| Net Income per Common Share |
M. 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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October 4,
2015 |
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September 28,
2014 |
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October 4,
2015 |
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September 28,
2014 |
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(in thousands, except per share amounts) |
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Net income for basic and diluted net income per share
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$ |
71,453 |
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$ |
82,949 |
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$ |
207,118 |
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$ |
185,083 |
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Weighted average common shares-basic
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210,032 |
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207,381 |
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213,688 |
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198,367 |
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Effect of dilutive potential common shares:
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Incremental shares from assumed conversion of convertible
notes (1)
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— |
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— |
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— |
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6,684 |
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Convertible note hedge warrant shares (2)
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— |
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8,885 |
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— |
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16,744 |
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Restricted stock units
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1,103 |
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1,167 |
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994 |
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975 |
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Stock options
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578 |
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879 |
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626 |
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997 |
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Employee stock purchase plan
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23 |
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21 |
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40 |
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28 |
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Dilutive potential common shares
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1,704 |
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10,952 |
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1,660 |
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25,428 |
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Weighted average common shares-diluted
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211,736 |
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218,333 |
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215,348 |
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223,795 |
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Net income per common share-basic
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$ |
0.34 |
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$ |
0.40 |
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$ |
0.97 |
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$ |
0.93 |
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Net income per common share-diluted
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$ |
0.34 |
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$ |
0.38 |
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$ |
0.96 |
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$ |
0.83 |
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| (1) |
Incremental shares from the assumed
conversion of the convertible notes were calculated using the
difference between the average Teradyne stock price for the period
and the conversion price of $5.48, multiplied by 34.7 million
shares. The result of this calculation, representing the total
intrinsic value of the convertible debt, was divided by the average
Teradyne stock price for the period. |
| (2) |
Convertible note hedge warrant shares
were calculated using the difference between the average Teradyne
stock price for the period and the warrant price of $7.6650,
multiplied by 34.7 million shares. The result of this
calculation, representing the total intrinsic value of the warrant,
was divided by the average Teradyne stock price for the period.
Teradyne’s call option on its common stock (convertible note
hedge transaction) was excluded from the calculation of diluted
shares because the effect was anti-dilutive. See Note F:
“Debt” regarding the convertible note hedge
transaction. |
The computation of diluted net income per common share for the
three and nine months ended October 4, 2015 excludes the
effect of the potential exercise of stock options to purchase
approximately 0.2 million shares because the effect would have
been anti-dilutive.
The computation of diluted net income per common share for the
three and nine months ended September 28, 2014 excludes the
effect of the potential exercise of stock options to purchase
approximately 0.3 million shares because the effect would have
been anti-dilutive.
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