs	$	43.3
Work force reduction costs		41.1
Cash facility exit costs		37.7
Non-cash facility exit costs		17.7
Other related costs	19.5
Business Integration Project	$	159.3

Non-cash costs are primarily related to accelerated depreciation of long-lived assets.

Other income (expense), net:

	Three Months Ended							Nine Months Ended
($ in millions)	August 27, 2016			August 29, 2015			2016 vs 2015	August 27, 2016			August 29, 2015			2016 vs 2015
Other income (expense), net	$	(1.0	)	$	(1.0	)	NMP	$	(7.6	)	$	(1.2	)	NMP

NMP = Non-meaningful percentage

Other income (expense), net in the third quarter of 2016 included $1.0 million of currency translation and re-measurement losses and $0.2 million of net financing expense, offset by $0.5 million of interest income. Other income (expense), net in the third quarter of 2015 included $1.3 million of currency translation and re-measurement losses.

Other income (expense), net in the first nine months of 2016 included $9.1 million of currency translation and re-measurement losses offset by $1.5 million of interest income. The majority of the $9.1 million of currency translation and re-measurement losses is related to the devaluation of the Argentine peso. Other income (expense), net in the first nine months of 2015 included $2.1 million of currency translation and re-measurement losses offset by $0.5 million of net financing income, $0.2 million of interest income, and $0.2 million of gains on disposal of fixed assets.

Interest expense:

	Three Months Ended							Nine Months Ended
($ in millions)	August 27, 2016		August 29, 2015		2016 vs 2015			August 27, 2016		August 29, 2015		2016 vs 2015
Interest expense	$	6.8	$	6.4		5.6	%	$	19.7	$	18.8		5.1	%

Interest expense in the third quarter of 2016 as compared to the same period last year was higher due to higher LIBOR rates on floating rate debt held in the U.S. and larger local currency debt balances at higher interest rates, offset by higher capitalized interest and lower average U.S. debt balances. We capitalized $0.2 million of interest expense in the third quarter of 2016 compared to $0.1 million in the same period last year.

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Interest expense for the first nine months of 2016 as compared to the same period last year was higher due to higher LIBOR rates on floating rate debt and larger local currency debt balances at higher interest rates, offset by higher capitalized interest. We capitalized $0.6 million of interest expense in the first nine months of 2016 compared to $0.1 million in the same period last year.

Income taxes:

	Three Months Ended									Nine Months Ended
($ in millions)	August 27, 2016			August 29, 2015			2016 vs 2015			August 27, 2016			August 29, 2015			2016 vs 2015
Income taxes	$	12.5		$	14.4			(12.9%	)	$	35.6		$	34.5			3.0	%
Effective tax rate		28.8	%		36.1	%					30.8	%		36.9	%

Income tax expense of $12.5 million in the third quarter of 2016 includes $1.1 million of discrete tax benefit and $0.8 million of tax expense relating to the special charges for costs related to the Business Integration Project.  Excluding the discrete tax expense and the effects of items included in special charges, the overall effective tax rate was 31.4 percent. 

Income tax expense of $35.6 million in the first nine months of 2016 includes $1.7 million of discrete tax benefits and $0.7 million of tax expense relating to special charges for costs related to the Business Integration Project. Excluding the discrete tax benefits and the effects of items included in special charges, the overall effective tax rate was 32.2 percent.

Income from equity method investments:

	Three Months Ended							Nine Months Ended
($ in millions)	August 27, 2016		August 29, 2015		2016 vs 2015			August 27, 2016		August 29, 2015		2016 vs 2015
Income from equity method investments	$	1.8	$	1.5		22.7	%	$	5.2	$	4.2		24.4	%

The income from equity method investments relates to our 50 percent ownership of the Sekisui-Fuller joint venture in Japan. The higher income for the third quarter and first nine months of 2016 compared to the same periods of 2015 is primarily related to higher net income in our joint venture.

Net income attributable to non-controlling interests:

	Three Months Ended							Nine Months Ended
($ in millions)	August 27, 2016			August 29, 2015			2016 vs 2015	August 27, 2016			August 29, 2015			2016 vs 2015
Net income attributable to non-controlling interests	$	(0.1	)	$	(0.1	)	NMP	$	(0.2	)	$	(0.3	)	NMP

NMP = Non-meaningful percentage

Net income attributable to non-controlling interests relates to an 11 percent redeemable non-controlling interest in HBF Turkey.

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Net income attributable to H.B. Fuller:

	Three Months Ended									Nine Months Ended
($ in millions)	August 27, 2016			August 29, 2015			2016 vs 2015			August 27, 2016			August 29, 2015			2016 vs 2015
Net income attributable to H.B. Fuller	$	32.7		$	26.8			22.2	%	$	85.0		$	61.7			37.8	%
Percent of net revenue		6.4	%		5.1	%					5.6	%		4.0	%

The net income attributable to H.B. Fuller for the third quarter of 2016 was $32.7 million compared to $26.8 million for the third quarter of 2015. The diluted earnings per share for the third quarter of 2016 was $0.64 per share as compared to $0.52 per share for the third quarter of 2015.

The net income attributable to H.B. Fuller for the first nine months of 2016 was $85.0 million compared to $61.7 million for the first nine months of 2015. The diluted earnings per share for the first nine months of 2016 was $1.66 per share as compared to $1.20 per share for the first nine months of 2015.

Operating Segment Results

Through the fourth quarter of 2015, our business was reported in four operating segments: Americas Adhesives, Europe, India, Middle East and Africa (EIMEA), Asia Pacific and Construction Products. Changes in our management reporting structure during the first quarter of 2016 required us to conduct an operating segment assessment in accordance with ASC Topic 280, Segment Reporting, to determine our reportable segments. As a result of this assessment, we now have five reportable segments: Americas Adhesives, EIMEA, Asia Pacific, Construction Products and Engineering Adhesives. Prior period segment information has been recast retrospectively to reflect our new operating segments.

Operating results of each of these segments are regularly reviewed by our chief operating decision maker to make decisions about resources to be allocated to the segments and assess their performance.

The tables below provide certain information regarding the net revenue and segment operating income of each of our operating segments. For segment evaluation by the chief operating decision maker, segment operating income is defined as gross profit less selling, general and administrative expenses. Segment operating income excludes special charges, net. The product pricing/sales volume variance and small acquisitions are viewed as constant currency growth.

Net Revenue by Segment:

	Three Months Ended										Nine Months Ended
	August 27, 2016					August 29, 2015					August 27, 2016					August 29, 2015
($ in millions)	Net Revenue		% of Total			Net Revenue		% of Total			Net Revenue		% of Total			Net Revenue		% of Total
Americas Adhesives	$	199.0		39	%	$	206.7		39	%	$	588.4		39	%	$	618.2		40	%
EIMEA		130.6		25	%		133.5		25	%		394.8		26	%		405.1		26	%
Asia Pacific		57.5		11	%		54.6		11	%		171.5		11	%		167.5		11	%
Construction Products		64.4		13	%		72.4		14	%		192.1		13	%		206.7		13	%
Engineering Adhesives		61.4		12	%		56.9		11	%		172.9		11	%		138.1		10	%
Total	$	512.9		100	%	$	524.1		100	%	$	1,519.7		100	%	$	1,535.6		100	%

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Segment Operating Income:

	Three Months Ended										Nine Months Ended
	August 27, 2016					August 29, 2015					August 27, 2016					August 29, 2015
($ in millions)	Segment Operating Income		% of Total			Segment Operating Income		% of Total			Segment Operating Income		% of Total			Segment Operating Income			% of Total
Americas Adhesives	$	31.9		67	%	$	33.6		69	%	$	94.0		67	%	$	91.0			77	%
EIMEA		8.4		17	%		5.3		11	%		25.6		18	%		8.3			8	%
Asia Pacific		2.5		5	%		2.8		6	%		9.3		6	%		8.8			7	%
Construction Products		2.1		4	%		3.4		7	%		5.4		4	%		10.8			9	%
Engineering Adhesives		3.5		7	%		3.4		7	%		6.5		5	%		(0.6	)		(1%	)
Total	$	48.4		100	%	$	48.5		100	%	$	140.8		100	%	$	118.3			100	%

The following table provides a reconciliation of segment operating income to income before income taxes and income from equity method investments, as reported on the Condensed Consolidated Statements of Income.

	Three Months Ended						Nine Months Ended
($ in millions)	August 27, 2016			August 29, 2015			August 27, 2016			August 29, 2015
Segment operating income	$	48.4		$	48.5		$	140.8		$	118.3
Special charges, net		2.8			(1.3	)		2.0			(4.6	)
Other income (expense), net		(1.0	)		(1.0	)		(7.6	)		(1.2	)
Interest expense		(6.8	)		(6.4	)		(19.7	)		(18.8	)
Income before income taxes and income from equity method investments	$	43.4		$	39.8		$	115.5		$	93.7

Americas Adhesives

	Three Months Ended									Nine Months Ended
($ in millions)	August 27, 2016			August 29, 2015			2016 vs 2015			August 27, 2016			August 29, 2015			2016 vs 2015
Net revenue	$	199.0		$	206.7			(3.7%	)	$	588.4		$	618.2			(4.8%	)
Segment operating income	$	31.9		$	33.6			(5.1%	)	$	94.0		$	91.0			3.3	%
Segment operating margin		16.0	%		16.3	%					16.0	%		14.7	%

The following tables provide details of the Americas Adhesives net revenue variances:

	Three Months Ended August 27, 2016 vs August 29, 2015			Nine Months Ended August 27, 2016 vs August 29, 2015
Constant currency growth		(3.6	%)		(4.3	%)
Currency		(0.1	%)		(0.5	%)
Total		(3.7	%)		(4.8	%)

Net revenue decreased 3.7 percent in the third quarter of 2016 compared to the third quarter of 2015. The 3.6 percent decrease in constant currency growth was attributable to a 0.1 percent decrease in sales volume and 3.5percent decrease in product pricing. The 0.1 percent negative currency effect was due to the weaker Canadian dollar compared to the U.S. dollar. As a percentage of net revenue, raw material costs decreased 30 basis points mainly due to reductions in raw material costs. Other manufacturing costs as a percentage of net revenue increased 30 basis points, primarily due to lower revenues. Segment operating income decreased 5.1 percent and segment operating margin as a percentage of net revenue decreased 30 basis points in the third quarter of 2016 compared to the third quarter of 2015.

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Net revenue decreased 4.8 percent in the first nine months of 2016 compared to the first nine months of 2015. The 4.3 percent decrease in constant currency growth was attributable to a 1.8 percent decrease in sales volume and a 2.5 percent decrease in product pricing. The 0.5 percent negative currency effect was due to the weaker Canadian dollar compared to the U.S. dollar. The sales volume decrease was driven by general end-market weakness in Latin America and unfavorable sales mix partially offset by modest market share gains. As a percentage of net revenue, raw material costs decreased 260 basis points mainly due to reductions in raw material costs. Other manufacturing costs as a percentage of net revenue increased 50 basis points. Segment operating income increased 3.3 percent and segment operating margin as a percentage of net revenue increased 130 basis points in the first nine months of 2016 compared to the first nine months of 2015.

EIMEA

	Three Months Ended									Nine Months Ended
($ in millions)	August 27, 2016			August 29, 2015			2016 vs 2015			August 27, 2016			August 29, 2015			2016 vs 2015
Net revenue	$	130.6		$	133.5			(2.2%	)	$	394.8		$	405.1			(2.5%	)
Segment operating income	$	8.4		$	5.3			58.3	%	$	25.6		$	8.3			208.6	%
Segment operating margin		6.5	%		4.0	%					6.5	%		2.0	%

The following table provides details of the EIMEA net revenue variances:

	Three Months Ended August 27, 2016 vs August 29, 2015			Nine Months Ended August 27, 2016 vs August 29, 2015
Constant currency growth		(2.0	%)		1.1	%
Currency		(0.2	%)		(3.6	%)
Total		(2.2	%)		(2.5	%)

Net revenue decreased 2.2 percent in the third quarter of 2016 compared to the third quarter of 2015. Sales volume increased 0.3 percent and product pricing decreased 2.3 percent. The negative currency effect of 0.2 percent was primarily the result of a weaker Egyptian pound, Turkish lira, and Indian rupee compared to the U.S. dollar partially offset by a stronger Euro. Sales volume growth was primarily related to the hygiene and packaging markets, with strong growth in the emerging markets. Raw material cost as a percentage of net revenue decreased 260 basis points in the third quarter of 2016 compared to the third quarter of 2015 primarily due to lower raw material costs. Other manufacturing costs as a percentage of net revenue were 100 basis points higher in the third quarter of 2016 compared to the third quarter of 2015. Segment operating income increased 58.3 percent and segment operating margin increased 250 basis points compared to the third quarter of 2015.

Net revenue decreased 2.5 percent in the first nine months of 2016 compared to the first nine months of 2015. Sales volume increased 2.1 percent and product pricing decreased 1.0 percent. The 3.6 percent negative currency effect was primarily the result of a weaker Euro, Turkish lira, and Indian rupee and compared to the U.S. dollar. Sales volume growth was primarily related to the hygiene market, with strong growth in the emerging markets, as well as growth in core Europe. Raw material cost as a percentage of net revenue decreased 280 basis points in the first nine months of 2016 compared to the first nine months of 2015 primarily due to lower raw material costs. Other manufacturing costs as a percentage of net revenue were 110 basis points lower than 2015 as a result of the reduction of production inefficiencies incurred in the prior year related to the Business Integration Project. As a result, segment operating income increased 208.6 percent and segment operating margin increased 450 basis points compared to the first nine months of 2015.

Asia Pacific

	Three Months Ended									Nine Months Ended
($ in millions)	August 27, 2016			August 29, 2015			2016 vs 2015			August 27, 2016			August 29, 2015			2016 vs 2015
Net revenue	$	57.5		$	54.6			5.2	%	$	171.5		$	167.5			2.4	%
Segment operating income	$	2.5		$	2.8			(8.7%	)	$	9.3		$	8.8			5.2	%
Segment operating margin		4.4	%		5.0	%					5.4	%		5.3	%

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The following table provides details of the Asia Pacific net revenue variances:

	Three Months Ended August 27, 2016 vs August 29, 2015			Nine Months Ended August 27, 2016 vs August 29, 2015
Constant currency growth		9.6	%		7.7	%
Currency		(4.4	%)		(5.3	%)
Total		5.2	%		2.4	%

Net revenue in the third quarter of 2016 increased 5.2 percent compared to the third quarter of 2015. The 9.6 percent increase in constant currency growth was attributable to a 10.6 percent increase in sales volume partially offset by a 1.0 percent decrease in product pricing. Most of the growth compared to the third quarter of 2015 is driven by the acquisition of Advanced Adhesives that occurred during the second quarter of 2016, as well as growth in Southeast Asia and Greater China. Negative currency effects of 4.4 percent compared to the third quarter of 2015 were primarily driven by the weaker Chinese renminbi and Malaysian ringgit compared to the U.S. dollar. Raw material costs as a percentage of net revenue decreased 220 basis points compared to the third quarter of 2015 due to lower raw material costs and changes in sales mix. Other manufacturing costs as a percentage of net revenue increased 230 basis points compared to the third quarter of 2015, primarily due to the acquisition of Advanced Adhesives and the costs to rationalize certain production capabilities in Southeast Asia. Segment operating income decreased 8.7 percent and segment operating margin decreased 60 basis points compared to the third quarter of 2015.

Net revenue in the first nine months of 2016 increased 2.4 percent compared to the first nine months of 2015. The 7.7 percent increase in constant currency growth was attributable to a 9.0 percent increase in sales volume partially offset by a 1.3 percent decrease in product pricing. Most of the growth compared to the first nine months of 2015 is driven by the acquisition of Advanced Adhesives that occurred during the second quarter of 2016, as well as growth in Southeast Asia and Greater China. Negative currency effects of 5.3 percent compared to the first nine months of 2015 were primarily driven by the weaker Chinese renminbi, Australian dollar and Malaysian ringgit compared to the U.S. dollar. Raw material costs as a percentage of net revenue decreased 120 basis points compared to the first nine months of 2015 due to lower raw material costs and changes in sales mix, partially offset by the impact of valuing inventories related to the Advanced Adhesives acquisition at fair value. Other manufacturing costs as a percentage of net revenue increased 150 basis points compared to the first nine months of 2015, primarily due to the acquisition of Advanced Adhesives and the costs to rationalize certain production capabilities in Southeast Asia. Segment operating income increased 5.2 percent and segment operating margin increased 10 basis points compared to the first nine months of 2015.

Construction Products

	Three Months Ended									Nine Months Ended
($ in millions)	August 27, 2016			August 29, 2015			2016 vs 2015			August 27, 2016			August 29, 2015			2016 vs 2015
Net revenue	$	64.4		$	72.4			(11.1%	)	$	192.1		$	206.7			(7.1%	)
Segment operating income	$	2.1		$	3.4			(38.8%	)	$	5.4		$	10.8			(49.8%	)
Segment operating margin		3.3	%		4.7	%					2.8	%		5.2	%

The following tables provide details of the Construction Products net revenue variances:

	Three Months Ended August 27, 2016 vs August 29, 2015			Nine Months Ended August 27, 2016 vs August 29, 2015
Constant currency growth		(11.0	%)		(6.6	%)
Currency		(0.1	%)		(0.5	%)
Total		(11.1	%)		(7.1	%)

Net revenue decreased 11.1 percent in the third quarter of 2016 compared to the third quarter of 2015. The decrease in constant currency growth was driven by a 11.2 percent decrease in sales volume offset by a 0.2 percent increase in product pricing. Negative currency effects of 0.1 percent compared to the third quarter of 2015 were primarily driven by the weaker Australian dollar compared to the U.S. dollar. The decrease in sales volume was primarily attributed to a strong third quarter of 2015 driven by market share gains with certain retail partners. The increase in pricing is mainly due to price increases related to certain product lines in multiple channels. Raw material cost as a percentage of net revenue was 350 basis points lower in the third quarter of 2016 compared to last year primarily due to changes in product mix and slightly lower raw material costs. Other manufacturing costs as a percentage of net revenue were 330 basis points higher in the third quarter of 2016 compared to the third quarter of 2015 mainly due to higher supply chain costs as we complete the facility upgrade and expansion project. Operating expense as a percentage of net revenue increased 160 basis points compared to the third quarter of 2015 due to lower revenues. Segment operating income decreased 38.8 percent and segment operating margin decreased 140 basis points in the third quarter of 2016 compared to the third quarter of 2015.

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Net revenue decreased 7.1 percent in the first nine months of 2016 compared to the first nine months of 2015. The decrease in constant currency growth was driven by a 7.5 percent decrease in sales volume offset by a 0.9 percent increase in product pricing. Negative currency effects of 0.5 percent compared to the first nine months of 2015 were primarily driven by the weaker Australian dollar compared to the U.S. dollar. The decrease in sales volume was primarily attributed to lower export revenue, inventory rebalancing with certain channel partners and a strong third quarter of 2015 driven by market share gains with certain retail partners. The increase in pricing is mainly due to price increases related to certain product lines in multiple channels. Raw material cost as a percentage of net revenue was 270 basis points lower in the first nine months of 2016 compared to 2015 primarily due to changes in product mix and slightly lower raw material costs. Other manufacturing costs as a percentage of net revenue were 300 basis points higher in the first nine months of 2016 compared to the first nine months of 2015 mainly due to higher supply chain costs as we complete the facility upgrade and expansion project. Operating expense as a percentage of net revenue increased 210 basis points compared to the first nine months of 2015 primarily due to lower revenues. Segment operating income decreased 49.8 percent and segment profit margin decreased 240 basis points in the first nine months compared to the first nine months of 2015.

