(Mark One) | ||||||||
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended: | |||||
Or |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||
For the transition period from to |
Commission file number |
(State or other jurisdiction of incorporation or organization) | (I.R.S. employer identification no.) |
(Address of principal executive offices) | (Zip code) | |||||||||||||
(Registrant's telephone number, including area code) |
Securities registered pursuant to Section 12(b) of the Exchange Act: | ||||||||||||||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
☒ | Accelerated filer | ☐ | ||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging growth company |
Page | |||||||||||
Page | |||||
Three Months Ended January 31, | |||||||||||
2021 | 2020 | ||||||||||
In millions, except per share amounts | |||||||||||
Net revenue: | |||||||||||
Products | $ | $ | |||||||||
Services | |||||||||||
Financing income | |||||||||||
Total net revenue | |||||||||||
Costs and expenses: | |||||||||||
Cost of products | |||||||||||
Cost of services | |||||||||||
Financing interest | |||||||||||
Research and development | |||||||||||
Selling, general and administrative | |||||||||||
Amortization of intangible assets | |||||||||||
Transformation costs | |||||||||||
Acquisition, disposition and other related charges | |||||||||||
Total costs and expenses | |||||||||||
Earnings from operations | |||||||||||
Interest and other, net | ( | ( | |||||||||
Tax indemnification adjustments | ( | ( | |||||||||
Non-service net periodic benefit credit | |||||||||||
Earnings from equity interests | |||||||||||
Earnings before taxes | |||||||||||
(Provision) benefit for taxes | ( | ||||||||||
Net earnings | $ | $ | |||||||||
Net earnings per share: | |||||||||||
Basic | $ | $ | |||||||||
Diluted | $ | $ | |||||||||
Weighted-average shares used to compute net earnings per share: | |||||||||||
Basic | |||||||||||
Diluted |
Three Months Ended January 31, | |||||||||||
2021 | 2020 | ||||||||||
In millions | |||||||||||
Net earnings | $ | $ | |||||||||
Other comprehensive income before taxes: | |||||||||||
Change in net unrealized gains (losses) on available-for-sale securities: | |||||||||||
Net unrealized gains (losses) arising during the period | |||||||||||
(Gains) losses reclassified into earnings | ( | ||||||||||
( | |||||||||||
Change in net unrealized gains (losses) on cash flow hedges: | |||||||||||
Net unrealized gains (losses) arising during the period | ( | ||||||||||
Net (gains) losses reclassified into earnings | ( | ||||||||||
( | |||||||||||
Change in unrealized components of defined benefit plans: | |||||||||||
Net unrealized gains (losses) arising during the period | |||||||||||
Amortization of net actuarial loss and prior service benefit | |||||||||||
Curtailments, settlements and other | |||||||||||
Change in cumulative translation adjustment | ( | ||||||||||
Other comprehensive income before taxes | |||||||||||
(Provision) benefit for taxes | ( | ( | |||||||||
Other comprehensive income, net of taxes | |||||||||||
Comprehensive income | $ | $ |
As of | |||||||||||
January 31, 2021 | October 31, 2020 | ||||||||||
(Unaudited) | (Audited) | ||||||||||
In millions, except par value | |||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net of allowances | |||||||||||
Financing receivables, net of allowances | |||||||||||
Inventory | |||||||||||
Assets held for sale | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Property, plant and equipment | |||||||||||
Long-term financing receivables and other assets | |||||||||||
Investments in equity interests | |||||||||||
Goodwill | |||||||||||
Intangible assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
Current liabilities: | |||||||||||
Notes payable and short-term borrowings | $ | $ | |||||||||
Accounts payable | |||||||||||
Employee compensation and benefits | |||||||||||
Taxes on earnings | |||||||||||
Deferred revenue | |||||||||||
Accrued restructuring | |||||||||||
Other accrued liabilities | |||||||||||
Total current liabilities | |||||||||||
Long-term debt | |||||||||||
Other non-current liabilities | |||||||||||
Commitments and contingencies | |||||||||||
Stockholders' equity | |||||||||||
HPE stockholders' equity: | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Total HPE stockholders' equity | |||||||||||
Non-controlling interests | |||||||||||
Total stockholders' equity | |||||||||||
Total liabilities and stockholders' equity | $ | $ |
Three Months Ended January 31, | |||||||||||
2021 | 2020 | ||||||||||
In millions | |||||||||||
Cash flows from operating activities: | |||||||||||
Net earnings | $ | $ | |||||||||
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Stock-based compensation expense | |||||||||||
Provision for inventory and doubtful accounts | |||||||||||
Restructuring charges | |||||||||||
Deferred taxes on earnings | ( | ( | |||||||||
Earnings from equity interests | ( | ( | |||||||||
Other, net | ( | ||||||||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||||||
Accounts receivable | |||||||||||
Financing receivables | ( | ( | |||||||||
Inventory | ( | ( | |||||||||
Accounts payable | ( | ( | |||||||||
Taxes on earnings | ( | ( | |||||||||
Restructuring | ( | ( | |||||||||
Other assets and liabilities | ( | ( | |||||||||
Net cash provided by (used in) operating activities | ( | ||||||||||
Cash flows from investing activities: | |||||||||||
Investment in property, plant and equipment | ( | ( | |||||||||
Proceeds from sale of property, plant and equipment | |||||||||||
Purchases of available-for-sale securities and other investments | ( | ( | |||||||||
Maturities and sales of available-for-sale securities and other investments | |||||||||||
Financial collateral posted | ( | ( | |||||||||
Financial collateral received | |||||||||||
Payments made in connection with business acquisitions, net of cash acquired | ( | ||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Short-term borrowings with original maturities less than 90 days, net | |||||||||||
Proceeds from debt, net of issuance costs | |||||||||||
Payment of debt | ( | ( | |||||||||
Payments related to stock-based award activities, net | ( | ( | |||||||||
Repurchase of common stock | ( | ||||||||||
Cash dividends paid to non-controlling interests | ( | ||||||||||
Contributions from non-controlling interests | |||||||||||
Cash dividends paid | ( | ( | |||||||||
Net cash used in financing activities | ( | ( | |||||||||
Decrease in cash, cash equivalents and restricted cash | ( | ( | |||||||||
Cash, cash equivalents and restricted cash at beginning of period | |||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | $ |
Common Stock | |||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended January 31, 2021 | Number of Shares | Par Value | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Equity Attributable to the Company | Non- controlling Interests | Total Equity | |||||||||||||||||||||||||||||||||||||||
In millions, except number of shares in thousands | |||||||||||||||||||||||||||||||||||||||||||||||
Balance at October 31, 2020 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
Net earnings | |||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | |||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive income | |||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | |||||||||||||||||||||||||||||||||||||||||||||||
Tax withholding related to vesting of employee stock plans | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock in connection with employee stock plans and other | |||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared ($ | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Effects of adoption of accounting standard updates (1) | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Balance at January 31, 2021 | $ | $ | $ | ( | $ | ( | $ | $ | $ |
Common Stock | |||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended January 31, 2020 | Number of Shares | Par Value | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Equity Attributable to the Company | Non- controlling Interests | Total Equity | |||||||||||||||||||||||||||||||||||||||
In millions, except number of shares in thousands | |||||||||||||||||||||||||||||||||||||||||||||||
Balance at October 31, 2019 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
Net earnings | |||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | |||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive income | |||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | |||||||||||||||||||||||||||||||||||||||||||||||
Tax withholding related to vesting of restricted stock units | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock in connection with employee stock plans and other | |||||||||||||||||||||||||||||||||||||||||||||||
Repurchases of common stock | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared ($ | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Effects of adoption of accounting standard updates | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at January 31, 2020 | $ | $ | $ | ( | $ | ( | $ | $ | $ |
Compute | HPC & MCS | Storage | Intelligent Edge | Financial Services | Corporate Investments and Other | Total | |||||||||||||||||||||||||||||||||||
In millions | |||||||||||||||||||||||||||||||||||||||||
Three months ended January 31, 2021 | |||||||||||||||||||||||||||||||||||||||||
Net revenue | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Intersegment net revenue | |||||||||||||||||||||||||||||||||||||||||
Total segment net revenue | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Segment earnings (loss) from operations | $ | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||
Three months ended January 31, 2020 | |||||||||||||||||||||||||||||||||||||||||
Net revenue | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Intersegment net revenue | |||||||||||||||||||||||||||||||||||||||||
Total segment net revenue | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Segment earnings (loss) from operations | $ | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||
Three Months Ended January 31, | |||||||||||
2021 | 2020 | ||||||||||
In millions | |||||||||||
Net Revenue: | |||||||||||
Total segments | $ | $ | |||||||||
Eliminations of intersegment net revenue | ( | ( | |||||||||
Total Hewlett Packard Enterprise consolidated net revenue | $ | $ | |||||||||
Earnings before taxes: | |||||||||||
Total segment earnings from operations | $ | $ | |||||||||
Unallocated corporate costs and eliminations | ( | ( | |||||||||
Stock-based compensation expense | ( | ( | |||||||||
Amortization of initial direct costs | ( | ( | |||||||||
Amortization of intangible assets | ( | ( | |||||||||
Transformation costs | ( | ( | |||||||||
Acquisition, disposition and other related charges | ( | ( | |||||||||
Interest and other, net | ( | ( | |||||||||
Tax indemnification adjustments | ( | ( | |||||||||
Non-service net periodic benefit credit | |||||||||||
Earnings from equity interests | |||||||||||
Total Hewlett Packard Enterprise consolidated earnings before taxes | $ | $ |
As of | |||||||||||
January 31, 2021 | October 31, 2020 | ||||||||||
In millions | |||||||||||
Compute | $ | $ | |||||||||
HPC & MCS | |||||||||||
Storage | |||||||||||
Intelligent Edge | |||||||||||
Financial Services | |||||||||||
Corporate Investments and Other | |||||||||||
Corporate and unallocated assets | |||||||||||
Total Hewlett Packard Enterprise consolidated assets | $ | $ |
Three Months Ended January 31, | |||||||||||
2021 | 2020 | ||||||||||
In millions | |||||||||||
Americas: | |||||||||||
United States | $ | $ | |||||||||
Americas excluding U.S. | |||||||||||
Total Americas | |||||||||||
Europe, Middle East and Africa | |||||||||||
Asia Pacific and Japan | |||||||||||
Total Hewlett Packard Enterprise consolidated net revenue | $ | $ |
Three months ended January 31, 2021 | |||||
In millions | |||||
Program management | $ | ||||
Restructuring charges | |||||
Total transformation costs | $ |
Three months ended January 31, | |||||||||||
2021 | 2020 | ||||||||||
In millions | |||||||||||
Program management | $ | $ | |||||||||
IT costs | |||||||||||
Restructuring charges | |||||||||||
Gain on real estate sales | ( | ( | |||||||||
Other | |||||||||||
Total transformation costs | $ | $ |
Cost Optimization and Prioritization Plan | HPE Next Plan | ||||||||||||||||||||||
Employee Severance | Infrastructure and other | Employee Severance | Infrastructure and other | ||||||||||||||||||||
In millions | |||||||||||||||||||||||
Liability as of October 31, 2020 | $ | $ | $ | $ | |||||||||||||||||||
Charges | |||||||||||||||||||||||
Cash payments | ( | ( | ( | ( | |||||||||||||||||||
Non-cash items | ( | ( | |||||||||||||||||||||
Liability as of January 31, 2021 | $ | $ | $ | $ | |||||||||||||||||||
Total costs incurred to date, as of January 31, 2021 | $ | $ | $ | $ | |||||||||||||||||||
Total expected costs to be incurred as of January 31, 2021 | $ | $ | $ | $ |
Three months ended January 31, | |||||||||||
2021 | 2020 | ||||||||||
In millions | |||||||||||
Service cost | $ | $ | |||||||||
Interest cost(1) | |||||||||||
Expected return on plan assets(1) | ( | ( | |||||||||
Amortization and deferrals(1): | |||||||||||
Actuarial loss | |||||||||||
Prior service benefit | ( | ( | |||||||||
Net periodic benefit (credit) cost | ( | ||||||||||
Settlement loss(1) | |||||||||||
Total net benefit (credit) cost | $ | $ | ( |
As of | |||||||||||
January 31, 2021 | October 31, 2020 | ||||||||||
In millions | |||||||||||
Deferred tax assets | $ | $ | |||||||||
Deferred tax liabilities | ( | ( | |||||||||
Deferred tax assets net of deferred tax liabilities | $ | $ |
As of | |||||||||||
January 31, 2021 | October 31, 2020 | ||||||||||
In millions | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash(1) | |||||||||||
Total | $ | $ |
As of | |||||||||||
January 31, 2021 | October 31, 2020 | ||||||||||
In millions | |||||||||||
Finished goods | $ | $ | |||||||||
Purchased parts and fabricated assemblies | |||||||||||
Total | $ | $ |
As of | |||||||||||
January 31, 2021 | October 31, 2020 | ||||||||||
In millions | |||||||||||
Land | $ | $ | |||||||||
Buildings and leasehold improvements | |||||||||||
Machinery and equipment, including equipment held for lease | |||||||||||
Accumulated depreciation | ( | ( | |||||||||
Total | $ | $ |
Three Months Ended January 31, 2021 | |||||
In millions | |||||
Balance at beginning of period | $ | ||||
Charges | |||||
Adjustments related to pre-existing warranties | ( | ||||
Settlements made | ( | ||||
Balance at end of period | $ |
As of | |||||||||||
January 31, 2021 | October 31, 2020 | ||||||||||
In millions | |||||||||||
Accounts receivable, net | |||||||||||
Accounts receivable | $ | $ | |||||||||
Unbilled receivables | |||||||||||
Allowances | ( | ( | |||||||||
Total | $ | $ |
As of | |||||||||||
January 31, 2021 | October 31, 2020 | ||||||||||
In millions | |||||||||||
Balance at beginning of the period | $ | $ | |||||||||
Provision for credit losses | |||||||||||
Write off's, net of recoveries | ( | ( | |||||||||
Balance at end of the period | $ | $ |
As of | |||||||||||
January 31, 2021 | October 31, 2020 | ||||||||||
In millions | |||||||||||
Minimum lease payments receivable | $ | $ | |||||||||
Unguaranteed residual value | |||||||||||
Unearned income | ( | ( | |||||||||
Financing receivables, gross | |||||||||||
Allowance for credit losses | ( | ( | |||||||||
Financing receivables, net | |||||||||||
Less: current portion | ( | ( | |||||||||
Amounts due after one year, net | $ | $ |
As of | ||||||||
January 31, 2021 | October 31, 2020 | |||||||
Fiscal year | In millions | |||||||
Remainder of fiscal 2021 | $ | $ | ||||||
2022 | ||||||||
2023 | ||||||||
2024 | ||||||||
2025 | ||||||||
Thereafter | ||||||||
Total undiscounted cash flows | $ | $ | ||||||
Present value of lease payments (recognized as finance receivables) | $ | $ | ||||||
Unearned income | $ | $ |
As of January 31, 2021 | |||||||||||||||||
Risk Rating | |||||||||||||||||
Low | Moderate | High | |||||||||||||||
Fiscal Year | In millions | ||||||||||||||||
2021 | $ | $ | $ | ||||||||||||||
2020 | |||||||||||||||||
2019 | |||||||||||||||||
2018 | |||||||||||||||||
2017 and prior | |||||||||||||||||
Total | $ | $ | $ |
As of | |||||
October 31, 2020 | |||||
In millions | |||||
Risk Rating: | |||||
Low | $ | ||||
Moderate | |||||
High | |||||
Total | $ |
As of | |||||||||||
January 31, 2021 | October 31, 2020 | ||||||||||
In millions | |||||||||||
Balance at beginning of period | $ | $ | |||||||||
Adjustment for adoption of the new credit loss standard | |||||||||||
Provision for credit losses | |||||||||||
Adjustment to the existing allowance | |||||||||||
Write-offs | ( | ( | |||||||||
Balance at end of period | $ | $ |
As of | |||||||||||
January 31, 2021 | October 31, 2020 | ||||||||||
In millions | |||||||||||
Billed:(1) | |||||||||||
Current 1-30 days | $ | $ | |||||||||
Past due 31-60 days | |||||||||||
Past due 61-90 days | |||||||||||
Past due > 90 days | |||||||||||
Unbilled sales-type and direct-financing lease receivables | |||||||||||
Total gross financing receivables | $ | $ | |||||||||
Gross financing receivables on non-accrual status(2) | $ | $ | |||||||||
Gross financing receivables 90 days past due and still accruing interest(2) | $ | $ |
As of | |||||||||||
January 31, 2021 | October 31, 2020 | ||||||||||
In millions | |||||||||||
Equipment leased to customers | $ | $ | |||||||||
Accumulated depreciation | ( | ( | |||||||||
Total | $ | $ |
As of | |||||
January 31, 2021 | |||||
Fiscal year | In millions | ||||
Remainder of fiscal 2021 | $ | ||||
2022 | |||||
2023 | |||||
2024 | |||||
2025 | |||||
Thereafter | |||||
Total | $ |
Three Months Ended January 31, | |||||||||||
2021 | 2020 | ||||||||||
In millions | |||||||||||
Sales-type leases and direct financing leases: | |||||||||||
Interest income | $ | $ | |||||||||
Lease income - operating leases | |||||||||||
Total lease income | $ | $ |
As of | |||||||||||
January 31, 2021 | October 31, 2020 | ||||||||||
Assets held by VIE | In millions | ||||||||||
Other current assets | $ | $ | |||||||||
Financing receivables | |||||||||||
Short-term | $ | $ | |||||||||
Long-term | $ | $ | |||||||||
Property, plant and equipment | $ | $ | |||||||||
Liabilities held by VIE | |||||||||||
Notes payable and short-term borrowings, net of unamortized debt issuance costs | $ | $ | |||||||||
Long-term debt, net of unamortized debt issuance costs | $ | $ |
Compute | HPC & MCS | Storage | Intelligent Edge | Financial Services | Corporate Investments and Other | Total | |||||||||||||||||||||||||||||||||||
In millions | |||||||||||||||||||||||||||||||||||||||||
Balance at October 31, 2020 and January 31, 2021 (1) (2) | $ | $ | $ | $ | $ | $ | $ |
As of January 31, 2021 | As of October 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measured Using | Fair Value Measured Using | ||||||||||||||||||||||||||||||||||||||||||||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Remaining Inputs (Level 2) | Significant Other Unobservable Remaining Inputs (Level 3) | Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Remaining Inputs (Level 2) | Significant Other Unobservable Remaining Inputs (Level 3) | Total | ||||||||||||||||||||||||||||||||||||||||
In millions | |||||||||||||||||||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||||||||||||||
Cash Equivalents and Investments: | |||||||||||||||||||||||||||||||||||||||||||||||
Time deposits | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Money market funds | |||||||||||||||||||||||||||||||||||||||||||||||
Foreign bonds | |||||||||||||||||||||||||||||||||||||||||||||||
Other debt securities | |||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments: | |||||||||||||||||||||||||||||||||||||||||||||||
Interest rate contracts | |||||||||||||||||||||||||||||||||||||||||||||||
Foreign exchange contracts | |||||||||||||||||||||||||||||||||||||||||||||||
Other derivatives | |||||||||||||||||||||||||||||||||||||||||||||||
Total assets | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments: | |||||||||||||||||||||||||||||||||||||||||||||||
Interest rate contracts | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Foreign exchange contracts | |||||||||||||||||||||||||||||||||||||||||||||||
Other derivatives | |||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities | $ | $ | $ | $ | $ | $ | $ | $ |
As of January 31, 2021 | As of October 31, 2020 | ||||||||||||||||||||||||||||||||||
Cost | Gross Unrealized Gain | Fair Value | Cost | Gross Unrealized Gain | Fair Value | ||||||||||||||||||||||||||||||
In millions | |||||||||||||||||||||||||||||||||||
Cash Equivalents: | |||||||||||||||||||||||||||||||||||
Time deposits | $ | $ | — | $ | $ | $ | — | $ | |||||||||||||||||||||||||||
Money market funds | — | — | |||||||||||||||||||||||||||||||||
Total cash equivalents | — | — | |||||||||||||||||||||||||||||||||
Available-for-Sale Debt Investments: | |||||||||||||||||||||||||||||||||||
Foreign bonds | |||||||||||||||||||||||||||||||||||
Other debt securities | |||||||||||||||||||||||||||||||||||
Total available-for-sale debt investments | |||||||||||||||||||||||||||||||||||
Total cash equivalents and available-for-sale debt investments | $ | $ | $ | $ | $ | $ |
January 31, 2021 | |||||||||||
Amortized Cost | Fair Value | ||||||||||
In millions | |||||||||||
Due in one year | $ | $ | |||||||||
Due in more than five years | |||||||||||
$ | $ |
As of January 31, 2021 | As of October 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | Fair Value | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding Gross Notional | Other Current Assets | Long-Term Financing Receivables and Other Assets | Other Accrued Liabilities | Long-Term Other Liabilities | Outstanding Gross Notional | Other Current Assets | Long-Term Financing Receivables and Other Assets | Other Accrued Liabilities | Long-Term Other Liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||||
