Net (loss) Income per Common Share

12 Months Ended

Dec. 31, 2016

L. NET (LOSS) INCOME PER COMMON SHARE

The following table sets forth the computation of basic and diluted net (loss) income per common share:


	2016			2015		2014
	(in thousands, except per share amounts)
Net (loss) income for basic and diluted net income per share	$	(43,421	)	$	206,477	$	81,272

Weighted average common shares-basic		202,578			211,544		202,908
Effect of dilutive potential common shares:
Incremental shares from assumed conversion of convertible notes (1)		—			—		5,013
Convertible note hedge warrant shares (2)		—			—		12,562
Restricted stock units		—			1,130		1,092
Stock options		—			606		944
Employee stock purchase rights		—			41		31

Dilutive potential common shares		—			1,777		19,642

Weighted average common shares-diluted		202,578			213,321		222,550

Net (loss) income per common share-basic	$	(0.21	)	$	0.98	$	0.40

Net (loss) income per common share-diluted	$	(0.21	)	$	0.97	$	0.37

(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.

The computation of diluted net loss per common share for 2016 excludes the effect of the potential exercise of all outstanding stock options and restricted stock units because Teradyne had a net loss and inclusion would be anti-dilutive.

The computation of diluted net income per common share for 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 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.