NET INCOME PER COMMON SHARE (Tables)

62 Months Ended

Dec. 31, 2012

Schedule Of Computation Of Basic And Diluted Net Income Per Common Share

The following table sets forth the computation of basic and diluted net income (loss) per common share from continuing and discontinued operations:

	2012		2011		2010
	(in thousands, except per share amounts)
Income from continuing operations	$	217,049	$	343,957	$	379,692
Income from discontinued operations		—		1,545		5,128
Gain on disposal of discontinued operations		—		24,371		—
Net income or basic net income per share		217,049		369,873		384,820
Income impact of assumed conversion of convertible notes (1)		—		—		13,203
Net income for diluted net income per share	$	217,049	$	369,873	$	398,023
Weighted average common shares-basic		186,878		184,683		179,924
Effect of dilutive potential common shares:
Incremental shares from assumed conversion of convertible notes (2)		22,367		21,504		30,848
Convertible note hedge warrant shares (3)		17,433		16,224		10,492
Restricted stock units		2,291		3,773		5,001
Stock options		1,213		566		443
Employee stock purchase rights		64		70		99
Dilutive potential common shares		43,368		42,137		46,883
Weighted average commons shares-diluted		230,246		226,820		226,807
Net income per common shares-basic:
Continuing operations	$	1.16	$	1.86	$	2.11
Discontinued operations		—		0.14		0.03
	$	1.16	$	2.00	$	2.14
Net income per common shares-diluted:
Continuing operations	$	0.94	$	1.52	$	1.73
Discontinued operations		—		0.11		0.02
	$	0.94	$	1.63	$	1.75

(1) Income impact of convertible notes for 2010 represents interest expense that would have not been recorded if the notes converted at the beginning of the period.

(2) Incremental shares from assumed conversion of the convertible notes for 2012 and 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 will 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. For 2010, incremental shares from assumed conversion of the convertible notes represent the 34.7 million of shares that will be issued upon conversion.

(3) Convertible notes hedge warrant shares for 2012, 2011 and 2010 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 will 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. Teradyne’s call option on its common stock (convertible note hedge transaction) is excluded from the calculation of diluted shares because the effect would be anti-dilutive. See Note I: “Debt” regarding convertible note hedge transaction.