(Mark One) | ||
x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the quarterly period ended: July 31, 2018 | ||
Or | ||
o | 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 001-37483 |
Delaware | 47-3298624 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. employer identification no.) | |
3000 Hanover Street, Palo Alto, California | 94304 | |
(Address of principal executive offices) | (Zip code) | |
(650) 687-5817 (Registrant's telephone number, including area code) |
Large accelerated filer x | Accelerated filer o | Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o | |||
Emerging growth company o |
Page | |||
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Three Months Ended July 31, | Nine Months Ended July 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
In millions, except per share amounts | |||||||||||||||
Net revenue: | |||||||||||||||
Products | $ | 4,944 | $ | 4,691 | $ | 14,414 | $ | 12,920 | |||||||
Services | 2,711 | 2,708 | 8,160 | 8,000 | |||||||||||
Financing income | 109 | 102 | 332 | 291 | |||||||||||
Total net revenue | 7,764 | 7,501 | 22,906 | 21,211 | |||||||||||
Costs and expenses: | |||||||||||||||
Cost of products | 3,515 | 3,447 | 10,428 | 9,329 | |||||||||||
Cost of services | 1,800 | 1,793 | 5,436 | 5,268 | |||||||||||
Financing interest | 69 | 66 | 207 | 197 | |||||||||||
Research and development | 434 | 390 | 1,224 | 1,122 | |||||||||||
Selling, general and administrative | 1,203 | 1,285 | 3,632 | 3,718 | |||||||||||
Amortization of intangible assets | 72 | 97 | 222 | 235 | |||||||||||
Restructuring charges | 2 | 152 | 14 | 304 | |||||||||||
Transformation costs | 131 | 31 | 499 | 31 | |||||||||||
Acquisition and other related charges | 24 | 56 | 70 | 150 | |||||||||||
Separation costs | (2 | ) | 5 | — | 46 | ||||||||||
Defined benefit plan settlement charges and remeasurement (benefit) | — | (22 | ) | — | (38 | ) | |||||||||
Total costs and expenses | 7,248 | 7,300 | 21,732 | 20,362 | |||||||||||
Earnings from continuing operations | 516 | 201 | 1,174 | 849 | |||||||||||
Interest and other, net | (64 | ) | (87 | ) | (163 | ) | (251 | ) | |||||||
Tax indemnification adjustments | 2 | 10 | (1,342 | ) | (1 | ) | |||||||||
Earnings (loss) from equity interests | 11 | 1 | 23 | (24 | ) | ||||||||||
Earnings (loss) from continuing operations before taxes | 465 | 125 | (308 | ) | 573 | ||||||||||
(Provision) benefit for taxes | (13 | ) | 160 | 3,092 | (515 | ) | |||||||||
Net earnings from continuing operations | 452 | 285 | 2,784 | 58 | |||||||||||
Net loss from discontinued operations | (1 | ) | (120 | ) | (119 | ) | (238 | ) | |||||||
Net earnings (loss) | $ | 451 | $ | 165 | $ | 2,665 | $ | (180 | ) | ||||||
Net earnings (loss) per share: | |||||||||||||||
Basic | |||||||||||||||
Continuing operations | $ | 0.30 | $ | 0.17 | $ | 1.79 | $ | 0.04 | |||||||
Discontinued operations | — | (0.07 | ) | (0.07 | ) | (0.15 | ) | ||||||||
Total basic net earnings (loss) per share | $ | 0.30 | $ | 0.10 | $ | 1.72 | $ | (0.11 | ) | ||||||
Diluted | |||||||||||||||
Continuing operations | $ | 0.29 | $ | 0.17 | $ | 1.76 | $ | 0.03 | |||||||
Discontinued operations | — | (0.07 | ) | (0.07 | ) | (0.14 | ) | ||||||||
Total diluted net earnings (loss) per share | $ | 0.29 | $ | 0.10 | $ | 1.69 | $ | (0.11 | ) | ||||||
Cash dividends declared per share | $ | 0.1125 | $ | 0.0650 | $ | 0.3750 | $ | 0.2600 | |||||||
Weighted-average shares used to compute net earnings (loss) per share: | |||||||||||||||
Basic | 1,513 | 1,641 | 1,552 | 1,656 | |||||||||||
Diluted | 1,531 | 1,667 | 1,578 | 1,683 |
Three Months Ended July 31, | Nine Months Ended July 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
In millions | |||||||||||||||
Net earnings (loss) | $ | 451 | $ | 165 | $ | 2,665 | $ | (180 | ) | ||||||
Other comprehensive income before taxes: | |||||||||||||||
Change in net unrealized (losses) gains on available-for-sale securities: | |||||||||||||||
Net unrealized (losses) gains arising during the period | (2 | ) | 7 | (1 | ) | (10 | ) | ||||||||
Gains reclassified into earnings | — | — | (9 | ) | — | ||||||||||
(2 | ) | 7 | (10 | ) | (10 | ) | |||||||||
Change in net unrealized gains (losses) on cash flow hedges: | |||||||||||||||
Net unrealized gains (losses) arising during the period | 149 | (133 | ) | 50 | 7 | ||||||||||
Net (gains) losses reclassified into earnings | (43 | ) | 15 | 78 | (231 | ) | |||||||||
106 | (118 | ) | 128 | (224 | ) | ||||||||||
Change in unrealized components of defined benefit plans: | |||||||||||||||
(Losses) gains arising during the period | (25 | ) | 210 | (23 | ) | 700 | |||||||||
Amortization of actuarial loss and prior service benefit | 47 | 56 | 143 | 230 | |||||||||||
Curtailments, settlements and other | 9 | 6 | 11 | 9 | |||||||||||
31 | 272 | 131 | 939 | ||||||||||||
Change in cumulative translation adjustment | (40 | ) | 49 | (40 | ) | 13 | |||||||||
Other comprehensive income before taxes | 95 | 210 | 209 | 718 | |||||||||||
Provision for taxes | (19 | ) | (26 | ) | (34 | ) | (58 | ) | |||||||
Other comprehensive income, net of taxes | 76 | 184 | 175 | 660 | |||||||||||
Comprehensive income | $ | 527 | $ | 349 | $ | 2,840 | $ | 480 |
As of | |||||||
July 31, 2018 | October 31, 2017 | ||||||
In millions, except par value | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 5,193 | $ | 9,579 | |||
Accounts receivable, net of allowance for doubtful accounts(1) | 2,906 | 3,073 | |||||
Financing receivables | 3,435 | 3,378 | |||||
Inventory | 2,771 | 2,315 | |||||
Assets held for sale(2) | 6 | 14 | |||||
Other current assets | 3,156 | 3,085 | |||||
Total current assets | 17,467 | 21,444 | |||||
Property, plant and equipment | 6,184 | 6,269 | |||||
Long-term financing receivables and other assets | 12,863 | 12,600 | |||||
Investments in equity interests | 2,513 | 2,535 | |||||
Goodwill | 17,626 | 17,516 | |||||
Intangible assets | 860 | 1,042 | |||||
Total assets | $ | 57,513 | $ | 61,406 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Notes payable and short-term borrowings | $ | 2,326 | $ | 3,850 | |||
Accounts payable | 6,143 | 6,072 | |||||
Employee compensation and benefits | 1,187 | 1,156 | |||||
Taxes on earnings | 484 | 429 | |||||
Deferred revenue | 3,168 | 3,128 | |||||
Accrued restructuring | 256 | 445 | |||||
Other accrued liabilities | 3,843 | 3,844 | |||||
Total current liabilities | 17,407 | 18,924 | |||||
Long-term debt | 9,963 | 10,182 | |||||
Other non-current liabilities | 6,681 | 8,795 | |||||
Commitments and contingencies | |||||||
Stockholders' equity | |||||||
HPE stockholders' equity: | |||||||
Preferred stock, $0.01 par value (300 shares authorized; none issued and outstanding at July 31, 2018) | — | — | |||||
Common stock, $0.01 par value (9,600 shares authorized; 1,482 and 1,595 shares issued and outstanding at July 31, 2018 and October 31, 2017, respectively) | 15 | 16 | |||||
Additional paid-in capital | 31,338 | 33,583 | |||||
Accumulated deficit | (5,021 | ) | (7,238 | ) | |||
Accumulated other comprehensive loss | (2,906 | ) | (2,895 | ) | |||
Total HPE stockholders' equity | 23,426 | 23,466 | |||||
Non-controlling interests | 36 | 39 | |||||
Total stockholders' equity | 23,462 | 23,505 | |||||
Total liabilities and stockholders' equity | $ | 57,513 | $ | 61,406 |
(1) | The allowance for doubtful accounts related to accounts receivable was $42 million at both July 31, 2018 and October 31, 2017. |
(2) | In connection with the HPE Next initiative, the Company determined that certain properties within its real estate portfolio met the criteria to be classified as Assets held for sale. The Company expects these properties to be sold within the next twelve months. |
Nine Months Ended July 31, | |||||||
2018 | 2017 | ||||||
In millions | |||||||
Cash flows from operating activities: | |||||||
Net earnings (loss) | $ | 2,665 | $ | (180 | ) | ||
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: | |||||||
Depreciation and amortization | 1,931 | 2,369 | |||||
Stock-based compensation expense | 242 | 349 | |||||
Provision for inventory and doubtful accounts | 137 | 82 | |||||
Restructuring charges | 399 | 558 | |||||
Deferred taxes on earnings | (1,215 | ) | 145 | ||||
(Earnings) loss from equity interests | (23 | ) | 24 | ||||
Dividends received from equity investees | 47 | — | |||||
Other, net | 55 | 392 | |||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||
Accounts receivable | 137 | 250 | |||||
Financing receivables | (228 | ) | (127 | ) | |||
Inventory | (545 | ) | (341 | ) | |||
Accounts payable | 72 | 652 | |||||
Taxes on earnings | (2,271 | ) | (602 | ) | |||
Restructuring | (540 | ) | (688 | ) | |||
Other assets and liabilities(1) | 775 | (2,379 | ) | ||||
Net cash provided by operating activities | 1,638 | 504 | |||||
Cash flows from investing activities: | |||||||
Investment in property, plant and equipment | (2,129 | ) | (2,405 | ) | |||
Proceeds from sale of property, plant and equipment | 561 | 403 | |||||
Purchases of available-for-sale securities and other investments | (32 | ) | (31 | ) | |||
Maturities and sales of available-for-sale securities and other investments | 96 | 14 | |||||
Financial collateral posted | (1,318 | ) | (384 | ) | |||
Financial collateral returned | 1,333 | 49 | |||||
Payments made in connection with business acquisitions, net of cash acquired | (207 | ) | (2,050 | ) | |||
Proceeds from (payments to) business divestitures, net | 13 | (20 | ) | ||||
Net cash used in investing activities | (1,683 | ) | (4,424 | ) | |||
Cash flows from financing activities: | |||||||
Short-term borrowings with original maturities less than 90 days, net | 84 | 30 | |||||
Proceeds from debt, net of issuance costs | 894 | 3,340 | |||||
Restricted cash - Seattle debt issuance (2) | — | (2,620 | ) | ||||
Payment of debt | (2,538 | ) | (2,296 | ) | |||
Settlement of cash flow hedge | — | 5 | |||||
Net proceeds related to stock-based award activities | 104 | 41 | |||||
Repurchase of common stock | (2,585 | ) | (1,936 | ) |
Cash dividend from Everett | — | 3,008 | |||||
Net transfer of cash and cash equivalents to Everett | (41 | ) | (559 | ) | |||
Net transfer of cash and cash equivalents from Seattle | 156 | — | |||||
Cash dividends paid to non-controlling interests | (9 | ) | — | ||||
Cash dividends paid | (406 | ) | (323 | ) | |||
Net cash used in financing activities | (4,341 | ) | (1,310 | ) | |||
Decrease in cash and cash equivalents | (4,386 | ) | (5,230 | ) | |||
Cash and cash equivalents at beginning of period | 9,579 | 12,987 | |||||
Cash and cash equivalents at end of period | $ | 5,193 | $ | 7,757 |
(1) | For the nine months ended July 31, 2017, this amount includes $1.9 billion of pension funding payments associated with the separation and merger of Everett SpinCo, Inc. with Computer Sciences Corporation. |
(2) | For the nine months ended July 31, 2017, this amount represents a $2.6 billion Seattle SpinCo, Inc. term loan facility. The proceeds from the term loan were used to fund a $2.5 billion dividend payment from Seattle SpinCo, Inc. to HPE. The obligation under the term loan facility was retained by Seattle SpinCo, Inc. |
Three Months Ended July 31, | Nine Months Ended July 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
In millions | |||||||||||||||
Net revenue | $ | — | $ | 708 | $ | — | $ | 8,337 | |||||||
Cost of revenue(1) | — | 218 | — | 5,838 | |||||||||||
Expenses(2) | — | 647 | 51 | 2,888 | |||||||||||
Interest and other, net(3) | — | 10 | 68 | 13 | |||||||||||
Loss from discontinued operations before taxes | — | (167 | ) | (119 | ) | (402 | ) | ||||||||
(Provision) benefit for taxes | (1 | ) | 47 | — | 164 | ||||||||||
Net loss from discontinued operations | $ | (1 | ) | $ | (120 | ) | $ | (119 | ) | $ | (238 | ) |
(1) | Cost of revenue includes cost of products and services. |
(2) | Expenses for the nine months ended July 31, 2018 primarily consist of separation costs. Expenses for the three and nine months ended July 31, 2017 primarily consist of selling, general and administrative (“SG&A”) expenses, research and development (“R&D”) expenses, restructuring charges, separation costs, amortization of intangible assets, acquisition and other related charges, and defined benefit plan settlement charges and remeasurement (benefit). |
(3) | Interest and other, net for the nine months ended July 31, 2018 primarily consists of tax indemnification adjustments in connection with the Everett and Seattle Transactions. |
• | Hybrid IT Product includes Compute, Storage and Data Center Networking ("DC Networking"). |
◦ | Compute offers both Industry Standard Servers ("ISS") as well as Mission-Critical Servers ("MCS") to address the full array of the Company's customers' computing needs. ISS provides a range of products, from entry level servers through premium HPE ProLiant servers. For the most mission-critical workloads, HPE delivers Integrity servers based on the Intel® Itanium® processor, HPE Integrity NonStop solutions and mission-critical x86 ProLiant servers. |
◦ | Storage offers Converged Storage solutions and traditional storage. Converged Storage solutions include All-Flash Arrays and hybrid storage solutions like HPE Nimble Storage, 3PAR StoreServe, StoreOnce, Big Data, StoreVirtual, and Software Defined and Cloud Group storage products. Traditional storage includes tape, storage networking and legacy external disk products such as MSA and XP. |
◦ | DC Networking offerings include top-of-rack switches, core switches, and open networking switches. The Company offers a full stack of networking solutions that deliver open, scalable, secure, and agile solutions, by enabling programmable fabric, network virtualization, and network management products. |
• | HPE Pointnext creates preferred IT experiences that power a digital business. The HPE Pointnext team and the Company's extensive partner network provide value across the IT life cycle delivering advice, transformation projects, professional services, support services, and operational services. HPE Pointnext is also a provider of on-premises flexible consumption models that enable IT agility, simplify operations and align costs to business value. HPE Pointnext offerings includes Operational Services, Advisory and Professional Services, and Communications and Media Solutions ("CMS"). |
Hybrid IT | Intelligent Edge | Financial Services | Corporate Investments | Total | |||||||||||||||
In millions | |||||||||||||||||||
Three months ended July 31, 2018 | |||||||||||||||||||
Net revenue | $ | 6,058 | $ | 784 | $ | 922 | $ | — | $ | 7,764 | |||||||||
Intersegment net revenue and other | 185 | 1 | 6 | — | 192 | ||||||||||||||
Total segment net revenue | $ | 6,243 | $ | 785 | $ | 928 | $ | — | $ | 7,956 | |||||||||
Segment earnings (loss) from operations | $ | 661 | $ | 91 | $ | 73 | $ | (24 | ) | $ | 801 | ||||||||
Three months ended July 31, 2017 | |||||||||||||||||||
Net revenue | $ | 5,898 | $ | 707 | $ | 896 | $ | — | $ | 7,501 | |||||||||
Intersegment net revenue and other(1) | 182 | 4 | 1 | — | 187 | ||||||||||||||
Total segment net revenue | $ | 6,080 | $ | 711 | $ | 897 | $ | — | $ | 7,688 | |||||||||
Segment earnings (loss) from operations | $ | 482 | $ | 104 | $ | 69 | $ | (24 | ) | $ | 631 | ||||||||
Nine months ended July 31, 2018 | |||||||||||||||||||
Net revenue | $ | 18,086 | $ | 2,100 | $ | 2,721 | $ | (1 | ) | $ | 22,906 | ||||||||
Intersegment net revenue and other | 511 | 15 | 11 | — | 537 | ||||||||||||||
Total segment net revenue | $ | 18,597 | $ | 2,115 | $ | 2,732 | $ | (1 | ) | $ | 23,443 | ||||||||
Segment earnings (loss) from operations | $ | 1,890 | $ | 155 | $ | 217 | $ | (67 | ) | $ | 2,195 | ||||||||
Nine months ended July 31, 2017 | |||||||||||||||||||
Net revenue | $ | 16,782 | $ | 1,864 | $ | 2,565 | $ | — | $ | 21,211 | |||||||||
Intersegment net revenue and other(1) | 690 | 23 | 27 | — | 740 | ||||||||||||||
Total segment net revenue | $ | 17,472 | $ | 1,887 | $ | 2,592 | $ | — | $ | 21,951 | |||||||||
Segment earnings (loss) from operations | $ | 1,672 | $ | 166 | $ | 222 | $ | (85 | ) | $ | 1,975 |
(1) | For the three and nine months ended July 31, 2017, the amounts include the elimination of pre-separation intercompany sales to the former Software segment, which are included within Net loss from discontinued operations in the Condensed Consolidated Statements of Earnings. The nine months ended July 31, 2017 also includes the elimination of pre-separation intercompany sales to the former Enterprise Services segment. |
Three Months Ended July 31, | Nine Months Ended July 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
In millions | |||||||||||||||
Net Revenue: | |||||||||||||||
Total segments | $ | 7,956 | $ | 7,688 | $ | 23,443 | $ | 21,951 | |||||||
Eliminations of intersegment net revenue and other | (192 | ) | (187 | ) | (537 | ) | (740 | ) | |||||||
Total Hewlett Packard Enterprise condensed consolidated net revenue | $ | 7,764 | $ | 7,501 | $ | 22,906 | $ | 21,211 | |||||||
Earnings before taxes: | |||||||||||||||
Total segment earnings from operations | $ | 801 | $ | 631 | $ | 2,195 | $ | 1,975 | |||||||
Unallocated corporate costs and eliminations | (44 | ) | (88 | ) | (152 | ) | (308 | ) | |||||||
Unallocated stock-based compensation expense | (14 | ) | (23 | ) | (64 | ) | (90 | ) | |||||||
Amortization of intangible assets | (72 | ) | (97 | ) | (222 | ) | (235 | ) | |||||||
Restructuring charges | (2 | ) | (152 | ) | (14 | ) | (304 | ) | |||||||
Transformation costs | (131 | ) | (31 | ) | (499 | ) | (31 | ) | |||||||
Acquisition and other related charges | (24 | ) | (56 | ) | (70 | ) | (150 | ) | |||||||
Separation costs | 2 | (5 | ) | — | (46 | ) | |||||||||
Defined benefit plan settlement (charges) and remeasurement benefit | — | 22 | — | 38 | |||||||||||
Interest and other, net | (64 | ) | (87 | ) | (163 | ) | (251 | ) | |||||||
Tax indemnification adjustments | 2 | 10 | (1,342 | ) | (1 | ) | |||||||||
Earnings (loss) from equity interests | 11 | 1 | 23 | (24 | ) | ||||||||||
Total Hewlett Packard Enterprise condensed consolidated earnings (loss) from continuing operations before taxes | $ | 465 | $ | 125 | $ | (308 | ) | $ | 573 |
Three Months Ended July 31, | Nine Months Ended July 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
In millions | |||||||||||||||
Hybrid IT | |||||||||||||||
Hybrid IT Product | |||||||||||||||
Compute | $ | 3,510 | $ | 3,340 | $ | 10,215 | $ | 9,516 | |||||||
Storage | 887 | 877 | 2,747 | 2,375 | |||||||||||
DC Networking | 59 | 63 | 167 | 157 | |||||||||||
Total Hybrid IT Product | 4,456 | 4,280 | 13,129 | 12,048 | |||||||||||
HPE Pointnext | 1,787 | 1,800 | 5,468 | 5,424 | |||||||||||
Total Hybrid IT | 6,243 | 6,080 | 18,597 | 17,472 | |||||||||||
Intelligent Edge | |||||||||||||||
HPE Aruba Product | 706 | 642 | 1,890 | 1,683 | |||||||||||
HPE Aruba Services | 79 | 69 | 225 | 204 | |||||||||||
Total Intelligent Edge | 785 | 711 | 2,115 | 1,887 | |||||||||||
Financial Services | 928 | 897 | 2,732 | 2,592 | |||||||||||
Corporate Investments | — | — | (1 | ) | — | ||||||||||
Total segment net revenue | 7,956 | 7,688 | 23,443 | 21,951 | |||||||||||
Eliminations of intersegment net revenue and other | (192 | ) | (187 | ) | (537 | ) | (740 | ) | |||||||
Total Hewlett Packard Enterprise condensed consolidated net revenue | $ | 7,764 | $ | 7,501 | $ | 22,906 | $ | 21,211 |
2015 Plan | 2012 Plan | ||||||||||||||||||
Employee Severance | Infrastructure and other | Employee Severance and EER | Infrastructure and other | Total | |||||||||||||||
In millions | |||||||||||||||||||
Liability as of October 31, 2017 | $ | 219 | $ | 17 | $ | 16 | $ | 2 | $ | 254 | |||||||||
Charges | 5 | (2 | ) | 12 | (1 | ) | 14 | ||||||||||||
Cash payments | (147 | ) | (8 | ) | (12 | ) | — | (167 | ) | ||||||||||
Non-cash items | (3 | ) | 4 | (1 | ) | — | — | ||||||||||||
Liability as of July 31, 2018 | $ | 74 | $ | 11 | $ | 15 | $ | 1 | $ | 101 | |||||||||
Total costs incurred to date, as of July 31, 2018 | $ | 747 | $ | 78 | $ | 1,267 | $ | 145 | $ | 2,237 | |||||||||
Total costs expected to be incurred, as of July 31, 2018 | $ | 747 | $ | 78 | $ | 1,267 | $ | 145 | $ | 2,237 |
Three months ended July 31, 2018 | Nine months ended July 31, 2018 | ||||||
In millions | |||||||
Program management(1) | $ | 28 | $ | 82 | |||
IT costs | 38 | 107 | |||||
Restructuring charges | 129 | 385 | |||||
Gain on real estate sales | (77 | ) | (114 | ) | |||
Other | 13 | 39 | |||||
Total | $ | 131 | $ | 499 |
(1) | Primarily consists of consulting fees and other direct costs attributable to the design and execution of the HPE Next initiative. |
Employee Severance | Infrastructure and other | ||||||
In millions | |||||||
Liability as of October 31, 2017 | $ | 296 | $ | — | |||
Charges | 347 | 38 | |||||
Cash payments | (365 | ) | (8 | ) | |||
Non-cash items | (13 | ) | (8 | ) | |||
Liability as of July 31, 2018 | $ | 265 | $ | 22 | |||
Total costs incurred to date, as of July 31, 2018 | $ | 643 | $ | 38 | |||
Total costs expected to be incurred, as of July 31, 2018 | $ | 750 | $ | 180 |
Three months ended July 31, | Nine months ended July 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
In millions | |||||||||||||||
Service cost | $ | 26 | $ | 36 | $ | 79 | $ | 106 | |||||||
Interest cost | 55 | 53 | 168 | 155 | |||||||||||
Expected return on plan assets | (139 | ) | (137 | ) | (423 | ) | (401 | ) | |||||||
Amortization and deferrals: | |||||||||||||||
Actuarial loss | 52 | 60 | 158 | 200 | |||||||||||
Prior service benefit | (4 | ) | (4 | ) | (12 | ) | (12 | ) | |||||||
Net periodic benefit (credit) cost | (10 | ) | 8 | (30 | ) | 48 | |||||||||
Settlement loss | 9 | 6 | 11 | 9 | |||||||||||
Special termination benefits | 1 | 1 | 5 | 3 | |||||||||||
Plan expense allocation(1) | — | (1 | ) | — | (17 | ) | |||||||||
Net benefit (credit) cost from continuing operations | — | 14 | (14 | ) | 43 | ||||||||||
Summary of net benefit (credit) cost: | |||||||||||||||
Continuing operations | — | 14 | (14 | ) | 43 | ||||||||||
Discontinued operations | — | 3 | — | 83 | |||||||||||
Net benefit (credit) cost | $ | — | $ | 17 | $ | (14 | ) | $ | 126 |
(1) | Plan expense 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. |
As of | |||||||
July 31, 2018 | October 31, 2017 | ||||||
In millions | |||||||
Deferred tax assets - long-term | $ | 5,933 | $ | 4,663 | |||
Deferred tax liabilities - long-term | (235 | ) | (104 | ) | |||
Deferred tax assets net of deferred tax liabilities | $ | 5,698 | $ | 4,559 |
As of | |||||||
July 31, 2018 | October 31, 2017 | ||||||
In millions | |||||||
Finished goods | $ | 1,382 | $ | 1,236 | |||
Purchased parts and fabricated assemblies | 1,389 | 1,079 | |||||
Total | $ | 2,771 | $ | 2,315 |
As of | |||||||
July 31, 2018 | October 31, 2017 | ||||||
In millions | |||||||
Land | $ | 296 | $ | 312 | |||
Buildings and leasehold improvements | 2,260 | 2,371 | |||||
Machinery and equipment, including equipment held for lease | 9,577 | 9,194 | |||||
12,133 | 11,877 | ||||||
Accumulated depreciation | (5,949 | ) | (5,608 | ) | |||
Total | $ | 6,184 | $ | 6,269 |
As of | |||||||
July 31, 2018 | October 31, 2017 | ||||||
In millions | |||||||
Current portion of long-term debt | $ | 1,402 | $ | 3,005 | |||
FS commercial paper | 442 | 401 | |||||
Notes payable to banks, lines of credit and other(1) | 482 | 444 | |||||
Total | $ | 2,326 | $ | 3,850 |
(1) | As of July 31, 2018 and October 31, 2017, notes payable to banks, lines of credit and other includes $369 million and $390 million, respectively, of borrowing and funding-related activity associated with FS and its subsidiaries and $113 million and $52 million, respectively, of receivables transferred under factoring arrangements, recorded as short-term borrowings. |
Nine Months Ended July 31, 2018 | |||
In millions | |||
Balance at beginning of period | $ | 475 | |
Accruals for warranties issued | 201 | ||
Adjustments related to pre-existing warranties | (6 | ) | |
Settlements made | (230 | ) | |
Balance at end of period | $ | 440 |
As of | |||||||
July 31, 2018 | October 31, 2017 | ||||||
In millions | |||||||
Minimum lease payments receivable | $ | 8,530 | $ | 8,226 | |||
Unguaranteed residual value | 290 | 272 | |||||
Unearned income | (705 | ) | (654 | ) | |||
Financing receivables, gross | 8,115 | 7,844 | |||||
Allowance for doubtful accounts | (103 | ) | (86 | ) | |||
Financing receivables, net | 8,012 | 7,758 | |||||
Less: current portion(1) | (3,435 | ) | (3,378 | ) | |||
Amounts due after one year, net(1) | $ | 4,577 | $ | 4,380 |
(1) | The Company includes the current portion in Financing receivables, and amounts due after one year, net in Long-term financing receivables and other assets, in the accompanying Condensed Consolidated Balance Sheets. |
As of | |||||||
July 31, 2018 | October 31, 2017 | ||||||
In millions | |||||||
Risk Rating: | |||||||
Low | $ | 4,236 | $ | 4,156 | |||
Moderate | 3,697 | 3,556 | |||||
High | 182 | 132 | |||||
Total | $ | 8,115 | $ | 7,844 |
As of | |||||||
July 31, 2018 | October 31, 2017 | ||||||
In millions | |||||||
Balance at beginning of period | $ | 86 | $ | 89 | |||
Provision for doubtful accounts | 27 | 23 | |||||
Write-offs, net of recoveries | (10 | ) | (26 | ) | |||
Balance at end of period | $ | 103 | $ | 86 |
As of | |||||||
July 31, 2018 | October 31, 2017 | ||||||
In millions | |||||||
Gross financing receivables collectively evaluated for loss | $ | 7,708 | $ | 7,523 | |||
Gross financing receivables individually evaluated for loss | 407 | 321 | |||||
Total | $ | 8,115 | $ | 7,844 | |||
Allowance for financing receivables collectively evaluated for loss | $ | 75 | $ | 67 | |||
Allowance for financing receivables individually evaluated for loss | 28 | 19 | |||||
Total | $ | 103 | $ | 86 |
As of | |||||||
July 31, 2018 | October 31, 2017 | ||||||
In millions | |||||||
Billed:(1) | |||||||
Current 1-30 days | $ | 274 | $ | 257 | |||
Past due 31-60 days | 59 | 52 | |||||
Past due 61-90 days | 15 | 15 | |||||
Past due > 90 days | 84 | 58 | |||||
Unbilled sales-type and direct-financing lease receivables | 7,683 | 7,462 | |||||
Total gross financing receivables | $ | 8,115 | $ | 7,844 | |||
Gross financing receivables on non-accrual status(2) | $ | 246 | $ | 188 | |||
Gross financing receivables 90 days past due and still accruing interest(2) | $ | 161 | $ | 133 |
(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. |
As of | |||||||
July 31, 2018 | October 31, 2017 | ||||||
In millions | |||||||
Equipment leased to customers | $ | 7,486 | $ | 7,356 | |||
Accumulated depreciation | (3,175 | ) | (2,943 | ) | |||
Total | $ | 4,311 | $ | 4,413 |
Hybrid IT | Intelligent Edge | Financial Services | Total | ||||||||||||
In millions | |||||||||||||||
Balance at October 31, 2017 | $ | 15,454 | $ | 1,918 | $ | 144 | $ | 17,516 | |||||||
Goodwill acquired during the period | 102 | 3 | — | 105 | |||||||||||
Changes due to foreign currency | (1 | ) | — | — | (1 | ) | |||||||||
Goodwill adjustments | 6 | — | — | 6 | |||||||||||
Balance at July 31, 2018 | $ | 15,561 | $ | 1,921 | $ | 144 | $ | 17,626 |
As of July 31, 2018 | As of October 31, 2017 | ||||||||||||||||||||||||||||||
Fair Value Measured Using | Fair Value Measured Using | ||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
In millions | |||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||
Cash Equivalents and Investments: | |||||||||||||||||||||||||||||||
Time deposits | $ | — | $ | 954 | $ | — | $ | 954 | $ | — | $ | 1,159 | $ | — | $ | 1,159 | |||||||||||||||
Money market funds | 2,461 | — | — | 2,461 | 5,592 | — | — | 5,592 | |||||||||||||||||||||||
Foreign bonds | 8 | 129 | — | 137 | 9 | 214 | — | 223 | |||||||||||||||||||||||
Other debt securities | — | — | 25 | 25 | — | — | 26 | 26 | |||||||||||||||||||||||
Derivative Instruments: | |||||||||||||||||||||||||||||||
Foreign exchange contracts | — | 327 | — | 327 | — | 259 | — | 259 | |||||||||||||||||||||||
Other derivatives | — | 2 | — | 2 | — | 1 | — | 1 | |||||||||||||||||||||||
Total assets | $ | 2,469 | $ | 1,412 | $ | 25 | $ | 3,906 | $ | 5,601 | $ | 1,633 | $ | 26 | $ | 7,260 | |||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||
Derivative Instruments: | |||||||||||||||||||||||||||||||
