NET INCOME PER SHARE

The following is a reconciliation of the numerator and denominator of the basic and diluted net income per share computations for the periods presented below:



	Three Months Ended				Six Months Ended
	April 30,				April 30,
	2019		2018		2019		2018
	(in millions)
Numerator:
Net income (loss)	$	182	$	205	$	686	$	(115	)
Denominator:
Basic weighted-average shares	317		322		318		323
Potential common shares— stock options and other employee stock plans	4		4		4		—
Diluted weighted-average shares	321		326		322		323

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 collectively are assumed proceeds to be used to repurchase hypothetical shares. An increase in the fair market value of the company's common stock can result in a greater dilutive effect from potentially dilutive awards.

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. In addition, we exclude from the calculation of diluted earnings per share stock options, ESPP, LTPP and restricted stock awards whose combined exercise price and unamortized fair value were greater than the average market price of our common stock because their effect would also be anti-dilutive.

For the three and six months ended April 30, 2019, no potential common shares were excluded from the calculation of diluted earnings per share. For the three months ended April 30, 2018, 96,800 potential common shares outstanding were excluded from the calculation of diluted earnings per share. For the six months ended April 30, 2018, the diluted net loss per share was the same as basic net loss per share as the effects of all 6.6 million potential common shares outstanding would have been anti-dilutive.