NET INCOME (LOSS) PER SHARE

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



	Three Months Ended					Nine Months Ended
	July 31,					July 31,
	2018		2017			2018		2017
	(in millions)
Numerator:
Net income (loss)	$	121	$	(18	)	$	279	$	140
Denominator:
Basic weighted-average shares	188		186			187		178
Potential common shares— stock options and other employee stock plans	3		—			4		2
Diluted weighted-average shares	191		186			191		180

The dilutive effect of share-based awards is reflected in diluted net income per share by application of the treasury stock method. In the period when we have a net loss, stock awards are excluded from our calculation of net income per share as their inclusion would have an anti-dilutive effect. For the three months ended July 31, 2017, we excluded approximately 6 million 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 the effect would be anti-dilutive. For the three and nine months ended July 31, 2018 and for the nine months ended July 31, 2017, we excluded no options from the calculation of diluted earnings per share. In addition, we exclude stock options, ESPP shares, LTP Program and restricted stock awards, of which the combined exercise price and unamortized fair value collectively was greater than the average market price of our common stock because the effect would be anti-dilutive. For the three and nine months ended July 31, 2018, we excluded approximately 3,500 shares and 2,200 shares, respectively. For the nine months ended July 31, 2017, we excluded approximately 188,600 shares.