In millions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives designated as hedging instruments | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value hedges: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate contracts | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
Cash flow hedges: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency contracts | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate contracts | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment hedges: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency contracts | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total derivatives designated as hedging instruments | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives not designated as hedging instruments | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency contracts | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other derivatives | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total derivatives not designated as hedging instruments | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total derivatives | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ |
As of January 31, 2021 | ||||||||||||||||||||||||||||||||||||||
In the Condensed Consolidated Balance Sheets | ||||||||||||||||||||||||||||||||||||||
(i) | (ii) | (iii) = (i)–(ii) | (iv) | (v) | (vi) = (iii)–(iv)–(v) | |||||||||||||||||||||||||||||||||
Gross Amounts Not Offset | ||||||||||||||||||||||||||||||||||||||
Gross Amount Recognized | Gross Amount Offset | Net Amount Presented | Derivatives | Financial Collateral | Net Amount | |||||||||||||||||||||||||||||||||
In millions | ||||||||||||||||||||||||||||||||||||||
Derivative assets | $ | $ | $ | $ | $ | (1) | $ | ( | ||||||||||||||||||||||||||||||
Derivative liabilities | $ | $ | $ | $ | $ | (2) | $ |
As of October 31, 2020 | ||||||||||||||||||||||||||||||||||||||
In the Condensed Consolidated Balance Sheets | ||||||||||||||||||||||||||||||||||||||
(i) | (ii) | (iii) = (i)–(ii) | (iv) | (v) | (vi) = (iii)–(iv)–(v) | |||||||||||||||||||||||||||||||||
Gross Amounts Not Offset | ||||||||||||||||||||||||||||||||||||||
Gross Amount Recognized | Gross Amount Offset | Net Amount Presented | Derivatives | Financial Collateral | Net Amount | |||||||||||||||||||||||||||||||||
In millions | ||||||||||||||||||||||||||||||||||||||
Derivative assets | $ | $ | $ | $ | $ | (1) | $ | |||||||||||||||||||||||||||||||
Derivative liabilities | $ | $ | $ | $ | $ | (2) | $ |
Carrying amount of the hedged assets/ (liabilities) | Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged assets/ (liabilities) | ||||||||||||||||||||||
As of | As of | ||||||||||||||||||||||
January 31, 2021 | October 31, 2020 | January 31, 2021 | October 31, 2020 | ||||||||||||||||||||
In millions | In millions | ||||||||||||||||||||||
Long-term debt | $ | ( | $ | ( | $ | ( | $ | ( |
Gains (Losses) Recognized in OCI on Derivatives | |||||||||||
Three months ended January 31, 2021 | Three months ended January 31, 2020 | ||||||||||
In millions | |||||||||||
Derivatives in Cash Flow Hedging relationship | |||||||||||
Foreign exchange contracts | $ | ( | $ | ||||||||
Interest rate contracts | ( | ||||||||||
Derivatives in Net Investment Hedging relationship | |||||||||||
Foreign exchange contracts | ( | ||||||||||
Total | $ | ( | $ |
Gains (Losses) Recognized in Income | |||||||||||||||||||||||
Three months ended January 31, 2021 | Three months ended January 31, 2020 | ||||||||||||||||||||||
Net revenue | Interest and other, net | Net revenue | Interest and other, net | ||||||||||||||||||||
In millions | |||||||||||||||||||||||
Total amounts of income and expense line items presented in the Condensed Consolidated Statements of Earnings in which the effects of fair value hedges, cash flow hedges and derivatives not designated as hedging instruments are recorded | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Gains (losses) on derivatives in fair value hedging relationships | |||||||||||||||||||||||
Interest rate contracts | |||||||||||||||||||||||
Hedged items | $ | $ | $ | $ | ( | ||||||||||||||||||
Derivatives designated as hedging instruments | ( | ||||||||||||||||||||||
Gains (losses) on derivatives in cash flow hedging relationships | |||||||||||||||||||||||
Foreign exchange contracts | |||||||||||||||||||||||
Amount of gains (losses) reclassified from accumulated other comprehensive income into income | ( | ( | |||||||||||||||||||||
Interest rate contracts | |||||||||||||||||||||||
Amount of gains (losses) reclassified from accumulated other comprehensive income into income | ( | ||||||||||||||||||||||
Gains (losses) on derivatives not designated as hedging instruments | |||||||||||||||||||||||
Foreign exchange contracts | ( | ( | |||||||||||||||||||||
Other derivatives | ( | ||||||||||||||||||||||
Total gains (losses) | $ | ( | $ | ( | $ | $ | ( |
As of | |||||||||||
January 31, 2021 | October 31, 2020 | ||||||||||
In millions | |||||||||||
Current portion of long-term debt | $ | $ | |||||||||
FS commercial paper | |||||||||||
Notes payable to banks, lines of credit and other | |||||||||||
Total notes payable and short-term borrowings | $ | $ | |||||||||
Long-term debt | |||||||||||
Total Debt | $ | $ |
Net unrealized gains (losses) on available-for-sale securities | Net unrealized gains (losses) on cash flow hedges | Unrealized components of defined benefit plans | Cumulative translation adjustment | Accumulated other comprehensive loss | |||||||||||||||||||||||||
In millions | |||||||||||||||||||||||||||||
Balance at beginning of period | $ | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||
Other comprehensive (loss) income before reclassifications | ( | ( | |||||||||||||||||||||||||||
Reclassifications of (gains) losses into earnings | |||||||||||||||||||||||||||||
Tax (provision) benefit | — | ( | ( | ( | |||||||||||||||||||||||||
Balance at end of period | $ | $ | ( | $ | ( | $ | ( | $ | ( |
Net unrealized gains (losses) on available-for-sale securities | Net unrealized gains (losses) on cash flow hedges | Unrealized components of defined benefit plans | Cumulative translation adjustment | Accumulated other comprehensive loss | |||||||||||||||||||||||||
In millions | |||||||||||||||||||||||||||||
Balance at beginning of period | $ | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
Effect of change in accounting principle | — | ( | ( | ( | |||||||||||||||||||||||||
Other comprehensive (loss) income before reclassifications | ( | ||||||||||||||||||||||||||||
Reclassifications of (gains) losses into earnings | ( | ( | ( | ||||||||||||||||||||||||||
Tax (provision) benefit | — | ( | ( | ( | |||||||||||||||||||||||||
Balance at end of period | $ | $ | $ | ( | $ | ( | $ | ( |
Three Months Ended January 31, | |||||||||||
2021 | 2020 | ||||||||||
In millions, except per share amounts | |||||||||||
Numerator: | |||||||||||
Net earnings | $ | $ | |||||||||
Denominator: | |||||||||||
Weighted-average shares used to compute basic net EPS | |||||||||||
Dilutive effect of employee stock plans | |||||||||||
Weighted-average shares used to compute diluted net EPS | |||||||||||
Net earnings per share: | |||||||||||
Basic | $ | $ | |||||||||
Diluted | $ | $ | |||||||||
Anti-dilutive weighted-average stock awards(1) |
Three Months Ended January 31, | |||||||||||||||||
2021 | 2020 | Change | |||||||||||||||
In millions, except per share amounts | |||||||||||||||||
Net revenue | $ | 6,833 | $ | 6,949 | (1.7)% | ||||||||||||
Gross profit | $ | 2,288 | $ | 2,282 | 0.3% | ||||||||||||
Gross profit margin | 33.5% | 32.8 | % | 0.7 pts | |||||||||||||
Earnings from operations | $ | 222 | $ | 348 | (36.2)% | ||||||||||||
Operating profit margin | 3.2% | 5.0 | % | (1.8) pts | |||||||||||||
Net earnings | $ | 223 | $ | 333 | (33.0)% | ||||||||||||
Diluted net earnings per share | $ | 0.17 | $ | 0.25 | $(0.08) | ||||||||||||
Cash flow from operations | $ | 963 | $ | (79) | $1,042 |
Three Months Ended January 31, | |||||||||||||||||
2021 | 2020 | Change | |||||||||||||||
In millions, except per share amounts | |||||||||||||||||
Net revenue adjusted for currency | $ | 6,773 | $ | 6,949 | (2.5)% | ||||||||||||
Non-GAAP gross profit | $ | 2,303 | $ | 2,318 | (0.6)% | ||||||||||||
Non-GAAP gross profit margin | 33.7 | % | 33.4 | % | 0.3 pts | ||||||||||||
Non-GAAP earnings from operations | $ | 773 | $ | 695 | 11.2% | ||||||||||||
Non-GAAP operating profit margin | 11.3 | % | 10.0 | % | 1.3 pts | ||||||||||||
Non-GAAP net earnings | $ | 679 | $ | 657 | 3.3% | ||||||||||||
Non-GAAP diluted net earnings per share | $ | 0.52 | $ | 0.50 | $0.02 | ||||||||||||
Free cash flow | $ | 563 | $ | (185) | $748 |
Three Months Ended January 31, | |||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||
Dollars | % of Revenue | Dollars | % of Revenue | ||||||||||||||||||||
Dollars in millions | |||||||||||||||||||||||
Net revenue | $ | 6,833 | 100.0 | % | $ | 6,949 | 100.0 | % | |||||||||||||||
Cost of sales | 4,545 | 66.5 | 4,667 | 67.2 | |||||||||||||||||||
Gross profit | 2,288 | 33.5 | 2,282 | 32.8 | |||||||||||||||||||
Research and development | 468 | 6.8 | 485 | 7.0 | |||||||||||||||||||
Selling, general and administrative | 1,159 | 17.0 | 1,218 | 17.5 | |||||||||||||||||||
Amortization of intangible assets | 110 | 1.6 | 120 | 1.7 | |||||||||||||||||||
Transformation costs | 311 | 4.6 | 89 | 1.3 | |||||||||||||||||||
Acquisition, disposition and other related charges | 18 | 0.3 | 22 | 0.3 | |||||||||||||||||||
Earnings from operations | 222 | 3.2 | 348 | 5.0 | |||||||||||||||||||
Interest and other, net | (44) | (0.7) | (19) | (0.3) | |||||||||||||||||||
Tax indemnification adjustments | (16) | (0.2) | (21) | (0.3) | |||||||||||||||||||
Non-service net periodic benefit credit | 17 | 0.3 | 37 | 0.5 | |||||||||||||||||||
Earnings from equity interests | 26 | 0.4 | 33 | 0.5 | |||||||||||||||||||
Earnings before taxes | 205 | 3.0 | 378 | 5.4 | |||||||||||||||||||
(Provision) benefit for taxes | 18 | 0.3 | (45) | (0.6) | |||||||||||||||||||
Net earnings | $ | 223 | 3.3 | % | $ | 333 | 4.8 | % |
Three Months Ended January 31, | |||||||||||
2021 | 2020 | ||||||||||
In millions | |||||||||||
Cost of sales | $ | 13 | $ | 13 | |||||||
Research and development | 37 | 27 | |||||||||
Selling, general and administrative | 60 | 53 | |||||||||
Acquisition, disposition and other related charges | 3 | — | |||||||||
Total | $ | 113 | $ | 93 |
Three Months Ended January 31, 2021 | |||||
Percentage points | |||||
Compute | (0.6) | ||||
HPC & MCS | (1.1) | ||||
Storage | (0.8) | ||||
Intelligent Edge | 1.2 | ||||
Financial Services | — | ||||
Corporate Investments and Other | (0.2) | ||||
Total Segment | (1.5) | ||||
Elimination of Intersegment net revenue | (0.2) | ||||
Total HPE | (1.7) |
Compute | HPC & MCS | Storage | Intelligent Edge | Financial Services | Corporate Investments and Other | HPE Consolidated | ||||||||||||||||||||||||||||||||||||||
Net revenue(1) | $ | 2,986 | $ | 762 | $ | 1,193 | $ | 806 | $ | 860 | $ | 321 | $ | 6,833 | ||||||||||||||||||||||||||||||
Year-over-year change % | (1.5) | % | (9.2) | % | (4.7) | % | 11.9 | % | 0.1 | % | (1.8) | % | (1.7) | % | ||||||||||||||||||||||||||||||
Earnings (loss) from operations(2) | $ | 342 | $ | 43 | $ | 235 | $ | 152 | $ | 84 | $ | (31) | $ | 222 | ||||||||||||||||||||||||||||||
Earnings (loss) from operations as a % of net revenue | 11.5 | % | 5.6 | % | 19.7 | % | 18.9 | % | 9.8 | % | (9.7) | % | 3.2 | % | ||||||||||||||||||||||||||||||
Year-over-year change percentage points | 0.8 pts | (1.9) pts | (0.3) pts | 6.8 pts | 1.1 pts | 6.5 pts | 1.3 pts |
Three months ended January 31, | |||||||||||||||||
2021 | 2020 | % Change | |||||||||||||||
Dollars in millions | |||||||||||||||||
Net revenue | $ | 2,986 | $ | 3,030 | (1.5) | % | |||||||||||
Earnings from operations | $ | 342 | $ | 324 | 5.6 | % | |||||||||||
Earnings from operations as a % of net revenue | 11.5 | % | 10.7 | % |
Three Months Ended January 31, | |||||||||||||||||
2021 | 2020 | % Change | |||||||||||||||
Dollars in millions | |||||||||||||||||
Net revenue | $ | 762 | $ | 839 | (9.2) | % | |||||||||||
Earnings from operations | $ | 43 | $ | 63 | (31.7) | % | |||||||||||
Earnings from operations as a % of net revenue | 5.6 | % | 7.5 | % |
Three Months Ended January 31, | |||||||||||||||||
2021 | 2020 | % Change | |||||||||||||||
Dollars in millions | |||||||||||||||||
Net revenue | $ | 1,193 | $ | 1,252 | (4.7) | % | |||||||||||
Earnings from operations | $ | 235 | 251 | (6.4) | % | ||||||||||||
Earnings from operations as a % of net revenue | 19.7 | % | 20.0 | % |
Three Months Ended January 31, | |||||||||||||||||
2021 | 2020 | % Change | |||||||||||||||
Dollars in millions | |||||||||||||||||
Net revenue | $ | 806 | $ | 720 | 11.9 | % | |||||||||||
Earnings from operations | $ | 152 | $ | 87 | 74.7 | % | |||||||||||
Earnings from operations as a % of net revenue | 18.9 | % | 12.1 | % |
Three Months Ended January 31, | |||||||||||||||||
2021 | 2020 | % Change | |||||||||||||||
Dollars in millions | |||||||||||||||||
Net revenue | $ | 860 | $ | 859 | 0.1 | % | |||||||||||
Earnings from operations | $ | 84 | $ | 75 | 12.0 | % | |||||||||||
Earnings from operations as a % of net revenue | 9.8 | % | 8.7 | % |
Three Months Ended January 31, | |||||||||||
2021 | 2020 | ||||||||||
In millions | |||||||||||
Financing volume | $ | 1,245 | $ | 1,408 |
As of | |||||||||||
January 31, 2021 | October 31, 2020 | ||||||||||
Dollars in millions | |||||||||||
Financing receivables, gross | $ | 9,157 | $ | 9,058 | |||||||
Net equipment under operating leases | 4,007 | 4,027 | |||||||||
Capitalized profit on intercompany equipment transactions(1) | 296 | 315 | |||||||||
Intercompany leases(1) | 93 | 92 | |||||||||
Gross portfolio assets | 13,553 | 13,492 | |||||||||
Allowance for credit losses(2) | 203 | 154 | |||||||||
Operating lease equipment reserve | 46 | 64 | |||||||||
Total reserves | 249 | 218 | |||||||||
Net portfolio assets | $ | 13,304 | $ | 13,274 | |||||||
Reserve coverage | 1.8 | % | 1.6 | % | |||||||
Debt-to-equity ratio(3) | 7.0x | 7.0x |
Three Months Ended January 31, | |||||||||||||||||
2021 | 2020 | % Change | |||||||||||||||
Dollars in millions | |||||||||||||||||
Net revenue | $ | 321 | $ | 327 | (1.8) | % | |||||||||||
Loss from operations | $ | (31) | $ | (53) | 41.5 | % | |||||||||||
Loss from operations as a % of net revenue | (9.7) | % | (16.2) | % |
Three months ended January 31, | |||||||||||
2021 | 2020 | ||||||||||
In millions | |||||||||||
Net cash provided by (used in) operating activities | $ | 963 | $ | (79) | |||||||
Net cash used in investing activities | (652) | (64) | |||||||||
Net cash used in financing activities | (459) | (385) | |||||||||
Net decrease in cash, cash equivalents and restricted cash | $ | (148) | $ | (528) |
Three months ended January 31, | |||||||||||||||||
2021 | 2020 | Change | |||||||||||||||
Days of sales outstanding in accounts receivable ("DSO") | 39 | 37 | 2 | ||||||||||||||
Days of supply in inventory ("DOS") | 55 | 49 | 6 | ||||||||||||||
Days of purchases outstanding in accounts payable ("DPO") | (103) | (103) | — | ||||||||||||||
Cash conversion cycle | (9) | (17) | 8 |
As of January 31, 2021 | |||||
In millions | |||||
Commercial paper programs | $ | 5,064 | |||
Uncommitted lines of credit | $ | 1,237 | |||
Three Months Ended January 31, | |||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||
Dollars in millions | Diluted net earnings per share | Dollars in millions | Diluted net earnings per share | ||||||||||||||||||||
GAAP net earnings | $ | 223 | $ | 0.17 | $ | 333 | $ | 0.25 | |||||||||||||||
Non-GAAP adjustments: | |||||||||||||||||||||||
Amortization of initial direct costs | 2 | — | 3 | — | |||||||||||||||||||
Amortization of intangible assets | 110 | 0.08 | 120 | 0.09 | |||||||||||||||||||
Transformation costs | 311 | 0.23 | 89 | 0.07 | |||||||||||||||||||
Stock-based compensation expense | 110 | 0.08 | 93 | 0.07 | |||||||||||||||||||
Acquisition, disposition and other related charges | 18 | 0.01 | 42 | 0.03 | |||||||||||||||||||
Tax indemnification adjustments | 16 | 0.02 | 21 | 0.02 | |||||||||||||||||||
Non-service net periodic benefit credit | (17) | (0.01) | (37) | (0.03) | |||||||||||||||||||
Loss from equity interests(1) | 34 | 0.03 | 37 | 0.03 | |||||||||||||||||||
Adjustments for taxes | (128) | (0.09) | (44) | (0.03) | |||||||||||||||||||
Non-GAAP net earnings | $ | 679 | $ | 0.52 | $ | 657 | $ | 0.50 |
Three Months Ended January 31, | |||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||
Dollars | % of Revenue | Dollars | % of Revenue | ||||||||||||||||||||
In millions | |||||||||||||||||||||||
GAAP earnings from operations | $ | 222 | 3.2 | % | $ | 348 | 5.0 | % | |||||||||||||||
Non-GAAP adjustments: | |||||||||||||||||||||||
Amortization of initial direct costs | 2 | — | % | 3 | — | % | |||||||||||||||||
Amortization of intangible assets | 110 | 1.6 | % | 120 | 1.7 | % | |||||||||||||||||
Transformation costs | 311 | 4.6 | % | 89 | 1.3 | % | |||||||||||||||||
Stock-based compensation expense | 110 | 1.6 | % | 93 | 1.4 | % | |||||||||||||||||
Acquisition, disposition and other related charges | 18 | 0.3 | % | 42 | 0.6 | % | |||||||||||||||||
Non-GAAP earnings from operations | $ | 773 | 11.3 | % | $ | 695 | 10.0 | % |
Three Months Ended January 31, | |||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||
Dollars | % of Revenue | Dollars | % of Revenue | ||||||||||||||||||||
In millions | |||||||||||||||||||||||
GAAP Net revenue | $ | 6,833 | 100 | % | $ | 6,949 | 100 | % | |||||||||||||||
GAAP Cost of sales | 4,545 | 66.5 | % | 4,667 | 67.2 | % | |||||||||||||||||
GAAP Gross profit | $ | 2,288 | 33.5 | % | $ | 2,282 | 32.8 | % | |||||||||||||||
Non-GAAP adjustments | |||||||||||||||||||||||
Amortization of initial direct costs | $ | 2 | — | % | $ | 3 | — | % | |||||||||||||||
Stock-based compensation expense | 13 | 0.2 | % | 13 | 0.2 | % | |||||||||||||||||
Acquisition, disposition and other related charges(1) | — | — | % | 20 | 0.4 | % | |||||||||||||||||
Non-GAAP Gross Profit | $ | 2,303 | 33.7 | % | $ | 2,318 | 33.4 | % |
Three Months Ended January 31, | |||||||||||
2021 | 2020 | ||||||||||
In millions | |||||||||||
Net cash provided by (used in) operating activities | $ | 963 | $ | (79) | |||||||
Investment in property, plant and equipment | (513) | (568) | |||||||||
Proceeds from sale of property, plant and equipment | 113 | 462 | |||||||||
Free cash flow | $ | 563 | $ | (185) |
Incorporated by Reference | ||||||||||||||||||||||||||||||||
Exhibit Number | Exhibit Description | Form | File No. | Exhibit(s) | Filing Date | |||||||||||||||||||||||||||
2.1 | 8-K | 001-37483 | 2.1 | November 5, 2015 | ||||||||||||||||||||||||||||
2.2 | 8-K | 001-37483 | 2.2 | November 5, 2015 | ||||||||||||||||||||||||||||
2.3 | 8-K | 001-37483 | 2.4 | November 5, 2015 | ||||||||||||||||||||||||||||
2.4 | 8-K | 001-37483 | 2.5 | November 5, 2015 | ||||||||||||||||||||||||||||
2.5 | 8-K | 001-37483 | 2.6 | November 5, 2015 | ||||||||||||||||||||||||||||
2.6 | 8-K | 001-37483 | 2.7 | November 5, 2015 | ||||||||||||||||||||||||||||
2.7 | 8-K | 001-37483 | 2.1 | May 26, 2016 | ||||||||||||||||||||||||||||
2.8 | 8-K | 001-37483 | 2.2 | May 26, 2016 | ||||||||||||||||||||||||||||
2.9 | 8-K | 001-37483 | 2.1 | September 7, 2016 | ||||||||||||||||||||||||||||
2.10 | 8-K | 001-37483 | 2.2 | September 7, 2016 | ||||||||||||||||||||||||||||
2.11 | 8-K | 001-37483 | 2.3 | September 7, 2016 | ||||||||||||||||||||||||||||
2.12 | 8-K | 001-37483 | 2.1 | November 2, 2016 | ||||||||||||||||||||||||||||
2.13 | 8-K | 001-37483 | 2.2 | November 2, 2016 | ||||||||||||||||||||||||||||
2.14 | 8-K | 001-37483 | 99.1 | March 7, 2017 | ||||||||||||||||||||||||||||
2.15 | 8-K | 001-37483 | 99.2 | March 7, 2017 |
2.16 | 8-K | 001-38033 | 2.1 | April 6, 2017 | ||||||||||||||||||||||||||||
2.17 | 8-K | 001-38033 | 2.2 | April 6, 2017 | ||||||||||||||||||||||||||||
2.18 | 8-K | 001-38033 | 2.3 | April 6, 2017 | ||||||||||||||||||||||||||||
2.19 | 8-K | 001-38033 | 2.4 | April 6, 2017 | ||||||||||||||||||||||||||||
2.20 | 8-K | 001-38033 | 2.5 | April 6, 2017 | ||||||||||||||||||||||||||||
2.21 | 8-K | 001-38033 | 2.6 | April 6, 2017 | ||||||||||||||||||||||||||||
2.22 | 8-K | 001-37483 | 2.1 | September 1, 2017 | ||||||||||||||||||||||||||||
2.23 | 8-K | 001-37483 | 2.2 | September 1, 2017 | ||||||||||||||||||||||||||||
2.24 | 8-K | 001-37483 | 2.3 | September 1, 2017 | ||||||||||||||||||||||||||||
2.25 | 8-K | 001-37483 | 2.4 | September 1, 2017 | ||||||||||||||||||||||||||||
2.26 | 8-K | 001-37483 | 2.1 | May 17, 2019 | ||||||||||||||||||||||||||||
2.27 | 8-K | 001-37483 | 2.1 | July 13, 2020 | ||||||||||||||||||||||||||||
3.1 | 8-K | 001-37483 | 3.1 | November 5, 2015 | ||||||||||||||||||||||||||||
3.2 | 8-K | 001-37483 | 3.2 | November 5, 2015 | ||||||||||||||||||||||||||||
3.3 | 8-K | 001-37483 | 3.1 | March 20, 2017 | ||||||||||||||||||||||||||||
3.4 | 8-K | 001-37483 | 3.2 | March 20, 2017 | ||||||||||||||||||||||||||||
4.1 | 8-K | 001-37483 | 4.1 | October 13, 2015 | ||||||||||||||||||||||||||||
4.2 | 8-K | 001-37483 | 4.5 | October 13, 2015 |
4.3 | 8-K | 001-37483 | 4.6 | October 13, 2015 | ||||||||||||||||||||||||||||
4.4 | 8-K | 001-37483 | 4.7 | October 13, 2015 | ||||||||||||||||||||||||||||
4.5 | 8-K | 001-37483 | 4.8 | October 13, 2015 | ||||||||||||||||||||||||||||
4.6 | 8-K | 001-37483 | 4.2 | September 19, 2018 | ||||||||||||||||||||||||||||
4.7 | 8-K | 001-37483 | 4.3 | September 19, 2018 | ||||||||||||||||||||||||||||
4.8 | 8-K | 001-37483 | 4.2 | September 13, 2019 | ||||||||||||||||||||||||||||
4.9 | 8-K | 001-37483 | 4.3 | September 13, 2019 | ||||||||||||||||||||||||||||
4.10 | 8-K | 001-37483 | 4.2 | April 9, 2020 | ||||||||||||||||||||||||||||
4.11 | 8-K | 001-37483 | 4.3 | April 9, 2020 | ||||||||||||||||||||||||||||
4.12 | 8-K | 001-37483 | 4.2 | July 17, 2020 | ||||||||||||||||||||||||||||
4.13 | 8-K | 001-37483 | 4.3 | July 17, 2020 | ||||||||||||||||||||||||||||
