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 three and six months ended June 26, 2010, diluted earnings per share includes the effect of common shares issuable upon conversion of our convertible debt. During this 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.

	Three Months Ended		Six Months Ended
	June 25,	June 26,	June 25,	June 26,
	2011	2010	2011	2010
Basic	90,766	90,021	90,710	89,733
Effect of dilutive securities:
Stock options, restricted stock and restricted units	2,680	2,286	2,620	2,289
Effect of assumed conversion of convertible debt	-	1,045	-	962
Diluted	93,446	93,352	93,330	92,984

Weighted-average options to purchase 990 thousand shares of common stock at exercise prices ranging from $59.89 to $62.05 per share that were outstanding during the three months ended June 26, 2010 were excluded from the computation of diluted earnings per share. Weighted-average options to purchase 6 thousand shares of common stock at an exercise price of $69.45 and 990 thousand shares of common stock at exercise prices ranging from $59.89 to $62.05 per share that were outstanding during the six months ended June 25, 2011 and June 26, 2010, respectively, were excluded from the computation of diluted earnings per share. In each of these periods, such options' exercise prices exceeded the average market price of our common stock, thereby causing the effect of such options to be anti-dilutive.

On September 3, 2010, we redeemed all of our 3% convertible contingent notes originally due in 2034 (the "Convertible Notes") for approximately $240 million in cash and issued 732 thousand shares of our common stock. The effect of assumed conversion of our Convertible Notes, as it relates to the impact on diluted earnings per share, was included through September 3, 2010.