Net Income per Common Share |
L. Net Income per Common
Share
The following
table sets forth the computation of basic and diluted net income
per common share:
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For the Three
Months
Ended |
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For the Nine Months
Ended |
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September 30,
2012 |
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October 2,
2011 |
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September 30,
2012 |
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October 2,
2011 |
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(in thousands, except per share
amounts) |
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Income from continuing
operations
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$ |
88,641 |
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$ |
56,706 |
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$ |
233,592 |
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$ |
214,728 |
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Income from discontinued
operations
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— |
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— |
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— |
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1,703 |
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Gain on disposal of
discontinued operations
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— |
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— |
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— |
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24,371 |
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Net income for basic net
income per share
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$ |
88,641 |
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$ |
56,706 |
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$ |
233,592 |
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$ |
240,802 |
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Weighted average common
shares-basic
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187,364 |
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185,102 |
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186,592 |
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185,063 |
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Effect of dilutive potential
common shares:
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Incremental shares from
assumed conversion of convertible Note(1)
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21,890 |
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19,540 |
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22,397 |
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21,870 |
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Convertible note hedge
warrant shares(2)
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16,765 |
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13,475 |
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17,474 |
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16,737 |
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Restricted stock
units
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1,423 |
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3,377 |
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1,413 |
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3,942 |
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Stock options
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1,735 |
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346 |
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2,075 |
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454 |
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Employee stock purchase
rights
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33 |
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52 |
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52 |
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75 |
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Dilutive potential common
shares
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41,846 |
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36,790 |
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43,411 |
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43,078 |
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Weighted average common
shares-diluted
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229,210 |
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221,892 |
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230,003 |
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228,141 |
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Net income per common
share-basic
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Continuing
operations
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$ |
0.47 |
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$ |
0.31 |
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$ |
1.25 |
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$ |
1.16 |
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Discontinued
operations
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— |
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— |
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— |
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0.14 |
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$ |
0.47 |
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$ |
0.31 |
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$ |
1.25 |
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$ |
1.30 |
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Net income per common
share-diluted
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Continuing
operations
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$ |
0.39 |
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$ |
0.26 |
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$ |
1.02 |
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$ |
0.94 |
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Discontinued
operations
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— |
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— |
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— |
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0.12 |
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$ |
0.39 |
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$ |
0.26 |
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$ |
1.02 |
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$ |
1.06 |
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(1) |
Incremental shares from
assumed conversion of the convertible notes for the three and nine
months ended September 30, 2012 and October 2, 2011 are
calculated using the difference between the average Teradyne stock
price for the period and the conversion price of $5.48, multiplied
by the 34.7 million shares that would be issued upon
conversion. The result of this calculation, representing the total
intrinsic value of the convertible debt, is divided by the average
Teradyne stock price for the period. |
(2) |
Convertible note hedge
warrant shares for the three and nine months ended
September 30, 2012 and October 2, 2011 are calculated
using the difference between the average Teradyne stock price for
the period and the warrant price of $7.67, multiplied by the
34.7 million shares that would be issued upon conversion. The
result of this calculation, representing the total intrinsic value
of the warrant, is divided by the average Teradyne stock price for
the period. |
The computation
of diluted net income per common share for the three and nine
months ended September 30, 2012 excludes the effect of the
potential exercise of stock options to purchase approximately
0.3 million shares, and the computation of the three and nine
months ended September 30, 2012 excludes the effect of the
potential exercise of restricted stock units of 0.1 million and 0.4
million, because the effect would have been
anti-dilutive.
The computation
of diluted net income per common share for the three and nine
months ended October 2, 2011 excludes the effect of the
potential exercise of stock options to purchase approximately
0.5 million and 0.8 million shares and restricted stock
units of 1.4 million and 0.5 million, respectively,
because the effect would have been anti-dilutive.
With respect to
Teradyne’s convertible debt, Teradyne intends to settle its
conversion spread (i.e., the intrinsic value of the embedded option
feature contained in the convertible debt) in shares. Teradyne
accounts for its conversion spread using the treasury stock
method.
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