Net Earnings Per Share

The Company calculates basic net EPS using net earnings and the weighted-average number of shares outstanding during the reporting period. Diluted net EPS includes any dilutive effect of restricted stock awards, stock options, and performance-based awards.

The reconciliations of the numerators and denominators of each of the basic and diluted net EPS calculations were as follows:



	Three months ended July 31,				Nine months ended July 31,
	2016		2015		2016		2015
	In millions, except per share amounts
Numerator:
Net earnings	$	2,272	$	224	$	2,859	$	1,076
Denominator:⁽¹⁾⁽²⁾
Weighted-average shares used to compute basic net EPS	1,681		1,804		1,722		1,804
Dilutive effect of employee stock plans⁽³⁾	34		30		26		30
Weighted-average shares used to compute diluted net EPS	1,715		1,834		1,748		1,834
Net earnings per share:
Basic	$	1.35	$	0.13	$	1.66	$	0.60
Diluted	$	1.32	$	0.13	$	1.64	$	0.59
Anti-dilutive weighted average stock awards⁽⁴⁾	25		28		44		28

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(1)	The Company considers restricted stock awards that provide the holder with a non-forfeitable right to receive dividends to be participating securities. For the periods presented, there were no shares outstanding of restricted stock that provided the holder with a non-forfeitable right to receive dividends.

(2)

On November 1, 2015, the separation and distribution date, HP Inc. stockholders received one share of Hewlett Packard Enterprise common stock for every share of HP Inc. common stock held as of the record date, October 21, 2015. For comparative purposes, the same number of shares used to compute basic and diluted net earnings per share for the fiscal year ended October 31, 2015 is used in the calculation of basic and diluted net earnings per share for all periods in fiscal 2015.

(3)

For the periods presented in fiscal 2015, the Company calculates the weighted-average dilutive effect of employee stock plans after conversion, by multiplying the dilutive Hewlett-Packard Company stock-based awards attributable to Hewlett Packard Enterprise employees for the fiscal year ended October 31, 2015 by the price conversion ratio used to convert those awards to equivalent units of Hewlett Packard Enterprise awards on the separation date. The price conversion ratio was calculated using the closing price of Hewlett-Packard Company common shares on October 31, 2015 divided by the opening price of Hewlett Packard Enterprise common shares on November 2, 2015.

(4)

The Company excludes stock awards where the assumed proceeds exceed the average market price from the calculation of diluted net EPS, because their effect would be anti-dilutive. The assumed proceeds of a stock award include the sum of its exercise price (if the award is an option), average unrecognized compensation cost and excess tax benefit. For the three and nine months ended July 31, 2015, the Company's anti-dilutive shares were calculated by multiplying the anti-dilutive Hewlett-Packard Company stock-based awards attributable to Hewlett Packard Enterprise employees for the fiscal year ended October 31, 2015 by the price conversion ratio used to convert those awards to equivalent units of Hewlett Packard Enterprise awards on the separation date. The price conversion ratio was calculated using the closing price of Hewlett-Packard Company common shares on October 31, 2015 divided by the opening price of Hewlett Packard Enterprise common shares on November 2, 2015.