The Alberto-Culver Company develops, manufactures, distributes, and markets branded beauty care products as well as branded food and household products in the United States and more than 100 other countries. The following is an excerpt from the comparative income statements (beginning with earnings from continuing operations) from Alberto-Culver's 2008 annual report ($ in thousands):

An income statement sometimes includes items that require separate presentation (net of income taxes) within the statement. The two possible “separately reported items” are discontinued operations and extraordinary items. Alberto-Culver reports one of these items.

A disclosure note from Alberto-Culver's 2008 annual report is shown below:

Required:

1. The disclosure note shows adjustments for “assumed exercise of stock options and assumed vesting of restricted stock.” What other adjustments might be needed? Explain why and how these adjustments are made to the weighted-average shares outstanding.

2. The disclosure note indicates that the effect of some of the stock options were not included because they would be antidilutive. What does that mean? Why not include antidilutive securities?

3. Based on the information provided, prepare the presentation of basic and diluted earnings per share for 2008, 2007, and 2006 that Alberto-Culver reports in its 2008 annual report.