Engineering Adhesives

	Three Months Ended									Nine Months Ended
($ in millions)	August 27, 2016			August 29, 2015			2016 vs 2015			August 27, 2016			August 29, 2015			2016 vs 2015
Net revenue	$	61.4		$	56.9			7.8	%	$	172.9		$	138.1			25.2	%
Segment operating income	$	3.5		$	3.4			1.9	%	$	6.5		$	(0.6	)		1050.7	%
Segment operating margin		5.7	%		6.0	%					3.7	%		(0.5%	)

The following tables provide details of the Engineering Adhesives net revenue variances:

	Three Months Ended August 27, 2016 vs August 29, 2015			Nine Months Ended August 27, 2016 vs August 29, 2015
Constant currency growth		11.8	%		30.0	%
Currency		(4.0%	)		(4.8%	)
Total		7.8	%		25.2	%

Net revenue increased 7.8 percent in the third quarter of 2016 compared to the third quarter of 2015. The 11.8 percent increase in constant currency growth was driven by the acquisition of Cyberbond that occurred during the third quarter of 2016, while product pricing remained flat. Negative currency effects of 4.0 percent compared to the third quarter of last year were primarily driven by the weaker Chinese renminbi compared to the U.S. dollar. Raw material cost as a percentage of net revenue was 140 basis points lower in the third quarter of 2016 compared to the third quarter of 2015. Other manufacturing costs as a percentage of net revenue were 190 basis points higher in the third quarter of 2016 compared to the third quarter of 2015 primarily due to the Cyberbond acquisition. Segment operating income increased 1.9 percent and segment operating margin decreased 30 basis points in the third quarter of 2016 compared to the third quarter of 2015.

Net revenue increased 25.2 percent in the first nine months of 2016 compared to the first nine months of 2015. The increase was driven by a 30.6 percent increase in sales volume partially offset by a 0.6 percent decrease in product pricing. The increase in sales volume was partially attributed to a full period of the Tonsan business, which was acquired late in the first quarter of 2015, as well as the acquisition of Cyberbond that occurred during the third quarter of 2016. Raw material cost as a percentage of net revenue was 400 basis points lower in the first nine months of 2016 compared to the first nine months of 2015 primarily due to the impact of valuing inventories related to the Tonsan acquisition at fair value, lower raw material costs and changes in product mix associated with the acquisition of Tonsan. Other manufacturing costs as a percentage of net revenue were 80 basis points higher in the first nine months of 2016 compared to the first nine months of 2015 primarily due to the impact of a full nine months of the Tonsan business and the Cyberbond acquisition. Operating expense as a percentage of net revenue decreased 90 basis points compared to the first nine months of 2015, partially due to the net mark to market adjustment related to the Tonsan contingent consideration liability offest by the Cyberbond acquisition. Segment operating income increased $7.1 million and segment operating margin increased 420 basis points in the first nine months of 2016 compared to the first nine months of 2015.

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Financial Condition, Liquidity and Capital Resources

Total cash and cash equivalents as of August 27, 2016 were $133.1 million compared to $119.2 million as of November 28, 2015 and $85.8 million as of August 29, 2015. Of the $133.1 million in cash and cash equivalents as of August 27, 2016, $120.3 million was held outside the United States. Total long and short-term debt was $713.6 million as of August 27, 2016, $722.9 million as of November 28, 2015 and $727.6 million as of August 29, 2015. The total debt to total capital ratio as measured by Total Debt divided by (Total Debt plus Total Equity) was 42.6 percent as of August 27, 2016 as compared to 45.3 percent as of November 28, 2015 and 44.6 percent as of August 29, 2015.

We believe that cash flows from operating activities will be adequate to meet our ongoing liquidity and capital expenditure needs. In addition, we believe we have the ability to obtain both short-term and long-term debt to meet our financing needs for the foreseeable future. Cash available in the United States has historically been sufficient and we expect it will continue to be sufficient to fund U.S. operations and U.S. capital spending and U.S. pension and other postretirement benefit contributions in addition to funding U.S. acquisitions, dividend payments, debt service and share repurchases as needed. For those international earnings considered to be reinvested indefinitely, we currently have no intention to, and plans do not indicate a need to, repatriate these funds for U.S. operations.

Our credit agreements and note purchase agreements include restrictive covenants that, if not met, could lead to a renegotiation of our credit lines and a significant increase in our cost of financing. At August 27, 2016, we were in compliance with all covenants of our contractual obligations as shown in the following table:

Covenant	Debt Instrument	Measurement	Result as of August 27, 2016
TTM EBITDA / TTM Interest Expense	All Debt Instruments	Not less than 2.5	10.5
Total Indebtedness / TTM EBITDA	All Debt Instruments	Not greater than 3.5	2.6

● TTM = Trailing 12 months

● EBITDA for covenant purposes is defined as consolidated net income, plus (i) interest expense, (ii) taxes, (iii) depreciation and amortization, (iv) non-cash impairment losses, (v) extraordinary non-cash losses incurred other than in the ordinary course of business, (vi) nonrecurring extraordinary non-cash restructuring charges, (vii) [reserved] , (viii) cash expenses incurred during fiscal years 2013 through 2015 in connection with facilities consolidation, restructuring and integration, discontinuance of operations, work force reduction, sale or abandonment of assets other than inventory, and professional and other fees incurred in connection with the acquired business or the restructuring of the company’s Europe, India, Middle East and Africa operations, not to exceed (x) $39.8 million for the period beginning with the fiscal quarter ending November 30, 2013 through and including the fiscal quarter ending May 31, 2014 and (y) $20.0 million for the period beginning with the fiscal quarter ending August 30, 2014 through and including the fiscal quarter ending November 28, 2015, (ix) cash expenses related to the Tonsan acquisition for advisory services and for arranging financing for the acquired business (including the non-cash write-off of deferred financing costs and any loss or expense on foreign exchange transactions intended to hedge the purchase price for the acquired business) with cash expenses not to exceed $10.0 million, minus extraordinary non-cash gains incurred other than in the ordinary course of business. For the Total Indebtedness / TTM EBITDA ratio, TTM EBITDA is adjusted for the pro forma results from Material Acquisitions and Material Divestitures as if the acquisition or divestiture occurred at the beginning of the calculation period. Additional detail is provided in the Form 8-K dated October 31, 2014.

● Pursuant to the Credit Agreement dated October 31, 2014, the company elected to increase the Total Indebtedness / TTM EBITDA ratio to a maximum of 3.75 to 1.00 for four quarters beginning with first fiscal quarter ending February 28, 2015. The maximum ratio returned to 3.50 to 1.00 in the first fiscal quarter 2016.

We believe we have the ability to meet all of our contractual obligations and commitments in fiscal 2016.

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Selected Metrics of Liquidity

Key metrics we monitor are net working capital as a percent of annualized net revenue, trade accounts receivable days sales outstanding (DSO), inventory days on hand, free cash flow and debt capitalization ratio.

	August 27, 2016			August 29, 2015
Net working capital as a percentage of annualized net revenue1		21.7	%		20.9	%
Accounts receivable DSO (in days)2		60			59
Inventory days on hand3		67			68
Free cash flow (in millions)4	$	75.8		$	85.2
Total debt to total capital ratio5		42.6	%		44.6	%

¹ Current quarter net working capital (trade receivables, net of allowance for doubtful accounts plus inventory minus trade payables) divided by annualized net revenue (current quarter multiplied by four).

² Trade receivables net of the allowance for doubtful accounts at the balance sheet date multiplied by 56 (8 weeks) and divided by the net revenue for the last 2 months of the quarter.

³ Total inventory multiplied by 56 and divided by cost of sales (excluding delivery costs) for the last 2 months of the quarter.

⁴ Year-to-date net cash provided by (used in) operations from continuing operations, less purchased property, plant and equipment and dividends paid.

⁵ Total debt divided by (total debt plus total stockholders’ equity).

Another key metric is the return on invested capital, or ROIC. The calculation is represented by total return divided by total invested capital.

● Total return is defined as: gross profit less selling, general and administrative expenses, less taxes at the effective tax rate plus income from equity method investments. Total return is calculated using trailing 12 month information.

● Total invested capital is defined as the sum of notes payable, current maturities of long-term debt, long-term debt, redeemable non-controlling interest and total equity.

We believe ROIC provides a true measure of return on capital invested and is focused on the long term. The following table shows the ROIC calculations based on the definition above:

($ in millions)	Trailing 12 months as of August 27, 2016			Trailing 12 months as of August 29, 2015
Gross profit	$	598.0		$	544.4
Selling, general and administrative expenses		(405.0	)		(387.2	)
Income taxes at effective rate		(68.9	)		(55.0	)
Income from equity method investments		6.9			4.1
Total return	$	131.0		$	106.3
Total invested capital	$	1,672.8		$	1,636.2
Return on invested capital		7.8	%		6.5	%

Summary of Cash Flows

Cash Flows from Operating Activities:

	Nine Months Ended
($ in millions)	August 27, 2016		August 29, 2015
Net cash provided by operating activities	$	145.9	$	153.0

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Net income including non-controlling interests was $85.2 million in the first nine months of 2016 compared to $62.0 million in the first nine months of 2015. Depreciation and amortization expense totaled $57.2 million in the first nine months of 2016 compared to $55.7 million in the first nine months of 2015. Accrued compensation was a use of cash of $6.7 million in 2016 compared to a use of cash of $4.6 million in 2015. Other accrued expenses was a use of cash of $4.9 million in the first nine months of 2016 compared to a source of cash of $4.7 million in the first nine months of 2015. Other liabilities was a use of cash of $9.9 million in the first nine months of 2016 compared to a use of cash of $3.3 million in the first nine months of 2015.

Changes in net working capital (trade receivables, inventory and trade payables) accounted for a source of cash of $18.0 million compared to a source of cash of $6.5 million in 2015. The table below provides the cash flow impact due to changes in the components of net working capital:

	Nine Months Ended
($ in millions)	August 27, 2016			August 29, 2015
Trade receivables, net	$	25.6		$	15.9
Inventory		(6.2	)		(20.0	)
Trade payables		(1.4	)		10.6
Total cash flow impact	$	18.0		$	6.5

● Trade Receivables, net – Trade receivables, net was a source of cash of $25.6 million in 2016 compared to a source of cash of $15.9 million in 2015. The higher source of cash in 2016 compared to 2015 was due to lower revenues. The DSO were 60 days at August 27, 2016 and 59 days at August 29, 2015.

● Inventory – Inventory was a use of cash of $6.2 million and $20.0 million in 2016 and 2015, respectively. The lower use of cash in 2016 is related to lower raw material costs and lower seasonal build of inventory in 2016, partially offset by acquisitions. Inventory days on hand were 67 days as of August 27, 2016 and 68 days as of August 29, 2015.

● Trade Payables – For the first nine months of 2016 trade payables was a use of cash of $1.4 million compared to a source of cash of $10.6 million in 2015. The use of cash in 2016 compared to the source of cash in 2015 is primarily related to lower purchases of inventory and property, plant and equipment.

Cash Flows from Investing Activities:

	Nine Months Ended
($ in millions)	August 27, 2016			August 29, 2015
Net cash used in investing activities	$	(96.5	)	$	(264.7	)

Purchases of property, plant and equipment were $49.6 million in the first nine months of 2016 as compared to $48.6 million for the same period of 2015. The decrease in 2016 compared to 2015 was primarily related to lower capital expenditures for the Business Integration Project in 2016 offset by the building of a new plant in Indonesia and the facility upgrade and expansion project in the Construction Products segment. We acquired Advanced Adhesives for $10.4 million in the second quarter of 2016 and Cyberbond for $42.5 million in the third quarter of 2016. In the first quarter of 2015, we acquired Tonsan Adhesive, Inc. for $215.9 million and Continental Products Limited for $1.6 million.

Cash Flows from Financing Activities:

	Nine Months Ended
($ in millions)	August 27, 2016			August 29, 2015
Net cash provided by (used in) financing activities	$	(31.5	)	$	131.7

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We did not have any proceeds from long-term debt in the first nine months of 2016 compared to $357.0 million in the first nine months of 2015. Included in the 2015 proceeds of $357.0 million is $300.0 million from our October 31, 2014 term loan, drawn in conjunction with the acquisition of Tonsan. Repayments of long-term debt were $16.9 million in the first nine months of 2016 and $207.5 million in the first nine months of 2015. Included in the $207.5 million of repayments in 2015 were $70.0 million from our October 31, 2014 term loan used to repay outstanding balances under the revolving credit facility. Net proceeds from notes payable were $6.6 million in 2016 compared to net payments of $2.1 million in 2015. Cash dividends paid were $20.6 million in 2016 compared to $19.2 million in 2015. Repurchases of common stock were $11.9 million in the first nine months of 2016 compared to $2.2 million in the first nine months of 2015. The $11.9 million common stock repurchases in 2016 includes $4.2 million from our 2010 share repurchase program.

Forward-Looking Statements and Risk Factors

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. In this Quarterly Report on Form 10-Q, we discuss expectations regarding our future performance which include anticipated financial performance, savings from restructuring and process initiatives, global economic conditions, liquidity requirements, the impact of litigation and environmental matters, the effect of new accounting pronouncements and one-time accounting charges and credits, and similar matters. This Quarterly Report on Form 10-Q contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of words like "plan," "expect," "aim," "believe," "project," "anticipate," "intend," "estimate," "will," "should," "could" (including the negative or variations thereof) and other expressions that indicate future events and trends. These plans and expectations are based upon certain underlying assumptions, including those mentioned with the specific statements. Such assumptions are in turn based upon internal estimates and analyses of current market conditions and trends, our plans and strategies, economic conditions and other factors. These plans and expectations and the assumptions underlying them are necessarily subject to risks and uncertainties inherent in projecting future conditions and results. Actual results could differ materially from expectations expressed in the forward-looking statements if one or more of the underlying assumptions and expectations proves to be inaccurate or is unrealized. In addition to the factors described in this report, Part II, Item 1A. Risk Factors in this report and Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year ended November 28, 2015, identify some of the important factors that could cause our actual results to differ materially from those in any such forward-looking statements. This list of important factors does not include all such factors nor necessarily present them in order of importance. In order to comply with the terms of the safe harbor, we have identified these important factors which could affect our financial performance and could cause our actual results for future periods to differ materially from the anticipated results or other expectations expressed in the forward-looking statements. Additionally, the variety of products sold by us and the regions where we do business makes it difficult to determine with certainty the increases or decreases in revenues resulting from changes in the volume of products sold, currency impact, changes in geographic and product mix and selling prices. Our best estimates of these changes as well as changes in other factors have been included. References to volume changes include volume, product mix and delivery charges, combined. These factors should be considered, together with any similar risk factors or other cautionary language, which may be made elsewhere in this Quarterly Report on Form 10-Q.

We may refer to Part II, Item 1A. Risk Factors and this section of the Form 10-Q to identify risk factors related to other forward looking statements made in oral presentations, including investor conferences and/or webcasts open to the public.

This disclosure, including that under "Forward-Looking Statements and Risk Factors," and other forward-looking statements and related disclosures made by us in this report and elsewhere from time to time, represents our best judgment as of the date the information is given. We do not undertake responsibility for updating any of such information, whether as a result of new information, future events, or otherwise, except as required by law. Investors are advised, however, to consult any further public company disclosures (such as in filings with the Securities and Exchange Commission or in company press releases) on related subjects.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Market Risk 

We are exposed to various market risks, including changes in interest rates, foreign currency rates and prices of raw materials. Market risk is the potential loss arising from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates and cost of raw materials.

Our financial performance may be negatively affected by the unfavorable economic conditions. Recessionary economic conditions may have an adverse impact on our sales volumes, pricing levels and profitability. As domestic and international economic conditions change, trends in discretionary consumer spending also become unpredictable and subject to reductions due to uncertainties about the future. A general reduction in consumer discretionary spending due to recession in the domestic and international economies, or uncertainties regarding future economic prospects, could have a material adverse effect on our results of operations.

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Interest Rate Risk 

Exposure to changes in interest rates result primarily from borrowing activities used to fund operations. Committed floating rate credit facilities are used to fund a portion of operations. We believe that probable near-term changes in interest rates would not materially affect financial condition, results of operations or cash flows. The annual impact on interest expense of a one-percentage point interest rate change on the outstanding balance of our variable rate debt as of August 27, 2016 would be approximately $2.7 million or $0.05 per diluted share.

Foreign Exchange Risk 

As a result of being a global enterprise, there is exposure to market risks from changes in foreign currency exchange rates, which may adversely affect operating results and financial condition. We enter into cross border transactions through importing and exporting raw materials, our products and other goods to and from different countries and locations. These transactions generate foreign exchange risk as they create assets, liabilities and cash flows in currencies other than the functional currency. This also applies to services provided and other cross border agreements among subsidiaries.

Approximately 58 percent of net revenue was generated outside of the United States for the first nine months of 2016. Principal foreign currency exposures relate to the Euro, British pound sterling, Canadian dollar, Chinese renminbi, Japanese yen, Australian dollar, Argentine peso, Brazilian real, Colombian peso, Mexican peso, Turkish lira, Egyptian pound, Indian rupee, Indonesian rupiah and Malaysian ringgit.

Our objective is to match our non-functional currency product costs with non-functional currency revenues to create a natural hedge and minimize foreign exchange impacts on our gross margins. In situations where these non-functional costs and revenues cannot be matched or changes in our functional currency selling price are unable to offset the impact of the foreign currency rate change, the change will impact our profitability. Based on the financial results of the first nine months of 2016, a hypothetical 1 percent change in our cost of sales due to foreign currency rate changes would have resulted in a change in net income of approximately $3.4 million or $0.07 per diluted share.

In addition, we strive to balance, where possible, non-functional currency denominated assets to non-functional currency denominated liabilities through normal operating and financing activities to have a natural hedge and minimize foreign exchange impacts. When deemed appropriate, we enter into derivative instruments to further mitigate foreign currency exchange risks. We do not enter into any speculative positions with regard to derivative instruments. Based on the financial results of the first nine months of 2016, and foreign currency balance sheet positions as of August 27, 2016, a hypothetical overall 10 percent change in the U.S. dollar would have resulted in a change in net income of approximately $5.0 million or $0.10 per diluted share.

In addition, the translation of financial results from non U.S. dollar functional entities into U.S. dollars for purposes of reporting consolidated financial results may be adversely impacted by changes in foreign currency exchange rates. The Company does not take measures to mitigate these translation effects.

Raw Materials 

The principal raw materials used to manufacture products include tackifying resins, polymers, synthetic rubbers, vinyl acetate monomer and plasticizers. Many of these raw materials are petroleum and natural gas based derivatives that are manufactured on a global basis. As such, the price of these raw materials fluctuate based upon changes in the cost of petroleum and natural gas, supply and demand and changes in foreign currency exchange rates.

We generally avoid single source supplier arrangements for raw materials. While alternate supplies of most key raw materials are available, unplanned supplier production outages may lead to strained supply-demand situations for several key raw materials such as tackifyers and base polymers. 

For the nine months ended August 27, 2016, our single largest expenditure was the purchase of raw materials. Our objective is to purchase raw materials that meet both our quality standards and production needs at the lowest total cost. Most raw materials are purchased on the open market or under contracts that limit the frequency but not the magnitude of price increases. In some cases, however, the risk of raw material price changes is managed by strategic sourcing agreements which limit price increases to increases in supplier feedstock costs, while requiring decreases as feedstock costs decline. The leverage of having substitute raw materials approved for use wherever possible is used to minimize the impact of possible price increases.

