NET INCOME PER SHARE

12 Months Ended

Oct. 31, 2019

The following is a reconciliation of the numerator and denominator of the basic and diluted net income per share computations.



	Year Ended October 31,
	2019		2018		2017
	(in millions)
Numerator:
Net income	$	621	$	165	$	102
Denominator:
Basic weighted-average shares	188		187		180
Potential common shares— stock options and other employee stock plans	3		4		2
Diluted weighted-average shares	191		191		182

The dilutive effect of share-based awards is reflected in diluted net income per share by application of the treasury stock method, which includes consideration of unamortized share-based compensation expense and the dilutive effect of in-the-money options and non-vested restricted stock units. Under the treasury stock method, the amount the employee must pay for exercising stock options and unamortized share-based compensation expense are collectively assumed to be used to repurchase hypothetical shares. The increase in diluted weighted average shares for the year ended October 31, 2018 includes 5 million shares attributed to the weighted impact of 13 million shares of common stock issued in March 2017.

We exclude stock options with exercise prices greater than the average market price of our common stock from the calculation of diluted earnings per share because their effect would be anti-dilutive. For the years ended 2019, 2018 and 2017, we excluded zero shares from the calculation of diluted earnings per share. In addition, we also exclude from the calculation of diluted earnings per share, stock options, ESPP, LTP Program and restricted stock awards, whose combined exercise price and unamortized fair value collectively were greater than the average market price of our common stock because their effect would also be anti-dilutive. The impact was immaterial in 2019, 2018 and 2017.