|
(Mark One)
|
|
ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the quarterly period ended: January 31, 2017
|
|
Or
|
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from to
|
|
Commission file number 1-4423
|
Delaware
|
|
94-1081436
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. employer
identification no.)
|
1501 Page Mill Road, Palo Alto, California
|
|
94304
|
(Address of principal executive offices)
|
|
(Zip code)
|
(650) 857-1501
(Registrant’s telephone number, including area code)
|
Large accelerated filer
ý
|
|
Accelerated filer
o
|
|
Non-accelerated filer
o
(Do not check if a smaller
reporting company)
|
|
Smaller reporting company
o
|
|
|
|
Page
|
|
||
|
||
|
||
|
||
|
|
Page
|
|
Three months ended January 31
|
||||||
|
2017
|
|
2016
|
||||
|
In millions, except per share amounts
|
||||||
Net revenue
|
$
|
12,684
|
|
|
$
|
12,246
|
|
Costs and expenses:
|
|
|
|
|
|
||
Cost of revenue
|
10,436
|
|
|
9,961
|
|
||
Research and development
|
296
|
|
|
292
|
|
||
Selling, general and administrative
|
1,017
|
|
|
1,037
|
|
||
Restructuring and other charges
|
63
|
|
|
20
|
|
||
Acquisition-related charges
|
16
|
|
|
—
|
|
||
Amortization of intangible assets
|
—
|
|
|
8
|
|
||
Total costs and expenses
|
11,828
|
|
|
11,318
|
|
||
Earnings from continuing operations
|
856
|
|
|
928
|
|
||
Interest and other, net
|
(81
|
)
|
|
(94
|
)
|
||
Earnings from continuing operations before taxes
|
775
|
|
|
834
|
|
||
Provision for taxes
|
(164
|
)
|
|
(184
|
)
|
||
Net earnings from continuing operations
|
611
|
|
|
650
|
|
||
Net loss from discontinued operations, net of taxes
|
—
|
|
|
(58
|
)
|
||
Net earnings
|
$
|
611
|
|
|
$
|
592
|
|
Net earnings (loss) per share:
|
|
|
|
|
|
||
Basic
|
|
|
|
|
|
||
Continuing operations
|
$
|
0.36
|
|
|
$
|
0.37
|
|
Discontinued operations
|
—
|
|
|
(0.04
|
)
|
||
Total basic net earnings per share
|
$
|
0.36
|
|
|
$
|
0.33
|
|
Diluted
|
|
|
|
|
|
||
Continuing operations
|
$
|
0.36
|
|
|
$
|
0.36
|
|
Discontinued operations
|
—
|
|
|
(0.03
|
)
|
||
Total diluted net earnings per share
|
$
|
0.36
|
|
|
$
|
0.33
|
|
Cash dividends declared per share
|
$
|
0.27
|
|
|
$
|
0.25
|
|
Weighted-average shares used to compute net earnings (loss) per share:
|
|
|
|
|
|
||
Basic
|
1,704
|
|
|
1,776
|
|
||
Diluted
|
1,721
|
|
|
1,785
|
|
|
Three months ended January 31
|
||||||
|
2017
|
|
2016
|
||||
|
In millions
|
||||||
Net earnings
|
$
|
611
|
|
|
$
|
592
|
|
Other comprehensive (loss) income before taxes:
|
|
|
|
|
|
||
Change in unrealized gains on available-for-sale securities:
|
|
|
|
|
|
||
Unrealized gains arising during the period
|
3
|
|
|
—
|
|
||
Change in unrealized components of cash flow hedges:
|
|
|
|
|
|
||
Unrealized (losses) gains arising during the period
|
(169
|
)
|
|
105
|
|
||
Gains reclassified into earnings
|
(71
|
)
|
|
(34
|
)
|
||
|
(240
|
)
|
|
71
|
|
||
Change in unrealized components of defined benefit plans:
|
|
|
|
|
|
||
Amortization of actuarial loss and prior service benefit
|
20
|
|
|
12
|
|
||
Other comprehensive (loss) income before taxes
|
(217
|
)
|
|
83
|
|
||
(Provision for) benefit from taxes
|
(14
|
)
|
|
16
|
|
||
Other comprehensive (loss) income, net of taxes
|
(231
|
)
|
|
99
|
|
||
Comprehensive income
|
$
|
380
|
|
|
$
|
691
|
|
|
Three months ended January 31
|
||||||
|
2017
|
|
2016
|
||||
|
In millions
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||
Net earnings
|
$
|
611
|
|
|
$
|
592
|
|
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||
Depreciation and amortization
|
84
|
|
|
79
|
|
||
Stock-based compensation expense
|
75
|
|
|
61
|
|
||
Provision for doubtful accounts
|
(2
|
)
|
|
11
|
|
||
Provision for inventory
|
(2
|
)
|
|
34
|
|
||
Restructuring and other charges
|
63
|
|
|
20
|
|
||
Deferred taxes on earnings
|
67
|
|
|
526
|
|
||
Other, net
|
23
|
|
|
(15
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Accounts receivable
|
614
|
|
|
704
|
|
||
Inventory
|
(69
|
)
|
|
202
|
|
||
Accounts payable
|
(116
|
)
|
|
(1,104
|
)
|
||
Taxes on earnings
|
(75
|
)
|
|
(534
|
)
|
||
Restructuring and other
|
(51
|
)
|
|
(31
|
)
|
||
Other assets and liabilities
|
(455
|
)
|
|
(647
|
)
|
||
Net cash provided by (used in) operating activities
|
767
|
|
|
(102
|
)
|
||
Cash flows from investing activities:
|
|
|
|
|
|
||
Investment in property, plant and equipment
|
(101
|
)
|
|
(120
|
)
|
||
Proceeds from sale of property, plant and equipment
|
69
|
|
|
—
|
|
||
Purchases of available-for-sale securities and other investments
|
(56
|
)
|
|
—
|
|
||
Maturities and sales of available-for-sale securities and other investments
|
2
|
|
|
9
|
|
||
Net cash used in investing activities
|
(86
|
)
|
|
(111
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|
||
Short-term borrowings with original maturities less than 90 days, net
|
35
|
|
|
26
|
|
||
Proceeds from debt, net of issuance costs
|
5
|
|
|
4
|
|
||
Payment of debt
|
(27
|
)
|
|
(2,155
|
)
|
||
Settlement of cash flow hedges
|
(4
|
)
|
|
(11
|
)
|
||
Net transfer of cash and cash equivalents to Hewlett Packard Enterprise Company
|
—
|
|
|
(10,375
|
)
|
||
Net payments related to stock-based award activities
|
(34
|
)
|
|
(3
|
)
|
||
Repurchase of common stock
|
(386
|
)
|
|
(797
|
)
|
||
Cash dividends paid
|
(227
|
)
|
|
(221
|
)
|
||
Net cash used in financing activities
|
(638
|
)
|
|
(13,532
|
)
|
||
Increase (decrease) in cash and cash equivalents
|
43
|
|
|
(13,745
|
)
|
||
Cash and cash equivalents at beginning of period
|
6,288
|
|
|
17,433
|
|
||
Cash and cash equivalents at end of period
|
$
|
6,331
|
|
|
$
|
3,688
|
|
Supplemental schedule of non-cash investing and financing activities:
|
|
|
|
|
|
||
Net assets transferred to Hewlett Packard Enterprise Company
|
$
|
—
|
|
|
$
|
22,197
|
|
Purchase of assets under capital leases
|
$
|
40
|
|
|
$
|
40
|
|
•
|
Commercial PCs
are optimized for use by customers including enterprise and SMBs, with a focus on robust designs, security, serviceability, connectivity, reliability and manageability in networked environments. Additionally, HP offers a range of services and solutions to enterprise and SMBs to help them manage the lifecycle of their PC and mobility installed base.
|
•
|
Consumer PCs
are Notebooks, Desktops and hybrids that are optimized for consumer usage, focusing on multi-media consumption, online browsing, gaming and light productivity.
|
•
|
Office Printing Solutions
delivers HP’s office printers, supplies, services, and solutions to SMBs and large enterprises. HP goes to market through its extensive channel network and directly with HP sales. Ongoing key initiatives include design and deployment of A3 products and solutions for the copier and multifunction printer market, printer security solutions, PageWide solutions and award-winning JetIntelligence LaserJet products.
|
•
|
Home Printing Solution
s delivers a compelling set of innovative printing products and solutions for the home and home business or small office customers utilizing both HP’s Ink and Laser technologies. Initiatives such as Instant Ink and Continuous Ink Supply System provide business model innovation to benefit and expand HP’s existing customer base while new innovations like Sprocket drives print relevance for a mobile generation.
|
•
|
Graphics Solutions
is reinventing the graphics industry by offering large-format, commercial and industrial solutions to print service providers and packaging converters through the largest portfolio of printers and presses (HP DesignJet, HP Latex Printers, HP Scitex, HP Indigo and HP PageWide Presses).
|
•
|
3D Printing
delivers HP’s Multi-Jet Fusion 3D Printing Solution designed for prototyping and production of functional parts and functioning on an open platform facilitating the development of new 3D printing materials.
|
|
Personal
Systems |
|
Printing
|
|
Corporate
Investments |
|
Total
Segments |
|
Intersegment
Eliminations and Other (1) |
|
Total
|
||||||||||||
|
In millions
|
||||||||||||||||||||||
Three months ended January 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net revenue
|
$
|
8,224
|
|
|
$
|
4,483
|
|
|
$
|
2
|
|
|
$
|
12,709
|
|
|
$
|
(25
|
)
|
|
$
|
12,684
|
|
Earnings (loss) from operations
|
$
|
313
|
|
|
$
|
716
|
|
|
$
|
(23
|
)
|
|
$
|
1,006
|
|
|
|
|
|
|
|
||
Three months ended January 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net revenue
|
$
|
7,467
|
|
|
$
|
4,642
|
|
|
$
|
3
|
|
|
$
|
12,112
|
|
|
$
|
134
|
|
|
$
|
12,246
|
|
Earnings (loss) from operations
|
$
|
229
|
|
|
$
|
787
|
|
|
$
|
(23
|
)
|
|
$
|
993
|
|
|
|
|
|
|
|
(1)
|
For the
three
months ended
January 31, 2016
, the amount includes the recognition of revenue previously deferred in relation to sales to the pre-Separation finance entity.