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Based on the financial results of the first nine months of 2016, a hypothetical 1 percent change in our raw material costs would have resulted in a change in net income of approximately $5.6 million or $0.11 per diluted share.

Item 4. Controls and Procedures

Controls and Procedures

We conducted an evaluation, under the supervision and with the participation of our president and chief executive officer and executive vice president, chief financial officer, of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (Exchange Act)) as of August 27, 2016.  Our president and chief executive officer and executive vice president, chief financial officer concluded that, as a result of the material weakness in internal control over financial reporting identified and described in Item 9A of our Annual Report on Form 10-K for the fiscal year ended November 28, 2015, our disclosure controls and procedures were not effective as of August 27, 2016.

For purposes of Rule 13a-15(e), the term disclosure controls and procedures means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act (15 U.S.C. 78a et seq.) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its president and chief executive officer and executive vice president, chief financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Remediation Plan for Material Weakness in Internal Control over Financial Reporting

We are in the process of improving our policies and procedures relating to the recognition and measurement of business acquisitions and designing more effective controls to remediate the material weakness described in Item 9A of our Annual Report on Form 10-K for the fiscal year ended November 28, 2015. Management plans to enhance the controls related to business combinations by a) supplementing its resources, b) enhancing the design and documentation of management review controls, and c) improving the documentation of internal control procedures.

We believe these measures will strengthen our internal controls over financial reporting and will prevent a reoccurrence of the material weakness described in Item 9A of our Annual Report on Form 10-K for the fiscal year ended November 28, 2015.

Changes in Internal Control over Financial Reporting

Other than the actions taken under Remediation Plan for Material Weakness in Internal Control over Financial Reporting discussed above, there were no changes in our internal control over financial reporting during our most recently completed fiscal quarter that have materially affected or are reasonably likely to materially affect our internal control over financial reporting, as defined in Rule 13a-15(f) under the Exchange Act.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Environmental Matters 

From time to time, we become aware of compliance matters relating to, or receive notices from, federal, state or local entities regarding possible or alleged violations of environmental, health or safety laws and regulations. We review the circumstances of each individual site, considering the number of parties involved, the level of potential liability or our contribution relative to the other parties, the nature and magnitude of the hazardous substances involved, the method and extent of remediation, the estimated legal and consulting expense with respect to each site and the time period over which any costs would likely be incurred. Also, from time to time, we are identified as a potentially responsible party (PRP) under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) and/or similar state laws that impose liability for costs relating to the clean up of contamination resulting from past spills, disposal or other release of hazardous substances. We are also subject to similar laws in some of the countries where current and former facilities are located. Our environmental, health and safety department monitors compliance with applicable laws on a global basis. To the extent we can reasonably estimate the amount of our probable liabilities for environmental matters, we establish a financial provision. 

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Currently we are involved in various environmental investigations, clean up activities and administrative proceedings and lawsuits. In particular, we are currently deemed a PRP in conjunction with numerous other parties, in a number of government enforcement actions associated with landfills and/or hazardous waste sites. As a PRP, we may be required to pay a share of the costs of investigation and clean up of these sites. In addition, we are engaged in environmental remediation and monitoring efforts at a number of current and former operating facilities. While uncertainties exist with respect to the amounts and timing of the ultimate environmental liabilities, based on currently available information, we have concluded that these matters, individually or in the aggregate, will not have a material adverse effect on our results of operations, financial condition or cash flow. However, adverse developments and/or periodic settlements could negatively impact the results of operations or cash flows in one or more future periods.

Other Legal Proceedings 

From time to time and in the ordinary course of business, we are a party to, or a target of, lawsuits, claims, investigations and proceedings, including product liability, personal injury, contract, patent and intellectual property, environmental, health and safety, tax and employment matters. While we are unable to predict the outcome of these matters, we have concluded, based upon currently available information, that the ultimate resolution of any pending matter, individually or in the aggregate, including the asbestos litigation described in the following paragraphs, will not have a material adverse effect on our results of operations, financial condition or cash flow.

We have been named as a defendant in lawsuits in which plaintiffs have alleged injury due to products containing asbestos manufactured more than 30 years ago. The plaintiffs generally bring these lawsuits against multiple defendants and seek damages (both actual and punitive) in very large amounts. In many cases, plaintiffs are unable to demonstrate that they have suffered any compensable injuries or that the injuries suffered were the result of exposure to products manufactured by us. We are typically dismissed as a defendant in such cases without payment. If the plaintiff presents evidence indicating that compensable injury occurred as a result of exposure to our products, the case is generally settled for an amount that reflects the seriousness of the injury, the length, intensity and character of exposure to products containing asbestos, the number and solvency of other defendants in the case, and the jurisdiction in which the case has been brought.

A significant portion of the defense costs and settlements in asbestos-related litigation is paid by third parties, including indemnification pursuant to the provisions of a 1976 agreement under which we acquired a business from a third party. Currently, this third party is defending and paying settlement amounts, under a reservation of rights, in most of the asbestos cases tendered to the third party.

In addition to the indemnification arrangements with third parties, we have insurance policies that generally provide coverage for asbestos liabilities (including defense costs).  Historically, insurers have paid a significant portion of our defense costs and settlements in asbestos-related litigation. However, certain of our insurers are insolvent.  We have entered into cost-sharing agreements with our insurers that provide for the allocation of defense costs and settlements and judgments in asbestos-related lawsuits.  These agreements require, among other things, that we fund a share of settlements and judgments allocable to years in which the responsible insurer is insolvent.

A summary of the number of and settlement amounts for asbestos-related lawsuits and claims is as follows:

	Nine Months Ended				3 Years Ended
($ in millions)	August 27, 2016		August 29, 2015		November 28, 2015
Lawsuits and claims settled		9		6		25
Settlement amounts	$	1.0	$	0.5	$	2.1
Insurance payments received or expected to be received	$	0.6	$	0.4	$	1.6

We do not believe that it would be meaningful to disclose the aggregate number of asbestos-related lawsuits filed against us because relatively few of these lawsuits are known to involve exposure to asbestos-containing products that we manufactured. Rather, we believe it is more meaningful to disclose the number of lawsuits that are settled and result in a payment to the plaintiff. To the extent we can reasonably estimate the amount of our probable liabilities for pending asbestos-related claims, we establish a financial provision and a corresponding receivable for insurance recoveries. 

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Based on currently available information, we have concluded that the resolution of any pending matter, including asbestos-related litigation, individually or in the aggregate, will not have a material adverse effect on our results of operations, financial condition or cash flow.  However, adverse developments and/or periodic settlements could negatively impact the results of operations or cash flows in one or more future periods.

Item 1A. Risk Factors

This Form 10-Q contains forward-looking statements concerning our future programs, products, expenses, revenue, liquidity and cash needs as well as our plans and strategies. These forward-looking statements are based on current expectations and we assume no obligation to update this information. Numerous factors could cause actual results to differ significantly from the results described in these forward-looking statements, including the risk factors identified under Part I, Item 1A. Risk Factors contained in our Annual Report on Form 10-K for the fiscal year ended November 28, 2015. There have been no material changes in the risk factors disclosed by us under Part I, Item 1A. Risk Factors contained in the Annual Report on Form 10-K for the fiscal year ended November 28, 2015.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

Information on our purchases of equity securities during the third quarter follows:

Period	(a) Total Number of Shares Purchased1		(b) Average Price Paid per Share		(c) Total Number of Shares Purchased as Part of a Publicly Announced Plan or Program		(d) Maximum Approximate Dollar Value of Shares that may yet be Purchased Under the Plan or Program (millions)
May 29, 2016 - July 2, 2016		125,000	$	42.61		125,000	$	40.6
July 3, 2016 - July 30, 2016		189	$	44.59		-	$	40.6
July 31, 2016 - August 27, 2016		-	$	-		-	$	40.6

¹   The total number of shares purchased includes 1,106 shares withheld to satisfy the employees’ withholding taxes upon vesting of restricted stock.

Repurchases of common stock are made to support our stock-based employee compensation plans and for other corporate purposes. Upon vesting of restricted stock awarded to employees, shares are withheld to cover the employees’ minimum withholding taxes.

In 2010, the Board of Directors authorized a share repurchase program of up to $100.0 million of our outstanding common shares. Under the program, we are authorized to repurchase shares for cash on the open market, from time to time, in privately negotiated transactions or block transactions, or through an accelerated repurchase agreement. The timing of such repurchases is dependent on price, market conditions and applicable regulatory requirements. Upon repurchase of the shares, we reduced our common stock for the par value of the shares with the excess being applied against additional paid-in capital.

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Item 6. Exhibits

31.1 Form of 302 Certification –James J. Owens

31.2 Form of 302 Certification –John J. Corkrean

32.1 Form of 906 Certification –James J. Owens

32.2 Form of 906 Certification –John J. Corkrean

101 The following materials from the H.B. Fuller Company Quarterly Report on Form 10-Q for the quarter ended August 27, 2016 formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Total Equity, (v) the Condensed Consolidated Statements of Cash Flows and (vi) the Notes to Condensed Consolidated Financial Statements.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	H.B. Fuller Company
Dated: September 23, 2016		/s/ John J. Corkrean
		John J. Corkrean
		Executive Vice President, Chief Financial Officer

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Exhibit Index

Exhibits

31.1 Form of 302 Certification – James J. Owens

31.2 Form of 302 Certification – John J. Corkrean

32.1 Form of 906 Certification –James J. Owens

32.2 Form of 906 Certification –John J. Corkrean

101 The following materials from the H.B. Fuller Company Quarterly Report on Form 10-Q for the quarter ended August 27, 2016 formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Total Equity, (v) the Condensed Consolidated Statements of Cash Flows and (vi) the Notes to Condensed Consolidated Financial Statements.

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EX-31.1

Exhibit 31.1

CERTIFICATION

I, James J. Owens, certify that:

1.     I have reviewed this report on Form 10-Q of H.B. Fuller Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-115(e) and 15d-115(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d–15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: September 23, 2016

/s/ James J. Owens

James J. Owens

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, John J. Corkrean, certify that:

1.     I have reviewed this report on Form 10-Q of H.B. Fuller Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-115(e) and 15d-115(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d–15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: September 23, 2016

/s/ John J. Corkrean

John J. Corkrean

Executive Vice President, Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION

I, James J. Owens, in connection with the Quarterly Report of H.B. Fuller Company on Form 10-Q for the quarter ended August 27, 2016 (the “Report”), hereby certify that:

(a) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)), and

(b) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of H.B. Fuller Company.

Date: September 23, 2016

/s/ James J. Owens

James J. Owens

President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION

I, John J. Corkrean, in connection with the Quarterly Report of H.B. Fuller Company on Form 10-Q for the quarter ended August 27, 2016 (the “Report”), hereby certify that:

(a) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)), and

(b) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of H.B. Fuller Company.

Date: September 23, 2016

/s/ John J. Corkrean

John J. Corkrean

Executive Vice President, Chief Financial Officer

XML

Document And Entity Information - shares	9 Months Ended
	Aug. 27, 2016	Sep. 16, 2016
Document Information [Line Items]
Entity Registrant Name	FULLER H B CO
Entity Central Index Key	0000039368
Trading Symbol	ful
Current Fiscal Year End Date	--12-03
Entity Filer Category	Large Accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	Yes
Entity Common Stock, Shares Outstanding (in shares)		50,342,974
Document Type	10-Q
Document Period End Date	Aug. 27, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands		3 Months Ended		9 Months Ended
		Aug. 27, 2016	Aug. 29, 2015	Aug. 27, 2016	Aug. 29, 2015
Net revenue		$ 512,858	$ 524,133	$ 1,519,698	$ 1,535,556
Cost of sales		(366,737)	(377,293)	(1,077,716)	(1,123,573)
Gross profit		146,121	146,840	441,982	411,983
Selling, general and administrative expenses		(97,692)	(98,297)	(301,143)	(293,712)
Special charges, net		2,807	(1,297)	2,024	(4,592)
Other income (expense), net		956	1,040	7,603	1,246
Interest expense		(6,809)	(6,448)	(19,714)	(18,765)
Income from continuing operations before income taxes and income from equity method investments		43,471	39,758	115,546	93,668
Income taxes		(12,513)	(14,372)	(35,563)	(34,528)
Income from equity method investments		1,840	1,500	5,172	4,157
Income from continuing operations		32,798	26,886	85,155	63,297
Loss from discontinued operations, net of tax					(1,300)
Net income including non-controlling interests		32,798	26,886	85,155	61,997
Net income attributable to non-controlling interests		(53)	(79)	(161)	(308)
Net income attributable to H.B. Fuller		$ 32,745	$ 26,807	$ 84,994	$ 61,689
Earnings per share attributable to H.B. Fuller common stockholders:
Income from continuing operations (in dollars per share)		$ 0.65	$ 0.53	$ 1.70	$ 1.25
Loss from discontinued operations (in dollars per share)					(0.03)
Basic (in dollars per share)		0.65	0.53	1.70	1.23
Income from continuing operations (in dollars per share)	[1]	0.64	0.52	1.66	1.22
Loss from discontinued operations (in dollars per share)	[1]				(0.03)
Diluted (in dollars per share)	[1]	$ 0.64	$ 0.52	$ 1.66	$ 1.20
Weighted-average common shares outstanding:
Basic (in shares)		50,261	50,421	50,122	50,318
Diluted (in shares)		51,453	51,530	51,234	51,460
Dividends declared per common share (in dollars per share)		$ 0.14	$ 0.13	$ 0.41	$ 0.38

[1] Income per share may not add due to rounding amounts.

XML

Condensed Consolidated Statements of Comprehesive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Aug. 27, 2016	Aug. 29, 2015	Aug. 27, 2016	Aug. 29, 2015
Net income including non-controlling interests	$ 32,798	$ 26,886	$ 85,155	$ 61,997
Other comprehensive income (loss)
Foreign currency translation	3,368	(10,719)	3,860	(48,639)
Defined benefit pension plans adjustment, net of tax	1,677	1,527	5,032	4,582
Interest rate swaps, net of tax	10	10	30	30
Cash-flow hedges, net of tax	35		(156)	(25)
Other comprehensive income (loss)	5,090	(9,182)	8,766	(44,052)
Comprehensive income	37,888	17,704	93,921	17,945
Less: Comprehensive income (loss) attributable to non-controlling interests	53	(19)	161	294
Comprehensive income attributable to H.B. Fuller	$ 37,835	$ 17,723	$ 93,760	$ 17,651

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Aug. 27, 2016	Nov. 28, 2015
Current assets:
Cash and cash equivalents	$ 133,102	$ 119,168
Trade receivables (net of allowances of $12,814 and $11,893, as of August 27, 2016 and November 28, 2015, respectively)	344,305	364,704
Inventories	261,363	248,504
Other current assets	64,992	68,675
Total current assets	803,762	801,051
Property, plant and equipment	1,156,171	1,111,987
Accumulated depreciation	(638,068)	(599,127)
Property, plant and equipment, net	518,103	512,860
Goodwill	393,251	354,204
Other intangibles, net	201,164	212,993
Other assets	164,113	161,144
Total assets	2,080,393	2,042,252
Current liabilities:
Notes payable	36,818	30,757
Current maturities of long-term debt	78,581	22,500
Trade payables	160,836	177,864
Accrued compensation	46,425	52,079
Income taxes payable	7,815	8,970
Other accrued expenses	53,250	57,355
Total current liabilities	383,725	349,525
Long-term debt, excluding current maturities	596,171	669,606
Accrued pension liabilities	68,067	76,324
Other liabilities	71,174	69,272
Total liabilities	1,119,137	1,164,727
Commitments and contingencies
Redeemable non-controlling interest	4,412	4,199
H.B. Fuller stockholders' equity:
Preferred stock (no shares outstanding) shares authorized – 10,045,900
Common stock, par value $1.00 per share, shares authorized – 160,000,000, shares outstanding – 50,331,880 and 50,074,310, as of August 27, 2016 and November 28, 2015, respectively	50,332	50,074
Additional paid-in capital	65,777	55,522
Retained earnings	1,058,847	994,608
Accumulated other comprehensive loss	(218,518)	(227,284)
Total H.B. Fuller stockholders' equity	956,438	872,920
Non-controlling interests	406	406
Total equity	956,844	873,326
Total liabilities, redeemable non-controlling interest and total equity	$ 2,080,393	$ 2,042,252

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Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Aug. 27, 2016	Nov. 28, 2015
Allowance for doubtful accounts	$ 12,418	$ 11,893
Preferred stock, shares authorized (in shares)	10,045,900	10,045,900
Preferred stock, shares outstanding (in shares)	0	0

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Condensed Consolidated Statements of Total Equity (Unaudited) - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Noncontrolling Interest [Member]	Total
Balance at Nov. 29, 2014	$ 50,311	$ 53,269	$ 933,819	$ (147,352)	$ 403	$ 890,450
Comprehensive income (loss)			86,680	(79,932)	400	7,148
Dividends			(25,891)			(25,891)
Stock option exercises	234	4,397				4,631
Share-based compensation plans other, net	83	15,159				15,242
Tax benefit on share-based compensation plans		1,433				1,433
Repurchases of common stock	(554)	(18,736)				(19,290)
Non-controlling interest assumed					14,197	14,197
Recognition of non-controlling interest redemption liability					(11,773)	(11,773)
Purchase of non-controlling interest					(2,424)	(2,424)
Non-controlling interest					(76)	(76)
Redeemable non-controlling interest					(321)	(321)
Balance at Nov. 28, 2015	50,074	55,522	994,608	(227,284)	406	873,326
Comprehensive income (loss)			84,994	8,766	161	93,921
Dividends			(20,755)			(20,755)
Stock option exercises	465	9,295				9,760
Share-based compensation plans other, net	111	11,081				11,192
Tax benefit on share-based compensation plans		1,462				1,462
Repurchases of common stock	(318)	(11,583)				(11,901)
Redeemable non-controlling interest					(161)	(161)
Balance at Aug. 27, 2016	$ 50,332	$ 65,777	$ 1,058,847	$ (218,518)	$ 406	$ 956,844

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Aug. 27, 2016	Aug. 29, 2015
Cash flows from operating activities:
Net income including non-controlling interests	$ 85,155	$ 61,997
Loss from discontinued operations, net of tax		1,300
Adjustments to reconcile net income including non-controlling interests to net cash provided by operating activities:
Depreciation	36,730	35,696
Amortization	20,509	20,046
Deferred income taxes	3,785	4,775
Income from equity method investments	(5,172)	(4,157)
(Gain) loss on sale of assets	(2,794)	327
Share-based compensation	9,469	10,325
Excess tax benefit from share-based compensation	(1,462)	(1,321)
Non-cash charge for the sale of inventories revalued at the date of acquisition	528	2,416
Change in assets and liabilities, net of effects of acquisitions:
Trade receivables, net	25,646	15,860
Inventories	(6,165)	(19,955)
Other assets	1,790	2,241
Trade payables	(1,365)	10,557
Accrued compensation	(6,715)	(4,617)
Other accrued expenses	(4,858)	4,705
Income taxes payable	(1,415)	1,714
Accrued / prepaid pensions	(2,072)	(6,565)
Other liabilities	(9,889)	(3,262)
Other	4,199	20,962
Net cash provided by operating activities	145,904	153,044
Cash flows from investing activities:
Purchased property, plant and equipment	(49,569)	(48,638)
Purchased businesses, net of cash acquired	(51,298)	(217,572)
Proceeds from sale of property, plant and equipment	4,403	1,529
Net cash used in investing activities	(96,464)	(264,681)
Cash flows from financing activities:
Proceeds from long-term debt		357,000
Repayment of long-term debt	(16,875)	(207,500)
Net proceeds from notes payable	6,639	(2,114)
Dividends paid	(20,570)	(19,174)
Proceeds from stock options exercised	9,760	4,342
Excess tax benefit from share-based compensation	1,462	1,321
Repurchases of common stock	(11,901)	(2,214)
Net cash provided by (used in) financing activities	(31,485)	131,661
Effect of exchange rate changes	(4,021)	(6,478)
Net change in cash and cash equivalents	13,934	13,546
Cash used in operating activities of discontinued operations		(5,294)
Net change in cash and cash equivalents	13,934	8,252
Cash and cash equivalents at beginning of period	119,168	77,569
Cash and cash equivalents at end of period	133,102	85,821
Supplemental disclosure of cash flow information:
Dividends paid with company stock	185	153
Cash paid for interest, net of amount capitalized of $556 and $91 for the periods ended August 27, 2016 and August 29, 2015, respectively	20,436	19,735
Cash paid for income taxes, net of refunds	$ 33,428	$ 23,748

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Condensed Consolidated Statements of Cash Flows (Unaudited) (Parentheticals) - USD ($) $ in Thousands	9 Months Ended
	Aug. 27, 2016	Aug. 29, 2015
Capitalized interest	$ 556	$ 91

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Note 1 - Basis of Presentation

9 Months Ended

Aug. 27, 2016

Notes to Financial Statements

Nature of Operations [Text Block]

Note

1

:

Basis of Presentation

The accompanying unaudited interim Condensed Consolidated Financial Statements of H.B. Fuller Company and Subsidiaries have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information necessary for a fair presentation of results of operations, comprehensive income, financial position, and cash flows in conformity with U.S. generally accepted accounting principles. In our opinion, the unaudited interim Condensed Consolidated Financial Statements reflect all adjustments of a normal recurring nature considered necessary for the fair presentation of the results for the periods presented. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures at the date of the financial statements and during the reporting period. Actual results could differ from these estimates. These unaudited interim Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in our Annual Report on Form 10-K for the year ended November 28, 2015 as filed with the Securities and Exchange Commission.

