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NOTE 4: NET EARNINGS PER SHARE Our basic net earnings per share – without considering the dilutive effect of our share-based awards – for the last three years was: • $3.60 in 2007; • $1.85 in 2006; and • $3.00 in 2005. Our net earnings per diluted share for the last three years was: • $3.59 in 2007; • $1.84 in 2006; and • $2.98 in 2005. This note provides details about: • how we calculate basic and diluted net earnings per share; • our stock repurchase program; and • our shares with an anti-dilutive effect. HOW WE CALCULATE BASIC AND DILUTED NET EARNINGS PER SHARE “Basic earnings” per share is net earnings divided by the weighted average number of our outstanding common and exchangeable shares. “Diluted earnings” per share is net earnings divided by the sum of the: • weighted average number of our outstanding common and exchangeable shares; and • effect of our outstanding dilutive potential common shares. Dilutive potential common shares may include: • outstanding stock options; • restricted stock units; or • performance share units. We use the treasury stock method to calculate the effect of our outstanding dilutive potential common shares. Components of Our Basic and Diluted Earnings per Share  The decrease in the basic weighted average number of shares outstanding from the 2006 periods reflects: • the cancellation of 25,490,194 shares as part of the Domtar Transaction in March 2007; and • the repurchase of 17,826,200 shares since August 2006, including 6,999,400 shares during 2007. SHARES EXCLUDED FROM DILUTIVE EFFECT Certain share-based awards were not included in the computation of diluted earnings per share because they were either anti-dilutive or the required performance conditions were not met: Potential Shares Not Included in the Computation of Diluted Earnings per Share  |