Interest rate contracts | $ | — | $ | 336 | $ | — | $ | 336 | $ | — | $ | 142 | $ | — | $ | 142 | |||||||||||||||
Foreign exchange contracts | — | 165 | — | 165 | — | 335 | — | 335 | |||||||||||||||||||||||
Total liabilities | $ | — | $ | 501 | $ | — | $ | 501 | $ | — | $ | 477 | $ | — | $ | 477 |
As of July 31, 2018 | As of October 31, 2017 | ||||||||||||||||||||||||||||||
Cost | Gross Unrealized Gain | Gross Unrealized Loss | Fair Value | Cost | Gross Unrealized Gain | Gross Unrealized Loss | Fair Value | ||||||||||||||||||||||||
In millions | |||||||||||||||||||||||||||||||
Cash Equivalents: | |||||||||||||||||||||||||||||||
Time deposits | $ | 954 | $ | — | $ | — | $ | 954 | $ | 1,159 | $ | — | $ | — | $ | 1,159 | |||||||||||||||
Money market funds | 2,461 | — | — | 2,461 | 5,592 | — | — | 5,592 | |||||||||||||||||||||||
Total cash equivalents | 3,415 | — | — | 3,415 | 6,751 | — | — | 6,751 | |||||||||||||||||||||||
Available-for-Sale Investments: | |||||||||||||||||||||||||||||||
Foreign bonds | 116 | 21 | — | 137 | 183 | 40 | — | 223 | |||||||||||||||||||||||
Other debt securities | 27 | — | (2 | ) | 25 | 37 | — | (11 | ) | 26 | |||||||||||||||||||||
Total available-for-sale investments | 143 | 21 | (2 | ) | 162 | 220 | 40 | (11 | ) | 249 | |||||||||||||||||||||
Total cash equivalents and available-for-sale investments | $ | 3,558 | $ | 21 | $ | (2 | ) | $ | 3,577 | $ | 6,971 | $ | 40 | $ | (11 | ) | $ | 7,000 |
July 31, 2018 | |||||||
Amortized Cost | Fair Value | ||||||
In millions | |||||||
Due in more than five years | $ | 143 | $ | 162 |
As of July 31, 2018 | As of October 31, 2017 | ||||||||||||||||||||||||||||||||||||||
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 | $ | 7,900 | $ | — | $ | — | $ | 3 | $ | 333 | $ | 9,500 | $ | — | $ | — | $ | 16 | $ | 126 | |||||||||||||||||||
Cash flow hedges: | |||||||||||||||||||||||||||||||||||||||
Foreign currency contracts | 8,298 | 179 | 62 | 39 | 49 | 7,202 | 105 | 45 | 101 | 70 | |||||||||||||||||||||||||||||
Net investment hedges: | |||||||||||||||||||||||||||||||||||||||
Foreign currency contracts | 1,817 | 25 | 29 | 22 | 13 | 1,944 | 35 | 10 | 36 | 41 | |||||||||||||||||||||||||||||
Total derivatives designated as hedging instruments | 18,015 | 204 | 91 | 64 | 395 | 18,646 | 140 | 55 | 153 | 237 | |||||||||||||||||||||||||||||
Derivatives not designated as hedging instruments | |||||||||||||||||||||||||||||||||||||||
Foreign currency contracts | 7,568 | 25 | 7 | 34 | 8 | 9,552 | 61 | 3 | 79 | 8 | |||||||||||||||||||||||||||||
Other derivatives | 107 | 2 | — | — | — | 96 | 1 | — | — | — | |||||||||||||||||||||||||||||
Total derivatives not designated as hedging instruments | 7,675 | 27 | 7 | 34 | 8 | 9,648 | 62 | 3 | 79 | 8 | |||||||||||||||||||||||||||||
Total derivatives | $ | 25,690 | $ | 231 | $ | 98 | $ | 98 | $ | 403 | $ | 28,294 | $ | 202 | $ | 58 | $ | 232 | $ | 245 |
As of July 31, 2018 | |||||||||||||||||||||||||
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 | $ | 329 | $ | — | $ | 329 | $ | 160 | $ | 104 | (1) | $ | 65 | ||||||||||||
Derivative liabilities | $ | 501 | $ | — | $ | 501 | $ | 160 | $ | 254 | (2) | $ | 87 |
As of October 31, 2017 | |||||||||||||||||||||||||
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 | $ | 260 | $ | — | $ | 260 | $ | 209 | $ | 34 | (1) | $ | 17 | ||||||||||||
Derivative liabilities | $ | 477 | $ | — | $ | 477 | $ | 209 | $ | 242 | (3) | $ | 26 |
(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. Of the $254 million of collateral posted, $205 million was in cash and, $49 million was through re-use of counterparty collateral. |
(3) | 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. Of the $242 million of collateral posted, $220 million was in cash and, $22 million was through re-use of counterparty collateral. |
Gains (Losses) Recognized in Earnings on Derivative and Related Hedged Item | ||||||||||||||||||||||
Derivative Instrument | Location | Three months ended July 31, 2018 | Nine months ended July 31, 2018 | Hedged Item | Location | Three months ended July 31, 2018 | Nine months ended July 31, 2018 | |||||||||||||||
In millions | In millions | |||||||||||||||||||||
Interest rate contracts | Interest and other, net | $ | 16 | $ | (194 | ) | Fixed-rate debt | Interest and other, net | $ | (16 | ) | $ | 194 |
Gains (Losses) Recognized in Earnings on Derivative and Related Hedged Item | ||||||||||||||||||||||
Derivative Instrument | Location | Three months ended July 31, 2017 | Nine months ended July 31, 2017 | Hedged Item | Location | Three months ended July 31, 2017 | Nine months ended July 31, 2017 | |||||||||||||||
In millions | In millions | |||||||||||||||||||||
Interest rate contracts | Interest and other, net | $ | 23 | $ | (202 | ) | Fixed-rate debt | Interest and other, net | $ | (23 | ) | $ | 202 |
Gains (Losses) Recognized in Other Comprehensive Income ("OCI") on Derivatives (Effective Portion) | Gains (Losses) Reclassified from Accumulated OCI Into Earnings (Effective Portion) | ||||||||||||||||
Three months ended July 31, 2018 | Nine months ended July 31, 2018 | Location | Three months ended July 31, 2018 | Nine months ended July 31, 2018 | |||||||||||||
In millions | In millions | ||||||||||||||||
Cash flow hedges: | |||||||||||||||||
Foreign currency contracts | $ | 121 | $ | 59 | Net revenue | $ | 29 | $ | (82 | ) | |||||||
Foreign currency contracts | 28 | (9 | ) | Interest and other, net | 14 | 4 | |||||||||||
Total cash flow hedges | $ | 149 | $ | 50 | Net earnings from continuing operations | $ | 43 | $ | (78 | ) | |||||||
Net investment hedges: | |||||||||||||||||
Foreign currency contracts | $ | 57 | $ | 31 | Interest and other, net | $ | — | $ | — |
Gains (Losses) Recognized in Other Comprehensive Income ("OCI") on Derivatives (Effective Portion) | Gains (Losses) Reclassified from Accumulated OCI Into Earnings (Effective Portion) | ||||||||||||||||
Three months ended July 31, 2017 | Nine months ended July 31, 2017 | Location | Three months ended July 31, 2017 | Nine months ended July 31, 2017 | |||||||||||||
In millions | In millions | ||||||||||||||||
Cash flow hedges: | |||||||||||||||||
Foreign currency contracts | $ | (160 | ) | $ | (163 | ) | Net revenue | $ | (45 | ) | $ | 9 | |||||
Foreign currency contracts | — | (1 | ) | Cost of products | — | — | |||||||||||
Foreign currency contracts | 28 | 170 | Interest and other, net | 29 | 178 | ||||||||||||
Subtotal | (132 | ) | 6 | Net earnings from continuing operations | (16 | ) | 187 | ||||||||||
Foreign currency contracts | (1 | ) | 1 | Net loss from discontinued operations | 1 | 44 | |||||||||||
Total cash flow hedges | $ | (133 | ) | $ | 7 | Net earnings (loss) | $ | (15 | ) | $ | 231 | ||||||
Net investment hedges: | |||||||||||||||||
Foreign currency contracts | $ | (97 | ) | $ | (107 | ) | Interest and other, net | $ | — | $ | — |
Gains (Losses) Recognized in Earnings on Derivatives | |||||||||||||||||
Location | Three months ended July 31, 2018 | Three months ended July 31, 2017 | Nine months ended July 31, 2018 | Nine months ended July 31, 2017 | |||||||||||||
In millions | |||||||||||||||||
Foreign currency contracts | Interest and other, net | $ | 233 | $ | (279 | ) | $ | 104 | $ | (525 | ) | ||||||
Other derivatives | Interest and other, net | — | — | — | 4 | ||||||||||||
Total | $ | 233 | $ | (279 | ) | $ | 104 | $ | (521 | ) |
As of | |||||||
July 31, 2018 | October 31, 2017 | ||||||
In millions | |||||||
Hewlett Packard Enterprise Senior Notes | |||||||
$2,650 issued at discount to par at a price of 99.872% in October 2015 at 2.85%, due October 5, 2018, interest payable semi-annually on April 5 and October 5 of each year(1) | $ | 1,050 | $ | 2,648 | |||
$250 issued at par in October 2015 at three-month USD LIBOR plus 1.93%, due October 5, 2018, interest payable quarterly on January 5, April 5, July 5 and October 5 of each year | 250 | 250 | |||||
$1,100 issued at discount to par at a price of 99.994% in September 2017 at 2.10%, due October 4, 2019, interest payable semi-annually on April 4 and October 4 of each year | 1,100 | 1,100 | |||||
$3,000 issued at discount to par at a price of 99.972% in October 2015 at 3.6%, due October 15, 2020, interest payable semi-annually on April 15 and October 15 of each year | 3,000 | 3,000 | |||||
$1,350 issued at discount to par at a price of 99.802% in October 2015 at 4.4%, due October 15, 2022, interest payable semi-annually on April 15 and October 15 of each year | 1,348 | 1,348 | |||||
$2,500 issued at discount to par at a price of 99.725% in October 2015 at 4.9%, due October 15, 2025, interest payable semi-annually on April 15 and October 15 of each year | 2,495 | 2,495 | |||||
$750 issued at discount to par at a price of 99.942% in October 2015 at 6.2%, due October 15, 2035, interest payable semi-annually on April 15 and October 15 of each year | 750 | 750 | |||||
$1,500 issued at discount to par at a price of 99.932% in October 2015 at 6.35%, due October 15, 2045, interest payable semi-annually on April 15 and October 15 of each year | 1,499 | 1,499 | |||||
Other, including capital lease obligations, at 0.00%-5.00%, due in calendar years 2018-2030(2) | 249 | 286 | |||||
Fair value adjustment related to hedged debt | (336 | ) | (142 | ) | |||
Unamortized debt issuance costs | (40 | ) | (47 | ) | |||
Less: current portion | (1,402 | ) | (3,005 | ) | |||
Total long-term debt | $ | 9,963 | $ | 10,182 |
(1) | On June 29, 2018, the Company redeemed $1.6 billion of its $2.65 billion Senior Notes with an original maturity date of October 5, 2018. These notes were fully hedged with interest rate swaps. As part of the transaction, HPE terminated and settled a proportional amount of the hedges, as well as allocated a proportional amount of unamortized discount and debt issuance costs to the retired debt. These costs, along with the redemption price of $1.6 billion resulted in an immaterial loss. |
(2) | Other, including capital lease obligations includes $143 million and $160 million as of July 31, 2018 and October 31, 2017, respectively, of borrowing- and funding-related activity associated with FS and its subsidiaries that are collateralized by receivables and underlying assets associated with the related capital and operating leases. For both the periods presented, the carrying amount of the assets approximated the carrying amount of the borrowings. |
Three months ended July 31, | Nine months ended July 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
In millions | |||||||||||||||
Taxes on change in net unrealized (losses) gains on available-for-sale securities: | |||||||||||||||
Tax provision on net unrealized (losses) gains arising during the period | $ | — | $ | (1 | ) | $ | — | $ | (2 | ) | |||||
— | (1 | ) | — | (2 | ) | ||||||||||
Taxes on change in net unrealized gains (losses) on cash flow hedges: | |||||||||||||||
Tax (provision) benefit on net unrealized gains (losses) arising during the period | (20 | ) | 47 | (6 | ) | 20 | |||||||||
Tax provision (benefit) on net (gains) losses reclassified into earnings | 5 | (10 | ) | (11 | ) | 35 | |||||||||
(15 | ) | 37 | (17 | ) | 55 | ||||||||||
Taxes on change in unrealized components of defined benefit plans: | |||||||||||||||
Tax benefit (provision) on (losses) gains arising during the period | 3 | (13 | ) | 2 | (38 | ) | |||||||||
Tax provision on amortization of actuarial loss and prior service benefit | (4 | ) | (4 | ) | (10 | ) | (15 | ) | |||||||
Tax provision on curtailments, settlements and other | (5 | ) | (41 | ) | (12 | ) | (55 | ) | |||||||
(6 | ) | (58 | ) | (20 | ) | (108 | ) | ||||||||
Tax benefit (provision) on change in cumulative translation adjustment | 2 | (4 | ) | 3 | (3 | ) | |||||||||
Tax provision on other comprehensive income | $ | (19 | ) | $ | (26 | ) | $ | (34 | ) | $ | (58 | ) |
Three months ended July 31, | Nine months ended July 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
In millions | |||||||||||||||
Other comprehensive income, net of taxes: | |||||||||||||||
Change in net unrealized (losses) gains on available-for-sale securities: | |||||||||||||||
Net unrealized (losses) gains arising during the period | $ | (2 | ) | $ | 6 | $ | (1 | ) | $ | (12 | ) | ||||
Gains reclassified into earnings | — | — | (9 | ) | — | ||||||||||
(2 | ) | 6 | (10 | ) | (12 | ) | |||||||||
Change in net unrealized gains (losses) on cash flow hedges: | |||||||||||||||
Net unrealized gains (losses) arising during the period | 129 | (86 | ) | 44 | 27 | ||||||||||
Net (gains) losses reclassified into earnings(1) | (38 | ) | 5 | 67 | (196 | ) | |||||||||
91 | (81 | ) | 111 | (169 | ) | ||||||||||
Change in unrealized components of defined benefit plans: | |||||||||||||||
(Losses) gains arising during the period | (22 | ) | 197 | (21 | ) | 662 | |||||||||
Amortization of actuarial gain and prior service benefit(2) | 43 | 52 | 133 | 215 | |||||||||||
Curtailments, settlements and other | 4 | (35 | ) | (1 | ) | (46 | ) | ||||||||
25 | 214 | 111 | 831 | ||||||||||||
Change in cumulative translation adjustment | (38 | ) | 45 | (37 | ) | 10 | |||||||||
Other comprehensive income, net of taxes | $ | 76 | $ | 184 | $ | 175 | $ | 660 |
(1) | For more details on the reclassification of pre-tax net (gains) losses on cash flow hedges into the Condensed Consolidated Statements of Earnings, see Note 12, "Financial Instruments". |
(2) | These components are included in the computation of net pension and post-retirement benefit cost in Note 6, "Retirement and Post-Retirement Benefit Plans". |
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 | $ | 29 | $ | (48 | ) | $ | (2,690 | ) | $ | (186 | ) | $ | (2,895 | ) | |||||
Activity related to separation and merger transactions | — | — | — | (186 | ) | (186 | ) | ||||||||||||
Other comprehensive (loss) income before reclassifications | (1 | ) | 44 | (21 | ) | (37 | ) | (15 | ) | ||||||||||
Reclassifications of (gains) losses into earnings | (9 | ) | 67 | 132 | — | 190 | |||||||||||||
Balance at end of period | $ | 19 | $ | 63 | $ | (2,579 | ) | $ | (409 | ) | $ | (2,906 | ) |
Three months ended July 31, | Nine months ended July 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
In millions, except per share amounts | |||||||||||||||
Numerator: | |||||||||||||||
Net earnings from continuing operations | $ | 452 | $ | 285 | $ | 2,784 | $ | 58 | |||||||
Net loss from discontinued operations | (1 | ) | (120 | ) | (119 | ) | (238 | ) | |||||||
Net earnings (loss) | $ | 451 | $ | 165 | $ | 2,665 | $ | (180 | ) | ||||||
Denominator: | |||||||||||||||
Weighted-average shares used to compute basic net EPS | 1,513 | 1,641 | 1,552 | 1,656 | |||||||||||
Dilutive effect of employee stock plans | 18 | 26 | 26 | 27 | |||||||||||
Weighted-average shares used to compute diluted net EPS | 1,531 | 1,667 | 1,578 | 1,683 | |||||||||||
Basic net earnings (loss) per share: | |||||||||||||||
Continuing operations | $ | 0.30 | $ | 0.17 | $ | 1.79 | $ | 0.04 | |||||||
Discontinued operations | — | (0.07 | ) | (0.07 | ) | (0.15 | ) | ||||||||
Basic net earnings (loss) per share | $ | 0.30 | $ | 0.10 | $ | 1.72 | $ | (0.11 | ) | ||||||
Diluted net earnings (loss) per share: | |||||||||||||||
Continuing operations | $ | 0.29 | $ | 0.17 | $ | 1.76 | $ | 0.03 | |||||||
Discontinued operations(1) | — | (0.07 | ) | (0.07 | ) | (0.14 | ) | ||||||||
Diluted net earnings (loss) per share | $ | 0.29 | $ | 0.10 | $ | 1.69 | $ | (0.11 | ) | ||||||
Anti-dilutive weighted-average stock awards(2) | 2 | 16 | 3 | 8 |
(1) | U.S. GAAP requires the denominator used in the diluted net EPS calculation for discontinued operations to be the same as that of continuing operations, regardless of net earnings (loss) from continuing operations. |
(2) | 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 (loss) per share, as their effect, if included, would have been anti-dilutive for the periods presented. |
As of | |||||||
July 31, 2018 | October 31, 2017 | ||||||
In millions | |||||||
Litigation matters and other contingencies | |||||||
Receivable | $ | 116 | $ | 150 | |||
Payable | $ | 89 | $ | 91 | |||
Income tax related indemnification(1) | |||||||
Net indemnification receivable - long-term | $ | 111 | $ | 1,430 | |||
Net indemnification payable - short-term | $ | 2 | $ | 36 |
(1) | The actual amount that the Company may receive or pay could vary depending upon the outcome of certain unresolved tax matters, which may not be resolved for several years. |
• | Overview. A discussion of our business and overall analysis of financial and other highlights affecting the Company to provide context for the remainder of MD&A. The overview analysis compares the three and nine months ended July 31, 2018 to the prior-year periods. |
• | Critical Accounting Policies and Estimates. A discussion of accounting policies and estimates that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results. |
• | Results of Operations. An analysis of our financial results comparing the three and nine months ended July 31, 2018 to the prior-year periods. A discussion of the results of operations at the consolidated level is followed by a discussion of the results of operations at the segment level. |
• | Liquidity and Capital Resources. An analysis of changes in our cash flows and a discussion of our financial condition and liquidity. |
• | Contractual and Other Obligations. An overview of contractual obligations, retirement and post-retirement benefit plan funding, restructuring plans, uncertain tax positions, cross-indemnifications with HP Inc. (formerly known as "Hewlett-Packard Company"), DXC Technology Company ("DXC"), and Micro Focus International plc ("Micro Focus") and off-balance sheet arrangements. |
HPE Consolidated | Hybrid IT | Intelligent Edge | Financial Services | Corporate Investments(3) | |||||||||||||||
Dollars in millions, except for per share amounts | |||||||||||||||||||
Net revenue(1) | $ | 7,764 | $ | 6,243 | $ | 785 | $ | 928 | $ | — | |||||||||
Year-over-year change % | 3.5 | % | 2.7 | % | 10.4 | % | 3.5 | % | NM | ||||||||||
Earnings (loss) from continuing operations(2) | $ | 516 | $ | 661 | $ | 91 | $ | 73 | $ | (24 | ) | ||||||||
Earnings (loss) from continuing operations as a % of net revenue | 6.6 | % | 10.6 | % | 11.6 | % | 7.9 | % | NM | ||||||||||
Year-over-year change percentage points | 3.9pts | 2.7 | pts | (3.0)pts | 0.2pts | NM | |||||||||||||
Net earnings from continuing operations | $ | 452 | |||||||||||||||||
Net earnings per share | |||||||||||||||||||
Basic net EPS from continuing operations | $ | 0.30 | |||||||||||||||||
Diluted net EPS from continuing operations | $ | 0.29 |
(1) | HPE consolidated net revenue excludes intersegment net revenue and other. |
(2) | Segment earnings from operations exclude certain unallocated corporate costs and eliminations, stock-based compensation expense related to corporate and certain global functions, transformation costs, amortization of intangible assets, acquisition and other related charges, restructuring charges, separation costs and defined benefit plan settlement charges and remeasurement (benefit). |
(3) | "NM" represents not meaningful. |
HPE Consolidated | Hybrid IT | Intelligent Edge | Financial Services | Corporate Investments(4) | |||||||||||||||
Dollars in millions, except for per share amounts | |||||||||||||||||||
Net revenue(1) | $ | 22,906 | $ | 18,597 | $ | 2,115 | $ | 2,732 | $ | (1 | ) | ||||||||
Year-over-year change % | 8.0 | % | 6.4 | % | 12.1 | % | 5.4 | % | NM | ||||||||||
Earnings (loss) from continuing operations(2) | $ | 1,174 | $ | 1,890 | $ | 155 | $ | 217 | $ | (67) | |||||||||
Earnings (loss) from continuing operations as a % of net revenue | 5.1 | % | 10.2 | % | 7.3 | % | 7.9 | % | NM | ||||||||||
Year-over-year change percentage points | 1.1pts | 0.6pts | (1.5)pts | (0.7)pts | NM | ||||||||||||||
Net earnings from continuing operations(3) | $ | 2,784 | |||||||||||||||||
Net earnings per share | |||||||||||||||||||
Basic net EPS from continuing operations | $ | 1.79 | |||||||||||||||||
Diluted net EPS from continuing operations | $ | 1.76 |
(1) | HPE consolidated net revenue excludes intersegment net revenue and other. |
(2) | Segment earnings from operations exclude certain unallocated corporate costs and eliminations, stock-based compensation expense related to corporate and certain global functions, transformation costs, amortization of intangible assets, acquisition and other related charges, restructuring charges, separation costs and defined benefit plan settlement charges and remeasurement (benefit). |
(3) | Includes a net benefit from taxes and tax indemnifications of $1.9 billion, primarily relating to tax amounts incurred in connection with the settlement of certain pre-Separation Hewlett-Packard Company income tax liabilities indemnified through the Tax Matters Agreement with HP Inc., U.S. tax reform, the Everett and Seattle Transactions, and excess tax benefits associated with stock-based compensation. |
(4) | "NM" represents not meaningful. |
Three months ended July 31, | Nine months ended July 31, | ||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||
Dollars | % of Revenue | Dollars | % of Revenue | Dollars | % of Revenue | Dollars | % of Revenue | ||||||||||||||||||||
Dollars in millions | |||||||||||||||||||||||||||
Net revenue | $ | 7,764 | 100.0 | % | $ | 7,501 | 100.0 | % | $ | 22,906 | 100.0 | % | $ | 21,211 | 100.0 | % | |||||||||||
Cost of sales | 5,384 | 69.3 | 5,306 | 70.7 | 16,071 | 70.2 | 14,794 | 69.7 | |||||||||||||||||||
Gross profit | 2,380 | 30.7 | 2,195 | 29.3 | 6,835 | 29.8 | 6,417 | 30.3 | |||||||||||||||||||
Research and development | 434 | 5.6 | 390 | 5.2 | 1,224 | 5.3 | 1,122 | 5.3 | |||||||||||||||||||
Selling, general and administrative | 1,203 | 15.5 | 1,285 | 17.1 | 3,632 | 15.9 | 3,718 | 17.6 | |||||||||||||||||||
Amortization of intangible assets | 72 | 0.9 | 97 | 1.3 | 222 | 0.9 | 235 | 1.1 | |||||||||||||||||||
Restructuring charges | 2 | — | 152 | 2.0 | 14 | 0.1 | 304 | 1.4 | |||||||||||||||||||
Transformation costs | 131 | 1.8 | 31 | 0.4 | 499 | 2.2 | 31 | 0.1 | |||||||||||||||||||
Acquisition and other related charges | 24 | 0.3 | 56 | 0.7 | 70 | 0.3 | 150 | 0.7 | |||||||||||||||||||
Separation costs | (2 | ) | — | 5 | 0.1 | — | — | 46 | 0.2 | ||||||||||||||||||
Defined benefit plan settlement charges and remeasurement (benefit) | — | — | (22 | ) | (0.2 | ) | — | — | (38 | ) | (0.1 | ) | |||||||||||||||
Earnings from continuing operations | 516 | 6.6 | 201 | 2.7 | 1,174 | 5.1 | 849 | 4.0 | |||||||||||||||||||
Interest and other, net | (64 | ) | (0.7 | ) | (87 | ) | (1.1 | ) | (163 | ) | (0.6 | ) | (251 | ) | (1.2 | ) | |||||||||||
Tax indemnification adjustments | 2 | — | 10 | 0.1 | (1,342 | ) | (5.9 | ) | (1 | ) | — | ||||||||||||||||
Earnings (loss) from equity interests | 11 | 0.1 | 1 | — | 23 | 0.1 | (24 | ) | (0.1 | ) | |||||||||||||||||
Earnings (loss) from continuing operations before taxes | 465 | 6.0 | 125 | 1.7 | (308 | ) | (1.3 | ) | 573 | 2.7 | |||||||||||||||||
(Provision) benefit for taxes | (13 | ) | (0.2 | ) | 160 | 2.1 | 3,092 | 13.5 | (515 | ) | (2.4 | ) | |||||||||||||||
Net earnings from continuing operations | 452 | 5.8 | 285 | 3.8 | 2,784 | 12.2 | 58 | 0.3 | |||||||||||||||||||
Net loss from discontinued operations | (1 | ) | — | (120 | ) | (1.6 | ) | (119 | ) | (0.6 | ) | (238 | ) | (1.1 | ) | ||||||||||||
Net earnings (loss) | $ | 451 | 5.8 | % | $ | 165 | 2.2 | % | $ | 2,665 | 11.6 | % | $ | (180 | ) | (0.8 | )% |
Three months ended July 31, | Nine months ended July 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Dollars in millions | |||||||||||||||
Cost of sales | $ | 7 | $ | 7 | $ | 34 | $ | 33 | |||||||
Research and development | 14 | 21 | 60 | 55 | |||||||||||
Selling, general and administrative | 35 | 58 | 148 | 194 | |||||||||||
Restructuring charges | — | 10 | — | 29 | |||||||||||
Transformation costs | — | — | 3 | — | |||||||||||
Acquisition and other related charges | 1 | 14 | 10 | 21 | |||||||||||
Separation costs | — | 5 | 10 | 34 | |||||||||||
Stock-based compensation expense from continuing operations | $ | 57 | $ | 115 | $ | 265 | $ | 366 | |||||||
Stock-based compensation expense from discontinued operations | $ | — | $ | 13 | $ | — | $ | 140 |
Three Months Ended July 31, 2018 | Nine Months Ended July 31, 2018 | ||
Percentage Points | |||
Hybrid IT | 2.2 | 5.3 | |
Intelligent Edge | 1.0 | 1.1 | |
Financial Services | 0.4 | 0.7 | |
Corporate Investments/Other (1) | (0.1 | ) | 0.9 |
Total HPE | 3.5 | 8.0 |
(1) | Other primarily relates to the elimination of intersegment net revenue. |
• | Hybrid IT net revenue increased as a result of favorable currency fluctuations and growth in Compute from core ISS products due to higher AUPs and increased market demand for IT products; |
• | Intelligent Edge net revenue increased due primarily to revenue growth in HPE Aruba Product from campus switching products; and |
• | FS net revenue increased due primarily to higher asset management revenue and favorable currency fluctuations. |
• | Hybrid IT net revenue increased due to growth in Compute from core ISS due primarily to higher AUPs and increased market demand for IT products, favorable currency fluctuations and incremental revenue from the Nimble Storage acquisition; |
• | Intelligent Edge net revenue increased due primarily to revenue growth in HPE Aruba Product from campus switching products; and |
• | FS net revenue increased due primarily to favorable currency fluctuations and higher asset management revenue. |
• | Hybrid IT gross margin increased for the three months ended July 31, 2018, as compared to the prior-year period, due to multiple factors including: a lower mix of revenue from Tier-1 server sales, as we streamline the business to focus on high margin solutions, higher AUPs in Compute from core ISS products, favorable currency impacts and the moderation of recent price increases for DRAM; |
• | Intelligent Edge gross margin decreased for the three months ended July 31, 2018, as compared to the prior-year period, due primarily to a higher mix of revenue from lower margin edge compute products and a lower mix of revenue from WLAN products; and |
• | FS gross margin increased for the three months ended July 31, 2018, as compared to the prior-year period due primarily to increased revenue from higher asset management activity. |
• | Hybrid IT gross margin decreased for the nine months ended July 31, 2018, as compared to the prior-year period, due primarily to a higher mix of lower margin solutions and higher variable compensation expense; |
• | Intelligent Edge gross margin remained flat for the nine months ended July 31, 2018, as compared to the prior-year period due to the impact of a one-time tax duty in the prior-year period offset by a higher mix of revenue from lower margin edge compute products. |
• | FS gross margin decreased for the nine months ended July 31, 2018, as compared to the prior-year period, due primarily to the combined impact of an increase in the bad debt reserve in the current period and a bad debt reserve release in the prior-year period. |
Three months ended July 31, | ||||||||||
2018 | 2017 | % Change | ||||||||
Dollars in millions | ||||||||||
Net revenue | $ | 6,243 | $ | 6,080 | 2.7 | % | ||||
Earnings from operations | $ | 661 | $ | 482 | 37.1 | % | ||||
Earnings from operations as a % of net revenue | 10.6 | % | 7.9 | % |
Nine months ended July 31, | ||||||||||
2018 | 2017 | % Change | ||||||||
Dollars in millions | ||||||||||
Net revenue | $ | 18,597 | $ | 17,472 | 6.4 | % | ||||
Earnings from operations | $ | 1,890 | $ | 1,672 | 13.0 | % | ||||
Earnings from operations as a % of net revenue | 10.2 | % | 9.6 | % |
Three months ended July 31, | ||||||||||
Net Revenue | Weighted Net Revenue Change Percentage Points | |||||||||
2018 | 2017 | 2018 | ||||||||
Dollars in millions | ||||||||||
Compute | $ | 3,510 | $ | 3,340 | 2.8 | |||||
Storage | 887 | 877 | 0.2 | |||||||
DC Networking | 59 | 63 | (0.1 | ) | ||||||
Hybrid IT Product | 4,456 | 4,280 | 2.9 | |||||||
HPE Pointnext | 1,787 | 1,800 | (0.2 | ) | ||||||
Total Hybrid IT | $ | 6,243 | $ | 6,080 | 2.7 |
Nine months ended July 31, | ||||||||||
Net Revenue | Weighted Net Revenue Change Percentage Points | |||||||||
2018 | 2017 | 2018 | ||||||||
Dollars in millions | ||||||||||