As of the beginning of the first quarter ending February 27, 2016, we created a new global operating segment named Engineering Adhesives, which includes the electronics, automotive and Tonsan and Cyberbond businesses from around the world. We also began reporting our Construction Products business on a global basis by combining our Europe, India, Middle East and Africa (EIMEA) and Asia Pacific construction businesses with our Construction Products operating segment. We now have five reportable segments: Americas Adhesives, EIMEA, Asia Pacific, Construction Products and Engineering Adhesives.

New Accounting Pronouncements

In August 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-15,

Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force)

.

This ASU requires changes in the presentation of certain items including but not limited to debt prepayment or debt extinguishment costs; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies and distributions received from equity method investees. Our effective date for adoption of this guidance is our fiscal year beginning December 2, 2018

.

We are currently evaluating the effect that this guidance will have on our Consolidated Financial Statements.

In June 2016, the FASB issued ASU No. 2016-13

, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Statements.

This ASU requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. Our effective date for adoption of this guidance is our fiscal year beginning November 29, 2020

.

We are currently evaluating the effect that this guidance will have on our Consolidated Financial Statements.

In March 2016, the FASB issued ASU No. 2016-09,

Compensation - Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting.

This ASU provides simplification in the accounting for share-based payment transactions including the accounting for income taxes, forfeitures, statutory tax withholding requirements and classification in the statement of cash flows.

Our effective date for adoption of this guidance is our fiscal year beginning December 3, 2017

.

We are currently evaluating the effect that this guidance will have on our Consolidated Financial Statements.

In March 2016, the FASB issued ASU No. 2016-08,

Revenue from Contracts with Customers (Topic 606), Principal

v

ersus Agent Considerations (Reporting Revenue Gross versus Net)

.  This ASU provides guidance on recording revenue on a gross basis versus a net basis based on the determination of whether an entity is a principal or an agent when another party is involved in providing goods or services to a customer.  The amendments in this ASU affect the guidance in ASU No. 2014-09 and are effective in the same timeframe as ASU No. 2014-09 as discussed below.

In February 2016, the FASB issued ASU No. 2016-05,

Derivatives and Hedging (Topic 815).

The amendments in this guidance clarify that a change in the counterparty to a derivative instrument that has been designated as a hedging instrument under Topic 815 does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. Our effective date for adoption of this guidance is our fiscal year beginning December 4, 2016

.

We have evaluated the effect that this guidance will have on our Consolidated Financial Statements and related disclosures and determined it will not have a material impact.

In February 2016, the FASB issued ASU No. 2016-02,

Leases (Subtopic 842).

This guidance changes accounting for leases and requires lessees to recognize the assets and liabilities arising from all leases, including those classified as operating leases under previous accounting guidance, on the balance sheet and requires disclosure of key information about leasing arrangements to increase transparency and comparability among organizations. Our effective date for adoption of this guidance is our fiscal year beginning December 1, 2019 with early adoption permitted

. The new guidance must be adopted using a modified retrospective transition approach, and provides for certain practical expedients. We are currently evaluating the impact that the new guidance will have on our Consolidated Financial Statements.

In June 2014, the FASB issued ASU No. 2014-12,

Compensation - Stock Compensation (Topic 718), Accounting for

Share-Based Payments When the Terms of an Award That a Performance Target Could Be Achieved after the Requisite Service Period,

which requires a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award and compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. Our effective date for adoption of this guidance is our fiscal year beginning December 4, 2016, however w

e elected to early adopt this guidance as of our first quarter ended February 27, 2016. The adoption of

this guidance did not have a material impact on our Consolidated Financial Statements.

In May 2014, the FASB issued ASU No. 2014-09,

Revenue from Contracts with Customers (Topic 606),

which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This guidance will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017 (as stated in ASU No. 2015-14 which defers the effective date and was issued in August 2015) and is now effective for our fiscal year beginning December 2, 2018. Early application as of the original effective date is permitted under ASU 2015-14. The standard permits the use of either the retrospective or cumulative effect transition method. We are evaluating the effect that this guidance will have on our Consolidated Financial Statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting.

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Note 2 - Acquisitions

9 Months Ended

Aug. 27, 2016

Notes to Financial Statements

Business Combination Disclosure [Text Block]

Note 2: Acquisitions

Cyberbond

On June 8, 2016, we acquired Cyberbond, L.L.C., heaquartered in Batavia, Illinois, which is a provider of industrial adhesives for the electronics, medical, audio equipment, automotive and structural markets. The acquisition will help us to broaden our global position and accelerate our growth in the high margin, high growth Engineering Adhesives segment.

The purchase price of $42,516 was funded through existing cash and was recorded in our Engineering Adhesives operating segment. We incurred acquisition related costs of approximately $558, which were recorded as selling, general and administrative expenses in the Condensed Consolidated Statements of Income.

The acquisition fair value measurement was preliminary as of August 27, 2016, subject to the completion of the valuation of Cyberbond and further management reviews and assessment of the preliminary fair values of the assets acquired and liabilities assumed. We expect the fair value measurement process to be completed in the fourth quarter of 2016.

The following table summarizes the preliminary fair value measurement of the assets acquired and liabilities assumed as of the date of acquisition:

	August 27, 2016
Current assets	$	4,410
Property, plant and equipment		1,460
Goodwill		38,152
Other assets		673
Current liabilities		(1,526	)
Long-term liabilities		(653	)
Total purchase price	$	42,516

We have preliminarily allocated the entire excess purchase price to goodwill in the amount of $38,152 pending completion of the valuation of other identified intangible assets. Such goodwill is not deductible for tax purposes. The goodwill was assigned to our Engineering Adhesives operating segment. The Cyberbond acquisition does not represent a material business combination, therefore pro forma financial information is not provided.

Advanced Adhesives

On April 29, 2016, we acquired Advanced Adhesives Pty Limited and the business assets of Advanced Adhesives (New Zealand) Limited (Advanced Adhesives), providers of industrial adhesives in Australia and New Zealand. The acquisition will help us to strengthen our industrial adhesives market position and leverage a broader technology portfolio in both Australia and New Zealand. The combined purchase price of $10,365 was funded through existing cash and was recorded in our Asia Pacific operating segment. We incurred acquisition related costs of approximately $670, which were recorded as selling, general and administrative expenses in the Condensed Consolidated Statements of Income.

During the third quarter of 2016, the Company substantially completed its procedures related to the working capital accounts and obtained a preliminary valuation of the identified intangible assets in order to allocate the purchase price to the assets acquired and liabilities assumed. The outcome of these procedures are reflected in the adjustments in the table below. The acquisition fair value measurement as of August 27, 2016, is subject to the completion of the final assessment of the fair values of the assets acquired and liabilities assumed, specifically related to the identified intangible assets. We expect the fair value measurement process to be completed in the fourth quarter of 2016.

The following table summarizes the fair value measurement of the assets acquired and liabilities assumed as of the date of acquisition:

	May 28, 2016			Adjustments			August 27, 2016
Current assets	$	6,197		$	(663	)	$	5,534
Property, plant and equipment		751			(167	)		584
Customer relationships		-			7,639			7,639
Trademarks		-			146			146
Goodwill		4,546			(4,546	)		-
Current liabilities		(2,371	)		(288	)		(2,659	)
Long-term liabilities		-			(879	)		(879	)
Total purchase price	$	9,123		$	1,242		$	10,365

The expected lives of the acquired intangible assets are 15 years for customer relationships and one year for trademarks.

Continental Products Limited

 

On February 3, 2015, we acquired the equity of Continental Products Limited, a provider of industrial adhesives, based in Nairobi, Kenya. The purchase price of $1,647, net of cash acquired of $371, was funded through existing cash.

Tonsan Adhesive, Inc

.

On February 2, 2015, we acquired 95 percent of the equity of Tonsan Adhesive, Inc., an independent engineering adhesives provider based in Beijing, China. The purchase price was 1.4 billion Chinese renminbi, or approximately $215,925, net of cash acquired of $7,754, which was financed with the proceeds from our October 31, 2014 term loan, drawn in conjunction with the acquisition.

Concurrent with the acquisition, we entered into an agreement to acquire the remaining 5 percent of Tonsan’s equity beginning February 1, 2019 for 82 million Chinese renminbi or approximately $13,038. In addition, the agreement requires us to pay up to 418 million Chinese renminbi or approximately $66,848 in contingent consideration based upon a formula related to Tonsan’s gross profit in fiscal 2018. The fair values of the agreement to purchase the remaining equity and the contingent consideration based upon a discounted cash flow model as of the date of acquisition were $11,773 and $7,714, respectively. See Note 14 for further discussion of the fair value of the contingent consideration.

The following table summarizes the fair value measurement of the assets acquired and liabilities assumed as of the date of acquisition:

	Amount
Current assets	$	49,839
Property, plant and equipment		59,142
Goodwill		125,790
Other intangibles
Developed technology		18,600
Customer relationships		25,700
Trademarks/trade names		11,000
Current liabilities		(38,068	)
Other liabilities		(24,305	)
Redeemable non-controlling interests		(11,773	)
Total purchase price	$	215,925

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Note 3 - Accounting for Share-based Compensation

9 Months Ended

Aug. 27, 2016

Notes to Financial Statements

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note 3: Accounting for Share-Based Compensation

Overview

 

We have various share-based compensation programs, which provide for equity awards including stock options, incentive stock options, restricted stock shares, restricted stock units, performance awards and deferred compensation. These equity awards fall under several plans and are described in detail in our Annual Report on Form 10-K for the year ended November 28, 2015.

Grant-Date Fair Value

We use the Black-Scholes option pricing model to calculate the grant-date fair value of an award. There were no options granted during the third quarter of 2015. The fair value of options granted during the three months ended August 27, 2016 and nine months ended August 27, 2016 and August 29, 2015 were calculated using the following weighted average assumptions: 

	Three Months Ended			Nine Months Ended
	August 27, 2016			August 27, 2016			August 29, 2015
Expected life (in years)		4.75			4.74			4.61
Weighted-average expected volatility		26.77%			28.96%			30.91%
Expected volatility	25.71%	-	27.10%	25.71%	-	29.23%	25.50%	-	31.67%
Risk-free interest rate		0.98%			1.43%			1.26%
Expected dividend yield		1.26%			1.54%			1.17%
Weighted-average fair value of grants		$9.38			$7.72			$10.21

Expected life – We use historical employee exercise and option expiration data to estimate the expected life assumption for the Black-Scholes grant-date valuation. We believe that this historical data is currently the best estimate of the expected term of a new option. We use a weighted-average expected life for all awards.

Expected volatility – Volatility is calculated using our historical volatility for the same period of time as the expected life. We have no reason to believe that our future volatility will differ materially from historical volatility.

Risk-free interest rate – The rate is based on the U.S. Treasury yield curve in effect at the time of the grant for the same period of time as the expected life.

Expected dividend yield – The calculation is based on the total expected annual dividend payout divided by the average stock price.

Expense Recognition

We use the straight-line attribution method to recognize share-based compensation expense for option awards, restricted stock shares and restricted stock units with graded and cliff vesting. Incentive stock options and performance awards are based on certain performance-based metrics and the expense is adjusted quarterly, based on our projections of the achievement of those metrics. The amount of share-based compensation expense recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest.

Total share-based compensation expense of $2,501 and $3,006 was included in our Condensed Consolidated Statements of Income for the third quarter ended August 27, 2016 and August 29, 2015, respectively. Total share-based compensation expense of $9,469 and $10,325 was included in our Condensed Consolidated Statements of Income for the nine months ended August 27, 2016 and August 29, 2015, respectively. All share-based compensation expense was recorded as selling, general and administrative expense. For the third quarter ended August 27, 2016 and August 29, 2015 there was $870 and $411 of excess tax benefit recognized, respectively. For the nine months ended August 27, 2016 and August 29, 2015 there was $1,462 and $1,321 of excess tax benefit recognized, respectively.

As of August 27, 2016, there was $8,059 of unrecognized compensation costs related to unvested stock option awards, which is expected to be recognized over a weighted-average period of 1.2 years. Unrecognized compensation costs related to unvested restricted stock shares was $194 which is expected to be recognized over a weighted-average period of 0.4 years. Unrecognized compensation costs related to unvested restricted stock units was $9,120 which is expected to be recognized over a weighted-average period of 1.3 years.

Share-based Activity

A summary of option activity as of August 27, 2016 and changes during the nine months then ended is presented below:

				Weighted-
				Average
	Options			Exercise Price
Outstanding at November 28, 2015		2,912,073		$	33.37
Granted		844,033			33.86
Exercised		(539,165	)		24.05
Forfeited or cancelled		(164,337	)		39.37
Outstanding at August 27, 2016		3,052,604		$	34.82

There were no options granted during the third quarter ended August 29, 2015. The total fair value of options granted during the third quarter ended August 27, 2016 was $47. Total intrinsic value of options exercised during the third quarter ended August 27, 2016 and August 29, 2015 was $3,365 and $1,565, respectively. Intrinsic value is the difference between our closing stock price on the respective trading day and the exercise price, multiplied by the number of options exercised. The total fair value of options granted during the nine months ended August 27, 2016 and August 29, 2015 was $6,509 and $7,189, respectively. Total intrinsic value of options exercised during the nine months ended August 27, 2016 and August 29, 2015 was $10,641 and $5,114, respectively. Proceeds received from option exercises during the third quarter ended August 27, 2016 and August 29, 2015 were $2,676 and $391, respectively, and $9,759 and $4,342 during the nine months ended August 27, 2016 and August 29, 2015, respectively.

A summary of nonvested restricted stock as of August 27, 2016 and changes during the nine months then ended is presented below:

												Weighted-
										Weighted-		Average
										Average		Remaining
										Grant		Contractual
										Date Fair		Life
	Units			Shares			Total			Value		(in Years)
Nonvested at November 28, 2015		237,013			110,160			347,173		$	42.17		0.8
Granted		243,628			-			243,628			35.32		1.6
Vested		(104,051	)		(70,428	)		(174,479	)		41.88		-
Forfeited		(31,337	)		(179	)		(31,516	)		38.34		1.7
Nonvested at August 27, 2016		345,253			39,553			384,806		$	38.33		1.2

Total fair value of restricted stock vested during the third quarter ended August 27, 2016 and August 29, 2015 was $25 and $57, respectively. Total fair value of restricted stock vested during the nine months ended August 27, 2016 and August 29, 2015 was $6,101 and $6,121, respectively. The total fair value of nonvested restricted stock at August 27, 2016 was $14,934.

We repurchased 189 and 193 restricted stock shares during the third quarter ended August 27, 2016 and August 29, 2015, respectively and 67,742 and 54,196 during the nine months ended August 27, 2016 and August 29, 2015, respectively. The repurchases relate to statutory minimum tax withholding.

We have a Directors’ Deferred Compensation plan that allows non-employee directors to defer all or a portion of their directors’ compensation in a number of investment choices, including units representing shares of our common stock. We also have a Key Employee Deferred Compensation Plan that allows key employees to defer a portion of their eligible compensation in a number of investment choices, including units, representing shares of our common stock. We provide a 10 percent match on deferred compensation invested into units, representing shares of our common stock. A summary of deferred compensation units as of August 27, 2016, and changes during the nine months then ended is presented below:

	Non-employee
	Directors			Employees			Total
Units outstanding November 28, 2015		380,170			45,906			426,076
Participant contributions		35,678			4,379			40,057
Company match contributions		3,568			438			4,006
Payouts		(301	)		(7,834	)		(8,135	)
Units outstanding August 27, 2016		419,115			42,889			462,004

Deferred compensation units are fully vested at the date of contribution.

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Note 4 - Earnings Per Share

9 Months Ended

Aug. 27, 2016

Notes to Financial Statements

Earnings Per Share [Text Block]

Note 4: Earnings Per Share

A reconciliation of the common share components for the basic and diluted earnings per share calculations is as follows:

	Three Months Ended				Nine Months Ended
	August 27,		August 29,		August 27,		August 29,
(Shares in thousands)	2016		2015		2016		2015
Weighted-average common shares - basic		50,261		50,421		50,122		50,318
Equivalent shares from share-based compensations plans		1,192		1,109		1,112		1,142
Weighted-average common and common equivalent shares - diluted		51,453		51,530		51,234		51,460

Basic earnings per share is calculated by dividing net income attributable to H.B. Fuller by the weighted-average number of common shares outstanding during the applicable period. Diluted earnings per share is based upon the weighted-average number of common and common equivalent shares outstanding during the applicable period. The difference between basic and diluted earnings per share is attributable to share-based compensation awards. We use the treasury stock method to calculate the effect of outstanding shares, which computes total employee proceeds as the sum of (a) the amount the employee must pay upon exercise of the award, (b) the amount of unearned share-based compensation costs attributed to future services and (c) the amount of tax benefits, if any, that would be credited to additional paid-in capital assuming exercise of the award. Share-based compensation awards for which total employee proceeds exceed the average market price over the applicable period have an antidilutive effect on earnings per share, and accordingly, are excluded from the calculation of diluted earnings per share.

Options to purchase 386,496 and 1,533,690 shares of common stock at a weighted-average exercise price of $48.57 and $42.88 for the quarters ended August 27, 2016 and August 29, 2015, respectively, were excluded from the diluted earnings per share calculations because they were antidilutive. Options to purchase 762,509 and 416,544 shares of common stock at a weighted-average exercise price of $44.86 and $48.89 for the nine months ended August 27, 2016 and August 29, 2015, respectively, were excluded from the diluted earnings per share calculations because they were antidilutive.