4.14 | 8-K | 001-37483 | 4.12 | October 13, 2015 |
4.15 | S-3ASR | 333-222102 | 4.5 | December 15, 2017 | ||||||||||||||||||||||||||||
4.16 | 10-K | 001-37483 | 4.16 | December 10, 2020 | ||||||||||||||||||||||||||||
10.1 | 8-K | 001-37483 | 10.1 | January 30, 2017 | ||||||||||||||||||||||||||||
10.2 | 10-12B/A | 001-37483 | 10.4 | September 28, 2015 | ||||||||||||||||||||||||||||
10.3 | S-8 | 333-207679 | 4.4 | October 30, 2015 | ||||||||||||||||||||||||||||
10.4 | 8-K | 001-37483 | 10.4 | November 5, 2015 | ||||||||||||||||||||||||||||
10.5 | 8-K | 001-37483 | 10.7 | November 5, 2015 | ||||||||||||||||||||||||||||
10.6 | 8-K | 001-37483 | 10.8 | November 5, 2015 | ||||||||||||||||||||||||||||
10.7 | 8-K | 001-37483 | 10.9 | November 5, 2015 | ||||||||||||||||||||||||||||
10.8 | 8-K | 001-37483 | 10.10 | November 5, 2015 | ||||||||||||||||||||||||||||
10.9 | 10-Q | 001-37483 | 10.14 | March 10, 2016 | ||||||||||||||||||||||||||||
10.10 | 10-Q | 001-37483 | 10.15 | March 10, 2016 | ||||||||||||||||||||||||||||
10.11 | 8-K | 001-37483 | 10.1 | May 26, 2016 | ||||||||||||||||||||||||||||
10.12 | S-8 | 333-216481 | 4.3 | March 6, 2017 | ||||||||||||||||||||||||||||
10.13 | S-8 | 333-217349 | 4.3 | April 18, 2017 | ||||||||||||||||||||||||||||
10.14 | S-8 | 333-217349 | 4.4 | April 18, 2017 | ||||||||||||||||||||||||||||
10.15 | S-8 | 333-217438 | 4.3 | April 24, 2017 | ||||||||||||||||||||||||||||
10.16 | 10-K | 000-51333 | 10.3 | September 10, 2012 | ||||||||||||||||||||||||||||
10.17 | S-8 | 333-221254 | 4.3 | November 1, 2017 | ||||||||||||||||||||||||||||
10.18 | S-8 | 333-221254 | 4.4 | November 1, 2017 | ||||||||||||||||||||||||||||
10.19 | S-8 | 333-226181 | 4.3 | July 16, 2018 | ||||||||||||||||||||||||||||
10.20 | 10-Q | 001-37483 | 10.29 | September 4, 2018 | ||||||||||||||||||||||||||||
10.21 | 10-Q | 001-37483 | 10.30 | September 4, 2018 | ||||||||||||||||||||||||||||
10.22 | 10-K | 001-37483 | 10.27 | December 12, 2018 | ||||||||||||||||||||||||||||
10.23 | 10-K | 001-37483 | 10.29 | December 12, 2018 | ||||||||||||||||||||||||||||
10.24 | S-8 | 333-229449 | 4.3 | January 31, 2019 | ||||||||||||||||||||||||||||
10.25 | 10-Q | 001-37483 | 10.32 | March 9, 2020 |
10.26 | 8-K | 001-37483 | 10.1 | August 20, 2019 | ||||||||||||||||||||||||||||
10.27 | S-8 | 333-234033 | 4.3 | October 1, 2019 | ||||||||||||||||||||||||||||
10.28 | 10-K | 001-37483 | 10.31 | December 13, 2019 | ||||||||||||||||||||||||||||
10.29 | S-8 | 333-249731 | 4.3 | October 29, 2020 | ||||||||||||||||||||||||||||
10.30 | S-8 | 333-249731 | 4.4 | October 29, 2020 | ||||||||||||||||||||||||||||
10.31 | ||||||||||||||||||||||||||||||||
10.32 | ||||||||||||||||||||||||||||||||
31.1 | ||||||||||||||||||||||||||||||||
31.2 | ||||||||||||||||||||||||||||||||
32 | ||||||||||||||||||||||||||||||||
101.INS | Inline XBRL Instance Document‡ | |||||||||||||||||||||||||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document‡ | |||||||||||||||||||||||||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document‡ | |||||||||||||||||||||||||||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document‡ | |||||||||||||||||||||||||||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document‡ | |||||||||||||||||||||||||||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document‡ | |||||||||||||||||||||||||||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
HEWLETT PACKARD ENTERPRISE COMPANY | ||||||||
/s/ TAREK A. ROBBIATI | ||||||||
Tarek A. Robbiati Executive Vice President and Chief Financial Officer (Principal Financial Officer and Authorized Signatory) |
DATED: | 01 March 2021 | /s/ Peter J. Ungaro | ||||||||||||
Peter Ungaro | ||||||||||||||
HEWLETT PACKARD ENTERPRISE COMPANY | ||||||||||||||
DATED: | 1 March 2021 | |||||||||||||
By: | /s/ Alan May | |||||||||||||
Name: | Alan May | |||||||||||||
Title: | EVP, Chief People Officer |
DATED: ______________________, 2021 | |||||||||||
Peter Ungaro | |||||||||||
/s/ ANTONIO F. NERI | |||||
Antonio F. Neri President and Chief Executive Officer (Principal Executive Officer) |
/s/ TAREK A. ROBBIATI | |||||
Tarek A. Robbiati Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
By: | /s/ ANTONIO F. NERI | |||||||
Antonio F. Neri President and Chief Executive Officer |
By: | /s/ TAREK A. ROBBIATI | |||||||
Tarek A. Robbiati Executive Vice President and Chief Financial Officer |
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares |
Jan. 31, 2021 |
Oct. 31, 2020 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 300,000,000 | 300,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 9,600,000,000 | 9,600,000,000 |
Common stock, shares issued | 1,300,000,000 | 1,287,000,000 |
Common stock, shares outstanding | 1,300,000,000 | 1,287,000,000 |
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Millions |
Total |
Common Stock |
Additional Paid-in Capital |
Accumulated Deficit |
Accumulated Deficit
Cumulative Effect, Period of Adoption, Adjustment
|
Accumulated Other Comprehensive Loss |
Accumulated Other Comprehensive Loss
Cumulative Effect, Period of Adoption, Adjustment
|
Equity Attributable to the Company |
Equity Attributable to the Company
Cumulative Effect, Period of Adoption, Adjustment
|
Non-controlling Interests |
Total Equity |
Total Equity
Cumulative Effect, Period of Adoption, Adjustment
|
|||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Balance at beginning of period (in shares) at Oct. 31, 2019 | 1,294,369 | ||||||||||||||||
Balance at beginning of period at Oct. 31, 2019 | $ 13 | $ 28,444 | $ (7,632) | $ 43 | $ (3,727) | $ (43) | $ 17,098 | $ 0 | $ 51 | $ 17,149 | $ 0 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Net earnings (loss) | 333 | 333 | 2 | 335 | |||||||||||||
Other comprehensive income | $ 70 | 70 | 70 | 70 | |||||||||||||
Comprehensive (loss) income | 403 | 2 | 405 | ||||||||||||||
Stock-based compensation expense | 93 | 93 | 93 | ||||||||||||||
Tax withholding related to vesting of employee stock plans | (72) | (72) | (72) | ||||||||||||||
Issuance of common stock in connection with employee stock plans and other (in shares) | 11,361 | ||||||||||||||||
Issuance of common stock in connection with employee stock plans and other | 26 | 1 | 27 | 1 | 28 | ||||||||||||
Repurchases of common stock (in shares) | (12,827) | ||||||||||||||||
Repurchases of common stock | (204) | (204) | (204) | ||||||||||||||
Cash dividends declared | (156) | (156) | (156) | ||||||||||||||
Balance at beginning of period (in shares) at Jan. 31, 2020 | 1,292,903 | ||||||||||||||||
Balance at end of period at Jan. 31, 2020 | $ 13 | 28,287 | (7,411) | (3,700) | 17,189 | 54 | 17,243 | ||||||||||
Balance at beginning of period (in shares) at Oct. 31, 2020 | 1,287,000 | 1,287,010 | |||||||||||||||
Balance at beginning of period at Oct. 31, 2020 | $ 16,096 | $ 13 | 28,350 | (8,375) | $ (25) | [1] | (3,939) | 16,049 | $ (25) | [1] | 47 | 16,096 | $ (25) | [1] | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Net earnings (loss) | 223 | 223 | 223 | ||||||||||||||
Other comprehensive income | $ 43 | 43 | 43 | 43 | |||||||||||||
Comprehensive (loss) income | 266 | 0 | 266 | ||||||||||||||
Stock-based compensation expense | 113 | 113 | 113 | ||||||||||||||
Tax withholding related to vesting of employee stock plans | (57) | (57) | (57) | ||||||||||||||
Issuance of common stock in connection with employee stock plans and other (in shares) | 13,486 | ||||||||||||||||
Issuance of common stock in connection with employee stock plans and other | 21 | 21 | 21 | ||||||||||||||
Cash dividends declared | (155) | (155) | (155) | ||||||||||||||
Balance at beginning of period (in shares) at Jan. 31, 2021 | 1,300,000 | 1,300,496 | |||||||||||||||
Balance at end of period at Jan. 31, 2021 | $ 16,259 | $ 13 | $ 28,427 | $ (8,332) | $ (3,896) | $ 16,212 | $ 47 | $ 16,259 | |||||||||
|
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) (Parenthetical) - $ / shares |
3 Months Ended | |
---|---|---|
Jan. 31, 2021 |
Jan. 31, 2020 |
|
Statement of Stockholders' Equity [Abstract] | ||
Cash dividends declared (in dollars per share) | $ 0.12 | $ 0.12 |
Overview and Summary of Significant Accounting Policies |
3 Months Ended |
---|---|
Jan. 31, 2021 | |
Accounting Policies [Abstract] | |
Overview and Summary of Significant Accounting Policies | Overview and Summary of Significant Accounting Policies Background Hewlett Packard Enterprise Company ("Hewlett Packard Enterprise", "HPE", or the "Company") is a global technology leader focused on developing intelligent solutions that allow customers to capture, analyze and act upon data seamlessly from edge to cloud. Hewlett Packard Enterprise enables customers to accelerate business outcomes by driving new business models, creating new customer and employee experiences, and increasing operational efficiency today and into the future. Hewlett Packard Enterprise's customers range from small- and medium-sized businesses ("SMBs") to large global enterprises and governmental entities. On November 1, 2015, the Company became an independent publicly-traded company through a pro rata distribution by HP Inc. ("former Parent" or "HPI"), formerly known as Hewlett-Packard Company ("HP Co."), of 100% of the outstanding shares of Hewlett Packard Enterprise Company to HP Inc.'s stockholders (the "Separation"). Basis of Presentation The Condensed Consolidated Financial Statements of the Company were prepared in accordance with United States ("U.S.") Generally Accepted Accounting Principles ("GAAP"). In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements of Hewlett Packard Enterprise contain all adjustments, including normal recurring adjustments, necessary to present fairly the Company's financial position as of January 31, 2021 and October 31, 2020, its results of operations for the three months ended January 31, 2021 and 2020, its cash flows for the three months ended January 31, 2021 and 2020, and its statements of stockholders' equity for the three months ended January 31, 2021 and 2020. The results of operations for the three months ended January 31, 2021 and the cash flows for the three months ended January 31, 2021 are not necessarily indicative of the results to be expected for the full year. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2020, including "Management's Discussion and Analysis of Financial Condition and Results of Operations", "Quantitative and Qualitative Disclosures About Market Risk" and the Consolidated Financial Statements and notes thereto included in Items 7, 7A and 8, respectively. Principles of Consolidation The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of the Company and all subsidiaries and affiliates in which the Company has a controlling financial interest or is the primary beneficiary. All intercompany transactions and accounts within the consolidated businesses of the Company have been eliminated. The Company consolidates a Variable Interest Entity (“VIE”) where it has been determined that the Company is the primary beneficiary of the entity’s operation. In evaluating whether the Company is the primary beneficiary, the Company evaluates its power to direct the most significant activities of the VIE by considering the purpose and design of the entity and the risks the entity was designed to create and pass through to its variable interest holders. The Company also evaluates its economic interests in the VIE. The Company accounts for investments in companies over which it has the ability to exercise significant influence but does not hold a controlling interest under the equity method of accounting, and the Company records its proportionate share of income or losses in Earnings from equity interests in the Condensed Consolidated Statements of Earnings. Non-controlling interests are presented as a separate component within Total stockholders' equity in the Condensed Consolidated Balance Sheets. Net earnings attributable to non-controlling interests are recorded within Interest and other, net in the Condensed Consolidated Statements of Earnings and are not presented separately, as they were not material for any periods presented. Segment Realignment and Reclassifications Effective at the beginning of the first quarter of fiscal 2021, HPE implemented certain organizational changes to align its segment financial reporting more closely with its current business structure. These organizational changes are: (i) the transfer of the lifecycle event services business, previously reported within the Advisory and Professional Services ("A & PS") reportable segment to Compute, Storage and HPC & MCS reportable segments; (ii) the transfer of certain software and related services business, previously reported within the Compute, Storage and A & PS reportable segments to the Corporate Investments and Other reportable segment, to form a new Software operating segment; and (iii) the transfer of the remaining A & PS operating segment, previously reported as a separate reportable segment, to the Corporate Investments and Other reportable segment. As a result of these changes, the Corporate Investments and Other Segment now includes the A & PS operating segment, the Communications and Media Solutions operating segment, the Software operating segment, and Hewlett Packard Enterprise Labs which is responsible for research and development. Additionally, effective at the beginning of the first quarter of fiscal 2021, the Company has excluded stock-based compensation expense from its segment earnings from operations. The Company reflected these changes to its segment information retrospectively to the earliest period presented, which primarily resulted in the realignment of net revenue, operating profit and total assets for each of the segments as described above. These changes had no impact on Hewlett Packard Enterprise’s previously reported consolidated net revenue, net earnings, net earnings per share ("EPS") or total assets. Significant Accounting Policies Except for the change in certain accounting policies upon adoption of the accounting standards described below, there have been no significant changes to the Company's significant accounting policies described in PART II, Item 8, Note 1, "Overview and Summary of Significant Accounting Policies", of the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2020. Recently Adopted Accounting Pronouncements In January 2021, the FASB issued guidance to clarify that all derivative instruments affected by changes to the interest rates used for discounting, margining or contract price alignment can apply certain optional expedients and exceptions mentioned in its reference rate reform guidance even though they do not reference to LIBOR or a rate being discontinued. This guidance was effective upon issuance. The Company adopted the guidance in the first quarter of fiscal 2021 and there was no impact on its Condensed Consolidated Financial Statements upon adoption. In December 2019, the FASB amended the existing accounting standards for income taxes. The amendments clarify and simplify the accounting for income taxes by eliminating certain exceptions to the general principles. The Company adopted the guidance in the first quarter of fiscal 2021 and there was no material impact on its Condensed Consolidated Financial Statements. In August 2018, the FASB issued guidance on a customer's accounting for implementation costs incurred in cloud-computing arrangements that are hosted by a vendor. Certain types of implementation costs should be capitalized and amortized over the term of the hosting arrangement. The Company adopted the guidance in the first quarter of fiscal 2021 and there was no material impact on its Condensed Consolidated Financial Statements. In August 2018, the FASB issued guidance which changes the disclosure requirements for fair value measurements and defined benefit pension plans. The Company adopted the guidance in the first quarter of fiscal 2021 and there was no impact on its Condensed Consolidated Financial Statements. However, the Company expects to have additional disclosures relating to retirement and post-retirement benefit plans in its Annual Report on Form 10-K for the fiscal year ended October 31, 2021. In June 2016, the FASB amended the existing accounting standards for the measurement of credit losses with additional amendments in 2018, 2019 and 2020. These amendments primarily require the measurement and recognition of current expected credit losses for financial assets held at amortized cost. The amended accounting standard replaces the existing incurred loss impairment model with an expected loss model, which requires the use of forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in earlier recognition of credit losses. The Company adopted the Current Expected Credit Losses standard (the “CECL standard”) as of November 1, 2020 using the modified retrospective method, with the cumulative-effect adjustment recorded to the opening balance of Accumulated deficit within stockholders’ equity in the Condensed Consolidated Balance Sheets. The cumulative effect of adopting the CECL standard resulted in an increase of $28 million to the allowance for expected credit losses within financing receivables, and a corresponding increase of $25 million, net of $3 million of deferred taxes to Accumulated deficit as of November 1, 2020. The allowance for expected credit losses related to accounts receivables is comprised of a general reserve and a specific reserve. The Company may record a specific reserve for individual accounts when the Company becomes aware of specific customer circumstances, such as in the case of a bankruptcy filing or deterioration in the customer's operating results or financial position. If there are additional changes in circumstances related to the specific customer, the Company further adjusts estimates of the recoverability of receivables. The Company maintains an allowance for credit losses for all other customers based on a variety of factors, including the use of third-party credit risk models that generate quantitative measures of default probabilities based on market factors, the financial condition of customers and the length of time receivables are past due. These qualitative factors are subjective and require a degree of management judgement. The past due or delinquency status of a receivable is based on the contractual payment terms of the receivable. The Company establishes an allowance for expected credit losses related to accounts receivable, including unbilled receivables. The allowance for expected credit losses related to financing receivables is comprised of a general reserve and a specific reserve. The Company establishes a specific reserve for financing receivables with identified exposures, such as customer defaults, bankruptcy or other events, that make it unlikely the Company will recover its investment. For individually evaluated receivables, the Company determines the expected cash flow for the receivable, which includes consideration of estimated proceeds from disposition of the collateral and calculates an estimate of the potential loss and the probability of loss. For those accounts where a loss is considered probable, the Company records a specific reserve. The Company maintains a general reserve using a credit loss model on a regional basis and bases such percentages on several factors, including consideration of historical credit losses and portfolio delinquencies, trends in the overall weighted-average risk rating of the portfolio, current economic conditions, and forward-looking information, including reasonable and supportable forecasts. The Company believes the economic forecasts employed represent reasonable and supportable forecasts, followed by a reversion to long term trends. The Company excludes accounts evaluated as part of the specific reserve from the general reserve analysis. The Company generally writes off a receivable or records a specific reserve when a receivable becomes 180 days past due, or sooner if the Company determines that the receivable is not collectible. The Company’s debt securities are generally considered available-for-sale and are reported at fair value with unrealized gains and losses, net of applicable taxes, recorded in Accumulated other comprehensive loss in the Condensed Consolidated Balance Sheets. Realized gains and losses for available-for-sale securities are calculated based on the specific identification method and included in Interest and other, net in the Condensed Consolidated Statements of Earnings. The Company monitors its investment portfolio for potential impairment on a quarterly basis. When the carrying amount of an investment in debt securities exceeds its fair value and the decline in value is determined to be due to credit-related factors, the Company recognizes the impairment by way of an allowance for credit loss in Interest and other, net in the Condensed Consolidated Statement of Earnings while the impairment that is not credit related is recorded in Accumulated other comprehensive loss in the Condensed Consolidated Balance Sheets. Recently Enacted Accounting Pronouncements In January 2020, the FASB issued guidance to clarify certain interactions between the guidance to account for equity securities, the guidance to account for investments under the equity method of accounting, and the guidance to account for derivatives and hedging. The new guidance clarifies the application of measurement alternatives and the accounting for certain forward contracts and purchased options to acquire investments. The Company is required to adopt the guidance in the first quarter of fiscal 2022, though early adoption is permitted. The Company is currently evaluating the timing and the impact of these amendments on its Consolidated Financial Statements. There have been no other significant changes to the Company's accounting policies, or recently adopted or enacted accounting pronouncements disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2020.