|
|
Three months ended January 31
|
||||||
|
2017
|
|
2016
|
||||
|
In millions
|
||||||
Net Revenue:
|
|||||||
Total segments
|
$
|
12,709
|
|
|
$
|
12,112
|
|
Intersegment net revenue eliminations and other
|
(25
|
)
|
|
134
|
|
||
Total net revenue
|
$
|
12,684
|
|
|
$
|
12,246
|
|
Earnings from continuing operations before taxes:
|
|
|
|
|
|
||
Total segment earnings from operations
|
$
|
1,006
|
|
|
$
|
993
|
|
Corporate and unallocated costs and eliminations
|
4
|
|
|
24
|
|
||
Acquisition-related charges
|
(16
|
)
|
|
—
|
|
||
Stock-based compensation expense
|
(75
|
)
|
|
(61
|
)
|
||
Restructuring and other charges
|
(63
|
)
|
|
(20
|
)
|
||
Amortization of intangible assets
|
—
|
|
|
(8
|
)
|
||
Interest and other, net
|
(81
|
)
|
|
(94
|
)
|
||
Total earnings from continuing operations before taxes
|
$
|
775
|
|
|
$
|
834
|
|
|
Three months ended January 31
|
||||||
|
2017
|
|
2016
|
||||
|
In millions
|
||||||
Notebooks
|
$
|
4,890
|
|
|
$
|
4,205
|
|
Desktops
|
2,534
|
|
|
2,527
|
|
||
Workstations
|
491
|
|
|
444
|
|
||
Other
|
309
|
|
|
291
|
|
||
Personal Systems
|
8,224
|
|
|
7,467
|
|
||
Supplies
|
3,007
|
|
|
3,101
|
|
||
Commercial Hardware
|
886
|
|
|
964
|
|
||
Consumer Hardware
|
590
|
|
|
577
|
|
||
Printing
|
4,483
|
|
|
4,642
|
|
||
Corporate Investments
|
2
|
|
|
3
|
|
||
Total segment net revenue
|
12,709
|
|
|
12,112
|
|
||
Intersegment net revenue eliminations and other
|
(25
|
)
|
|
134
|
|
||
Total net revenue
|
$
|
12,684
|
|
|
$
|
12,246
|
|
|
Fiscal 2017 Plan
|
|
Fiscal 2015 Plan
|
|
Fiscal 2012 Plan
|
|
|
||||||||||||||||||||
|
Severance
|
|
Infrastructure and other
|
|
Severance and PRP
(1)
|
|
Infrastructure and other
|
|
Severance and EER
(2)
|
|
Infrastructure and other
|
|
Total
|
||||||||||||||
|
In millions
|
|
|
||||||||||||||||||||||||
Accrued balance as of October 31, 2016
|
$
|
24
|
|
|
$
|
—
|
|
|
$
|
21
|
|
|
$
|
4
|
|
|
$
|
7
|
|
|
$
|
2
|
|
|
$
|
58
|
|
Charges
|
24
|
|
|
1
|
|
|
6
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
32
|
|
|||||||
Cash payments
|
(8
|
)
|
|
(1
|
)
|
|
(24
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|
—
|
|
|
(37
|
)
|
|||||||
Non-cash and other adjustments
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||||
Accrued balance as of January 31, 2017
|
$
|
40
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
2
|
|
|
$
|
6
|
|
|
$
|
2
|
|
|
$
|
54
|
|
Total costs incurred to date as of January 31, 2017
|
$
|
48
|
|
|
$
|
1
|
|
|
$
|
162
|
|
|
$
|
27
|
|
|
$
|
1,075
|
|
|
$
|
44
|
|
|
$
|
1,357
|
|
Reflected in Consolidated Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Other accrued liabilities
|
$
|
40
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
2
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
52
|
|
Other non-current liabilities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Accrued balance as of October 31, 2015
|
—
|
|
|
—
|
|
|
39
|
|
|
—
|
|
|
21
|
|
|
3
|
|
|
63
|
|
|||||||
Charges
|
—
|
|
|
—
|
|
|
15
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|||||||
Cash payments
|
—
|
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
(19
|
)
|
|
—
|
|
|
(31
|
)
|
|||||||
Non-cash and other adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(1
|
)
|
|
(5
|
)
|
|||||||
Accrued balance as of January 31, 2016
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
42
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
47
|
|
(1)
|
PRP represents Phased Retirement Program.
|
(2)
|
EER represents Enhanced Early Retirement.
|
|
Three months ended January 31
|
||||||||||||||||||||||
|
U.S.
Defined Benefit Plans |
|
Non-U.S.
Defined Benefit Plans |
|
Post-
Retirement Benefit Plans |
||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||
|
In millions
|
||||||||||||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12
|
|
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
117
|
|
|
136
|
|
|
4
|
|
|
6
|
|
|
4
|
|
|
5
|
|
||||||
Expected return on plan assets
|
(169
|
)
|
|
(183
|
)
|
|
(8
|
)
|
|
(12
|
)
|
|
(6
|
)
|
|
(8
|
)
|
||||||
Amortization and deferrals:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Actuarial loss (gain)
|
18
|
|
|
14
|
|
|
10
|
|
|
6
|
|
|
(2
|
)
|
|
(3
|
)
|
||||||
Prior service benefit
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
(5
|
)
|
|
(4
|
)
|
||||||
Net periodic benefit (credit) cost
|
(34
|
)
|
|
(33
|
)
|
|
17
|
|
|
11
|
|
|
(9
|
)
|
|
(10
|
)
|
||||||
Settlement loss
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total periodic benefit (credit) cost
|
$
|
(34
|
)
|
|
$
|
(32
|
)
|
|
$
|
17
|
|
|
11
|
|
|
$
|
(9
|
)
|
|
$
|
(10
|
)
|
|
Three months ended January 31
|
||||||
|
2017
|
|
2016
|
||||
|
In millions
|
||||||
Stock-based compensation expense
|
$
|
75
|
|
|
$
|
61
|
|
Income tax benefit
|
(24
|
)
|
|
(22
|
)
|
||
Stock-based compensation expense, net of tax
|
$
|
51
|
|
|
$
|
39
|
|
|
Three months ended January 31
|
||||||
|
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.
|
|
Three months ended January 31, 2017
|
|||||
|
Shares
|
|
Weighted-Average
Grant Date Fair Value Per Share |
|||
|
In thousands
|
|
|
|||
Outstanding at beginning of period
|
28,710
|
|
|
$
|
13
|
|
Granted
|
13,476
|
|
|
$
|
16
|
|
Vested
|
(10,044
|
)
|
|
$
|
13
|
|
Forfeited
|
(224
|
)
|
|
$
|
14
|
|
Outstanding at end of period
|
31,918
|
|
|
$
|
14
|
|
|
Three months ended January 31, 2016
|
||
Weighted-average fair value
(1)
|
$
|
4
|
|
Expected volatility
(2)
|
36.4
|
%
|
|
Risk-free interest rate
(3)
|
1.9
|
%
|
|
Expected dividend yield
(4)
|
3.4
|
%
|
|
Expected term in years
(5)
|
6.0
|
|
(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.
|
|
Three months ended January 31, 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
|
(630
|
)
|
|
$
|
11
|
|
|
|
|
|
|
|
Forfeited and expired
|
(226
|
)
|
|
$
|
16
|
|
|
|
|
|
|
|
Outstanding at end of period
|
27,362
|
|
|
$
|
12
|
|
|
4.8
|
|
$
|
83
|
|
Vested and expected to vest at end of period
|
26,376
|
|
|
$
|
12
|
|
|
4.8
|
|
$
|
82
|
|
Exercisable at end of period
|
17,370
|
|
|
$
|
11
|
|
|
3.8
|
|
$
|
71
|
|
|
As of
|
||||||
|
January 31, 2017
|
|
October 31, 2016
|
||||
|
In millions
|
||||||
Accounts receivable
|
$
|
3,578
|
|
|
$
|
4,221
|
|
Allowance for doubtful accounts
|
(100
|
)
|
|
(107
|
)
|
||
|
$
|
3,478
|
|
|
$
|
4,114
|
|
|
Three months ended January 31, 2017
|
||
|
In millions
|
||
Balance at beginning of period
|
$
|
107
|
|
Provision for doubtful accounts
|
(2
|
)
|
|
Deductions, net of recoveries
|
(5
|
)
|
|
Balance at end of period
|
$
|
100
|
|
|
Three months ended January 31
|
||||||
|
2017
|
|
2016
|
||||
|
In millions
|
||||||
Balance at beginning of period
|
$
|
149
|
|
|
$
|
93
|
|
Trade receivables sold
|
2,449
|
|
|
1,876
|
|
||
Cash receipts
|
(2,493
|
)
|
|
(1,877
|
)
|
||
Foreign currency and other
|
(1
|
)
|
|
(3
|
)
|
||
Balance at end of period
|
$
|
104
|
|
|
$
|
89
|
|
|
As of
|
||||||
|
January 31, 2017
|
|
October 31, 2016
|
||||
|
In millions
|
||||||
Finished goods
|
$
|
2,977
|
|
|
$
|
3,103
|
|
Purchased parts and fabricated assemblies
|
1,578
|
|
|
1,381
|
|
||
|
$
|
4,555
|
|
|
$
|
4,484
|
|
|
As of
|
||||||
|
January 31, 2017
|
|
October 31, 2016
|
||||
|
In millions
|
||||||
Value-added taxes receivable
|
$
|
761
|
|
|
$
|
795
|
|
Supplier and other receivables
|
1,742
|
|
|
1,700
|
|
||
Prepaid and other current assets
|
908
|
|
|
1,087
|
|
||
|
$
|
3,411
|
|
|
$
|
3,582
|
|
|
As of
|
||||||
|
January 31, 2017
|
|
October 31, 2016
|
||||
|
In millions
|
||||||
Land, buildings and leasehold improvements
|
$
|
2,338
|
|
|
$
|
2,421
|
|
Machinery and equipment, including equipment held for lease
|
3,729
|
|
|
3,663
|
|
||
|
6,067
|
|
|
6,084
|
|
||
Accumulated depreciation
|
(4,337
|
)
|
|
(4,348
|
)
|
||
|
$
|
1,730
|
|
|
$
|
1,736
|
|
|
As of
|
||||||
|
January 31, 2017
|
|
October 31, 2016
|
||||
|
In millions
|
||||||
Tax indemnifications receivable
(1)
|
$
|
1,628
|
|
|
$
|
1,591
|
|
Deferred tax assets
|
249
|
|
|
254
|
|
||
Other
|
1,188
|
|
|
1,316
|
|
||
|
$
|
3,065
|
|
|
$
|
3,161
|
|
(1)
|
In connection with the TMA discussed under Note 6, “Taxes on Earnings”.