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Note 5 - Accumulated Other Comprehensive Income (Loss)

9 Months Ended

Aug. 27, 2016

Notes to Financial Statements

Accumulated Other Comprehensive Income (Loss) Disclosure [Text Block]

Note 5: Accumulated Other Comprehensive Income (Loss)

The following table provides details of total comprehensive income (loss):

	Three Months Ended August 27, 2016									Three Months Ended August 29, 2015
	H.B. Fuller Stockholders							Non- controlling Interests		H.B. Fuller Stockholders									Non- controlling Interests
	Pretax		Tax			Net		Net		Pretax			Tax			Net			Net
Net income including non-controlling interests		-		-		$	32,745	$	53		-			-		$	26,807		$	79
Foreign currency translation adjustment ¹	$	3,368		-			3,368		-	$	(10,621	)		-			(10,621	)		(98	)
Reclassification to earnings:
Defined benefit pension plans adjustment²		2,585	$	(908	)		1,677		-		2,325		$	(798	)		1,527			-
Interest rate swap ³		16		(6	)		10		-		15			(5	)		10			-
Cash-flow hedges ³		56		(21	)		35		-		-			-			-			-
Other comprehensive income (loss)	$	6,025	$	(935	)		5,090		-	$	(8,281	)	$	(803	)		(9,084	)		(98	)
Comprehensive income (loss)						$	37,835	$	53							$	17,723		$	(19	)

	Nine Months Ended August 27, 2016											Nine Months Ended August 29, 2015
	H.B. Fuller Stockholders									Non- controlling Interests		H.B. Fuller Stockholders									Non- controlling Interests
	Pretax			Tax			Net			Net		Pretax			Tax			Net			Net
Net income including non-controlling interests		-			-		$	84,994		$	161		-			-		$	61,689		$	308
Foreign currency translation adjustment ¹	$	3,860			-			3,860			-	$	(48,625	)		-			(48,625	)		(14	)
Reclassification to earnings:
Defined benefit pension plans adjustment²		7,755		$	(2,723	)		5,032			-		6,976		$	(2,394	)		4,582			-
Interest rate swap ³		45			(15	)		30			-		37			(7	)		30			-
Cash-flow hedges ³		(252	)		96			(156	)		-		(31	)		6			(25	)		-
Other comprehensive income (loss)	$	11,408		$	(2,642	)		8,766			-	$	(41,643	)	$	(2,395	)		(44,038	)		(14	)
Comprehensive income (loss)							$	93,760		$	161							$	17,651		$	294

¹

Income taxes are not provided for foreign currency translation relating to permanent investments in international subsidiaries.

²

Loss reclassified from accumulated other comprehensive income (AOCI) into earnings as part of net periodic cost related to pension and other postretirement benefit plans is reported in cost of sales, selling, general and administrative and special charges, net.

³

Loss reclassified from AOCI into earnings is reported in other income (expense), net.

The components of accumulated other comprehensive loss is as follows:

	August 27, 2016
	Total			H.B. Fuller Stockholders			Non- controlling Interests
Foreign currency translation adjustment	$	(47,732	)	$	(47,694	)	$	(38	)
Defined benefit pension plans adjustment, net of taxes of $90,289		(169,368	)		(169,368	)		-
Interest rate swap, net of taxes of ($10)		17			17			-
Cash-flow hedges, net of taxes of $907		(1,473	)		(1,473	)		-
Accumulated other comprehensive loss	$	(218,556	)	$	(218,518	)	$	(38	)

	November 28, 2015
	Total			H.B. Fuller Stockholders			Non- controlling Interests
Foreign currency translation adjustment	$	(51,592	)	$	(51,554	)	$	(38	)
Defined benefit pension plans adjustment, net of taxes of $93,012		(174,400	)		(174,400	)		-
Interest rate swap, net of taxes of $5		(13	)		(13	)		-
Cash-flow hedges, net of taxes of $811		(1,317	)		(1,317	)		-
Accumulated other comprehensive loss	$	(227,322	)	$	(227,284	)	$	(38	)

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Note 6 - Special Charges, Net

9 Months Ended

Aug. 27, 2016

Notes to Financial Statements

Special Charges [Text Block]

Note

6

:

Special Charges

, net

The integration of the industrial adhesives business we acquired in March 2012 involved a significant amount of restructuring and capital investment to optimize the new combined entity. In addition, we have taken a series of actions in our existing EIMEA operating segment to improve the profitability and future growth prospects of this operating segment. We combined these two initiatives into a single project which we refer to as the “Business Integration Project”. During the third quarter ended August 27, 2016 and August 29, 2015, we incurred special charges, net of $(2,807) and $1,297, respectively, for costs related to the Business Integration Project. During the nine months ended August 27, 2016 and August 29, 2015, we incurred special charges, net of $(2,024) and $4,592, respectively, for costs related to the Business Integration Project. Included in facility exit costs for the three and nine months ended August 27, 2016 is a $3.6 million gain on the sale of our production facility located in Wels, Austria, which closed during the third quarter of 2016.

The following table provides detail of special charges, net:

	Three Months Ended						Nine Months Ended
	August 27, 2016			August 29, 2015			August 27, 2016			August 29, 2015
Acquisition and transformation related costs	$	55		$	48		$	242		$	595
Workforce reduction costs		-			216			(1	)		2
Facility exit costs		(2,862	)		1,043			(2,455	)		3,683
Other related costs		-			(10	)		190			312
Special charges, net	$	(2,807	)	$	1,297		$	(2,024	)	$	4,592

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Note 7 - Components of Net Periodic Cost (Benefit) Related to Pension and Other Postretirement Benefit Plans

9 Months Ended

Aug. 27, 2016

Notes to Financial Statements

Pension and Other Postretirement Benefits Disclosure [Text Block]

Note 7: Components of Net Periodic Cost (Benefit) related to Pension and Other Postretirement Benefit Plans

	Three Months Ended August 27, 2016 and August 29, 2015
													Other
	Pension Benefits												Postretirement
	U.S. Plans						Non-U.S. Plans						Benefits
Net periodic cost (benefit):	2016			2015			2016			2015			2016			2015
Service cost	$	27		$	27		$	519		$	467		$	84		$	112
Interest cost		3,768			4,082			1,343			1,471			479			510
Expected return on assets		(6,078	)		(6,421	)		(2,435	)		(2,590	)		(1,341	)		(1,377	)
Amortization:
Prior service cost		7			7			(1	)		(1	)		(10	)		(626	)
Actuarial loss		1,292			1,407			788			775			532			607
Net periodic (benefit) cost	$	(984	)	$	(898	)	$	214		$	122		$	(256	)	$	(774	)

	Nine Months Ended August 27, 2016 and August 29, 2015
													Other
	Pension Benefits												Postretirement
	U.S. Plans						Non-U.S. Plans						Benefits
Net periodic cost (benefit):	2016			2015			2016			2015			2016			2015
Service cost	$	81		$	80		$	1,480		$	1,447		$	252		$	336
Interest cost		11,303			12,242			4,076			4,448			1,439			1,531
Expected return on assets		(18,232	)		(19,262	)		(7,400	)		(7,830	)		(4,025	)		(4,132	)
Amortization:
Prior service cost		21			22			(3	)		(3	)		(30	)		(1,878	)
Actuarial loss		3,878			4,221			2,293			2,387			1,596			1,823
Net periodic (benefit) cost	$	(2,949	)	$	(2,697	)	$	446		$	449		$	(768	)	$	(2,320	)

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Note 8 - Inventories

9 Months Ended

Aug. 27, 2016

Notes to Financial Statements

Inventory Disclosure [Text Block]

Note 8: Inventories

The composition of inventories is as follows:

	August 27,			November 28,
	2016			2015
Raw materials	$	125,421		$	121,545
Finished goods		148,829			142,195
LIFO reserve		(12,887	)		(15,236	)
Total inventories	$	261,363		$	248,504

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Note 9 - Financial Instruments

9 Months Ended

Aug. 27, 2016

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

Note 9: Financial Instruments

Foreign Currency Derivative Instruments

As a result of being a global enterprise, our earnings, cash flows and financial position are exposed to foreign currency risk from foreign currency denominated receivables and payables. These items are denominated in various foreign currencies, including the Euro, British pound sterling, Canadian dollar, Chinese renminbi, Japanese yen, Australian dollar, Argentine peso, Brazilian real, Colombian peso, Mexican peso, Turkish lira, Egyptian pound, Indian rupee and Malaysian ringgit.

Our objective is to balance, where possible, local currency denominated assets to local currency denominated liabilities to have a natural hedge and minimize foreign exchange impacts. We take steps to minimize risks from foreign currency exchange rate fluctuations through normal operating and financing activities and, when deemed appropriate, through the use of derivative instruments. We do not enter into any speculative positions with regard to derivative instruments.

We enter into derivative contracts with a group of investment grade multinational commercial banks. We evaluate the credit quality of each of these banks on a periodic basis as warranted.

Effective October 7, 2015, we entered into three cross-currency swap agreements to convert a notional amount of $134,736 of foreign currency denominated intercompany loans into US dollars. The first swap matures in 2017, the second swap matures in 2018 and the third swap matures in 2019. As of August 27, 2016, the combined fair value of the swaps was a liability of $2,048 and was included in other liabilities in the Condensed Consolidated Balance Sheets. The swaps were designated as cash-flow hedges for accounting treatment. The lesser amount between the cumulative change in the fair value of the actual swaps and the cumulative change in the fair value of hypothetical swaps is recorded in accumulated other comprehensive income (loss) in the Condensed Consolidated Balance Sheets. The difference between the cumulative change in the fair value of the actual swaps and the cumulative change in the fair value of hypothetical swaps are recorded as other income (expense), net in the Condensed Consolidated Statements of Income. In a perfectly effective hedge relationship, the two fair value calculations would exactly offset each other. Any difference in the calculation represents hedge ineffectiveness. The ineffectiveness calculations as of August 27, 2016 resulted in additional pre-tax gain of $40 for the nine months ended August 27, 2016 as the change in fair value of the cross-currency swaps was less than the change in the fair value of the hypothetical swaps. The amount in accumulated other comprehensive income (loss) related to cross-currency swaps was a loss of $1,473 as of August 27, 2016. The estimated net amount of the existing loss that is reported in accumulated other comprehensive income (loss) as of August 27, 2016 that is expected to be reclassified into earnings within the next twelve months is $827. As of August 27, 2016, we do not believe any gains or losses will be reclassified into earnings as a result of the discontinuance of these cash flow hedges because the original forecasted transaction will not occur.

The following table summarizes the cross-currency swaps outstanding as of August 27, 2016:

	Fiscal Year of Expiration	Interest Rate		Notional Value		Fair Value
Pay EUR	2017		3.05%	$	44,912	$	(342	)
Receive USD			3.9145%
Pay EUR	2018		3.45%	$	44,912	$	(689	)
Receive USD			4.5374%
Pay EUR	2019		3.80%	$	44,912	$	(1,017	)
Receive USD			5.0530%
Total				$	134,736	$	(2,048	)

Except for the cross-currency swap agreements listed above, foreign currency derivative instruments outstanding are not designated as hedges for accounting purposes. The gains and losses related to mark-to-market adjustments are recognized as other income or expense in the Condensed Consolidated Statements of Income during the periods in which the derivative instruments are outstanding. See Note 14 for fair value amounts of these derivative instruments.

As of August 27, 2016, we had forward foreign currency contracts maturing between September 12, 2016 and February 24, 2017. The mark-to-market effect associated with these contracts, on a net basis, was a loss of $4,570 at August 27, 2016. These losses were largely offset by the underlying transaction gains and losses resulting from the foreign currency exposures for which these contracts relate.

Interest Rate Swaps

We have interest rate swap agreements to convert $75,000 of our senior notes to variable interest rates. The change in fair value of the senior notes, attributable to the change in the risk being hedged, was a liability of $2,284 at August 27, 2016 and was included in long-term debt and current maturities of long-term debt in the Condensed Consolidated Balance Sheets. The combined fair value of the swaps were an asset of $2,337 at August 27, 2016 and $3,395 at November 28, 2015 and were included in other assets in the Condensed Consolidated Balance Sheets. The swaps were designated for hedge accounting treatment as fair value hedges.

The changes in the fair value of the swap and the fair value of the senior notes attributable to the change in the risk being hedged are recorded as other income (expense), net in the Condensed Consolidated Statements of Income. In a perfectly effective hedge relationship, the two fair value calculations would exactly offset each other. Any difference in the calculation represents hedge ineffectiveness. For the nine months ended August 27, 2016 and August 29, 2015, a pretax gain of $14 and $62, respectively, was recorded as the fair value of the senior notes decreased by more than the change in the fair value of the interest rate swaps attributable to the change in the risk being hedged.

Concentrations of credit risk with respect to trade accounts receivable are limited due to the large number of entities in the customer base and their dispersion across many different industries and countries. As of August 27, 2016, there were no significant concentrations of credit risk.

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Note 10 - Commitments and Contingencies

9 Months Ended

Aug. 27, 2016

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

Note

10

: Commitments and Contingencies

Environmental Matters

 

From time to time, we become aware of compliance matters relating to, or receive notices from, federal, state or local entities regarding possible or alleged violations of environmental, health or safety laws and regulations. We review the circumstances of each individual site, considering the number of parties involved, the level of potential liability or our contribution relative to the other parties, the nature and magnitude of the hazardous substances involved, the method and extent of remediation, the estimated legal and consulting expense with respect to each site and the time period over which any costs would likely be incurred. Also, from time to time, we are identified as a potentially responsible party (PRP) under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) and/or similar state laws that impose liability for costs relating to the clean up of contamination resulting from past spills, disposal or other release of hazardous substances. We are also subject to similar laws in some of the countries where current and former facilities are located. Our environmental, health and safety department monitors compliance with applicable laws on a global basis. To the extent we can reasonably estimate the amount of our probable liabilities for environmental matters, we establish a financial provision. 

Currently we are involved in various environmental investigations, clean up activities and administrative proceedings and lawsuits. In particular, we are currently deemed a PRP in conjunction with numerous other parties, in a number of government enforcement actions associated with landfills and/or hazardous waste sites. As a PRP, we may be required to pay a share of the costs of investigation and clean up of these sites. In addition, we are engaged in environmental remediation and monitoring efforts at a number of current and former operating facilities. While uncertainties exist with respect to the amounts and timing of the ultimate environmental liabilities, based on currently available information, we have concluded that these matters, individually or in the aggregate, will not have a material adverse effect on our results of operations, financial condition or cash flow.

Other Legal Proceedings

 

From time to time and in the ordinary course of business, we are a party to, or a target of, lawsuits, claims, investigations and proceedings, including product liability, personal injury, contract, patent and intellectual property, environmental, health and safety, tax and employment matters. While we are unable to predict the outcome of these matters, we have concluded, based upon currently available information, that the ultimate resolution of any pending matter, individually or in the aggregate, including the asbestos litigation described in the following paragraphs, will not have a material adverse effect on our results of operations, financial condition or cash flow.

We have been named as a defendant in lawsuits in which plaintiffs have alleged injury due to products containing asbestos manufactured more than 30 years ago. The plaintiffs generally bring these lawsuits against multiple defendants and seek damages (both actual and punitive) in very large amounts. In many cases, plaintiffs are unable to demonstrate that they have suffered any compensable injuries or that the injuries suffered were the result of exposure to products manufactured by us. We are typically dismissed as a defendant in such cases without payment. If the plaintiff presents evidence indicating that compensable injury occurred as a result of exposure to our products, the case is generally settled for an amount that reflects the seriousness of the injury, the length, intensity and character of exposure to products containing asbestos, the number and solvency of other defendants in the case, and the jurisdiction in which the case has been brought.

A significant portion of the defense costs and settlements in asbestos-related litigation is paid by third parties, including indemnification pursuant to the provisions of a 1976 agreement under which we acquired a business from a third party. Currently, this third party is defending and paying settlement amounts, under a reservation of rights, in most of the asbestos cases tendered to the third party.

In addition to the indemnification arrangements with third parties, we have insurance policies that generally provide coverage for asbestos liabilities, including defense costs.  Historically, insurers have paid a significant portion of our defense costs and settlements in asbestos-related litigation. However, certain of our insurers are insolvent.  We have entered into cost-sharing agreements with our insurers that provide for the allocation of defense costs and settlements and judgments in asbestos-related lawsuits.  These agreements require, among other things, that we fund a share of settlements and judgments allocable to years in which the responsible insurer is insolvent

A summary of the number of and settlement amounts for asbestos-related lawsuits and claims is as follows:

	Nine Months Ended				3 Years Ended
($ in thousands)	August 27, 2016		August 29, 2015		November 28, 2015
Lawsuits and claims settled		9		6		25
Settlement amounts	$	978	$	463	$	2,072
Insurance payments received or expected to be received	$	645	$	373	$	1,648

We do not believe that it would be meaningful to disclose the aggregate number of asbestos-related lawsuits filed against us because relatively few of these lawsuits are known to involve exposure to asbestos-containing products that we manufactured. Rather, we believe it is more meaningful to disclose the number of lawsuits that are settled and result in a payment to the plaintiff. To the extent we can reasonably estimate the amount of our probable liabilities for pending asbestos-related claims, we establish a financial provision and a corresponding receivable for insurance recoveries. 

Based on currently available information, we have concluded that the resolution of any pending matter, including asbestos-related litigation, individually or in the aggregate, will not have a material adverse effect on our results of operations, financial condition or cash flow. 

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Note 11 - Operating Segments

9 Months Ended

Aug. 27, 2016

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note

11

: Operating Segments

We are required to report segment information in the same way that we internally organize our business for assessing performance and making decisions regarding allocation of resources. We evaluate the performance of each of our operating segments based on segment operating income, which is defined as gross profit less selling, general and administrative expenses. Segment operating income excludes special charges, net. Corporate expenses are fully allocated to each operating segment. Inter-segment revenues are recorded at cost plus a markup for administrative costs. Operating results of each segment are regularly reviewed by our chief operating decision maker to make decisions about resources to be allocated to the segments and assess their performance.

Through the fourth quarter of 2015, our business was reported in four operating segments: Americas Adhesives, EIMEA, Asia Pacific and Construction Products. Changes in our management reporting structure during the first quarter of 2016 required us to conduct an operating segment assessment in accordance with ASC Topic 280,

Segment Reporting

, to determine our reportable segments. As a result of this assessment, we now have five reportable segments: Americas Adhesives, EIMEA, Asia Pacific, Construction Products and Engineering Adhesives. Prior period segment information has been recast retrospectively to reflect our new operating segments.

The table below provides certain information regarding net revenue and segment operating income for each of our operating segments:

	Three Months Ended
	August 27, 2016						August 29, 2015
	Trade Revenue		Inter- Segment Revenue		Segment Operating Income		Trade Revenue		Inter- Segment Revenue		Segment Operating Income
Americas Adhesives	$	198,957	$	4,096	$	31,900	$	206,623	$	4,725	$	33,617
EIMEA		130,619		4,056		8,430		133,512		4,513		5,325
Asia Pacific		57,488		1,540		2,510		54,645		1,137		2,749
Construction Products		64,402		185		2,093		72,404		119		3,421
Engineering Adhesives		61,392		-		3,496		56,949		-		3,431
Total	$	512,858			$	48,429	$	524,133			$	48,543

	Nine Months Ended
	August 27, 2016						August 29, 2015
	Trade Revenue		Inter- Segment Revenue		Segment Operating Income		Trade Revenue		Inter- Segment Revenue		Segment Operating Income
Americas Adhesives	$	588,422	$	11,821	$	94,043	$	618,172	$	16,428	$	91,021
EIMEA		394,807		13,821		25,620		405,044		12,174		8,303
Asia Pacific		171,467		3,801		9,299		167,541		8,570		8,838
Construction Products		192,111		340		5,412		206,690		541		10,790
Engineering Adhesives		172,891		-		6,465		138,109		-		(681	)
Total	$	1,519,698			$	140,839	$	1,535,556			$	118,271

Reconciliation of segment operating income to income before income taxes and income from equity method investments:

	Three Months Ended						Nine Months Ended
	August 27, 2016			August 29, 2015			August 27, 2016			August 29, 2015
Segment operating income	$	48,429		$	48,543		$	140,839		$	118,271
Special charges, net		2,807			(1,297	)		2,024			(4,592	)
Other income (expense), net		(956	)		(1,040	)		(7,603	)		(1,246	)
Interest expense		(6,809	)		(6,448	)		(19,714	)		(18,765	)
Income before income taxes and income from equity method investments	$	43,471		$	39,758		$	115,546		$	93,668

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Note 12 - Income Taxes

9 Months Ended

Aug. 27, 2016

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note

12

: Income Taxes

As of August 27, 2016, we had a liability of $4,508 recorded under FASB ASC 740,

Income Taxes,

for gross unrecognized tax benefits (excluding interest), compared to $5,124 as of November 28, 2015. As of August 27, 2016, we had accrued $639 of gross interest relating to unrecognized tax benefits. For the quarter ended August 27, 2016, our recorded liability for gross unrecognized tax benefits decreased by $652.