Compute | $ | 10,215 | $ | 9,516 | 4.0 | |||||
Storage | 2,747 | 2,375 | 2.1 | |||||||
DC Networking | 167 | 157 | 0.1 | |||||||
Hybrid IT Product | 13,129 | 12,048 | 6.2 | |||||||
HPE Pointnext | 5,468 | 5,424 | 0.2 | |||||||
Total Hybrid IT | $ | 18,597 | $ | 17,472 | 6.4 |
• | The net revenue increase in Compute was due primarily to favorable currency fluctuations and growth in core ISS products. Mission-critical servers ("MCS") also experienced a net revenue increase for the period. The increase in Compute net revenue was partially offset by a decline in Tier-1 server sales as we continue to exit less profitable product categories. The growth in core ISS revenue was driven by an increase in AUPs across core products due to several factors including Generation 10 servers representing a higher mix of overall core ISS server products, the cost of certain commodities and improved server configurations. The increase in AUPs was partially offset by a decline in unit shipments, primarily in the rack, tower and blade categories. MCS revenue increased as a result of higher revenue from NonStop products. |
• | The net revenue increase in Storage was due to favorable currency fluctuations. Revenue in converged storage increased due to growth in big data products partially offset by lower revenue from All-Flash Array and HPE Nimble Storage products. Traditional storage revenue increased due to growth in networking products. |
• | Lower revenue in DC Networking was due primarily to a decline in switching products partially offset by favorable currency fluctuations. |
• | The net revenue increase in Compute was due primarily to growth in ISS, favorable currency impacts and growth in MCS. ISS revenue increased due to growth in core ISS, primarily in the rack server category, partially offset by a decline in Tier-1 server sales. The growth in core ISS revenue was driven by higher AUPs, primarily in the rack category, in part as they include the cost of certain commodities, partially offset by a unit decline in the tower, rack and blade categories. |
• | The net revenue increase in Storage was driven by growth in our converged and traditional storage products. Converged storage revenue growth was due primarily to revenue from HPE Nimble Storage and growth in big data and All-Flash Array products. Traditional storage revenue increased as a result of growth in networking and MSA products. |
• | Higher revenue in DC Networking was due primarily to growth in switching products. |
Three months ended July 31, | ||||||||||
2018 | 2017 | % Change | ||||||||
Dollars in millions | ||||||||||
Net revenue | $ | 785 | $ | 711 | 10.4 | % | ||||
Earnings from operations | $ | 91 | $ | 104 | (12.5 | )% | ||||
Earnings from operations as a % of net revenue | 11.6 | % | 14.6 | % |
Nine months ended July 31, | ||||||||||
2018 | 2017 | % Change | ||||||||
Dollars in millions | ||||||||||
Net revenue | $ | 2,115 | $ | 1,887 | 12.1 | % | ||||
Earnings from operations | $ | 155 | $ | 166 | (6.6 | )% | ||||
Earnings from operations as a % of net revenue | 7.3 | % | 8.8 | % |
Three months ended July 31, | ||||||||||
Net Revenue | Weighted Net Revenue Change Percentage Points | |||||||||
2018 | 2017 | 2018 | ||||||||
Dollars in millions | ||||||||||
HPE Aruba Product | $ | 706 | $ | 642 | 9.0 | |||||
HPE Aruba Services | 79 | 69 | 1.4 | |||||||
Total Intelligent Edge | $ | 785 | $ | 711 | 10.4 |
Nine months ended July 31, | |||||||||
Net Revenue | Weighted Net Revenue Change Percentage Points | ||||||||
2018 | 2017 | 2018 | |||||||
Dollars in millions | |||||||||
HPE Aruba Product | $ | 1,890 | $ | 1,683 | 11.0 | ||||
HPE Aruba Services | 225 | 204 | 1.1 | ||||||
Total Intelligent Edge | $ | 2,115 | $ | 1,887 | 12.1 |
Three months ended July 31, | ||||||||||
2018 | 2017 | % Change | ||||||||
Dollars in millions | ||||||||||
Net revenue | $ | 928 | $ | 897 | 3.5 | % | ||||
Earnings from operations | $ | 73 | $ | 69 | 5.8 | % | ||||
Earnings from operations as a % of net revenue | 7.9 | % | 7.7 | % |
Nine months ended July 31, | ||||||||||
2018 | 2017 | % Change | ||||||||
Dollars in millions | ||||||||||
Net revenue | $ | 2,732 | $ | 2,592 | 5.4 | % | ||||
Earnings from operations | $ | 217 | $ | 222 | (2.3 | )% | ||||
Earnings from operations as a % of net revenue | 7.9 | % | 8.6 | % |
Three months ended July 31, | Nine months ended July 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
In millions | |||||||||||||||
Total financing volume | $ | 1,658 | $ | 1,448 | $ | 4,636 | $ | 4,337 |
As of | |||||||
July 31, 2018 | October 31, 2017 | ||||||
Dollars in millions | |||||||
Financing receivables, gross | $ | 8,115 | $ | 7,844 | |||
Net equipment under operating leases | 4,311 | 4,413 | |||||
Capitalized profit on intercompany equipment transactions | 534 | 656 | |||||
Intercompany leases | 85 | 115 | |||||
Gross portfolio assets | 13,045 | 13,028 | |||||
Allowance for doubtful accounts(1) | 103 | 86 | |||||
Operating lease equipment reserve | 55 | 49 | |||||
Total reserves | 158 | 135 | |||||
Net portfolio assets | $ | 12,887 | $ | 12,893 | |||
Reserve coverage | 1.2 | % | 1.0 | % | |||
Debt-to-equity ratio(2) | 7.0x | 7.0x |
(1) | Allowance for doubtful accounts for financing receivables includes both the short- and long-term portions. |
(2) | Debt benefiting FS consists of intercompany equity that is treated as debt for segment reporting purposes, intercompany debt, and borrowing- and funding-related activity associated with FS and its subsidiaries. Debt benefiting FS totaled $11.6 billion and $11.2 billion at July 31, 2018 and October 31, 2017, respectively, and was determined by applying an assumed debt-to-equity ratio, which management believes to be comparable to that of other similar financing companies. FS equity at July 31, 2018 and October 31, 2017 was $1.7 billion and $1.6 billion, respectively. |
Three months ended July 31, | ||||||||||
2018 | 2017 | % Change(1) | ||||||||
Dollars in millions | ||||||||||
Net revenue | $ | — | $ | — | NM | |||||
Loss from operations | $ | (24 | ) | $ | (24 | ) | — | % | ||
Loss from operations as a % of net revenue(1) | NM | NM | NM |
(1) | "NM" represents not meaningful. |
Nine months ended July 31, | ||||||||||
2018 | 2017 | % Change(1) | ||||||||
Dollars in millions | ||||||||||
Net revenue | $ | (1 | ) | $ | — | NM | ||||
Loss from operations | $ | (67 | ) | $ | (85 | ) | (21.2 | )% | ||
Loss from operations as a % of net revenue(1) | NM | NM | NM |
(1) | "NM" represents not meaningful. |
Nine months ended July 31, | |||||||
2018 | 2017 | ||||||
In millions | |||||||
Net cash provided by operating activities | $ | 1,638 | $ | 504 | |||
Net cash used in investing activities | (1,683 | ) | (4,424 | ) | |||
Net cash used in financing activities | (4,341 | ) | (1,310 | ) | |||
Net decrease in cash and cash equivalents | $ | (4,386 | ) | $ | (5,230 | ) |
Three months ended July 31, | ||||||||
2018 | 2017 | Change | ||||||
Days of sales outstanding in accounts receivable ("DSO") | 34 | 39 | (5 | ) | ||||
Days of supply in inventory ("DOS") | 46 | 36 | 10 | |||||
Days of purchases outstanding in accounts payable ("DPO") | (103 | ) | (96 | ) | (7 | ) | ||
Cash conversion cycle | (23 | ) | (21 | ) | (2 | ) |
As of July 31, 2018 | |||
In millions | |||
Commercial paper programs | $ | 4,058 | |
Uncommitted lines of credit | $ | 1,299 |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs | |||||||||
In thousands, except per share amounts | |||||||||||||
Month #1 (May 2018) | 19,536 | $ | 17.02 | 19,536 | $ | 6,299,228 | |||||||
Month #2 (June 2018) | 19,927 | $ | 15.59 | 19,927 | $ | 5,988,591 | |||||||
Month #3 (July 2018) | 19,093 | $ | 15.32 | 19,093 | $ | 5,695,989 | |||||||
Total | 58,556 | $ | 15.98 | 58,556 |
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 | 2.3 | November 5, 2015 | ||||||
2.4 | 8-K | 001-37483 | 2.4 | November 5, 2015 | ||||||
2.5 | 8-K | 001-37483 | 2.5 | November 5, 2015 | ||||||
2.6 | 8-K | 001-37483 | 2.6 | November 5, 2015 | ||||||
2.7 | 8-K | 001-37483 | 2.7 | November 5, 2015 | ||||||
2.8 | 8-K | 001-37483 | 2.1 | May 26, 2016 | ||||||
2.9 | 8-K | 001-37483 | 2.2 | May 26, 2016 | ||||||
2.10 | 8-K | 001-37483 | 2.1 | September 7, 2016 | ||||||
2.11 | 8-K | 001-37483 | 2.2 | September 7, 2016 | ||||||
2.12 | 8-K | 001-37483 | 2.3 | September 7, 2016 | ||||||
2.13 | 8-K | 001-37483 | 2.1 | November 2, 2016 | ||||||
2.14 | 8-K | 001-37483 | 2.2 | November 2, 2016 | ||||||
2.15 | 8-K | 001-37483 | 99.1 | March 7, 2017 |
2.16 | 8-K | 001-37483 | 99.2 | March 7, 2017 | ||||||
2.17 | 8-K | 001-38033 | 2.1 | April 6, 2017 | ||||||
2.18 | 8-K | 001-38033 | 2.2 | April 6, 2017 | ||||||
2.19 | 8-K | 001-38033 | 2.3 | April 6, 2017 | ||||||
2.20 | 8-K | 001-38033 | 2.4 | April 6, 2017 | ||||||
2.21 | 8-K | 001-38033 | 2.5 | April 6, 2017 | ||||||
2.22 | 8-K | 001-38033 | 2.6 | April 6, 2017 | ||||||
2.23 | 8-K | 001-37483 | 2.1 | September 1, 2017 | ||||||
2.24 | 8-K | 001-37483 | 2.2 | September 1, 2017 | ||||||
2.25 | 8-K | 001-37483 | 2.3 | September 1, 2017 | ||||||
2.26 | 8-K | 001-37483 | 2.4 | September 1, 2017 | ||||||
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 | 4.2 | October 13, 2015 |
4.3 | 8-K | 001-37483 | 4.3 | October 13, 2015 | ||||||
4.4 | 8-K | 001-37483 | 4.4 | October 13, 2015 | ||||||
4.5 | 8-K | 001-37483 | 4.5 | October 13, 2015 | ||||||
4.6 | 8-K | 001-37483 | 4.6 | October 13, 2015 | ||||||
4.7 | 8-K | 001-37483 | 4.7 | October 13, 2015 | ||||||
4.8 | 8-K | 001-37483 | 4.8 | October 13, 2015 | ||||||
4.9 | 8-K | 001-37483 | 4.9 | October 13, 2015 | ||||||
4.10 | 8-K | 001-37483 | 4.10 | October 13, 2015 | ||||||
4.11 | 8-K | 001-37483 | 4.11 | October 13, 2015 | ||||||
4.12 | 8-K | 001-37483 | 4.12 | October 13, 2015 | ||||||
4.13 | 10-K | 001-04423 | 4.13 | December 17, 2015 | ||||||
4.14 | S-8 | 333-207680 | 4.3 | October 30, 2015 | ||||||
4.15 | 8-K | 001-37483 | 10.1 | December 22, 2016 |
4.16 | 8-K | 001-37483 | 4.1 | September 20, 2017 | ||||||
4.17 | S-3ASR | 333-222102 | 4.5 | December 15, 2017 | ||||||
10.1 | 8-K | 001-37483 | 10.1 | January 30, 2017 | ||||||
10.2 | 10 | 001-37483 | 10.2 | September 28, 2015 | ||||||
10.3 | 10 | 001-37483 | 10.4 | September 28, 2015 | ||||||
10.4 | S-8 | 333-207679 | 4.3 | October 30, 2015 | ||||||
10.5 | S-8 | 333-207679 | 4.4 | October 30, 2015 | ||||||
10.6 | 8-K | 001-37483 | 10.4 | November 5, 2015 | ||||||
10.7 | 8-K | 001-37483 | 10.5 | November 5, 2015 | ||||||
10.8 | 8-K | 001-37483 | 10.6 | November 5, 2015 | ||||||
10.9 | 8-K | 001-37483 | 10.7 | November 5, 2015 | ||||||
10.10 | 8-K | 001-37483 | 10.8 | November 5, 2015 | ||||||
10.11 | 8-K | 001-37483 | 10.9 | November 5, 2015 | ||||||
10.12 | 8-K | 001-37483 | 10.10 | November 5, 2015 | ||||||
10.13 | 8-K | 001-37483 | 10.1 | November 5, 2015 | ||||||
10.14 | 10-Q | 001-37483 | 10.14 | March 10, 2016 | ||||||
10.15 | 10-Q | 001-37483 | 10.15 | March 10, 2016 | ||||||
10.16 | 8-K | 001-37483 | 10.1 | May 26, 2016 | ||||||
10.17 | S-8 | 333-207679 | 4.3 | March 6, 2017 | ||||||
10.18 | S-8 | 001-37483 | 4.3 | April 18, 2017 | ||||||
10.19 | S-8 | 001-37483 | 4.4 | April 18, 2017 | ||||||
10.20 | S-8 | 001-37483 | 4.3 | April 24, 2017 | ||||||
10.21 | 10-Q | 000-51333 | 10.1 | January 29, 2016 | ||||||
10.22 | 10-K | 000-51333 | 10.48 | February 28, 2007 | ||||||
10.23 | 10-K | 000-51333 | 10.3 | September 10, 2012 | ||||||
10.24 | S-1 | 000-51333 | 10.10 | February 4, 2005 |
10.25 | S-8 | 333-221254 | 4.3 | October 31, 2017 | ||||||
10.26 | S-8 | 333-221254 | 4.4 | October 31, 2017 | ||||||
10.27 | 10-Q | 001-37483 | 10.27 | June 7, 2018 | ||||||
10.28 | S-8 | 333-226181 | 4.3 | July 16, 2018 | ||||||
10.29 | ||||||||||
10.30 | ||||||||||
31.1 | ||||||||||
31.2 | ||||||||||
32 | ||||||||||
101.INS | XBRL Instance Document‡ | |||||||||
101.SCH | XBRL Taxonomy Extension Schema Document‡ | |||||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document‡ | |||||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document‡ | |||||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document‡ | |||||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document‡ |
* | Indicates management contract or compensation plan, contract or arrangement |
‡ | Filed herewith |
† | Furnished herewith |
HEWLETT PACKARD ENTERPRISE COMPANY | ||
/s/ TIMOTHY C. STONESIFER | ||
Timothy C. Stonesifer Executive Vice President and Chief Financial Officer (Principal Financial Officer and Authorized Signatory) |
(a) | “Affiliate” shall mean any (i) Subsidiary and (ii) any other entity other than the Corporation in an unbroken chain of entities beginning with the Corporation if, at the time of the granting of the option, each of the entities, other than the last entity in the unbroken chain, owns or controls 50 percent or more of the total ownership interest in one of the other entities in such chain. |
(b) | “Board” shall mean the Board of Directors of the Corporation. |
(c) | “Code” shall mean the Internal Revenue Code of 1986, of the USA, as amended. Any reference to a section of the Code herein shall be a reference to any successor or amended section of the Code. |
(d) | “Code Section 423 Plan” shall mean an employee stock purchase plan which is designed to meet the requirements set forth in Code Section 423. |
(e) | “Committee” shall mean the committee appointed by the Board in accordance with Section 14 of the Plan. |
(f) | “Common Stock” shall mean the Common Stock of the Corporation, or any stock into which such Common Stock may be converted. |
(g) | “Compensation” shall mean an Employee’s base cash compensation (including 13th/14th month payments or similar concepts under local law), commissions and shift premiums paid on account of personal services rendered by the Employee to the Corporation or a Designated Affiliate, but shall exclude payments for overtime, incentive compensation, incentive payments and bonuses, with any modifications determined by the Committee. The Committee shall have the authority to determine and approve all forms of pay to be included in the definition of Compensation and may change the definition on a prospective basis. |
(h) | “Contributions” shall mean the payroll deductions (to the extent permitted under applicable local law) and other additional payments that the Corporation may allow to be made by a Participant to fund the exercise of options granted pursuant to the Plan if payroll deductions are not permitted under applicable local law. |
(i) | “Corporation” shall mean Hewlett Packard Enterprise Company, a Delaware corporation. |
(j) | “Designated Affiliate” shall mean an Affiliate, whether now existing or existing in the future, that has been designated by the Committee as eligible to participate in the Plan with respect to its Employees. In the event the Designated Affiliate is not a Subsidiary, it shall be designated for participation in the Non-423 Plan. |
(k) | “Employee” shall mean an individual classified as an employee (within the meaning of Code Section 3401(c) and the regulations thereunder or as otherwise determined under applicable local law) by the Corporation or a Designated Affiliate on the Corporation’s or such Designated Affiliate’s payroll records during the relevant participation period. Employees shall not include individuals whose customary employment is for not more than five (5) months in any calendar year (except those Employees in such category the exclusion of whom is not permitted under applicable local law) or individuals classified as independent contractors. For purposes of clarity, regardless of any subsequent reclassification as an employee by the Corporation or a Designated Affiliate, any governmental agency, or any court, the term “Employee” shall not include the following prior to the date of the reclassification: (i) any independent contractor; (ii) any consultant; (iii) any individual performing services for the Corporation or a Designated Affiliate who has entered into an independent contractor or consultant agreement with the Corporation or a Designated Affiliate ; (iv) any individual performing services for the Corporation or a Designated Affiliate under an independent contractor or consultant agreement, a purchase order, a supplier agreement or any other agreement that the Corporation or a Designated Affiliate enters into for services; (v) any leased employee; (vi) any individual whose base wage or salary is not processed for payment by the payroll department(s) or payroll provider(s) of the Corporation or a Designated Affiliate; and (vii) any individual classified by the Corporation or a Designated Affiliate as contract labor (such as contract employees and job shoppers), regardless of length of service (unless such exclusion is not permitted under applicable local law). The Committee shall have exclusive discretion to determine whether an individual is an Employee for purposes of the Plan. |
(l) | “Entry Date” shall mean the first Trading Day of the Offering Period, or, for new Participants, the first Trading Day of their first Purchase Period. |
(m) | “Fair Market Value” shall be the closing sales price for the Common Stock (or the closing bid, if no sales were reported) as quoted on the New York Stock Exchange on the date of determination if that date is a Trading Day, or if the date of determination is not a Trading Day, the last market Trading Day prior to the date of determination, as reported in The Wall Street Journal or such other source as the Committee deems reliable. |
(n) | “Non-423 Plan” shall mean an employee stock purchase plan which does not meet the requirements set forth in Code Section 423. |
(o) | “Offering Period” shall mean the period of up to 24 months during which an option granted pursuant to the Plan may be exercised. Notwithstanding the foregoing, unless changed by the Committee, “Offering Period” shall mean a period of approximately six (6) months and Offering Periods shall commence on the first Trading Day on or after November 1 and May 1 of each year and terminate on the last Trading Day, respectively, of April and October. The duration and timing of Offering Periods may be changed or modified by the Committee pursuant to Section 4. The first Offering Period shall commence on the Plan’s effective date. |
(p) | “Participant” shall mean a participant in the Plan as described in Section 5 of the Plan. |
(q) | “Plan” shall mean this Employee Stock Purchase Plan which includes: (i) a Code Section 423 Plan and (ii) a Non-423 Plan. |
(r) | “Purchase Date” shall mean the last Trading Day of each Purchase Period. |
(s) | “Purchase Period” shall mean the period of six (6) months commencing after one Purchase Date and ending with the next Purchase Date, except that the first Purchase Period shall commence on the Plan’s effective date. Subsequent Purchase Periods, if any, shall run consecutively after the termination of the preceding Purchase Period. Notwithstanding the foregoing, subject to the Committee’s discretion to modify Offering Periods and Purchase Periods, “Purchase Period” shall mean the six (6) month period commencing on the first day of an Offering Period and ending on the last day of such Offering Period. |
(t) | “Purchase Price” shall mean 95% of the Fair Market Value of a share of Common Stock on the Purchase Date; provided however, that the Committee may elect with respect to future Offering Periods to establish the Purchase Price as a price that is no less than 85% of the Fair Market Value of a share of Common Stock on the Entry Date or the Purchase Date, whichever is lower; provided however, that the Purchase Price may be adjusted by the Committee pursuant to Sections 7.4 and 10. |
(u) | “Shareowner” shall mean a record holder of shares entitled to vote shares of Common Stock under the Corporation’s by‑laws. |
(v) | “Subsidiary” shall mean any corporation (other than the Corporation) in an unbroken chain of corporations beginning with the Corporation, as described in Code Section 424(f). |
(w) | “Tax-Related Items” shall mean any income tax, social insurance, payroll tax, payment on account or other tax-related items arising in relation to the Participant’s participation in the Plan. |
(x) | “Trading Day” shall mean a day on which U.S. national stock exchanges and the national market system are open for trading. |
5.1 | An Employee who is eligible to participate in the Plan in accordance with Section 3 may become a Participant by completing and submitting, on a date prescribed by the Committee prior to an applicable Entry Date, a completed payroll deduction authorization or, if applicable local law prohibits payroll deductions for the purpose of the Plan, other authorization stating the amount of Contributions to the Plan, expressed as any whole percentage up to ten percent (10%) of the eligible Employee’s Compensation, and Plan enrollment form provided by the Corporation or by following an electronic or other enrollment process as prescribed by the Committee. Where applicable local law prohibits payroll deductions for the purpose of the Plan, the Corporation may permit a Participant to contribute amounts to the Plan through payment by cash, check or other means set forth in the Plan enrollment form prior to each Purchase Date. An eligible Employee may authorize Contributions at the rate of any whole percentage of the Employee’s Compensation, not to exceed ten percent (10%) of the Employee’s Compensation. All payroll deductions may be held by the Corporation and commingled with its other corporate funds where administratively appropriate, except where applicable local law requires that Contributions to the Plan from Participants be segregated from the general corporate funds and/or deposited with an independent third party. No interest shall be paid or credited to the Participant with respect to such Contributions, unless required by local law. The Corporation shall maintain a separate bookkeeping account for each Participant under the Plan and the amount of each Participant’s Contributions shall be credited to such account. A Participant may not make any additional payments into such account. |
5.2 | Under procedures established by the Committee, a Participant may withdraw from the Plan during an Offering Period, by completing and filing a new payroll deduction authorization or, if applicable local law prohibits payroll deductions for the purpose of the Plan, other Contribution authorization and Plan enrollment form with the Corporation or by following electronic or other procedures prescribed by the Committee, prior to the change enrollment deadline established by the Corporation. If a Participant withdraws from the Plan during an Offering Period, his or her accumulated Contributions will be refunded to the Participant without interest. The Committee may establish rules limiting the frequency with which Participants may withdraw and re‑enroll in the Plan and may impose a waiting period on Participants wishing to re‑enroll following withdrawal. |
5.3 | A Participant may change his or her rate of Contributions at any time by filing a new payroll deduction authorization or, if applicable local law prohibits payroll deductions for the purpose of the Plan, other authorization stating the amount of Contributions to the Plan expressed as any whole percentage up to ten percent (10%) of the eligible Employee’s Compensation and Plan enrollment form or by following electronic or other procedures prescribed by the Committee. If a Participant has not followed such procedures to change the rate of Contributions, the rate of Contributions shall continue at the originally elected rate throughout the Offering Period and future Offering Periods. In accordance with Section 423(b)(8) of the Code, the Committee may reduce a Participant’s Contributions to zero percent (0%) at any time during an Offering Period. |
7.1 | Subject to adjustment as set forth in Section 10, the maximum number of shares of Common Stock that may be issued pursuant to the Plan shall be 80,000,000. If, on a given Purchase Date, the number of shares with respect to which options are to be exercised exceeds the number of shares then available under the Plan, the Corporation shall make a pro rata allocation of the shares remaining available for purchase in as uniform a manner as shall be practicable and as it shall determine to be equitable. For avoidance of doubt, the limitation set forth in this Section may be used to satisfy purchases of shares of Common Stock under either the Code Section 423 Plan or the Non-423 Plan. |
7.2 | Each Offering Period shall be determined by the Committee. Unless otherwise determined by the Committee, the Plan will operate with successive six (6) month Offering Periods commencing at the beginning of each fiscal year half. The Committee shall |
7.3 | Each eligible Employee who has elected to participate as provided in Section 5.1 shall be granted an option to purchase that number of shares of Common Stock (not to exceed 5,000 shares, subject to adjustment under Section 10 of the Plan) which may be purchased with the Contributions accumulated on behalf of such Employee during each Offering Period at the Purchase Price specified in Section 7.4 below, subject to the additional limitation that no Employee shall be granted an option to purchase Common Stock under the Plan at a rate which exceeds U.S. twenty‑five thousand dollars (U.S. $25,000) of the Fair Market Value of such Common Stock (determined at the time such option is granted) for each calendar year in which such option is outstanding at any time. For purposes of the Plan, an option is “granted” on a Participant’s Entry Date. An option will expire upon the earlier to occur of (i) the termination of a Participant’s participation in the Plan; or (ii) the termination of an Offering Period. This section shall be interpreted so as to comply with Code Section 423(b)(8). |
7.4 | The Committee has the right to establish that the Purchase Price under each option shall be the lower of: (i) a percentage (not less than eighty‑five percent (85%)) established by the Committee (“Designated Percentage”) of the Fair Market Value of the Common Stock on the Entry Date on which an option is granted, or (ii) the Designated Percentage of the Fair Market Value of the Common Stock on the Purchase Date on which the Common Stock is purchased. The Committee may change the Designated Percentage with respect to any future Offering Period, but not below eighty‑five percent (85%), and the Committee may determine with respect to any prospective Offering Period that the Purchase Price shall be the Designated Percentage of the Fair Market Value of the Common Stock on the Purchase Date. |
7.5 | For purposes of the Code Section 423 Plan only, and unless the Committee otherwise determines, each Designated Affiliate shall be deemed to participate in a separate offering from the Corporation or any other Designated Affiliate, provided that the terms of participation within any such offering are the same for all Participants in such offering, to comply with Code Section 423. |
13.1 | The Plan shall continue in effect until the ten-year anniversary of the effective date of the Plan set forth in Section 20 unless otherwise terminated earlier in accordance with Section 13.2. |
13.2 | The Board may, in its sole discretion, insofar as permitted by law, terminate or suspend the Plan, or revise or amend it in any respect whatsoever, except that, without approval of the Shareowners, no such revision or amendment shall increase the number of shares subject to the Plan, other than an adjustment under Section 10 of the Plan or materially increase the class of Employees eligible to participate in the Plan. |
15.1 | The Committee may adopt rules or procedures relating to the operation and administration of the Plan to accommodate the specific requirements of local laws and procedures. Without limiting the generality of the foregoing, the Committee is specifically authorized to adopt rules and procedures regarding handling of Contributions, payment of interest, conversion of local currency, payroll tax, withholding procedures and handling of share issuances which vary with local legal requirements. |
