Note 4: Earnings Per Share

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

	13 Weeks Ended
	March 3,	February 26,
(Shares in thousands)	2012	2011
Weighted-average common shares - basic	49,365	49,006
Equivalent shares from share-based compensations plans	888	871
Weighted-average common and common equivalent shares - diluted	50,253	49,877

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.

Our March 3, 2012 stock price was higher than any of our stock option grant prices, therefore no option shares were excluded from the diluted earnings per share calculations for the first quarter of 2012. Options to purchase 966,011 shares of common stock at the weighted-average exercise price of $24.66 for the 13 week period ended February 26, 2011 were excluded from the diluted earnings per share calculations because they were antidilutive.