Net Income (Loss) Per Common Share From Continuing Operations Attributable to Microchip Technology Stockholders

The following table sets forth the computation of basic and diluted net income (loss) per common share from continuing operations attributable to Microchip Technology stockholders (in thousands, except per share amounts):



	Three Months Ended				Six Months Ended
	September 30,				September 30,
	2016		2015		2016			2015
Net income (loss) from continuing operations attributable to Microchip Technology	$	35,574	$	64,899	$	(73,651	)	$	195,566
Weighted average common shares outstanding	215,524		204,275		214,935			203,254
Dilutive effect of stock options and RSUs	4,465		3,065		—			3,228
Dilutive effect of 2037 junior subordinated convertible debentures	13,971		9,759		—			10,451
Weighted average common and potential common shares outstanding	233,960		217,099		214,935			216,933
Basic net income (loss) per common share from continuing operations attributable to Microchip Technology stockholders	$	0.17	$	0.32	$	(0.34	)	$	0.96
Diluted net income (loss) per common share from continuing operations attributable to Microchip Technology stockholders	$	0.15	$	0.30	$	(0.34	)	$	0.90

The Company computed basic net income (loss) per common share from continuing operations attributable to its stockholders using net income (loss) from continuing operations available to common stockholders and the weighted average number of common shares outstanding during the period. The Company computed diluted net income (loss) per common share from continuing operations attributable to its stockholders using net income (loss) from continuing operations available to common stockholders and the weighted average number of common shares outstanding plus potentially dilutive common shares outstanding during the period.

Potentially dilutive common shares from employee equity incentive plans are determined by applying the treasury stock method to the assumed exercise of outstanding stock options and the assumed vesting of outstanding RSUs. For the six months ended September 30, 2016, the calculation of diluted net loss per common share excluded 4,312,066 common shares from employee equity incentive plans as the related impact would have been anti-dilutive as the Company generated a net loss. Weighted average common shares exclude the effect of option shares which are not dilutive. There were no anti-dilutive option shares for the three months ended September 30, 2016. For the three and six months ended September 30, 2015, the number of option shares that were antidilutive was 182,848 and 47,296, respectively.

Diluted net income per common share attributable to stockholders for the three months ended September 30, 2016, includes 13,971,278 shares issuable upon the exchange of the Company's 2.125% junior subordinated convertible debentures due December 15, 2037 (see Note 16). For the six months ended September 30, 2016, the calculations of diluted net loss per common share excluded 13,068,545 shares issuable upon the exchange of the Company's 2.125% junior subordinated convertible debentures as the related impact would have been anti-dilutive as the Company generated a loss. Diluted net income per common share from continuing operations attributable to stockholders for the three and six months ended September 30, 2015 includes 9,759,393 shares and 10,451,083 shares, respectively, issuable upon the exchange of the Company's 2.125% junior subordinated convertible debentures. The debentures have no impact on diluted net income per common share unless the average price of the Company's common stock exceeds the conversion price because the principal amount of the debentures will be settled in cash upon conversion. Prior to conversion, the Company will include, in the diluted net income per common share calculation, the effect of the additional shares that may be issued when the Company's common stock price exceeds the conversion price using the treasury stock method. The weighted average conversion price per share used in calculating the dilutive effect of the convertible debt for the three and six-month periods ended September 30, 2016 was $24.07 and $24.15, respectively. The weighted average conversion price per share used in calculating the dilutive effect of the convertible debt for the three and six months ended September 30, 2015 was $24.87 and $24.94, respectively.

There were no shares issuable upon the exchange of the Company's 1.625% senior subordinated convertible debentures due February 15, 2025 (see Note 15). The debentures have no impact on diluted net income per common share unless the average price of the Company's common stock exceeds the conversion price because the principal amount of the debentures will be settled in cash upon conversion. Prior to conversion, the Company will include, in the diluted net income per common share calculation, the effect of the additional shares that may be issued when the Company's common stock price exceeds the conversion price using the treasury stock method. The weighted average conversion price per share used in calculating the dilutive effect of the convertible debt for the three and six-month periods ended September 30, 2016 was $65.38 and $65.60, respectively. The weighted average conversion price per share used in calculating the dilutive effect of the convertible debt for the three and six-month periods ended September 30, 2015 was $67.55 and $67.75, respectively.