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Equity Method Investments
9 Months Ended
Jul. 31, 2017
Equity Method Investments and Joint Ventures [Abstract]  
Equity Method Investments
Equity Method Investments
The Company includes investments which are accounted for using the equity method, under Investments in equity interests on the Company's Condensed Consolidated Balance Sheets. As of July 31, 2017 and October 31, 2016, the Company's Investments in equity interests primarily included $2.6 billion related to a 49% interest in H3C.
Investment in H3C
In May 2016, Tsinghua Holdings’ subsidiary, Unisplendour Corporation, purchased 51% of the new business named H3C, comprising Hewlett Packard Enterprise’s former H3C Technologies and China-based servers, storage and technology services businesses which were previously reported within the Enterprise Group segment. The Company retained a 49% interest in the new company, which it records as an equity method investment.
For the three and nine months ended July 31, 2017, the Company recorded Earnings in equity interests of $1 million and a Loss in equity interests of $24 million, respectively, in the Condensed Consolidated Statements of Earnings. For the three months ended July 31, 2017, the earnings from equity interests consisted of the Company's $40 million share of H3C's net income, partially offset by the amortization of the Company's interest in a basis difference of $39 million. For the nine months ended July 31, 2017, the loss from equity interests consisted of the amortization of the Company's interest in a basis difference of $112 million, partially offset by the Company's $88 million share of H3C's net income. The loss from equity interests for the nine months ended July 31, 2017, was reflected as a reduction in the carrying amount of Investments in equity interests in the Condensed Consolidated Balance Sheet as of July 31, 2017.
The Company also has commercial arrangements with H3C to buy and sell HPE branded servers, storage, networking and technology services. During the three and nine months ended July 31, 2017, HPE recorded approximately $289 million and $802 million in sales to H3C and $68 million and $225 million in purchases from H3C. Net payables due to H3C as of July 31, 2017 and October 31, 2016 were approximately $60 million and $71 million, respectively.