Net Income Per Common Share

3 Months Ended

Apr. 04, 2021

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
	April 4, 2021		March 29, 2020
	(in thousands, except per share amounts)
Net income for basic and diluted net income per share	$	205,512	$	176,191
Weighted average common shares-basic		166,491		166,589
Effect of dilutive potential common shares:
Incremental shares from assumed conversion of convertible notes (1)		10,310		7,333
Convertible note hedge warrant shares (2)		9,429		5,492
Restricted stock units		1,395		1,163
Stock options		108		134
Employee stock purchase plan		7		25
Dilutive potential common shares		21,249		14,147
Weighted average common shares-diluted		187,740		180,736
Net income per common share-basic	$	1.23	$	1.06
Net income per common share-diluted	$	1.09	$	0.97

(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 $31.55, multiplied by 13.8 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 $39.59, multiplied by 13.8 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 restricted stock units because the effect would have been anti-dilutive.