XML 50 R36.htm IDEA: XBRL DOCUMENT v3.8.0.1
Retirement and Post-Retirement Benefit Plans (Tables)
 12 Months Ended
Oct. 31, 2017
Retirement Benefits [Abstract]  
Schedule of net pension benefit (credit) costs
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 Consolidated and Combined Statements of Earnings for fiscal 2017, 2016 and 2015 are presented in the table below. In addition, the table includes costs related to the plans transferred from former Parent in the fourth quarter of fiscal 2015.
 
As of October 31,
 
2017
 
2016
 
2015
 
2017
 
2016
 
2015
 
Defined
Benefit Plans
 
Post-Retirement
Benefit Plans
 
In millions
Service cost
$
139

 
$
199

 
$
48

 
$
3

 
$
3

 
$
—

Interest cost
213

 
317

 
85

 
6

 
6

 
1

Expected return on plan assets
(548
)
 
(667
)
 
(180
)
 
(2
)
 
(2
)
 
—

Amortization and deferrals:
 

 
 

 
 

 
 

 
 

 
 

Actuarial loss (gain)
264

 
220

 
83

 
(2
)
 
(3
)
 
—

Prior service benefit
(17
)
 
(19
)
 
(4
)
 
—

 
—

 
(1
)
Net periodic benefit cost
51


50


32


5


4


—

Curtailment gain
(1
)
 
—

 
—

 
—

 
—

 
—

Settlement loss
15

 
4

 
3

 
—

 
—

 
—

Special termination benefits
5

 
5

 
1

 
—

 
—

 
—

Plan credit allocation(1)
(14
)
 
(15
)
 
(91
)
 
(1
)
 
(1
)
 
(1
)
Net benefit cost (credit) from continuing operations(2)
56

 
44

 
(55
)
 
4

 
3

 
(1
)
Summary of net benefit cost (credit):
 
 
 
 
 
 
 
 
 
 
 
Continuing operations
56

 
44

 
(55
)
 
4

 
3

 
(1
)
Discontinued operations
81

 
92

 
195

 
1

 
1

 
1

Total net benefit cost
$
137

 
$
136

 
$
140

 
$
5

 
$
4

 
$
—


 
(1)
Plan credit allocation represents the net cost impact of employees of HPE covered under Everett or Seattle plans and employees of Everett or Seattle covered under HPE plans.
(2)
Net benefit cost from continuing operations for the Company's U.S. defined benefit plans was not material for fiscal 2017, 2016 and 2015.
Schedule of weighted average assumptions used to calculate net benefit (credit) cost
The weighted-average assumptions used to calculate the net benefit cost (credit) from continuing operations in the above table for fiscal 2017, 2016 and 2015 were as follows:
 
As of October 31,
 
2017
 
2016
 
2015
 
2017
 
2016
 
2015
 
Defined
Benefit Plans
 
Post-Retirement
Benefit Plans
Discount rate used to determine benefit obligation
2.0
%
 
2.7
%
 
2.6
%
 
4.2
%
 
4.6
%
 
4.7
%
Discount rate used to determine service cost
2.0
%
 
2.7
%
 
2.6
%
 
3.7
%
 
4.6
%
 
4.7
%
Discount rate used to determine interest cost
1.8
%
 
2.7
%
 
2.6
%
 
3.8
%
 
4.6
%
 
4.7
%
Expected increase in compensation levels
2.4
%
 
2.3
%
 
2.3
%
 
—

 
—

 
—

Expected long-term return on plan assets
4.4
%
 
5.8
%
 
6.6
%
 
3.1
%
 
4.0
%
 
—
Schedule of funded status of the direct plans
The funded status of the plans was as follows:
 
As of October 31,
 
2017
 
2016
 
2017
 
2016
 
Defined
Benefit Plans
 
Post-Retirement
Benefit Plans
 
In millions
Change in fair value of plan assets:
 

 
 

 
 

 
 

Fair value—beginning of year
$
11,989

 
$
11,684

 
$
47

 
$
40

Transfers to Everett/Seattle plans(1)
(799
)
 
—

 
—

 
—

Addition/deletion of plans(2)
5

 
141

 
—

 
—

Actual return on plan assets
941

 
1,212

 
1

 
1

Employer contributions
266

 
242

 
4

 
3

Participant contributions
17

 
40

 
4

 
6

Benefits paid
(408
)
 