|
|
As of
|
||||||
|
January 31, 2017
|
|
October 31, 2016
|
||||
|
In millions
|
||||||
Other accrued taxes
|
$
|
688
|
|
|
$
|
755
|
|
Warranty
|
706
|
|
|
729
|
|
||
Sales and marketing programs
|
2,213
|
|
|
2,312
|
|
||
Other
|
2,184
|
|
|
1,922
|
|
||
|
$
|
5,791
|
|
|
$
|
5,718
|
|
|
As of
|
||||||
|
January 31, 2017
|
|
October 31, 2016
|
||||
|
In millions
|
||||||
Pension, post-retirement, and post-employment liabilities
|
$
|
2,627
|
|
|
$
|
2,705
|
|
Deferred tax liability
|
1,198
|
|
|
1,116
|
|
||
Tax liability
|
1,794
|
|
|
1,910
|
|
||
Deferred revenue
|
866
|
|
|
865
|
|
||
Other
|
759
|
|
|
737
|
|
||
|
$
|
7,244
|
|
|
$
|
7,333
|
|
|
As of January 31, 2017
|
|
As of October 31, 2016
|
||||||||||||||||||||||||||||
|
Fair Value Measured Using
|
|
|
|
Fair Value Measured Using
|
|
|
||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
|
In millions
|
||||||||||||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cash Equivalents and Investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Time deposits
|
$
|
—
|
|
|
$
|
2,280
|
|
|
$
|
—
|
|
|
$
|
2,280
|
|
|
$
|
—
|
|
|
$
|
2,092
|
|
|
$
|
—
|
|
|
$
|
2,092
|
|
Money market funds
|
2,541
|
|
|
—
|
|
|
—
|
|
|
2,541
|
|
|
2,568
|
|
|
—
|
|
|
—
|
|
|
2,568
|
|
||||||||
Marketable equity securities
|
5
|
|
|
6
|
|
|
—
|
|
|
11
|
|
|
5
|
|
|
4
|
|
|
—
|
|
|
9
|
|
||||||||
Mutual funds
|
44
|
|
|
—
|
|
|
—
|
|
|
44
|
|
|
44
|
|
|
—
|
|
|
—
|
|
|
44
|
|
||||||||
Other debt securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||||||
Derivative Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
48
|
|
|
—
|
|
|
48
|
|
||||||||
Foreign currency contracts
|
—
|
|
|
166
|
|
|
—
|
|
|
166
|
|
|
—
|
|
|
266
|
|
|
11
|
|
|
277
|
|
||||||||
Other derivatives
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total Assets
|
$
|
2,590
|
|
|
$
|
2,457
|
|
|
$
|
—
|
|
|
$
|
5,047
|
|
|
$
|
2,617
|
|
|
$
|
2,412
|
|
|
$
|
11
|
|
|
$
|
5,040
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency contracts
|
—
|
|
|
230
|
|
|
9
|
|
|
239
|
|
|
—
|
|
|
94
|
|
|
1
|
|
|
95
|
|
||||||||
Other derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||||||
Total Liabilities
|
$
|
—
|
|
|
$
|
238
|
|
|
$
|
9
|
|
|
$
|
247
|
|
|
$
|
—
|
|
|
$
|
96
|
|
|
$
|
1
|
|
|
$
|
97
|
|
|
As of January 31, 2017
|
|
As of October 31, 2016
|
||||||||||||||||||||||||||||
|
Cost
|
|
Gross
Unrealized Gain |
|
Gross
Unrealized Loss |
|
Fair
Value |
|
Cost
|
|
Gross
Unrealized Gain |
|
Gross
Unrealized Loss |
|
Fair
Value |
||||||||||||||||
|
In millions
|
||||||||||||||||||||||||||||||
Cash Equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Time deposits
|
$
|
2,280
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,280
|
|
|
$
|
2,092
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,092
|
|
Money market funds
|
2,541
|
|
|
—
|
|
|
—
|
|
|
2,541
|
|
|
2,568
|
|
|
—
|
|
|
—
|
|
|
2,568
|
|
||||||||
Total cash equivalents
|
4,821
|
|
|
—
|
|
|
—
|
|
|
4,821
|
|
|
4,660
|
|
|
—
|
|
|
—
|
|
|
4,660
|
|
||||||||
Available-for-Sale Investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Marketable equity securities
|
1
|
|
|
6
|
|
|
—
|
|
|
7
|
|
|
1
|
|
|
3
|
|
|
—
|
|
|
4
|
|
||||||||
Mutual funds
|
35
|
|
|
9
|
|
|
—
|
|
|
44
|
|
|
35
|
|
|
9
|
|
|
—
|
|
|
44
|
|
||||||||
Other debt securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||||||
Total available-for-sale investments
|
36
|
|
|
15
|
|
|
—
|
|
|
51
|
|
|
38
|
|
|
12
|
|
|
—
|
|
|
50
|
|
||||||||
Total cash equivalents and available-for-sale investments
|
$
|
4,857
|
|
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
4,872
|
|
|
$
|
4,698
|
|
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
4,710
|
|
|
As of January 31, 2017
|
||||||
|
Amortized
Cost
|
|
Fair Value
|
||||
|
In millions
|
||||||
Due in one year
|
$
|
—
|
|
|
$
|
—
|
|
Due in one to five years
|
$
|
—
|
|
|
$
|
—
|
|
Due in more than five years
|
$
|
35
|
|
|
$
|
44
|
|
|
As of January 31, 2017
|
|
As of October 31, 2016
|
||||||||||||||||||||||||||||||||||||
|
Outstanding
Gross Notional |
|
Other Current Assets
|
|
Other
Non-Current Assets |
|
Other
Accrued Liabilities |
|
Other
Non-Current Liabilities |
|
Outstanding
Gross Notional |
|
Other
Current Assets |
|
Other
Non-Current Assets |
|
Other
Accrued Liabilities |
|
Other
Non-Current Liabilities |
||||||||||||||||||||
|
In millions
|
||||||||||||||||||||||||||||||||||||||
Derivatives designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fair value hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate contracts
|
$
|
2,500
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
2,000
|
|
|
$
|
—
|
|
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency contracts
|
12,174
|
|
|
131
|
|
|
20
|
|
|
156
|
|
|
40
|
|
|
11,852
|
|
|
203
|
|
|
63
|
|
|
52
|
|
|
12
|
|
||||||||||
Total derivatives designated as hedging instruments
|
14,674
|
|
|
131
|
|
|
24
|
|
|
156
|
|
|
48
|
|
|
13,852
|
|
|
203
|
|
|
111
|
|
|
52
|
|
|
12
|
|
||||||||||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency contracts
|
3,808
|
|
|
12
|
|
|
3
|
|
|
40
|
|
|
3
|
|
|
3,934
|
|
|
11
|
|
|
—
|
|
|
31
|
|
|
—
|
|
||||||||||
Other derivatives
|
152
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
150
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||||||||
Total derivatives not designated as hedging instruments
|
3,960
|
|
|
13
|
|
|
3
|
|
|
40
|
|
|
3
|
|
|
4,084
|
|
|
11
|
|
|
—
|
|
|
33
|
|
|
—
|
|
||||||||||
Total derivatives
|
$
|
18,634
|
|
|
$
|
144
|
|
|
$
|
27
|
|
|
$
|
196
|
|
|
$
|
51
|
|
|
$
|
17,936
|
|
|
$
|
214
|
|
|
$
|
111
|
|
|
$
|
85
|
|
|
$
|
12
|
|
|
In the Consolidated Condensed Balance Sheets
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
Gross Amounts Not Offset
|
|
|
|
|
||||||||||||||
|
Gross Amount
Recognized
(i)
|
Gross Amount
Offset
(ii)
|
Net Amount
Presented
(iii) = (i)–(ii)
|
|
Derivatives
(iv)
|
|
Financial
Collateral
(v)
|
|
|
|
Net Amount
(vi) = (iii)–(iv)–(v)
|
||||||||||||||
|
In millions
|
||||||||||||||||||||||||
As of January 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Derivative assets
|
$
|
171
|
|
|
$
|
—
|
|
|
$
|
171
|
|
|
$
|
148
|
|
|
$
|
16
|
|
|
(1)
|
|
$
|
7
|
|
Derivative liabilities
|
$
|
247
|
|
|
$
|
—
|
|
|
$
|
247
|
|
|
$
|
148
|
|
|
$
|
70
|
|
|
(2)
|
|
$
|
29
|
|
As of October 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Derivative assets
|
$
|
325
|
|
|
$
|
—
|
|
|
$
|
325
|
|
|
$
|
88
|
|
|
$
|
189
|
|
|
(1)
|
|
$
|
48
|
|
Derivative liabilities
|
$
|
97
|
|
|
$
|
—
|
|
|
$
|
97
|
|
|
$
|
88
|
|
|
$
|
2
|
|
|
(2)
|
|
$
|
7
|
|
(1)
|
Represents the cash collateral posted by counterparties as of the respective reporting date for HP’s asset position, net of derivative amounts that could be offset, as of, generally,
two
business days prior to the respective reporting date.
|
(2)
|
Represents the collateral posted by HP through re-use of counterparty cash collateral as of the respective reporting date for HP’s liability position, net of derivative amounts that could be offset, as of, generally,
two
business days prior to the respective reporting date.
|
|
|
(Loss) Gain Recognized in Earnings on Derivative and Related Hedged Item
|
||||||||||||||||||||
Derivative Instrument
|
|
Location
|
|
Three months ended January 31, 2017
|
|
Three months ended January 31, 2016
|
|
Hedged Item
|
|
Location
|
|
Three months ended January 31, 2017
|
|
Three months ended January 31, 2016
|
||||||||
|
|
|
|
In millions
|
|
|
|
|
|
In millions
|
||||||||||||
Interest rate contracts
|
|
Interest and other, net
|
|
$
|
(52
|
)
|
|
$
|
14
|
|
|
Fixed-rate debt
|
|
Interest and other, net
|
|
$
|
52
|
|
|
$
|
(14
|
)
|
|
(Loss) Gain Recognized in
Other Comprehensive Income (“OCI”) on Derivatives (Effective Portion) |
|
Gain (Loss) Reclassified from Accumulated OCI Into
Earnings (Effective Portion)
|
||||||||||||||
|
Three months ended January 31, 2017
|
|
Three months ended January 31, 2016
|
|
Location
|
|
Three months ended January 31, 2017
|
|
Three months ended January 31, 2016
|
||||||||
|
In millions
|
|
|
|
In millions
|
||||||||||||
Cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency contracts
|
$
|
(169
|
)
|
|
$
|
105
|
|
|
Net revenue
|
|
$
|
76
|
|
|
$
|
78
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
—
|
|
|
(40
|
)
|
||||
|
|
|
|
|
|
|
Interest and other, net
|
|
(5
|
)
|
|
(4
|
)
|
||||
Total
|
$
|
(169
|
)
|
|
$
|
105
|
|
|
|
|
$
|
71
|
|
|
$
|
34
|
|
|
Gain Recognized in Earnings on Derivatives
|
||||||||
|
Location
|
|
Three months ended January 31, 2017
|
|
Three months ended January 31, 2016
|
||||
|
|
|
In millions
|
||||||
Foreign currency contracts
|
Interest and other, net
|
|
$
|
(2
|
)
|
|
$
|
21
|
|
Other derivatives
|
Interest and other, net
|
|
3
|
|
|
(8
|
)
|
||
Total
|
|
|
$
|
1
|
|
|
$
|
13
|
|
|
As of January 31, 2017
|
|
As of October 31, 2016
|
||||||||||
|
Amount
Outstanding |
|
Weighted-Average
Interest Rate |
|
Amount
Outstanding |
|
Weighted-Average
Interest Rate |
||||||
|
In millions
|
|
|
|
In millions
|
|
|
||||||
Current portion of long-term debt
|
$
|
68
|
|
|
3.8
|
%
|
|
$
|
51
|
|
|
4.1
|
%
|
Notes payable to banks, lines of credit and other
|
32
|
|
|
1.1
|
%
|
|
27
|
|
|
2.0
|
%
|
||
|
$
|
100
|
|
|
|
|
|
$
|
78
|
|
|
|
|
|
As of
|
||||||
|
January 31, 2017
|
|
October 31, 2016
|
||||
|
In millions
|
||||||
U.S. Dollar Global Notes
(1)
|
|
|
|
|
|
||
2009 Shelf Registration Statement:
|
|
|
|
|
|
||
$1,350 issued at discount to par at a price of 99.827% in December 2010 at 3.75%, due December 2020
|
648
|
|
|
648
|
|
||
$1,250 issued at discount to par at a price of 99.799% in May 2011 at 4.3%, due June 2021
|
1,248
|
|
|
1,248
|
|
||
$1,000 issued at discount to par at a price of 99.816% in September 2011 at 4.375%, due September 2021
|
999
|
|
|
999
|
|
||
$1,500 issued at discount to par at a price of 99.707% in December 2011 at 4.65%, due December 2021
|
1,498
|
|
|
1,498
|
|
||
$500 issued at discount to par at a price of 99.771% in March 2012 at 4.05%, due September 2022
|
499
|
|
|
499
|
|
||
$1,200 issued at discount to par at a price of 99.863% in September 2011 at 6.0%, due September 2041
|
1,199
|
|
|
1,199
|
|
||
2012 Shelf Registration Statement:
|
|
|
|
|
|
||
$750 issued at par in January 2014 at three-month USD LIBOR plus 0.94%, due January 2019
|
102
|
|
|
102
|
|
||
$1,250 issued at discount to par at a price of 99.954% in January 2014 at 2.75%, due January 2019
|
300
|
|
|
300
|
|
||
|
6,493
|
|
|
6,493
|
|
||
Other, including capital lease obligations, at 0.51%-8.50%, due in calendar years 2017-2025
|
266
|
|
|
244
|
|
||
Fair value adjustment related to hedged debt
|
19
|
|
|
72
|
|
||
Less: unamortized debt issuance cost
(2)
|
(22
|
)
|
|
(23
|
)
|
||
Less: current portion of long-term debt
|
(68
|
)
|
|
(51
|
)
|
||
Total long-term debt
|
$
|
6,688
|
|
|
$
|
6,735
|
|
(1)
|
HP may redeem some or all of the fixed-rate U.S. Dollar Global Notes at any time in accordance with the terms thereof. The U.S. Dollar Global Notes are senior unsecured debt.
