Basic and Diluted Net Income (Loss) Per Common Share

Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per common share is computed using net income (loss) and the weighted average number of common shares outstanding plus potentially dilutive common shares outstanding during the period. Potentially dilutive common shares include the assumed exercise of outstanding stock options, assumed release of outstanding restricted stock units ("RSUs") and performance stock units ("PSUs"), assumed conversion of convertible senior notes from conversion spread, and assumed issuance of stock under the Company’s ESPP using the treasury stock method. The Company includes the common shares underlying PSUs in the calculation of diluted net income per share only when they become contingently issuable. In net loss periods, these potentially diluted common shares have been anti-dilutive and therefore, excluded from the diluted net loss calculation.

The following table sets forth the computation of net income (loss) per common share—basic and diluted (in thousands, except per share amounts):



	Years Ended
	December 27, 2014		December 28, 2013			December 29, 2012
Numerator:
Net income (loss)	$	13,659	$	(32,119	)	$	(85,330	)
Denominator:
Basic weighted average common shares outstanding	123,672		117,425			110,739
Effect of dilutive securities:
Employee equity plans	4,778		—			—
Assumed conversion of convertible senior notes from conversion spread	115		—			—
Dilutive weighted average common shares outstanding	128,565		117,425			110,739

Net income (loss) per common share
Basic	$	0.11	$	(0.27	)	$	(0.77	)
Diluted	$	0.11	$	(0.27	)	$	(0.77	)

The number of shares outstanding used in the computation of basic and diluted net income (loss) per share does not include the effect of the potential outstanding common stock listed in the following table. The effects of these potentially outstanding shares were not included in the calculation of diluted net income (loss) per share because their effect would have been anti-dilutive under the treasury stock method or the performance condition of the award has not been met (in thousands):



	As of
	December 27, 2014	December 28, 2013	December 29, 2012
Stock options outstanding	362	6,367	9,008
Restricted stock units	331	6,583	6,703
Performance stock units	124	721	1,368
Employee stock purchase plan shares	741	661	1,100
Warrants to purchase common stock	—	—	93
Total	1,558	14,332	18,272

In 2014, the Company included the dilutive effects of the Company's convertible senior notes in the calculation of diluted net income per common share as the average market price was above the conversion price. The dilutive impact of the Company's convertible senior notes was based on the difference between the Company's average stock price and the conversion price of the convertible senior notes, provided there is a spread. In 2013, the Company excluded the potential shares issuable upon conversion of the convertible senior notes in the calculation of diluted earnings per share because the market price was below the conversion price. Upon conversion of the convertible senior notes, it is the Company’s intention to pay cash equal to the lesser of the aggregate principal amount or the conversion value of the Notes being converted, therefore, only the conversion spread relating to the notes would be included in the Company’s diluted earnings per share calculation unless their effect is anti-dilutive.