|
Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment InformationAs described in Note 1, "Overview and Summary of Significant Accounting Policies", effective at the beginning of the first quarter of fiscal 2021, the Company implemented certain organizational changes to align its segment financial reporting more closely with its current business structure. Hewlett Packard Enterprise's operations are now organized into six segments for financial reporting purposes: Compute, HPC & MCS, Storage, Intelligent Edge, Financial Services ("FS"), and Corporate Investments and Other. Hewlett Packard Enterprise's organizational structure is based on a number of factors that the Chief Operating Decision Maker ("CODM"), who is the Chief Executive Officer ("CEO"), uses to evaluate, view and run the Company's business operations, which include, but are not limited to, customer base and homogeneity of products and technology. The six segments are based on this organizational structure and information reviewed by Hewlett Packard Enterprise's management to evaluate segment results. A summary description of each segment follows. Compute portfolio offers both general purpose servers for multi-workload computing and workload optimized servers to offer the best performance and value for demanding applications. This portfolio of products includes the HPE Proliant rack and tower servers; HPE BladeSystem, and HPE Synergy. Compute offerings also include operational and support services. High Performance Computing & Mission-Critical Solutions portfolio offers specialized compute servers designed to support specific use cases. The HPC portfolio of products includes the HPE Apollo and Cray high performance computing products that are often sold as supercomputing systems, including exascale supercomputers. The MCS portfolio includes the HPE Superdome Flex, HPE Nonstop and HPE Integrity product lines. The HPC & MCS segment also includes the Converged Edge Systems business which consists of the HPE Moonshot and HPE Edgeline products. HPC & MCS offerings also include operational and support services. Storage portfolio offers workload optimized storage product and service offerings which include an intelligent hyperconverged infrastructure ("HCI") with HPE Nimble Storage dHCI and HPE SimpliVity. The portfolio also includes HPE Primera, HPE Nimble Storage and HPE 3PAR Storage for mission-critical and general-purpose workloads, HPE Recovery Manager Central, HPE StoreOnce, HPE Cloud Volumes Backup and Big Data solutions. Storage also provides solutions for secondary workloads and traditional tape, storage networking and disk products, such as HPE Modular Storage Arrays ("MSA") and HPE XP. Storage offerings also include operational and support services. Intelligent Edge portfolio offers wired and wireless local area network "(LAN"), campus and data center switching, software-defined wide-area-networking, security, and associated services to enable secure connectivity for businesses of any size. The HPE Aruba product portfolio includes products such as Wi-Fi access points, switches, routers, and sensors. The HPE Aruba software and services portfolio includes software products for cloud-based management, network management, network access control, analytics and assurance, location services software and professional and support services, as well as as-a Service ("aaS") and consumption models for the Intelligent Edge portfolio of products. Financial Services provides flexible investment solutions, such as leasing, financing, IT consumption, and utility programs and asset management services, for customers that facilitate unique technology deployment models and the acquisition of complete IT solutions, including hardware, software and services from Hewlett Packard Enterprise and others. Corporate Investments and Other includes the Communications and Media Solutions business ("CMS") which primarily offers software and related services to the telecommunications industry; the HPE Software business which offers HPE Ezmeral Container Platform and HPE Ezmeral Data Fabric, and incubates other software related technology innovation; the A & PS business which primarily offers consultative-led services, HPE and partner technology expertise and advice, implementation services as well as complex solution engagement capabilities; and the Hewlett Packard Labs which is responsible for research and development. Segment Policy There have been no changes to the Company's segment accounting policies disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2020, except for the organizational changes and the change in allocation of stock based compensation expense described in Note 1, "Overview and Summary of Significant Accounting Policies". Hewlett Packard Enterprise does not allocate to its segments certain operating expenses, which it manages at the corporate level. These unallocated operating costs include certain corporate costs and eliminations, stock-based compensation expense, amortization of initial direct costs, amortization of intangible assets, impairment of goodwill, transformation costs, disaster charges, acquisition, disposition and other related charges. Segment Operating Results Segment net revenue and segment operating results were as follows:
The reconciliation of segment operating results to Hewlett Packard Enterprise Condensed Consolidated Financial statements was as follows:
Total assets by segment and the reconciliation of segment assets to Hewlett Packard Enterprise consolidated total assets were as follows:
The Company’s net revenue by geographic region was as follows:
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Transformations Programs |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transformation Programs | Transformation Programs Transformation programs are comprised of the cost optimization and prioritization plan, and the HPE Next initiative. During the third quarter of fiscal 2020, the Company launched the cost optimization and prioritization plan which focuses on realigning the workforce to areas of growth, including a new hybrid workforce model called Edge-to-Office, real estate strategies and simplifying and evolving our product portfolio strategy. The changes to the workforce will vary by country, based on business needs, local legal requirements and consultations with employee works councils and other employee representatives, as appropriate. The implementation period of the cost optimization and prioritization plan is through fiscal 2023. During this time the Company expects to incur transformation costs predominantly related to labor restructuring, non-labor restructuring, IT investments, design and execution charges and real estate initiatives. During the third quarter of fiscal 2017, the Company launched an initiative called HPE Next to put in place a purpose-built company designed to compete and win in the markets where it participates. Through this program, the Company is simplifying the operating model, and streamlining our offerings, business processes and business systems to improve our execution. The implementation period of the HPE Next initiative is through fiscal 2023. As of October 31, 2020, the headcount exits under HPE Next Plan are complete. During the remaining implementation period, the Company expects to incur transformation costs predominantly related to IT infrastructure costs for streamlining, upgrading and simplifying back-end operations, and real estate initiatives. These costs are expected to be partially offset by gains from real estate sales. Transformation Costs During the three months ended January 31, 2021, the Company incurred $252 million of charges related to the cost optimization and prioritization plan which is recorded within Transformation costs, the components of which were as follows:
During the three months ended January 31, 2021 and 2020, the Company incurred $59 million and $89 million, respectively, in net charges associated with HPE Next which were recorded within Transformation costs in the Condensed Consolidated Statements of Earnings. The components of Transformation costs relating to HPE Next were as follows:
Restructuring Plan Restructuring activities related to the Company's employees and infrastructure under the cost optimization and prioritization plan and HPE Next Plan, were presented in the table below:
The current restructuring liability related to the transformation programs, reported in Condensed Consolidated Balance Sheets at January 31, 2021 and October 31, 2020, was $234 million and $359 million, respectively, in accrued restructuring, and $42 million and $24 million, respectively, in Other accrued liabilities. The non-current restructuring liability related to the transformation programs, reported in Other non-current liabilities in the Condensed Consolidated Balance Sheets as of January 31, 2021 and October 31, 2020, was $181 million and $91 million, respectively.
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Retirement Benefit Plans |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefit Plans | Retirement Benefit Plans The Company's net pension benefit (credit) cost for defined benefit plans recognized in the Condensed Consolidated Statements of Earnings was as follows:
(1)These non-service components of net periodic benefit cost were included in Non-service net periodic benefit credit in the Condensed Consolidated Statements of Earnings.
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Taxes on Earnings |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Taxes on Earnings | Taxes on Earnings Provision for Taxes The Company's effective tax rate was (8.8)% and 11.9% for the three months ended January 31, 2021 and 2020, respectively. The effective tax rate generally differs from the U.S. federal statutory rate of 21% due to favorable tax rates associated with certain earnings from the Company’s operations in lower tax jurisdictions throughout the world but are also impacted by discrete tax adjustments during each fiscal period. For the three months ended January 31, 2021, the Company recorded $90 million of net income tax benefits related to various items discrete to the period. The amount primarily included $66 million of income tax benefits related to transformation costs, and acquisition, disposition and other related charges and $30 million of income tax benefits related to the change in pre-Separation tax liabilities, primarily those for which we share joint and several liability with HP Inc. and for which we are indemnified by HP Inc. For the three months ended January 31, 2020, the Company recorded $16 million of net income tax benefits related to various items discrete to the period. The amount primarily included $21 million of income tax benefits related to the change in pre-Separation tax liabilities for which the Company shares joint and several liability with HP Inc. and for which the Company is indemnified by HP Inc. Uncertain Tax Positions As of January 31, 2021 and October 31, 2020, the amount of unrecognized tax benefits was $2.1 billion and $2.2 billion, respectively, of which up to $702 million and $731 million, respectively, would affect the Company's effective tax rate if realized as of their respective periods. For tax liabilities pertaining to unrecognized tax benefits, the Company recognizes interest income from favorable settlements and interest expense and penalties in (Provision) benefit for taxes in the Condensed Consolidated Statements of Earnings. As of January 31, 2021 and October 31, 2020, the Company had accrued $112 million and $119 million, respectively, for interest and penalties in the Condensed Consolidated Balance Sheets. The Company engages in continuous discussions and negotiations with tax authorities regarding tax matters in various jurisdictions. The Company does not expect complete resolution of any U.S. Internal Revenue Service ("IRS") audit cycle within the next 12 months. However, it is reasonably possible that certain federal, foreign and state tax issues may be concluded in the next 12 months, including issues involving resolution of certain intercompany transactions, joint and several tax liabilities and other matters. Accordingly, the Company believes it is reasonably possible that its existing unrecognized tax benefits may be reduced by an amount up to $47 million within the next 12 months. Deferred Tax Assets and Liabilities Deferred tax assets and liabilities included in the Condensed Consolidated Balance Sheets were as follows:
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Balance Sheet Details |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Details | Balance Sheet Details Balance sheet details were as follows: Cash, cash equivalents and restricted cash
(1) The Company includes restricted cash in Other current assets in the accompanying Condensed Consolidated Balance Sheets. Inventory
Property, Plant and Equipment
Warranties The Company's aggregate product warranty liability as of January 31, 2021, and changes were as follows:
Contract balances The Company’s contract balances consist of contract assets, contract liabilities, and costs to obtain a contract with a customer. Contract Assets A summary of accounts receivable, net, including unbilled receivables was as follows:
The allowances for credit losses related to accounts receivable and changes therein were as follows:
Sale of Trade Receivables The Company has third-party revolving short-term financing arrangements intended to facilitate the working capital requirements of certain customers. During the three months ended January 31, 2021, the Company sold $1.1 billion of trade receivables. During the twelve months ended October 31, 2020, the Company sold $3.9 billion of trade receivables. The Company recorded an obligation of $74 million and $75 million in Notes payable and short-term borrowings in its Condensed Consolidated Balance Sheets as of January 31, 2021 and October 31, 2020 respectively, related to the trade receivables sold and collected from the third-party for which the revenue recognition was deferred. Contract Liabilities Contract liabilities consist of deferred revenue. The aggregate balance of current and non-current deferred revenue was $6.3 billion and $6.2 billion as of January 31, 2021 and October 31, 2020, respectively. During the three months ended January 31, 2021, approximately $1.2 billion of the deferred revenue as of October 31, 2020 was recognized as revenue. Remaining Performance Obligations Revenue allocated to remaining performance obligations represents contract work that has not yet been performed and does not include contracts where the customer is not committed. Remaining performance obligations estimates are subject to change and are affected by several factors, including contract terminations, changes in the scope of contracts, adjustments for revenue that has not materialized and adjustments for currency. Remaining performance obligations consist of deferred revenue. As of January 31, 2021, the aggregate amount of remaining performance obligations was $6.3 billion. The Company expects to recognize approximately 44% of this amount as revenue over the remainder of the fiscal year. Costs to Obtain a Contract As of January 31, 2021, the current and non-current portions of the capitalized costs to obtain a contract were $56 million and $81 million, respectively. As of October 31, 2020, the current and non-current portions of the capitalized costs to obtain a contract were $54 million and $76 million, respectively. The current and non-current portions of the capitalized costs to obtain a contract were included in Other current assets and Long-term financing receivables and other assets, respectively, in the Condensed Consolidated Balance Sheet. For the three months ended January 31, 2021 and 2020, the Company amortized $15 million and $14 million respectively, of capitalized costs to obtain a contract. The amortized capitalized costs to obtain a contract are included in Selling, general and administrative expense in the Condensed Consolidated Statement of Earnings.
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Accounting for Leases as a Lessor |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting for Leases as a Lessor | Accounting for Leases as a Lessor Financing receivables represent sales-type and direct-financing leases of the Company and third-party products. These receivables typically have terms ranging from to five years and are usually collateralized by a security interest in the underlying assets. Financing receivables also include billed receivables from operating leases. The allowance for credit losses represents future expected credit losses over the life of the receivables based on past experience, current information and forward-looking economic considerations. The components of financing receivables were as follows:
As of January 31, 2021 and October 31, 2020, scheduled maturities of the Company's minimum lease payments receivable were as follows:
Sale of Financing Receivables The Company enters into arrangements to transfer the contractual payments due under certain financing receivables to third party financial institutions. For the transfer of receivables that qualifies the true-sale accounting criteria in accordance with Accounting Standards Codification ("ASC") 860 - Transfers and Servicing of Financial Assets, the Company derecognizes the carrying value of the receivable transferred and recognizes a net gain or loss on the sale. For transfer of receivables that do not satisfy the true-sale accounting criteria, the Company accounts the obligation as unsecured debt and records the short-term portion in Notes payable and short-term borrowings and long-term portion in Long-term debt in its Condensed Consolidated Balance Sheets. During the three months ended January 31, 2021 the Company sold $57 million of financing receivables, for which $11 million did not satisfy the true-sale accounting criteria. During the fiscal year ended October 31, 2020, the Company sold $103 million of financing receivables. Credit Quality Indicators Due to the homogeneous nature of its leasing transactions, the Company manages its financing receivables on an aggregate basis when assessing and monitoring credit risk. Credit risk is generally diversified due to the large number of entities comprising the Company's customer base and their dispersion across many different industries and geographic regions. The Company evaluates the credit quality of an obligor at lease inception and monitors that credit quality over the term of a transaction. The Company assigns risk ratings to each lease based on the creditworthiness of the obligor and other variables that augment or mitigate the inherent credit risk of a particular transaction. Such variables include the underlying value and liquidity of the collateral, the essential use of the equipment, the term of the lease, and the inclusion of credit enhancements, such as guarantees, letters of credit or security deposits. The credit risk profile of financing receivables, based on internal risk ratings as of January 31, 2021, presented on amortized cost basis by year of origination was as follows:
The credit risk profile of gross financing receivables, based on internal risk ratings as of October 31, 2020, was as follows:
Accounts rated low risk typically have the equivalent of a Standard & Poor's rating of BBB– or higher, while accounts rated moderate risk generally have the equivalent of BB+ or lower. The Company classifies accounts as high risk when it considers the financing receivable to be impaired or when management believes there is a significant near-term risk of impairment. Effective November 1, 2020, under the new guidance for credit losses, the Company discloses its credit quality by year of origination. The credit quality indicators do not reflect any mitigation actions taken to transfer credit risk to third parties. Allowance for Credit Losses The allowance for credit losses for financing receivables as of January 31, 2021 and October 31, 2020 and the respective changes during the three and twelve months then ended were as follows:
Non-Accrual and Past-Due Financing Receivables The following table summarizes the aging and non-accrual status of gross financing receivables:
(1)Includes billed operating lease receivables and billed sales-type and direct-financing lease receivables. (2)Includes billed operating lease receivables and billed and unbilled sales-type and direct-financing lease receivables. Operating Leases Operating lease assets included in Property, plant and equipment in the Condensed Consolidated Balance Sheets were as follows:
Minimum future rentals on non-cancelable operating leases related to leased equipment were as follows:
If a lease is classified as an operating lease, the Company records lease revenue on a straight line basis over the lease term. At commencement of an operating lease, initial direct costs are deferred and are expensed over the lease term on the same basis as the lease revenue is recorded. The following table presents amounts included in the Condensed Consolidated Statement of Earnings related to lessor activity as of January 31, 2021:
Variable Interest Entities The Company has issued asset-backed debt securities under a fixed-term securitization program to private investors. The asset-backed debt securities are collateralized by the U.S. fixed-term financing receivables and leased equipment in the offering, which is held by a Special Purpose Entity (“SPE”). The SPE meets the definition of a VIE and is consolidated, along with the associated debt, into the Condensed Consolidated Financial Statements as the Company is the primary beneficiary of the VIE. The SPE is a bankruptcy-remote legal entity with separate assets and liabilities. The purpose of the SPE is to facilitate the funding of customer receivables and leased equipment in the capital markets. The Company’s risk of loss related to securitized receivables and leased equipment is limited to the amount by which the Company’s right to receive collections for assets securitized exceeds the amount required to pay interest, principal, and fees and expenses related to the asset-backed securities. The following table presents the assets and liabilities held by the consolidated VIE as of January 31, 2021, which are included in the Condensed Consolidated Balance Sheets. The assets in the table below include those that can be used to settle the obligations of the VIE. Additionally, general creditors do not have recourse to the assets of the VIE.
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Goodwill |
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Goodwill | Goodwill The following table represents the change in carrying value of goodwill, by reportable segment, for three months ended January 31, 2021:
(1)As a result of the organizational realignments which were effective as of November 1, 2020, (described in Note 1, "Overview and Summary of Significant Accounting Policies"), $213 million of goodwill was reallocated from Storage segment to Corporate Investments and Other segment as of the beginning of the period using a relative fair value approach. (2)Goodwill is net of accumulated impairment losses of $953 million. Of this amount, $865 million related to the HPC & MCS reporting unit was recorded during the second quarter of 2020 and $88 million related to the CMS reporting unit within Corporate Investments and Other was recorded during the fourth quarter of fiscal 2018. There is no goodwill remaining in the CMS reporting unit. Effective at the beginning of the first quarter of fiscal 2021, the Company's operations were realigned into six segments for financial reporting purposes. The Company's reporting units containing goodwill are consistent with the reportable segments identified in Note 2, "Segment Information" with the exception of Corporate Investments and Other which is made up of three reporting units, A & PS, CMS, and Software, of which only Software has goodwill. As a result of this realignment, the Company performed an interim quantitative goodwill impairment test for all of its reporting units as of November 1, 2020, which did not result in any goodwill impairment charges. The fair value of all reporting units continued to exceed the carrying value of their net assets. The excess of fair value over carrying value for our reporting units ranged from approximately 8% to 37% of the respective carrying values. In order to evaluate the sensitivity of the estimated fair value of our reporting units in the goodwill impairment test, the Company applied a hypothetical 10% decrease to the fair value of each reporting unit. Based on the results of this hypothetical 10% decrease all of the reporting units had an excess of fair value over carrying value, with the exception of HPC & MCS reporting unit. As of the interim test date, the HPC & MCS reporting unit has goodwill of $3.6 billion and an excess of fair value over carrying value of net assets of 8%. The fair value of the HPC & MCS reporting unit was based on a weighting of fair values derived most significantly from the income approach, and to a lesser extent, the market approach. The HPC & MCS business is facing challenges on the current and projected future results as the revenue growth is dependent on timing of delivery and related achievement of customer acceptance milestones. If the Company is not successful in addressing these challenges, the projected revenue growth rates or operating margins could decline resulting in a decrease in the fair value of the HPC & MCS reporting unit. The fair value of the HPC & MCS reporting unit could also be negatively impacted by changes in its weighted average cost of capital, changes in management's business strategy or significant and sustained declines in the stock price, which could result in an indicator of impairment. In addition, should economic conditions deteriorate, estimates of future cash flows for each of the Company's reporting units may be insufficient to support the carrying value and the goodwill assigned to them, requiring impairment charges. Further impairment charges, if any, may be material to the results of operations and financial position. The Company will continue to evaluate the recoverability of goodwill on an annual basis as of the beginning of its fourth fiscal quarter and whenever events or changes in circumstances indicate there may be a potential impairment.
