Net Income Per Common Share

9 Months Ended

Oct. 03, 2021

O. 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				For the Nine Months Ended
	October 3, 2021		September 27, 2020		October 3, 2021		September 27, 2020

	(in thousands, except per share amounts)
Net income for basic and diluted net income per share	$	256,718	$	222,718	$	790,549	$	587,815

Weighted average common shares-basic		164,583		166,014		165,690		166,131
Effect of dilutive potential common shares:
Convertible note hedge warrant shares (1)		9,819		7,775		9,774		6,364
Incremental shares from assumed conversion of convertible notes (2)		6,464		9,156		8,784		8,029
Restricted stock units		1,035		1,237		1,147		1,104
Stock options		73		141		87		136
Employee stock purchase plan		13		15		10		13

Dilutive potential common shares		17,404		18,324		19,802		15,646

Weighted average common shares-diluted		181,987		184,338		185,492		181,777

Net income per common share-basic	$	1.56	$	1.34	$	4.77	$	3.54

Net income per common share-diluted	$	1.41	$	1.21	$	4.26	$	3.23

(1)

Convertible notes hedge warrant shares were calculated using the difference between the average Teradyne stock price for the period and the warrant price of $39.56

and $39.58, multiplied by

14.6

million shares and 14.6 million shares for the three and nine months ended October 3, 2021, respectively. The result of this calculation, representing the total intrinsic value of the warrant, was divided by the average Teradyne stock price for the period.

(2)

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 $31.53

and $31.54, multiplied by

8.7

million shares and 11.7 million shares, for the three and nine months ended October 3, 2021, respectively. 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.

The computation of diluted net income per common share for the three and nine months ended October 3, 2021 excludes the effect of the potential vesting of 0.1 million and 0.1 million, respectively, of restricted stock units 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 27, 2020 excludes the effect of the potential vesting of 0.1 million and 0.2 million, respectively, of restricted stock units because the effect would have been anti-dilutive.