|
(2)
|
Effective November 1, 2016, HP adopted ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs”, which amended the presentation of debt issuance costs as a direct deduction from the carrying amount of debt liability.
|
|
Three months ended January 31
|
||||||
|
2017
|
|
2016
|
||||
|
In millions
|
||||||
Tax effects on change in unrealized gains on available-for-sale securities:
|
|
|
|
|
|
||
Tax provision on unrealized gains arising during the period
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
(1
|
)
|
|
—
|
|
||
Tax effects on change in unrealized components of cash flow hedges:
|
|
|
|
|
|||
Tax (provision) benefit on unrealized (loss) gains arising during the period
|
(3
|
)
|
|
11
|
|
||
Tax provision on gains reclassified into earnings
|
4
|
|
|
8
|
|
||
|
1
|
|
|
19
|
|
||
Tax effects on change in unrealized components of defined benefit plans:
|
|
|
|
|
|
||
Tax provision on amortization of actuarial loss and prior service benefit
|
(6
|
)
|
|
(3
|
)
|
||
Tax provision on settlements and other
|
(8
|
)
|
|
—
|
|
||
|
(14
|
)
|
|
(3
|
)
|
||
Tax (provision) benefit on other comprehensive loss
|
$
|
(14
|
)
|
|
$
|
16
|
|
|
Three months ended January 31
|
||||||
|
2017
|
|
2016
|
||||
|
In millions
|
||||||
Other comprehensive income, net of taxes:
|
|
|
|
|
|
||
Change in unrealized gains on available-for-sale securities:
|
|
|
|
|
|
||
Unrealized gains arising during the period
|
$
|
2
|
|
|
$
|
—
|
|
|
2
|
|
|
—
|
|
||
Change in unrealized components of cash flow hedges:
|
|
|
|
|
|||
Unrealized (losses) gains arising during the period
|
(172
|
)
|
|
116
|
|
||
Gains reclassified into earnings
(1)
|
(67
|
)
|
|
(26
|
)
|
||
|
(239
|
)
|
|
90
|
|
||
Change in unrealized components of defined benefit plans:
|
|
|
|
|
|
||
Amortization of actuarial loss and prior service benefit
(2)
|
14
|
|
|
9
|
|
||
Settlements and other
|
(8
|
)
|
|
—
|
|
||
|
6
|
|
|
9
|
|
||
Other comprehensive (loss) income, net of taxes
|
$
|
(231
|
)
|
|
$
|
99
|
|
(1)
|
Reclassification of pre-tax gains on cash flow hedges into the Consolidated Condensed Statements of Earnings was as follows:
|
|
Three months ended January 31
|
||||||
|
2017
|
|
2016
|
||||
|
In millions
|
||||||
Net revenue
|
$
|
(76
|
)
|
|
$
|
(78
|
)
|
Cost of revenue
|
—
|
|
|
40
|
|
||
Interest and other, net
|
5
|
|
|
4
|
|
||
Total
|
$
|
(71
|
)
|
|
$
|
(34
|
)
|
(2)
|
These components are included in the computation of net pension and post-retirement benefit (credit) charges in Note 4, “Retirement and Post-Retirement Benefit Plans”.
|
|
Three months ended January 31, 2017
|
||||||||||||||
|
Net unrealized
gains on available-for-sale securities |
|
Net unrealized
gains (losses) on cash flow hedges |
|
Unrealized
components of defined benefit plans |
|
Accumulated
other comprehensive loss |
||||||||
|
In millions
|
||||||||||||||
Balance at beginning of period
|
$
|
9
|
|
|
$
|
186
|
|
|
$
|
(1,633
|
)
|
|
$
|
(1,438
|
)
|
Other comprehensive income (loss) before reclassifications
|
2
|
|
|
(172
|
)
|
|
(8
|
)
|
|
(178
|
)
|
||||
Reclassifications of losses into earnings
|
—
|
|
|
(67
|
)
|
|
14
|
|
|
(53
|
)
|
||||
Balance at end of period
|
$
|
11
|
|
|
$
|
(53
|
)
|
|
$
|
(1,627
|
)
|
|
$
|
(1,669
|
)
|
|
Three months ended January 31
|
||||||
|
2017
|
|
2016
|
||||
|
In millions, except per share amounts
|
||||||
Numerator:
|
|
|
|
|
|
||
Net earnings from continuing operations
|
$
|
611
|
|
|
$
|
650
|
|
Net loss from discontinued operations
|
—
|
|
|
(58
|
)
|
||
Net earnings
|
$
|
611
|
|
|
$
|
592
|
|
Denominator:
|
|
|
|
|
|
||
Weighted-average shares used to compute basic net EPS
|
1,704
|
|
|
1,776
|
|
||
Dilutive effect of employee stock plans
|
17
|
|
|
9
|
|
||
Weighted-average shares used to compute diluted net EPS
|
1,721
|
|
|
1,785
|
|
||
Basic net earnings (loss) per share:
|
|
|
|
|
|
||
Continuing operations
|
$
|
0.36
|
|
|
$
|
0.37
|
|
Discontinued operations
|
—
|
|
|
(0.04
|
)
|
||
Basic net earnings per share
|
$
|
0.36
|
|
|
$
|
0.33
|
|
Diluted net earnings (loss) per share:
|
|
|
|
|
|
||
Continuing operations
|
$
|
0.36
|
|
|
$
|
0.36
|
|
Discontinued operations
|
—
|
|
|
(0.03
|
)
|
||
Diluted net earnings per share
|
$
|
0.36
|
|
|
$
|
0.33
|
|
Anti-dilutive weighted average stock-based compensation awards
(1)
|
9
|
|
|
25
|
|
(1)
|
HP excludes stock options and restricted stock units where the assumed proceeds exceed the average market price from the calculation of diluted net EPS, because their effect would be anti-dilutive. The assumed proceeds of a stock option include the sum of its exercise price and average unrecognized compensation cost. The assumed proceeds of a restricted stock unit represents average unrecognized compensation.
|
•
|
Investigations
.
As a result of the findings of an ongoing investigation, HP has provided information to the United Kingdom (“U.K.”) Serious Fraud Office, the U.S. Department of Justice (“DOJ”) and the SEC related to the accounting improprieties, disclosure failures and misrepresentations at Autonomy that occurred prior to and in connection with HP’s acquisition of Autonomy. On January 19, 2015, the U.K. Serious Fraud Office notified HP that it
|
•
|
Litigation
.
As described below, HP is involved in various stockholder litigation relating to, among other things, its October 2011 acquisition of Autonomy and its November 20, 2012 announcement that it recorded a non-cash charge for the impairment of goodwill and intangible assets within Hewlett Packard Enterprise’s software segment of approximately
$8.8 billion
in the fourth quarter of its 2012 fiscal year and HP’s statements that, based on HP’s findings from an ongoing investigation, the majority of this impairment charge related to accounting improprieties, misrepresentations to the market and disclosure failures at Autonomy that occurred prior to and in connection with HP’s acquisition of Autonomy and the impact of those improprieties, failures and misrepresentations on the expected future financial performance of the Autonomy business over the long-term. This stockholder litigation was commenced against, among others, certain current and former HP executive officers, certain current and former members of HP’s Board of Directors and certain advisors to HP. The plaintiffs in these litigation matters are seeking to recover certain compensation paid by HP to the defendants and/or other damages. Pursuant to the separation and distribution agreement, HP and Hewlett Packard Enterprise share equally the cost and any damages arising from these litigation matters. These matters include the following:
|
•
|
In re Hewlett-Packard Shareholder Derivative Litigation
(the “Federal Court Derivative Action”) consists of
seven
consolidated lawsuits filed beginning on November 26, 2012 in the United States District Court for the Northern District of California alleging, among other things, that the defendants violated Sections
10
(b) and
20
(a) of the Exchange Act by concealing material information and making false statements related to HP’s acquisition of Autonomy and the financial performance of HP’s enterprise services business. The lawsuits also allege that the defendants breached their fiduciary duties, wasted corporate assets and were unjustly enriched in connection with HP’s acquisition of Autonomy and by causing HP to repurchase its own stock at allegedly inflated prices between August 2011 and October 2012.
One
lawsuit further alleges that certain individual defendants engaged in or assisted insider trading and thereby breached their fiduciary duties, were unjustly enriched and violated Sections
25402
and
25403
of the California Corporations Code. On May 3, 2013, the lead plaintiff filed a consolidated complaint alleging, among other things, that the defendants concealed material information and made false statements related to HP’s acquisition of Autonomy and Autonomy’s Intelligent Data Operating Layer technology and thereby violated Sections 10(b) and 20(a) of the Exchange Act, breached their fiduciary duties, engaged in “abuse of control” over HP, corporate waste and were unjustly enriched. The litigation was stayed until June 2014. The lead plaintiff filed a stipulation of proposed settlement on June 30, 2014. The court declined to grant preliminary approval to this settlement, and, on December 19, 2014, also declined to grant preliminary approval to a revised version of the settlement. On January 22, 2015, the lead plaintiff moved for preliminary approval of a further revised version of the settlement. On March 13, 2015, the court issued an order granting preliminary approval to the settlement. On July 24, 2015, the court held a hearing to entertain any remaining objections to the settlement and decide whether to grant final approval of the settlement. On July 30, 2015, the court granted final approval to the settlement and denied all remaining objections to the settlement.
