Description of Business and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Jul. 31, 2019

The following table presents the composition of shares used in the computation of basic and diluted net income per share for the periods indicated.



	Twelve Months Ended July 31,
(In millions, except per share amounts)	2019		2018		2017
Numerator:
Net income	$	1,557	$	1,329	$	985
Denominator:
Shares used in basic per share amounts:
Weighted average common shares outstanding	260		256		257
Shares used in diluted per share amounts:
Weighted average common shares outstanding	260		256		257
Dilutive common equivalent shares from stock options and restricted stock awards	4		5		4
Dilutive weighted average common shares outstanding	264		261		261

Basic and diluted net income per share:
Basic net income per share	$	5.99	$	5.18	$	3.83
Diluted net income per share	$	5.89	$	5.09	$	3.78

Shares excluded from diluted net income per share:
Weighted average stock options and restricted stock units that have been excluded from dilutive common equivalent shares outstanding due to their anti-dilutive effect	1		—		3

Adoption of ASU 2014-09 impacted our previously reported results as follows:



	July 31, 2018
(In millions)	As Reported		Topic 606 Adjustment			As Adjusted
Prepaid expenses and other current assets	$	184	$	18		$	202
Long-term deferred income taxes ⁽¹⁾	87		(85		)	2
Other assets ⁽¹⁾	190		23			213
Deferred revenue	961		(380		)	581
Other current liabilities	191		7			198
Long-term deferred revenue⁽²⁾	197		(194		)	3
Other long-term obligations^{(2) (3)}	123		61			184
Stockholders’ equity	2,354		462			2,816

(1) Upon adoption, long-term deferred income taxes are included in other assets on our consolidated balance sheets.

(2) Upon adoption, long-term deferred revenue is included in other long-term obligations on our consolidated balance sheets.

(3) Balance includes long-term deferred income tax liabilities and other long-term obligations on our consolidated balance sheets.



	Twelve Months Ended July 31, 2018
(In millions, except per share amounts)	As Reported		Topic 606 Adjustment			As Adjusted
Net revenue	$	5,964	$	61		$	6,025
Cost of revenue	977		1			978
Selling and marketing expenses	1,634		(3		)	1,631
Operating income	1,497		63			1,560
Income tax provision	292		(55		)	237
Net income	1,211		118			1,329

Diluted earnings per share	$	4.64	$	0.45		$	5.09



	Twelve Months Ended July 31, 2017
(In millions, except per share amounts)	As Reported		Topic 606 Adjustment			As Adjusted
Net revenue	$	5,177	$	19		$	5,196
Cost of revenue	809		1			810
Selling and marketing expenses	1,420		(5		)	1,415
Operating income	1,395		23			1,418
Income tax provision	396		9			405
Net income	971		14			985

Diluted earnings per share	$	3.72	$	0.06		$	3.78

The adoption of ASU 2016-18 impacted our previously reported consolidated statement of cash flows as follows:



	Twelve Months Ended July 31, 2018
(Dollars in millions)	As Reported			ASU 2016-18 Adjustment			As Adjusted
Net cash provided by (used in):
Operating activities	$	2,112		$	—		$	2,112
Investing activities	(532		)	(5		)	(537		)
Financing activities	(634		)	—			(634		)
Effect of exchange rates on cash, cash equivalents, restricted cash, and restricted cash equivalents	(11		)	—			(11		)
Net increase in cash, cash equivalents, restricted cash, and restricted cash equivalents	$	935		$	(5	)	$	930



	Twelve Months Ended July 31, 2017
(Dollars in millions)	As Reported			ASU 2016-18 Adjustment		As Adjusted
Net cash provided by (used in):
Operating activities	$	1,599		$	—	$	1,599
Investing activities	(85		)	68		(17		)
Financing activities	(1,632		)	—		(1,632		)
Effect of exchange rates on cash, cash equivalents, restricted cash, and restricted cash equivalents	9			—		9
Net decrease in cash, cash equivalents, restricted cash, and restricted cash equivalents	$	(109	)	$	68	$	(41	)