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | Fair Value Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The following table presents the Company's assets and liabilities that are measured at fair value on a recurring basis:
The Company uses valuation techniques that are based upon observable and unobservable inputs. Observable inputs are developed using market data such as publicly available information and reflect the assumptions market participants would use, while unobservable inputs are developed using the best information available about the assumptions market participants would use. Other Fair Value Disclosures Short-Term and Long-Term Debt: At January 31, 2021 and October 31, 2020, the estimated fair value of the Company's short-term and long-term debt was $17.0 billion and $17.1 billion, respectively. At January 31, 2021 and October 31, 2020, the carrying value of the Company's short-term and long-term debt was $15.7 billion and $15.9 billion, respectively. In the second quarter of fiscal 2020, the Company recorded a goodwill impairment charge of $865 million associated with the HPC & MCS reporting unit. The fair value of the Company's reporting units was classified in Level 3 of the fair value hierarchy due to the significance of unobservable inputs developed using company-specific information. For more information on the goodwill impairment, see Note 8 "Goodwill".
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Financial Instruments |
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Investments, All Other Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments | Financial Instruments Cash Equivalents and Available-for-Sale Debt Investments Cash equivalents and available-for-sale debt investments were as follows:
As of January 31, 2021 and October 31, 2020, the carrying amount of cash equivalents approximated fair value due to the short period of time to maturity. Time deposits were primarily issued by institutions outside of the U.S. as of January 31, 2021 and October 31, 2020. The estimated fair value of the available-for-sale debt investments may not be representative of values that will be realized in the future. Contractual maturities of available-for-sale debt investments were as follows:
Equity securities investments in privately held companies are included in Long-term financing receivables and other assets in the Condensed Consolidated Balance Sheets. The carrying amount of those without readily determinable fair values amounted to $301 million and $295 million at January 31, 2021 and October 31, 2020, respectively. Investments in equity securities that are accounted for using the equity method are included in Investments in equity interests in the Condensed Consolidated Balance Sheets. These amounted to $2.2 billion at January 31, 2021 and October 31, 2020. The Company did not recognize any impairments on these equity investments during the three months ended January 31, 2021. Fair Value of Derivative Instruments in the Condensed Consolidated Balance Sheets The gross notional and fair value of derivative instruments in the Condensed Consolidated Balance Sheets were as follows:
Offsetting of Derivative Instruments The Company recognizes all derivative instruments on a gross basis in the Condensed Consolidated Balance Sheets. The Company's derivative instruments are subject to master netting arrangements and collateral security arrangements. The Company does not offset the fair value of its derivative instruments against the fair value of cash collateral posted under collateral security agreements. The information related to the potential effect of the Company's use of the master netting agreements and collateral security agreements were as follows:
(1)Represents the cash collateral posted by counterparties as of the respective reporting date for the Company's asset position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date. (2)Represents the collateral posted by the Company in cash or through the re-use of counterparty cash collateral as of the respective reporting date for the Company's liability position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date. As of January 31, 2021, of the $168 million of collateral posted, $67 million was in cash and $101 million was through re-use of counterparty collateral. As of October 31, 2020, $55 million of collateral posted was entirely by way of re-use of counterparty collateral. The amounts recorded on the Condensed Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges were as follows:
The pre-tax effect of derivative instruments in cash flow and net investment hedging relationships recognized in Other Comprehensive Income ("OCI") were as follows:
As of January 31, 2021, the Company expects to reclassify an estimated net accumulated other comprehensive loss of approximately $69 million, net of taxes, to earnings in the next twelve months along with the earnings effects of the related forecasted transactions associated with cash flow hedges. Effect of Derivative Instruments on the Condensed Consolidated Statements of Earnings The pre-tax effect of derivative instruments on the Condensed Consolidated Statements of Earnings were as follows:
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Borrowings |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Borrowings | Borrowings Notes Payable, Short-Term Borrowings and Long-Term Debt Notes payable, short-term borrowings, including the current portion of long-term debt, and long-terms debt were as follows:
Asset-backed Debt Securities In March 2021, the Company issued $1.0 billion of asset-backed debt securities in six tranches at a weighted average price of 99.99% and a weighted average interest rate of 0.49%, payable monthly from April 2021 with a stated final maturity date of March 2031. Commercial Paper Hewlett Packard Enterprise maintains two commercial paper programs, "the Parent Programs", and a wholly-owned subsidiary maintains a third program. Hewlett Packard Enterprise's U.S. program provides for the issuance of U.S. dollar-denominated commercial paper up to a maximum aggregate principal amount of $4.75 billion. Hewlett Packard Enterprise's euro commercial paper program provides for the issuance of commercial paper outside of the U.S. denominated in U.S. dollars, euros or British pounds up to a maximum aggregate principal amount of $3.0 billion or the equivalent in those alternative currencies. The combined aggregate principal amount of commercial paper outstanding under those two programs at any one time cannot exceed the $4.75 billion as authorized by Hewlett Packard Enterprise's Board of Directors. In addition, the Hewlett Packard Enterprise subsidiary's euro Commercial Paper/Certificate of Deposit Program provides for the issuance of commercial paper in various currencies of up to a maximum aggregate principal amount of $1.0 billion. As of January 31, 2021 and October 31, 2020, no borrowings were outstanding under the Parent Programs, and $686 million and $677 million, respectively, were outstanding under the subsidiary’s program.
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Stockholders' Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Stockholders' Equity The components of Accumulated other comprehensive loss, net of taxes as of January 31, 2021, and changes during the three months ended January 31, 2021 were as follows:
The components of Accumulated other comprehensive loss, net of taxes as of January 31, 2020, and changes during the three months ended January 31, 2020 were as follows:
Share Repurchase Program On April 6, 2020, the Company announced that it suspended purchases under its share repurchase program in response to the global economic uncertainty that resulted from the worldwide spread of COVID-19. As of January 31, 2021, the Company had a remaining authorization of $2.1 billion for future share repurchases.
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Net Earnings Per Share |
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Net Earnings Per Share | 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 the weighted-average dilutive effect of restricted stock units, 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:
(1)The Company excludes shares potentially issuable under employee stock plans that could dilute basic net EPS in the future from the calculation of diluted net earnings per share, as their effect, if included, would have been anti-dilutive for the periods presented.
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Litigation and Contingencies |
3 Months Ended |
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Jan. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation and Contingencies | Litigation and Contingencies Hewlett Packard Enterprise is involved in various lawsuits, claims, investigations and proceedings including those consisting of intellectual property, commercial, securities, employment, employee benefits and environmental matters, which arise in the ordinary course of business. In addition, as part of the Separation and Distribution Agreement, Hewlett Packard Enterprise and HP Inc. (formerly known as "Hewlett-Packard Company") agreed to cooperate with each other in managing certain existing litigation related to both parties' businesses. The Separation and Distribution Agreement included provisions that allocate liability and financial responsibility for pending litigation involving the parties, as well as provide for cross-indemnification of the parties against liabilities to one party arising out of liabilities allocated to the other party. The Separation and Distribution Agreement also included provisions that assign to the parties responsibility for managing pending and future litigation related to the general corporate matters of HP Inc. arising prior to the Separation. Hewlett Packard Enterprise records a liability when it believes that it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated. Significant judgment is required to determine both the probability of having incurred a liability and the estimated amount of the liability. Hewlett Packard Enterprise reviews these matters at least quarterly and adjusts these liabilities to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other updated information and events pertaining to a particular matter. Litigation is inherently unpredictable. However, Hewlett Packard Enterprise believes it has valid defenses with respect to legal matters pending against us. Nevertheless, cash flows or results of operations could be materially affected in any particular period by the resolution of one or more of these contingencies. Hewlett Packard Enterprise believes it has recorded adequate provisions for any such matters and, as of January 31, 2021, it was not reasonably possible that a material loss had been incurred in connection with such matters in excess of the amounts recognized in its financial statements. Litigation, Proceedings and Investigations Ross and Rogus v. Hewlett Packard Enterprise Company. On November 8, 2018, a putative class action complaint was filed in the Superior Court of California, County of Santa Clara alleging that HPE pays its California-based female employees “systemically lower compensation” than HPE pays male employees performing substantially similar work. The complaint alleges various California state law claims, including California’s Equal Pay Act, Fair Employment and Housing Act, and Unfair Competition Law, and seeks certification of a California-only class of female employees employed in certain “Covered Positions.” The complaint seeks damages, statutory and civil penalties, attorneys’ fees and costs. On April 2, 2019, HPE filed a demurrer to all causes of action and an alternative motion to strike portions of the complaint. On July 2, 2019, the court denied HPE’s demurrer as to the claims of the putative class and granted HPE’s demurrer as to the claims of the individual plaintiffs. India Directorate of Revenue Intelligence Proceedings. On April 30 and May 10, 2010, the India Directorate of Revenue Intelligence (the "DRI") issued show cause notices to Hewlett-Packard India Sales Private Ltd ("HP India"), a subsidiary of HP Inc., seven HP India employees and one former HP India employee alleging that HP India underpaid customs duties while importing products and spare parts into India and seeking to recover an aggregate of approximately $370 million, plus penalties. Prior to the issuance of the show cause notices, HP India deposited approximately $16 million with the DRI and agreed to post a provisional bond in exchange for the DRI's agreement to not seize HP India products and spare parts and to not interrupt the transaction of business by HP India. On April 11, 2012, the Bangalore Commissioner of Customs issued an order on the products-related show cause notice affirming certain duties and penalties against HP India and the named individuals of approximately $386 million, of which HP India had already deposited $9 million. On December 11, 2012, HP India voluntarily deposited an additional $10 million in connection with the products-related show cause notice. On April 20, 2012, the Commissioner issued an order on the parts-related show cause notice affirming certain duties and penalties against HP India and certain of the named individuals of approximately $17 million, of which HP India had already deposited $7 million. After the order, HP India deposited an additional $3 million in connection with the parts-related show cause notice to avoid certain penalties. HP India filed appeals of the Commissioner's orders before the Customs Tribunal along with applications for waiver of the pre-deposit of remaining demand amounts as a condition for hearing the appeals. The Customs Department has also filed cross-appeals before the Customs Tribunal. On January 24, 2013, the Customs Tribunal ordered HP India to deposit an additional $24 million against the products order, which HP India deposited in March 2013. The Customs Tribunal did not order any additional deposit to be made under the parts order. In December 2013, HP India filed applications before the Customs Tribunal seeking early hearing of the appeals as well as an extension of the stay of deposit as to HP India and the individuals already granted until final disposition of the appeals. On February 7, 2014, the application for extension of the stay of deposit was granted by the Customs Tribunal until disposal of the appeals. On October 27, 2014, the Customs Tribunal commenced hearings on the cross-appeals of the Commissioner's orders. The Customs Tribunal rejected HP India's request to remand the matter to the Commissioner on procedural grounds. The hearings were scheduled to reconvene on April 6, 2015, and again on November 3, 2015 April 11, 2016, and January 15, 2019, but were canceled at the request of the Customs Tribunal. The hearing was again rescheduled for January 20, 2021 but was postponed and has not yet been rescheduled. ECT Proceedings. In January 2011, the postal service of Brazil, Empresa Brasileira de Correios e Telégrafos ("ECT"), notified a former subsidiary of HP Inc. in Brazil ("HP Brazil") that it had initiated administrative proceedings to consider whether to suspend HP Brazil's right to bid and contract with ECT related to alleged improprieties in the bidding and contracting processes whereby employees of HP Brazil and employees of several other companies allegedly coordinated their bids and fixed results for three ECT contracts in 2007 and 2008. In late July 2011, ECT notified HP Brazil it had decided to apply the penalties against HP Brazil and suspend HP Brazil's right to bid and contract with ECT for five years, based upon the evidence before it. In August 2011, HP Brazil appealed ECT's decision. In April 2013, ECT rejected HP Brazil's appeal, and the administrative proceedings were closed with the penalties against HP Brazil remaining in place. In parallel, in September 2011, HP Brazil filed a civil action against ECT seeking to have ECT's decision revoked. HP Brazil also requested an injunction suspending the application of the penalties until a final ruling on the merits of the case. The court of first instance has not issued a decision on the merits of the case, but it has denied HP Brazil's request for injunctive relief. HP Brazil appealed the denial of its request for injunctive relief to the intermediate appellate court, which issued a preliminary ruling denying the request for injunctive relief but reducing the length of the sanctions from to two years. HP Brazil appealed that decision and, in December 2011, obtained a ruling staying enforcement of ECT's sanctions until a final ruling on the merits of the case. HP Brazil expects the decision to be issued in 2021 and any subsequent appeal on the merits to last several years. Forsyth, et al. vs. HP Inc. and Hewlett Packard Enterprise. This purported class and collective action was filed on August 18, 2016 and an amended complaint was filed on December 19, 2016 in the United States District Court for the Northern District of California, against HP Inc. and Hewlett Packard Enterprise alleging defendants violated the Federal Age Discrimination in Employment Act ("ADEA"), the California Fair Employment and Housing Act, California public policy and the California Business and Professions Code by terminating older workers and replacing them with younger workers. Plaintiffs seek to certify a nationwide collective action under the ADEA comprised of all individuals aged 40 and older who had their employment terminated by an HP entity pursuant to a work force reduction ("WFR") plan on or after December 9, 2014 for individuals terminated in deferral states and on or after April 8, 2015 in non-deferral states. Plaintiffs also seek to certify a Rule 23 class under California law comprised of all persons 40 years or older employed by defendants in the state of California and terminated pursuant to a WFR plan on or after August 18, 2012. On September 20, 2017, the court granted the defendants' motion to compel arbitration and administratively closed the case pending resolution of the arbitration proceedings. On November 30, 2017, three named plaintiffs filed a single arbitration demand. Thirteen additional plaintiffs later joined the arbitration. On December 22, 2017, defendants filed a motion to (1) stay the case pending arbitrations and (2) enjoin the demanded arbitration and require each plaintiff to file a separate arbitration demand. On February 6, 2018, the court granted the motion to stay and denied the motion to enjoin. The claims of these sixteen arbitration named plaintiffs have been resolved. Additional opt-in plaintiffs were added to the litigation and these claims also were resolved as part of the arbitration process. The stay of the Forsyth class action has been lifted and a Third Amended Complaint was filed on January 7, 2020. Defendants filed a motion to dismiss the Third Amended Complaint on February 6, 2020. On May 18, 2020, the court issued an order granting in part and denying in part Defendants’ motion to dismiss. The court granted Plaintiffs leave to amend their complaint. On July 9, 2020, Plaintiffs filed a Fourth Amended Complaint. On October 15, 2020, Defendants' motion to dismiss the Fourth Amended Complaint was denied. On December 30, 2020, Plaintiffs filed a Motion for Preliminary Class Certification. Defendants’ Opposition to Plaintiffs’ Motion was filed on February 23, 2021. A hearing date on the Motion for Preliminary Class Certification is tentatively scheduled for April 15, 2021. Hewlett-Packard Company v. Oracle (Itanium). On June 15, 2011, HP Inc. filed suit against Oracle in the Superior Court of California, County of Santa Clara in connection with Oracle's March 2011 announcement that it was discontinuing software support for HP Inc.’s Itanium-based line of mission critical servers. HP Inc. asserted, among other things, that Oracle’s actions breached the contract that was signed by the parties as part of the settlement of the litigation relating to Oracle’s hiring of Mark Hurd. Trial was bifurcated into two phases. HP Inc. prevailed in the first phase of the trial, in which the court ruled that the contract at issue required Oracle to continue to offer its software products on HP Inc.'s Itanium-based servers for as long as HP Inc. decided to sell such servers. Phase 2 of the trial was then postponed by Oracle’s appeal of the trial court’s denial of Oracle’s “anti-SLAPP” motion, in which Oracle argued that HP Inc.’s damages claim infringed on Oracle’s First Amendment rights. On August 27, 2015, the California Court of Appeal rejected Oracle’s appeal. The matter was remanded to the trial court for Phase 2 of the trial, which began on May 23, 2016, and was submitted to the jury on June 29, 2016. On June 30, 2016, the jury returned a verdict in favor of HP Inc., awarding HP Inc. approximately $3 billion in damages: $1.7 billion for past lost profits and $1.3 billion for future lost profits. On October 20, 2016, the court entered judgment for this amount with interest accruing until the judgment is paid. Oracle’s motion for a new trial was denied on December 19, 2016, and Oracle filed its notice of appeal from the trial court’s judgment on January 17, 2017. On February 2, 2017, HP Inc. filed a notice of cross-appeal challenging the trial court’s denial of prejudgment interest. On May 16, 2019, HP Inc. filed its application to renew the judgment. As of May 16, 2019, the renewed judgment is approximately $3.8 billion. Daily interest on the renewed judgment is now accruing at $1 million and will be recorded upon receipt. The parties have completed appellate briefing in the California Court of Appeal and are awaiting the scheduling of oral argument. Pursuant to the terms of the Separation and Distribution Agreement, HP Inc. and Hewlett Packard Enterprise will share equally in any recovery from Oracle once Hewlett Packard Enterprise has been reimbursed for all costs incurred in the prosecution of the action prior to the HP Inc. /Hewlett Packard Enterprise separation on November 1, 2015. Oracle America, Inc., et al. v. Hewlett Packard Enterprise Company (Terix copyright matter). On March 22, 2016, Oracle filed a complaint against HPE in the United States District Court for the Northern District of California, alleging copyright infringement, interference with contract, intentional interference with prospective economic relations, and unfair competition. Oracle’s claims arise out of HPE’s prior use of a third-party maintenance provider named Terix Computer Company, Inc. (“Terix”). Oracle contends that in connection with HPE’s use of Terix as a subcontractor for certain customers of HPE’s multivendor support business, Oracle’s copyrights were infringed, and HPE is liable for vicarious and contributory infringement and related claims. The lawsuit against HPE follows a prior lawsuit brought by Oracle against Terix in 2013 relating to Terix’s alleged unauthorized provision of Solaris patches to customers on Oracle hardware. On June 14, 2018, the court heard oral argument on HPE's and Oracle's cross-motions for summary judgment. On January 29, 2019, the court granted HPE’s Motion for Summary Judgment as to all of Oracle’s claims and vacated the trial date. On February 20, 2019, the court entered judgment in favor of HPE, dismissing Oracle’s claims in their entirety. Oracle has appealed the trial court’s ruling to the United States Court of Appeals for the Ninth Circuit. On August 20, 2020, the United States Court of Appeals for the Ninth Circuit issued its ruling, affirming in part and reversing in part the trial court’s decision granting summary judgment in favor of HPE. On October 6, 2020, the matter was remanded to the United States District Court for the Northern District of California for further proceedings consistent with the ruling from the United States Court of Appeals for the Ninth Circuit. The United States District Court for the Northern District of California has set a hearing date on summary judgment motions for June 3, 2021 and a trial date for November 29, 2021. Network-1 Technologies, Inc. v. Alcatel-Lucent USA Inc., et al. This patent infringement action was filed on September 15, 2011 in the United States District Court for the Eastern District of Texas, alleging that various Hewlett Packard Enterprise switches and access points infringe Network-1’s patent relating to the 802.3af and 802.3at “Power over Ethernet” standards. Network-1 seeks damages, attorneys’ fees and costs, and declaratory and injunctive relief. A jury trial was conducted beginning on November 6, 2017. On November 13, 2017, the jury returned a verdict in favor of HPE, finding that HPE did not infringe Network-1’s patent and that the patent was invalid. On August 29 2018, the court denied Network-1's motion for a new trial on infringement and entered the jury's verdict finding that HPE does not infringe the relevant Network-1 patent. The court also granted Network-1's motion for Judgment as a Matter of Law on validity. Network-1 has appealed the jury verdict of non-infringement to the United States Court of Appeals for the Federal Circuit. HPE has cross-appealed the court’s decision to grant Network-1's motion for Judgment as a Matter of Law on validity. Appellate briefing has been completed. The Federal Circuit Court of Appeal held oral argument on November 4, 2019. On September 24, 2020, the Federal Circuit issued its ruling, affirming-in-part and reversing-in-part the jury's verdict, and finding that an erroneous claim construction was presented to the jury that prejudiced Network-1. HPE filed a petition for rehearing with the Federal Circuit that was denied on November 20, 2020. The matter has been remanded back to United States District Court for the Eastern District of Texas for further proceedings consistent with the Federal Circuit's ruling. Shared Litigation with HP Inc., DXC and Micro Focus As part of the Separation and Distribution Agreements between Hewlett Packard Enterprise and HP Inc., Hewlett Packard Enterprise and DXC, and Hewlett Packard Enterprise and Seattle SpinCo, the parties to each agreement agreed to cooperate with each other in managing certain existing litigation related to both parties' businesses. The Separation and Distribution Agreements also included provisions that assign to the parties responsibility for managing pending and future litigation related to the general corporate matters of HP Inc. (in the case of the separation of Hewlett Packard Enterprise from HP Inc.) or of Hewlett Packard Enterprise (in the case of the separation of DXC from Hewlett Packard Enterprise and the separation of Seattle SpinCo from Hewlett Packard Enterprise), in each case arising prior to the applicable separation. Environmental The Company's operations and products are or may in the future become subject to various federal, state, local and foreign laws and regulations concerning environmental protection, including laws addressing the discharge of pollutants into the air and water, the management and disposal of hazardous substances and wastes, the clean-up of contaminated sites, the substances and materials used in the Company's products, the energy consumption of products, services and operations and the operational or financial responsibility for recycling, treatment and disposal of those products. This includes legislation that makes producers of electrical goods, including servers and networking equipment, financially responsible for specified collection, recycling, treatment and disposal of past and future covered products (sometimes referred to as "product take-back legislation"). The Company could incur substantial costs, its products could be restricted from entering certain jurisdictions, and it could face other sanctions, if it were to violate or become liable under environmental laws or if its products become non-compliant with environmental laws. The Company's potential exposure includes impacts on revenue, fines and civil or criminal sanctions, third-party property damage or personal injury claims and clean-up costs. The amount and timing of costs to comply with environmental laws are difficult to predict. In particular, the Company may become a party to, or otherwise involved in, proceedings brought by U.S. or state environmental agencies under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), known as "Superfund," or other federal, state or foreign laws and regulations addressing the clean-up of contaminated sites, and may become a party to, or otherwise involved in, proceedings brought by private parties for contribution towards clean-up costs. The Company is also contractually obligated to make financial contributions to address actions related to certain environmental liabilities, both ongoing and arising in the future, pursuant to its Separation and Distribution Agreement with HP Inc.
