XML 16 R39.htm IDEA: XBRL DOCUMENT v3.19.3.a.u2
Stock-Based Compensation (Tables)
 12 Months Ended
Oct. 31, 2019
Share-based compensation  
Schedule of stock based compensation expense and the resulting tax benefits
Stock-based compensation expense and the resulting tax benefits were as follows:
 
Fiscal years ended October 31,
 
2019
 
2018
 
2017
 
In millions
Stock-based compensation expense from continuing operations
$
270

 
$
309

 
$
454

Income tax benefit
(50
)
 
(56
)
 
(159
)
Stock-based compensation expense from continuing operations, net of tax
$
220

 
$
253

 
$
295

Stock-based compensation expense from discontinued operations
$
—

 
$
—

 
$
166
Stock-based compensation expense
Stock-based compensation expense from continuing operations as presented in the table above is recorded within the following cost and expense lines in the Consolidated Statement of Earnings.
 
For the fiscal years ended October 31,
 
2019
 
2018
 
2017
 
In millions
Cost of sales
$
37

 
$
39

 
$
41

Research and development
70

 
73

 
74

Selling, general and administrative
161

 
174

 
242

Restructuring charges
—

 
—

 
33

Transformation costs
2

 
3

 
—

Acquisition, disposition and other related charges
—

 
10

 
23

Separation costs
—

 
10

 
41

Stock-based compensation expense from continuing operations
$
270

 
$
309

 
$
454
Schedule of restricted stock award activity
The following table summarizes restricted stock unit activity:
 
Fiscal years ended October 31,
 
2019
 
2018
 
2017
 
Shares
 
Weighted-
Average
Grant Date
Fair Value
Per Share
 
Shares
 
Weighted-
Average
Grant Date
Fair Value
Per Share
 
Shares
 
Weighted-
Average
Grant Date
Fair Value
Per Share
 
In thousands
 
 
 
In thousands
 
 
 
In thousands
 
 
Outstanding at beginning of year
32,417

 
$
14

 
48,517

 
$
14

 
57,321

 
$
15

Granted and assumed through acquisition(1)
23,400

 
$
15

 
22,131

 
$
15

 
23,980

 
$
21

Additional shares granted due to post-spin adjustments(2)
—

 
$
—

 
—

 
$
—

 
25,543

 
$
9

Vested(3)
(12,794
)
 
$
14

 
(32,659
)
 
$
14

 
(51,976
)
 
$
16

Forfeited/canceled
(3,323
)
 
$
15

 
(5,572
)
 
$
14

 
(6,351
)
 
$
16

Outstanding at end of year
39,700

 
$
14

 
32,417

 
$
14

 
48,517

 
$
14

 
(1)
Fiscal 2017 includes approximately 11 million restricted stock units assumed by the Company through acquisition with a weighted-average grant date fair value of $18 per share.
(2)
Additional shares granted as a result of the post-spin exercise price adjustments made related to the Everett and Seattle Transactions, as permitted by the Plan, in order to preserve the intrinsic value of outstanding awards prior to the close of the transactions.
(3)
Fiscal 2018 includes approximately 6 million restricted stock units, with a weighted-average grant date fair value of $14 per share, which were accelerated to vest on June 1, 2018 as part of the Everett Transaction. Fiscal 2017 includes approximately 14 million restricted stock units, with a weighted-average grant date fair value of $17 per share, which were accelerated as part of the Everett and Seattle Transactions.
Stock Options  
Share-based compensation  
Schedule of weighted-average fair value and the assumptions used to measure fair value The weighted-average fair value and the assumptions used to measure fair value was as follows:
 
Fiscal year ended October 31, 2017
Weighted-average fair value(1)
$
6

Expected volatility(2)
25.7
%
Risk-free interest rate(3)
2.0
%
Expected dividend yield(4)
1.0
%
Expected term in years(5)
6.1

 
(1)
The weighted-average fair value was based on the fair value of stock options granted under the Plan during the respective periods.
(2)
Expected volatility was estimated using the average historical volatility of selected peer companies.
(3)
The risk-free interest rate was estimated based on the yield on U.S. Treasury zero-coupon issues.
(4)
The expected dividend yield represents a constant dividend yield applied for the duration of the expected term of the option.
(5)
For options granted subject to service-based vesting, the expected term was estimated using the simplified method detailed in SEC Staff Accounting Bulletin No. 110.
Schedule of stock options activity
The following table summarizes stock option activity:
 
Fiscal years ended October 31,
 
2019
 
2018
 
2017
 
Shares
 
Weighted-
Average
Exercise
Price
 
Weighted-
Average
Remaining
Contractual
Term
 
Aggregate
Intrinsic
Value
 
Shares
 
Weighted-
Average
Exercise
Price
 
Weighted-
Average
Remaining
Contractual
Term
 
Aggregate
Intrinsic
Value
 
Shares
 
Weighted-
Average
Exercise
Price
 
Weighted-
Average
Remaining
Contractual
Term
 
Aggregate
Intrinsic
Value
 
In thousands
 
 
 
In years
 
In millions
 
In thousands
 
 
 
In years
 
In millions
 
In thousands
 
 
 
In years
 
In millions
Outstanding at beginning of year
18,263

 
$
10

 
 
 
 
 
49,274

 
$
10

 
 
 
 

 
57,498

 
$
15

 
 
 
 

Granted and assumed through acquisition
170

 
$
9

 
 
 
 
 
316

 
$
10

 
 
 
 

 
6,074

 
$
23

 
 
 
 

Additional shares granted due to post-spin adjustments(1)
—

 
$
—

 
 
 
 
 
—

 
$
—

 
 
 
 
 
24,523

 
$
11

 
 
 
 
Exercised
(7,841
)
 
$
9

 
 
 
 
 
(26,476
)
 
$
9

 
 
 
 

 
(29,492
)
 
$
12

 
 
 
 

Forfeited/canceled/expired(2)
(430
)
 
$
13

 
 
 
 
 
(4,851
)
 
$
13

 
 
 
 

 
(9,329
)
 
$
16

 
 
 
 

Outstanding at end of year(3)
10,162

 
$
11

 
3.8
 
$
57

 
18,263

 
$
10

 
4.2
 
$
92

 
49,274

 
$
10

 
4.6
 
$
207

Vested and expected to vest at end of year(3)
10,130

 
$
11

 
3.8
 
$
57

 
18,038

 
$
10

 
4.2
 
$
91

 
48,566

 
$
10

 
4.6
 
$
205

Exercisable at end of year(3)
8,764

 
$
11

 
3.5
 
$
52

 
14,896

 
$
10

 
3.7
 
$
85

 
24,736

 
$
9

 
3.0
 
$
123

 
(1)
Additional shares granted as a result of the post-spin exercise price adjustments made related to the Everett and Seattle Transactions, as permitted by the Plan, in order to preserve the intrinsic value of the awards prior to the close of the transaction.
(2)
Fiscal 2017 includes approximately 8 million stock options, with a weighted-average exercise price of $16 per share, related to the former ES and Software segments, which were canceled by HPE in connection with the Everett and Seattle Transactions, and in accordance with the respective Employee Matters Agreements.
(3)
The weighted average exercise price reflects the impact of the post-spin adjustments to the exercise price related to the Everett and Seattle Transactions.