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Note 13 - Goodwill and Other Intangible Assets

9 Months Ended

Aug. 27, 2016

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

Note

13

: Goodwill

and Other Intangible Assets

A summary of goodwill activity as of August 27, 2016 and changes during the nine months then ended is presented below:

	Americas Adhesives		EIMEA		Asia Pacific		Construction Products		Engineering Adhesives			Total
Balance at November 28, 2015	$	59,706	$	100,638	$	17,329	$	22,668	$	153,863		$	354,204
Acquisitions		-		-		-		-		38,852	1		38,852
Currency impact		116		3,885		812		97		(4,715	)		195
Balance at August 27, 2016	$	59,822	$	104,523	$	18,141	$	22,765	$	188,000		$	393,251

1 Preliminary goodwill balance as of August 27, 2016.

As discussed in Note 11, during the first quarter of fiscal year 2016, we changed our operating segments as a result of a change in our management reporting structure. This resulted in a change in our reporting units. We allocated goodwill to our new reporting units using the relative fair value approach.

Balances of amortizable identifiable intangible assets, excluding goodwill and other non-amortizable intangible assets are as follows:

	August 27, 2016
Amortizable Intangible Assets	Purchased Technology & Patents			Customer Relationships			All Other			Total
Original cost	$	70,237		$	243,017		$	49,776		$	363,030
Accumulated amortization		(23,727	)		(110,258	)		(28,343	)		(162,328	)
Net identifiable intangibles	$	46,510		$	132,759		$	21,433		$	200,702

	November 28, 2015
Amortizable Intangible Assets	Purchased Technology & Patents			Customer Relationships			All Other			Total
Original cost	$	69,792		$	234,995		$	49,563		$	354,350
Accumulated amortization		(17,613	)		(99,405	)		(24,801	)		(141,819	)
Net identifiable intangibles	$	52,179		$	135,590		$	24,762		$	212,531

Amortization expense with respect to amortizable intangible assets was $20,509 and $20,046 for the nine months ended August 27, 2016 and August 29, 2015, respectively.

Estimated aggregate amortization expense based on the current carrying value of amortizable intangible assets for the next five fiscal years are as follows:

Fiscal Year	Remainder 2016		2017		2018		2019		2020		Thereafter
Amortization Expense	$	7,023	$	25,901	$	25,444	$	23,506	$	22,527	$	96,301

Non-amortizable intangible assets as of August 27, 2016 are $462 and are related to trademarks and trade names.

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Note 14 - Fair Value Measurements

9 Months Ended

Aug. 27, 2016

Notes to Financial Statements

Fair Value Disclosures [Text Block]

Note 14: Fair Value Measurements

Estimates of fair value for financial assets and liabilities are based on the framework established in the accounting guidance for fair value measurements. The framework defines fair value, provides guidance for measuring fair value and requires certain disclosures. The framework discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow) and the cost approach (cost to replace the service capacity of an asset or replacement cost). The framework utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

● Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

● Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly.  These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

● Level 3: Unobservable inputs that reflect management’s assumptions, and include situations where there is little, if any, market activity for the asset or liability.

Balances Measured at Fair Value on a Recurring Basis

The following table presents information about our financial assets and liabilities that are measured at fair value on a recurring basis as of August 27, 2016 and November 28, 2015, and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value.

	August 27,		Fair Value Measurements Using:
Description	2016		Level 1		Level 2		Level 3
Assets:
Marketable securities	$	1,816	$	1,816	$	-	$	-
Derivative assets		2,931		-		2,931		-
Interest rate swaps		2,337		-		2,337		-
Liabilities:
Derivative liabilities	$	7,501	$	-	$	7,501	$	-
Contingent consideration liability		10,192		-		-		10,192
Cash-flow hedges		2,048		-		2,048		-

	November 28,		Fair Value Measurements Using:
Description	2015		Level 1		Level 2		Level 3
Assets:
Marketable securities	$	1,698	$	1,698	$	-	$	-
Derivative assets		15,185		-		15,185		-
Interest rate swaps		3,395		-		3,395		-
Cash-flow hedges		5,384		-		5,384		-
Liabilities:
Derivative liabilities	$	4,744	$	-	$	4,744	$	-
Contingent consideration liability		10,854		-		-		10,854

We use the income approach in calculating the fair value of our contingent consideration liabilities using a real option model with Level 3 inputs. The expected cash flows are affected by various significant judgments and assumptions, including revenue growth rates, profit margin percentages, volatility and discount rate, which are sensitive to change. Estimates of fair value are inherently uncertain and represent only management’s reasonable expectation regarding future developments. These estimates and the judgments and assumptions upon which the estimates are based will, in all likelihood, differ in some respects from actual future results. The valuation of the contingent consideration liability related to the acquisition of Tonsan Adhesive, Inc. resulted in a fair value of $10,221 as of August 27, 2016 and a $2,018 mark to market adjustment recorded as a credit to selling, general and administrative in the Condensed Consolidated Statement of Income as of August 27, 2016.

Contingent consideration liabilities
Level 3 balance November 28, 2015	$	10,854
Opening balance sheet adjustment		700
Mark to market adjustment		(2,055	)
Foreign currency translation adjustment		693
Level 3 balance August 27, 2016	$	10,192

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Note 15 - Share Repurchase Program

9 Months Ended

Aug. 27, 2016

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

Note

15

: Share Repurchase Program

On September 30, 2010, the Board of Directors authorized a share repurchase program of up to $100,000 of our outstanding common shares. Under the program, we are authorized to repurchase shares for cash on the open market, from time to time, in privately negotiated transactions or block transactions, or through an accelerated repurchase agreement. The timing of such repurchases is dependent on price, market conditions and applicable regulatory requirements. Upon repurchase of the shares, we reduced our common stock for the par value of the shares with the excess being applied against additional paid-in capital.

Under this program, we repurchased shares with an aggregate value of $5,326 during the third quarter of 2016. During the nine months ended August 27, 2016, we repurchased shares under this program with an aggregate value of $9,536. Of this amount, $250 reduced common stock and $9,286 reduced additional paid-in capital. We did not repurchase any shares during the nine months ended August 29, 2015.

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Note 16 - Redeemable Non-controlling Interest

9 Months Ended

Aug. 27, 2016

Notes to Financial Statements

Noncontrolling Interest Disclosure [Text Block]

Note 16

:

Redeemable Non-Controlling Interest

We account for the non-controlling interest in H.B. Fuller Kimya Sanayi Ticaret A.S. (HBF Kimya) as a redeemable non-controlling interest because both the non-controlling shareholder and H.B. Fuller have an option, exercisable beginning August 1, 2018, to require the redemption of the shares owned by the non-controlling shareholder at a price determined by a formula based on 24 months trailing EBITDA. Since the option makes the redemption of the non-controlling ownership shares of HBF Kimya outside of our control, these shares are classified as a redeemable non-controlling interest in temporary equity in the Condensed Consolidated Balance Sheets. The non-controlling shareholder is entitled to increase his ownership by 1 percent per year for 5 years up to a maximum of 13 percent ownership based on the achievement of profitability targets in each year. The option is subject to a minimum price of €3,500. The redemption value of the option, if it were currently redeemable, is estimated to be €3,500.

The results of operations for the HBF Kimya non-controlling interest is consolidated in our financial statements. Both the non-controlling interest and the accretion adjustment to redemption value are included in net income attributable to non-controlling interests in the Condensed Consolidated Statements of Income and in the carrying value of the redeemable non-controlling interest on the Condensed Consolidated Balance Sheets. HBF Kimya’s functional currency is the Turkish lira and changes in exchange rates will affect the reported amount of the redeemable non-controlling interest.

	Redeemable Non-Controlling Interest
Balance at November 28, 2015	$	4,199
Net income (loss) attributed to redeemable non-controlling interest		161
Foreign currency translation adjustment		52
Balance at August 27, 2016	$	4,412

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Significant Accounting Policies (Policies)

9 Months Ended

Aug. 27, 2016

Accounting Policies [Abstract]

New Accounting Pronouncements, Policy [Policy Text Block]

New Accounting Pronouncements

In August 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-15,

Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force)

.

This ASU requires changes in the presentation of certain items including but not limited to debt prepayment or debt extinguishment costs; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies and distributions received from equity method investees. Our effective date for adoption of this guidance is our fiscal year beginning December 2, 2018

.

We are currently evaluating the effect that this guidance will have on our Consolidated Financial Statements.

In June 2016, the FASB issued ASU No. 2016-13

, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Statements.

This ASU requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. Our effective date for adoption of this guidance is our fiscal year beginning November 29, 2020

.

We are currently evaluating the effect that this guidance will have on our Consolidated Financial Statements.

In March 2016, the FASB issued ASU No. 2016-09,

Compensation - Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting.

This ASU provides simplification in the accounting for share-based payment transactions including the accounting for income taxes, forfeitures, statutory tax withholding requirements and classification in the statement of cash flows.

Our effective date for adoption of this guidance is our fiscal year beginning December 3, 2017

.

We are currently evaluating the effect that this guidance will have on our Consolidated Financial Statements.

In March 2016, the FASB issued ASU No. 2016-08,

Revenue from Contracts with Customers (Topic 606), Principal

v

ersus Agent Considerations (Reporting Revenue Gross versus Net)

.  This ASU provides guidance on recording revenue on a gross basis versus a net basis based on the determination of whether an entity is a principal or an agent when another party is involved in providing goods or services to a customer.  The amendments in this ASU affect the guidance in ASU No. 2014-09 and are effective in the same timeframe as ASU No. 2014-09 as discussed below.

In February 2016, the FASB issued ASU No. 2016-05,

Derivatives and Hedging (Topic 815).

The amendments in this guidance clarify that a change in the counterparty to a derivative instrument that has been designated as a hedging instrument under Topic 815 does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. Our effective date for adoption of this guidance is our fiscal year beginning December 4, 2016

.

We have evaluated the effect that this guidance will have on our Consolidated Financial Statements and related disclosures and determined it will not have a material impact.

In February 2016, the FASB issued ASU No. 2016-02,

Leases (Subtopic 842).

This guidance changes accounting for leases and requires lessees to recognize the assets and liabilities arising from all leases, including those classified as operating leases under previous accounting guidance, on the balance sheet and requires disclosure of key information about leasing arrangements to increase transparency and comparability among organizations. Our effective date for adoption of this guidance is our fiscal year beginning December 1, 2019 with early adoption permitted

. The new guidance must be adopted using a modified retrospective transition approach, and provides for certain practical expedients. We are currently evaluating the impact that the new guidance will have on our Consolidated Financial Statements.

In June 2014, the FASB issued ASU No. 2014-12,

Compensation - Stock Compensation (Topic 718), Accounting for

Share-Based Payments When the Terms of an Award That a Performance Target Could Be Achieved after the Requisite Service Period,

which requires a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award and compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. Our effective date for adoption of this guidance is our fiscal year beginning December 4, 2016, however w

e elected to early adopt this guidance as of our first quarter ended February 27, 2016. The adoption of

this guidance did not have a material impact on our Consolidated Financial Statements.

In May 2014, the FASB issued ASU No. 2014-09,

Revenue from Contracts with Customers (Topic 606),

which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This guidance will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017 (as stated in ASU No. 2015-14 which defers the effective date and was issued in August 2015) and is now effective for our fiscal year beginning December 2, 2018. Early application as of the original effective date is permitted under ASU 2015-14. The standard permits the use of either the retrospective or cumulative effect transition method. We are evaluating the effect that this guidance will have on our Consolidated Financial Statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting.

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Note 2 - Acquisitions (Tables)

9 Months Ended

Aug. 27, 2016

Tonsan Adhesive [Member]

Notes Tables

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

	Amount
Current assets	$	49,839
Property, plant and equipment		59,142
Goodwill		125,790
Other intangibles
Developed technology		18,600
Customer relationships		25,700
Trademarks/trade names		11,000
Current liabilities		(38,068	)
Other liabilities		(24,305	)
Redeemable non-controlling interests		(11,773	)
Total purchase price	$	215,925

Advanced Adhesives Pty Limited and Advance Adhesives (New Zealand) [Member]

Notes Tables

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

	May 28, 2016			Adjustments			August 27, 2016
Current assets	$	6,197		$	(663	)	$	5,534
Property, plant and equipment		751			(167	)		584
Customer relationships		-			7,639			7,639
Trademarks		-			146			146
Goodwill		4,546			(4,546	)		-
Current liabilities		(2,371	)		(288	)		(2,659	)
Long-term liabilities		-			(879	)		(879	)
Total purchase price	$	9,123		$	1,242		$	10,365

Cyberbond LLC [Member]

Notes Tables

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

	August 27, 2016
Current assets	$	4,410
Property, plant and equipment		1,460
Goodwill		38,152
Other assets		673
Current liabilities		(1,526	)
Long-term liabilities		(653	)
Total purchase price	$	42,516

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Note 3 - Accounting for Share-based Compensation (Tables)

9 Months Ended

Aug. 27, 2016

Notes Tables

Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value [Table Text Block]

	Three Months Ended			Nine Months Ended
	August 27, 2016			August 27, 2016			August 29, 2015
Expected life (in years)		4.75			4.74			4.61
Weighted-average expected volatility		26.77%			28.96%			30.91%
Expected volatility	25.71%	-	27.10%	25.71%	-	29.23%	25.50%	-	31.67%
Risk-free interest rate		0.98%			1.43%			1.26%
Expected dividend yield		1.26%			1.54%			1.17%
Weighted-average fair value of grants		$9.38			$7.72			$10.21

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

				Weighted-
				Average
	Options			Exercise Price
Outstanding at November 28, 2015		2,912,073		$	33.37
Granted		844,033			33.86
Exercised		(539,165	)		24.05
Forfeited or cancelled		(164,337	)		39.37
Outstanding at August 27, 2016		3,052,604		$	34.82

Schedule of Nonvested Restricted Stock Units Activity [Table Text Block]

												Weighted-
										Weighted-		Average
										Average		Remaining
										Grant		Contractual
										Date Fair		Life
	Units			Shares			Total			Value		(in Years)
Nonvested at November 28, 2015		237,013			110,160			347,173		$	42.17		0.8
Granted		243,628			-			243,628			35.32		1.6
Vested		(104,051	)		(70,428	)		(174,479	)		41.88		-
Forfeited		(31,337	)		(179	)		(31,516	)		38.34		1.7
Nonvested at August 27, 2016		345,253			39,553			384,806		$	38.33		1.2

Schedule of Deferred Compensation Arrangement with Individual, Share-based Payments [Table Text Block]

	Non-employee
	Directors			Employees			Total
Units outstanding November 28, 2015		380,170			45,906			426,076
Participant contributions		35,678			4,379			40,057
Company match contributions		3,568			438			4,006
Payouts		(301	)		(7,834	)		(8,135	)
Units outstanding August 27, 2016		419,115			42,889			462,004

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Note 4 - Earnings Per Share (Tables)

9 Months Ended

Aug. 27, 2016

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended				Nine Months Ended
	August 27,		August 29,		August 27,		August 29,
(Shares in thousands)	2016		2015		2016		2015
Weighted-average common shares - basic		50,261		50,421		50,122		50,318
Equivalent shares from share-based compensations plans		1,192		1,109		1,112		1,142
Weighted-average common and common equivalent shares - diluted		51,453		51,530		51,234		51,460

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Note 5 - Accumulated Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Aug. 27, 2016

Notes Tables

Comprehensive Income (Loss) [Table Text Block]

	Three Months Ended August 27, 2016									Three Months Ended August 29, 2015
	H.B. Fuller Stockholders							Non- controlling Interests		H.B. Fuller Stockholders									Non- controlling Interests
	Pretax		Tax			Net		Net		Pretax			Tax			Net			Net
Net income including non-controlling interests		-		-		$	32,745	$	53		-			-		$	26,807		$	79
Foreign currency translation adjustment ¹	$	3,368		-			3,368		-	$	(10,621	)		-			(10,621	)		(98	)
Reclassification to earnings:
Defined benefit pension plans adjustment²		2,585	$	(908	)		1,677		-		2,325		$	(798	)		1,527			-
Interest rate swap ³		16		(6	)		10		-		15			(5	)		10			-
Cash-flow hedges ³		56		(21	)		35		-		-			-			-			-
Other comprehensive income (loss)	$	6,025	$	(935	)		5,090		-	$	(8,281	)	$	(803	)		(9,084	)		(98	)
Comprehensive income (loss)						$	37,835	$	53							$	17,723		$	(19	)

	Nine Months Ended August 27, 2016											Nine Months Ended August 29, 2015
	H.B. Fuller Stockholders									Non- controlling Interests		H.B. Fuller Stockholders									Non- controlling Interests
	Pretax			Tax			Net			Net		Pretax			Tax			Net			Net
Net income including non-controlling interests		-			-		$	84,994		$	161		-			-		$	61,689		$	308
Foreign currency translation adjustment ¹	$	3,860			-			3,860			-	$	(48,625	)		-			(48,625	)		(14	)
Reclassification to earnings:
Defined benefit pension plans adjustment²		7,755		$	(2,723	)		5,032			-		6,976		$	(2,394	)		4,582			-
Interest rate swap ³		45			(15	)		30			-		37			(7	)		30			-
Cash-flow hedges ³		(252	)		96			(156	)		-		(31	)		6			(25	)		-
Other comprehensive income (loss)	$	11,408		$	(2,642	)		8,766			-	$	(41,643	)	$	(2,395	)		(44,038	)		(14	)
Comprehensive income (loss)							$	93,760		$	161							$	17,651		$	294

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

	August 27, 2016
	Total			H.B. Fuller Stockholders			Non- controlling Interests
Foreign currency translation adjustment	$	(47,732	)	$	(47,694	)	$	(38	)
Defined benefit pension plans adjustment, net of taxes of $90,289		(169,368	)		(169,368	)		-
Interest rate swap, net of taxes of ($10)		17			17			-
Cash-flow hedges, net of taxes of $907		(1,473	)		(1,473	)		-
Accumulated other comprehensive loss	$	(218,556	)	$	(218,518	)	$	(38	)

	November 28, 2015
	Total			H.B. Fuller Stockholders			Non- controlling Interests
Foreign currency translation adjustment	$	(51,592	)	$	(51,554	)	$	(38	)
Defined benefit pension plans adjustment, net of taxes of $93,012		(174,400	)		(174,400	)		-
Interest rate swap, net of taxes of $5		(13	)		(13	)		-
Cash-flow hedges, net of taxes of $811		(1,317	)		(1,317	)		-
Accumulated other comprehensive loss	$	(227,322	)	$	(227,284	)	$	(38	)