15.2 | The Committee may also adopt rules, procedures or sub-plans applicable to particular Affiliates or locations, which rules, procedures or sub-plans may be designed to be outside the scope of Code Section 423. The terms of such rules, procedures or sub-plans may take precedence over other provisions of this Plan, with the exception of Section 7.1, but unless otherwise expressly superseded by the terms of such rule, procedure or sub-plan, the provisions of this Plan shall govern the operation of the Plan. To the extent inconsistent with the requirements of Code Section 423, such rules, procedures or sub-plans shall be considered part of the Non-423 Plan, and the options granted thereunder shall not be considered to comply with Section 423. |
Name: | fld_NAME_AC | Employee ID: | fld_EMPLID |
Grant Date: | expGRANT_DATE |
Grant ID: | fld_GRANT_NBR |
Amount: | 0 |
Plan: | fld_DESCR |
Vesting Schedule: | fld_HTMLAREA1 |
1. | Grant of Restricted Stock Units. |
2. | Vesting Schedule. |
3. | Benefit Upon Vesting. |
(a) | the number of RSUs that have become vested as of such vesting date or vesting event, as applicable, multiplied by the Fair Market Value of a Share on the date on which such RSUs vested; plus |
(1) | Multiplying, separately, the number of RSUs that became vested as determined in Section 3(a) by the dividend per Share on each dividend payment date between the Grant Date and the applicable Vesting Date to determine the dividend equivalent amount for each applicable dividend payment date; |
(2) | dividing the amount determined in (1i) above by the Fair Market Value of a Share on the dividend payment date to determine the number of additional whole and fractional RSUs to be credited to the Employee; and |
(3) | multiplying the number of additional RSUs determined in (2ii) above by the Fair Market Value of a Share on the Vesting Date to determine the aggregate value of dividend equivalent payments for such vested RSUs; |
4. | Restrictions. |
5. | Custody of Restricted Stock Units. |
6. | No Stockholder Rights. |
7. | Termination of Employment. |
8. | Disability of the Employee. |
9. | Death of the Employee. |
10. | Retirement of the Employee. |
11. | Section 409A. |
12. | Taxes. |
(a) | The Employee shall be liable for any and all taxes, including income tax, social insurance, fringe benefit tax, payroll tax, payment on account, employer taxes or other tax-related items related to the Employee’s participation in the Plan and legally applicable to or otherwise recoverable from the Employee by the Company and/or, if different, the Employee’s employer (the “Employer”) whether incurred at grant, vesting, sale, prior to vesting or at any other time (“Tax-Related Items”). In the event that the Company or the Employer (which, for purposes of this Section 11, shall include a former employer) is required, allowed or permitted to withhold taxes as a result of the RSUs or the Shares acquired pursuant to such RSUs, or due upon receipt of dividend equivalent payments or dividends, the Employee shall surrender a sufficient number of whole Shares, make a cash payment or make adequate arrangements satisfactory to the Company and/or the Employer to withhold such taxes from Employee’s wages or other cash compensation paid to the Employee by the Company and/or the Employer at the election of the Company, in its sole discretion, or, if permissible under local law, the Company may sell or arrange for the sale of Shares that Employee acquires as necessary to cover all Tax-Related Items that the Company or the Employer has to withhold or that are legally recoverable from the Employee (such as fringe benefit tax) at the time the restrictions on the RSUs lapse, unless the Company, in its sole discretion, has established alternative procedures for such payment. However, with respect to any RSUs subject to Section 409A, the Employer shall limit the surrender of Shares to the minimum number of Shares permitted to avoid a prohibited acceleration under Section 409A. The Employee will receive a cash refund for any fraction of a surrendered Share or Shares in excess of any and all Tax-Related Items. To the extent that any surrender of Shares or payment of cash or alternative procedure for such payment is insufficient, the Employee authorizes the Company, its Affiliates and Subsidiaries, which are qualified to deduct tax at source, to deduct from the Employee’s compensation all Tax-Related Items. The Employee agrees to pay any Tax-Related Items that cannot be satisfied from wages or other cash compensation, to the extent permitted by Applicable Law. |
(b) | Regardless of any action the Company or the Employer takes with respect to any or all Tax-Related Items, the Employee acknowledges and agrees that the ultimate liability for all Tax-Related Items is and remains the Employee’s responsibility and may exceed the amount actually withheld by the Company or the Employer. The Employee further acknowledges that the Company and/or the Employer: (i) make no representations nor undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of this grant of RSUs or dividend equivalents, including, but not limited to, the grant, vesting or settlement of RSUs or dividend equivalents, the subsequent delivery of Shares and/or cash upon settlement of such RSUs or the subsequent sale of any Shares acquired pursuant to such RSUs and receipt of any dividends or dividend equivalent payments; and (ii) notwithstanding Section 11, do not commit to and are under no obligation to structure the terms or any aspect of this grant of RSUs and/or dividend equivalents to reduce or eliminate the Employee’s liability for Tax-Related Items or to achieve any particular tax result. Further, if the Employee has become subject to tax in more than one jurisdiction, the Employee acknowledges that the Company and/or the Employer may be required to withhold or account for Tax-Related Items in more than one jurisdiction. The Employee shall pay the Company or the |
(c) | In accepting the RSUs, the Employee consents and agrees that in the event the RSUs or the dividend equivalents become subject to an employer tax that is legally permitted to be recovered from the Employee, as may be determined by the Company and/or the Employer at their sole discretion, and whether or not the Employee’s employment with the Company and/or the Employer is continuing at the time such tax becomes recoverable, the Employee will assume any liability for any such taxes that may be payable by the Company and/or the Employer in connection with the RSUs and dividend equivalents. Further, by accepting the RSUs, the Employee agrees that the Company and/or the Employer may collect any such taxes from the Employee by any of the means set forth in this Section 12. The Employee further agrees to execute any other consents or elections required to accomplish the above, promptly upon request of the Company. |
13. | Data Privacy Consent. |
(a) | The Employee hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of the Employee’s personal data as described in this Grant Agreement and any other materials by and among, as applicable, the Company, the Employer and its other Subsidiaries and Affiliates for the exclusive purpose of implementing, administering and managing the Employee’s participation in the Plan. |
(b) | The Employee understands that the Company, the Employer and its other Subsidiaries and Affiliates may hold certain personal information about the Employee, including, but not limited to, name, home address, email address, and telephone number, date of birth, social insurance number, passport or other identification number, salary, nationality, residency, status, job title, any shares of stock or directorships held in the Company, details of all RSUs, options or any other entitlement to shares of stock granted, canceled, purchased, exercised, vested, unvested or outstanding in the Employee’s favor (“Data”) for the exclusive purpose of implementing, managing and administering the Plan. |
(c) | The Employee understands that Data will be transferred to the Company or one or more stock plan service providers as may be selected by the Company from time to time, which is assisting the Company with the implementation, administration and management of the Plan. The Employee understands that the recipients of the Data may be located in the United States or elsewhere, and that the recipient’s country of operation (e.g., the United States) may have different data privacy laws and protections than the Employee’s country. The Employee understands that if he or she resides outside the United States, the Employee may request a list with the names and addresses of any potential recipients of the Data by contacting his or her local human resources representative. The Employee authorizes the Company and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purposes of implementing, administering and managing the Employee’s participation in the Plan. The Employee understands that Data will be held only as long as is necessary to implement, administer and manage the Employee’s participation in the Plan. The Employee understands that if he or she resides outside the United States, the Employee may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing his or her local human resources representative. |
(d) | Further, the Employee understands that he or she is providing the consents herein on a purely voluntary basis. If the Employee does not consent, or if the Employee later seeks to revoke his or her consent, the Employee's employment with the Employer will not be affected; the only consequence of refusing or withdrawing the Employee’s consent is that the Company would not be able to grant RSUs or other equity awards to the Employee or administer or maintain such awards. Therefore, the Employee understands that refusing or withdrawing the consent may affect the Employee’s ability to participate in the Plan. For more information on the consequences of the Employee’s refusal to consent or withdrawal of consent, the Employee understands that he or she may contact his or her local human resources representative. |
14. | Plan Information. |
15. | Acknowledgment and Waiver. |
(a) | except as provided in Sections 8, 9 and 10, the vesting of the RSUs is earned only by continuing as an employee with the Company or one of its Subsidiaries or Affiliates and that being hired and granted RSUs will not result in the RSUs vesting; |
(b) | this Grant Agreement and its incorporated documents reflect all agreements on its subject matters and the Employee is not accepting this Grant Agreement based on any promises, representations or inducements other than those reflected in this Grant Agreement; |
(c) | all good faith decisions and interpretations of the Committee regarding the Plan and Awards granted under the Plan are binding, conclusive and final; |
(d) | the Plan is established voluntarily by the Company, it is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time; |
(e) | the grant of RSUs is voluntary and occasional and does not create any contractual or other right to receive future grants of RSUs or other awards, or benefits in lieu of RSUs, even if Shares or RSUs have been granted in the past; |
(f) | all decisions with respect to future grants, if any, will be at the sole discretion of the Company; |
(g) | the Employee’s participation in the Plan shall not create a right to further employment with the Employer and shall not interfere with the ability of the Employer to terminate the Employee’s employment relationship at any time and it is expressly agreed and understood that employment is terminable at the will of either party; |
(h) | the Employee is voluntarily participating in the Plan; |
(i) | RSUs and their resulting benefits are extraordinary items that are outside the scope of the Employee’s employment contract, if any; |
(j) | RSUs and their resulting benefits are not intended to replace any pension rights or compensation; |
(k) | RSUs and their resulting benefits are not part of normal or expected compensation or salary for any purposes, including, but not limited to calculating any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments; |
(l) | unless otherwise agreed by the Company, the RSUs and their resulting benefits are not granted as consideration for, or in connection with, the service the Employee may provide as a director of a Subsidiary or Affiliate; |
(m) | this grant of RSUs will not be interpreted to form an employment contract or relationship with the Company, and furthermore, this grant of RSUs will not be interpreted to form an employment contract with any Subsidiary or Affiliate; |
(n) | the future value of the underlying Shares is unknown, indeterminable and cannot be predicted with certainty; |
(o) | no claim or entitlement to compensation or damages shall arise from forfeiture of the RSUs resulting from termination of Employee’s employment (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where the Employee is employed or retained or the terms of the Employee's employment or service agreement, if any), and in consideration of the grant of the RSUs to not institute any claim against the Company, the Employer or any other Subsidiary or Affiliate; |
(p) | the Company, the Employer or any other Subsidiary or Affiliate will not be liable for any foreign exchange rate fluctuation between the Employee’s local currency and the United States dollar that may affect the value of the RSUs or any amounts due to the Employee pursuant to the settlement of the RSUs or the subsequent sale of any Shares acquired upon settlement; |
(q) | if the Company determines that the Employee has engaged in Detrimental Activities, or conduct prohibited by Applicable Law or any applicable policy of the Company, as in effect from time to time, or the Company is required to make recovery from the Employee under Applicable Law or a Company policy adopted to comply with applicable legal requirements, then the Company may, in its sole discretion, to the extent it determines appropriate, (i) recover from the Employee the proceeds from RSUs vested up to three years prior to the Employee’s termination of employment or any time thereafter, (ii) cancel the Employee’s outstanding RSUs, and (iii) take any other action it deems to be required and appropriate; and |
(r) | the delivery of any documents related to the Plan or Awards granted under the Plan, including the Plan, this Grant Agreement, the Plan prospectus and any reports of the Company generally provided to the Company’s stockholders, may be made by electronic delivery. Such means of electronic delivery may include the delivery of a link to a Company intranet or the Internet site of a third party involved in administering the Plan, the delivery of the document via electronic mail or other |
16. | No Advice Regarding Grant. |
17. | Additional Eligibility Requirements. |
(a) | For purposes of this Grant Agreement, “Detrimental Activities” refers to conduct that is in violation of any contract or other legal obligation Employee has to the Company and any one or more of the following activities if engaged in by Employee in the twelve (12) month period following the Termination of Employment: |
(i) | the provision of services to a Competitor in any role or position (as an employee, consultant, or otherwise) that would involve Conflicting Business Activities; |
(ii) | knowingly participating (in person or through assistance to others) in soliciting or communicating with any customer of the Company in pursuit of a Competing Line of Business if Employee either had business-related contact with that customer or received Confidential Information about that customer in the last two years of his or her employment with Company; |
(iii) | knowingly participating (in person or through assistance to others) in soliciting or communicating with an HPE Employee for the purpose of persuading or helping the HPE Employee to end or reduce his or her employment relationship with the Company if Employee either worked with that HPE Employee or received Confidential Information about that HPE Employee in the last two years of employment with Company; and, |
(iv) | knowingly participating (in person or through assistance to others) in soliciting or communicating with an HPE Supplier for the purpose of persuading or helping the HPE Supplier to end or modify to HPE’s detriment an existing business relationship with the Company if Employee either worked with that HPE Supplier or received Confidential Information about that HPE Supplier in the last two years of employment with the Company; |
(b) | As used here, “Competitor” means an individual, corporation, or other business entity, or separately operated business unit of such an entity, that engages in a Competing Line of Business. “Competing Line of Business” means a business that involves a product or service offered by anyone other than the Company that would replace or compete with any product or service offered or to be offered by the Company with which Employee had material involvement while employed by the Company (unless the Company is no longer engaged in or planning to engage in that line of business). “Conflicting Business Activities” means job duties or other business-related activities in the United States or in any other country where the Company business units that Employee provides services to do business, and management or supervision of such job duties or business-related activities, if such job duties or business-related activities are the same as or similar to the job duties or business-related activities that Employee participates in or receives Confidential Information or trade secrets about in the last two years of his or her employment with Company. Employee stipulates it is reasonable for the scope of Conflicting Duties to include a national or larger geographic area given the scope of trade secret and Confidential Information made available to him or her. “HPE Employee” means an individual employed by or retained as a consultant to Company or its subsidiaries. “HPE Supplier” means an individual, corporation, other business entity or separately operated business unit of an entity that regularly provides goods or services to the Company or its subsidiaries, including without limitation any OEM, ODM or subcontractor. “Confidential Information” has the meaning provided for in the Employee’s ARCIPD. |
(c) | Some activities by Employee following employment would, by their nature, involve unauthorized use or disclosure of Company trade secrets and Confidential Information, whether or not intentional, which would cause irreparable harm to the Company and be undetectable until it is too late to obtain any effective remedy. In order to resolve any dispute over what activities would fall into this category, the parties agree that the activities prohibited by the Restrictive Covenants are activities of this nature that must be avoided by Employee in order to avoid irreparable harm to the Company. |
(d) | The Restrictive Covenants will apply and be valid notwithstanding any change in Employee’s duties, responsibilities, position, or title, or the termination of Employee’s employment with the Company irrespective of which party terminates the relationship or why; provided, however, that unless Employee is provided with written notice to the contrary at the time of termination, the restriction in part 17(a)(i) shall not apply in the event Employee’s employment with Company is involuntary terminated by Company as a direct result of a workforce restructuring program or similar reduction in force. |
(e) | If Employee violates or threatens to violate a Restrictive Covenant, the Company will be entitled to: injunctive relief by temporary restraining order, temporary injunction, and/or permanent injunction; where permitted by law, recovery of attorneys' fees and costs incurred in obtaining such relief; and, any other legal and equitable relief to which it may be entitled. Injunctive relief will not exclude other remedies that might apply. For purposes of any award of fees or costs, the Company shall be considered the prevailing party if it is awarded any part of the relief requested by it, either through partial enforcement, reformation of this Agreement, or otherwise. If Employee is found to have violated any restrictions in the Restrictive Covenants, then the time period for such restrictions will be extended by one day for each day that Employee is found to have violated the restriction, up to a maximum extension equal to the time period originally prescribed for the restriction. If Restrictive Covenants are held unenforceable as written, the parties expressly authorize the court or arbiter to enforce the restriction to such lesser degree as would be enforceable and/or to revise, delete, or add to the unenforceable restriction to the extent necessary to enforce the intent of the parties and provide Company with effective protection. |
(a) | Nothing in this section prohibits Employee from reporting possible violations of law or regulation to any governmental agency or entity, or making other disclosures that are protected under the whistleblower provisions of law or regulation. Employee does not need the prior authorization of the Company to make any such reports or disclosures, and Employee is not required to notify the Company that Employee has made such reports or disclosures. |
18. | Miscellaneous. |
(a) | The Company shall not be required to treat as owner of RSUs and any associated benefits hereunder, any transferee to whom such RSUs or benefits shall have been transferred in violation of any of the provisions of this Grant Agreement. |
(b) | The parties agree to execute such further instruments and to take such action as may reasonably be necessary to carry out the intent of this Grant Agreement. |
(c) | The Plan is incorporated herein by reference. The Plan and this Grant Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Employee with respect to the subject matter hereof, other than the terms of any severance plan applicable to the Employee that provides more favorable vesting, supplements and does not replace or diminish Employee’s obligations under Employee’s ARCIPD and any other agreements containing post-employment restrictive covenants. Notwithstanding the foregoing, nothing in the Plan or this Grant Agreement shall affect the validity or interpretation of any duly authorized written agreement between the Company and the Employee under which an award properly granted under and pursuant to the Plan serves as any part of the consideration furnished to the Employee. This Grant Agreement is voluntarily entered into and is not a condition of employment with the Company. This Grant Agreement is governed by the laws of the state of Delaware without regard to its conflict of law provisions. All actions and proceedings seeking to enforce any provision of, or based on any right arising out of, this Grant Agreement must be brought against either of the parties in the courts of the State of Delaware, County of New Castle, or, if it has or can acquire jurisdiction, in the United States District Court for the District of Delaware, and each of the parties consents to the exclusive jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein. Employee stipulates that this Grant Agreement involves contractual rights (such as the Restrictive Covenants) with a value in excess of US$100,000, and that Delaware Code Title 6. Commerce and Trade § 2708 applies to this Grant Agreement. |
(d) | If the Employee has received this or any other document related to the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control. |
(e) | The provisions of this Grant Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable. |
(f) | Notwithstanding Section 18(e), the Company’s obligations under this Grant Agreement and the Employee’s agreement to the terms of an arbitration agreement and/or an ARCIPD, if any, are mutually dependent. In the event that the Employee breaches the arbitration agreement or the Employee’s ARCIPD is breached or found not to be binding upon the Employee for any reason by a court of law, then the Company will have no further obligation or duty to perform under the Plan or this Grant Agreement. |
(g) | A waiver by the Company of a breach of any provision of this Grant Agreement shall not operate or be construed as a waiver of any other provision of this Grant Agreement, or of any subsequent breach by the Employee or any other Awardee. |
(h) | The Employee may be subject to insider trading restrictions and/or market abuse laws, which may affect the Employee's ability to acquire or sell Shares or rights to Shares (e.g., RSUs) under the Plan during such times as the Employee is considered to have “inside information” regarding the Company (as defined by applicable laws). Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. The Employee is responsible for ensuring compliance with any applicable restrictions and is advised to consult his or her personal legal advisor on this matter. |
(i) | The Company reserves the right to impose other requirements on the Employee’s participation in the Plan, on the RSUs and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require the Employee to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. |
(j) | Any notice required or permitted hereunder to the Employee shall be given in writing and shall be deemed effectively given upon delivery to the Employee at the address then on file with the Company. |
(k) | Any notice to be given under the terms of this Grant Agreement to the Company will be addressed in care of Attn: Global Equity Administration at Hewlett Packard Enterprise Company, 3000 Hanover Street, Palo Alto, California 94304, USA. |
1. | I have reviewed this Quarterly Report on Form 10-Q of Hewlett Packard Enterprise Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ ANTONIO F. NERI | |
Antonio F. Neri President and Chief Executive Officer (Principal Executive Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of Hewlett Packard Enterprise Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ TIMOTHY C. STONESIFER | |
Timothy C. Stonesifer 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/ TIMOTHY C. STONESIFER | |
Timothy C. Stonesifer Executive Vice President and Chief Financial Officer |
Document and Entity Information - shares |
9 Months Ended | |
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Jul. 31, 2018 |
Aug. 20, 2018 |
|
Document and Entity Information | ||
Entity Registrant Name | Hewlett Packard Enterprise Co, | |
Entity Central Index Key | 0001645590 | |
Document Type | 10-Q | |
Document Period End Date | Jul. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --10-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 1,471,648,283 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q3 |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions |
Jul. 31, 2018 |
Oct. 31, 2017 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 42 | $ 42 |
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 |
Preferred stock, shares outstanding | 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 | 1,482,000,000 | 1,595,000,000 |
Common stock, shares outstanding | 1,482,000,000 | 1,595,000,000 |
Condensed Consolidated Statements of Cash Flows $ in Millions |
9 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Jul. 31, 2018
USD ($)
|
Jul. 31, 2017
USD ($)
|
|||||||
Cash flows from operating activities: | ||||||||
Net earnings (loss) | $ 2,665 | $ (180) | ||||||
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 1,931 | 2,369 | ||||||
Stock-based compensation expense | 242 | 349 | ||||||
Provision for inventory and doubtful accounts | 137 | 82 | ||||||
Restructuring charges | 399 | 558 | ||||||
Deferred taxes on earnings | (1,215) | 145 | ||||||
(Earnings) loss from equity interests | (23) | 24 | ||||||
Dividends received from equity investees | 47 | 0 | ||||||
Other, net | 55 | 392 | ||||||
Changes in operating assets and liabilities, net of acquisitions: | ||||||||
Accounts receivable | 137 | 250 | ||||||
Financing receivables | (228) | (127) | ||||||
Inventory | (545) | (341) | ||||||
Accounts payable | 72 | 652 | ||||||
