Retirement and Post-Retirement Benefit Plans

Pension Benefit Expense

Prior to October 31, 2015 and with the exception of certain defined benefit pension plans, of which the Company was the sole sponsor, certain Hewlett Packard Enterprise eligible employees, retirees and other former employees participated in certain U.S. and international defined benefit pension plans offered by former Parent. These plans, whose participants included both Company employees and employees of the former Parent, were accounted for as multiemployer benefit plans, and the related net benefit plan obligations were not included in the Company's Combined Balance Sheets through July 31, 2015. The related benefit plan expense was allocated to the Company based on the Company's labor costs and allocations of corporate and other shared functional personnel. Substantially all plan assets and the related benefit obligations that were directly attributable to Hewlett Packard Enterprise eligible employees, retirees and other former employees were transferred to the Company as of October 31, 2015.

The Company recognized total net pension and other post-retirement benefit expense in the Condensed Consolidated and Combined Statement of Earnings of $38 million and $16 million for the three months ended July 31, 2016 and 2015 respectively, and $108 million and $68 million for the nine months ended July 31, 2016 and 2015, respectively. The amount for the three and nine months ended July 31, 2015 includes a $15 million related benefit plan credit that was allocated to the Company by former Parent for the multiemployer pension plans.

The Company's net pension and post-retirement benefit costs that were directly attributable to the eligible employees, retirees and other former employees of Hewlett Packard Enterprise and recognized in the Condensed Consolidated and Combined Statements of Earnings were as follows:



	Three months ended July 31,
	U.S. Defined Benefit Plans				Non-U.S. Defined Benefit Plans						Post-Retirement Benefit Plans
	2016		2015		2016			2015			2016			2015
	In millions
Service cost	$	—	$	—	$	64		$	18		$	1		$	—
Interest cost	—		4		137			63			2			—
Expected return on plan assets	—		—		(244		)	(97		)	(1		)	—
Amortization and deferrals:
Actuarial loss (gain)	—		1		79			34			(1		)	—
Prior service benefit	—		—		(6		)	(1		)	—			—
Net periodic benefit cost	—		5		30			17			1			—
Settlement loss	—		—		1			—			—			—
Special termination benefits	—		—		6			9			—			—
Net benefit cost	$	—	$	5	$	37		$	26		$	1		$	—



	Nine months ended July 31,
	U.S. Defined Benefit Plans				Non-U.S. Defined Benefit Plans						Post-Retirement Benefit Plans
	2016		2015		2016			2015			2016			2015
	In millions
Service cost	$	—	$	—	$	192		$	54		$	3		$	—
Interest cost	—		12		414			191			6			—
Expected return on plan assets	—		—		(738		)	(294		)	(2		)	—
Amortization and deferrals:
Actuarial loss (gain)	—		2		235			103			(3		)	—
Prior service benefit	—		—		(18		)	(1		)	—			—
Net periodic benefit cost	—		14		85			53			4			—
Settlement loss	—		—		2			1			—			—
Special termination benefits	—		—		17			15			—			—
Net benefit cost	$	—	$	14	$	104		$	69		$	4		$	—

Defined Benefit Plan Settlement Charges

In January 2015, former Parent offered certain terminated vested participants of the U.S. HP Pension Plan (a Shared plan) a one-time voluntary window during which they could elect to receive their pension benefit as a lump sum payment. During the three months ended July 31, 2015, the former Parent pension plan trust made lump sum payments to eligible participants who elected to receive their pension benefit under this lump sum program. As a result of the lump sum program, former Parent incurred a settlement expense during the three months ended July 31, 2015 and a remeasurement of the U.S. defined benefit plans was required. Settlement expense and additional net periodic benefit cost totaling $178 million resulting from this lump sum program was determined to be directly attributable to the Company and was recognized in Defined benefit plan settlement charges in the Condensed Consolidated and Combined Statements of Earnings for the three and nine months ended July 31, 2015.

Employer Contributions and Funding Policy

The Company's policy is to fund its pension plans so that it makes at least the minimum contribution required by local government, funding and taxing authorities.

HPE previously disclosed in its Combined and Consolidated Financial Statements for the fiscal year ended October 31, 2015 that it expected to contribute approximately $366 million in fiscal 2016 to its non-U.S. pension plans, approximately $1 million to cover benefit payments to U.S. non-qualified plan participants and approximately $3 million to cover benefit claims for the Company's post-retirement benefit plans.

During the nine months ended July 31, 2016, the Company contributed $293 million to its non-U.S. pension plans, and paid $2 million to cover benefit claims under the Company's post-retirement benefit plans. During the remainder of fiscal 2016, as a result of the impact of foreign currency fluctuations, HPE now anticipates making additional contributions of approximately $55 million to its non-U.S. pension plans, approximately $1 million to its U.S. non-qualified plan participants and expects to pay approximately $1 million to cover benefit claims under the Company's post-retirement benefit plans.

The Company's pension and other post-retirement benefit costs and obligations depend on various assumptions. Differences between expected and actual returns on investments and changes in discount rates and other actuarial assumptions are reflected as unrecognized gains or losses, and such gains or losses are amortized to earnings in future periods. A deterioration in the funded status of a plan could result in a need for additional company contributions or an increase in net pension and post-retirement benefit costs in future periods. Actuarial gains or losses are determined at the measurement date and amortized over the remaining service life for active plans or the life expectancy of plan participants for frozen plans.