Three
objectors to the settlement appealed the court’s final approval order to United States Court of Appeals for the Ninth Circuit. Plaintiffs-appellants filed their opening briefs on December 30, 2015. HP’s response brief was filed on February 29, 2016, and the reply briefs were filed on May 12, 2016.
|
•
|
Autonomy Corporation Limited v. Michael Lynch and Sushovan Hussain
.
On April 17, 2015,
four
HP subsidiaries (Autonomy Corporation Limited, Hewlett Packard Vision BV, Autonomy Systems, Limited, and Autonomy, Inc.) initiated civil proceedings in the U.K. High Court of Justice against
two
members of Autonomy’s former management, Michael Lynch and Sushovan Hussain. The Particulars of Claim seek damages in excess of
$5 billion
from Messrs. Lynch and Hussain for breach of their fiduciary duties by causing Autonomy group companies to engage in improper transactions and accounting practices. On October 1, 2015, Messrs. Lynch and Hussain filed their defenses. Mr. Lynch also filed a counterclaim against Autonomy Corporation Limited seeking
$160 million
in damages, among other things, for alleged misstatements regarding Lynch. The HP subsidiary claimants filed their replies to the defenses and the asserted counter-claim on March 11, 2016. The parties are actively engaged in the disclosure process. A
six
-month trial is scheduled to begin on January 28, 2019.
|
•
|
In re HP ERISA Litigation
consists of
three
consolidated putative class actions filed beginning on December 6, 2012 in the United States District Court for the Northern District of California alleging, among other things, that from August 18, 2011 to November 22, 2012, the defendants breached their fiduciary obligations to HP’s
401
(k) Plan and its participants and thereby violated Sections
404
(a)
(1)
and
405
(a) of the Employee Retirement Income Security Act of 1974, as amended, by concealing negative information regarding the financial performance of Autonomy and HP’s enterprise services business and by failing to restrict participants from investing in HP stock. On August 16, 2013, HP filed a motion to dismiss the lawsuit. On March 31, 2014, the court granted HP’s motion to dismiss this action with leave to amend. On July 16, 2014, the plaintiffs filed a second amended complaint containing substantially similar allegations and seeking substantially similar relief as the first amended complaint. On June 15, 2015, the court granted HP’s motion to dismiss the second amended complaint in its entirety and denied plaintiffs leave to file another amended complaint. On July 2, 2015, plaintiffs appealed the court’s order to the United States Court of Appeals for the Ninth Circuit.
|
|
Three months ended January 31, 2017
|
||
|
In millions
|
||
Balance at beginning of period
|
$
|
980
|
|
Accruals for warranties issued
|
236
|
|
|
Adjustments related to pre-existing warranties (including changes in estimates)
|
(11
|
)
|
|
Settlements made (in cash or in kind)
|
(256
|
)
|
|
Balance at end of period
|
$
|
949
|
|
|
Three months ended January 31
|
||||||
|
2017
|
|
2016
|
||||
|
In millions
|
||||||
Expenses
(1)
|
$
|
—
|
|
|
$
|
87
|
|
Interest and other, net
(2)
|
(29
|
)
|
|
—
|
|
||
Earnings (loss) from discontinued operations before taxes
|
29
|
|
|
(87
|
)
|
||
(Provision for) benefit from taxes
|
(29
|
)
|
|
29
|
|
||
Loss from discontinued operations, net of taxes
|
$
|
—
|
|
|
$
|
(58
|
)
|
(1)
|
Expenses for the
three
months ended
January 31, 2016
were primarily related to separation costs.
|
(2)
|
In connection with the TMA, Interest and other, net for the
three
months ended
January 31, 2017
includes
$29 million
of net tax indemnification amounts and Provision for taxes for the
three
months ended
January 31, 2017
includes
$29 million
of the tax impact relating to the above amounts. For more information on tax indemnifications and the TMA, see Note 6, “Taxes on Earnings”.
|
•
|
HP Inc. Separation Transaction.
A discussion of the separation of Hewlett Packard Enterprise Company, HP Inc.’s former enterprise technology infrastructure, software, services and financing businesses.
|
•
|
Overview.
A discussion of our business and other highlights affecting the company to provide context for the remainder of this MD&A.
|
•
|
Critical Accounting Policies and Estimates.
A discussion of accounting policies and estimates that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results.
|
•
|
Results of Operations.
An analysis of our continuing operations financial results comparing the
three
months ended
January 31, 2017
to the prior-year period. A discussion of the results of continuing operations is followed by a more detailed discussion of the results of operations by segment.
|
•
|
Liquidity and Capital Resources.
An analysis of changes in our cash flows and a discussion of our liquidity and continuing financial condition.
|
•
|
Contractual and Other Obligations.
An overview of contractual obligations, retirement and post-retirement benefit plan contributions, cost saving plan, uncertain tax positions and off-balance sheet arrangements of our continuing operations.
|
•
|
In Personal Systems, our strategic focus is on profitable growth through improved market segmentation with respect to enhanced innovation in multi-operating systems, multi-architecture, geography, customer segments and other key attributes. Additionally, HP is investing in premium and mobility form factors such as convertible notebooks, detachable notebooks, and commercial tablets and mobility devices in order to meet customer preference for mobile, thinner and lighter devices. We expect a decrease in the rate of the market decline and we believe that we are well positioned due to our competitive product lineup.
|
•
|
In Printing, our strategic focus is on business printing, a shift to contractual solutions and graphics. Business printing includes delivering solutions to SMBs and enterprise customers, such as multi-function and PageWide printers,
|
•
|
In Personal Systems, demand for PCs is being impacted by weaker macroeconomic conditions and currency depreciation in Latin America and certain European and Asian markets. As such, we anticipate continued market headwinds.
|
•
|
In Printing, we are experiencing the impact of demand challenges in consumer and commercial markets. We are also experiencing an overall competitive pricing environment and the strength of the yen has allowed our Japanese competitors to be aggressive in their pricing. We obtain a number of components from single sources due to technology, availability, price, quality or other considerations. For instance, we source laser printer engines and laser toner cartridges from Canon. Any decision by either party to not renew our agreement with Canon or to limit or reduce the scope of the agreement could adversely affect our net revenue from LaserJet products; however, we have a long-standing business relationship with Canon and do not anticipate non-renewal of this agreement.
|
|
Three months ended January 31
|
||||||||||||
|
2017
|
|
2016
|
||||||||||
|
Dollars
|
|
% of Net Revenue
|
|
Dollars
|
|
% of Net Revenue
|
||||||
|
Dollars in millions
|
||||||||||||
Net revenue
|
$
|
12,684
|
|
|
100.0
|
%
|
|
$
|
12,246
|
|
|
100.0
|
%
|
Cost of revenue
|
(10,436
|
)
|
|
(82.3
|
)%
|
|
(9,961
|
)
|
|
(81.3
|
)%
|
||
Gross profit
|
2,248
|
|
|
17.7
|
%
|
|
2,285
|
|
|
18.7
|
%
|
||
Research and development
|
(296
|
)
|
|
(2.3
|
)%
|
|
(292
|
)
|
|
(2.4
|
)%
|
||
Selling, general and administrative
|
(1,017
|
)
|
|
(8.1
|
)%
|
|
(1,037
|
)
|
|
(8.5
|
)%
|
||
Acquisition-related charges
|
(16
|
)
|
|
(0.1
|
)%
|
|
—
|
|
|
—
|
%
|
||
Restructuring and other charges
|
(63
|
)
|
|
(0.5
|
)%
|
|
(20
|
)
|
|
(0.2
|
)%
|
||
Amortization of intangible assets
|
—
|
|
|
—
|
%
|
|
(8
|
)
|
|
—
|
%
|
||
Earnings from continuing operations before interest and taxes
|
856
|
|
|
6.7
|
%
|
|
928
|
|
|
7.6
|
%
|
||
Interest and other, net
|
(81
|
)
|
|
(0.6
|
)%
|
|
(94
|
)
|
|
(0.8
|
)%
|
||
Earnings from continuing operations before taxes
|
775
|
|
|
6.1
|
%
|
|
834
|
|
|
6.8
|
%
|
||
Provision for taxes
|
(164
|
)
|
|
(1.3
|
)%
|
|
(184
|
)
|
|
(1.5
|
)%
|
||
Net earnings from continuing operations
|
611
|
|
|
4.8
|
%
|
|
650
|
|
|
5.3
|
%
|
||
Net loss from discontinued operations, net of taxes
|
—
|
|
|
—
|
%
|
|
(58
|
)
|
|
(0.5
|
)%
|
||
Net earnings
|
$
|
611
|
|
|
4.8
|
%
|
|
$
|
592
|
|
|
4.8
|
%
|
|
Three months ended January 31
|
|||||||||
|
2017
|
|
2016
|
|
% Change
|
|||||
|
Dollars in millions
|
|||||||||
Net revenue
|
$
|
8,224
|
|
|
$
|
7,467
|
|
|
10.1
|
%
|
Earnings from operations
|
$
|
313
|
|
|
$
|
229
|
|
|
36.7
|
%
|
Earnings from operations as a % of net revenue
|
3.8
|
%
|
|
3.1
|
%
|
|
|
|
|
Three months ended January 31
|
|||||||||
|
Net Revenue
|
|
Weighted Net Revenue Change
|
|||||||
|
2017
|
|
2016
|
|
||||||
|
Dollars in millions
|
|
Percentage Points
|
|||||||
Notebooks
|
$
|
4,890
|
|
|
$
|
4,205
|
|
|
9.2
|
|
Desktops
|
2,534
|
|
|
2,527
|
|
|
0.1
|
|
||
Workstations
|
491
|
|
|
444
|
|
|
0.6
|
|
||
Other
|
309
|
|
|
291
|
|
|
0.2
|
|
||
Total Personal Systems
|
$
|
8,224
|
|
|
$
|
7,467
|
|
|
10.1
|
|
|
Three months ended January 31
|
|||||||||
|
2017
|
|
2016
|
|
% Change
|
|||||
|
Dollars in millions
|
|||||||||
Net revenue
|
$
|
4,483
|
|
|
$
|
4,642
|
|
|
(3.4
|
)%
|
Earnings from operations
|
$
|
716
|
|
|
$
|
787
|
|
|
(9.0
|
)%
|
Earnings from operations as a % of net revenue
|
16.0
|
%
|
|
17.0
|
%
|
|
|
|
|
Three months ended January 31
|
|||||||||
|
Net Revenue
|
|
|
|||||||
|
2017
|
|
2016
|
|
Weighted Net Revenue Change
|
|||||
|
Dollars in millions
|
|
Percentage Points
|
|||||||
Supplies
|
$
|
3,007
|
|
|
$
|
3,101
|
|
|
(2.0
|
)
|
Commercial Hardware
|
886
|
|
|
964
|
|
|
(1.7
|
)
|
||
Consumer Hardware
|
590
|
|
|
577
|
|
|
0.3
|
|
||
Total Printing
|
$
|
4,483
|
|
|
$
|
4,642
|
|
|
(3.4
|
)
|
|
Three months ended January 31
|
||||||
|
2017
|
|
2016
|
||||
|
In millions
|
||||||
Net cash provided by (used in) operating activities
|
$
|
767
|
|
|
$
|
(102
|
)
|
Net cash used in investing activities
|
(86
|
)
|
|
(111
|
)
|
||
Net cash used in financing activities
|
(638
|
)
|
|
(13,532
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
$
|
43
|
|
|
$
|
(13,745
|
)
|
|
As of
|
|
As of
|
|
|
|||||||||||||||
|
January 31, 2017
|
|
October 31, 2016
|
|
Change
|
|
January 31, 2016
|
|
October 31, 2015
|
|
Change
|
|
Y/Y Change
|
|||||||
Days of sales outstanding in accounts receivable ("DSO")
|
25
|
|
|
30
|
|
|
(5
|
)
|
|
30
|
|
|
35
|
|
|
(5
|
)
|
|
(5
|
)
|
Days of supply in inventory ("DOS")
|
39
|
|
|
39
|
|
|
—
|
|
|
37
|
|
|
39
|
|
|
(2
|
)
|
|
2
|
|
Days of purchases outstanding in accounts payable ("DPO")
|
(94
|
)
|
|
(98
|
)
|
|
4
|
|
|
(82
|
)
|
|
(93
|
)
|
|
11
|
|
|
(12
|
)
|
Cash conversion cycle
|
(30
|
)
|
|
(29
|
)
|
|
(1
|
)
|
|
(15
|
)
|
|
(19
|
)
|
|
4
|
|
|
(15
|
)
|
|
As of January 31, 2017
|
||
|
In millions
|
||
2016 Shelf Registration Statement
|
Unspecified
|
|
|
Uncommitted lines of credit
|
$
|
950
|
|
Period
|
Total
Number of Shares Purchased |
|
Average
Price Paid per Share |
|
Total Number of
Shares Purchased as Part of Publicly Announced Plans or Programs |
|
Approximate Dollar
Value of Shares that May Yet Be Purchased under the Plans or Programs |
||||||
|
In thousands, except per share amounts
|
||||||||||||
November 2016
|
7,807
|
|
|
$
|
14.99
|
|
|
7,807
|
|
|
$
|
3,754,979
|
|
December 2016
|
8,318
|
|
|
$
|
15.44
|
|
|
8,318
|
|
|
$
|
3,626,501
|
|
January 2017
|
9,423
|
|
|
$
|
14.88
|
|
|
9,423
|
|
|
$
|
3,486,276
|
|
Total
|
25,548
|
|
|
|
|
|
25,548
|
|
|
|
|
|
HP INC.
