Net Income Per Share

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



	Year Ended
	January 28, 2018		January 29, 2017		January 31, 2016
	(In millions, except per share data)
Numerator:
Net income	$	3,047	$	1,666	$	614
Denominator:
Basic weighted average shares	599		541		543
Dilutive impact of outstanding securities:
Equity awards	24		26		13
1.00% Convertible Senior Notes	5		44		13
Warrants issued with the 1.00% Convertible Senior Notes	4		38		—
Diluted weighted average shares	632		649		569
Net income per share:
Basic (1)	$	5.09	$	3.08	$	1.13
Diluted (2)	$	4.82	$	2.57	$	1.08
Equity awards excluded from diluted net income per share because their effect would have been anti-dilutive	4		8		10


(1)	Calculated as net income divided by basic weighted average shares.


(2)	Calculated as net income divided by diluted weighted average shares.

The 1.00% Convertible Senior Notes, or the Convertible Notes, are included in the calculation of diluted net income per share. The Convertible Notes have a dilutive impact on net income per share if our average stock price for the reporting period exceeds the adjusted conversion price of $20.0350 per share. The warrants associated with our Convertible Notes, or the Warrants, outstanding are also included in the calculation of diluted net income per share. As of January 28, 2018, there were no warrants outstanding.

For fiscal year 2018, our average stock price was $158.35, which exceeded both the adjusted conversion price and the adjusted strike price, causing the Convertible Notes and the Warrants to have a dilutive impact.

The denominator for diluted net income per share does not include any effect from the convertible note hedge transactions, or the Note Hedges, that we entered into concurrently with the issuance of the Convertible Notes, as its effect would be anti-dilutive. In the event of conversion of the Convertible Notes, the shares delivered to us under the Note Hedges will offset the dilutive effect of the shares that we would issue under the Convertible Notes.

Refer to Note 11 of these Notes to the Consolidated Financial Statements for additional discussion regarding the Convertible Notes, Note Hedges, and Warrants.