Net Income (Loss) per Common Share (Tables)

12 Months Ended

Dec. 31, 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:

	2019		2018		2017
	(in thousands, except per share amounts)
Net income for basic and diluted net income per share	$	467,468	$	451,779	$	257,692
Weighted average common shares-basic		170,425		187,672		198,069
Effect of dilutive potential common shares:
Incremental shares from assumed conversion of convertible notes (1)		4,909		2,749		1,298
Convertible note hedge warrant shares (2)		2,698		485		112
Restricted stock units		1,236		1,385		1,800
Stock options		178		278		335
Employee stock purchase rights		13		36		27
Dilutive potential common shares		9,034		4,933		3,572
Weighted average common shares-diluted		179,459		192,605		201,641
Net income per common share-basic	$	2.74	$	2.41	$	1.30
Net income per common share-diluted	$	2.60	$	2.35	$	1.28

(1) Incremental shares from the assumed conversion of the convertible notes was calculated using the difference between the average Teradyne stock price for the period and the conversion price of $31.62, 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 notes hedge warrant shares were calculated using the difference between the average Teradyne stock price for the period and the warrant price of $39.68, 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.