|
|
/s/ Catherine A. Lesjak
|
|
Catherine A. Lesjak
Chief Financial Officer
(Principal Financial Officer and
Authorized Signatory)
|
Exhibit
Number
|
|
|
|
Incorporated by Reference
|
||||||
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit(s)
|
|
Filing Date
|
||
2(a)
|
|
Separation and Distribution Agreement, dated as of October 31, 2015, by and among Hewlett-Packard Company, Hewlett Packard Enterprise Company and the Other Parties Thereto.**
|
|
8-K
|
|
001-04423
|
|
2.1
|
|
November 5, 2015
|
2(b)
|
|
Transition Services Agreement, dated as of November 1, 2015, by and between Hewlett-Packard Company and Hewlett Packard Enterprise Company.**
|
|
8-K
|
|
001-04423
|
|
2.2
|
|
November 5, 2015
|
2(c)
|
|
Tax Matters Agreement, dated as of October 31, 2015, by and between Hewlett-Packard Company and Hewlett Packard Enterprise Company.**
|
|
8-K
|
|
001-04423
|
|
2.3
|
|
November 5, 2015
|
2(d)
|
|
Employee Matters Agreement, dated as of October 31, 2015, by and between Hewlett-Packard Company and Hewlett Packard Enterprise Company.**
|
|
8-K
|
|
001-04423
|
|
2.4
|
|
November 5, 2015
|
2(e)
|
|
Real Estate Matters Agreement, dated as of October 31, 2015, by and between Hewlett-Packard Company and Hewlett Packard Enterprise Company.**
|
|
8-K
|
|
001-04423
|
|
2.5
|
|
November 5, 2015
|
2(f)
|
|
Master Commercial Agreement, dated as of November 1, 2015, by and between Hewlett-Packard Company and Hewlett Packard Enterprise Company.**
|
|
8-K
|
|
001-04423
|
|
2.6
|
|
November 5, 2015
|
2(g)
|
|
Information Technology Service Agreement, dated as of November 1, 2015, by and between Hewlett-Packard Company and HP Enterprise Services, LLC.**
|
|
8-K
|
|
001-04423
|
|
2.7
|
|
November 5, 2015
|
3(a)
|
|
Registrant’s Certificate of Incorporation.
|
|
10-Q
|
|
001-04423
|
|
3(a)
|
|
June 12, 1998
|
3(b)
|
|
Registrant’s Amendment to the Certificate of Incorporation.
|
|
10-Q
|
|
001-04423
|
|
3(b)
|
|
March 16, 2001
|
Exhibit
Number
|
|
|
|
Incorporated by Reference
|
||||||
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit(s)
|
|
Filing Date
|
||
3(c)
|
|
Registrant’s Certificate of Amendment to the Certificate of Incorporation.
|
|
8-K
|
|
001-04423
|
|
3.2
|
|
October 22, 2015
|
3(d)
|
|
Registrant’s Certificate of Amendment to the Certificate of Incorporation.
|
|
8-K
|
|
001-04423
|
|
3.1
|
|
April 7, 2016
|
3(e)
|
|
Registrant’s Amended and Restated Bylaws.
|
|
8-K
|
|
001-04423
|
|
3.2
|
|
July 25, 2016
|
4(a)
|
|
Form of Senior Indenture
|
|
S-3
|
|
333-215116
|
|
4.1
|
|
December 15, 2016
|
4(b)
|
|
Form of Subordinated Indenture.
|
|
S-3
|
|
333-21516
|
|
4.2
|
|
December 15, 2016
|
4(c)
|
|
Form of Registrant’s 3.750% Global Note due December 1, 2020 and form of related Officers’ Certificate.
|
|
8-K
|
|
001-04423
|
|
4.2 and 4.3
|
|
December 2, 2010
|
4(d)
|
|
Form of Registrant’s 4.300% Global Note due June 1, 2021 and form of related Officers’ Certificate.
|
|
8-K
|
|
001-04423
|
|
4.5 and 4.6
|
|
June 1, 2011
|
4(e)
|
|
Form of Registrant’s 4.375% Global Note due September 15, 2021 and 6.000% Global Note due September 15, 2041 and form of related Officers’ Certificate.
|
|
8-K
|
|
001-04423
|
|
4.4, 4.5 and 4.6
|
|
September 19, 2011
|
4(f)
|
|
Form of Registrant’s 4.650% Global Note due December 9, 2021 and related Officers’ Certificate.
|
|
8-K
|
|
001-04423
|
|
4.3 and 4.4
|
|
December 12, 2011
|
4(g)
|
|
Form of Registrant’s 4.050% Global Note due September 15, 2022 and related Officers’ Certificate.
|
|
8-K
|
|
001-04423
|
|
4.2 and 4.3
|
|
March 12, 2012
|
Exhibit
Number
|
|
|
|
Incorporated by Reference
|
||||||
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit(s)
|
|
Filing Date
|
||
4(h)
|
|
Form of Registrant’s 2.750% Global Note due January 14, 2019 and Floating Rate Global Note due January 14, 2019 and related Officers’ Certificate.
|
|
8-K
|
|
001-04423
|
|
4.1, 4.2 and 4.3
|
|
January 14, 2014
|
4(i)
|
|
Specimen certificate for the Registrant’s common stock.
