NET INCOME PER SHARE

12 Months Ended

Oct. 31, 2020

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



	Year Ended October 31,
	2020		2019		2018
	(in millions)
Numerator:
Net income	$	627	$	621	$	165
Denominator:
Basic weighted-average shares	187		188		187
Potential common shares — stock options and other employee stock plans	2		3		4
Diluted weighted-average shares	189		191		191

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 RSUs. 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.

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 2020, 2019 and 2018, 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 number of shares excluded was not material in 2020, 2019 and 2018.