Net Income Per Common Share

6 Months Ended

Jun. 28, 2020

Net Income per Common Share

N. 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
	June 28,		June 30,		June 28,		June 30,
	2020		2019		2020		2019
	(in thousands, except per share amounts)
Net income for basic and diluted net income per share	$	188,908	$	97,397	$	365,098	$	206,535
Weighted average common shares-basic		165,789		171,241		166,189		172,387
Effect of dilutive potential common shares:
Incremental shares from assumed conversion of convertible notes (1)		7,599		4,364		7,466		3,275
Convertible note hedge warrant shares (2)		5,824		1,778		5,658		889
Restricted stock units		913		1,002		1,038		1,012
Stock options		132		183		133		202
Employee stock purchase plan		—		22		13		16
Dilutive potential common shares		14,468		7,349		14,308		5,394
Weighted average common shares-diluted		180,257		178,590		180,497		177,781
Net income per common share-basic	$	1.14	$	0.57	$	2.20	$	1.20
Net income per common share-diluted	$	1.05	$	0.55	$	2.02	$	1.16

(1) Incremental shares from 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 $31.59, multiplied by 14.6 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 $39.64, 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.

The computation of diluted net income per common share for the three and six months ended June 30, 2019 excludes the effect of the potential vesting of 0.2 million and 0.4 million of stock options, respectively, because the effect would have been anti-dilutive.