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

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



	Three Months Ended				Nine Months Ended
	December 31,				December 31,
	2016		2015		2016		2015
Net income from continuing operations attributable to Microchip Technology	$	107,335	$	61,211	$	33,684	$	256,777
Weighted average common shares outstanding	216,210		203,294		215,360		203,267
Dilutive effect of stock options and RSUs	4,330		3,593		4,317		3,350
Dilutive effect of 2037 junior subordinated convertible debentures	14,884		11,088		13,674		10,663
Weighted average common and potential common shares outstanding	235,424		217,975		233,351		217,280
Basic net income per common share from continuing operations attributable to Microchip Technology stockholders	$	0.50	$	0.30	$	0.16	$	1.26
Diluted net income per common share from continuing operations attributable to Microchip Technology stockholders	$	0.46	$	0.28	$	0.14	$	1.18

The Company computed basic net income per common share from continuing operations attributable to its stockholders using net income 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 per common share from continuing operations attributable to its stockholders using net income 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. Weighted average common shares exclude the effect of option shares which are not dilutive. There were no anti-dilutive option shares for the three and nine months ended December 31, 2016. For the three and nine months ended December 31, 2015, the number of option shares that were antidilutive was 292,327 and 319,981, respectively.

Diluted net income per common share from continuing operations attributable to stockholders for the three and nine months ended December 31, 2016, includes 14,883,643 shares and 13,673,578 shares, respectively, issuable upon the exchange of the Company's 2.125% junior subordinated convertible debentures due December 15, 2037 (see Note 16). Diluted net income per common share from continuing operations attributable to stockholders for the three and nine months ended December 31, 2015 includes 11,088,239 shares and 10,663,468 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 nine-month periods ended December 31, 2016 was $23.93 and $24.08, respectively. The weighted average conversion price per share used in calculating the dilutive effect of the convertible debt for the three and nine months ended December 31, 2015 was $24.62 and $24.83, 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 nine-month periods ended December 31, 2016 was $65.00 and $65.40, respectively. The weighted average conversion price per share used in calculating the dilutive effect of the convertible debt for the three and nine-month periods ended December 31, 2015 was $66.89 and $67.46, respectively.