Stock-Based Compensation (Tables)

9 Months Ended

Jul. 31, 2018

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 July 31						Nine months ended July 31
	2018			2017			2018			2017
	In millions
Stock-based compensation expense	$	55		$	46		$	203		$	169
Income tax benefit	(12		)	(15		)	(45		)	(54		)
Stock-based compensation expense, net of tax	$	43		$	31		$	158		$	115

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 the fair value of restricted stock units subject to performance-adjusted vesting conditions in the Monte Carlo simulation model were as follows:



	Three months ended July 31						Nine months ended July 31
	2018			2017			2018			2017
Weighted-average grant date fair value⁽¹⁾	$	28		$	—		$	24		$	20
Expected volatility⁽²⁾	24.8		%	—		%	29.5		%	30.5		%
Risk-free interest rate⁽³⁾	2.5		%	—		%	1.9		%	1.4		%
Expected performance period in years⁽⁴⁾	2.3			0.0			2.9			2.9


⁽¹⁾	The weighted-average grant date 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.

The weighted-average fair value and the assumptions used to measure the fair value of stock options for the three and nine months ended July 31, 2018 and 2017 were as follows:



	Three months ended July 31						Nine months ended July 31
	2018			2017			2018			2017
Weighted-average grant date fair value ⁽¹⁾	$	—		$	4		$	5		$	4
Expected volatility ⁽²⁾	—		%	28.0		%	29.4		%	28.0		%
Risk-free interest rate ⁽³⁾	—		%	1.9		%	2.5		%	1.9		%
Expected dividend yield ⁽⁴⁾	—		%	2.8		%	2.6		%	2.8		%
Expected term in years ⁽⁵⁾	0.0			5.5			5.0			5.5


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


⁽²⁾	The expected volatility was estimated based on a blended volatility (50% historical volatility and 50% implied volatility from traded options on 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 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 the performance-contingent awards, the expected term represents an output from the lattice model.

Schedule of Restricted Stock Award Activity

A summary of restricted stock unit activity was as follows:



	Nine months ended July 31, 2018
	Shares		Weighted-Average Grant Date Fair Value Per Share
	In thousands
Outstanding at beginning of period	31,822		$	14
Granted	15,014		$	21
Vested	(14,080	)	$	14
Forfeited	(1,436	)	$	17
Outstanding at end of period	31,320		$	17

Schedule of Stock Option Activity

A summary of stock option activity was as follows:



	Nine months ended July 31, 2018
	Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value
	In thousands				In years	In millions
Outstanding at beginning of period	18,067		$	13
Granted	54		$	21
Exercised	(8,593	)	$	12
Forfeited and expired	(278	)	$	16
Outstanding at end of period	9,250		$	14	4.2	$	86
Vested and expected to vest	9,204		$	14	4.2	$	85
Exercisable	6,555		$	14	3.7	$	61