Stock-Based Compensation (Table)

6 Months Ended

Apr. 30, 2016

Share-based compensation

Schedule of stock based compensation expense and the resulting tax benefits from continuing operations

	Three months ended April 30						Six months ended April 30
	2016			2015			2016			2015
	In millions
Stock-based compensation expense	$	40		$	59		$	101		$	110
Income tax benefit		(13	)		(16	)		(35	)		(32	)
Stock-based compensation expense, net of tax	$	27		$	43		$	66		$	78

Schedule of restricted stock award activity

	Six months ended April 30, 2016
	Shares			Weighted- Average Grant Date Fair Value Per Share
	In thousands
Outstanding at beginning of period		29,717		$	32
Granted		27,334		$	9
Vested		(2,137	)	$	12
Cancelled Awards		(23,926	)	$	32
Forfeited		(933	)	$	13
Outstanding at end of period		30,055		$	13

Stock Options

Share-based compensation

Schedule of weighted-average fair value and the assumptions used to measure fair value

	Three months ended April 30						Six months ended April 30
	2016			2015			2016			2015
Weighted-average fair value(1)	$	2		$	7		$	4		$	8
Expected volatility(2)		31.6	%		27.7	%		36.4	%		26.3	%
Risk-free interest rate(3)		1.6	%		1.4	%		1.9	%		1.7	%
Expected dividend yield(4)		5.1	%		2.2	%		3.4	%		1.7	%
Expected term in years(5)		5.0			5.2			6.0			5.8

(1)	The weighted-average fair value was based on stock options granted during the period.
(2)	For all awards granted in fiscal 2016, 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. For all awards granted in fiscal 2015, expected volatility was estimated using the implied volatility derived from options traded 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)	For awards subject to service-based vesting, due to the lack of historical exercise and post-vesting termination patterns of the post-Separation employee base, the expected term was estimated using a simplified method for all awards granted in fiscal 2016 and the expected term was estimated using historical exercise and post-vesting termination patterns for all awards granted in fiscal 2015; and for performance-contingent awards, the expected term represents an output from the lattice model.

Schedule of stock options activity

	Six months ended April 30, 2016
	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value
	In thousands					In years		In millions
Outstanding at beginning of period		36,278		$	26
Granted		25,108		$	6
Exercised		(1,371	)	$	7
Cancelled Awards		(26,252	)	$	26
Forfeited and expired		(1,689	)	$	16
Outstanding at end of period		32,074		$	12		5.1	$	47
Vested and expected to vest at end of period		30,107		$	12		5.0	$	47
Exercisable at end of period		17,966		$	11		3.7	$	47

Performance-Based restricted stock units

Share-based compensation

Schedule of weighted-average fair value and the assumptions used to measure fair value

	Six months ended April 30
	2016			2015
Weighted-average fair value(1)	$	13		$	47
Expected volatility(2)		32.5	%		33.6	%
Risk-free interest rate(3)		1.2	%		1.0	%
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.