Earnings Per Share

9 Months Ended

Sep. 30, 2011

NOTE 5. Earnings Per Share

Net earnings per share was calculated using the weighted average number of shares outstanding during the respective periods. The following table sets forth the reconciliation from basic to diluted weighted average shares outstanding and the calculations of net earnings per share (in thousands, except per share data):

	Three months ended				Nine months ended
	September 30,				September 30,
	2011		2010		2011		2010

Net earnings	$	90,726	$	75,773	$	240,569	$	182,091

Weighted average shares outstanding:
Basic		72,546		70,994		72,017		70,784
Dilutive potential common shares from stock options and restricted stock (1)		1,679		701		1,508		863
Dilutive potential common shares from conversion of Convertible Notes and Warrants (2)		4,186		-		1,364		-

Diluted		78,411		71,695		74,889		71,647

Basic net earnings per share	$	1.25	$	1.07	$	3.34	$	2.57

Diluted net earnings per share	$	1.16	$	1.06	$	3.21	$	2.54


(1) Potentially dilutive stock options and restricted stock totaling 43 shares and 3,931 shares for the three months ended September 30, 2011 and 2010, respectively, and 1,109 shares and 4,156 shares for the nine months ended September 30, 2011 and 2010, respectively, were excluded from the computation of diluted weighted average shares outstanding due to their antidilutive effect. (2) The average price of our common stock was $66.18 and $35.10 for the three months ended September 30, 2011 and 2010, respectively, and $57.15 and $40.33 for the nine months ended September 30, 2011 and 2010, respectively.

Holders of our Convertible Notes may convert the Convertible Notes into cash, and if applicable, shares of our common stock at the applicable conversion rate, at their option any business day prior to October 15, 2014 if specific conditions are satisfied. For further information on the Convertible Notes, see Note 3 of the notes to the condensed consolidated financial statements. The Convertible Notes have no impact on diluted earnings per share (“EPS”) unless the average price of our common stock for the period exceeds the conversion price (initially $51.34 per share) because the principal amount of the Convertible Notes will be settled in cash upon conversion. Prior to conversion, we use the treasury stock method to include the effect of the additional shares that may be issued if our common stock price exceeds the conversion price. The convertible note hedge purchased in connection with the issuance of our Convertible Notes is excluded from the calculation of diluted EPS as its impact is always anti-dilutive. The warrant transactions associated with the issuance of our Convertible Notes have no impact on EPS unless our average share price for the period exceeds the $60.41 exercise price. The dilutive impact, if any, from the conversion of the Convertible Notes and Warrants has been included in the diluted weighted average shares for both the three and nine months ended September 30, 2011.