(344
)
 
(6
)
 
(3
)
Settlement
(60
)
 
(16
)
 
—

 
—

Currency impact
659

 
(970
)
 
—

 
—

Fair value—end of year(3)
$
12,610


$
11,989


$
50


$
47

Change in benefit obligation:
 

 
 

 
 

 
 

Projected benefit obligation—beginning of year
$
13,555

 
$
12,483

 
$
158

 
$
139

Transfers to Everett/Seattle plans(1)
(668
)
 
—

 
—

 
—

Addition/deletion of plans(2)
19

 
25

 
—

 
—

Service cost
139

 
199

 
3

 
3

Interest cost
213

 
317

 
6

 
6

Participant contributions
17

 
40

 
4

 
6

Actuarial (gain) loss
(445
)
 
1,832

 
4

 
6

Benefits paid
(408
)
 
(344
)
 
(6
)
 
(3
)
Plan amendments
(1
)
 
1

 
—

 
—

Curtailment
(1
)
 
—

 
—

 
—

Settlement
(60
)
 
(16
)
 
—

 
—

Special termination benefits
5

 
5

 
—

 
—

Currency impact
704

 
(987
)
 
1

 
1

Projected benefit obligation—end of year(3)
$
13,069

 
$
13,555

 
$
170

 
$
158

Funded status at end of year
$
(459
)
 
$
(1,566
)
 
$
(120
)
 
$
(111
)
Accumulated benefit obligation
$
12,832

 
$
13,241

 
$
—

 
$
—

 
(1)
In fiscal 2017, in connection with the Everett and Seattle Transactions, the Company transferred plan assets and liabilities from the Company's plans to newly established Everett and Seattle plans. The Company transferred net plan assets of $702 million and $97 million to Everett and Seattle, respectively, and liabilities of $503 million and $165 million to Everett and Seattle, respectively.
(2)
Includes the addition/deletion of plans resulting from acquisitions or divestitures. Amounts are primarily attributable to a business divestiture of outsourcing services in Germany and a Netherlands plan data review that transferred HPI retirees to HPE.
(3)
As of October 31, 2017 and 2016, the Company's U.S. defined benefit plans had zero plan assets and a projected benefit obligation of $5 million and $7 million, respectively.
Schedule of weighted-average assumptions used to calculate the projected benefit obligations
The weighted-average assumptions used to calculate the projected benefit obligations were as follows:
 
As of October 31,
 
2017
 
2016
 
2017
 
2016
 
Defined
Benefit Plans
 
Post-Retirement
Benefit Plans
Discount rate
2.0
%
 
1.7
%
 
4.5
%
 
4.2
%
Expected increase in compensation levels
2.3
%
 
2.3
%
 
—

 
—
Schedule of net amount recognized for the direct plans in the entity's Combined Balance Sheets
The net amounts recognized for defined benefit and post-retirement benefit plans in the Company's Consolidated Balance Sheets were as follows:
 
As of October 31,
 
2017
 
2016
 
2017
 
2016
 
Defined
Benefit Plans
 
Post-Retirement
Benefit Plans
 
In millions
Non-current assets
$
830

 
$
366

 
$
—

 
$
—

Current liabilities
(39
)
 
(20
)
 
(4
)
 
(3
)
Non-current liabilities
(1,250
)
 
(1,912
)
 
(116
)
 
(108
)
Funded status at end of year
$
(459
)

$
(1,566
)

$
(120
)

$
(111
)
Summary of pre-tax net actuarial loss and prior service benefit recognized in accumulated other comprehensive loss for direct defined benefit plans
The following table summarizes the pre-tax net actuarial loss and prior service benefit recognized in Accumulated other comprehensive loss for the defined benefit plans:
 
As of October 31, 2017
 
Defined
Benefit Plans
 
Post-Retirement
Benefit Plans
 
In millions
Net actuarial loss (gain)
$
2,777

 
$
(2
)
Prior service benefit
(103
)
 
—

Total recognized in accumulated other comprehensive loss
$
2,674


$
(2
)
Summary of actuarial loss and prior service benefit for direct plans that are expected to be amortized from Accumulated other comprehensive loss and recognized as components of net periodic benefit cost (credit)
The following table summarizes the net actuarial loss and prior service benefit for plans that are expected to be amortized from Accumulated other comprehensive loss and recognized as components of net periodic benefit cost (credit) during the next fiscal year.
 
