Net Income Per Share

6 Months Ended

Jul. 31, 2020

Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding for the fiscal period. Diluted earnings per share is computed by giving effect to all potential weighted average dilutive common stock, including options and restricted stock units. The dilutive effect of outstanding awards and convertible securities is reflected in diluted earnings per share by application of the treasury stock method.

A reconciliation of the denominator used in the calculation of basic and diluted earnings per share is as follows (in millions):


2	Three Months Ended July 31,						Six Months Ended July 31,
	2020		2019		2020		2019
Numerator:
Net income	$	2,625	$	91	$	2,724	$	483
Denominator:
Weighted-average shares outstanding for basic earnings per share	904		776		901		774


Dilutive effect of employee stock awards	18		19		18		21

Adjusted weighted-average shares outstanding and assumed conversions for diluted earnings per share	922		795		919		795

The weighted-average number of shares outstanding used in the computation of diluted earnings per share does not include the effect of the following potential outstanding common stock. The effects of these potentially outstanding shares were not included in the calculation of diluted earnings per share because the effect would have been anti-dilutive (in millions):


	Three Months Ended July 31,			Six Months Ended July 31,
	2020	2019	2020	2019
Employee stock awards	12	7	11	5