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Net Income per Common Share
 3 Months Ended
Apr. 05, 2015
Net Income per Common Share

M. 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 5,
2015		      March 30,
2014		  
    

(in thousands, except per

share amounts)

  

Net income for basic and diluted net income per share

    $ 32,787       $ 929   
  

 

 

     

 

 

  

Weighted average common shares-basic

   217,187      193,311   

Effect of dilutive potential common shares:

Incremental shares from assumed conversion of convertible notes (1)

   —       20,052   

Convertible note hedge warrant shares (2)

   —       20,942   

Restricted stock units

   901      1,051   

Stock options

   696      1,106   

Employee stock purchase plan

   28      22   
  

 

 

     

 

 

  

Dilutive potential common shares

   1,625      43,173   
  

 

 

     

 

 

  

Weighted average common shares-diluted

   218,812      236,484   
  

 

 

     

 

 

  

Net income per common share-basic

 $ 0.15    $ 0.00   
  

 

 

     

 

 

  

Net income per common share-diluted

 $ 0.15    $ 0.00   
  

 

 

     

 

 

  

 

(1) Incremental shares from the 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 $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 note hedge warrant shares were calculated using the difference between the average Teradyne stock price for the period and the warrant price of $7.6650, 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 F: “Debt” regarding the convertible note hedge transaction.

The computation of diluted net income per common share for the three months ended April 5, 2015 excludes the effect of the potential exercise of stock options to purchase approximately 0.2 million shares because the effect would have been anti-dilutive.

The computation of diluted net income per common share for the three months ended March 30, 2014 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.