Taxes on earnings | (2,271) | (602) | ||||||
Restructuring | (540) | (688) | ||||||
Other assets and liabilities | 775 | [1] | (2,379) | [1] | ||||
Net cash provided by operating activities | 1,638 | 504 | ||||||
Cash flows from investing activities: | ||||||||
Investment in property, plant and equipment | (2,129) | (2,405) | ||||||
Proceeds from sale of property, plant and equipment | 561 | 403 | ||||||
Purchases of available-for-sale securities and other investments | (32) | (31) | ||||||
Maturities and sales of available-for-sale securities and other investments | 96 | 14 | ||||||
Financial collateral posted | (1,318) | (384) | ||||||
Financial collateral returned | 1,333 | 49 | ||||||
Payments made in connection with business acquisitions, net of cash acquired | (207) | (2,050) | ||||||
Proceeds from (payments to) business divestitures, net | 13 | (20) | ||||||
Net cash used in investing activities | (1,683) | (4,424) | ||||||
Cash flows from financing activities: | ||||||||
Short-term borrowings with original maturities less than 90 days, net | 84 | 30 | ||||||
Proceeds from debt, net of issuance costs | 894 | 3,340 | ||||||
Restricted cash - Seattle debt issuance (2) | 0 | [2] | (2,620) | [2] | ||||
Payment of debt | (2,538) | (2,296) | ||||||
Settlement of cash flow hedge | 0 | 5 | ||||||
Net proceeds related to stock-based award activities | 104 | 41 | ||||||
Repurchase of common stock | (2,585) | (1,936) | ||||||
Cash dividends paid to non-controlling interests | (9) | 0 | ||||||
Cash dividends paid | (406) | (323) | ||||||
Net cash used in financing activities | (4,341) | (1,310) | ||||||
Decrease in cash and cash equivalents | (4,386) | (5,230) | ||||||
Cash and cash equivalents at beginning of period | 9,579 | 12,987 | ||||||
Cash and cash equivalents at end of period | 5,193 | 7,757 | ||||||
Seattle SpinCo, Inc. | ||||||||
Cash flows from financing activities: | ||||||||
Net transfer of cash and cash equivalents to Everett | 156 | 0 | ||||||
Everett SpinCo, Inc. | ||||||||
Cash flows from financing activities: | ||||||||
Cash dividend from Everett | 0 | 3,008 | ||||||
Net transfer of cash and cash equivalents to Everett | $ (41) | (559) | ||||||
Non-U.S. pension plans | Pension Plan | ||||||||
Cash flows from financing activities: | ||||||||
Pension funding payments | 1,900 | |||||||
HPE | Dividend Payable In Connection With The Seattle Transaction | Seattle SpinCo, Inc. | ||||||||
Cash flows from financing activities: | ||||||||
Due to HPE | 2,500 | |||||||
HPE | Term Loan Facility | Seattle SpinCo, Inc. | ||||||||
Cash flows from financing activities: | ||||||||
Face amount of debt instrument | $ 2,600 | |||||||
|
Overview and Basis of Presentation |
9 Months Ended |
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Jul. 31, 2018 | |
Accounting Policies [Abstract] | |
Overview and Basis of Presentation | Overview and Basis of Presentation Background Hewlett Packard Enterprise Company ("Hewlett Packard Enterprise", "HPE" or "the Company") is an industry leading technology company that enables customers to go further, faster. With a deep and comprehensive portfolio, spanning the cloud to the data center to the intelligent edge, its technology and services help customers around the world make better business outcomes. Hewlett Packard Enterprise's customers range from small- and medium-sized businesses ("SMBs") to large global enterprises. 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, of 100% of the outstanding shares of Hewlett Packard Enterprise Company to HP Inc.'s stockholders (the "Separation"). Discontinued Operations On April 1, 2017, HPE completed the separation and merger of its Enterprise Services business with Computer Sciences Corporation ("CSC") (collectively, the "Everett Transaction"). HPE transferred its Enterprise Services business to Everett SpinCo, Inc. (a wholly-owned subsidiary of HPE) ("Everett") and distributed all of the shares of Everett to HPE stockholders. Following the distribution, New Everett Merger Sub Inc., a wholly-owned subsidiary of Everett, merged with and into CSC and Everett changed its name to DXC Technology Company ("DXC"). On September 1, 2017, the Company completed the separation and merger of its Software business segment with Micro Focus International plc (“Micro Focus”) (collectively, the “Seattle Transaction”). HPE transferred its Software business segment to Seattle SpinCo, Inc. (a wholly-owned subsidiary of HPE) ("Seattle"), and distributed all of the shares of Seattle to HPE stockholders. Following the share distribution, Seattle MergerSub, Inc., an indirect, wholly-owned subsidiary of Micro Focus, merged with and into Seattle. The historical financial results of Everett and Seattle are reported as Net loss from discontinued operations in the Condensed Consolidated Statements of Earnings. For further information on discontinued operations, see Note 2, "Discontinued Operations". Basis of Presentation These 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 July 31, 2018 and October 31, 2017, its results of operations for the three and nine months ended July 31, 2018 and 2017 and its cash flows for the nine months ended July 31, 2018 and 2017. The results of operations for the three and nine months ended July 31, 2018 and its cash flows for the nine months ended July 31, 2018, 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, 2017, including "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Quantitative and Qualitative Disclosures About Market Risk" and the Consolidated and Combined Financial Statements and notes thereto included in Items 7, 7A and 8, respectively, included therein. 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 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 (loss) 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 period presented. Segment Realignment and Reclassifications See Note 3, "Segment Information", for a discussion of the Company's segment realignment. Use of Estimates The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company's Condensed Consolidated Financial Statements and accompanying notes. Actual results could differ materially from those estimates. Acquisition On June 1, 2018 the Company completed the acquisition of Plexxi, a leading provider of software-defined data fabric networking technology. Plexxi's results of operations have been included within the Hybrid IT segment from the date of the acquisition. Recent Tax Legislation On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was enacted into law. The Tax Act includes significant changes to the U.S. corporate income tax structure, including a federal corporate rate reduction from 35% to 21% effective January 1, 2018; limitations on the deductibility of interest expense and executive compensation; creation of new minimum taxes such as the Base Erosion Anti-abuse Tax (“BEAT”) and the Global Intangible Low Taxed Income (“GILTI”) tax; and the transition of U.S. international taxation from a worldwide tax system to a modified territorial tax system, which will result in a one-time U.S. tax liability on those earnings which have not previously been repatriated to the U.S. (the “Transition Tax”). In December 2017, the U.S. Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), which allows the Company to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. Due to the complexity involved in applying the provisions of the Tax Act, the Company has not completed the accounting for the effects of the Tax Act, but has made reasonable estimates of the effects and recorded provisional amounts in its Condensed Consolidated Financial Statements for the three and nine months ended July 31, 2018. The accounting for the tax effects of the Tax Act will be completed during the measurement period in accordance with SAB 118. For further details, see Note 7, "Taxes on Earnings". Recently Adopted Accounting Pronouncements In March 2018, the Financial Accounting Standards Board (“FASB”) issued guidance that amends ASC 740, Income Taxes, to reflect and codify SAB 118. The guidance became effective upon issuance. The Company applied SAB 118 upon the original issuance in December 2017 prior to the codification. See Note 7, “Taxes on Earnings” for a full description of the impact of the Tax Act to the Company's operations. In March 2016, the FASB amended the existing accounting standards for employee share-based payment arrangements. The new guidance requires excess tax benefits and tax deficiencies to be recorded in the income statement when stock awards vest or are settled. In addition, cash flows related to excess tax benefits will no longer be separately classified as an inflow from financing activities, with a corresponding outflow from operating activities, but will be classified along with other income tax cash flows as an operating activity. The standard also allows the Company to repurchase more of an employee’s vesting shares for tax withholding purposes without triggering liability accounting and clarifies that all cash payments made to tax authorities on an employee’s behalf for withheld shares should be presented as a financing activity on the statement of cash flows. The Company adopted the guidance in the first quarter of fiscal 2018 and prospectively recorded all excess tax benefits and tax deficiencies arising from stock awards vesting or settled as income tax expense or benefit, rather than in equity. For the three and nine months ended July 31, 2018, the impact of the adoption was the recognition of $26 million and $68 million respectively, of net excess tax benefits as a component of the (provision) benefit for income taxes. The Company elected to continue to estimate forfeitures of awards in determining stock-based compensation expense. The Company elected to apply the presentation requirements for cash flows retrospectively, which resulted in an increase to Net cash provided by operating activities of $441 million and a corresponding increase to Net cash used in financing activities for the nine months ended July 31, 2017. There were no other material impacts to the Company's Condensed Consolidated Financial Statements as a result of adopting this standard. Recently Enacted Accounting Pronouncements In February 2018, the FASB issued guidance that allows companies to reclassify stranded tax effects resulting from the Tax Act, from accumulated other comprehensive income to retained earnings. The guidance also requires certain new disclosures regardless of the election. The Company is required to adopt the guidance in the first quarter of fiscal 2020. Early adoption is permitted. The Company is currently evaluating the timing and the impact of these amendments to its Condensed Consolidated Financial Statements. In February 2016, the FASB amended the existing accounting standards for leases. The amendments require lessees to record, at lease inception, a lease liability for the obligation to make lease payments and a right-of-use ("ROU") asset for the right to use the underlying asset for the lease term on their balance sheets. Lessees may elect to not recognize lease liabilities and ROU assets for most leases with terms of 12 months or less. The lease liability is measured at the present value of the lease payments over the lease term. The ROU asset will be based on the liability, adjusted for lease prepayments, lease incentives received, and the lessee's initial direct costs. For finance leases, lease expense will be the sum of interest on the lease obligation and amortization of the ROU asset, resulting in a front-loaded expense pattern. For operating leases, lease expense will generally be recognized on a straight-line basis over the lease term. The amended lessor accounting model is similar to the current model, updated to align with certain changes to the lessee model and the new revenue standard. The current sale-leaseback guidance, including guidance applicable to real estate, is also replaced with a new model for both lessees and lessors. The Company is required to adopt the guidance in the first quarter of fiscal 2020 and early adoption is permitted. In addition, the FASB provided a practical expedient transition method to adopt the new lease requirements by allowing companies to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption that would enable the Company to not provide comparative period financial statements. Instead, the Company would apply the transition provisions at its effective date. The Company is currently evaluating the timing and the impact of these amendments on its Condensed Consolidated Financial Statements. In May 2014, the FASB amended the existing accounting standards for revenue recognition. The Company plans to adopt the new revenue standard in the first quarter of fiscal 2019, beginning November 1, 2018, using the modified retrospective method. The Company has completed a review of the accounting systems and processes required to apply the modified retrospective method. In response, the Company is in the process of implementing a new IT solution as part of the adoption of the new standard. The Company expects revenue recognition for its broad portfolio of hardware, software and services offerings to remain largely unchanged. However, the guidance is expected to change the timing of revenue recognition in certain areas, including accounting for certain software licenses. The Company is still assessing the impact of these changes. Since the Company currently expenses sales commissions as incurred, the requirement in the new standard to capitalize certain sales commissions will result in an accounting change for the Company. The Company is in the process of quantifying the impact on its Consolidated Financial Statements. The Company will continue to assess the impact of the new revenue standard as it works through the adoption in fiscal 2018, and there still remain areas to be fully concluded upon. 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, 2017. |
Discontinued Operations |
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Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations | Discontinued Operations On April 1, 2017 and September 1, 2017, the Company completed the Everett and Seattle Transactions, respectively. As a result, the financial results of Everett and Seattle are presented as Net loss from discontinued operations in the Condensed Consolidated Statements of Earnings. The following table presents the financial results for HPE's discontinued operations.
For the three and nine months ended July 31, 2017, significant non-cash items of discontinued operations consisted of depreciation and amortization of $44 million and $514 million, respectively. For the nine months ended July 31, 2017, purchases of property, plant and equipment of discontinued operations consisted of $153 million. |
Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information Hewlett Packard Enterprise's operations are organized into four segments for financial reporting purposes: Hybrid IT, Intelligent Edge, Financial Services ("FS"), and Corporate Investments. Hewlett Packard Enterprise's organizational structure is based on a number of factors that the Chief Operating Decision Maker ("CODM"), the Chief Executive Officer ("CEO"), uses to evaluate, view and run its business operations, which include, but are not limited to, customer base and homogeneity of products and technology. The 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. Hybrid IT provides a broad portfolio of services-led and software-enabled infrastructure and solutions including secure, software-defined servers, storage, data center networking and HPE Pointnext services, thereby combining HPE's hardware, software and services capabilities to make Hybrid IT simple for its customers. Described below are the business units and capabilities within Hybrid IT.
Intelligent Edge offers unified, software-defined Aruba Mobile First architecture solutions for connectivity in the campus and branch environments, including wireless local area network equipment, mobility and security software, switches, routers, network management products, and associated customer support, as well as industrial IoT solutions. Financial Services provides flexible investment solutions, such as leasing, financing, IT consumption, and utility programs and asset management services, for customers to enable the creation of unique technology deployment models and acquire complete IT solutions, including hardware, software and services from HPE and others. Providing flexible services and capabilities that support the entire IT life cycle, FS partners with customers globally to help build investment strategies that enhance their business agility and support their business transformation. FS offers a wide selection of investment solution capabilities for large enterprise customers and channel partners, along with an array of financial options to SMBs and educational and governmental entities. Corporate Investments includes Hewlett Packard Labs and certain business incubation projects. Segment Policy There have been no significant 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, 2017, except as described in the 'Segment Realignment' section below. Hewlett Packard Enterprise periodically engages in intercompany advanced royalty payment and licensing arrangements that may result in advance payments between subsidiaries. Revenues from these intercompany arrangements are deferred and recognized as earned over the term of the arrangement by the Hewlett Packard Enterprise legal entities involved in such transactions; however, these advanced payments are eliminated from revenues as reported by Hewlett Packard Enterprise and its business segments. Hewlett Packard Enterprise executed intercompany advanced royalty payment arrangements resulting in advanced payments of $439 million during the first nine months of fiscal 2017. In these transactions, the payments were received in the U.S. from a foreign consolidated affiliate, with a deferral of intercompany revenues over the term of the arrangements, approximately 15 years. The impact of these intercompany arrangements is eliminated from both Hewlett Packard Enterprise's consolidated and segment net revenues. Hewlett Packard Enterprise does not allocate to its segments certain operating expenses, which it manages at the corporate level. These unallocated costs include certain corporate costs and eliminations, stock-based compensation expense related to corporate and certain global functions, transformation costs, amortization of intangible assets, acquisition and other related charges, restructuring charges, separation costs and defined benefit plan settlement charges and remeasurement (benefit). Segment Realignment Effective at the beginning of the first quarter of fiscal 2018, the Company implemented organizational changes to align its segment financial reporting more closely with its current business structure. These organizational changes primarily include: (i) the transfer of the former Servers and Storage business units, the HPE Pointnext and CMS businesses within the former Technology Services business unit, and the data center networking business within the former Networking business unit, all of which were previously reported within the former Enterprise Group ("EG") segment, to the newly formed Hybrid IT segment; (ii) the transfer of the remaining networking products businesses, which include wireless local area network, campus and branch switching and edge compute within the former Networking business unit, and Aruba services within the former Technology Services business unit, all of which were previously reported within the former EG segment, to the newly formed Intelligent Edge segment; and (iii) the transfer of cloud-related activities previously reported within Corporate Investments to the Hybrid IT segment. The Company reflected these changes to its segment information retrospectively to the earliest period presented, which primarily resulted in the transfer of net revenue, related eliminations of intersegment revenues and operating profit or loss from the former business units and segments to the newly formed business units and segments as described above. The Company also implemented certain changes to its allocation methodology for stock-based compensation expense and certain corporate costs, which align to its segment financial reporting and are consistent with the manner in which the operating segments will be evaluated for performance on a prospective basis. The Company reflected these changes retrospectively to the earliest period presented, which resulted in: (i) the transfer of a portion of stock-based compensation expense, which under the prior allocation methodology was not allocated to the segments, to the Hybrid IT, Intelligent Edge and Financial Services segments; and (ii) the transfer of certain corporate function costs previously allocated to the segments to unallocated corporate costs. These changes had no impact on Hewlett Packard Enterprise's previously reported net revenue, earnings from operations, net earnings, or net earnings per share. Segment Operating Results
The reconciliation of segment operating results to Hewlett Packard Enterprise condensed consolidated results was as follows:
Net revenue by segment and business unit was as follows:
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Restructuring |
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Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring | Restructuring Summary of Restructuring Plans On September 14, 2015, former Parent's Board of Directors approved a restructuring plan (the "2015 Plan") in connection with the Separation. On May 23, 2012, former Parent adopted a multi-year restructuring plan (the "2012 Plan") designed to simplify business processes, accelerate innovation and deliver better results for customers, employees and stockholders. As of October 31, 2017, the 2015 and 2012 Plans were complete. Restructuring Activity In connection with the 2015 and 2012 Plans, restructuring charges of $2 million and $152 million have been recorded by the Company for the three months ended July 31, 2018 and 2017, respectively, and $14 million and $304 million for the nine months ended July 31, 2018 and 2017, respectively, based on restructuring activities impacting the Company's employees and infrastructure. For details on restructuring charges related to HPE Next, see Note 5, "HPE Next". Restructuring activities related to the Company's employees and infrastructure for the 2015 and 2012 Plans are presented in the table below:
The current restructuring liabilities related to the plans in the table above, reported in Accrued restructuring in the Condensed Consolidated Balance Sheets at July 31, 2018 and October 31, 2017, were $31 million and $158 million, respectively. The non-current restructuring liabilities related to the plans in the table above, reported in Other liabilities in the Condensed Consolidated Balance Sheets at July 31, 2018 and October 31, 2017, were $70 million and $96 million, respectively. HPE Next Transformation Costs The HPE Next initiative is expected to be implemented through fiscal 2020, during which time the Company expects to incur expenses for workforce reductions, to upgrade and simplify its IT infrastructure, and for other non-labor actions. These costs will be partially offset by proceeds resulting from real estate sales. During the three and nine months ended July 31, 2018, the Company incurred $131 million and $499 million in net charges associated with the HPE Next initiative, which were recorded within Transformation costs in the Condensed Consolidated Statements of Earnings and include the following:
Restructuring Plan On October 16, 2017, the Company's Board of Directors approved a restructuring plan in connection with the HPE Next initiative (the "HPE Next Plan"), which will be implemented through fiscal 2020. The changes to the workforce will vary by country, based on business needs, local legal requirements and consultations with employee work councils and other employee representatives, as appropriate, and are expected to be completed during fiscal 2019. As of July 31, 2018, the Company estimates that it will incur aggregate pre-tax restructuring charges of approximately $0.9 billion through fiscal 2020 in connection with the HPE Next Plan, of which approximately $0.7 billion relates to workforce reductions and approximately $0.2 billion relates to infrastructure, primarily real estate site exits.
As of July 31, 2018 and October 31, 2017, the current restructuring liability related to the HPE Next Plan, reported in Accrued restructuring in the Condensed Consolidated Balance Sheets, was $225 million and $287 million, respectively. The non-current restructuring liability related to the HPE Next Plan, reported in Other liabilities in the Condensed Consolidated Balance Sheets as of July 31, 2018 and October 31, 2017 was $62 million and $9 million, respectively. |
HPE Next |
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Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
HPE Next | Restructuring Summary of Restructuring Plans On September 14, 2015, former Parent's Board of Directors approved a restructuring plan (the "2015 Plan") in connection with the Separation. On May 23, 2012, former Parent adopted a multi-year restructuring plan (the "2012 Plan") designed to simplify business processes, accelerate innovation and deliver better results for customers, employees and stockholders. As of October 31, 2017, the 2015 and 2012 Plans were complete. Restructuring Activity In connection with the 2015 and 2012 Plans, restructuring charges of $2 million and $152 million have been recorded by the Company for the three months ended July 31, 2018 and 2017, respectively, and $14 million and $304 million for the nine months ended July 31, 2018 and 2017, respectively, based on restructuring activities impacting the Company's employees and infrastructure. For details on restructuring charges related to HPE Next, see Note 5, "HPE Next". Restructuring activities related to the Company's employees and infrastructure for the 2015 and 2012 Plans are presented in the table below:
The current restructuring liabilities related to the plans in the table above, reported in Accrued restructuring in the Condensed Consolidated Balance Sheets at July 31, 2018 and October 31, 2017, were $31 million and $158 million, respectively. The non-current restructuring liabilities related to the plans in the table above, reported in Other liabilities in the Condensed Consolidated Balance Sheets at July 31, 2018 and October 31, 2017, were $70 million and $96 million, respectively. HPE Next Transformation Costs The HPE Next initiative is expected to be implemented through fiscal 2020, during which time the Company expects to incur expenses for workforce reductions, to upgrade and simplify its IT infrastructure, and for other non-labor actions. These costs will be partially offset by proceeds resulting from real estate sales. During the three and nine months ended July 31, 2018, the Company incurred $131 million and $499 million in net charges associated with the HPE Next initiative, which were recorded within Transformation costs in the Condensed Consolidated Statements of Earnings and include the following:
Restructuring Plan On October 16, 2017, the Company's Board of Directors approved a restructuring plan in connection with the HPE Next initiative (the "HPE Next Plan"), which will be implemented through fiscal 2020. The changes to the workforce will vary by country, based on business needs, local legal requirements and consultations with employee work councils and other employee representatives, as appropriate, and are expected to be completed during fiscal 2019. As of July 31, 2018, the Company estimates that it will incur aggregate pre-tax restructuring charges of approximately $0.9 billion through fiscal 2020 in connection with the HPE Next Plan, of which approximately $0.7 billion relates to workforce reductions and approximately $0.2 billion relates to infrastructure, primarily real estate site exits.
