Net Income Per Common Share (Tables)

9 Months Ended

Sep. 29, 2019

Computation of Basic and Diluted Net Income (Loss) Per Common Share

The following table sets forth the computation of basic and diluted net income per common share:

	For the Three Months Ended				For the Nine Months Ended
	September 29, 2019		September 30, 2018		September 29, 2019		September 30, 2018
	(in thousands, except per share amounts)
Net income for basic and diluted net income per share	$	135,860	$	119,981	$	342,395	$	307,991
Weighted average common shares-basic		169,641		185,744		171,471		190,576
Effect of dilutive potential common shares:
Incremental shares from assumed conversion of convertible notes (1)		5,800		3,025		4,117		3,356
Convertible note hedge warrant shares (2)		3,580		108		1,786		646
Restricted stock units		1,313		1,331		1,112		1,406
Stock options		155		275		186		290
Employee stock purchase plan		5		22		13		26
Dilutive potential common shares		10,853		4,761		7,214		5,724
Weighted average common shares-diluted		180,494		190,505		178,685		196,300
Net income per common share-basic	$	0.80	$	0.65	$	2.00	$	1.62
Net income per common share-diluted	$	0.75	$	0.63	$	1.92	$	1.57

(1) Incremental shares from 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 $31.70, multiplied by 14.5 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 $39.78, multiplied by 14.5 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.