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Net Income per Common Share | 12 Months Ended
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Dec. 31, 2014
Net Income per Common Share | K. NET INCOME PER COMMON SHARE The following table sets forth the computation of basic and diluted net income per common share from operations:
|  | 2014 |  |  | 2013 |  |  | 2012 |
|  | (in thousands, except per share amounts) |
Net income for basic and diluted net income per share |  | $ | 81,272 |  |  | $ | 164,947 |  |  | $ | 217,049 |
Weighted average common shares-basic |  |  | 202,908 |  |  |  | 190,772 |  |  |  | 186,878 |
Effect of dilutive potential common shares: |  |  |  |  |  |  |  |  |  |  |  |
Incremental shares from assumed conversion of convertible notes (1) |  |  | 5,013 |  |  |  | 23,341 |  |  |  | 22,367 |
Convertible note hedge warrant shares (2) |  |  | 12,562 |  |  |  | 18,795 |  |  |  | 17,433 |
Restricted stock units |  |  | 1,092 |  |  |  | 1,127 |  |  |  | 2,291 |
Stock options |  |  | 944 |  |  |  | 1,528 |  |  |  | 1,213 |
Employee stock purchase rights |  |  | 31 |  |  |  | 36 |  |  |  | 64 |
Dilutive potential common shares |  |  | 19,642 |  |  |  | 44,827 |  |  |  | 43,368 |
Weighted average common shares-diluted |  |  | 222,550 |  |  |  | 235,599 |  |  |  | 230,246 |
Net income per common share-basic |  | $ | 0.40 |  |  | $ | 0.86 |  |  | $ | 1.16 |
Net income per common share-diluted |  | $ | 0.37 |  |  | $ | 0.70 |  |  | $ | 0.94 |
(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 $5.48, multiplied by 34.7 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 $7.67, multiplied by 34.7 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. Teradyne’s call option on its common stock (convertible note hedge transaction) was excluded from the calculation of diluted shares because the effect was anti-dilutive. See Note G: “Debt” regarding the convertible note hedge transaction.
The computation of diluted net income per common share for 2014 excludes the effect of the potential exercise of stock options to purchase approximately 0.3 million shares because the effect would have been anti-dilutive. The computation of diluted net income per common share for 2013 excludes the effect of the potential exercise of stock options to purchase approximately 0.4 million shares because the effect would have been anti-dilutive. The computation of diluted net income per common share for 2012 excludes the effect of the potential exercise of stock options to purchase approximately 0.3 million shares and restricted stock units to purchase approximately 0.3 million shares because the effect would have been anti-dilutive.

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