As of October 31, 2017
 
Defined
Benefit Plans
 
Post-Retirement
Benefit Plans
 
In millions
Net actuarial loss (gain)
$
206

 
$
(3
)
Prior service benefit
(17
)
 
—

Total expected to be recognized in net periodic benefit cost (credit)
$
189


$
(3
)
Schedule of direct defined benefit plans with projected benefit obligations exceeding the fair value of plan assets
Defined benefit plans with projected benefit obligations exceeding the fair value of plan assets were as follows:
 
As of October 31, 2017
 
2017
 
2016
 
In millions
Aggregate fair value of plan assets
$
2,596

 
$
6,193

Aggregate projected benefit obligation
$
3,884

 
$
8,125
Schedule of direct defined benefit plans with accumulated benefit obligations exceeding the fair value of plan assets
Defined benefit plans with accumulated benefit obligations exceeding the fair value of plan assets were as follows:
 
As of October 31, 2017
 
2017
 
2016
 
In millions
Aggregate fair value of plan assets
$
1,272

 
$
5,856

Aggregate accumulated benefit obligation
$
2,476

 
$
7,518
Schedule of fair value of direct plan non-U.S. defined benefit plan assets by asset category within the fair value hierarchy
The table below sets forth the fair value of non-U.S defined benefit plan assets by asset category within the fair value hierarchy as of October 31, 2017 and 2016.
 
As of
October 31, 2017
 
As of
October 31, 2016
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Level 1
 
Level 2
 
Level 3
 
Total
 
In millions
Asset Category:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Equity securities
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

U.S. 
$
270

 
$
13

 
$
—

 
$
283

 
$
576

 
$
34

 
—

 
$
610

Non-U.S. 
365

 
140

 
—

 
505

 
838

 
106

 
—

 
944

Non-U.S. at NAV(1)
 
 
 
 
 
 
480

 
 
 
 
 
 
 
456

Debt securities
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Corporate
—

 
1,966

 
—

 
1,966

 
—

 
1,349

 
—

 
1,349

Government
—

 
702

 
—

 
702

 
—

 
791

 
—

 
791

Government at NAV(2)
 
 
 
 
 
 
687

 
 
 
 
 
 
 
779

Alternative investments
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Private Equity
—

 
7

 
33

 
40

 
—

 
4

 
32

 
36

Hybrids(3)
—

 
492

 
—

 
492

 
—

 
182

 
—

 
182

Hybrids at NAV(4)


 


 


 
2,339

 


 


 


 
1,034

Hedge Funds
—

 
63

 
—

 
63

 
—

 
192

 
—

 
192

Hedge Funds at NAV
 
 
 
 
 
 
21

 
 
 
 
 
 
 
30

Common Contractual Funds at NAV(5)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equities at NAV


 


 


 
2,547

 


 


 


 
2,505

Fixed Income at NAV


 


 


 
701

 


 


 


 
942

Emerging Markets at NAV


 


 


 
368

 


 


 


 
529

Alternative investments at NAV


 


 


 
363

 


 


 