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Note 6 - Special Charges, Net (Tables)

9 Months Ended

Aug. 27, 2016

Notes Tables

Business Acquisition, Integration, Restructuring and Other Related Costs [Table Text Block]

	Three Months Ended						Nine Months Ended
	August 27, 2016			August 29, 2015			August 27, 2016			August 29, 2015
Acquisition and transformation related costs	$	55		$	48		$	242		$	595
Workforce reduction costs		-			216			(1	)		2
Facility exit costs		(2,862	)		1,043			(2,455	)		3,683
Other related costs		-			(10	)		190			312
Special charges, net	$	(2,807	)	$	1,297		$	(2,024	)	$	4,592

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Note 7 - Components of Net Periodic Cost (Benefit) Related to Pension and Other Postretirement Benefit Plans (Tables)

9 Months Ended

Aug. 27, 2016

Notes Tables

Schedule of Net Benefit Costs [Table Text Block]

	Three Months Ended August 27, 2016 and August 29, 2015
													Other
	Pension Benefits												Postretirement
	U.S. Plans						Non-U.S. Plans						Benefits
Net periodic cost (benefit):	2016			2015			2016			2015			2016			2015
Service cost	$	27		$	27		$	519		$	467		$	84		$	112
Interest cost		3,768			4,082			1,343			1,471			479			510
Expected return on assets		(6,078	)		(6,421	)		(2,435	)		(2,590	)		(1,341	)		(1,377	)
Amortization:
Prior service cost		7			7			(1	)		(1	)		(10	)		(626	)
Actuarial loss		1,292			1,407			788			775			532			607
Net periodic (benefit) cost	$	(984	)	$	(898	)	$	214		$	122		$	(256	)	$	(774	)

	Nine Months Ended August 27, 2016 and August 29, 2015
													Other
	Pension Benefits												Postretirement
	U.S. Plans						Non-U.S. Plans						Benefits
Net periodic cost (benefit):	2016			2015			2016			2015			2016			2015
Service cost	$	81		$	80		$	1,480		$	1,447		$	252		$	336
Interest cost		11,303			12,242			4,076			4,448			1,439			1,531
Expected return on assets		(18,232	)		(19,262	)		(7,400	)		(7,830	)		(4,025	)		(4,132	)
Amortization:
Prior service cost		21			22			(3	)		(3	)		(30	)		(1,878	)
Actuarial loss		3,878			4,221			2,293			2,387			1,596			1,823
Net periodic (benefit) cost	$	(2,949	)	$	(2,697	)	$	446		$	449		$	(768	)	$	(2,320	)

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Note 8 - Inventories (Tables)

9 Months Ended

Aug. 27, 2016

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	August 27,			November 28,
	2016			2015
Raw materials	$	125,421		$	121,545
Finished goods		148,829			142,195
LIFO reserve		(12,887	)		(15,236	)
Total inventories	$	261,363		$	248,504

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Note 9 - Financial Instruments (Tables)

9 Months Ended

Aug. 27, 2016

Notes Tables

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block]

	Fiscal Year of Expiration	Interest Rate		Notional Value		Fair Value
Pay EUR	2017		3.05%	$	44,912	$	(342	)
Receive USD			3.9145%
Pay EUR	2018		3.45%	$	44,912	$	(689	)
Receive USD			4.5374%
Pay EUR	2019		3.80%	$	44,912	$	(1,017	)
Receive USD			5.0530%
Total				$	134,736	$	(2,048	)

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Note 10 - Commitments and Contingencies (Tables)

9 Months Ended

Aug. 27, 2016

Notes Tables

Schedule of Loss Contingencies by Contingency [Table Text Block]

	Nine Months Ended				3 Years Ended
($ in thousands)	August 27, 2016		August 29, 2015		November 28, 2015
Lawsuits and claims settled		9		6		25
Settlement amounts	$	978	$	463	$	2,072
Insurance payments received or expected to be received	$	645	$	373	$	1,648

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Note 11 - Operating Segments (Tables)

9 Months Ended

Aug. 27, 2016

Notes Tables

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Three Months Ended
	August 27, 2016						August 29, 2015
	Trade Revenue		Inter- Segment Revenue		Segment Operating Income		Trade Revenue		Inter- Segment Revenue		Segment Operating Income
Americas Adhesives	$	198,957	$	4,096	$	31,900	$	206,623	$	4,725	$	33,617
EIMEA		130,619		4,056		8,430		133,512		4,513		5,325
Asia Pacific		57,488		1,540		2,510		54,645		1,137		2,749
Construction Products		64,402		185		2,093		72,404		119		3,421
Engineering Adhesives		61,392		-		3,496		56,949		-		3,431
Total	$	512,858			$	48,429	$	524,133			$	48,543

	Nine Months Ended
	August 27, 2016						August 29, 2015
	Trade Revenue		Inter- Segment Revenue		Segment Operating Income		Trade Revenue		Inter- Segment Revenue		Segment Operating Income
Americas Adhesives	$	588,422	$	11,821	$	94,043	$	618,172	$	16,428	$	91,021
EIMEA		394,807		13,821		25,620		405,044		12,174		8,303
Asia Pacific		171,467		3,801		9,299		167,541		8,570		8,838
Construction Products		192,111		340		5,412		206,690		541		10,790
Engineering Adhesives		172,891		-		6,465		138,109		-		(681	)
Total	$	1,519,698			$	140,839	$	1,535,556			$	118,271

Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Table Text Block]

	Three Months Ended						Nine Months Ended
	August 27, 2016			August 29, 2015			August 27, 2016			August 29, 2015
Segment operating income	$	48,429		$	48,543		$	140,839		$	118,271
Special charges, net		2,807			(1,297	)		2,024			(4,592	)
Other income (expense), net		(956	)		(1,040	)		(7,603	)		(1,246	)
Interest expense		(6,809	)		(6,448	)		(19,714	)		(18,765	)
Income before income taxes and income from equity method investments	$	43,471		$	39,758		$	115,546		$	93,668

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Note 13 - Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Aug. 27, 2016

Notes Tables

Schedule of Goodwill [Table Text Block]

	Americas Adhesives		EIMEA		Asia Pacific		Construction Products		Engineering Adhesives			Total
Balance at November 28, 2015	$	59,706	$	100,638	$	17,329	$	22,668	$	153,863		$	354,204
Acquisitions		-		-		-		-		38,852	1		38,852
Currency impact		116		3,885		812		97		(4,715	)		195
Balance at August 27, 2016	$	59,822	$	104,523	$	18,141	$	22,765	$	188,000		$	393,251

Schedule of Acquired Finite-Lived Intangible Assets by Major Class [Table Text Block]

	August 27, 2016
Amortizable Intangible Assets	Purchased Technology & Patents			Customer Relationships			All Other			Total
Original cost	$	70,237		$	243,017		$	49,776		$	363,030
Accumulated amortization		(23,727	)		(110,258	)		(28,343	)		(162,328	)
Net identifiable intangibles	$	46,510		$	132,759		$	21,433		$	200,702

	November 28, 2015
Amortizable Intangible Assets	Purchased Technology & Patents			Customer Relationships			All Other			Total
Original cost	$	69,792		$	234,995		$	49,563		$	354,350
Accumulated amortization		(17,613	)		(99,405	)		(24,801	)		(141,819	)
Net identifiable intangibles	$	52,179		$	135,590		$	24,762		$	212,531

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

Fiscal Year	Remainder 2016		2017		2018		2019		2020		Thereafter
Amortization Expense	$	7,023	$	25,901	$	25,444	$	23,506	$	22,527	$	96,301

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Note 14 - Fair Value Measurements (Tables)

9 Months Ended

Aug. 27, 2016

Notes Tables

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

	August 27,		Fair Value Measurements Using:
Description	2016		Level 1		Level 2		Level 3
Assets:
Marketable securities	$	1,816	$	1,816	$	-	$	-
Derivative assets		2,931		-		2,931		-
Interest rate swaps		2,337		-		2,337		-
Liabilities:
Derivative liabilities	$	7,501	$	-	$	7,501	$	-
Contingent consideration liability		10,192		-		-		10,192
Cash-flow hedges		2,048		-		2,048		-

	November 28,		Fair Value Measurements Using:
Description	2015		Level 1		Level 2		Level 3
Assets:
Marketable securities	$	1,698	$	1,698	$	-	$	-
Derivative assets		15,185		-		15,185		-
Interest rate swaps		3,395		-		3,395		-
Cash-flow hedges		5,384		-		5,384		-
Liabilities:
Derivative liabilities	$	4,744	$	-	$	4,744	$	-
Contingent consideration liability		10,854		-		-		10,854

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

Contingent consideration liabilities
Level 3 balance November 28, 2015	$	10,854
Opening balance sheet adjustment		700
Mark to market adjustment		(2,055	)
Foreign currency translation adjustment		693
Level 3 balance August 27, 2016	$	10,192

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Note 16 - Redeemable Non-controlling Interest (Tables)

9 Months Ended

Aug. 27, 2016

Notes Tables

Redeemable Noncontrolling Interest [Table Text Block]

	Redeemable Non-Controlling Interest
Balance at November 28, 2015	$	4,199
Net income (loss) attributed to redeemable non-controlling interest		161
Foreign currency translation adjustment		52
Balance at August 27, 2016	$	4,412

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Note 1 - Basis of Presentation (Details Textual)	9 Months Ended	12 Months Ended
	Aug. 27, 2016	Nov. 28, 2015
Number of Reportable Segments	5	4

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Note 2 - Acquisitions (Details Textual) ¥ in Millions						9 Months Ended
	Jun. 08, 2016 USD ($)	Apr. 29, 2016 USD ($)	Feb. 03, 2015 USD ($)	Feb. 02, 2015 USD ($)	Feb. 02, 2015 CNY (¥)	Aug. 27, 2016 USD ($)	Aug. 29, 2015 USD ($)	May 28, 2016 USD ($)	Feb. 27, 2016 USD ($)	Nov. 28, 2015 USD ($)	Feb. 02, 2015 CNY (¥)
Cyberbond LLC [Member] | Selling, General and Administrative Expenses [Member]
Business Combination, Acquisition Related Costs	$ 558,000
Cyberbond LLC [Member]
Payments to Acquire Businesses, Gross	42,516,000
Goodwill	38,152,000					$ 38,152,000
Business Acquisition, Goodwill, Expected Tax Deductible Amount	$ 0
Advanced Adhesives Pty Limited and Advance Adhesives (New Zealand) [Member] | Customer Relationships [Member]
Finite-Lived Intangible Asset, Useful Life		15 years
Advanced Adhesives Pty Limited and Advance Adhesives (New Zealand) [Member] | Trademarks [Member]
Finite-Lived Intangible Asset, Useful Life		1 year
Advanced Adhesives Pty Limited and Advance Adhesives (New Zealand) [Member]
Payments to Acquire Businesses, Gross		$ 10,365,000
Business Combination, Acquisition Related Costs		$ 670,000
Goodwill								$ 4,546,000
Continental Products Limited [Member]
Payments to Acquire Businesses, Net of Cash Acquired			$ 1,647,000
Cash Acquired from Acquisition			$ 371,000
Tonsan Adhesive [Member]
Goodwill				$ 125,790,000
Payments to Acquire Businesses, Net of Cash Acquired				215,925,000	¥ 1,400
Cash Acquired from Acquisition				$ 7,754,000
Business Acquisition, Percentage of Voting Interests Acquired				95.00%							95.00%
Business Combination, Agreement to Purchase Remaining Equity				$ 11,773,000
Tonson Adhesive [Member]
Business Acquisition, Remaining Percentage of Voting Interests to Be Acquired				5.00%							5.00%
Business Combination, Agreement to Purchase Remaining Equity				$ 13,038,000					$ 11,773,000		¥ 82
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High				$ 66,848,000							¥ 418
Business Combination, Contingent Consideration, Liability										$ 7,714,000
Goodwill						393,251,000				$ 354,204,000
Payments to Acquire Businesses, Net of Cash Acquired						$ 51,298,000	$ 217,572,000

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Note 2 - Preliminary Fair Value Measurement (Details) - USD ($)	Aug. 27, 2016	Jun. 08, 2016	Nov. 28, 2015
Cyberbond LLC [Member]
Current assets	$ 4,410,000
Property, plant and equipment	1,460,000
Goodwill	38,152,000	$ 38,152,000
Other assets	673,000
Current liabilities	(1,526,000)
Long-term liabilities	(653,000)
Total purchase price	42,516,000
Goodwill	$ 393,251,000		$ 354,204,000

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Note 2 - Fair Value Adjustment of Business Acquired (Details) - USD ($) $ in Thousands	Aug. 27, 2016	May 28, 2016	Nov. 28, 2015
Advanced Adhesives Pty Limited and Advance Adhesives (New Zealand) [Member] | Changes Measurement [Member] | Customer Relationships [Member]
Customer relationships	$ 7,639
Advanced Adhesives Pty Limited and Advance Adhesives (New Zealand) [Member] | Changes Measurement [Member] | Trademarks [Member]
Customer relationships	146
Advanced Adhesives Pty Limited and Advance Adhesives (New Zealand) [Member] | Changes Measurement [Member]
Current assets	(663)
Property, plant and equipment	(167)
Goodwill	(4,546)
Current liabilities	(288)
Long-term liabilities	(879)
Total purchase price	1,242
Advanced Adhesives Pty Limited and Advance Adhesives (New Zealand) [Member] | Customer Relationships [Member]
Customer relationships	7,639
Advanced Adhesives Pty Limited and Advance Adhesives (New Zealand) [Member] | Trademarks [Member]
Customer relationships	146
Advanced Adhesives Pty Limited and Advance Adhesives (New Zealand) [Member]
Current assets	5,534	6,197
Property, plant and equipment	584	751
Goodwill		4,546
Current liabilities	(2,659)	(2,371)
Long-term liabilities	(879)
Total purchase price	10,365	$ 9,123
Goodwill	$ 393,251		$ 354,204

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Note 2 - Purchase Price Allocation of Assets and Liabilities Assumed of Tonsan Adhesive (Details) - USD ($) $ in Thousands	Aug. 27, 2016	Nov. 28, 2015	Feb. 02, 2015
Tonsan Adhesive [Member] | Intellectual Property [Member]
Customer relationships			$ 18,600
Tonsan Adhesive [Member] | Customer Relationships [Member]
Customer relationships			25,700
Tonsan Adhesive [Member] | Trademarks and Trade Names [Member]
Customer relationships			11,000
Tonsan Adhesive [Member]
Current assets			49,839
Property, plant and equipment			59,142
Goodwill			125,790
Current liabilities			(38,068)
Long-term liabilities			(24,305)
Redeemable non-controlling interests			(11,773)
Total purchase price			$ 215,925
Goodwill	$ 393,251	$ 354,204

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Note 3 - Accounting for Share-based Compensation (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Aug. 27, 2016	Aug. 29, 2015	Aug. 27, 2016	Aug. 29, 2015
Employee Stock Option [Member]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options	$ 8,059,000		$ 8,059,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition			1 year 73 days
Restricted Stock [Member]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options	194,000		$ 194,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition			146 days
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value	25,000	$ 57,000	$ 6,101,000	$ 6,121,000
Restricted Stock Units (RSUs) [Member]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options	9,120,000		$ 9,120,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition			1 year 109 days
Employees [Member]
Deferred Compensation Plan, Matching Percentage			10.00%
Allocated Share-based Compensation Expense	2,501,000	3,006,000	$ 9,469,000	10,325,000
Employee Service Share-based Compensation, Tax Benefit Realized from Exercise of Stock Options	870,000	411,000	1,462,000	1,321,000
Fair Value Options Granted During Period Value Share-based Compensation	47,000	0	6,509,000	7,189,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value	3,365,000	1,565,000	10,641,000	5,114,000
Proceeds from Issuance of Shares under Incentive and Share-based Compensation Plans, Including Stock Options	2,676,000	$ 391,000	9,759,000	$ 4,342,000
Total Fair Value of Nonvested Restricted Stock	$ 14,934,000		$ 14,934,000
Repurchased Restricted Stock Shares	189	193	67,742	54,196

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Note 3 - Fair Value of Options Granted (Details) - $ / shares	3 Months Ended	9 Months Ended
	Aug. 27, 2016	Aug. 27, 2016	Aug. 29, 2015
Minimum [Member]
Expected volatility	25.71%	25.71%	25.50%
Maximum [Member]
Expected volatility	27.10%	29.23%	31.67%
Expected life (in years)	4 years 273 days	4 years 270 days	4 years 222 days
Weighted-average expected volatility	26.77%	28.96%	30.91%
Risk-free interest rate	0.98%	1.43%	1.26%
Expected dividend yield	1.26%	1.54%	1.17%
Weighted-average fair value of grants (in dollars per share)	$ 9.38	$ 7.72	$ 10.21

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Note 3 - Stock Option Activity (Details)	9 Months Ended
	Aug. 27, 2016 $ / shares shares
Outstanding Options (in shares) | shares	2,912,073
Outstanding Options (in dollars per share) | $ / shares	$ 33.37
Granted (in shares) | shares	844,033
Granted (in dollars per share) | $ / shares	$ 33.86
Exercised (in shares) | shares	(539,165)
Exercised (in dollars per share) | $ / shares	$ 24.05
Forfeited or cancelled (in shares) | shares	(164,337)
Forfeited or cancelled (in dollars per share) | $ / shares	$ 39.37
Outstanding Options (in shares) | shares	3,052,604
Outstanding Options (in dollars per share) | $ / shares	$ 34.82

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Note 3 - Nonvested Restricted Stock Activity (Details) - $ / shares	9 Months Ended	12 Months Ended
	Aug. 27, 2016	Nov. 28, 2015
Restricted Stock Units (RSUs) [Member]
Nonvested (in shares)	237,013
Granted (in shares)	243,628
Vested (in shares)	(104,051)
Forfeited (in shares)	(31,337)
Nonvested (in shares)	345,253	237,013
Restricted Stock [Member]
Nonvested (in shares)	110,160
Granted (in shares)
Vested (in shares)	(70,428)
Forfeited (in shares)	(179)
Nonvested (in shares)	39,553	110,160
Nonvested (in shares)	347,173
Nonvested (in dollars per share)	$ 42.17
Nonvested	1 year 73 days	292 days
Granted (in shares)	243,628
Granted (in dollars per share)	$ 35.32
Granted	1 year 219 days
Vested (in shares)	(174,479)
Vested (in dollars per share)	$ 41.88
Forfeited (in shares)	(31,516)
Forfeited (in dollars per share)	$ 38.34
Forfeited	1 year 255 days
Nonvested (in shares)	384,806	347,173
Nonvested (in dollars per share)	$ 38.33	$ 42.17

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Note 3 - Deferred Compensation Units (Details)	9 Months Ended
	Aug. 27, 2016 shares
Non Employee Directors [Member]
Units outstanding (in shares)	380,170
Participant contributions (in shares)	35,678
Company match contributions (in shares)	3,568
Payouts (in shares)	(301)
Units outstanding (in shares)	419,115
Employees [Member]
Units outstanding (in shares)	45,906
Participant contributions (in shares)	4,379
Company match contributions (in shares)	438
Payouts (in shares)	(7,834)
Units outstanding (in shares)	42,889
Units outstanding (in shares)	426,076
Participant contributions (in shares)	40,057
Company match contributions (in shares)	4,006
Payouts (in shares)	(8,135)
Units outstanding (in shares)	462,004

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Note 4 - Earnings Per Share (Details Textual) - $ / shares	3 Months Ended		9 Months Ended
	Aug. 27, 2016	Aug. 29, 2015	Aug. 27, 2016	Aug. 29, 2015
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	386,496	1,533,690	762,509	416,544
Antidilutive Weighted Average Share Price Excluded from Computation of Earnings Per Share Amount	$ 48.57	$ 42.88	$ 44.86	$ 48.89

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Note 4 - Earnings Per Share (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Aug. 27, 2016	Aug. 29, 2015	Aug. 27, 2016	Aug. 29, 2015
Basic (in shares)	50,261	50,421	50,122	50,318
Equivalent shares from share-based compensations plans (in shares)	1,192	1,109	1,112	1,142
Weighted-average common and common equivalent shares - diluted (in shares)	51,453	51,530	51,234	51,460

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Note 5 - Comprehensive Income (Loss) Information (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Aug. 27, 2016	Aug. 29, 2015	Aug. 27, 2016	Aug. 29, 2015
Net income attributable to H.B. Fuller		$ 32,745	$ 26,807	$ 84,994	$ 61,689
Net income including non-controlling interests		53	79	161	308
Foreign currency translation adjustment¹	[1]	3,368	(10,621)	3,860	(48,625)
Foreign currency translation adjustment¹	[1]
Foreign currency translation adjustment¹	[1]	3,368	(10,621)	3,860	(48,625)
Foreign currency translation adjustment¹	[1]		(98)		(14)
Defined benefit pension plans adjustment²	[2]	2,585	2,325	7,755	6,976
Defined benefit pension plans adjustment²	[2]	(908)	(798)	(2,723)	(2,394)
Defined benefit pension plans adjustment²	[2]	1,677	1,527	5,032	4,582
Interest rate swap³	[3]	16	15	45	37
Interest rate swap³	[3]	(6)	(5)	(15)	(7)
Interest rate swap³	[3]	10	10	30	30
Cash-flow hedges³	[3]	56		(252)	(31)
Cash-flow hedges³	[3]	(21)		96	6
Cash-flow hedges³	[3]	35		(156)	(25)
Other comprehensive income (loss)		6,025	(8,281)	11,408	(41,643)
Other comprehensive income (loss)		(935)	(803)	(2,642)	(2,395)
Other comprehensive income (loss)		5,090	(9,084)	8,766	(44,038)
Other comprehensive income (loss)			(98)		(14)
Comprehensive income (loss)		37,835	17,723	93,760	17,651
Comprehensive income (loss)		$ 53	$ (19)	$ 161	$ 294

[1] Income taxes are not provided for foreign currency translation relating to permanent investments in international subsidiaries.

