Earnings Per Share

9 Months Ended

Jul. 01, 2011

Earnings Per Share

Earnings Per Share

15. EARNINGS PER SHARE

Basic net earnings per share is computed by dividing net earnings by the weighted average number of shares of VMS common stock outstanding for the period. Diluted net earnings per share is computed by dividing net earnings by the sum of the weighted average number of common shares outstanding and dilutive common shares under the treasury method.

The following table sets forth the computation of net basic and diluted earnings per share:

	Three Months Ended					Nine Months Ended
(In thousands, except per share amounts)	July 1, 2011		July 2, 2010			July 1, 2011		July 2, 2010
Earnings from continuing operations	$	98,605	$	91,944		$	298,173	$	261,833
Loss from discontinued operations, net of taxes		—		(6,450	)		—		(6,450	)
Net earnings	$	98,605	$	85,494		$	298,173	$	255,383
Basic weighted average shares outstanding		116,874		122,072			117,614		122,871
Dilutive effect of potential common shares		2,190		2,439			2,217		1,660
Diluted weighted average shares outstanding		119,064		124,511			119,831		124,531
Net earnings (loss) per share - basic:
Continuing operations	$	0.84	$	0.75		$	2.54	$	2.13
Discontinued operations		—		(0.05	)		—		(0.05	)
Net earnings per share	$	0.84	$	0.70		$	2.54	$	2.08
Net earnings (loss) per share - diluted:
Continuing operations	$	0.83	$	0.74		$	2.49	$	2.10
Discontinued operations		—		(0.05	)		—		(0.05	)
Net earnings per share	$	0.83	$	0.69		$	2.49	$	2.05

The Company excludes shares underlying stock options from the computation of diluted weighted average shares outstanding if the per share value, either the exercise price of the options or the sum of (a) the exercise price of the options and (b) the amount of the compensation cost attributed to future services and not yet recognized and (c) the amount of tax benefit or shortfall that would be recorded in additional paid-in capital when the award becomes deductible, is greater than the average market price of the shares, because the inclusion of the shares underlying these stock options would be antidilutive to earnings per share.

Based on this calculation, stock options to purchase 47,750 shares at an average exercise price of $69.67 per share and 1,326,128 shares at an average exercise price of $53.16 per share were excluded from the computation of diluted weighted average shares outstanding for the three months ended July 1, 2011 and July 2, 2010, respectively. Stock options to purchase 41,000 shares at an average exercise price of $70.60 and 6,188,386 shares at an average exercise price of $51.27 per share were excluded from the computation of diluted weighted average shares outstanding for the nine months ended July 1, 2011 and July 2, 2010, respectively.