Net Income Per Common Share

3 Months Ended

Mar. 29, 2020

Net Income per Common Share

N. NET INCOME PER COMMON SHARE

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

	For the Three Months Ended
	March 29,		March 31,
	2020		2019
	(in thousands, except per share amounts)
Net income for basic and diluted net income per share	$	176,191	$	109,138
Weighted average common shares-basic		166,589		173,532
Effect of dilutive potential common shares:
Incremental shares from assumed conversion of convertible notes (1)		7,333		2,186
Convertible note hedge warrant shares (2)		5,492		—
Restricted stock units		1,163		1,021
Stock options		134		222
Employee stock purchase plan		25		11
Dilutive potential common shares		14,147		3,440
Weighted average common shares-diluted		180,736		176,972
Net income per common share-basic	$	1.06	$	0.63
Net income per common share-diluted	$	0.97	$	0.62

(1) Incremental shares from 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 $31.61, multiplied by 14.6 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 $39.66, multiplied by 14.6 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.

The computation of diluted net income per common share for the three months ended March 29, 2020 excludes the effect of the potential vesting of 0.3 million of restricted stock units because the effect would have been anti-dilutive.

The computation of diluted net income per common share for the three months ended March 31, 2019 excludes the effect of the potential vesting of 0.6 million shares of restricted stock units because the effect would have been anti-dilutive.