As of July 31, 2018 and October 31, 2017, the current restructuring liability related to the HPE Next Plan, reported in Accrued restructuring in the Condensed Consolidated Balance Sheets, was $225 million and $287 million, respectively. The non-current restructuring liability related to the HPE Next Plan, reported in Other liabilities in the Condensed Consolidated Balance Sheets as of July 31, 2018 and October 31, 2017 was $62 million and $9 million, respectively. |
Retirement and Post-Retirement Benefit Plans |
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Retirement Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement and Post-Retirement Benefit Plans | Retirement and Post-Retirement Benefit Plans The Company's net pension benefit cost for defined benefit plans recognized in the Condensed Consolidated Statements of Earnings for the three and nine months ended July 31, 2018 and 2017, was as follows:
Net pension benefit cost for the Company's post-retirement benefit plans was not material for the three and nine months ended July 31, 2018 and 2017. 401(k) Plan Effective January 1, 2018, the Hewlett Packard Enterprise Company 401(k) Plan ("HPE 401(k) Plan") was amended such that quarterly employer matching contributions will be 100% of an employee's contributions, up to a maximum of 4% of eligible compensation. During 2017, the Company's active U.S. employees were eligible to participate in the HPE 401(k) Plan, under which the annual employer matching contribution was 50% of an employee’s contributions, on a maximum of 6% of eligible compensation. |
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 2.8% and (128.0)% for the three months ended July 31, 2018 and 2017, respectively, and 1,003.9% and 89.9% for the nine months ended July 31, 2018 and 2017, respectively. The effective tax rate for three months ended July 31, 2018 was impacted by various items discrete to the quarter. The effective tax rate for nine months ended July 31, 2018 was significantly impacted by the Tax Act and the settlement of certain pre-Separation tax liabilities of HP Inc. For the three and nine months ended July 31, 2018, the Company recorded $68 million and $3.3 billion of net income tax benefits, respectively, related to various items discrete to the period. For the three months ended July 31, 2018 this amount primarily included $38 million of income tax benefits from the release of non-U.S. valuation allowances on deferred tax assets following changes in foreign tax laws, $33 million of net income tax benefits for impacts related to U.S. tax reform and $26 million of net excess tax benefits related to stock-based compensation partially offset by $7 million of income tax charges related to tax indemnification with HP Inc. For the nine months ended July 31, 2018, this amount primarily included $2.0 billion of income tax benefits for the effects of the settlement of certain pre-Separation income tax liabilities, $713 million of net income tax benefits for impacts related to U.S. tax reform, $228 million of income tax benefits from foreign tax credits and from the release of non-U.S. valuation allowances on deferred tax assets and liabilities established in connection with the Everett Transaction following changes in foreign tax laws, $203 million of income tax benefits related to the liquidation of an insolvent non-U.S. subsidiary, $74 million of net income tax benefits on restructuring charges, separation costs and acquisition and other related charges, $68 million of net excess tax benefits related to stock-based compensation and $38 million of income tax benefits from the release of non-U.S. valuation allowances on deferred tax assets following changes in foreign tax laws. For the three and nine months ended July 31, 2017, the Company recorded $290 million of net income tax benefits and $236 million of net income tax charges, respectively, related to various items discrete to the period. For the three months ended July 31, 2017, this amount primarily included $189 million of income tax benefits related to the Everett transaction, $61 million of income tax benefits on restructuring charges, separation costs and acquisition and other related charges, $29 million of income tax benefits related to U.S. provision-to-return adjustments, and $25 million of income tax benefits related to the expiration of the statute of limitations on uncertain tax reserves partially offset by $26 million related to tax indemnification with HP Inc. For the nine months ended July 31, 2017, this amount primarily included $473 million of income tax charges from valuation allowances on U.S. state deferred tax assets and $57 million of income tax charges related to tax indemnification with HP Inc., partially offset by $129 million of net income tax benefits on restructuring charges, separation costs and acquisition and other related charges, $79 million of income tax benefits related to the Everett transaction, $29 million of income tax benefits related to U.S. provision-to-return adjustments and $25 million income tax benefits related to the expiration of the statute of limitations on uncertain tax reserves. Recent Tax Legislation See Note 1, "Overview and Basis of Presentation", for details related to the Tax Act. The Tax Act requires the Company to incur a one-time Transition Tax on deferred foreign income not previously subject to U.S. income tax at a rate of 15.5% for foreign cash and certain other net current assets and 8% on the remaining income. The GILTI and BEAT provisions of the Tax Act will be effective for the Company beginning November 1, 2018. The Company has an October 31 fiscal year end; therefore, the lower corporate tax rate enacted by the Tax Act will be phased in, resulting in a U.S. statutory federal rate of 23.3% for the fiscal year ending October 31, 2018 and 21% for subsequent fiscal years. The Company has not completed its accounting for the tax effects of the Tax Act. Reasonable estimates of the impacts of the Tax Act are provided in accordance with guidance from the SEC that allows for a measurement period of up to one year after the enactment date of the Tax Act to finalize the recording of the related tax impacts. Adjustments may materially impact the Company’s provision for income taxes and effective tax rate in the period in which the adjustments are made. The Company expects to complete the accounting under the Tax Act as soon as practicable, but in no event later than one year from the enactment date of the Tax Act. For the nine months ended July 31, 2018, the Company recorded a provisional estimate of $1.1 billion related to the Transition Tax, which was included in (Provision) benefit for taxes in the Condensed Consolidated Statements of Earnings. The adjustments made in the third quarter of fiscal 2018 were not significant. The final calculations of the Transition Tax may differ from estimates, potentially materially, due to, among other things, changes in interpretations of the Tax Act, analysis of proposed regulations and current and additional guidance from the Internal Revenue Service ("IRS"), the Company’s analysis of the Tax Act, or any updates or changes to estimates that the Company utilized to calculate the transition impacts, including impacts from changes to current year earnings estimates and assertions. No cash payment is anticipated due to the availability of tax attributes to offset the Transition Tax. In addition, for the nine months ended July 31, 2018, the Company recorded a net $1.8 billion provisional tax benefit related to the remeasurement of U.S. deferred tax assets and liabilities as a result of the reduction of the U.S. corporate tax rate, which was included in (Provision) benefit for taxes in the Condensed Consolidated Statements of Earnings. The adjustments made in the third quarter of fiscal 2018 were not significant. As part of the remeasurement of the net U.S. deferred tax assets, the Company will need to reassess the realizability of certain deferred tax assets, including tax credits and other non-credit deferred tax assets, based on the new method of taxation on non-U.S. earnings applicable beginning in fiscal 2019 and such change may have a material impact. The Company's analysis of the future realization of the deferred tax assets is incomplete. Regarding the new GILTI tax rules, the Company is required to make an accounting policy election to either treat taxes due on future GILTI inclusions in U.S. taxable income as a current period expense when incurred or reflect such portion of the future GILTI inclusions in U.S. taxable income that relate to existing basis differences in the Company's current measurement of deferred taxes. The Company's analysis of the new GILTI tax rules and how they may impact the Company is in process. Accordingly, the Company has not made a policy election regarding the treatment of the GILTI tax. Uncertain Tax Positions As of July 31, 2018 and October 31, 2017, the amount of unrecognized tax benefits was $8.7 billion and $11.3 billion, respectively, of which up to $1.1 billion and $3.0 billion would affect the Company's effective tax rate if realized as of their respective periods. The Company is joint and severally liable for certain pre-Separation tax liabilities of HP Inc. HP Inc. is subject to numerous ongoing audits by federal, state and foreign tax authorities. During the nine months ended July 31, 2018, HP Inc. settled with the IRS on certain matters and closed pre-Separation Hewlett-Packard Company audits for fiscal years 2009 through 2012, for which the Company had been joint and severally liable, resulting in a reduction in the Company's unrecognized tax benefits of $2.6 billion. The Company recognizes interest income from favorable settlements and interest expense and penalties accrued on unrecognized tax benefits in (Provision) benefit for taxes in the Condensed Consolidated Statements of Earnings. As of July 31, 2018 and October 31, 2017, the Company recorded $179 million and $304 million, respectively, for interest and penalties in the Condensed Consolidated Balance Sheets. The Company engages in continuous discussions and negotiations with taxing authorities regarding tax matters in various jurisdictions. The Company does not expect complete resolution of any 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 transfer pricing, joint and several tax liabilities related to the Separation from HP Inc. 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 $85 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:
The Company periodically engages in intercompany advanced royalty payment and licensing arrangements that may result in advance payments between subsidiaries in different tax jurisdictions. When the local tax treatment of the intercompany licensing arrangements differs from the U.S. GAAP treatment, deferred taxes are recognized. For further details, see Note 3, "Segment Information". Tax Matters Agreement and Other Income Tax Matters In connection with the Separation, the Company entered into a Tax Matters Agreement with HP Inc. In connection with the Everett and Seattle Transactions, the Company entered into a Tax Matters Agreement with DXC and a Tax Matters Agreement with Micro Focus, respectively. For more details, see the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2017. |
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: Inventory
For the nine months ended July 31, 2018, the increase in inventory was due primarily to higher levels of strategic commodities inventory to support customer demand, increases in memory component costs, and higher inventory of server solutions which have longer time-to-shipment cycles. Property, Plant and Equipment
Notes Payable and Short-Term Borrowings
Warranties The Company's aggregate product warranty liability as of July 31, 2018, and changes during the nine months ended July 31, 2018 were as follows:
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Financing Receivables and Operating Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financing Receivables and Operating Leases | Financing Receivables and Operating Leases Financing receivables represent sales-type and direct-financing leases of the Company and third-party products. These receivables typically have terms ranging from two 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 components of financing receivables were as follows:
Sale of Financing Receivables During the three and nine months ended July 31, 2018 and 2017, the Company entered into arrangements to transfer the contractual payments due under certain financing receivables to third party financial institutions. During the nine months ended July 31, 2018 and 2017, the Company sold $127 million and $130 million, respectively, of financing receivables. The gains recognized on the sales of financing receivables were not material for both periods. Credit Quality Indicators The credit risk profile of gross financing receivables, based upon internal risk ratings, 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. Allowance for Doubtful Accounts The allowance for doubtful accounts for financing receivables as of July 31, 2018 and October 31, 2017 and the respective changes during the nine and twelve months then ended were as follows:
The gross financing receivables and related allowance evaluated for loss were as follows:
Non-Accrual and Past-Due Financing Receivables The following table summarizes the aging and non-accrual status of gross financing receivables:
Operating Leases Operating lease assets included in Property, plant and equipment in the Condensed Consolidated Balance Sheets were as follows:
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Goodwill |
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Goodwill | Goodwill Goodwill allocated to the Company's reportable segments as of July 31, 2018 and the change in the respective carrying amounts during the nine months then ended were as follows:
On November 1, 2017, the Company’s former EG segment was realigned into two new reportable segments, Hybrid IT and Intelligent Edge. The Company's reporting units are consistent with the reportable segments identified in Note 3, "Segment Information". As a result of this realignment, the Company performed an interim goodwill impairment analysis for Hybrid IT and Intelligent Edge as of November 1, 2017, which did not result in any impairment charges. The Company will continue to evaluate the recoverability of goodwill at the reporting unit level 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. |
Fair Value |
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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. Fair Value Hierarchy 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. Assets and liabilities are classified in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement: Level 1—Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2—Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and market-corroborated inputs. Level 3—Unobservable inputs for the asset or liability. The fair value hierarchy gives the highest priority to observable inputs and lowest priority to unobservable inputs. The following table presents the Company's assets and liabilities that are measured at fair value on a recurring basis:
During the nine months ended July 31, 2018, there were no transfers between levels within the fair value hierarchy. Other Fair Value Disclosures Short- and Long-Term Debt: At July 31, 2018 and October 31, 2017, the estimated fair value of the Company's short-term and long-term debt was $12.5 billion and $14.6 billion, respectively. |
Financial Instruments |
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Investments, All Other Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments | Financial Instruments Cash Equivalents and Available-for-Sale Investments Cash equivalents and available-for-sale investments were as follows:
As of July 31, 2018 and October 31, 2017, 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 the U.S. as of July 31, 2018 and October 31, 2017. The estimated fair value of the available-for-sale investments may not be representative of values that will be realized in the future. Contractual maturities of investments in available-for-sale debt securities were as follows:
Equity securities in privately held companies that are accounted for as cost method investments are included in Long-term financing receivables and other assets in the Condensed Consolidated Balance Sheets. These investments amounted to $165 million and $149 million at July 31, 2018 and October 31, 2017, 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 investments amounted to $2.5 billion at July 31, 2018 and October 31, 2017. 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. As of July 31, 2018 and October 31, 2017, information related to the potential effect of the Company's use of the master netting agreements and collateral security agreements was as follows:
Effect of Derivative Instruments on the Condensed Consolidated Statements of Earnings The pre-tax effect of derivative instruments and related hedged items in a fair value hedging relationship for the three and nine months ended July 31, 2018 and 2017 were as follows:
The pre-tax effect of derivative instruments in cash flow and net investment hedging relationships for the three and nine months ended July 31, 2018 were as follows:
The pre-tax effect of derivative instruments in cash flow and net investment hedging relationships for the three and nine months ended July 31, 2017 was as follows:
As of July 31, 2018 and 2017, no portion of the hedging instruments' gain or loss was excluded from the assessment of effectiveness for fair value, cash flow or net investment hedges. Hedge ineffectiveness for fair value, cash flow, and net investment hedges was not material for the three and nine months ended July 31, 2018 and 2017. As of July 31, 2018, the Company expects to reclassify an estimated net Accumulated other comprehensive gain of approximately $71 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. The pre-tax effect of derivative instruments not designated as hedging instruments on the Condensed Consolidated Statements of Earnings for the three and nine months ended July 31, 2018 and 2017 was as follows:
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Borrowings | Borrowings Long-Term Debt
As disclosed in Note 12, "Financial Instruments", the Company uses interest rate swaps to mitigate the exposure of its debt portfolio to changes in fair value resulting from changes in interest rates by achieving a primarily U.S. dollar LIBOR-based floating interest expense. As of July 31, 2018, the Company had entered into interest rate swaps to reduce the exposure of $7.9 billion of aggregate principal amount of fixed rate senior notes to changes in fair value resulting from changes in interest rates by achieving LIBOR-based floating interest expense. Interest rates on long-term debt in the table above have not been adjusted to reflect the impact of any interest rate swaps. |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Stockholders' Equity Taxes related to Other Comprehensive Income (Loss)
Changes and reclassifications related to Other Comprehensive Income (Loss), net of taxes
The components of Accumulated other comprehensive loss, net of taxes as of July 31, 2018, and changes during the nine months ended July 31, 2018 were as follows:
Share Repurchase Program For the nine months ended July 31, 2018, the Company retired a total of 160 million shares under its share repurchase program through open market repurchases, which included 1.7 million shares that were unsettled open market repurchases as of October 31, 2017. Additionally, as of July 31, 2018, the Company had unsettled open market repurchases of 1.5 million shares. Shares repurchased during the nine months ended July 31, 2018 were recorded as a $2.6 billion reduction to stockholders' equity. On February 21, 2018, the Company's Board of Directors authorized an additional $2.5 billion under the share repurchase program. As of July 31, 2018, the Company had a remaining authorization of $5.7 billion for future share repurchases. On February 22, 2018, the Company announced an increase to the regular quarterly dividend from $0.075 per share to $0.1125 per share, which was effective in the third quarter of fiscal 2018. |
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Net Earnings Per Share | Net Earnings Per Share The Company calculates basic net EPS using net earnings (loss) 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:
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Litigation and Contingencies |
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Jul. 31, 2018 | |
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 IP, 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 July 31, 2018, 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 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 so as 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 and April 11, 2016, but were canceled at the request of the Customs Tribunal. The hearing has been rescheduled for September 12, 2018. 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 five 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 2018 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 stayed the case pending resolution of the arbitration proceedings. On November 30, 2017, three named plaintiffs and twelve opt-in plaintiffs filed a single arbitration demand. 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. Jackson, et al. v. HP Inc. and Hewlett Packard Enterprise. This putative nationwide class action was filed on July 24, 2017 in United States District Court for the Northern District of California. Plaintiffs purport to bring the lawsuit on behalf of themselves and other similarly situated African-Americans and individuals over the age of forty. Plaintiffs allege that defendants engaged in a pattern and practice of racial and age discrimination in lay-offs and promotions. Plaintiffs filed an amended complaint on September 29, 2017. On January 12, 2018, defendants moved to transfer the matter to the federal district court in the Northern District of Georgia. Defendants also moved to dismiss the claims on various grounds and to strike certain aspects of the proposed class definition. On July 11, 2018, the court granted defendants' motion to dismiss this action for improper venue, and also partially dismissed and struck certain claims without prejudice to re-filing in the appropriate venue. On July 23, 2018, plaintiffs re-filed their lawsuit in the United States District Court for the Northern District of Georgia. On August 9, 2018, Plaintiffs filed a notice of appeal of the dismissal of the Northern District of California action with the Ninth Circuit Court of Appeals. On August 15, 2018, Plaintiffs filed a motion to stay their lawsuit in the Northern District of Georgia. Defendants do not oppose this motion. Wall v. Hewlett Packard Enterprise Company and HP Inc. This certified California class action and Private Attorney General Act action was filed against Hewlett-Packard Company on January 17, 2012 and the fifth amended (and operative) complaint was filed against HP Inc. and Hewlett Packard Enterprise on June 28, 2016. The complaint alleges that the defendants paid earned incentive compensation late and failed to timely pay final wages in violation of the California Labor Code. On August 9, 2016, the court ordered the class certified without prejudice to a future motion to amend or modify the class certification order or to decertify. The scheduled January 22, 2018 trial date was vacated following the parties’ notification to the court that they had reached a preliminary agreement to resolve the dispute. The parties subsequently finalized and executed a settlement agreement and, on May 9, 2018, plaintiff filed a motion seeking preliminary approval of the settlement. On July 2, 2018, the court issued an order granting preliminary approval of the settlement. The final approval hearing date has not yet been scheduled. Hewlett-Packard Company v. Oracle (Itanium). On June 15, 2011, HP Inc. filed suit against Oracle in Santa Clara Superior Court 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. The matter eventually progressed to trial, which 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 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 HP 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 filed a notice of cross-appeal challenging the trial court’s denial of prejudgment interest. The schedule for appellate briefing and argument has not yet been established. The Company expects that any appeal could take several years to be resolved and could materially affect the amount ultimately recovered by the Company. The amounts ultimately awarded, if any, would be recorded in the period received. 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 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. The court has not yet ruled on the parties' motions. The scheduled start of the trial has been moved from October 29, 2018, to March 4, 2019. Pursuant to the Separation and Distribution agreement between Hewlett-Packard Enterprise and DXC, this is a shared litigation as it relates to both parties’ businesses. Network-1 Technologies, Inc. v. Alcatel-Lucent USA Inc., et al. This patent infringement action was filed in September 2011 in the United States District Court for the Eastern District of Texas and alleges 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. The Network-1 patent at issue expires in 2020. 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 stated it intends to appeal the jury verdict of non-infringement to the United States Court of Appeals for the Federal Circuit. DXC Technology Indemnification Demand. On March 27, 2018, DXC Technology (“DXC”) served an arbitration demand on HPE under the Separation and Distribution Agreement by and between HPE and DXC (f/k/a Everett SpinCo, Inc.) dated May 24, 2016, relating to the separation of HPE’s Enterprise Services business (the “ES Business”). The arbitration demand asserts that HPE is required to indemnify DXC for any transferred long-term capitalized lease obligations of the ES Business that exceed the threshold amount of $250 million. DXC contends that this $250 million threshold was exceeded by approximately $1.0 billion because the valuation of the assets underlying certain leases did not justify their classification as operating leases based on the terms of such leases, thereby rendering them long-term capitalized lease obligations. The arbitration demand follows DXC's November 8, 2017 request for indemnification on this same issue. The arbitration is scheduled to begin on February 4, 2019. HPE believes the relevant leases were properly classified as operating leases, DXC’s arbitration claim has no merit, and there is no basis for indemnification. HPE intends to vigorously defend its interests in this matter. 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. |
Indemnifications |
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Guarantees and Product Warranties [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Indemnifications | Indemnifications General Cross-indemnification and Tax Matters Agreements with HP Inc., DXC and Micro Focus In connection with the Separation and the Everett and Seattle Transactions, the Company entered into a Separation and Distribution Agreement and Tax Matters Agreement with each of HP Inc., DXC and affiliates, and Micro Focus and affiliates, effective November 1, 2015, March 31, 2017 and September 1, 2017, respectively. For further details on these agreements, see the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2017. As of July 31, 2018 and October 31, 2017, the Company’s receivable and payable balances related to indemnified litigation matters and other contingencies, and income tax-related indemnification covered by these agreements were as follows:
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Overview and Basis of Presentation (Policies) |
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Jul. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation These 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 July 31, 2018 and October 31, 2017, its results of operations for the three and nine months ended July 31, 2018 and 2017 and its cash flows for the nine months ended July 31, 2018 and 2017. The results of operations for the three and nine months ended July 31, 2018 and its cash flows for the nine months ended July 31, 2018, 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, 2017, including "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Quantitative and Qualitative Disclosures About Market Risk" and the Consolidated and Combined Financial Statements and notes thereto included in Items 7, 7A and 8, respectively, included therein. |
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 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 (loss) 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 period presented. |
Segment Realignment and Reclassifications | Segment Realignment and Reclassifications See Note 3, "Segment Information", for a discussion of the Company's segment realignment. |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company's Condensed Consolidated Financial Statements and accompanying notes. Actual results could differ materially from those estimates. |
Acquisition | Acquisition On June 1, 2018 the Company completed the acquisition of Plexxi, a leading provider of software-defined data fabric networking technology. Plexxi's results of operations have been included within the Hybrid IT segment from the date of the acquisition. |
Recent Tax Legislation | Recent Tax Legislation On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was enacted into law. The Tax Act includes significant changes to the U.S. corporate income tax structure, including a federal corporate rate reduction from 35% to 21% effective January 1, 2018; limitations on the deductibility of interest expense and executive compensation; creation of new minimum taxes such as the Base Erosion Anti-abuse Tax (“BEAT”) and the Global Intangible Low Taxed Income (“GILTI”) tax; and the transition of U.S. international taxation from a worldwide tax system to a modified territorial tax system, which will result in a one-time U.S. tax liability on those earnings which have not previously been repatriated to the U.S. (the “Transition Tax”). In December 2017, the U.S. Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), which allows the Company to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. Due to the complexity involved in applying the provisions of the Tax Act, the Company has not completed the accounting for the effects of the Tax Act, but has made reasonable estimates of the effects and recorded provisional amounts in its Condensed Consolidated Financial Statements for the three and nine months ended July 31, 2018. The accounting for the tax effects of the Tax Act will be completed during the measurement period in accordance with SAB 118. For further details, see Note 7, "Taxes on Earnings". |
Recently Adopted Accounting Pronouncements and Recently Enacted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In March 2018, the Financial Accounting Standards Board (“FASB”) issued guidance that amends ASC 740, Income Taxes, to reflect and codify SAB 118. The guidance became effective upon issuance. The Company applied SAB 118 upon the original issuance in December 2017 prior to the codification. See Note 7, “Taxes on Earnings” for a full description of the impact of the Tax Act to the Company's operations. In March 2016, the FASB amended the existing accounting standards for employee share-based payment arrangements. The new guidance requires excess tax benefits and tax deficiencies to be recorded in the income statement when stock awards vest or are settled. In addition, cash flows related to excess tax benefits will no longer be separately classified as an inflow from financing activities, with a corresponding outflow from operating activities, but will be classified along with other income tax cash flows as an operating activity. The standard also allows the Company to repurchase more of an employee’s vesting shares for tax withholding purposes without triggering liability accounting and clarifies that all cash payments made to tax authorities on an employee’s behalf for withheld shares should be presented as a financing activity on the statement of cash flows. The Company adopted the guidance in the first quarter of fiscal 2018 and prospectively recorded all excess tax benefits and tax deficiencies arising from stock awards vesting or settled as income tax expense or benefit, rather than in equity. For the three and nine months ended July 31, 2018, the impact of the adoption was the recognition of $26 million and $68 million respectively, of net excess tax benefits as a component of the (provision) benefit for income taxes. The Company elected to continue to estimate forfeitures of awards in determining stock-based compensation expense. The Company elected to apply the presentation requirements for cash flows retrospectively, which resulted in an increase to Net cash provided by operating activities of $441 million and a corresponding increase to Net cash used in financing activities for the nine months ended July 31, 2017. There were no other material impacts to the Company's Condensed Consolidated Financial Statements as a result of adopting this standard. Recently Enacted Accounting Pronouncements In February 2018, the FASB issued guidance that allows companies to reclassify stranded tax effects resulting from the Tax Act, from accumulated other comprehensive income to retained earnings. The guidance also requires certain new disclosures regardless of the election. The Company is required to adopt the guidance in the first quarter of fiscal 2020. Early adoption is permitted. The Company is currently evaluating the timing and the impact of these amendments to its Condensed Consolidated Financial Statements. In February 2016, the FASB amended the existing accounting standards for leases. The amendments require lessees to record, at lease inception, a lease liability for the obligation to make lease payments and a right-of-use ("ROU") asset for the right to use the underlying asset for the lease term on their balance sheets. Lessees may elect to not recognize lease liabilities and ROU assets for most leases with terms of 12 months or less. The lease liability is measured at the present value of the lease payments over the lease term. The ROU asset will be based on the liability, adjusted for lease prepayments, lease incentives received, and the lessee's initial direct costs. For finance leases, lease expense will be the sum of interest on the lease obligation and amortization of the ROU asset, resulting in a front-loaded expense pattern. For operating leases, lease expense will generally be recognized on a straight-line basis over the lease term. The amended lessor accounting model is similar to the current model, updated to align with certain changes to the lessee model and the new revenue standard. The current sale-leaseback guidance, including guidance applicable to real estate, is also replaced with a new model for both lessees and lessors. The Company is required to adopt the guidance in the first quarter of fiscal 2020 and early adoption is permitted. In addition, the FASB provided a practical expedient transition method to adopt the new lease requirements by allowing companies to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption that would enable the Company to not provide comparative period financial statements. Instead, the Company would apply the transition provisions at its effective date. The Company is currently evaluating the timing and the impact of these amendments on its Condensed Consolidated Financial Statements. In May 2014, the FASB amended the existing accounting standards for revenue recognition. The Company plans to adopt the new revenue standard in the first quarter of fiscal 2019, beginning November 1, 2018, using the modified retrospective method. The Company has completed a review of the accounting systems and processes required to apply the modified retrospective method. In response, the Company is in the process of implementing a new IT solution as part of the adoption of the new standard. The Company expects revenue recognition for its broad portfolio of hardware, software and services offerings to remain largely unchanged. However, the guidance is expected to change the timing of revenue recognition in certain areas, including accounting for certain software licenses. The Company is still assessing the impact of these changes. Since the Company currently expenses sales commissions as incurred, the requirement in the new standard to capitalize certain sales commissions will result in an accounting change for the Company. The Company is in the process of quantifying the impact on its Consolidated Financial Statements. The Company will continue to assess the impact of the new revenue standard as it works through the adoption in fiscal 2018, and there still remain areas to be fully concluded upon. 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, 2017. |
Segment Policy | Segment Policy There have been no significant 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, 2017, except as described in the 'Segment Realignment' section below. Hewlett Packard Enterprise periodically engages in intercompany advanced royalty payment and licensing arrangements that may result in advance payments between subsidiaries. Revenues from these intercompany arrangements are deferred and recognized as earned over the term of the arrangement by the Hewlett Packard Enterprise legal entities involved in such transactions; however, these advanced payments are eliminated from revenues as reported by Hewlett Packard Enterprise and its business segments. Hewlett Packard Enterprise executed intercompany advanced royalty payment arrangements resulting in advanced payments of $439 million during the first nine months of fiscal 2017. In these transactions, the payments were received in the U.S. from a foreign consolidated affiliate, with a deferral of intercompany revenues over the term of the arrangements, approximately 15 years. The impact of these intercompany arrangements is eliminated from both Hewlett Packard Enterprise's consolidated and segment net revenues. Hewlett Packard Enterprise does not allocate to its segments certain operating expenses, which it manages at the corporate level. These unallocated costs include certain corporate costs and eliminations, stock-based compensation expense related to corporate and certain global functions, transformation costs, amortization of intangible assets, acquisition and other related charges, restructuring charges, separation costs and defined benefit plan settlement charges and remeasurement (benefit). |
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. Fair Value Hierarchy 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. Assets and liabilities are classified in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement: Level 1—Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2—Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and market-corroborated inputs. Level 3—Unobservable inputs for the asset or liability. The fair value hierarchy gives the highest priority to observable inputs and lowest priority to unobservable inputs. |
Discontinued Operations (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Discontinued Operations | The following table presents the financial results for HPE's discontinued operations.
