Net Income Per Common Share

6 Months Ended

Jul. 04, 2021

O. 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				For the Six Months Ended
	July 4, 2021		June 28, 2020		July 4, 2021		June 28, 2020
	(in thousands, except per share amounts)
Net income for basic and diluted net income per share	$	328,319	$	188,908	$	533,831	$	365,098

Weighted average common shares-basic		165,995		165,789		166,243		166,189
Effect of dilutive potential common shares:
Incremental shares from assumed conversion of convertible notes (1)		9,578		7,599		9,944		7,466
Convertible note hedge warrant shares (2)		10,073		5,824		9,751		5,658
Restricted stock units		1,015		913		1,205		1,038
Stock options		78		132		93		133
Employee stock purchase plan		11		—		9		13

Dilutive potential common shares		20,755		14,468		21,002		14,308

Weighted average common shares-diluted		186,750		180,257		187,245		180,497

Net income per common share-basic	$	1.98	$	1.14	$	3.21	$	2.20

Net income per common share-diluted	$	1.76	$	1.05	$	2.85	$	2.02

(1)

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 $31.54, multiplied by 12.7 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 $39.58, 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.

The computation of diluted net income per common share for the three and six months ended June 28, 2020 excludes the effect of the potential vesting of 0.1 million and 0.2 million, respectively, of restricted stock units because the effect would have been anti-dilutive.