EARNINGS PER SHARE

9 Months Ended

Jul. 01, 2016

Basic net earnings per share is computed by dividing net earnings attributable to Varian 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 attributable to Varian by the sum of the weighted average number of common shares outstanding and dilutive common shares under the treasury stock method.

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



	Three Months Ended				Nine Months Ended
(In thousands, except per share amounts)	July 1, 2016		July 3, 2015		July 1, 2016		July 3, 2015
Net earnings attributable to Varian	$	98,795	$	113,506	$	284,793	$	312,789
Weighted average shares outstanding - basic	94,940		99,721		95,955		100,090
Dilutive effect of potential common shares	492		733		567		930
Weighted average shares outstanding - diluted	95,432		100,454		96,522		101,020
Net earnings per share attributable to Varian - basic	$	1.04	$	1.14	$	2.97	$	3.13
Net earnings per share attributable to Varian - diluted	$	1.04	$	1.13	$	2.95	$	3.10
Anti-dilutive employee shared based awards, excluded	2,014		948		2,016		994

The Company excludes potentially dilutive common shares (consisting of shares underlying stock options and the employee stock purchase plan) from the computation of diluted weighted average shares outstanding if the per share value, either the exercise price of the awards or the sum of (a) the exercise price of the awards 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 awards would be anti-dilutive to earnings per share.