|
|
8-K/A
|
|
001-04423
|
|
4.1
|
|
June 23, 2006
|
10(a)
|
|
Registrant’s 2004 Stock Incentive Plan.*
|
|
S-8
|
|
333-114253
|
|
4.1
|
|
April 7, 2004
|
10(b)
|
|
Registrant’s Excess Benefit Retirement Plan, amended and restated as of January 1, 2006.*
|
|
8-K
|
|
001-04423
|
|
10.2
|
|
September 21, 2006
|
10(c)
|
|
Hewlett-Packard Company Cash Account Restoration Plan, amended and restated as of January 1, 2005.*
|
|
8-K
|
|
001-04423
|
|
99.3
|
|
November 23, 2005
|
10(d)
|
|
Registrant’s 2005 Pay-for-Results Plan, as amended.*
|
|
10-K
|
|
001-04423
|
|
10(h)
|
|
December 14, 2011
|
10(e)
|
|
Registrant’s Executive Severance Agreement.*
|
|
10-Q
|
|
001-04423
|
|
10(u)(u)
|
|
June 13, 2002
|
10(f)
|
|
Registrant’s Executive Officers Severance Agreement.*
|
|
10-Q
|
|
001-04423
|
|
10(v)(v)
|
|
June 13, 2002
|
10(g)
|
|
Form letter regarding severance offset for restricted stock and restricted units.*
|
|
8-K
|
|
001-04423
|
|
10.2
|
|
March 22, 2005
|
10(h)
|
|
Form of Agreement Regarding Confidential Information and Proprietary Developments (California).*
|
|
8-K
|
|
001-04423
|
|
10.2
|
|
January 24, 2008
|
10(i)
|
|
Form of Agreement Regarding Confidential Information and Proprietary Developments (Texas).*
|
|
10-Q
|
|
001-04423
|
|
10(o)(o)
|
|
March 10, 2008
|
10(j)
|
|
Form of Stock Option Agreement for Registrant’s 2004 Stock Incentive Plan.*
|
|
10-Q
|
|
001-04423
|
|
10(c)(c)
|
|
March 10, 2008
|
10(k)
|
|
Form of Option Agreement for Registrant’s 2000 Stock Plan.*
|
|
10-Q
|
|
001-04423
|
|
10(t)(t)
|
|
June 6, 2008
|
10(1)
|
|
Form of Common Stock Payment Agreement for Registrant’s 2000 Stock Plan.*
|
|
10-Q
|
|
001-04423
|
|
10(u)(u)
|
|
June 6, 2008
|
10(m)
|
|
Form of Stock Notification and Award Agreement for awards of non-qualified stock options.*
|
|
10-K
|
|
001-04423
|
|
10(y)(y)
|
|
December 18, 2008
|
Exhibit
Number
|
|
|
|
Incorporated by Reference
|
||||||
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit(s)
|
|
Filing Date
|
||
10(n)
|
|
First Amendment to the Hewlett-Packard Company Excess Benefit Retirement Plan.*
|
|
10-Q
|
|
001-04423
|
|
10(b)(b)(b)
|
|
March 10, 2009
|
10(o)
|
|
Form of Stock Notification and Award Agreement for awards of non-qualified stock options.*
|
|
10-K
|
|
001-04423
|
|
10(i)(i)(i)
|
|
December 15, 2010
|
10(p)
|
|
Form of Agreement Regarding Confidential Information and Proprietary Developments (California—new hires).*
|
|
10-K
|
|
001-04423
|
|
10(j)(j)(j)
|
|
December 15, 2010
|
10(q)
|
|
Form of Agreement Regarding Confidential Information and Proprietary Developments (California—current employees).*
|
|
10-K
|
|
001-04423
|
|
10(k)(k)(k)
|
|
December 15, 2010
|
10(r)
|
|
Second Amended and Restated Hewlett-Packard Company 2004 Stock Incentive Plan, as amended effective February 28, 2013.*
|
|
8-K
|
|
001-04423
|
|
10.2
|
|
March 21, 2013
|
10(s)
|
|
Form of Stock Notification and Award Agreement for awards of restricted stock units.*
|
|
10-Q
|
|
001-04423
|
|
10(u)(u)
|
|
March 11, 2014
|
10(t)
|
|
Form of Stock Notification and Award Agreement for awards of foreign stock appreciation rights.*
|
|
10-Q
|
|
001-04423
|
|
10(v)(v)
|
|
March 11, 2014
|
10(u)
|
|
Form of Stock Notification and Award Agreement for long-term cash awards.*
|
|
10-Q
|
|
001-04423
|
|
10(w)(w)
|
|
March 11, 2014
|
10(v)
|
|
Form of Stock Notification and Award Agreement for awards of non-qualified stock options.*
|
|
10-Q
|
|
001-04423
|
|
10(x)(x)
|
|
March 11, 2014
|
10(w)
|
|
Form of Grant Agreement for grants of performance-adjusted restricted stock units.*
|
|
10-Q
|
|
001-04423
|
|
10(y)(y)
|
|
March 11, 2014
|
10(x)
|
|
Form of Stock Notification and Award Agreement for awards of restricted stock.*
|
|
10-Q
|
|
001-04423
|
|
10(z)(z)
|
|
March 11, 2014
|
10(y)
|
|
Form of Stock Notification and Award Agreement for awards of performance-contingent non-qualified stock options.*
|
|
10-Q
|
|
001-04423
|
|
10(a)(a)(a)
|
|
March 11, 2014
|
Exhibit
Number
|
|
|
|
Incorporated by Reference
|
||||||
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit(s)
|
|
Filing Date
|
||
10(z)
|
|
Form of Grant Agreement for grants of performance-contingent non-qualified stock options.*
|
|
10-Q
|
|
001-04423
|
|
10(b)(b)(b)
|
|
March 11, 2014
|
10(a)(a)
|
|
Form of Grant Agreement for grants of restricted stock units.*
|
|
10-Q
|
|
001-04423
|
|
10(c)(c)(c)
|
|
March 11, 2015
|
10(b)(b)
|
|
Form of Grant Agreement for grants of foreign stock appreciation rights.*
|
|
10-Q
|
|
001-04423
|
|
10(d)(d)(d)
|
|
March 11, 2015
|
10(c)(c)
|
|
Form of Grant Agreement for grants of long-term cash awards.*
|
|
10-Q
|
|
001-04423
|
|
10(c)(c)(c)
|
|
March 11, 2015
|
10(d)(d)
|
|
Form of Grant Agreement for grants of non-qualified stock options.*
|
|
10-Q
|
|
001-04423
|
|
10(f)(f)(f)
|
|
March 11, 2015
|
10(e)(e)
|
|
Form of Grant Agreement for grants of performance-adjusted restricted stock units.*
|
|
10-Q
|
|
001-04423
|
|
10(g)(g)(g)
|
|
March 11, 2015
|
10(f)(f)
|
|
Form of Grant Agreement for grants of restricted stock awards.*
|
|
10-Q
|
|
001-04423
|
|
10(h)(h)(h)
|
|
March 11, 2015
|
10(g)(g)
|
|
Form of Grant Agreement for grants of performance-contingent non-qualified stock options.*
|
|
10-Q
|
|
001-04423
|
|
10(i)(i)(i)
|
|
March 11, 2015
|
10(h)(h)
|
|
Term Loan Agreement, dated as of April 30, 2015, among the Registrant, the lenders named therein and JPMorgan Chase Bank, N.A., as administrative agent.
|
|
10-Q
|
|
001-04423
|
|
10(b)(b)(b)
|
|
June 8, 2015
|
10(i)(i)
|
|
Amendment, dated as of June 1, 2015, to the Term Loan Agreement, dated as of April 30, 2015, among the Registrant, the lenders named therein and JPMorgan Chase Bank, N.A., as administrative agent.
|
|
10-Q
|
|
001-04423
|
|
10(c)(c)(c)
|
|
June 8, 2015
|
10(j)(j)
|
|
Five-Year Credit Agreement, dated as of April 2, 2014, as Amended and Restated as of November 1, 2015, among the Registrant, the lenders named therein and Citibank, N.A., as administrative processing agent and co-administrative agent, and JPMorgan Chase Bank, N.A., as co-administrative agent.
|
|
8-K
|
|
001-04423
|
|
10.1
|
|
November 5, 2015
|
Exhibit
Number
|
|
|
|
Incorporated by Reference
|
|||||||
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit(s)
|
|
Filing Date
|
||
10(k)(k)
|
|
|
Form of Grant Agreement for grants of foreign stock appreciation rights.*
|
|
10-K
|
|
001-04423
|
|
10(e)(e)(e)
|
|
December 12, 2016
|
10(l)(l)
|
|
|
Form of Grant Agreement for grants of performance-contingent non-qualified stock options.*
|
|
10-K
|
|
001-04423
|
|
10(f)(f)(f)
|
|
December 12, 2016
|
10(m)(m)
|
|
|
Form of Grant Agreement for grants of non-qualified stock options.*
|
|
10-K
|
|
001-04423
|
|
10(g)(g)(g)
|
|
December 12, 2016
|
10(n)(n)
|
|
|
Registrant’s 2005 Executive Deferred Compensation Plan, amended and restated effective November 1, 2015.*
|
|
10-Q
|
|
001-04423
|
|
10(n)(n)
|
|
March 3, 2016
|
10(o)(o)
|
|
|
Registrant’s Severance and Long-Term Incentive Change in Control Plan for Executive Officers, amended and restated effective November 1, 2015.*
|
|
10-Q
|
|
001-04423
|
|
10(o)(o)
|
|
March 3, 2016
|
10(p)(p)
|
|
|
Form of Stock Notification and Award Agreement for awards of performance-contingent non-qualified stock options (launch grant).*
|
|
10-Q
|
|
001-04423
|
|
10(p)(p)
|
|
March 3, 2016
|
10(q)(q)
|
|
|
Form of Stock Notification and Award Agreement for awards of restricted stock units (launch grant).*
|
|
10-Q
|
|
001-04423
|
|
10(q)(q)
|
|
March 3, 2016
|
10(r)(r)
|
|
|
Form of Stock Notification and Award Agreement for awards of restricted stock units.*
|
|
10-Q
|
|
001-04423
|
|
10(r)(r)
|
|
March 3, 2016
|
10(s)(s)
|
|
|
Form of Stock Notification and Award Agreement for awards of performance-adjusted restricted stock units.*
|
|
10-Q
|
|
001-04423
|
|
10(s)(s)
|
|
March 3, 2016
|
10(t)(t)
|
|
|
Form of Amendment to Award Agreements for awards of restricted stock units or performance-adjusted restricted stock units, effective January 1, 2016.*
|
|
10-Q
|
|
001-04423
|
|
10(t)(t)
|
|
March 3, 2016
|
10(u)(u)
|
|
|
First Amendment to Severance and Long-Term Incentive Change in Control Plan for Executive Officers, as amended and restated effective November 1, 2015.*
|
|
10-K
|
|
001-04423
|
|
10(u)(u)
|
|
December 15, 2016
|
10(v)(v)
|
|
|
Second Amendment to Severance and Long-Term Incentive Change in Control Plan for Executive Officers, as amended and restated effective November 1, 2015.*‡
|
|
|
|
|
|
|
|
|
10(w)(w)
|
|
|
2017 Amendment to the Hewlett-Packard Company Cash Account Restoration Plan.*‡
|
|
|
|
|
|
|
|
|
10(x)(x)
|
|
|
Second Amendment to the Hewlett-Packard Company Excess Benefit Retirement Plan.*‡
|
|
|
|
|
|
|
|
|
10(y)(y)
|
|
|
Second Amended and Restated HP Inc. 2004 Stock Incentive Plan, as amended and restated effective January 23, 2017.*‡
|
|
|
|
|
|
|
|
|
10(z)(z)
|
|
|
Form of Grant Agreement for grants of performance-adjusted restricted stock units (for use from November 1, 2016).*‡
|
|
|
|
|
|
|
|
|
10(a)(a)(a)
|
|
|
Form of Grant Agreement for grants of restricted stock units (for use from November 1, 2016).*‡
|
|
|
|
|
|
|
|
|
31.1
|
|
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.‡
|
|
|
|
|
|
|
|
|
Exhibit
Number
|
|
|
|
Incorporated by Reference
|
|||||||
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit(s)
|
|
Filing Date
|
||
31.2
|
|
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.‡
|
|
|
|
|
|
|
|
|
32
|
|
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.†
|
|
|
|
|
|
|
|
|
101.INS
|
|
|
XBRL Instance Document.‡
|
|
|
|
|
|
|
|
|
101.SCH
|
|
|
XBRL Taxonomy Extension Schema Document.‡
|
|
|
|
|
|
|
|
|
101.CAL
|
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.‡
|
|
|
|
|
|
|
|
|
101.DEF
|
|
|
XBRL Taxonomy Extension Definition Linkbase Document.‡
|
|
|
|
|
|
|
|
|
101.LAB
|
|
|
XBRL Taxonomy Extension Label Linkbase Document.‡
|
|
|
|
|
|
|
|
|
101.PRE
|
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.‡
|
|
|
|
|
|
|
|
|
Name:
|
|
Employee ID:
|
|
|
|
|
|
|
|
|
Grant Date:
|
|
Grant ID:
|
|
Amount:
|
|
|
|
Plan:
|
|
Vesting Schedule:
|
|
1.
|
Grant of Restricted Stock Units.
|
2.
|
Vesting Schedule.
|
3.
|
Benefit Upon Vesting.
|
(a)
|
the number of RSUs that have become vested as of such vesting date or vesting event, as applicable, multiplied by the Fair Market Value of a Share on the date on which such RSUs vested; plus
|
(1)
|
Multiplying, separately, the number of RSUs that became vested as determined in Section 3(a) by the dividend per Share on each dividend payment date between the Grant Date and the applicable Vesting Date to determine the dividend equivalent amount for each applicable dividend payment date;
|
(2)
|
dividing the amount determined in (1) above by the Fair Market Value of a Share on the dividend payment date to determine the number of additional whole and fractional RSUs to be credited to the Employee; and
|
(3)
|
multiplying the number of additional RSUs determined in (2) above by the Fair Market Value of a Share on the Vesting Date to determine the aggregate value of dividend equivalent payments for such vested RSUs;
|
4.
