Discontinued Operations

3 Months Ended

Jan. 31, 2016

Discontinued Operations

Discontinued Operations

Note 2: Discontinued Operations

        On November 1, 2015, HP completed the Separation of Hewlett Packard Enterprise. After the Separation, HP does not beneficially own any shares of Hewlett Packard Enterprise common stock.

        In connection with the Separation, HP and Hewlett Packard Enterprise have entered into a separation and distribution agreement as well as various other agreements that provide a framework for the relationships between the parties going forward, including among others a tax matters agreement, an employee matters agreement, a transition service agreement, a real estate matters agreement, a master commercial agreement and an information technology service agreement. These agreements provide for the allocation between HP and Hewlett Packard Enterprise of assets, employees, liabilities and obligations (including investments, property, employee benefits and tax-related assets and liabilities) attributable to periods prior to, at and after the Separation and govern certain relationships between HP and Hewlett Packard Enterprise after the Separation.

        HP no longer consolidates Hewlett Packard Enterprise within its financial results of continuing operations. The financial results of Hewlett Packard Enterprise are presented as (loss) earnings from discontinued operations, net of taxes on the Consolidated Condensed Statements of Earnings. Discontinued operations include results of Hewlett Packard Enterprise's business and separation costs primarily related to third-party consulting, contractor fees and other related costs.

        The following table presents the financial results of HP's discontinued operations:

	Three months ended January 31
	2016			2015
	In millions
Net revenue	$	—		$	12,981
Costs and expenses(1)		87			12,179
Interest and other, net		—			53
(Loss) earnings from discontinued operations before taxes		(87	)		749
Benefit from (provision for) taxes		29			(153	)
(Loss) earnings from discontinued operations, net of taxes	$	(58	)	$	596

(1) Costs and expenses for the three months ended January 31, 2016 relate to separation costs.

        There were no significant non-cash items or capital expenditures of discontinued operations for the three months ended January 31, 2016. For the three months ended January 31, 2015, significant non-cash items and capital expenditures of discontinued operations are outlined below:

	In millions
Depreciation and amortization	$	921
Purchases of property, plant and equipment	$	613

        The following table presents assets and liabilities that were transferred to Hewlett Packard Enterprise as of November 1, 2015 and presented as discontinued operations on the Consolidated Condensed Balance Sheets as of October 31, 2015:

	In millions
Cash and cash equivalents	$	9,849
Accounts receivable		8,538
Financing receivables		2,918
Inventory		2,197
Other current assets		7,090
Total current assets of discontinued operations	$	30,592
Property, plant and equipment	$	9,598
Goodwill		27,261
Long-term financing receivables and other non-current assets		9,472
Total non-current assets of discontinued operations	$	46,331
Notes payable and short-term borrowings	$	691
Accounts payable		5,762
Employee compensation and benefits		2,861
Taxes on earnings		587
Deferred revenue		5,148
Other accrued liabilities		6,472
Total current liabilities of discontinued operations	$	21,521
Long-term debt	$	15,103
Other non-current liabilities		7,346
Total non-current liabilities of discontinued operations	$	22,449

        Subsequent to the Separation, HP made a final net cash transfer of $526 million to Hewlett Packard Enterprise.