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:



	Three Months Ended
	April 29,		April 30,
	2018		2017
	(In millions, except per share data)
Numerator:
Net income	$	1,244	$	507
Denominator:
Basic weighted average shares	606		592
Dilutive impact of outstanding securities:
Equity awards	20		26
1.00% Convertible Senior Notes	1		14
Warrants issued with the 1.00% Convertible Senior Notes	—		9
Diluted weighted average shares	627		641
Net income per share:
Basic (1)	$	2.05	$	0.86
Diluted (2)	$	1.98	$	0.79
Equity awards excluded from diluted net income per share because their effect would have been anti-dilutive	1		2


(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 Due 2018, 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 $20.0296 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 April 29, 2018, there were no warrants outstanding.

For the first quarter of fiscal year 2019, our average stock price was $235.10, which exceeded the adjusted conversion price, causing the Convertible Notes 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 12 of these Notes to Condensed Consolidated Financial Statements for additional discussion regarding the Convertible Notes and Note Hedges.