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Overview and Summary of Significant Accounting Policies (Policies) |
3 Months Ended |
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Jan. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Condensed Consolidated Financial Statements of the Company were prepared in accordance with United States ("U.S.") Generally Accepted Accounting Principles ("GAAP"). In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements of Hewlett Packard Enterprise contain all adjustments, including normal recurring adjustments, necessary to present fairly the Company's financial position as of January 31, 2021 and October 31, 2020, its results of operations for the three months ended January 31, 2021 and 2020, its cash flows for the three months ended January 31, 2021 and 2020, and its statements of stockholders' equity for the three months ended January 31, 2021 and 2020. The results of operations for the three months ended January 31, 2021 and the cash flows for the three months ended January 31, 2021 are not necessarily indicative of the results to be expected for the full year. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2020, including "Management's Discussion and Analysis of Financial Condition and Results of Operations", "Quantitative and Qualitative Disclosures About Market Risk" and the Consolidated Financial Statements and notes thereto included in Items 7, 7A and 8, respectively.
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Principles of Consolidation | Principles of Consolidation The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of the Company and all subsidiaries and affiliates in which the Company has a controlling financial interest or is the primary beneficiary. All intercompany transactions and accounts within the consolidated businesses of the Company have been eliminated. The Company consolidates a Variable Interest Entity (“VIE”) where it has been determined that the Company is the primary beneficiary of the entity’s operation. In evaluating whether the Company is the primary beneficiary, the Company evaluates its power to direct the most significant activities of the VIE by considering the purpose and design of the entity and the risks the entity was designed to create and pass through to its variable interest holders. The Company also evaluates its economic interests in the VIE. The Company accounts for investments in companies over which it has the ability to exercise significant influence but does not hold a controlling interest under the equity method of accounting, and the Company records its proportionate share of income or losses in Earnings from equity interests in the Condensed Consolidated Statements of Earnings. Non-controlling interests are presented as a separate component within Total stockholders' equity in the Condensed Consolidated Balance Sheets. Net earnings attributable to non-controlling interests are recorded within Interest and other, net in the Condensed Consolidated Statements of Earnings and are not presented separately, as they were not material for any periods presented.
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Segment Realignment and Reclassifications | Segment Realignment and Reclassifications Effective at the beginning of the first quarter of fiscal 2021, HPE implemented certain organizational changes to align its segment financial reporting more closely with its current business structure. These organizational changes are: (i) the transfer of the lifecycle event services business, previously reported within the Advisory and Professional Services ("A & PS") reportable segment to Compute, Storage and HPC & MCS reportable segments; (ii) the transfer of certain software and related services business, previously reported within the Compute, Storage and A & PS reportable segments to the Corporate Investments and Other reportable segment, to form a new Software operating segment; and (iii) the transfer of the remaining A & PS operating segment, previously reported as a separate reportable segment, to the Corporate Investments and Other reportable segment. As a result of these changes, the Corporate Investments and Other Segment now includes the A & PS operating segment, the Communications and Media Solutions operating segment, the Software operating segment, and Hewlett Packard Enterprise Labs which is responsible for research and development. Additionally, effective at the beginning of the first quarter of fiscal 2021, the Company has excluded stock-based compensation expense from its segment earnings from operations. Segment Policy There have been no changes to the Company's segment accounting policies disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2020, except for the organizational changes and the change in allocation of stock based compensation expense described in Note 1, "Overview and Summary of Significant Accounting Policies". Hewlett Packard Enterprise does not allocate to its segments certain operating expenses, which it manages at the corporate level. These unallocated operating costs include certain corporate costs and eliminations, stock-based compensation expense, amortization of initial direct costs, amortization of intangible assets, impairment of goodwill, transformation costs, disaster charges, acquisition, disposition and other related charges.
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Recently Adopted Accounting Pronouncements and Recently Enacted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In January 2021, the FASB issued guidance to clarify that all derivative instruments affected by changes to the interest rates used for discounting, margining or contract price alignment can apply certain optional expedients and exceptions mentioned in its reference rate reform guidance even though they do not reference to LIBOR or a rate being discontinued. This guidance was effective upon issuance. The Company adopted the guidance in the first quarter of fiscal 2021 and there was no impact on its Condensed Consolidated Financial Statements upon adoption. In December 2019, the FASB amended the existing accounting standards for income taxes. The amendments clarify and simplify the accounting for income taxes by eliminating certain exceptions to the general principles. The Company adopted the guidance in the first quarter of fiscal 2021 and there was no material impact on its Condensed Consolidated Financial Statements. In August 2018, the FASB issued guidance on a customer's accounting for implementation costs incurred in cloud-computing arrangements that are hosted by a vendor. Certain types of implementation costs should be capitalized and amortized over the term of the hosting arrangement. The Company adopted the guidance in the first quarter of fiscal 2021 and there was no material impact on its Condensed Consolidated Financial Statements. In August 2018, the FASB issued guidance which changes the disclosure requirements for fair value measurements and defined benefit pension plans. The Company adopted the guidance in the first quarter of fiscal 2021 and there was no impact on its Condensed Consolidated Financial Statements. However, the Company expects to have additional disclosures relating to retirement and post-retirement benefit plans in its Annual Report on Form 10-K for the fiscal year ended October 31, 2021. In June 2016, the FASB amended the existing accounting standards for the measurement of credit losses with additional amendments in 2018, 2019 and 2020. These amendments primarily require the measurement and recognition of current expected credit losses for financial assets held at amortized cost. The amended accounting standard replaces the existing incurred loss impairment model with an expected loss model, which requires the use of forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in earlier recognition of credit losses. The Company adopted the Current Expected Credit Losses standard (the “CECL standard”) as of November 1, 2020 using the modified retrospective method, with the cumulative-effect adjustment recorded to the opening balance of Accumulated deficit within stockholders’ equity in the Condensed Consolidated Balance Sheets. The cumulative effect of adopting the CECL standard resulted in an increase of $28 million to the allowance for expected credit losses within financing receivables, and a corresponding increase of $25 million, net of $3 million of deferred taxes to Accumulated deficit as of November 1, 2020. The allowance for expected credit losses related to accounts receivables is comprised of a general reserve and a specific reserve. The Company may record a specific reserve for individual accounts when the Company becomes aware of specific customer circumstances, such as in the case of a bankruptcy filing or deterioration in the customer's operating results or financial position. If there are additional changes in circumstances related to the specific customer, the Company further adjusts estimates of the recoverability of receivables. The Company maintains an allowance for credit losses for all other customers based on a variety of factors, including the use of third-party credit risk models that generate quantitative measures of default probabilities based on market factors, the financial condition of customers and the length of time receivables are past due. These qualitative factors are subjective and require a degree of management judgement. The past due or delinquency status of a receivable is based on the contractual payment terms of the receivable. The Company establishes an allowance for expected credit losses related to accounts receivable, including unbilled receivables. The allowance for expected credit losses related to financing receivables is comprised of a general reserve and a specific reserve. The Company establishes a specific reserve for financing receivables with identified exposures, such as customer defaults, bankruptcy or other events, that make it unlikely the Company will recover its investment. For individually evaluated receivables, the Company determines the expected cash flow for the receivable, which includes consideration of estimated proceeds from disposition of the collateral and calculates an estimate of the potential loss and the probability of loss. For those accounts where a loss is considered probable, the Company records a specific reserve. The Company maintains a general reserve using a credit loss model on a regional basis and bases such percentages on several factors, including consideration of historical credit losses and portfolio delinquencies, trends in the overall weighted-average risk rating of the portfolio, current economic conditions, and forward-looking information, including reasonable and supportable forecasts. The Company believes the economic forecasts employed represent reasonable and supportable forecasts, followed by a reversion to long term trends. The Company excludes accounts evaluated as part of the specific reserve from the general reserve analysis. The Company generally writes off a receivable or records a specific reserve when a receivable becomes 180 days past due, or sooner if the Company determines that the receivable is not collectible. The Company’s debt securities are generally considered available-for-sale and are reported at fair value with unrealized gains and losses, net of applicable taxes, recorded in Accumulated other comprehensive loss in the Condensed Consolidated Balance Sheets. Realized gains and losses for available-for-sale securities are calculated based on the specific identification method and included in Interest and other, net in the Condensed Consolidated Statements of Earnings. The Company monitors its investment portfolio for potential impairment on a quarterly basis. When the carrying amount of an investment in debt securities exceeds its fair value and the decline in value is determined to be due to credit-related factors, the Company recognizes the impairment by way of an allowance for credit loss in Interest and other, net in the Condensed Consolidated Statement of Earnings while the impairment that is not credit related is recorded in Accumulated other comprehensive loss in the Condensed Consolidated Balance Sheets. Recently Enacted Accounting Pronouncements In January 2020, the FASB issued guidance to clarify certain interactions between the guidance to account for equity securities, the guidance to account for investments under the equity method of accounting, and the guidance to account for derivatives and hedging. The new guidance clarifies the application of measurement alternatives and the accounting for certain forward contracts and purchased options to acquire investments. The Company is required to adopt the guidance in the first quarter of fiscal 2022, though early adoption is permitted. The Company is currently evaluating the timing and the impact of these amendments on its Consolidated Financial Statements. There have been no other significant changes to the Company's accounting policies, or recently adopted or enacted accounting pronouncements disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2020.
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Fair Value | Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. |
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Jan. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Operating Results from Continuing Operations | Segment Operating Results Segment net revenue and segment operating results were as follows:
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Reconciliation of Segment Operating Results | The reconciliation of segment operating results to Hewlett Packard Enterprise Condensed Consolidated Financial statements was as follows:
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Schedule of Reconciliation of Assets from Segments to Consolidated | Total assets by segment and the reconciliation of segment assets to Hewlett Packard Enterprise consolidated total assets were as follows:
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Net Revenue by Geographic Areas | The Company’s net revenue by geographic region was as follows:
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Transformation Programs (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Costs | During the three months ended January 31, 2021, the Company incurred $252 million of charges related to the cost optimization and prioritization plan which is recorded within Transformation costs, the components of which were as follows:
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Schedule of Restructuring Reserve by Cost | Restructuring activities related to the Company's employees and infrastructure under the cost optimization and prioritization plan and HPE Next Plan, were presented in the table below:
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Retirement Benefit Plans (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Net Benefit Cost | The Company's net pension benefit (credit) cost for defined benefit plans recognized in the Condensed Consolidated Statements of Earnings was as follows:
(1)These non-service components of net periodic benefit cost were included in Non-service net periodic benefit credit in the Condensed Consolidated Statements of Earnings.
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Taxes on Earnings (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Deferred Tax Assets and Liabilities | Deferred tax assets and liabilities included in the Condensed Consolidated Balance Sheets were as follows:
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Balance Sheet Details (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash and Cash Equivalents | Cash, cash equivalents and restricted cash
(1) The Company includes restricted cash in Other current assets in the accompanying Condensed Consolidated Balance Sheets.
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Schedule of Inventory | Inventory
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Schedule of Property, Plant and Equipment | Property, Plant and Equipment
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Changes in Aggregate Product Warranty Liabilities | The Company's aggregate product warranty liability as of January 31, 2021, and changes were as follows:
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Summary of Accounts Receivable, Net | A summary of accounts receivable, net, including unbilled receivables was as follows:
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Schedule of Trade Receivables Sold and Cash Received | The allowances for credit losses related to accounts receivable and changes therein were as follows:
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Accounting for Leases as a Lessor (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales-type and Direct Financing Leases, Lease Receivable, Maturity | As of January 31, 2021 and October 31, 2020, scheduled maturities of the Company's minimum lease payments receivable were as follows:
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Credit Risk Profile of Gross Financing Receivables | The credit risk profile of financing receivables, based on internal risk ratings as of January 31, 2021, presented on amortized cost basis by year of origination was as follows:
The credit risk profile of gross financing receivables, based on internal risk ratings as of October 31, 2020, was as follows:
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Allowance for Doubtful Accounts for Financing Receivables | The allowance for credit losses for financing receivables as of January 31, 2021 and October 31, 2020 and the respective changes during the three and twelve months then ended were as follows:
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Summary of the Aging and Non-accrual Status of Gross Financing Receivables | The following table summarizes the aging and non-accrual status of gross financing receivables:
(1)Includes billed operating lease receivables and billed sales-type and direct-financing lease receivables. (2)Includes billed operating lease receivables and billed and unbilled sales-type and direct-financing lease receivables.
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Operating Lease Assets Included in Machinery and Equipment | Operating lease assets included in Property, plant and equipment in the Condensed Consolidated Balance Sheets were as follows:
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Lessor Operating Lease Payments Maturity | Minimum future rentals on non-cancelable operating leases related to leased equipment were as follows:
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Lessor Lease Activity | The following table presents amounts included in the Condensed Consolidated Statement of Earnings related to lessor activity as of January 31, 2021:
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Schedule of Variable Interest Entities | The assets in the table below include those that can be used to settle the obligations of the VIE. Additionally, general creditors do not have recourse to the assets of the VIE.
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Components of Financing Receivables | The components of financing receivables were as follows:
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Goodwill (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Allocation and Changes in the Carrying Amount of Goodwill | The following table represents the change in carrying value of goodwill, by reportable segment, for three months ended January 31, 2021:
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Fair Value (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table presents the Company's assets and liabilities that are measured at fair value on a recurring basis:
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Financial Instruments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, All Other Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash Equivalents and Available-for-Sale Investments | Cash equivalents and available-for-sale debt investments were as follows:
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Contractual Maturities of Investments in Available-for-Sale Debt Securities | Contractual maturities of available-for-sale debt investments were as follows:
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Gross Notional and Fair Value of Derivative Instruments in the Condensed Consolidated Balance Sheets | The gross notional and fair value of derivative instruments in the Condensed Consolidated Balance Sheets were as follows:
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Offsetting Assets | The information related to the potential effect of the Company's use of the master netting agreements and collateral security agreements were as follows:
(1)Represents the cash collateral posted by counterparties as of the respective reporting date for the Company's asset position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date. (2)Represents the collateral posted by the Company in cash or through the re-use of counterparty cash collateral as of the respective reporting date for the Company's liability position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date. As of January 31, 2021, of the $168 million of collateral posted, $67 million was in cash and $101 million was through re-use of counterparty collateral. As of October 31, 2020, $55 million of collateral posted was entirely by way of re-use of counterparty collateral.
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Offsetting Liabilities | The information related to the potential effect of the Company's use of the master netting agreements and collateral security agreements were as follows:
(1)Represents the cash collateral posted by counterparties as of the respective reporting date for the Company's asset position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date. (2)Represents the collateral posted by the Company in cash or through the re-use of counterparty cash collateral as of the respective reporting date for the Company's liability position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date. As of January 31, 2021, of the $168 million of collateral posted, $67 million was in cash and $101 million was through re-use of counterparty collateral. As of October 31, 2020, $55 million of collateral posted was entirely by way of re-use of counterparty collateral.
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Pre-tax Effect of Derivative Instruments and Related Hedged Items in a Fair Value Hedging Relationship | The amounts recorded on the Condensed Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges were as follows:
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Pre-tax Effect of Derivative Instruments in Net Investment Hedging Relationships | The pre-tax effect of derivative instruments in cash flow and net investment hedging relationships recognized in Other Comprehensive Income ("OCI") were as follows:
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Pre-tax Effect of Derivative Instruments in Cash Flow Hedging Relationships | The pre-tax effect of derivative instruments in cash flow and net investment hedging relationships recognized in Other Comprehensive Income ("OCI") were as follows:
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Effect of Derivative Instruments on the Statement of Earnings | The pre-tax effect of derivative instruments on the Condensed Consolidated Statements of Earnings were as follows:
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Borrowings (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of notes payable and short-term borrowings, including the current portion of long-term debt | Notes payable, short-term borrowings, including the current portion of long-term debt, and long-terms debt were as follows:
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Stockholders' Equity (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Accumulated Other Comprehensive Loss, Net of Taxes | The components of Accumulated other comprehensive loss, net of taxes as of January 31, 2021, and changes during the three months ended January 31, 2021 were as follows:
The components of Accumulated other comprehensive loss, net of taxes as of January 31, 2020, and changes during the three months ended January 31, 2020 were as follows:
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Net Earnings Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliations of the Numerators and Denominators of the Basic and Diluted Net EPS Calculations | The reconciliations of the numerators and denominators of each of the basic and diluted net EPS calculations were as follows:
(1)The Company excludes shares potentially issuable under employee stock plans that could dilute basic net EPS in the future from the calculation of diluted net earnings per share, as their effect, if included, would have been anti-dilutive for the periods presented.