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Segment Information (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Operating Results from Continuing Operations | Segment Operating Results
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Reconciliation of Segment Operating Results | The reconciliation of segment operating results to Hewlett Packard Enterprise condensed consolidated results was as follows:
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Schedule of Net Revenue by Segment and Business Unit | Net revenue by segment and business unit was as follows:
|
Restructuring (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Activities | Restructuring activities related to the Company's employees and infrastructure for the 2015 and 2012 Plans are presented in the table below:
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HPE Next (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Costs | During the three and nine months ended July 31, 2018, the Company incurred $131 million and $499 million in net charges associated with the HPE Next initiative, which were recorded within Transformation costs in the Condensed Consolidated Statements of Earnings and include the following:
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Schedule of Restructuring Reserve by Cost | Restructuring activities related to the Company's employees and infrastructure for the 2015 and 2012 Plans are presented in the table below:
|
Retirement and Post-Retirement Benefit Plans (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Net Benefit Cost | The Company's net pension benefit cost for defined benefit plans recognized in the Condensed Consolidated Statements of Earnings for the three and nine months ended July 31, 2018 and 2017, was as follows:
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Taxes on Earnings (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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:
|
Balance Sheet Details (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory | Inventory
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Schedule of Property, Plant and Equipment | Property, Plant and Equipment
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Notes Payable and Short-Term Borrowings | Notes Payable and Short-Term Borrowings
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Changes in Aggregate Product Warranty Liabilities | The Company's aggregate product warranty liability as of July 31, 2018, and changes during the nine months ended July 31, 2018 were as follows:
|
Financing Receivables and Operating Leases (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Financing Receivables | The components of financing receivables were as follows:
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Credit Risk Profile of Gross Financing Receivables | The credit risk profile of gross financing receivables, based upon internal risk ratings, was as follows:
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Allowance for Doubtful Accounts for Financing Receivables | The allowance for doubtful accounts for financing receivables as of July 31, 2018 and October 31, 2017 and the respective changes during the nine and twelve months then ended were as follows:
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Gross Financing Receivables and Related Allowance Evaluated for Loss | The gross financing receivables and related allowance evaluated for loss 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:
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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:
|
Goodwill (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Allocation and Changes in the Carrying Amount of Goodwill | Goodwill allocated to the Company's reportable segments as of July 31, 2018 and the change in the respective carrying amounts during the nine months then ended were as follows:
|
Fair Value (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, All Other Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash Equivalents and Available-for-Sale Investments | Cash equivalents and available-for-sale investments were as follows:
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Contractual Maturities of Investments in Available-for-Sale Debt Securities | Contractual maturities of investments in available-for-sale debt securities 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 | As of July 31, 2018 and October 31, 2017, information related to the potential effect of the Company's use of the master netting agreements and collateral security agreements was as follows:
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Offsetting Liabilities | As of July 31, 2018 and October 31, 2017, information related to the potential effect of the Company's use of the master netting agreements and collateral security agreements was as follows:
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Pre-tax Effect of Derivative Instruments and Related Hedged Items in a Fair Value Hedging Relationship | The pre-tax effect of derivative instruments and related hedged items in a fair value hedging relationship for the three and nine months ended July 31, 2018 and 2017 were as follows:
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Pre-tax Effect of Derivative Instruments in Cash Flow and Net Investment Hedging Relationships | The pre-tax effect of derivative instruments in cash flow and net investment hedging relationships for the three and nine months ended July 31, 2018 were as follows:
The pre-tax effect of derivative instruments in cash flow and net investment hedging relationships for the three and nine months ended July 31, 2017 was as follows:
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Pre-tax Effect of Derivative Instruments Not Designated as Hedging Instruments on the Condensed Consolidated and Combined Statements of Earnings | The pre-tax effect of derivative instruments not designated as hedging instruments on the Condensed Consolidated Statements of Earnings for the three and nine months ended July 31, 2018 and 2017 was as follows:
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Borrowings (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of long-term debt | Long-Term Debt
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Stockholders' Equity (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Taxes Related to Other Comprehensive Income (Loss) | Taxes related to Other Comprehensive Income (Loss)
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Changes and Reclassifications Related to Other Comprehensive Income (Loss), Net of Taxes | Changes and reclassifications related to Other Comprehensive Income (Loss), net of taxes
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Components of Accumulated Other Comprehensive Loss, Net of Taxes | The components of Accumulated other comprehensive loss, net of taxes as of July 31, 2018, and changes during the nine months ended July 31, 2018 were as follows:
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Net Earnings Per Share (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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:
|
Indemnifications (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Guarantees and Product Warranties [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Indemnified Litigation Matters and Other Contingencies | As of July 31, 2018 and October 31, 2017, the Company’s receivable and payable balances related to indemnified litigation matters and other contingencies, and income tax-related indemnification covered by these agreements were as follows:
|
Overview and Basis of Presentation (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Jul. 31, 2018 |
Jul. 31, 2018 |
Jul. 31, 2017 |
|
Segment Reporting Information [Line Items] | |||
Net excess tax benefits | $ 26 | $ 68 | |
Net cash provided by (used in) operating activities | 1,638 | $ 504 | |
Net cash provided by financing activities | $ (4,341) | (1,310) | |
Accounting Standards Update 2016-09, Statutory Tax Withholding Component | |||
Segment Reporting Information [Line Items] | |||
Net cash provided by (used in) operating activities | 441 | ||
Net cash provided by financing activities | $ 441 |
Discontinued Operations - Narrative (Details) - Separation and merger transactions - Discontinued Operations, Disposed of by Means Other than Sale, Spinoff - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended |
---|---|---|
Jul. 31, 2017 |
Jul. 31, 2017 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Depreciation and amortization | $ 44 | $ 514 |
Purchases of property, plant and equipment | $ 153 |
Discontinued Operations - Schedule of Discontinued Operations, Financial Results (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jul. 31, 2018 |
Jul. 31, 2017 |
Jul. 31, 2018 |
Jul. 31, 2017 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Net loss from discontinued operations | $ (1) | $ (120) | $ (119) | $ (238) |
Separation and merger transactions | Discontinued Operations, Disposed of by Means Other than Sale, Spinoff | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Net revenue | 0 | 708 | 0 | 8,337 |
Cost of revenue | 0 | 218 | 0 | 5,838 |
Expenses | 0 | 647 | 51 | 2,888 |
Interest and other, net | 0 | 10 | 68 | 13 |
Loss from discontinued operations before taxes | 0 | (167) | (119) | (402) |
(Provision) benefit for taxes | (1) | 47 | 0 | 164 |
Net loss from discontinued operations | $ (1) | $ (120) | $ (119) | $ (238) |
Segment Information - Narrative (Details) $ in Millions |
9 Months Ended | ||
---|---|---|---|
Nov. 01, 2017
segment
|
Jul. 31, 2018
segment
|
Jul. 31, 2017
USD ($)
|
|
Segment Reporting [Abstract] | |||
Number of segments | segment | 2 | 4 | |
Advanced payments from advanced royalty payment arrangements | $ | $ 439 | ||
Term of arrangements | 15 years |
Segment Information - Segment Operating Results from Continuing Operations (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jul. 31, 2018 |
Jul. 31, 2017 |
Jul. 31, 2018 |
Jul. 31, 2017 |
|
Segment Reporting Information [Line Items] | ||||
Net revenue | $ 7,764 | $ 7,501 | $ 22,906 | $ 21,211 |
Segment earnings (loss) from continuing operations | 516 | 201 | 1,174 | 849 |
Intersegment net revenue and other | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 192 | 187 | 537 | 740 |
Operating Segment | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 7,956 | 7,688 | 23,443 | 21,951 |
Segment earnings (loss) from continuing operations | 801 | 631 | 2,195 | 1,975 |
Hybrid IT | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 6,058 | 5,898 | 18,086 | 16,782 |
Hybrid IT | Intersegment net revenue and other | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 185 | 182 | 511 | 690 |
Hybrid IT | Operating Segment | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 6,243 | 6,080 | 18,597 | 17,472 |
Segment earnings (loss) from continuing operations | 661 | 482 | 1,890 | 1,672 |
Intelligent Edge | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 784 | 707 | 2,100 | 1,864 |
Intelligent Edge | Intersegment net revenue and other | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 1 | 4 | 15 | 23 |
Intelligent Edge | Operating Segment | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 785 | 711 | 2,115 | 1,887 |
Segment earnings (loss) from continuing operations | 91 | 104 | 155 | 166 |
Financial Services | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 922 | 896 | 2,721 | 2,565 |
Financial Services | Intersegment net revenue and other | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 6 | 1 | 11 | 27 |
Financial Services | Operating Segment | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 928 | 897 | 2,732 | 2,592 |
Segment earnings (loss) from continuing operations | 73 | 69 | 217 | 222 |
Corporate Investments | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 0 | 0 | (1) | 0 |
Corporate Investments | Intersegment net revenue and other | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 0 | 0 | 0 | 0 |
Corporate Investments | Operating Segment | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 0 | 0 | (1) | 0 |
Segment earnings (loss) from continuing operations | $ (24) | $ (24) | $ (67) | $ (85) |
Segment Information - Reconciliation of Segment Operating Results (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jul. 31, 2018 |
Jul. 31, 2017 |
Jul. 31, 2018 |
Jul. 31, 2017 |
|
Net revenue: | ||||
Net revenue | $ 7,764 | $ 7,501 | $ 22,906 | $ 21,211 |
Earnings before taxes: | ||||
Total segment earnings from operations | 516 | 201 | 1,174 | 849 |
Amortization of intangible assets | (72) | (97) | (222) | (235) |
Restructuring charges | (2) | (152) | (14) | (304) |
Transformation costs | (131) | (31) | (499) | (31) |
Acquisition and other related charges | (24) | (56) | (70) | (150) |
Separation costs | 2 | (5) | 0 | (46) |
Interest and other, net | (64) | (87) | (163) | (251) |
Tax indemnification adjustments | 2 | 10 | (1,342) | (1) |
Earnings (loss) from equity interests | 11 | 1 | 23 | (24) |
Earnings (loss) from continuing operations before taxes | 465 | 125 | (308) | 573 |
Operating Segment | ||||
Net revenue: | ||||
Net revenue | 7,956 | 7,688 | 23,443 | 21,951 |
Earnings before taxes: | ||||
Total segment earnings from operations | 801 | 631 | 2,195 | 1,975 |
Elimination of intersegment net revenue and other | ||||
Net revenue: | ||||
Net revenue | 192 | 187 | 537 | 740 |
Segment Reconciling Items | ||||
Earnings before taxes: | ||||
Unallocated corporate costs and eliminations | (44) | (88) | (152) | (308) |
Unallocated stock-based compensation expense | (14) | (23) | (64) | (90) |
Amortization of intangible assets | (72) | (97) | (222) | (235) |
Restructuring charges | (2) | (152) | (14) | (304) |
Transformation costs | (131) | (31) | (499) | (31) |
Acquisition and other related charges | (24) | (56) | (70) | (150) |
Separation costs | 2 | (5) | 0 | (46) |
Defined benefit plan settlement (charges) and remeasurement benefit | 0 | 22 | 0 | 38 |
Interest and other, net | (64) | (87) | (163) | (251) |
Tax indemnification adjustments | 2 | 10 | (1,342) | (1) |
Earnings (loss) from equity interests | $ 11 | $ 1 | $ 23 | $ (24) |
Segment Information - Schedule of Net Revenue by Segment and Business Unit (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jul. 31, 2018 |
Jul. 31, 2017 |
Jul. 31, 2018 |
Jul. 31, 2017 |
|
Segment Reporting Information [Line Items] | ||||
Net revenue | $ 7,764 | $ 7,501 | $ 22,906 | $ 21,211 |
Hybrid IT | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 6,058 | 5,898 | 18,086 | 16,782 |
Intelligent Edge | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 784 | 707 | 2,100 | 1,864 |
Financial Services | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 922 | 896 | 2,721 | 2,565 |
Corporate Investments | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 0 | 0 | (1) | 0 |
Operating Segment | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 7,956 | 7,688 | 23,443 | 21,951 |
Operating Segment | Hybrid IT | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 6,243 | 6,080 | 18,597 | 17,472 |
Operating Segment | Hybrid IT | Total Hybrid IT Product | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 4,456 | 4,280 | 13,129 | 12,048 |
Operating Segment | Hybrid IT | Compute | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 3,510 | 3,340 | 10,215 | 9,516 |
Operating Segment | Hybrid IT | Storage | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 887 | 877 | 2,747 | 2,375 |
Operating Segment | Hybrid IT | DC Networking | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 59 | 63 | 167 | 157 |
Operating Segment | Hybrid IT | Pointnext | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 1,787 | 1,800 | 5,468 | 5,424 |
Operating Segment | Intelligent Edge | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 785 | 711 | 2,115 | 1,887 |
Operating Segment | Intelligent Edge | HPE Aruba Product | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 706 | 642 | 1,890 | 1,683 |
Operating Segment | Intelligent Edge | HPE Aruba Services | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 79 | 69 | 225 | 204 |
Operating Segment | Financial Services | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 928 | 897 | 2,732 | 2,592 |
Operating Segment | Corporate Investments | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 0 | 0 | (1) | 0 |
Elimination of intersegment net revenue and other | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 192 | 187 | 537 | 740 |
Elimination of intersegment net revenue and other | Hybrid IT | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 185 | 182 | 511 | 690 |
Elimination of intersegment net revenue and other | Intelligent Edge | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 1 | 4 | 15 | 23 |
Elimination of intersegment net revenue and other | Financial Services | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 6 | 1 | 11 | 27 |
Elimination of intersegment net revenue and other | Corporate Investments | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | $ 0 | $ 0 | $ 0 | $ 0 |
Restructuring - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Jul. 31, 2018 |
Jul. 31, 2017 |
Jul. 31, 2018 |
Jul. 31, 2017 |
Oct. 31, 2017 |
|
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 2 | $ 152 | $ 14 | $ 304 | |
Current restructuring liability reported in Accrued restructuring | 256 | 256 | $ 445 | ||
Non-current restructuring liability reported in Other liabilities | 70 | 70 | 96 | ||
All Restructuring Plan | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | 14 | ||||
Current restructuring liability reported in Accrued restructuring | $ 31 | $ 31 | $ 158 |
Restructuring - Schedule of Restructuring Activities (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jul. 31, 2018 |
Jul. 31, 2017 |
Jul. 31, 2018 |
Jul. 31, 2017 |
|
Restructuring Reserve | ||||
Charges | $ 2 | $ 152 | $ 14 | $ 304 |
Cash payments | (540) | $ (688) | ||
Total | ||||
Restructuring Reserve | ||||
Balance at the beginning of the period | 254 | |||
Charges | 14 | |||
Cash payments | (167) | |||
Non-cash items | 0 | |||
Balance at the end of the period | 101 | 101 | ||
Total costs incurred to date, as of July 31, 2018 | 2,237 | 2,237 | ||
Total costs expected to be incurred, as of July 31, 2018 | 2,237 | 2,237 | ||
Employee Severance | 2015 Plan | ||||
Restructuring Reserve | ||||
Balance at the beginning of the period | 219 | |||
Charges | 5 | |||
Cash payments | (147) | |||
Non-cash items | (3) | |||
Balance at the end of the period | 74 | 74 | ||
Total costs incurred to date, as of July 31, 2018 | 747 | 747 | ||
Total costs expected to be incurred, as of July 31, 2018 | 747 | 747 | ||
Infrastructure and other | 2015 Plan | ||||
Restructuring Reserve | ||||
Balance at the beginning of the period | 17 | |||
Charges | (2) | |||
Cash payments | (8) | |||
Non-cash items | 4 | |||
Balance at the end of the period | 11 | 11 | ||
Total costs incurred to date, as of July 31, 2018 | 78 | 78 | ||
Total costs expected to be incurred, as of July 31, 2018 | 78 | 78 | ||
Infrastructure and other | 2012 Plan | ||||
Restructuring Reserve | ||||
Balance at the beginning of the period | 2 | |||
Charges | (1) | |||
Cash payments | 0 | |||
Non-cash items | 0 | |||
Balance at the end of the period | 1 | 1 | ||
Total costs incurred to date, as of July 31, 2018 | 145 | 145 | ||
Total costs expected to be incurred, as of July 31, 2018 | 145 | 145 | ||
Employee Severance and EER | 2012 Plan | ||||
Restructuring Reserve | ||||
Balance at the beginning of the period | 16 | |||
Charges | 12 | |||
Cash payments | (12) | |||
Non-cash items | (1) | |||
Balance at the end of the period | 15 | 15 | ||
Total costs incurred to date, as of July 31, 2018 | 1,267 | 1,267 | ||
Total costs expected to be incurred, as of July 31, 2018 | $ 1,267 | $ 1,267 |
HPE Next (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Jul. 31, 2018 |
Jul. 31, 2017 |
Jul. 31, 2018 |
Jul. 31, 2017 |
Oct. 31, 2017 |
|
Restructuring Cost and Reserve [Line Items] | |||||
Transformation costs | $ 131 | $ 31 | $ 499 | $ 31 | |
Current restructuring liability reported in Accrued restructuring | 256 | 256 | $ 445 | ||
Long-term portion of restructuring reserve, recorded in Other liabilities | 70 | 70 | 96 | ||
HPE Next | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Transformation costs | 131 | 499 | |||
Total costs expected to be incurred, as of July 31, 2018 | 900 | 900 | |||
Current restructuring liability reported in Accrued restructuring | 225 | 225 | 287 | ||
Long-term portion of restructuring reserve, recorded in Other liabilities | 62 | 62 | $ 9 | ||
HPE Next | Employee Severance | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Total costs expected to be incurred, as of July 31, 2018 | 700 | 700 | |||
HPE Next | Infrastructure and other | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Total costs expected to be incurred, as of July 31, 2018 | $ 200 | $ 200 |
HPE Next (Details 2) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jul. 31, 2018 |
Jul. 31, 2017 |
Jul. 31, 2018 |
Jul. 31, 2017 |
|
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 2 | $ 152 | $ 14 | $ 304 |
Total | 131 | $ 31 | 499 | $ 31 |
HPE Next | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Program management | 28 | 82 | ||
IT costs | 38 | 107 | ||
Restructuring charges | 129 | 385 | ||
Gain on real estate sales | (77) | (114) | ||
Other | 13 | 39 | ||
Total | $ 131 | $ 499 |
HPE Next (Details 3) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jul. 31, 2018 |
Jul. 31, 2017 |
Jul. 31, 2018 |
Jul. 31, 2017 |
|
Restructuring Reserve | ||||
Charges | $ 2 | $ 152 | $ 14 | $ 304 |
Cash payments | (540) | $ (688) | ||
HPE Next | ||||
Restructuring Reserve | ||||
Charges | 129 | 385 | ||
HPE Next | Employee Severance | ||||
Restructuring Reserve | ||||
Balance at the beginning of the period | 296 | |||
Charges | 347 | |||
Cash payments | (365) | |||
Non-cash items | (13) | |||
Balance at the end of the period | 265 | 265 | ||
Total costs incurred to date, as of July 31, 2018 | 643 | 643 | ||
Total costs expected to be incurred, as of July 31, 2018 | 750 | 750 | ||
HPE Next | Infrastructure and other | ||||
Restructuring Reserve | ||||
Balance at the beginning of the period | 0 | |||
Charges | 38 | |||
Cash payments | (8) | |||
Non-cash items | (8) | |||
Balance at the end of the period | 22 | 22 | ||
Total costs incurred to date, as of July 31, 2018 | 38 | 38 | ||
Total costs expected to be incurred, as of July 31, 2018 | $ 180 | $ 180 |
Retirement and Post-Retirement Benefit Plans - Narrative (Details) - HPE 401(k) |
12 Months Ended | |
---|---|---|
Jan. 01, 2018 |
Oct. 31, 2017 |
|
Defined Benefit Plan Disclosure [Line Items] | ||
Employer matching contribution | 100.00% | 50.00% |
Employer matching contribution percent of eligible compensation | 4.00% | 6.00% |
Retirement and Post-Retirement Benefit Plans - Summary of Net Benefit Cost (Details) - Benefit Plans - Non-U.S. Defined Benefit Plans - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jul. 31, 2018 |
Jul. 31, 2017 |
Jul. 31, 2018 |
Jul. 31, 2017 |
|
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Service cost | $ 26 | $ 36 | $ 79 | $ 106 |
Interest cost | 55 | 53 | 168 | 155 |
Expected return on plan assets | (139) | (137) | (423) | (401) |
Amortization and deferrals: | ||||
Actuarial loss | 52 | 60 | 158 | 200 |
Prior service benefit | (4) | (4) | (12) | (12) |
Net periodic benefit (credit) cost | (10) | 8 | (30) | 48 |
Settlement loss | 9 | 6 | 11 | 9 |
Special termination benefits | 1 | 1 | 5 | 3 |
Plan expense allocation | 0 | (1) | 0 | (17) |
Net benefit (credit) cost from continuing operations | 0 | 14 | (14) | 43 |
Discontinued operations | 0 | 3 | 0 | 83 |
Net benefit (credit) cost | $ 0 | $ 17 | $ (14) | $ 126 |
Taxes on Earnings - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Jul. 31, 2018 |
Jul. 31, 2017 |
Jul. 31, 2018 |
Jul. 31, 2017 |
Oct. 31, 2017 |
|
Income Tax Examination [Line Items] | |||||
Effective tax rate (as a percent) | 2.80% | (128.00%) | 1003.90% | 89.90% | |
Net income tax charges (benefits) | $ (68) | $ (290) | $ (3,300) | $ 236 | |
Release of non-U.S. valuation allowances on deferred tax assets | 38 | 38 | |||
Income tax benefits from U.S. tax reform | 33 | 713 | |||
Net excess tax benefits related to stock compensation | 26 | 68 | |||
Income tax benefit on restructuring charges, separation costs, transformation costs and acquisition and other related charges | 61 | 74 | 129 | ||
Pre-Separation tax matters | 7 | 2,000 | |||
Foreign tax credit | 228 | ||||
Benefit from liquidation of business | $ 203 | ||||
U.S. provision-to-return adjustments | 29 | 29 | |||
Accrued divestiture tax | 189 | 189 | |||
Tax indemnification | 26 | 57 | |||
Valuation allowance | 473 | ||||
Reduction resulting from lapse of applicable statute of limitations | $ 25 | 25 | |||
Federal statutory rate (as a percent) | 23.30% | ||||
Transition tax | $ 1,100 | ||||
Provisional tax benefit from Tax Cut and Jobs Act | 1,800 | ||||
Unrecognized tax benefits | 8,700 | 8,700 | $ 11,300 | ||
Unrecognized tax benefits that would affect effective tax rate if realized | 1,100 | 1,100 | 3,000 | ||
Decrease from settlements with IRS | 2,600 | ||||
Accrued income tax for interest and penalties | 179 | $ 179 | $ 304 | ||
Likelihood of no resolution period | 12 months | ||||
Reasonably possible reduction in existing unrecognized tax benefits within the next 12 months | $ 85 | $ 85 | |||
Likelihood of conclusion period for certain federal, foreign and state tax issues | 12 months | ||||
Discontinued Operations, Disposed of by Means Other than Sale, Spinoff | Everett SpinCo | |||||
Income Tax Examination [Line Items] | |||||
Net income tax charges (benefits) | $ (79) |
Taxes on Earnings - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions |
Jul. 31, 2018 |
Oct. 31, 2017 |
---|---|---|
Income Tax Disclosure [Abstract] | ||
Deferred tax assets - long-term | $ 5,933 | $ 4,663 |
Deferred tax liabilities - long-term | (235) | (104) |
Deferred tax assets net of deferred tax liabilities | $ 5,698 | $ 4,559 |
Balance Sheet Details - Schedule of Inventory (Details) - USD ($) $ in Millions |
Jul. 31, 2018 |
Oct. 31, 2017 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Finished goods | $ 1,382 | $ 1,236 |
Purchased parts and fabricated assemblies | 1,389 | 1,079 |
Total | $ 2,771 | $ 2,315 |
Balance Sheet Details - Schedule of Property, Plant and Equipment and Narrative (Details) - USD ($) $ in Millions |
Jul. 31, 2018 |
Oct. 31, 2017 |
---|---|---|
Property, Plant and Equipment, Net | ||
Property, plant and equipment, gross | $ 12,133 | $ 11,877 |
Accumulated depreciation | (5,949) | (5,608) |
Total | 6,184 | 6,269 |
Land | ||
Property, Plant and Equipment, Net | ||
Property, plant and equipment, gross | 296 | 312 |
Buildings and leasehold improvements | ||
Property, Plant and Equipment, Net | ||
Property, plant and equipment, gross | 2,260 | 2,371 |
Machinery and equipment, including equipment held for lease | ||
Property, Plant and Equipment, Net | ||
Property, plant and equipment, gross | $ 9,577 | $ 9,194 |
Balance Sheet Details - Notes Payable and Short-Term Borrowings (Details) - USD ($) $ in Millions |
Jul. 31, 2018 |
Oct. 31, 2017 |
---|---|---|
Long-term debt | ||
Current portion of long-term debt | $ 1,402 | $ 3,005 |
FS commercial paper | 442 | 401 |
Notes payable to banks, lines of credit and other | 482 | 444 |
Total | 2,326 | 3,850 |
Contract with Customer, Liability, Current | 113 | 52 |
Financial Services | ||
Long-term debt | ||
Notes payable to banks, lines of credit and other | $ 369 | $ 390 |
Balance Sheet Details - Changes in Aggregate Product Warranty Liabilities (Details) $ in Millions |
9 Months Ended |
---|---|
Jul. 31, 2018
USD ($)
| |
Changes in aggregated product warranty liabilities | |
Balance at beginning of period | $ 475 |
Accruals for warranties issued | 201 |
Adjustments related to pre-existing warranties | (6) |
Settlements made | (230) |
Balance at end of period | $ 440 |
Financing Receivables and Operating Leases - Narrative (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Jul. 31, 2018 |
Jul. 31, 2017 |
|
Leases [Abstract] | ||
Financing receivable term, low end of range | 2 years | |
Financing receivable term, high end of range | 5 years | |
Financing receivable sold | $ 127 | $ 130 |
Financing Receivables and Operating Leases - Components of Financing Receivables (Details) - USD ($) $ in Millions |
Jul. 31, 2018 |
Oct. 31, 2017 |
Oct. 31, 2016 |
---|---|---|---|
Leases [Abstract] | |||
Minimum lease payments receivable | $ 8,530 | $ 8,226 | |
Unguaranteed residual value | 290 | 272 | |
Unearned income | (705) | (654) | |
Financing receivables, gross | 8,115 | 7,844 | |
Allowance for doubtful accounts | (103) | (86) | $ (89) |
Financing receivables, net | 8,012 | 7,758 | |
Less: current portion | (3,435) | (3,378) | |
Amounts due after one year, net | $ 4,577 | $ 4,380 |
Financing Receivables and Operating Leases - Credit Risk Profile of Gross Financing Receivables (Details) - USD ($) $ in Millions |
Jul. 31, 2018 |
Oct. 31, 2017 |
---|---|---|
Gross financing receivables | ||
Gross financing receivables | $ 8,115 | $ 7,844 |
Low | ||
Gross financing receivables | ||
Gross financing receivables | 4,236 | 4,156 |
Moderate | ||
Gross financing receivables | ||
Gross financing receivables | 3,697 | 3,556 |
High | ||
Gross financing receivables | ||
Gross financing receivables | $ 182 | $ 132 |
Financing Receivables and Operating Leases - Allowance for Doubtful Accounts for Financing Receivables (Details) - USD ($) $ in Millions |
9 Months Ended | 12 Months Ended |
---|---|---|
Jul. 31, 2018 |
Oct. 31, 2017 |
|
Allowance for doubtful accounts | ||
Balance at beginning of period | $ 86 | $ 89 |
Provision for doubtful accounts | 27 | 23 |
Write-offs, net of recoveries | (10) | (26) |
Balance at end of period | $ 103 | $ 86 |
Financing Receivables and Operating Leases - Gross Financing Receivables and Related Allowance Evaluated for Loss (Details) - USD ($) $ in Millions |
Jul. 31, 2018 |
Oct. 31, 2017 |
Oct. 31, 2016 |
---|---|---|---|
Leases [Abstract] | |||
Gross financing receivables collectively evaluated for loss | $ 7,708 | $ 7,523 | |
Gross financing receivables individually evaluated for loss | 407 | 321 | |
Financing receivables, gross | 8,115 | 7,844 | |
Allowance for financing receivables collectively evaluated for loss | 75 | 67 | |
Allowance for financing receivables individually evaluated for loss | 28 | 19 | |
Total | $ 103 | $ 86 | $ 89 |
Financing Receivables and Operating Leases - Summary of the Aging and Non-accrual Status of Gross Financing Receivables (Details) - USD ($) $ in Millions |
Jul. 31, 2018 |
Oct. 31, 2017 |
---|---|---|
Billed: | ||
Current 1-30 days | $ 274 | $ 257 |
Past due 31-60 days | 59 | 52 |
Past due 61-90 days | 15 | 15 |
Past due 90 days | 84 | 58 |
Unbilled sales-type and direct-financing lease receivables | 7,683 | 7,462 |
Financing receivables, gross | 8,115 | 7,844 |
Gross financing receivables on non-accrual status | 246 | 188 |
Gross financing receivables 90 days past due and still accruing interest | $ 161 | $ 133 |
Financing Receivables and Operating Leases - Operating Lease Assets Included in Machinery and Equipment (Details) - USD ($) $ in Millions |
Jul. 31, 2018 |
Oct. 31, 2017 |
---|---|---|
Leases [Abstract] | ||
Equipment leased to customers | $ 7,486 | $ 7,356 |
Accumulated depreciation | (3,175) | (2,943) |
Total | $ 4,311 | $ 4,413 |
Goodwill - Schedule of Allocation and Changes in the Carrying Amount of Goodwill (Details) $ in Millions |