 
363

Real Estate Funds
38

 
158

 
57

 
253

 
215

 
269

 
26

 
510

Insurance Group Annuity Contracts
—

 
35

 
52

 
87

 
—

 
37

 
63

 
100

Cash and Cash Equivalents
184

 
363

 
—

 
547

 
329

 
46

 
—

 
375

Other(6)
43

 
122

 
1

 
166

 
71

 
183

 
8

 
262

Total
$
900

 
$
4,061

 
$
143

 
$
12,610

 
$
2,029

 
$
3,193

 
$
129

 
$
11,989

 
(1)
Includes various worldwide equity index funds with the objective to provide returns that are consistent with the FTSE All World indexes. While the funds are not publicly traded, the custodians strike a net asset value at least monthly. There are no redemption restrictions or future commitments on these investments.
(2)
Includes various government bonds issued by worldwide governments, interest rate swaps, and cash, to match or slightly outperform the benchmark of the future liabilities of the funds. While the funds are not publicly traded, the custodians strike a net asset value daily. There are no redemption restrictions or future commitments on these investments.
(3)
Includes a fund that invests in both private and public equities primarily in the United Kingdom, as well as emerging markets across all sectors. The fund also holds fixed income and derivative instruments to hedge interest rate and inflation risk. In addition, the fund includes units in transferable securities, collective investment schemes, money market funds, asset-backed income, private debt, cash, and deposits.
(4)
Includes pooled funds that invest in government bonds and derivative instruments, such as interest rate swaps, future contracts and repurchase agreements with the objective to provide nominal and/or inflation-linked returns. While the funds are not publicly traded, the custodians strike a net asset value at least monthly. There are no redemption restrictions or future commitments on these investments.
(5)
HP Invest Common Contractual Funds (CCFs) is an investment arrangement in which institutional investors pool their assets.  Units may be acquired in four different sub-funds focused on equities, fixed income, alternative investments, and emerging markets. Each sub-fund is invested in accordance with the fund’s investment objective and units are issued in relation to each sub-fund. While the sub-funds are not publicly traded, the custodian strikes a net asset value either once or twice a month, depending on the sub-fund. There are no redemption restrictions or future commitments on these investments.
(6)
Includes international insured contracts, derivative instruments and unsettled transactions.
Schedule of changes in fair value measurements of Level 3 investments for Direct non-U.S. defined benefit plans
Changes in fair value measurements of Level 3 investments for the non-U.S. defined benefit plans were as follows:
 
Fiscal year ended October 31, 2017
 
Alternative
Investments
 
 
 
 
 
 
 
 
 
Private
Equity
 
Real
Estate
Funds
 
Insurance
Group
Annuities
 
Other
 
Total
 
In millions
Balance at beginning of year
$
32

 
$
26

 
$
63

 
$
8

 
$
129

Actual return on plan assets:
 

 
 

 
 

 
 
 
 
Relating to assets held at the reporting date
—

 
3

 
(39
)
 
12

 
(24
)
Relating to assets sold during the period
1

 
—

 
—

 
—

 
1

Purchases, sales, and settlements
—

 
—

 
—

 
28

 
28

Transfers in and/or out of Level 3
—

 
28

 
28

 
(47
)
 
9

Balance at end of year
$
33

 
$
57

 
$
52

 
$
1

 
$
143


 
Fiscal year ended October 31, 2016
 
Alternative
Investments
 
 
 
 
 
 
 
 
 
Private
Equity
 
Hedge Funds
 
Real
Estate
Funds
 
Insurance
Group
Annuities
 
Other
 
Total
 
In millions
Balance at beginning of year
$
27

 
$
236

 
$
229

 
$
69

 
$
35

 
$
596

Actual return on plan assets:
 

 
 
 
 

 
 

 
 

 
 

Relating to assets held at the reporting date
(1
)
 
(35
)
 
(33
)
 
(2
)
 
(1
)
 
(72
)
Relating to assets sold during the period
4

 
—

 
—

 
(3
)
 
—

 
1

Purchases, sales, and settlements
2

 
(11
)
 
—

 
(3
)
 
82

 
70

Transfers in and/or out of Level 3
—

 
(190
)
 
(170
)
 
2

 
(108
)
 
(466
)
Balance at end of year
$
32

 
$
—

 
$
26

 
$
63

 
$
8

 
$
129
Schedule of weighted-average target and actual asset allocations across the benefit plans
The weighted-average target and actual asset allocations across the benefit plans at the respective measurement dates for the non-U.S. defined benefit plans were as follows:
 
Defined
Benefit Plans
 
 
 
Plan Assets
Asset Category
2017
Target
Allocation
 
2017
 
2016
Public equity securities
 

 
33.8
%
 
43.9
%
Private/hybrid equity securities
 

 
25.7
%
 
13.5
%
Real estate and other
 

 
3.3
%
 
6.5
%
Equity-related investments
58.1
%
 
62.8
%
 
63.9
%
Debt securities
39.9
%
 
32.9
%
 
33.0
%
Cash and cash equivalents
2.0
%
 
4.3
%
 
3.1
%
Total
100.0
%
 
100.0
%
 
100.0
%
Schedule of estimated future benefits payable for the Company's direct retirement plans
As of October 31, 2017, estimated future benefits payments for the Company's retirement plans were as follows:
Fiscal year
Defined
Benefit Plans
 
Post-Retirement
Benefit Plans
 
In millions
2018
$
439

 
$
6

2019
410

 
7

2020
435

 
8

2021
419

 
9

2022
471

 
10

Next five fiscal years to October 31, 2027
2,627

 
60