Net Income Per Common Share

3 Months Ended

Apr. 03, 2022

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 3,		April 4,
	2022		2021
	(in thousands, except per share amounts)
Net income for basic and diluted net income per share	$	161,928	$	205,512
Weighted average common shares-basic		162,048		166,491
Effect of dilutive potential common shares:
Convertible note hedge warrant shares (1)		10,028		9,429
Incremental shares from assumed conversion of convertible notes (2)		2,541		10,310
Restricted stock units		875		1,395
Stock options		69		108
Employee stock purchase plan		14		7
Dilutive potential common shares		13,527		21,249
Weighted average common shares-diluted		175,575		187,740
Net income per common share-basic	$	1.00	$	1.23
Net income per common share-diluted	$	0.92	$	1.09

(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 $39.54, 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.

(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 $31.51, multiplied by 3.4 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.

The computation of diluted net income per common share for the three months ended April 3, 2022 and April 4, 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.