|
Segment Information - Narrative (Details) |
3 Months Ended |
---|---|
Jan. 31, 2021
segment
| |
Segment Reporting [Abstract] | |
Number of segments | 6 |
Segment Information - Segment Operating Results from Continuing Operations (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Jan. 31, 2021 |
Jan. 31, 2020 |
|
Segment Reporting Information [Line Items] | ||
Net revenue | $ 6,833 | $ 6,949 |
Segment earnings (loss) from operations | 222 | 348 |
Intersegment net revenue and other | ||
Segment Reporting Information [Line Items] | ||
Net revenue | (95) | (78) |
Operating Segment | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 6,928 | 7,027 |
Segment earnings (loss) from operations | 825 | 747 |
Compute | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 2,930 | 2,982 |
Compute | Intersegment net revenue and other | ||
Segment Reporting Information [Line Items] | ||
Net revenue | (56) | (48) |
Compute | Operating Segment | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 2,986 | 3,030 |
Segment earnings (loss) from operations | 342 | 324 |
HPC & MCS | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 746 | 831 |
HPC & MCS | Intersegment net revenue and other | ||
Segment Reporting Information [Line Items] | ||
Net revenue | (16) | (8) |
HPC & MCS | Operating Segment | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 762 | 839 |
Segment earnings (loss) from operations | 43 | 63 |
Storage | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 1,174 | 1,237 |
Storage | Intersegment net revenue and other | ||
Segment Reporting Information [Line Items] | ||
Net revenue | (19) | (15) |
Storage | Operating Segment | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 1,193 | 1,252 |
Segment earnings (loss) from operations | 235 | 251 |
Intelligent Edge | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 803 | 715 |
Intelligent Edge | Intersegment net revenue and other | ||
Segment Reporting Information [Line Items] | ||
Net revenue | (3) | (5) |
Intelligent Edge | Operating Segment | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 806 | 720 |
Segment earnings (loss) from operations | 152 | 87 |
Financial Services | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 859 | 857 |
Financial Services | Intersegment net revenue and other | ||
Segment Reporting Information [Line Items] | ||
Net revenue | (1) | (2) |
Financial Services | Operating Segment | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 860 | 859 |
Segment earnings (loss) from operations | 84 | 75 |
Corporate Investments and Other | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 321 | 327 |
Corporate Investments and Other | Intersegment net revenue and other | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 0 | 0 |
Corporate Investments and Other | Operating Segment | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 321 | 327 |
Segment earnings (loss) from operations | $ (31) | $ (53) |
Segment Information - Reconciliation of Segment Operating Results (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Jan. 31, 2021 |
Jan. 31, 2020 |
|
Net revenue: | ||
Net revenue | $ 6,833 | $ 6,949 |
(Loss) earnings before taxes: | ||
Total segment earnings from operations | 222 | 348 |
Amortization of intangible assets | (110) | (120) |
Transformation costs | (311) | (89) |
Acquisition, disposition and other related charges | (18) | (22) |
Interest and other, net | (44) | (19) |
Tax indemnification adjustments | (16) | (21) |
Non-service net periodic benefit credit | 17 | 37 |
Earnings from equity interests | 26 | 33 |
Earnings before taxes | 205 | 378 |
Operating Segment | ||
Net revenue: | ||
Net revenue | 6,928 | 7,027 |
(Loss) earnings before taxes: | ||
Total segment earnings from operations | 825 | 747 |
Elimination of intersegment net revenue and other | ||
Net revenue: | ||
Net revenue | (95) | (78) |
Segment Reconciling Items | ||
(Loss) earnings before taxes: | ||
Unallocated corporate costs and eliminations | (52) | (52) |
Stock-based compensation expense | (110) | (93) |
Amortization of initial direct costs | (2) | (3) |
Amortization of intangible assets | (110) | (120) |
Transformation costs | (311) | (89) |
Acquisition, disposition and other related charges | (18) | (42) |
Interest and other, net | (44) | (19) |
Tax indemnification adjustments | (16) | (21) |
Non-service net periodic benefit credit | 17 | 37 |
Earnings from equity interests | $ 26 | $ 33 |
Segment Information - Reconciliation of Segment Assets (Details) - USD ($) $ in Millions |
Jan. 31, 2021 |
Oct. 31, 2020 |
---|---|---|
Segment Reporting Information [Line Items] | ||
Assets | $ 53,451 | $ 54,015 |
Operating Segment | Compute | ||
Segment Reporting Information [Line Items] | ||
Assets | 14,927 | 14,962 |
Operating Segment | HPC & MCS | ||
Segment Reporting Information [Line Items] | ||
Assets | 5,902 | 6,245 |
Operating Segment | Storage | ||
Segment Reporting Information [Line Items] | ||
Assets | 6,397 | 6,438 |
Operating Segment | Intelligent Edge | ||
Segment Reporting Information [Line Items] | ||
Assets | 4,318 | 4,352 |
Operating Segment | Financial Services | ||
Segment Reporting Information [Line Items] | ||
Assets | 14,605 | 14,765 |
Operating Segment | Corporate Investments and Other | ||
Segment Reporting Information [Line Items] | ||
Assets | 1,067 | 1,124 |
Corporate and unallocated assets | ||
Segment Reporting Information [Line Items] | ||
Assets | $ 6,235 | $ 6,129 |
Segment Information - Revenue by Geographic Region (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Jan. 31, 2021 |
Jan. 31, 2020 |
|
Segment Reporting Information [Line Items] | ||
Total net revenue | $ 6,833 | $ 6,949 |
Total Americas | ||
Segment Reporting Information [Line Items] | ||
Total net revenue | 2,613 | 2,786 |
United States | ||
Segment Reporting Information [Line Items] | ||
Total net revenue | 2,178 | 2,318 |
Americas excluding U.S. | ||
Segment Reporting Information [Line Items] | ||
Total net revenue | 435 | 468 |
Europe, Middle East and Africa | ||
Segment Reporting Information [Line Items] | ||
Total net revenue | 2,620 | 2,560 |
Asia Pacific and Japan | ||
Segment Reporting Information [Line Items] | ||
Total net revenue | $ 1,600 | $ 1,603 |
Transformation Programs - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Jan. 31, 2021 |
Jan. 31, 2020 |
Oct. 31, 2020 |
|
Restructuring Cost and Reserve [Line Items] | |||
Transformation costs | $ 311 | $ 89 | |
Current restructuring liability reported in Accrued restructuring | 241 | $ 366 | |
Transformation Program | |||
Restructuring Cost and Reserve [Line Items] | |||
Current restructuring liability reported in Accrued restructuring | 234 | 359 | |
Transformation Program | Other Accrued Liabilities | |||
Restructuring Cost and Reserve [Line Items] | |||
Current restructuring liability reported in Accrued restructuring | 42 | 24 | |
Transformation Program | Long-Term Other Liabilities | |||
Restructuring Cost and Reserve [Line Items] | |||
Long-term portion of restructuring reserve, recorded in Other liabilities | 181 | $ 91 | |
HPE Next | |||
Restructuring Cost and Reserve [Line Items] | |||
Transformation costs | 59 | $ 89 | |
Cost optimization and prioritization plan | |||
Restructuring Cost and Reserve [Line Items] | |||
Transformation costs | $ 252 |
Transformation Programs - Transformation Costs (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Jan. 31, 2021 |
Jan. 31, 2020 |
|
Restructuring Cost and Reserve [Line Items] | ||
Total | $ 311 | $ 89 |
HPE Next | ||
Restructuring Cost and Reserve [Line Items] | ||
Program management | 2 | 11 |
IT costs | 26 | 28 |
Restructuring charges | 17 | 84 |
Gain on real estate sales | (1) | (34) |
Other | 15 | 0 |
Total | 59 | $ 89 |
Cost optimization and prioritization plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Program management | 37 | |
Restructuring charges | 215 | |
Total | $ 252 |
Transformation Programs - Schedule of Restructuring Activity (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Jan. 31, 2021 |
Jan. 31, 2020 |
|
HPE Next | ||
Restructuring Reserve | ||
Charges | $ 17 | $ 84 |
HPE Next | Employee Severance | ||
Restructuring Reserve | ||
Balance at the beginning of the period | 144 | |
Charges | 0 | |
Cash payments | (65) | |
Non-cash items | 4 | |
Balance at the end of the period | 83 | |
Total costs incurred to date, as of January 31, 2021 | 1,261 | |
Total expected costs to be incurred as of January 31, 2021 | 1,261 | |
HPE Next | Infrastructure and other | ||
Restructuring Reserve | ||
Balance at the beginning of the period | 52 | |
Charges | 17 | |
Cash payments | (13) | |
Non-cash items | (2) | |
Balance at the end of the period | 54 | |
Total costs incurred to date, as of January 31, 2021 | 242 | |
Total expected costs to be incurred as of January 31, 2021 | 248 | |
Cost optimization and prioritization plan | ||
Restructuring Reserve | ||
Charges | 215 | |
Cost optimization and prioritization plan | Employee Severance | ||
Restructuring Reserve | ||
Balance at the beginning of the period | 210 | |
Charges | 54 | |
Cash payments | (117) | |
Non-cash items | 6 | |
Balance at the end of the period | 153 | |
Total costs incurred to date, as of January 31, 2021 | 284 | |
Total expected costs to be incurred as of January 31, 2021 | 700 | |
Cost optimization and prioritization plan | Infrastructure and other | ||
Restructuring Reserve | ||
Balance at the beginning of the period | 68 | |
Charges | 161 | |
Cash payments | (25) | |
Non-cash items | (37) | |
Balance at the end of the period | 167 | |
Total costs incurred to date, as of January 31, 2021 | 260 | |
Total expected costs to be incurred as of January 31, 2021 | $ 610 |
Retirement Benefit Plans (Details) - Benefit Plans - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Jan. 31, 2021 |
Jan. 31, 2020 |
|
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Service cost | $ 24 | $ 23 |
Interest cost | 29 | 36 |
Expected return on plan assets | (119) | (135) |
Amortization and deferrals: | ||
Actuarial loss | 74 | 64 |
Prior service benefit | (3) | (3) |
Net periodic benefit (credit) cost | 5 | (15) |
Settlement loss | 1 | 0 |
Total net benefit (credit) cost | $ 6 | $ (15) |
Taxes on Earnings - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Jan. 31, 2021 |
Jan. 31, 2020 |
Oct. 31, 2020 |
|
Income Tax Disclosure [Abstract] | |||
Effective tax rate (as a percent) | (8.80%) | 11.90% | |
Net income tax benefits | $ 90 | $ 16 | |
Income tax benefit on restructuring charges, separation costs, transformation costs and acquisition and other related charges | 66 | ||
Tax rate changes | 30 | ||
Pre-Separation tax matters | $ (21) | ||
Unrecognized tax benefits | 2,100 | $ 2,200 | |
Unrecognized tax benefits that would affect effective tax rate if realized | 702 | 731 | |
Accrued income tax for interest and penalties | $ 112 | $ 119 | |
Likelihood of no resolution period | 12 months | ||
Reasonably possible reduction in existing unrecognized tax benefits within the next 12 months | $ 47 | ||
Likelihood of conclusion period for certain federal, foreign and state tax issues | 12 months |
Taxes on Earnings - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions |
Jan. 31, 2021 |
Oct. 31, 2020 |
---|---|---|
Income Tax Disclosure [Abstract] | ||
Deferred tax assets | $ 1,885 | $ 1,778 |
Deferred tax liabilities | (308) | (290) |
Deferred tax assets net of deferred tax liabilities | $ 1,577 | $ 1,488 |
Balance Sheet Details - Schedule of Cash and Cash Equivalents (Details) - USD ($) $ in Millions |
Jan. 31, 2021 |
Oct. 31, 2020 |
Jan. 31, 2020 |
Oct. 31, 2019 |
---|---|---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 4,165 | $ 4,233 | ||
Restricted cash | 308 | 388 | ||
Total | $ 4,473 | $ 4,621 | $ 3,548 | $ 4,076 |
Balance Sheet Details - Schedule of Inventory (Details) - USD ($) $ in Millions |
Jan. 31, 2021 |
Oct. 31, 2020 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Finished goods | $ 1,203 | $ 1,197 |
Purchased parts and fabricated assemblies | 1,588 | 1,477 |
Total | $ 2,791 | $ 2,674 |
Balance Sheet Details - Schedule of Property, Plant and Equipment and Narrative (Details) - USD ($) $ in Millions |
Jan. 31, 2021 |
Oct. 31, 2020 |
---|---|---|
Property, Plant and Equipment, Net | ||
Machinery and equipment, including equipment held for lease | $ 9,771 | $ 9,624 |
Property, plant and equipment before accumulated depreciation | 11,570 | 11,599 |
Accumulated depreciation | (5,997) | (5,974) |
Total | 5,573 | 5,625 |
Land | ||
Property, Plant and Equipment, Net | ||
Equipment leased to customers | 79 | 89 |
Buildings and leasehold improvements | ||
Property, Plant and Equipment, Net | ||
Equipment leased to customers | $ 1,720 | $ 1,886 |
Balance Sheet Details - Changes in Aggregate Product Warranty Liabilities (Details) $ in Millions |
3 Months Ended |
---|---|
Jan. 31, 2021
USD ($)
| |
Changes in aggregated product warranty liabilities | |
Balance at beginning of period | $ 385 |
Charges | 55 |
Adjustments related to pre-existing warranties | (10) |
Settlements made | (60) |
Balance at end of period | $ 370 |
Balance Sheet Details - Summary of Accounts Receivable, Net (Details) - USD ($) $ in Millions |
Jan. 31, 2021 |
Oct. 31, 2020 |
Oct. 31, 2019 |
---|---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Accounts receivable | $ 2,769 | $ 3,227 | |
Unbilled receivables | 211 | 205 | |
Allowances | (47) | (46) | $ (31) |
Total | $ 2,933 | $ 3,386 |
Balance Sheet Details - Allowance for Doubtful Accounts (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended |
---|---|---|
Jan. 31, 2021 |
Oct. 31, 2020 |
|
Accounts Receivable, Allowance for Credit Loss | ||
Balance at beginning of year | $ 46 | $ 31 |
Provision for doubtful accounts | 3 | 29 |
Deductions, net of recoveries | (2) | (14) |
Balance at end of year | $ 47 | $ 46 |
Balance Sheet Details - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Jan. 31, 2021 |
Jan. 31, 2020 |
Oct. 31, 2020 |
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Trade receivables sold | $ 1,100 | $ 3,900 | |
Deferred revenue | 3,440 | 3,430 | |
Contract liabilities | 6,300 | 6,200 | |
Unearned revenue recognized | 1,200 | ||
Unsatisfied performance obligations | 6,300 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Current portion of capitalized costs | 56 | 54 | |
Non-current portion of capitalized costs | 81 | 76 | |
Amortization of capitalized costs to obtain a contract | $ 15 | $ 14 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-02-01 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Unsatisfied performance obligation expected to be recognized over the remainder of the year | 44.00% | ||
Expected timing of satisfaction | 9 months | ||
Notes payable and short-term borrowings | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Deferred revenue | $ 74 | $ 75 |
Accounting for Leases as a Lessor - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended |
---|---|---|
Jan. 31, 2021 |
Oct. 31, 2020 |
|
Leases [Abstract] | ||
Financing receivable term, low end of range | 2 years | |
Financing receivable term, high end of range | 5 years | |
Financing receivable sold | $ 57 | $ 103 |
Financing receivables that did not satisfy true sale accounting | $ 11 |
Accounting for Leases as a Lessor - Components of Financing Receivables (Details) - USD ($) $ in Millions |
Jan. 31, 2021 |
Oct. 31, 2020 |
Oct. 31, 2019 |
---|---|---|---|
Leases [Abstract] | |||
Minimum lease payments receivable | $ 9,532 | $ 9,448 | |
Unguaranteed residual value | 375 | 364 | |
Unearned income | (750) | (754) | |
Financing receivables, gross | 9,157 | 9,058 | |
Allowance for credit losses | (203) | (154) | $ (131) |
Financing receivables, net | 8,954 | 8,904 | |
Less: current portion | (3,883) | (3,794) | |
Amounts due after one year, net | $ 5,071 | $ 5,110 |
Accounting for Leases as a Lessor - Finance Lease Receivable Maturity (Details) - USD ($) $ in Millions |
Jan. 31, 2021 |
Oct. 31, 2020 |
---|---|---|
Leases [Abstract] | ||
Remainder of fiscal 2021 | $ 3,328 | |
2022 | 2,910 | $ 4,182 |
2023 | 1,872 | 2,662 |
2024 | 960 | 1,572 |
2025 | 372 | 720 |
2025 | 252 | |
Thereafter | 90 | |
Thereafter | 60 | |
Total undiscounted cash flows | 9,532 | 9,448 |
Present value of lease payments (recognized as finance receivables) | 8,782 | 8,694 |
Unearned income | $ 750 | $ 754 |
Accounting for Leases as a Lessor - Credit Risk Profile of Financing Receivables (Details) $ in Millions |
Jan. 31, 2021
USD ($)
|
---|---|
Low | |
Financing Receivable, Allowance for Credit Loss [Line Items] | |
2021 | $ 483 |
2020 | 1,882 |
2019 | 1,257 |
2018 | 671 |
2017 and prior | 338 |
Total | 4,631 |
Moderate | |
Financing Receivable, Allowance for Credit Loss [Line Items] | |
2021 | 434 |
2020 | 1,522 |
2019 | 1,120 |
2018 | 679 |
2017 and prior | 408 |
Total | 4,163 |
High | |
Financing Receivable, Allowance for Credit Loss [Line Items] | |
2021 | 28 |
2020 | 84 |
2019 | 79 |
2018 | 82 |
2017 and prior | 90 |
Total | $ 363 |
Accounting for Leases as a Lessor - Credit Risk Profile of Gross Financing Receivables (Details) - USD ($) $ in Millions |
Jan. 31, 2021 |
Oct. 31, 2020 |
---|---|---|
Gross financing receivables | ||
Gross financing receivables | $ 9,157 | $ 9,058 |
Low | ||
Gross financing receivables | ||
Gross financing receivables | 4,590 | |
Moderate | ||
Gross financing receivables | ||
Gross financing receivables | 4,091 | |
High | ||
Gross financing receivables | ||
Gross financing receivables | $ 377 |
Accounting for Leases as a Lessor - Allowance for Doubtful Accounts for Financing Receivables (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended |
---|---|---|
Jan. 31, 2021 |
Oct. 31, 2020 |
|
Allowance for doubtful accounts | ||
Balance at beginning of period | $ 154 | $ 131 |
Provision for credit losses | 18 | 43 |
Adjustment to the existing allowance | 19 | 0 |
Write-offs | (16) | (20) |
Balance at end of period | 203 | 154 |
Cumulative Effect, Period of Adoption, Adjustment | ||
Allowance for doubtful accounts | ||
Balance at beginning of period | $ 28 | 0 |
Balance at end of period | $ 28 |
Accounting for Leases as a Lessor - Summary of the Aging and Non-accrual Status of Gross Financing Receivables (Details) - USD ($) $ in Millions |
Jan. 31, 2021 |
Oct. 31, 2020 |
---|---|---|
Billed: | ||
Current 1-30 days | $ 379 | $ 340 |
Past due 31-60 days | 41 | 43 |
Past due 61-90 days | 30 | 22 |
Past due > 90 days | 125 | 140 |
Unbilled sales-type and direct-financing lease receivables | 8,582 | 8,513 |
Financing receivables, gross | 9,157 | 9,058 |
Gross financing receivables on non-accrual status | 367 | 364 |
Gross financing receivables 90 days past due and still accruing interest | $ 95 | $ 74 |
Accounting for Leases as a Lessor - Operating Lease Assets Included in Machinery and Equipment (Details) - USD ($) $ in Millions |
Jan. 31, 2021 |
Oct. 31, 2020 |
---|---|---|
Lessor, Lease, Description [Line Items] | ||
Total | $ 5,573 | $ 5,625 |
Equipment Leased to Customers | ||
Lessor, Lease, Description [Line Items] | ||
Equipment leased to customers | 7,225 | 7,184 |
Accumulated depreciation | (3,218) | (3,157) |
Total | $ 4,007 | $ 4,027 |
Accounting for Leases as a Lessor - Operating Lease Payments Maturity (Details) $ in Millions |
Jan. 31, 2021
USD ($)
|
---|---|
Leases [Abstract] | |
Remainder of fiscal 2021 | $ 1,432 |
2022 | 1,219 |
2023 | 577 |
2024 | 117 |
2025 | 11 |
Thereafter | 1 |
Total | $ 3,357 |
Accounting for Leases as a Lessor - Lessor Activity Included in Income Statement (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Jan. 31, 2021 |
Jan. 31, 2020 |
|
Leases [Abstract] | ||
Interest income | $ 122 | $ 113 |
Lease income - operating leases | 604 | 625 |
Total lease income | $ 726 | $ 738 |
Accounting for Leases as a Lessor - Assets and Liabilities of VIE (Details) - VIE Primary Beneficiary - USD ($) $ in Millions |
Jan. 31, 2021 |
Oct. 31, 2020 |
---|---|---|
Variable Interest Entity [Line Items] | ||
Other current assets | $ 119 | $ 120 |
Short-term | 494 | 531 |
Long-term | 478 | 584 |
Property, plant and equipment | 569 | 665 |
Notes payable and short-term borrowings, net of unamortized debt issuance costs | 847 | 886 |
Long-term debt, net of unamortized debt issuance costs | $ 627 | $ 834 |
Goodwill (Details) $ in Millions |
3 Months Ended | |||||
---|---|---|---|---|---|---|
Jan. 31, 2021
USD ($)
segment
|
Apr. 30, 2020
USD ($)
|
Oct. 31, 2018
USD ($)
|
Nov. 01, 2020
USD ($)
|
Oct. 31, 2020
USD ($)
|
Oct. 31, 2019
USD ($)
|
|
Goodwill | ||||||
Goodwill | $ 18,017 | $ 18,017 | ||||
Goodwill impairment | $ 953 | |||||
Number of segments | segment | 6 | |||||
Minimum | ||||||
Goodwill | ||||||
Percentage of fair value in excess of carrying amount | 8.00% | |||||
Maximum | ||||||
Goodwill | ||||||
Percentage of fair value in excess of carrying amount | 37.00% | |||||
Compute | ||||||
Goodwill | ||||||
Goodwill | $ 7,532 | 7,532 | ||||
HPC & MCS | ||||||
Goodwill | ||||||
Goodwill | 3,616 | $ 3,600 | 3,616 | |||
Impairment of goodwill | $ 865 | |||||
Percentage of fair value in excess of carrying amount | 8.00% | |||||
Storage | ||||||
Goodwill | ||||||
Goodwill | 3,946 | 3,946 | ||||
Intelligent Edge | ||||||
Goodwill | ||||||
Goodwill | 2,566 | 2,566 | ||||
Financial Services | ||||||
Goodwill | ||||||
Goodwill | 144 | 144 | ||||
Corporate Investments and Other | ||||||
Goodwill | ||||||
Goodwill | $ 213 | $ 213 | ||||
Amount of transfer in goodwill | $ 213 | |||||
CMS Reporting Unit | ||||||
Goodwill | ||||||
Goodwill | $ 0 | |||||
Impairment of goodwill | $ 88 |
Fair Value - Schedule of Assets and Liabilities on a Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions |
Jan. 31, 2021 |
Oct. 31, 2020 |
---|---|---|
Assets | ||
Total assets | $ 2,925 | $ 2,762 |
Liabilities | ||
Total liabilities | 362 | 194 |
Time deposits | ||
Assets | ||
Total assets | 821 | 939 |
Money market funds | ||
Assets | ||
Total assets | 1,605 | 1,167 |
Foreign bonds | ||
Assets | ||
Total assets | 132 | 125 |
Other debt securities | ||
Assets | ||
Total assets | 20 | 21 |
Interest rate contracts | ||
Assets | ||
Total assets | 202 | 220 |
Liabilities | ||
Total liabilities | 1 | 2 |
Foreign exchange contracts | ||
Assets | ||
Total assets | 144 | 290 |
Liabilities | ||
Total liabilities | 360 | 189 |
Other derivatives | ||
Assets | ||
Total assets | 1 | 0 |
Liabilities | ||
Total liabilities | 1 | 3 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets | ||
Total assets | 1,605 | 1,167 |
Liabilities | ||
Total liabilities | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Time deposits | ||
Assets | ||
Total assets | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Money market funds | ||
Assets | ||
Total assets | 1,605 | 1,167 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Foreign bonds | ||
Assets | ||
Total assets | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Other debt securities | ||
Assets | ||
Total assets | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Interest rate contracts | ||
Assets | ||
Total assets | 0 | 0 |
Liabilities | ||
Total liabilities | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Foreign exchange contracts | ||
Assets | ||
Total assets | 0 | 0 |
Liabilities | ||
Total liabilities | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Other derivatives | ||
Assets | ||
Total assets | 0 | 0 |
Liabilities | ||
Total liabilities | 0 | 0 |
Significant Other Observable Remaining Inputs (Level 2) | ||
Assets | ||
Total assets | 1,300 | 1,574 |
Liabilities | ||
Total liabilities | 362 | 194 |
Significant Other Observable Remaining Inputs (Level 2) | Time deposits | ||
Assets | ||
Total assets | 821 | 939 |
Significant Other Observable Remaining Inputs (Level 2) | Money market funds | ||
Assets | ||
Total assets | 0 | 0 |
Significant Other Observable Remaining Inputs (Level 2) | Foreign bonds | ||
Assets | ||
Total assets | 132 | 125 |