9 Months Ended |
---|---|
Jul. 31, 2018
USD ($)
| |
Goodwill [Roll Forward] | |
Goodwill beginning balance | $ 17,516 |
Goodwill acquired during the period | 105 |
Changes due to foreign currency | (1) |
Goodwill adjustments | 6 |
Goodwill ending balance | 17,626 |
Hybrid IT | |
Goodwill [Roll Forward] | |
Goodwill beginning balance | 15,454 |
Goodwill acquired during the period | 102 |
Changes due to foreign currency | (1) |
Goodwill adjustments | 6 |
Goodwill ending balance | 15,561 |
Intelligent Edge | |
Goodwill [Roll Forward] | |
Goodwill beginning balance | 1,918 |
Goodwill acquired during the period | 3 |
Changes due to foreign currency | 0 |
Goodwill adjustments | 0 |
Goodwill ending balance | 1,921 |
Financial Services | |
Goodwill [Roll Forward] | |
Goodwill beginning balance | 144 |
Goodwill acquired during the period | 0 |
Changes due to foreign currency | 0 |
Goodwill adjustments | 0 |
Goodwill ending balance | $ 144 |
Goodwill - Narrative (Details) - segment |
9 Months Ended | |
---|---|---|
Nov. 01, 2017 |
Jul. 31, 2018 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Number of segments | 2 | 4 |
Fair Value - Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions |
Jul. 31, 2018 |
Oct. 31, 2017 |
---|---|---|
Assets | ||
Total assets | $ 3,906 | $ 7,260 |
Liabilities | ||
Total liabilities | 501 | 477 |
Time deposits | ||
Assets | ||
Total assets | 954 | 1,159 |
Money market funds | ||
Assets | ||
Total assets | 2,461 | 5,592 |
Foreign bonds | ||
Assets | ||
Total assets | 137 | 223 |
Other debt securities | ||
Assets | ||
Total assets | 25 | 26 |
Foreign exchange contracts | ||
Assets | ||
Total assets | 327 | 259 |
Liabilities | ||
Total liabilities | 165 | 335 |
Other derivatives | ||
Assets | ||
Total assets | 2 | 1 |
Interest rate contracts | ||
Liabilities | ||
Total liabilities | 336 | 142 |
Level 1 | ||
Assets | ||
Total assets | 2,469 | 5,601 |
Liabilities | ||
Total liabilities | 0 | 0 |
Level 1 | Time deposits | ||
Assets | ||
Total assets | 0 | 0 |
Level 1 | Money market funds | ||
Assets | ||
Total assets | 2,461 | 5,592 |
Level 1 | Foreign bonds | ||
Assets | ||
Total assets | 8 | 9 |
Level 1 | Other debt securities | ||
Assets | ||
Total assets | 0 | 0 |
Level 1 | Foreign exchange contracts | ||
Assets | ||
Total assets | 0 | 0 |
Liabilities | ||
Total liabilities | 0 | 0 |
Level 1 | Other derivatives | ||
Assets | ||
Total assets | 0 | 0 |
Level 1 | Interest rate contracts | ||
Liabilities | ||
Total liabilities | 0 | 0 |
Level 2 | ||
Assets | ||
Total assets | 1,412 | 1,633 |
Liabilities | ||
Total liabilities | 501 | 477 |
Level 2 | Time deposits | ||
Assets | ||
Total assets | 954 | 1,159 |
Level 2 | Money market funds | ||
Assets | ||
Total assets | 0 | 0 |
Level 2 | Foreign bonds | ||
Assets | ||
Total assets | 129 | 214 |
Level 2 | Other debt securities | ||
Assets | ||
Total assets | 0 | 0 |
Level 2 | Foreign exchange contracts | ||
Assets | ||
Total assets | 327 | 259 |
Liabilities | ||
Total liabilities | 165 | 335 |
Level 2 | Other derivatives | ||
Assets | ||
Total assets | 2 | 1 |
Level 2 | Interest rate contracts | ||
Liabilities | ||
Total liabilities | 336 | 142 |
Level 3 | ||
Assets | ||
Total assets | 25 | 26 |
Liabilities | ||
Total liabilities | 0 | 0 |
Level 3 | Time deposits | ||
Assets | ||
Total assets | 0 | 0 |
Level 3 | Money market funds | ||
Assets | ||
Total assets | 0 | 0 |
Level 3 | Foreign bonds | ||
Assets | ||
Total assets | 0 | 0 |
Level 3 | Other debt securities | ||
Assets | ||
Total assets | 25 | 26 |
Level 3 | Foreign exchange contracts | ||
Assets | ||
Total assets | 0 | 0 |
Liabilities | ||
Total liabilities | 0 | 0 |
Level 3 | Other derivatives | ||
Assets | ||
Total assets | 0 | 0 |
Level 3 | Interest rate contracts | ||
Liabilities | ||
Total liabilities | $ 0 | $ 0 |
Fair Value - Narrative (Details) - USD ($) $ in Billions |
Jul. 31, 2018 |
Oct. 31, 2017 |
---|---|---|
Fair Value Disclosures [Abstract] | ||
Fair value, short-term and long-term debt | $ 12.5 | $ 14.6 |
Financial Instruments - Narrative (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Jul. 31, 2018 |
Oct. 31, 2017 |
|
Investment Holdings | ||
Investments in equity interests | $ 2,513 | $ 2,535 |
Equity securities in privately held companies | Long-Term Financing Receivables and Other Assets | ||
Investment Holdings | ||
Investment amount | 165 | $ 149 |
Cash flow hedges | ||
Investment Holdings | ||
Gain expected to be reclassified from Accumulated OCI into earnings in next 12 months | $ 71 |
Financial Instruments - Cash Equivalents and Available-for-Sale Investments (Details) - USD ($) $ in Millions |
Jul. 31, 2018 |
Oct. 31, 2017 |
---|---|---|
Cash and Cash Equivalents [Line Items] | ||
Total cash and equivalents and available-for-sale investments, Cost basis | $ 3,558 | $ 6,971 |
Gross Unrealized Gain | 21 | 40 |
Gross Unrealized Loss | (2) | (11) |
Total cash equivalents and available-for-sale investments | 3,577 | 7,000 |
Cost | ||
Cash and Cash Equivalents [Line Items] | ||
Total cash equivalents | 3,415 | 6,751 |
Cost | Time deposits | ||
Cash and Cash Equivalents [Line Items] | ||
Total cash equivalents | 954 | 1,159 |
Cost | Money market funds | ||
Cash and Cash Equivalents [Line Items] | ||
Total cash equivalents | 2,461 | 5,592 |
Fair Value | ||
Cash and Cash Equivalents [Line Items] | ||
Total cash equivalents | 3,415 | 6,751 |
Fair Value | Time deposits | ||
Cash and Cash Equivalents [Line Items] | ||
Total cash equivalents | 954 | 1,159 |
Fair Value | Money market funds | ||
Cash and Cash Equivalents [Line Items] | ||
Total cash equivalents | 2,461 | 5,592 |
Debt securities | ||
Cash and Cash Equivalents [Line Items] | ||
Debt securities, Amortized Cost | 143 | 220 |
Debt securities, Gross Unrealized Gain | 21 | 40 |
Debt securities, Gross Unrealized Loss | (2) | (11) |
Debt securities, Fair Value | 162 | 249 |
Foreign bonds | ||
Cash and Cash Equivalents [Line Items] | ||
Debt securities, Amortized Cost | 116 | 183 |
Debt securities, Gross Unrealized Gain | 21 | 40 |
Debt securities, Gross Unrealized Loss | 0 | 0 |
Debt securities, Fair Value | 137 | 223 |
Other debt securities | ||
Cash and Cash Equivalents [Line Items] | ||
Debt securities, Amortized Cost | 27 | 37 |
Debt securities, Gross Unrealized Gain | 0 | 0 |
Debt securities, Gross Unrealized Loss | (2) | (11) |
Debt securities, Fair Value | $ 25 | $ 26 |
Financial Instruments - Contractual Maturities of Investments in Available-for-Sale Debt Securities (Details) $ in Millions |
Jul. 31, 2018
USD ($)
|
---|---|
Amortized Cost | |
Due in more than five years | $ 143 |
Fair Value | |
Due in more than five years | $ 162 |
Financial Instruments - Gross Notional and Fair Value of Derivative Instruments in the Condensed Consolidated Balance Sheets (Details) - USD ($) $ in Millions |
Jul. 31, 2018 |
Oct. 31, 2017 |
---|---|---|
Derivatives, Fair Value | ||
Outstanding Gross Notional | $ 25,690 | $ 28,294 |
Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 231 | 202 |
Long-Term Financing Receivables and Other Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 98 | 58 |
Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 98 | 232 |
Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 403 | 245 |
Derivatives designated as hedging instruments | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 18,015 | 18,646 |
Derivatives designated as hedging instruments | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 204 | 140 |
Derivatives designated as hedging instruments | Long-Term Financing Receivables and Other Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 91 | 55 |
Derivatives designated as hedging instruments | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 64 | 153 |
Derivatives designated as hedging instruments | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 395 | 237 |
Derivatives designated as hedging instruments | Fair value hedges | Interest rate contracts | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 7,900 | 9,500 |
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 | 0 | 0 |
Derivatives designated as hedging instruments | Fair value hedges | Interest rate contracts | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 3 | 16 |
Derivatives designated as hedging instruments | Fair value hedges | Interest rate contracts | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 333 | 126 |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 8,298 | 7,202 |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 179 | 105 |
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 | 62 | 45 |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 39 | 101 |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 49 | 70 |
Derivatives designated as hedging instruments | Net investment hedges | Foreign exchange contracts | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 1,817 | 1,944 |
Derivatives designated as hedging instruments | Net investment hedges | Foreign exchange contracts | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 25 | 35 |
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 | 10 |
Derivatives designated as hedging instruments | Net investment hedges | Foreign exchange contracts | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 22 | 36 |
Derivatives designated as hedging instruments | Net investment hedges | Foreign exchange contracts | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 13 | 41 |
Derivatives not designated as hedging instruments | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 7,675 | 9,648 |
Derivatives not designated as hedging instruments | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 27 | 62 |
Derivatives not designated as hedging instruments | Long-Term Financing Receivables and Other Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 7 | 3 |
Derivatives not designated as hedging instruments | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 34 | 79 |
Derivatives not designated as hedging instruments | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 8 | 8 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 7,568 | 9,552 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 25 | 61 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | Long-Term Financing Receivables and Other Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 7 | 3 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 34 | 79 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 8 | 8 |
Derivatives not designated as hedging instruments | Other derivatives | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 107 | 96 |
Derivatives not designated as hedging instruments | Other derivatives | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 2 | 1 |
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 | 0 | 0 |
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) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Jul. 31, 2018 |
Oct. 31, 2017 |
|
Derivative assets | ||
Gross Amount Recognized | $ 329 | $ 260 |
Gross Amount Offset | 0 | 0 |
Net Amount Presented | 329 | 260 |
Gross Amounts Not Offset | ||
Derivatives | 160 | 209 |
Financial Collateral | 104 | 34 |
Net Amount | 65 | 17 |
Derivative liabilities | ||
Gross Amount Recognized | 501 | 477 |
Gross Amount Offset | 0 | 0 |
Net Amount Presented | 501 | 477 |
Gross Amounts Not Offset | ||
Derivatives | 160 | 209 |
Financial Collateral | 254 | 242 |
Net Amount | $ 87 | 26 |
Business days prior to reporting date | 2 days | |
Cash collateral | $ 205 | 220 |
Counterparty collateral | $ 49 | $ 22 |
Financial Instruments - Pre-tax Effect of Derivative Instruments and Related Hedged Items in a Fair Value Hedging Relationship (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jul. 31, 2018 |
Jul. 31, 2017 |
Jul. 31, 2018 |
Jul. 31, 2017 |
|
Interest rate contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (Losses) Recognized in Earnings on Derivative | $ 16 | $ 23 | $ (194) | $ (202) |
Gains (Losses) Recognized in Earnings on Related Hedged Item | (16) | (23) | 194 | 202 |
Cash flow hedges | Foreign exchange contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (Losses) Recognized in Other Comprehensive Income (OCI) on Derivatives (Effective Portion) | 149 | (133) | 50 | 7 |
Interest and other, net | Cash flow hedges | Foreign exchange contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (Losses) Recognized in Other Comprehensive Income (OCI) on Derivatives (Effective Portion) | $ 28 | $ 28 | $ (9) | $ 170 |
Financial Instruments - Pre-tax Effect of Derivative Instruments in Cash Flow and Net Investment Hedging Relationships (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jul. 31, 2018 |
Jul. 31, 2017 |
Jul. 31, 2018 |
Jul. 31, 2017 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net revenue | $ 7,764 | $ 7,501 | $ 22,906 | $ 21,211 |
Interest and other, net | (64) | (87) | (163) | (251) |
Earnings (loss) from continuing operations before taxes | 465 | 125 | (308) | 573 |
Net loss from discontinued operations | (1) | (120) | (119) | (238) |
Net earnings (loss) | 451 | 165 | 2,665 | (180) |
Foreign currency contracts | Cash flow hedges | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (Losses) Recognized in Other Comprehensive Income (OCI) on Derivatives (Effective Portion) | 149 | (133) | 50 | 7 |
Foreign currency contracts | Cash flow hedges | Gains (Losses) Reclassified from Accumulated OCI Into Earnings (Effective Portion) | Reclassifications of gains (losses) into earnings | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net revenue | 29 | (45) | (82) | 9 |
Interest and other, net | 14 | 29 | 4 | 178 |
Earnings (loss) from continuing operations before taxes | 43 | (16) | (78) | 187 |
Net loss from discontinued operations | 1 | 44 | ||
Net earnings (loss) | (15) | 231 | ||
Foreign currency contracts | Cash flow hedges | Net revenue | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (Losses) Recognized in Other Comprehensive Income (OCI) on Derivatives (Effective Portion) | 121 | (160) | 59 | (163) |
Foreign currency contracts | Cash flow hedges | Cost of products | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (Losses) Recognized in Other Comprehensive Income (OCI) on Derivatives (Effective Portion) | 0 | (1) | ||
Foreign currency contracts | Cash flow hedges | Interest and other, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (Losses) Recognized in Other Comprehensive Income (OCI) on Derivatives (Effective Portion) | 28 | 28 | (9) | 170 |
Foreign currency contracts | Cash flow hedges | Net earnings from continuing operations | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (Losses) Recognized in Other Comprehensive Income (OCI) on Derivatives (Effective Portion) | (132) | 6 | ||
Foreign currency contracts | Cash flow hedges | Net (loss) earnings from discontinued operations | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (Losses) Recognized in Other Comprehensive Income (OCI) on Derivatives (Effective Portion) | (1) | 1 | ||
Foreign currency contracts | Net investment hedges | Gains (Losses) Reclassified from Accumulated OCI Into Earnings (Effective Portion) | Reclassifications of gains (losses) into earnings | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Interest and other, net | 0 | 0 | 0 | 0 |
Foreign currency contracts | Net investment hedges | Interest and other, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (Losses) Recognized in Other Comprehensive Income (OCI) on Derivatives (Effective Portion) | $ 57 | $ (97) | $ 31 | $ (107) |
Financial Instruments - Pre-tax Effect of Derivative Instruments Not Designated as Hedging Instruments on the Condensed Consolidated and Combined Statements of Earnings (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jul. 31, 2018 |
Jul. 31, 2017 |
Jul. 31, 2018 |
Jul. 31, 2017 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (Losses) Recognized in Earnings on Derivatives | $ 233 | $ (279) | $ 104 | $ (521) |
Foreign currency contracts | Interest and other, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (Losses) Recognized in Earnings on Derivatives | 233 | (279) | 104 | (525) |
Other derivatives | Interest and other, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (Losses) Recognized in Earnings on Derivatives | $ 0 | $ 0 | $ 0 | $ 4 |
Borrowings (Details) - USD ($) |
9 Months Ended | 12 Months Ended | |
---|---|---|---|
Jul. 31, 2018 |
Oct. 31, 2017 |
Jun. 29, 2018 |
|
Long-term debt | |||
Total long-term debt | $ 9,963,000,000 | $ 10,182,000,000 | |
Fair value adjustment related to hedged debt | (336,000,000) | (142,000,000) | |
Unamortized debt issuance costs | (40,000,000) | (47,000,000) | |
Less: current portion | (1,402,000,000) | (3,005,000,000) | |
$2,650 issued at discount to par at a price of 99.872% in October 2015 at 2.85%, due October 5, 2018, interest payable semi-annually on April 5 and October 5 of each year | |||
Long-term debt | |||
Total long-term debt | 1,050,000,000 | 2,648,000,000 | |
Face amount of debt instrument | $ 2,650,000,000 | $ 2,650,000,000 | |
Discount to par (as a percent) | 99.872% | 99.872% | |
Interest rate | 2.85% | 2.85% | |
Repurchased face amount of debt | $ 1,600,000,000 | ||
$250 issued at par in October 2015 at three-month USD LIBOR plus 1.93%, due October 5, 2018, interest payable quarterly on January 5, April 5, July 5 and October 5 of each year | |||
Long-term debt | |||
Face amount of debt instrument | $ 250,000,000 | $ 250,000,000 | |
$250 issued at par in October 2015 at three-month USD LIBOR plus 1.93%, due October 5, 2018, interest payable quarterly on January 5, April 5, July 5 and October 5 of each year | LIBOR | |||
Long-term debt | |||
Total long-term debt | $ 250,000,000 | $ 250,000,000 | |
Spread on reference interest rate (as a percent) | 1.93% | 1.93% | |
$1,100 issued at discount to par at a price of 99.994% in September 2017 at 2.10%, due October 4, 2019, interest payable semi-annually on April 4 and October 4 of each year | |||
Long-term debt | |||
Total long-term debt | $ 1,100,000,000 | $ 1,100,000,000 | |
Face amount of debt instrument | $ 1,100,000,000 | $ 1,100,000,000 | |
Discount to par (as a percent) | 99.994% | 99.994% | |
Interest rate | 2.10% | 2.10% | |
$3,000 issued at discount to par at a price of 99.972% in October 2015 at 3.6%, due October 15, 2020, interest payable semi-annually on April 15 and October 15 of each year | |||
Long-term debt | |||
Total long-term debt | $ 3,000,000,000 | $ 3,000,000,000 | |
Face amount of debt instrument | $ 3,000,000,000 | $ 3,000,000,000 | |
Discount to par (as a percent) | 99.972% | 99.972% | |
Interest rate | 3.60% | 3.60% | |
$1,350 issued at discount to par at a price of 99.802% in October 2015 at 4.4%, due October 15, 2022, interest payable semi-annually on April 15 and October 15 of each year | |||
Long-term debt | |||
Total long-term debt | $ 1,348,000,000 | $ 1,348,000,000 | |
Face amount of debt instrument | $ 1,350,000,000 | $ 1,350,000,000 | |
Discount to par (as a percent) | 99.802% | 99.802% | |
Interest rate | 4.40% | 4.40% | |
$2,500 issued at discount to par at a price of 99.725% in October 2015 at 4.9%, due October 15, 2025, interest payable semi-annually on April 15 and October 15 of each year | |||
Long-term debt | |||
Total long-term debt | $ 2,495,000,000 | $ 2,495,000,000 | |
Face amount of debt instrument | $ 2,500,000,000 | $ 2,500,000,000 | |
Discount to par (as a percent) | 99.725% | 99.725% | |
Interest rate | 4.90% | 4.90% | |
$750 issued at discount to par at a price of 99.942% in October 2015 at 6.2%, due October 15, 2035, interest payable semi-annually on April 15 and October 15 of each year | |||
Long-term debt | |||
Total long-term debt | $ 750,000,000 | $ 750,000,000 | |
Face amount of debt instrument | $ 750,000,000 | $ 750,000,000 | |
Discount to par (as a percent) | 99.942% | 99.942% | |
Interest rate | 6.20% | 6.20% | |
$1,500 issued at discount to par at a price of 99.932% in October 2015 at 6.35%, due October 15, 2045, interest payable semi-annually on April 15 and October 15 of each year | |||
Long-term debt | |||
Total long-term debt | $ 1,499,000,000 | $ 1,499,000,000 | |
Face amount of debt instrument | $ 1,500,000,000 | $ 1,500,000,000 | |
Discount to par (as a percent) | 99.932% | 99.932% | |
Interest rate | 6.35% | 6.35% | |
Other, including capital lease obligations, at 0.00%-6.05%, due in calendar years 2017-2030(2) | |||
Long-term debt | |||
Other, including capital lease obligations, at 0.00%-6.05%, due in calendar years 2017-2030(2) | $ 249,000,000 | $ 286,000,000 | |
Other, including capital lease obligations, at 0.00%-6.05%, due in calendar years 2017-2030(2) | Financial Services | |||
Long-term debt | |||
Other, including capital lease obligations | $ 143,000,000 | $ 160,000,000 | |
Other, including capital lease obligations, at 0.00%-6.05%, due in calendar years 2017-2030(2) | Minimum | |||
Long-term debt | |||
Interest rate | 0.00% | 0.00% | |
Other, including capital lease obligations, at 0.00%-6.05%, due in calendar years 2017-2030(2) | Maximum | |||
Long-term debt | |||
Interest rate | 5.00% | 5.00% |
Borrowings (Details 2) $ in Billions |
Jul. 31, 2018
USD ($)
|
---|---|
Senior Notes | |
Debt instruments | |
Interest rate swaps value | $ 7.9 |
Stockholders' Equity - Taxes Related to Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jul. 31, 2018 |
Jul. 31, 2017 |
Jul. 31, 2018 |
Jul. 31, 2017 |
|
Taxes on change in net unrealized (losses) gains on available-for-sale securities: | ||||
Tax provision on net unrealized (losses) gains arising during the period | $ 0 | $ (1) | $ 0 | $ (2) |
Taxes on change in net unrealized gains (losses) on available-for-sale securities | 0 | (1) | 0 | (2) |
Taxes on change in net unrealized gains (losses) on cash flow hedges: | ||||
Tax (provision) benefit on net unrealized gains (losses) arising during the period | (20) | 47 | (6) | 20 |
Tax provision (benefit) on net (gains) losses reclassified into earnings | 5 | (10) | (11) | 35 |
Taxes on change in net unrealized (losses) gains on cash flow hedges | (15) | 37 | (17) | 55 |
Taxes on change in unrealized components of defined benefit plans: | ||||
Tax benefit (provision) on (losses) gains arising during the period | 3 | (13) | 2 | (38) |
Tax provision on amortization of actuarial loss and prior service benefit | (4) | (4) | (10) | (15) |
Tax provision on curtailments, settlements and other | (5) | (41) | (12) | (55) |
Taxes on change in unrealized components of defined benefit plans | (6) | (58) | (20) | (108) |
Tax benefit (provision) on change in cumulative translation adjustment | 2 | (4) | 3 | (3) |
Tax provision on other comprehensive income | $ (19) | $ (26) | $ (34) | $ (58) |
Stockholders' Equity - Changes and Reclassifications Related to Other Comprehensive Income (Loss), Net of Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jul. 31, 2018 |
Jul. 31, 2017 |
Jul. 31, 2018 |
Jul. 31, 2017 |
|
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Other comprehensive income, net of taxes | $ 76 | $ 184 | $ 175 | $ 660 |
Net unrealized gains (losses) on available-for-sale securities | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Other comprehensive (loss) income before reclassifications | (1) | |||
Gains reclassified into earnings | (9) | |||
Change in net unrealized (losses) gains on cash flow hedges | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Other comprehensive (loss) income before reclassifications | 44 | |||
Gains reclassified into earnings | 67 | |||
Change in unrealized components of defined benefit plans | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Other comprehensive (loss) income before reclassifications | (21) | |||
Gains reclassified into earnings | 132 | |||
Change in cumulative translation adjustment | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Other comprehensive (loss) income before reclassifications | (37) | |||
Gains reclassified into earnings | 0 | |||
Reclassifications of gains (losses) into earnings | Net unrealized gains (losses) on available-for-sale securities | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Other comprehensive (loss) income before reclassifications | (2) | 6 | (1) | (12) |
Gains reclassified into earnings | 0 | 0 | (9) | 0 |
Other comprehensive income, net of taxes | (2) | 6 | (10) | (12) |
Reclassifications of gains (losses) into earnings | Change in net unrealized (losses) gains on cash flow hedges | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Other comprehensive (loss) income before reclassifications | 129 | (86) | 44 | 27 |
Gains reclassified into earnings | (38) | 5 | 67 | (196) |
Other comprehensive income, net of taxes | 91 | (81) | 111 | (169) |
Reclassifications of gains (losses) into earnings | Change in unrealized components of defined benefit plans | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Other comprehensive income, net of taxes | 25 | 214 | 111 | 831 |
Reclassifications of gains (losses) into earnings | (Losses) gains arising during the period | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Gains reclassified into earnings | (22) | 197 | (21) | 662 |
Reclassifications of gains (losses) into earnings | Amortization of actuarial loss and prior service benefit | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Gains reclassified into earnings | 43 | 52 | 133 | 215 |
Reclassifications of gains (losses) into earnings | Curtailments, settlements and other | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Other comprehensive income, net of taxes | 4 | (35) | (1) | (46) |
Reclassifications of gains (losses) into earnings | Change in cumulative translation adjustment | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Other comprehensive income, net of taxes | $ (38) | $ 45 | $ (37) | $ 10 |
Stockholders' Equity - Components of Accumulated Other Comprehensive Loss, Net of Taxes (Details) $ in Millions |
9 Months Ended |
---|---|
Jul. 31, 2018
USD ($)
| |
Components of accumulated other comprehensive loss, net of taxes | |
Balance at beginning of period | $ 23,505 |
Balance at end of period | 23,462 |
Net unrealized gains (losses) on available-for-sale securities | |
Components of accumulated other comprehensive loss, net of taxes | |
Balance at beginning of period | 29 |
Other comprehensive (loss) income before reclassifications | (1) |
Reclassifications of (gains) losses into earnings | (9) |
Balance at end of period | 19 |
Net unrealized gains (losses) on cash flow hedges | |
Components of accumulated other comprehensive loss, net of taxes | |
Balance at beginning of period | (48) |
Other comprehensive (loss) income before reclassifications | 44 |
Reclassifications of (gains) losses into earnings | 67 |
Balance at end of period | 63 |
Unrealized components of defined benefit plans | |
Components of accumulated other comprehensive loss, net of taxes | |
Balance at beginning of period | (2,690) |
Other comprehensive (loss) income before reclassifications | (21) |
Reclassifications of (gains) losses into earnings | 132 |
Balance at end of period | (2,579) |
Cumulative translation adjustment | |
Components of accumulated other comprehensive loss, net of taxes | |
Balance at beginning of period | (186) |
Other comprehensive (loss) income before reclassifications | (37) |
Reclassifications of (gains) losses into earnings | 0 |
Balance at end of period | (409) |
Accumulated other comprehensive loss | |
Components of accumulated other comprehensive loss, net of taxes | |
Balance at beginning of period | (2,895) |
Other comprehensive (loss) income before reclassifications | (15) |
Reclassifications of (gains) losses into earnings | 190 |
Balance at end of period | (2,906) |
Separation and merger transactions | Cumulative translation adjustment | |
Components of accumulated other comprehensive loss, net of taxes | |
Adjustments related to transactions | (186) |
Separation and merger transactions | Accumulated other comprehensive loss | |
Components of accumulated other comprehensive loss, net of taxes | |
Adjustments related to transactions | $ (186) |
Stockholders' Equity - Narrative (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Billions |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|---|
Feb. 22, 2018 |
Feb. 21, 2018 |
Jul. 31, 2018 |
Jul. 31, 2017 |
Jul. 31, 2018 |
Jul. 31, 2017 |
Oct. 31, 2017 |
|
Equity, Class of Treasury Stock [Line Items] | |||||||
Cash dividends declared per share, quarterly (in dollars per share) | $ 0.1125 | $ 0.075 | $ 0.1125 | $ 0.0650 | $ 0.3750 | $ 0.260 | |
Share Repurchase program | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Common stock retired (in shares) | 160.0 | 1.7 | |||||
Open share repurchases during period (in shares) | 1.5 | ||||||
Repurchases of common stock recorded as a reduction to stockholders' equity | $ 2.6 | ||||||
Share repurchase program additional authorized amount | $ 2.5 | ||||||
Remaining authorized repurchase amount | $ 5.7 | $ 5.7 |
Net Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jul. 31, 2018 |
Jul. 31, 2017 |
Jul. 31, 2018 |
Jul. 31, 2017 |
|
Numerator: | ||||
Net earnings from continuing operations | $ 452 | $ 285 | $ 2,784 | $ 58 |
Net loss from discontinued operations | (1) | (120) | (119) | (238) |
Net earnings (loss) | $ 451 | $ 165 | $ 2,665 | $ (180) |
Denominator: | ||||
Weighted-average shares used to compute basic net EPS (in shares) | 1,513 | 1,641 | 1,552 | 1,656 |
Dilutive effect of employee stock plans (in shares) | 18 | 26 | 26 | 27 |
Weighted-average shares used to compute diluted net EPS (in shares) | 1,531 | 1,667 | 1,578 | 1,683 |
Basic net earnings (loss) per share: | ||||
Continuing operations (in dollars per share) | $ 0.30 | $ 0.17 | $ 1.79 | $ 0.04 |
Discontinued operations (in dollars per share) | 0.00 | (0.07) | (0.07) | (0.15) |
Total basic net earnings (loss) per share (in dollars per share) | 0.30 | 0.10 | 1.72 | (0.11) |
Diluted net earnings (loss) per share: | ||||
Diluted - Continuing operations (in dollars per share) | 0.29 | 0.17 | 1.76 | 0.03 |
Diluted - Discontinued operations (in dollars per share) | 0.00 | (0.07) | (0.07) | (0.14) |
Total diluted net earnings (loss) per share (in dollars per share) | $ 0.29 | $ 0.10 | $ 1.69 | $ (0.11) |
Anti-dilutive weighted-average stock awards (in shares) | 2 | 16 | 3 | 8 |
Litigation and Contingencies (Details) $ in Millions |
1 Months Ended | 9 Months Ended | 24 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Nov. 08, 2017
USD ($)
|
Jun. 30, 2016
USD ($)
|
Jan. 24, 2013
USD ($)
|
Dec. 11, 2012
USD ($)
|
Apr. 21, 2012
USD ($)
|
May 10, 2010
USD ($)
employee
|
Apr. 29, 2010
USD ($)
|
Jul. 31, 2011 |
Jul. 31, 2018 |
Oct. 31, 2008
contract
|
Apr. 20, 2012
USD ($)
|
Apr. 11, 2012
USD ($)
|
Jun. 15, 2011
phase
|
|
Litigation and Contingencies | |||||||||||||
Damages sought | $ 370 | ||||||||||||
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 | ||||||||||||
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 | ||||||||||||
Everett SpinCo | Cross-Indemnifications | |||||||||||||
Litigation and Contingencies | |||||||||||||
Damages sought | $ 1,000 | ||||||||||||
Everett SpinCo | Discontinued Operations, Disposed of by Means Other than Sale, Spinoff | |||||||||||||
Litigation and Contingencies | |||||||||||||
Indemnification threshold amount | $ 250 |
Indemnifications (Details) - USD ($) $ in Millions |
Jul. 31, 2018 |
Oct. 31, 2017 |
---|---|---|
Tax Indemnification | ||
Other Commitments [Line Items] | ||
Receivable - long-term | $ 111 | $ 1,430 |
Payables - short-term | 2 | 36 |
Cross-Indemnifications | ||
Other Commitments [Line Items] | ||
Receivable | 116 | 150 |
Payable | $ 89 | $ 91 |
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