Stock-Based Compensation (Tables)

6 Months Ended

Apr. 30, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Stock Based Compensation Expense and the Resulting Tax Benefits from Continuing Operations

Stock-based compensation expense and the resulting tax benefits were as follows:



	Three months ended April 30						Six months ended April 30
	2017			2016			2017			2016
	In millions
Stock-based compensation expense	$	48		$	40		$	123		$	101
Income tax benefit	(15		)	(13		)	(39		)	(35		)
Stock-based compensation expense, net of tax	$	33		$	27		$	84		$	66

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 for the three and six months ended April 30, 2016 were as follows:



	Three months ended April 30			Six months ended April 30
	2016			2016
Weighted-average fair value⁽¹⁾	$	2		$	4
Expected volatility⁽²⁾	31.6		%	36.4		%
Risk-free interest rate⁽³⁾	1.6		%	1.9		%
Expected dividend yield⁽⁴⁾	5.1		%	3.4		%
Expected term in years⁽⁵⁾	5			6


⁽¹⁾	The weighted-average fair value was based on stock options granted during the period.


⁽²⁾	The expected volatility was estimated using the leverage-adjusted average of the term-matching volatilities of peer companies due to the lack of volume of forward traded options, which precluded the use of implied volatility.


⁽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 award.


⁽⁵⁾	Due to the lack of historical exercise and post-vesting termination patterns of the post-Separation employee base, the expected term was estimated using the simplified method; and for performance-contingent awards, the expected term represents an output from the lattice model.

The weighted-average fair value and the assumptions used to measure the fair value of restricted stock units subject to performance-adjusted vesting conditions in the Monte Carlo simulation model were as follows:



	Six months ended April 30
	2017			2016
Weighted-average fair value⁽¹⁾	$	20		$	13
Expected volatility⁽²⁾	30.5		%	32.5		%
Risk-free interest rate⁽³⁾	1.4		%	1.2		%
Expected performance period in years⁽⁴⁾	2.9			2.9


⁽¹⁾	The weighted-average fair value was based on performance-adjusted restricted stock units granted during the period.


⁽²⁾	The expected volatility was estimated using the historical volatility derived from HP’s common stock.


⁽³⁾	The risk-free interest rate was estimated based on the yield on U.S. Treasury zero-coupon issues.


⁽⁴⁾	The expected performance period was estimated based on the length of the remaining performance period from the grant date.

Schedule of Restricted Stock Award Activity

A summary of restricted stock award activity was as follows:



	Six months ended April 30, 2017
	Shares		Weighted-Average Grant Date Fair Value Per Share
	In thousands
Outstanding at beginning of period	28,710		$	13
Granted	13,902		$	16
Vested	(10,345	)	$	13
Forfeited	(427	)	$	14
Outstanding at end of period	31,840		$	14

Schedule of Stock Option Activity

A summary of stock option activity was as follows:



	Six months ended April 30, 2017
	Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value
	In thousands				In years	In millions
Outstanding at beginning of period	28,218		$	12
Granted	—		$	—
Exercised	(2,921	)	$	11
Forfeited and expired	(762	)	$	17
Outstanding at end of period	24,535		$	12	4.7	$	159
Vested and expected to vest at end of period	23,872		$	12	4.7	$	156
Exercisable at end of period	16,526		$	12	3.9	$	122