Per Share Amounts and Common Shares Outstanding

We calculate our basic earnings per share by dividing net income or net loss by the weighted average number of common shares outstanding during the period. Diluted earnings per share are calculated in a similar manner, but include the effect of dilutive securities. To the extent these securities are antidilutive, they are excluded from the calculation of earnings per share. The per share amounts were computed as follows:



	Three Months Ended				Six Months Ended
	June 30, 2012		July 2, 2011		June 30, 2012		July 2, 2011
Income available to common shareholders:
Net Income	$	9,416	$	9,159	$	8,845	$	3,113

Weighted-average shares:
Basic:
Outstanding	13,838		14,058		13,851		14,093
Basic weighted-average shares	13,838		14,058		13,851		14,093

Diluted:
Basic from above	13,838		14,058		13,851		14,093
Incremental shares from assumed:
Exercise of stock options and awards	448		511		474		519
Diluted weighted-average shares	14,286		14,569		14,325		14,612

Net income per share:
Basic	$	.68	$	.65	$	.64	$	.22

Diluted	$	.66	$	.63	$	.62	$	.21

Common Shares Outstanding--A summary of the activity of the common shares outstanding for the six months ended June 30, 2012 follows:



Shares outstanding at January 1, 2012	13,845,635
Shares purchased	(394,390	)
Shares sold	232,891
Options and awards exercised	129,081
	(32,418	)
Shares outstanding at June 30, 2012	13,813,217

On June 30, 2012, we had 13,813,217 common shares outstanding, and employee and director options exercisable to purchase 822,525 common shares.

Stock Subscription Offering--Beginning May 2012, the Company offered to eligible employees and nonemployee directors the right to subscribe to common shares of the Company at $19.70 per share in accordance with the provisions of The Davey Tree Expert Company 2004 Omnibus Stock Plan and the rules of the Compensation Committee of the Company's Board of Directors (collectively, the "plan"). The offering period ended on August 1, 2012.


J.	Per Share Amounts and Common Shares Outstanding (continued)

Under the plan, a participant in the offering purchasing common shares for an aggregate purchase price of less than $5 had to pay with cash. All participants (excluding Company directors and officers) purchasing $5 or more of the common shares had an option to finance their purchase through a down-payment of at least 10% of the total purchase price and a seven-year promissory note for the balance due with interest at 2%. Payments on the promissory note can be made either by payroll deductions or annual lump-sum payments of both principal and interest.

Common shares purchased under the plan have been pledged as security for the payment of the promissory note and the common shares will not be issued until the promissory note is paid-in-full. Dividends will be paid on all subscribed shares, subject to forfeiture to the extent that payment is not ultimately made for the shares.

All participants in the offering purchasing in excess of $5 of common shares were granted a "right" to purchase one additional common share at a price of $19.70 per share for every three common shares purchased under the plan. Each right may be exercised at the rate of one-seventh per year and will expire seven years after the date that the right was granted. Employees may not exercise a right should they cease to be employed by the Company.