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EARNINGS PER SHARE
 9 Months Ended
Sep. 27, 2013
EARNINGS PER SHARE
NOTE 10. EARNINGS PER SHARE
Basic earnings per share is computed by dividing Net income attributable to Trimble Navigation Ltd. by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing Net income attributable to Trimble Navigation Ltd. by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include outstanding stock options, shares to be purchased under the Company’s employee stock purchase plan and unvested restricted stock units. The dilutive effect of potentially dilutive securities is reflected in diluted earnings per share by application of the treasury stock method. Under the treasury stock method, an increase in the fair market value of the Company’s common stock can result in a greater dilutive effect from potentially dilutive securities.
The following table shows the computation of basic and diluted earnings per share:

 
 
Third Quarter of
 
First Three Quarters of
 
2013
 
2012
 
2013
 
2012
(Dollars in thousands, except per share amounts)
 
 
 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
Net income attributable to Trimble Navigation Ltd.
$
54,469

 
$
53,364

 
$
158,858

 
$
157,874

Denominator:
 
 
 
 
 
 
 
Weighted average number of common shares used in basic earnings per share
257,037

 
251,742

 
256,135

 
250,404

Effect of dilutive securities
4,100

 
5,016


4,529


5,884

Weighted average number of common shares and dilutive potential common shares used in diluted earnings per share
261,137

 
256,758

 
260,664

 
256,288

Basic earnings per share
$
0.21

 
$
0.21

 
$
0.62

 
$
0.63

Diluted earnings per share
$
0.21

 
$
0.21

 
$
0.61

 
$
0.62


For the third quarter of fiscal 2013 and 2012, the Company excluded 3.5 million and 5.2 million shares of outstanding stock options, respectively, from the calculation of diluted earnings per share because their effect would have been antidilutive. For the first three quarters of fiscal 2013 and 2012, the Company excluded 3.0 million and 4.6 million shares of outstanding stock options, respectively, from the calculation of diluted earnings per share because their effect would have been antidilutive.