Significant Other Observable Remaining Inputs (Level 2) | Other debt securities | ||
Assets | ||
Total assets | 0 | 0 |
Significant Other Observable Remaining Inputs (Level 2) | Interest rate contracts | ||
Assets | ||
Total assets | 202 | 220 |
Liabilities | ||
Total liabilities | 1 | 2 |
Significant Other Observable Remaining Inputs (Level 2) | Foreign exchange contracts | ||
Assets | ||
Total assets | 144 | 290 |
Liabilities | ||
Total liabilities | 360 | 189 |
Significant Other Observable Remaining Inputs (Level 2) | Other derivatives | ||
Assets | ||
Total assets | 1 | 0 |
Liabilities | ||
Total liabilities | 1 | 3 |
Significant Other Unobservable Remaining Inputs (Level 3) | ||
Assets | ||
Total assets | 20 | 21 |
Liabilities | ||
Total liabilities | 0 | 0 |
Significant Other Unobservable Remaining Inputs (Level 3) | Time deposits | ||
Assets | ||
Total assets | 0 | 0 |
Significant Other Unobservable Remaining Inputs (Level 3) | Money market funds | ||
Assets | ||
Total assets | 0 | 0 |
Significant Other Unobservable Remaining Inputs (Level 3) | Foreign bonds | ||
Assets | ||
Total assets | 0 | 0 |
Significant Other Unobservable Remaining Inputs (Level 3) | Other debt securities | ||
Assets | ||
Total assets | 20 | 21 |
Significant Other Unobservable Remaining Inputs (Level 3) | Interest rate contracts | ||
Assets | ||
Total assets | 0 | 0 |
Liabilities | ||
Total liabilities | 0 | 0 |
Significant Other Unobservable Remaining Inputs (Level 3) | Foreign exchange contracts | ||
Assets | ||
Total assets | 0 | 0 |
Liabilities | ||
Total liabilities | 0 | 0 |
Significant Other Unobservable Remaining Inputs (Level 3) | Other derivatives | ||
Assets | ||
Total assets | 0 | 0 |
Liabilities | ||
Total liabilities | $ 0 | $ 0 |
Fair Value - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Apr. 30, 2020 |
Jan. 31, 2021 |
Oct. 31, 2020 |
|
HPC & MCS | |||
Financial assets and liabilities measured at fair value on a recurring basis | |||
Impairment of goodwill | $ 865 | ||
HPC & MCS | Significant Other Unobservable Remaining Inputs (Level 3) | |||
Financial assets and liabilities measured at fair value on a recurring basis | |||
Impairment of goodwill | $ 865 | ||
Fair Value | |||
Financial assets and liabilities measured at fair value on a recurring basis | |||
Fair value, short-term and long-term debt | $ 17,000 | $ 17,100 | |
Carrying Value | |||
Financial assets and liabilities measured at fair value on a recurring basis | |||
Fair value, short-term and long-term debt | $ 15,700 | $ 15,900 |
Financial Instruments - Cash Equivalents and Available-for-Sale Investments (Details) - USD ($) $ in Millions |
Jan. 31, 2021 |
Oct. 31, 2020 |
---|---|---|
Cash and Cash Equivalents [Line Items] | ||
Debt securities, Amortized Cost | $ 131 | |
Debt securities, Gross Unrealized Gain | 21 | $ 18 |
Debt securities, Fair Value | 152 | |
Total cash and equivalents and available-for-sale investments, Cost basis | 2,557 | 2,234 |
Total cash equivalents and available-for-sale debt investments | 2,578 | 2,252 |
Cost | ||
Cash and Cash Equivalents [Line Items] | ||
Total cash equivalents | 2,426 | 2,106 |
Cost | Time deposits | ||
Cash and Cash Equivalents [Line Items] | ||
Total cash equivalents | 821 | 939 |
Cost | Money market funds | ||
Cash and Cash Equivalents [Line Items] | ||
Total cash equivalents | 1,605 | 1,167 |
Fair Value | ||
Cash and Cash Equivalents [Line Items] | ||
Total cash equivalents | 2,426 | 2,106 |
Fair Value | Time deposits | ||
Cash and Cash Equivalents [Line Items] | ||
Total cash equivalents | 821 | 939 |
Fair Value | Money market funds | ||
Cash and Cash Equivalents [Line Items] | ||
Total cash equivalents | 1,605 | 1,167 |
Debt securities | ||
Cash and Cash Equivalents [Line Items] | ||
Debt securities, Amortized Cost | 131 | 128 |
Debt securities, Gross Unrealized Gain | 21 | 18 |
Debt securities, Fair Value | 152 | 146 |
Foreign bonds | ||
Cash and Cash Equivalents [Line Items] | ||
Debt securities, Amortized Cost | 112 | 108 |
Debt securities, Gross Unrealized Gain | 20 | 17 |
Debt securities, Fair Value | 132 | 125 |
Other debt securities | ||
Cash and Cash Equivalents [Line Items] | ||
Debt securities, Amortized Cost | 19 | 20 |
Debt securities, Gross Unrealized Gain | 1 | 1 |
Debt securities, Fair Value | $ 20 | $ 21 |
Financial Instruments - Contractual Maturities of Investments in Available-for-Sale Debt Securities (Details) - USD ($) $ in Millions |
Jan. 31, 2021 |
Oct. 31, 2020 |
---|---|---|
Amortized Cost | ||
Due in one year | $ 1 | |
Due in more than five years | 130 | |
Debt securities, Amortized Cost | 131 | |
Fair Value | ||
Due in one year | 1 | |
Due in more than five years | 151 | |
Debt securities, Fair Value | 152 | |
Summary of Investment Holdings [Line Items] | ||
Investments in equity interests | 2,211 | $ 2,170 |
Equity Securities in Privately Held Companies | Long-Term Financing Receivables and Other Assets | ||
Summary of Investment Holdings [Line Items] | ||
Equity securities without readily determinable fair value | $ 301 | $ 295 |
Financial Instruments - Gross Notional and Fair Value of Instruments in the Balance Sheets (Details) - USD ($) $ in Millions |
Jan. 31, 2021 |
Oct. 31, 2020 |
---|---|---|
Derivatives, Fair Value | ||
Outstanding Gross Notional | $ 19,857 | $ 20,068 |
Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 77 | 152 |
Long-Term Financing Receivables and Other Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 270 | 358 |
Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 216 | 146 |
Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 146 | 48 |
Derivatives designated as hedging instruments | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 13,918 | 13,806 |
Derivatives designated as hedging instruments | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 43 | 109 |
Derivatives designated as hedging instruments | Long-Term Financing Receivables and Other Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 264 | 349 |
Derivatives designated as hedging instruments | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 201 | 108 |
Derivatives designated as hedging instruments | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 143 | 47 |
Derivatives designated as hedging instruments | Fair value hedges | Interest rate contracts | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 3,850 | 3,850 |
Derivatives designated as hedging instruments | Fair value hedges | Interest rate contracts | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 0 | 0 |
Derivatives designated as hedging instruments | Fair value hedges | Interest rate contracts | Long-Term Financing Receivables and Other Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 202 | 220 |
Derivatives designated as hedging instruments | Fair value hedges | Interest rate contracts | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 0 | 0 |
Derivatives designated as hedging instruments | Fair value hedges | Interest rate contracts | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 0 | 0 |
Derivatives designated as hedging instruments | Cash flow hedges | Interest rate contracts | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 500 | 500 |
Derivatives designated as hedging instruments | Cash flow hedges | Interest rate contracts | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 0 | 0 |
Derivatives designated as hedging instruments | Cash flow hedges | Interest rate contracts | Long-Term Financing Receivables and Other Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 0 | 0 |
Derivatives designated as hedging instruments | Cash flow hedges | Interest rate contracts | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 1 | 2 |
Derivatives designated as hedging instruments | Cash flow hedges | Interest rate contracts | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 0 | 0 |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 7,749 | 7,652 |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 27 | 75 |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | Long-Term Financing Receivables and Other Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 33 | 85 |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 179 | 95 |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 116 | 38 |
Derivatives designated as hedging instruments | Net investment hedges | Foreign exchange contracts | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 1,819 | 1,804 |
Derivatives designated as hedging instruments | Net investment hedges | Foreign exchange contracts | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 16 | 34 |
Derivatives designated as hedging instruments | Net investment hedges | Foreign exchange contracts | Long-Term Financing Receivables and Other Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 29 | 44 |
Derivatives designated as hedging instruments | Net investment hedges | Foreign exchange contracts | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 21 | 11 |
Derivatives designated as hedging instruments | Net investment hedges | Foreign exchange contracts | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 27 | 9 |
Derivatives not designated as hedging instruments | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 5,939 | 6,262 |
Derivatives not designated as hedging instruments | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 34 | 43 |
Derivatives not designated as hedging instruments | Long-Term Financing Receivables and Other Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 6 | 9 |
Derivatives not designated as hedging instruments | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 15 | 38 |
Derivatives not designated as hedging instruments | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 3 | 1 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 5,816 | 6,157 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 33 | 43 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | Long-Term Financing Receivables and Other Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 6 | 9 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 14 | 35 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 3 | 1 |
Derivatives not designated as hedging instruments | Other derivatives | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 123 | 105 |
Derivatives not designated as hedging instruments | Other derivatives | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 1 | 0 |
Derivatives not designated as hedging instruments | Other derivatives | Long-Term Financing Receivables and Other Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 0 | 0 |
Derivatives not designated as hedging instruments | Other derivatives | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 1 | 3 |
Derivatives not designated as hedging instruments | Other derivatives | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | $ 0 | $ 0 |
Financial Instruments - Offsetting Assets and Liabilities (Details) $ in Millions |
Jan. 31, 2021
USD ($)
business_day
|
Oct. 31, 2020
USD ($)
business_day
|
---|---|---|
Derivative assets | ||
Gross Amount Recognized | $ 347 | $ 510 |
Gross Amount Offset | 0 | 0 |
Net Amount Presented | 347 | 510 |
Gross Amounts Not Offset | ||
Derivatives | 176 | 137 |
Financial Collateral | 188 | 321 |
Net Amount | (17) | 52 |
Derivative liabilities | ||
Gross Amount Recognized | 362 | 194 |
Gross Amount Offset | 0 | 0 |
Net Amount Presented | 362 | 194 |
Gross Amounts Not Offset | ||
Derivatives | 176 | 137 |
Financial Collateral | 168 | 55 |
Net Amount | $ 18 | $ 2 |
Business days prior to respective reporting date | business_day | 2 | 2 |
Cash collateral | $ 67 | |
Counterparty collateral | $ 101 | $ 55 |
Financial Instruments - Amounts Recorded in the Balance Sheet (Details) - Long-term debt - USD ($) $ in Millions |
Jan. 31, 2021 |
Oct. 31, 2020 |
---|---|---|
Derivatives, Fair Value | ||
Carrying amount of the hedged assets/ (liabilities) | $ (4,042) | $ (4,059) |
Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged (liabilities) | $ (202) | $ (220) |
Financial Instruments - Pre-tax Effect of Derivative Instruments in Hedging Relationships on OCI (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Jan. 31, 2021 |
Jan. 31, 2020 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains (Losses) Recognized in OCI on Derivatives in Cash Flow Hedging Relationship | $ (329) | $ 75 |
Total | (403) | 96 |
Expected amount of AOCI expected to be reclassified in the next 12 months | 69 | |
Foreign currency contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains (Losses) Recognized in OCI on Derivatives in Cash Flow Hedging Relationship | (329) | 76 |
Gains (Losses) Recognized in OCI on Derivatives in Net Investment Hedging Relationship | (74) | 21 |
Interest rate contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains (Losses) Recognized in OCI on Derivatives in Cash Flow Hedging Relationship | $ 0 | $ (1) |
Financial Instruments - Pre-tax Effect of Derivative Instruments on Statement of Earnings (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Jan. 31, 2021 |
Jan. 31, 2020 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||
Net revenue | $ 6,833 | $ 6,949 |
Interest and other, net | (44) | (19) |
Net revenue | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total gains (losses) | (64) | 26 |
Interest and other, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total gains (losses) | (254) | (14) |
Interest rate contracts | Net revenue | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains (losses) on derivatives in fair value hedging relationships | 0 | 0 |
Amount of gains (losses) reclassified from accumulated other comprehensive income into income | 0 | 0 |
Interest rate contracts | Interest and other, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains (losses) on derivatives in fair value hedging relationships | 18 | (29) |
Amount of gains (losses) reclassified from accumulated other comprehensive income into income | (1) | 0 |
Foreign currency contracts | Net revenue | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of gains (losses) reclassified from accumulated other comprehensive income into income | (64) | 26 |
Gains (losses) on derivatives not designated as hedging instruments | 0 | 0 |
Foreign currency contracts | Interest and other, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of gains (losses) reclassified from accumulated other comprehensive income into income | (213) | 43 |
Gains (losses) on derivatives not designated as hedging instruments | (41) | (54) |
Other derivatives | Net revenue | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains (losses) on derivatives not designated as hedging instruments | 0 | 0 |
Other derivatives | Interest and other, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains (losses) on derivatives not designated as hedging instruments | 1 | (3) |
Derivatives designated as hedging instruments | Interest rate contracts | Net revenue | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains (losses) on derivatives in fair value hedging relationships | 0 | 0 |
Derivatives designated as hedging instruments | Interest rate contracts | Interest and other, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains (losses) on derivatives in fair value hedging relationships | $ (18) | $ 29 |
Borrowings - Notes Payable and Short-Term Borrowings (Details) - USD ($) $ in Millions |
Jan. 31, 2021 |
Oct. 31, 2020 |
---|---|---|
Debt Disclosure [Abstract] | ||
Current portion of long-term debt | $ 2,712 | $ 2,768 |
FS commercial paper | 686 | 677 |
Notes payable to banks, lines of credit and other | 329 | 310 |
Notes payable and short-term borrowings | 3,727 | 3,755 |
Long-term debt | 11,963 | 12,186 |
Total Debt | $ 15,690 | $ 15,941 |
Borrowings - Narrative (Details) |
Mar. 04, 2021
USD ($)
tranche
|
Jan. 31, 2021
USD ($)
tranche
|
Oct. 31, 2020
USD ($)
|
Mar. 31, 2020
USD ($)
|
---|---|---|---|---|
Asset-backed Debt Securities | Subsequent Event | ||||
Line of Credit Facility [Line Items] | ||||
Amount issued | $ 1,000,000,000.0 | |||
Number of tranches | tranche | 6 | |||
Discount rate at issuance | 9999.00% | |||
Weighted-average interest rate | 49.00% | |||
Commercial Paper | ||||
Line of Credit Facility [Line Items] | ||||
Number of commercial paper programs | tranche | 2 | |||
Maximum borrowing capacity under commercial paper program | $ 4,750,000,000 | |||
Amount outstanding | $ 0 | $ 0 | ||
Commercial Paper | Euro Commercial Paper Program | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity under commercial paper program | 3,000,000,000.0 | |||
Commercial Paper | Euro Commercial Paper Certificate of Deposit Programme | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity under commercial paper program | 1,000,000,000.0 | |||
Commercial Paper | Hewlett Packard Enterprise | Euro Commercial Paper Certificate of Deposit Programme | ||||
Line of Credit Facility [Line Items] | ||||
Amount outstanding | $ 686,000,000 | $ 677,000,000 |
Stockholders' Equity - Components of AOCI (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Jan. 31, 2021 |
Jan. 31, 2020 |
|
Components of accumulated other comprehensive loss, net of taxes | ||
Balance at beginning of period | $ 16,096 | |
Balance at end of period | 16,259 | |
Net unrealized gains (losses) on available-for-sale securities | ||
Components of accumulated other comprehensive loss, net of taxes | ||
Balance at beginning of period | 18 | $ 23 |
Other comprehensive (loss) income before reclassifications | 3 | 2 |
Reclassifications of (gains) losses into earnings | 0 | (3) |
Balance at end of period | 21 | 22 |
Net unrealized gains (losses) on cash flow hedges | ||
Components of accumulated other comprehensive loss, net of taxes | ||
Balance at beginning of period | (7) | 53 |
Other comprehensive (loss) income before reclassifications | (329) | 75 |
Reclassifications of (gains) losses into earnings | 278 | (69) |
Tax (provision) benefit | 5 | (1) |
Balance at end of period | (53) | 48 |
Net unrealized gains (losses) on cash flow hedges | Cumulative Effect, Period of Adoption, Adjustment | ||
Components of accumulated other comprehensive loss, net of taxes | ||
Balance at beginning of period | (10) | |
Unrealized components of defined benefit plans | ||
Components of accumulated other comprehensive loss, net of taxes | ||
Balance at beginning of period | (3,473) | (3,366) |
Other comprehensive (loss) income before reclassifications | 0 | 17 |
Reclassifications of (gains) losses into earnings | 72 | 61 |
Tax (provision) benefit | (5) | (9) |
Balance at end of period | (3,406) | (3,297) |
Unrealized components of defined benefit plans | Cumulative Effect, Period of Adoption, Adjustment | ||
Components of accumulated other comprehensive loss, net of taxes | ||
Balance at beginning of period | 0 | |
Cumulative translation adjustment | ||
Components of accumulated other comprehensive loss, net of taxes | ||
Balance at beginning of period | (477) | (437) |
Other comprehensive (loss) income before reclassifications | 21 | (4) |
Reclassifications of (gains) losses into earnings | 0 | 0 |
Tax (provision) benefit | (2) | 1 |
Balance at end of period | (458) | (473) |
Cumulative translation adjustment | Cumulative Effect, Period of Adoption, Adjustment | ||
Components of accumulated other comprehensive loss, net of taxes | ||
Balance at beginning of period | (33) | |
Accumulated other comprehensive loss | ||
Components of accumulated other comprehensive loss, net of taxes | ||
Balance at beginning of period | (3,939) | (3,727) |
Other comprehensive (loss) income before reclassifications | (305) | 90 |
Reclassifications of (gains) losses into earnings | 350 | (11) |
Tax (provision) benefit | (2) | (9) |
Balance at end of period | $ (3,896) | (3,700) |
Accumulated other comprehensive loss | Cumulative Effect, Period of Adoption, Adjustment | ||
Components of accumulated other comprehensive loss, net of taxes | ||
Balance at beginning of period | $ (43) |
Stockholders' Equity - Narrative (Details) $ in Billions |
Jan. 31, 2021
USD ($)
|
---|---|
Equity [Abstract] | |
Remaining authorized repurchase amount | $ 2.1 |
Net Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | |
---|---|---|
Jan. 31, 2021 |
Jan. 31, 2020 |
|
Numerator: | ||
Net earnings | $ 223 | $ 333 |
Denominator: | ||
Weighted-average shares used to compute basic net EPS (in shares) | 1,300 | 1,300 |
Dilutive effect of employee stock plans (in shares) | 15 | 15 |
Weighted-average shares used to compute diluted net EPS (in shares) | 1,315 | 1,315 |
Net earnings per share: | ||
Basic (in dollars per share) | $ 0.17 | $ 0.26 |
Diluted (in dollars per share) | $ 0.17 | $ 0.25 |
Anti-dilutive weighted-average stock awards (in shares) | 22 | 1 |
Litigation and Contingencies (Details) $ in Millions |
1 Months Ended | 3 Months Ended | 24 Months Ended | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
May 16, 2019
USD ($)
|
Feb. 06, 2018
plaintiff
|
Nov. 30, 2017
plaintiff
|
Dec. 19, 2016 |
Jun. 30, 2016
USD ($)
|
Jan. 24, 2013
USD ($)
|
Dec. 11, 2012
USD ($)
|
Apr. 21, 2012
USD ($)
|
May 10, 2010
USD ($)
employee
|
Apr. 29, 2010
USD ($)
|
Dec. 21, 2017
plaintiff
|
Jul. 31, 2011 |
Jan. 31, 2021 |
Oct. 31, 2008
contract
|
Apr. 20, 2012
USD ($)
|
Apr. 11, 2012
USD ($)
|
Jun. 15, 2011
phase
|
|
Litigation and Contingencies | |||||||||||||||||
Damages sought | $ 370 | ||||||||||||||||
Forsyth, et al. vs HP Inc. and Hewlett Packard Enterprise | |||||||||||||||||
Litigation and Contingencies | |||||||||||||||||
Number of plaintiffs | plaintiff | 16 | 3 | 13 | ||||||||||||||
Judicial ruling | Oracle | |||||||||||||||||
Litigation and Contingencies | |||||||||||||||||
Number of phases | phase | 2 | ||||||||||||||||
Amount awarded | $ 3,000 | ||||||||||||||||
Judicial ruling | Oracle - past lost profits | |||||||||||||||||
Litigation and Contingencies | |||||||||||||||||
Amount awarded | 1,700 | ||||||||||||||||
Judicial ruling | Oracle - future lost profits | |||||||||||||||||
Litigation and Contingencies | |||||||||||||||||
Amount awarded | $ 1,300 | ||||||||||||||||
Renewed judgement | Oracle | |||||||||||||||||
Litigation and Contingencies | |||||||||||||||||
Amount awarded | $ 3,800 | ||||||||||||||||
Daily interest accrual on renewed judgement | $ 1 | ||||||||||||||||
Minimum | Forsyth, et al. vs HP Inc. and Hewlett Packard Enterprise | |||||||||||||||||
Litigation and Contingencies | |||||||||||||||||
Age of terminated employees | 40 years | ||||||||||||||||
India Directorate of Revenue Intelligence Proceedings | |||||||||||||||||
Litigation and Contingencies | |||||||||||||||||
Number of HP India employees alleging underpaid customs | employee | 7 | ||||||||||||||||
Number of former HP India employees alleging underpaid customs | employee | 1 | ||||||||||||||||
Loss contingency deposit to prevent interruption of business | $ 16 | ||||||||||||||||
Bangalore Commissioner of Customs | |||||||||||||||||
Litigation and Contingencies | |||||||||||||||||
Duties and penalties under show cause notices | $ 17 | $ 386 | |||||||||||||||
Amount deposited under show cause notice prior to order | $ 7 | $ 9 | |||||||||||||||
Additional amount deposited against products-related show cause notice | $ 10 | ||||||||||||||||
Additional amount deposited against parts-related show cause notice | $ 3 | ||||||||||||||||
Additional amount deposited against product order | $ 24 | ||||||||||||||||
ECT proceedings | |||||||||||||||||
Litigation and Contingencies | |||||||||||||||||
Number of ECT contracts related to alleged improprieties | contract | 3 | ||||||||||||||||
Bid and contract term | 5 years | ||||||||||||||||
ECT proceedings | Maximum | |||||||||||||||||
Litigation and Contingencies | |||||||||||||||||
Length of sanctions | 5 years | ||||||||||||||||
ECT proceedings | Minimum | |||||||||||||||||
Litigation and Contingencies | |||||||||||||||||
Length of sanctions | 2 years |
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