Henry Schein 2009 Annual Report Download - page 80

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HENRY SCHEIN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(In thousands, except share and per share data)
68
Note 2 – Earnings Per Share
Basic earnings per share is computed by dividing net income attributable to Henry Schein, Inc. by the
weighted-average number of common shares outstanding for the period. Our diluted earnings per share is
computed similarly to basic earnings per share, except that it reflects the effect of common shares issuable
upon vesting of restricted stock and upon exercise of stock options using the treasury stock method in
periods in which they have a dilutive effect.
For the year ended December 26, 2009, our convertible debt was not convertible at a premium and
thus the impact of an assumed conversion was not applicable.
For the years ended December 27, 2008 and December 29, 2007, diluted earnings per share includes
the effect of common shares issuable upon conversion of our convertible debt. During the period, the debt
was convertible at a premium as a result of the conditions of the debt. As a result, the amount in excess of
the principal is presumed to be settled in common shares and is reflected in our calculation of diluted
earnings per share.
A reconciliation of shares used in calculating basic and diluted earnings per share follows:
December 26,
2009
December 27,
2008
December 29,
2007
Basic ................................................................................... 88,872,032 89,080,457 88,558,553
Effect of dilutive securities:
Stock options, restricted stock and restricted units .......... 1,684,306 1,514,623 1,740,798
Effect of assumed conversion of convertible debt .............. - 625,906 864,131
Diluted ........................................................................... 90,556,338 91,220,986 91,163,482
Years ended
Weighted-average options to purchase 2,737,820 and 910,359 shares of common stock at prices
ranging from $47.31 to $62.05 and $53.43 to $62.05 per share that were outstanding during the years
ended December 26, 2009 and December 27, 2008 were excluded from each respective year’s computation
of diluted earnings per share. In each of these years, such options’ exercise prices exceeded the average
market price of our common stock, thereby causing the effect of such options to be anti-dilutive. During
the year ended December 29, 2007, the average market price of our common stock exceeded the exercise
price of our options outstanding, resulting in no options being anti-dilutive during 2007.