L. NET INCOME (LOSS) PER COMMON SHARE

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


	2017		2016			2015
	(in thousands, except per share amounts)
Net income (loss) for basic and diluted net income per share	$	257,692	$	(43,421	)	$	206,477

Weighted average common shares-basic		198,069		202,578			211,544
Effect of dilutive potential common shares:
Restricted stock units		1,800		—			1,130
Incremental shares from assumed conversion of convertible notes (1)		1,298		—			—
Stock options		335		—			606
Convertible note hedge warrant shares (2)		112		—			—
Employee stock purchase rights		27		—			41

Dilutive potential common shares		3,572		—			1,777

Weighted average common shares-diluted		201,641		202,578			213,321

Net income (loss) per common share-basic	$	1.30	$	(0.21	)	$	0.98

Net income (loss) per common share-diluted	$	1.28	$	(0.21	)	$	0.97

(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 $31.80, multiplied by 14.5 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 $39.91, multiplied by 14.5 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 income per common share for 2017 excludes the effect of the potential exercise of stock options to purchase approximately 0.1 million shares because the effect would have been 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.