NET INCOME ATTRIBUTABLE TO IPG PHOTONICS CORPORATION PER SHARE

The following table sets forth the computation of diluted net income attributable to IPG Photonics Corporation per share:



	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
Net income attributable to IPG Photonics Corporation	$	104,116	$	67,058	$	179,061	$	116,385
Weighted average shares	53,380		53,065		53,403		52,981
Dilutive effect of common stock equivalents	1,091		723		1,047		724
Diluted weighted average common shares	54,471		53,788		54,450		53,705
Basic net income attributable to IPG Photonics Corporation per share	$	1.95	$	1.26	$	3.35	$	2.20
Diluted net income attributable to IPG Photonics Corporation per share	$	1.91	$	1.25	$	3.29	$	2.17

For the three months ended June 30, 2017 and 2016, respectively, the computation of diluted weighted average common shares excludes of 45,900 and 59,000 common stock equivalents which include 6,400 and 11,000 restricted stock units ("RSUs") and 200 and 0 performance stock units ("PSUs"), respectively. For the six months ended June 30, 2017 and 2016, it excludes 95,400 and 95,100 common stock equivalents which include 23,200 and 31,300 RSUs and 8,100 and 6,400 PSUs, respectively, because the effect of including them would be anti-dilutive.

Under ASU 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" ("ASU 2016-09"), excess tax benefits and deficiencies as a result of stock option exercises and release of RSUs upon vesting are to be recognized as discrete items within income tax expense or benefit in the consolidated statements of comprehensive income in the reporting period in which they occur. The Company recognized excess tax benefits from stock award exercises and restricted stock unit vesting as a discrete tax benefit, which reduced the provision for income taxes for the three months ended June 30, 2017 by $3,394 and for the six months ended June 30, 2017 by $7,524. The adoption of ASU 2016-09 also increased the calculation of fully diluted shares outstanding for the three months ended June 30, 2017, by 238,917 shares and for six months ended June 30, 2017, by 210,776 shares.

On July 28, 2016, the Company announced that its Board of Directors authorized a share repurchase program (the “Program”) to mitigate the dilutive impact of shares issued upon exercise or release under the Company's various employee and director equity compensation and employee stock purchase plans. Under the Program, the Company's management is authorized to repurchase shares of common stock in an amount not to exceed the number of shares issued to employees and directors under its various employee and director equity compensation and employee stock purchase plans from January 1, 2016 through December 31, 2017. The Program limits aggregate share repurchases to no more than $100,000 over a period ending June 30, 2018.

For the three months ended June 30, 2017, the Company repurchased 90,832 shares of its common stock with an average price of $127.41 per share in the open market. Also, for the six months ended June 30, 2017, the Company repurchased 198,532 shares of its common stock with an average price of $121.45 per share in the open market. The impact on the reduction of weighted average shares for the three months ended June 30, 2017 was 59,256 shares and for the six months ended June 30, 2017 was 99,421 shares. As the Program was announced in July 2016, there were no repurchases made by the Company for the three months ended June 30, 2016 or six months ended June 30, 2016.