[2] Loss reclassified from accumulated other comprehensive income (AOCI) into earnings as part of net periodic cost related to pension and other postretirement benefit plans is reported in cost of sales, selling, general and administrative (SG&A) and special charges, net.

[3] Loss reclassified from AOCI into earnings is reported in other income (expense), net.

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Note 5 - Components of Accumulaed Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	Aug. 27, 2016	Nov. 28, 2015
AOCI Including Portion Attributable to Noncontrolling Interest [Member]
Foreign currency translation adjustment	$ (47,732)	$ (51,592)
Defined benefit pension plans adjustment, net of taxes of $90,289	(169,368)	(174,400)
Interest rate swap, net of taxes of ($10)	17	(13)
Accumulated Other Comprehensive Income (Loss), Cumulative Changes in Net Gain (Loss) from Cash Flow Hedges, Effect Net of Tax	(1,473)	(1,317)
Accumulated other comprehensive loss	(218,556)	(227,322)
AOCI Attributable to Parent [Member]
Foreign currency translation adjustment	(47,694)	(51,554)
Defined benefit pension plans adjustment, net of taxes of $90,289	(169,368)	(174,400)
Interest rate swap, net of taxes of ($10)	17	(13)
Accumulated Other Comprehensive Income (Loss), Cumulative Changes in Net Gain (Loss) from Cash Flow Hedges, Effect Net of Tax	(1,473)	(1,317)
Accumulated other comprehensive loss	(218,518)	(227,284)
AOCI Attributable to Noncontrolling Interest [Member]
Foreign currency translation adjustment	(38)	(38)
Defined benefit pension plans adjustment, net of taxes of $90,289
Interest rate swap, net of taxes of ($10)
Accumulated Other Comprehensive Income (Loss), Cumulative Changes in Net Gain (Loss) from Cash Flow Hedges, Effect Net of Tax
Accumulated other comprehensive loss	(38)	(38)
Accumulated other comprehensive loss	$ (218,518)	$ (227,284)

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Note 5 - Components of Accumulaed Other Comprehensive Income (Loss) (Details) (Parentheticals) - USD ($) $ in Thousands	Aug. 27, 2016	Nov. 28, 2015
Tax on interest rate swap	$ (10)	$ 5
Tax on cash flow hedges	$ 907	811
Taxes on defined benefit pension plans adjustment		$ 93,012

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Note 6 - Special Charges, Net (Details Textual) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Aug. 27, 2016	Aug. 29, 2015	Aug. 27, 2016	Aug. 29, 2015
Business Integration Project [Member]
Other Nonrecurring (Income) Expense	$ (2,807)	$ 1,297	$ (2,024)	$ 4,592
Gain (Loss) on Disposition of Property Plant Equipment, Excluding Oil and Gas Property and Timber Property	3,600		3,600
Other Nonrecurring (Income) Expense	$ (2,807)	$ 1,297	$ (2,024)	$ 4,592

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Note 6 - Special Charges (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Aug. 27, 2016	Aug. 29, 2015	Aug. 27, 2016	Aug. 29, 2015
Business Integration Project [Member]
Acquisition and transformation related costs	$ 55	$ 48	$ 242	$ 595
Workforce reduction costs		216	(1)	2
Facility exit costs	(2,862)	(1,043)	(2,455)	(3,683)
Facility exit costs	2,862	1,043	2,455	3,683
Other related costs		(10)	190	312
Other Nonrecurring (Income) Expense	(2,807)	1,297	(2,024)	4,592
Other Nonrecurring (Income) Expense	$ (2,807)	$ 1,297	$ (2,024)	$ 4,592

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Note 7 - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Aug. 27, 2016	Aug. 29, 2015	Aug. 27, 2016	Aug. 29, 2015
United States Pension Plan of US Entity [Member]
Service cost	$ 27	$ 27	$ 81	$ 80
Interest cost	3,768	4,082	11,303	12,242
Expected return on assets	(6,078)	(6,421)	(18,232)	(19,262)
Prior service cost	7	7	21	22
Actuarial loss	1,292	1,407	3,878	4,221
Net periodic (benefit) cost	(984)	(898)	(2,949)	(2,697)
Foreign Pension Plan [Member]
Service cost	519	467	1,480	1,447
Interest cost	1,343	1,471	4,076	4,448
Expected return on assets	(2,435)	(2,590)	(7,400)	(7,830)
Prior service cost	(1)	(1)	(3)	(3)
Actuarial loss	788	775	2,293	2,387
Net periodic (benefit) cost	214	122	446	449
Other Postretirement Benefit Plan [Member]
Service cost	84	112	252	336
Interest cost	479	510	1,439	1,531
Expected return on assets	(1,341)	(1,377)	(4,025)	(4,132)
Prior service cost	(10)	(626)	(30)	(1,878)
Actuarial loss	532	607	1,596	1,823
Net periodic (benefit) cost	$ (256)	$ (774)	$ (768)	$ (2,320)

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Note 8 - Inventories (Details) - USD ($) $ in Thousands	Aug. 27, 2016	Nov. 28, 2015
Raw materials	$ 125,421	$ 121,545
Finished goods	148,829	142,195
LIFO reserve	(12,887)	(15,236)
Total inventories	$ 261,363	$ 248,504

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Note 9 - Financial Instruments (Details Textual) - USD ($) $ in Thousands	9 Months Ended
	Aug. 27, 2016	Aug. 29, 2015	Nov. 28, 2015	Oct. 07, 2015
Cross Currency Interest Rate Contract [Member] | Other Liabilities [Member]
Foreign Currency Cash Flow Hedge Liability at Fair Value	$ 2,048
Cross Currency Interest Rate Contract [Member]
Derivative, Notional Amount	134,736			$ 134,736
Gain (Loss) on Foreign Currency Cash Flow Hedge Ineffectiveness	40
Accumulated Other Comprehensive Income (Loss), Cumulative Changes in Net Gain (Loss) from Cash Flow Hedges, Effect Net of Tax	1,473
Foreign Currency Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months	827
Foreign Exchange Forward [Member]
Gain (Loss) on Foreign Currency Derivatives Recorded in Earnings, Net	(4,570)
Interest Rate Swap [Member]
Derivative, Amount of Hedged Item	75,000
Interest Rate Fair Value Hedge Liability at Fair Value	2,284
Interest Rate Fair Value Hedge Asset at Fair Value	2,337		$ 3,395
Derivative, Net Hedge Ineffectiveness Gain (Loss)	14	$ 62
Interest Rate Fair Value Hedge Asset at Fair Value	$ 2,337		$ 3,395

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Note 9 - Swaps Outstanding (Details) - USD ($) $ in Thousands	9 Months Ended
	Aug. 27, 2016	Nov. 28, 2015	Oct. 07, 2015
Cross Currency Interest Rate Contract [Member] | Currency Swap 1 [Member]
Fiscal Year of Expiration	2017
Interest rate minimum	3.05%
Derivative, Notional Amount	$ 44,912
Fair Value	$ (342)
Interest rate maximum	3.9145%
Cross Currency Interest Rate Contract [Member] | Currency Swap 2 [Member]
Fiscal Year of Expiration	2018
Interest rate minimum	3.45%
Derivative, Notional Amount	$ 44,912
Fair Value	$ (689)
Interest rate maximum	4.5374%
Cross Currency Interest Rate Contract [Member] | Currency Swap 3 [Member]
Fiscal Year of Expiration	2019
Interest rate minimum	3.80%
Derivative, Notional Amount	$ 44,912
Fair Value	$ (1,017)
Interest rate maximum	5.053%
Cross Currency Interest Rate Contract [Member]
Derivative, Notional Amount	$ 134,736		$ 134,736
Fair Value	(2,048)
Fair Value	$ 2,048	$ 5,384

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Note 10 - Asbestos Related Lawsuits and Claims (Details) - Asbestos Related Lawsuits And Claims [Member] $ in Thousands	9 Months Ended		36 Months Ended
	Aug. 27, 2016 USD ($)	Aug. 29, 2015 USD ($)	Nov. 28, 2015 USD ($)
Lawsuits and claims settled	9	6	25
Settlement amounts	$ 978	$ 463	$ 2,072
Insurance payments received or expected to be received	$ 645	$ 373	$ 1,648

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Note 11 - Operating Segments (Details Textual)	9 Months Ended	12 Months Ended
	Aug. 27, 2016	Nov. 28, 2015
Number of Reportable Segments	5	4

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Note 11 - Reportable Operating Segment Financial Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Aug. 27, 2016	Aug. 29, 2015	Aug. 27, 2016	Aug. 29, 2015
Operating Segments [Member] | Americas Adhesives [Member]
Trade Revenue	$ 198,957	$ 206,623	$ 588,422	$ 618,172
Segment operating income	31,900	33,617	94,043	91,021
Operating Segments [Member] | EIMEA [Member]
Trade Revenue	130,619	133,512	394,807	405,044
Segment operating income	8,430	5,325	25,620	8,303
Operating Segments [Member] | Asia Pacific [Member]
Trade Revenue	57,488	54,645	171,467	167,541
Segment operating income	2,510	2,749	9,299	8,838
Operating Segments [Member] | Construction Products [Member]
Trade Revenue	64,402	72,404	192,111	206,690
Segment operating income	2,093	3,421	5,412	10,790
Operating Segments [Member] | Engineering Adhesives [Member]
Trade Revenue	61,392	56,949	172,891	138,109
Segment operating income	3,496	3,431	6,465	(681)
Operating Segments [Member]
Trade Revenue	512,858	524,133	1,519,698	1,535,556
Segment operating income	48,429	48,543	140,839	118,271
Intersegment Eliminations [Member] | Americas Adhesives [Member]
Trade Revenue	4,096	4,725	11,821	16,428
Intersegment Eliminations [Member] | EIMEA [Member]
Trade Revenue	4,056	4,513	13,821	12,174
Intersegment Eliminations [Member] | Asia Pacific [Member]
Trade Revenue	1,540	1,137	3,801	8,570
Intersegment Eliminations [Member] | Construction Products [Member]
Trade Revenue	185	119	340	541
Intersegment Eliminations [Member] | Engineering Adhesives [Member]
Trade Revenue
Intersegment Eliminations [Member]
Trade Revenue
Trade Revenue	512,858	524,133	1,519,698	1,535,556
Segment operating income	$ 48,429	$ 48,543	$ 140,839	$ 118,271

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Note 11 - Reconciliation of Segment Operating Income to Income from Continuing Operations Before Income Taxes and Income from Equity Method Investments (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Aug. 27, 2016	Aug. 29, 2015	Aug. 27, 2016	Aug. 29, 2015
Segment operating income	$ 48,429	$ 48,543	$ 140,839	$ 118,271
Special charges, net	2,807	(1,297)	2,024	(4,592)
Other income (expense), net	(956)	(1,040)	(7,603)	(1,246)
Interest expense	(6,809)	(6,448)	(19,714)	(18,765)
Income before income taxes and income from equity method investments	$ 43,471	$ 39,758	$ 115,546	$ 93,668

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Note 12 - Income Taxes (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Aug. 27, 2016	Nov. 28, 2015
Unrecognized Tax Benefits	$ 4,508	$ 5,124
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued	639
Unrecognized Tax Benefits, Period Increase (Decrease)	$ (652)

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Note 13 - Goodwill and Other Intangible Assets (Details Textual) - USD ($) $ in Thousands	9 Months Ended
	Aug. 27, 2016	Aug. 29, 2015
Amortization of Intangible Assets	$ 20,509	$ 20,046
Indefinite Lived Trademarks and Trade Names	$ 462

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Note 13 - Goodwill By Segment (Details) $ in Thousands	9 Months Ended
	Aug. 27, 2016 USD ($)
Americas Adhesives [Member]
Goodwill	$ 59,706
Acquisitions
Currency impact	116
Goodwill	59,822
EIMEA [Member]
Goodwill	100,638
Acquisitions
Currency impact	3,885
Goodwill	104,523
Asia Pacific [Member]
Goodwill	17,329
Acquisitions
Currency impact	812
Goodwill	18,141
Construction Products [Member]
Goodwill	22,668
Acquisitions
Currency impact	97
Goodwill	22,765
Engineering Adhesives [Member]
Goodwill	153,863
Acquisitions	38,852	[1]
Currency impact	(4,715)
Goodwill	188,000
Goodwill	354,204
Acquisitions	38,852
Currency impact	195
Goodwill	$ 393,251

[1] Preliminary goodwill balance as of August 27, 2016.

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Note 13 - Amortizable Intangible Assets (Details) - USD ($) $ in Thousands	Aug. 27, 2016	Nov. 28, 2015
Purchased Technology And Patents [Member]
Original cost	$ 70,237	$ 69,792
Accumulated amortization	(23,727)	(17,613)
Net identifiable intangibles	46,510	52,179
Customer Relationships [Member]
Original cost	243,017	234,995
Accumulated amortization	(110,258)	(99,405)
Net identifiable intangibles	132,759	135,590
Other Intangible Assets [Member]
Original cost	49,776	49,563
Accumulated amortization	(28,343)	(24,801)
Net identifiable intangibles	21,433	24,762
Original cost	363,030	354,350
Accumulated amortization	(162,328)	(141,819)
Net identifiable intangibles	$ 200,702	$ 212,531

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Note 13 - Estimated Aggregate Amortization Expense (Details) $ in Thousands	Aug. 27, 2016 USD ($)
2016	$ 7,023
2017	25,901
2018	25,444
2019	23,506
2020	22,527
Thereafter	$ 96,301

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Note 14 - Fair Value Measurements (Details Textual) - Tonsan Adhesive [Member] $ in Thousands	9 Months Ended
	Aug. 27, 2016 USD ($)
Portion at Fair Value Measurement [Member]
Business Combination, Contingent Consideration, Liability	$ 10,221
Selling, General and Administrative Expenses [Member]
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability	$ 2,018

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Note 14 - Fair Value Measurements (Details) - USD ($) $ in Thousands	Aug. 27, 2016	Nov. 28, 2015
Fair Value, Inputs, Level 1 [Member]
Assets:
Marketable securities	$ 1,816	$ 1,698
Derivative assets
Interest Rate Fair Value Hedge Asset at Fair Value
Fair Value
Liabilities:
Derivative liabilities
Contingent consideration liability
Fair Value
Fair Value, Inputs, Level 2 [Member]
Assets:
Marketable securities
Derivative assets	2,931	15,185
Interest Rate Fair Value Hedge Asset at Fair Value	2,337	3,395
Fair Value	2,048	5,384
Liabilities:
Derivative liabilities	7,501	4,744
Contingent consideration liability
Fair Value	2,048	5,384
Fair Value, Inputs, Level 3 [Member]
Assets:
Marketable securities
Derivative assets
Interest Rate Fair Value Hedge Asset at Fair Value
Fair Value
Liabilities:
Derivative liabilities
Contingent consideration liability	10,192	10,854
Fair Value
Marketable securities	1,816	1,698
Derivative assets	2,931	15,185
Interest Rate Fair Value Hedge Asset at Fair Value	2,337	3,395
Fair Value	2,048	5,384
Derivative liabilities	7,501	4,744
Contingent consideration liability	10,192	10,854
Fair Value	$ 2,048	$ 5,384

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Note 14 - Schedule of Contingent Consideration Liabilities (Details) - Fair Value, Inputs, Level 3 [Member] $ in Thousands	9 Months Ended
	Aug. 27, 2016 USD ($)
Level 3 balance beginning of period	$ 10,854
Opening balance sheet adjustment	700
Mark to market adjustment	(2,055)
Foreign currency translation adjustment	693
Level 3 balance ending of period	$ 10,192

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Note 15 - Share Repurchase Program (Details Textual) - USD ($)	3 Months Ended	9 Months Ended		12 Months Ended
	Aug. 27, 2016	Aug. 27, 2016	Aug. 29, 2015	Nov. 28, 2015	Sep. 30, 2010
2010 Share Repurchase Program [Member]
Stock Repurchase Program, Authorized Amount					$ 100,000,000
Stock Repurchased During Period, Value	$ 5,326,000	$ 9,536,000	$ 0
Decreased Value of Common Stock Shares Repurchased		250,000
Decreased Value of Additional Paid in Capital for Shares Repurchased		9,286,000
Stock Repurchased During Period, Value		$ 11,901,000		$ 19,290,000

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Note 16 - Redeemable Non-controlling Interest (Details Textual) € in Millions	9 Months Ended
	Aug. 27, 2016 EUR (€)
Noncontrolling Interest, Increase in Ownership Percentage Per Year	1.00%
Noncontrolling Interest, Number of Years Ownership can Be Increased	5 years
Noncontrolling Interest, Maximum Ownership Percentage by Noncontrolling Shareholder	13.00%
Redeemable Noncontrolling Interest, Equity, Minimum Redemption Value	€ 3.5
Redeemable Noncontrolling Interest, Equity, Redemption Value	€ 3.5

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Note 16 - Redeemable Non-controlling Interests (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Aug. 27, 2016	Nov. 28, 2015
Balance at beginning of period	$ 4,199
Net income (loss) attributed to redeemable non-controlling interest	161	$ 321
Foreign currency translation adjustment	52
Balance at end of period	$ 4,412	$ 4,199