Annual report pursuant to Section 13 and 15(d)

Earnings (Loss) Per Share (Notes)

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Earnings (Loss) Per Share (Notes)
 12 Months Ended
Dec. 29, 2018
Earnings Per Share [Abstract]  
Earnings (Loss) Per Share
Earnings (Loss) Per Share
Earnings (Loss) Per Share. Basic earnings (loss) per share is computed based on the weighted-average number of shares outstanding.
Diluted net income (loss) per share is computed based on the weighted-average number of shares outstanding plus potentially dilutive shares outstanding during the period. Potentially dilutive shares are determined by applying the treasury stock method to the assumed exercise of outstanding stock options, the assumed vesting of outstanding RSUs, the assumed issuance of common stock under the employee stock purchase plan (ESPP) and the assumed exercise of the warrant under the warrant agreement (the Warrant Agreement) with West Coast Hitech L.P. (WCH), a wholly-owned subsidiary of Mubadala Investment Company PJSC (Mubadala). Potentially dilutive shares issuable upon conversion of the 2.125% Convertible Senior Notes due 2026 (2.125% Notes) are calculated using the if-converted method.
The following table sets forth the components of basic and diluted earnings (loss) per share:
 
2018
 
2017
 
2016
 
(In millions, except per share amounts)
Numerator—Net income (loss):
 
 
 
 
 
Numerator for basic and diluted earnings (loss) per share
$
337

 
$
(33
)
 
$
(498
)
Denominator—Weighted average shares:
 
 
 
 
 
Denominator for basic earnings (loss) per share
982

 
952

 
835

Effect of potentially dilutive shares:
 
 
 
 
 
 Employee equity incentive plans and warrants
82

 
—

 
—

Denominator for diluted earnings (loss) per share
1,064

 
952

 
835

Earnings (loss) per share:
 
 
 
 
 
Basic
$
0.34

 
$
(0.03
)
 
$
(0.60
)
Diluted
$
0.32

 
$
(0.03
)
 
$
(0.60
)

Potential shares from employee equity incentive plans and the conversion of the 2.125% Notes totaling 105 million shares for 2018 and potential shares from employee equity incentive plans, the conversion of the 2.125% Notes and the warrants under the Warrants Agreement totaling 189 million and 231 million shares for 2017 and 2016, respectively, were not included in the diluted earnings (loss) per share calculation as their inclusion would have been anti-dilutive.