|
Restrictions.
|
5.
|
Custody of Restricted Stock Units.
|
6.
|
No Stockholder Rights.
|
7.
|
Termination of Employment.
|
8.
|
Disability or Retirement of the Employee.
|
9.
|
Death of the Employee.
|
10.
|
Section 409A.
|
11.
|
Taxes.
|
(a)
|
The Employee shall be liable for any and all taxes, including income tax, social insurance, fringe benefit tax, payroll tax, payment on account, employer taxes or other tax-related items related to the Employee’s participation in the Plan and legally applicable to or otherwise recoverable from the Employee by the Company and/or, if different, the Employee’s employer (the “Employer”) whether incurred at grant, vesting, sale, prior to vesting or at any other time (“Tax-Related Items”). In the event that the Company or the Employer (which, for purposes of this Section 11, shall include a former employer) is required, allowed or permitted to withhold taxes as a result of the RSUs or the Shares acquired pursuant to such RSUs, or due upon receipt of dividend equivalent payments or dividends, the Employee shall surrender a sufficient number of whole Shares, make a cash payment or make adequate arrangements satisfactory to the Company and/or the Employer to withhold such taxes from Employee’s wages or other cash compensation paid to the Employee by the Company and/or the Employer at the election of the Company, in its sole discretion, or, if permissible under local law, the Company may sell or arrange for the sale of Shares that Employee acquires as necessary to cover all Tax-Related Items that the Company or the Employer has to withhold or that are legally recoverable from the Employee (such as fringe benefit tax) at the time the restrictions on the RSUs lapse, unless the Company, in its sole discretion, has established alternative procedures for such payment. However, with respect to any RSUs subject to Section 409A, the Employer shall limit the surrender of Shares to the minimum number of Shares permitted to avoid a prohibited acceleration under Section 409A. The Employee will receive a cash refund for any fraction of a surrendered Share or Shares in excess of any and all Tax-Related Items. To the extent that any surrender of Shares or payment of cash or alternative procedure for such payment is insufficient, the Employee authorizes the Company, its Affiliates and Subsidiaries, which are qualified to deduct tax at source, to deduct from the Employee’s compensation all Tax-Related Items. The Employee agrees to pay any Tax-Related Items that cannot be satisfied from wages or other cash compensation, to the extent permitted by Applicable Law.
|
(b)
|
Regardless of any action the Company or the Employer takes with respect to any or all Tax-Related Items, the Employee acknowledges and agrees that the ultimate liability for all Tax-Related Items is and remains the Employee’s responsibility and may exceed the amount actually withheld by the Company or the Employer. The Employee further acknowledges that the Company and/or the Employer: (i) make no representations nor undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of this grant of RSUs or dividend equivalents, including, but not limited to, the grant, vesting or settlement of RSUs or dividend equivalents, the subsequent delivery of Shares and/or cash upon settlement of such RSUs or the subsequent sale of any Shares acquired pursuant to such RSUs and receipt of any dividends or dividend equivalent payments; and (ii) notwithstanding Section 10, do not commit to and are under no obligation to structure the terms or any aspect of this grant of RSUs and/or dividend equivalents to reduce or eliminate the Employee’s liability for Tax-Related Items or to achieve any particular tax result. Further, if the Employee has become subject to tax in more than one jurisdiction, the Employee acknowledges that the Company and/or the Employer may be required to withhold or account for Tax-Related Items in more than one jurisdiction. The Employee shall pay the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of the Employee’s participation in the Plan or the Employee’s receipt of RSUs that cannot be satisfied by the means previously described. The Company may refuse to deliver the benefit described in Section 3 if the Employee fails to comply with the Employee’s obligations in connection with the Tax-Related Items.
|
(c)
|
In accepting the RSUs, the Employee consents and agrees that in the event the RSUs or the dividend equivalents become subject to an employer tax that is legally permitted to be recovered from the Employee, as may be determined by the Company and/or
|
12.
|
Data Privacy Consent.
|
(a)
|
The Employee hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of the Employee’s personal data as described in this Grant Agreement and any other materials by and among, as applicable, the Company, the Employer and its other Subsidiaries and Affiliates for the exclusive purpose of implementing, administering and managing the Employee’s participation in the Plan.
|
(b)
|
The Employee understands that the Company, the Employer and its other Subsidiaries and Affiliates may hold certain personal information about the Employee, including, but not limited to, name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, residency, status, job title, any shares of stock or directorships held in the Company, details of all RSUs, options or any other entitlement to shares of stock granted, canceled, purchased, exercised, vested, unvested or outstanding in the Employee’s favor (“Data”) for the exclusive purpose of implementing, managing and administering the Plan.
|
(c)
|
The Employee understands that Data will be transferred to the Company or one or more stock plan service providers as may be selected by the Company from time to time, which is assisting the Company with the implementation, administration and management of the Plan. The Employee understands that the recipients of the Data may be located in the United States or elsewhere, and that the recipient’s country of operation (e.g., the United States) may have different data privacy laws and protections than the Employee’s country. The Employee understands that if he or she resides outside the United States, the Employee may request a list with the names and addresses of any potential recipients of the Data by contacting his or her local human resources representative. The Employee authorizes the Company and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purposes of implementing, administering and managing the Employee’s participation in the Plan. The Employee understands that Data will be held only as long as is necessary to implement, administer and manage the Employee’s participation in the Plan. The Employee understands that if he or she resides outside the United States, the Employee may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing his or her local human resources representative.
|
(d)
|
Further, the Employee understands that he or she is providing the consents herein on a purely voluntary basis. If the Employee does not consent, or if the Employee later seeks to revoke his or her consent, the Employee's employment and career with the Employer will not be affected; the only consequence of refusing or withdrawing the Employee’s consent is that the Company would not be able to grant RSUs or other equity awards to the Employee or administer or maintain such awards. Therefore, the Employee understands that refusing or withdrawing the consent may affect the Employee’s ability to participate in the Plan. For more information on the consequences of the Employee’s refusal to consent or withdrawal of consent, the Employee understands that he or she may contact his or her local human resources representative.
|
13.
|
Plan Information.
|
14.
|
Acknowledgment and Waiver.
|
(a)
|
except as provided in Sections 8 and 9, the vesting of the RSUs is earned only by continuing as an employee with the Company or one of its Subsidiaries or Affiliates and that being hired and granted RSUs will not result in the RSUs vesting;
|
(b)
|
this Grant Agreement and its incorporated documents reflect all agreements on its subject matters and the Employee is not accepting this Grant Agreement based on any promises, representations or inducements other than those reflected in this Grant Agreement;
|
(c)
|
all good faith decisions and interpretations of the Committee regarding the Plan and Awards granted under the Plan are binding, conclusive and final;
|
(d)
|
the Plan is established voluntarily by the Company, it is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time;
|
(e)
|
the grant of RSUs is exceptional, voluntary and occasional and does not create any contractual or other right to receive future grants of RSUs or other awards, or benefits in lieu of RSUs, even if Shares or RSUs have been granted in the past;
|
(f)
|
all decisions with respect to future grants, if any, will be at the sole discretion of the Company;
|
(g)
|
the Employee’s participation in the Plan shall not create a right to further employment with the Employer and shall not interfere with the ability of the Employer to terminate the Employee’s employment relationship at any time and it is expressly agreed and understood that employment is terminable at the will of either party;
|
(h)
|
the Employee is voluntarily participating in the Plan;
|
(i)
|
RSUs and their resulting benefits are extraordinary items that are outside the scope of the Employee’s employment contract, if any;
|
(j)
|
RSUs and their resulting benefits are not intended to replace any pension rights or compensation;
|
(k)
|
RSUs and their resulting benefits are not part of normal or expected compensation or salary for any purposes, including, but not limited to calculating any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, holiday pay, long-service awards, pension or retirement or welfare benefits or similar payments;
|
(l)
|
unless otherwise agreed by the Company, the RSUs and their resulting benefits are not granted as consideration for, or in connection with, the service the Employee may provide as a director of a Subsidiary or Affiliate;
|
(m)
|
this grant of RSUs will not be interpreted to form an employment contract or relationship with the Company, and furthermore, this grant of RSUs will not be interpreted to form an employment contract with any Subsidiary or Affiliate;
|
(n)
|
the future value of the underlying Shares is unknown, indeterminable and cannot be predicted with certainty;
|
(o)
|
no claim or entitlement to compensation or damages shall arise from forfeiture of the RSUs resulting from termination of Employee’s employment (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where the Employee is employed or retained or the terms of the Employee's employment or service agreement, if any), and in consideration of the grant of the RSUs to which the Employee is otherwise not entitled, the Employee irrevocably agrees never to institute any claim against the Company, the Employer or any other Subsidiary or Affiliate and releases the Company, the Employer and any other Subsidiary and Affiliate from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, the Employee shall be deemed irrevocably to have agreed not to pursue such claim and to have agreed to execute any and all documents necessary to request dismissal or withdrawal of such claims;
|
(p)
|
the Company, the Employer or any other Subsidiary or Affiliate will not be liable for any foreign exchange rate fluctuation between the Employee’s local currency and the United States dollar that may affect the value of the RSUs or any amounts due to the Employee pursuant to the settlement of the RSUs or the subsequent sale of any Shares acquired upon settlement;
|
(q)
|
if the Company determines that the Employee has engaged in misconduct prohibited by Applicable Law or any applicable policy of the Company, as in effect from time to time, or the Company is required to make recovery from the Employee under Applicable Law or a Company policy adopted to comply with applicable legal requirements, then the Company may, in its sole discretion, to the extent it determines appropriate, (i) recover from the Employee the proceeds from RSUs vested up to three years prior to the Employee’s termination of employment or any time thereafter, (ii) cancel the Employee’s outstanding RSUs, and (iii) take any other action it deems to be required and appropriate; and
|
(r)
|
the delivery of any documents related to the Plan or Awards granted under the Plan, including the Plan, this Grant Agreement, the Plan prospectus and any reports of the Company generally provided to the Company’s stockholders, may be made by electronic delivery. Such means of electronic delivery may include the delivery of a link to a Company intranet or the Internet site of a third party involved in administering the Plan, the delivery of the document via electronic mail or other such means of electronic delivery specified by the Company. The Employee may receive from the Company a paper copy of any documents delivered electronically at no cost to the Employee by contacting the Company in writing in accordance with Section 17(k). If the attempted electronic delivery of any document fails, the Employee will be provided with a paper copy of such document. The Employee may revoke his or her consent to the electronic delivery of documents or may change the electronic mail address to which such documents are to be delivered (if the Employee has provided an electronic mail address) at any time by notifying the Company of such
|
15.
|
No Advice Regarding Grant.
|
16.
|
Additional Eligibility Requirements Permitted.
|
17.
|
Miscellaneous.
|
(a)
|
The Company shall not be required to treat as owner of RSUs and any associated benefits hereunder, any transferee to whom such RSUs or benefits shall have been transferred in violation of any of the provisions of this Grant Agreement.
|
(b)
|
The parties agree to execute such further instruments and to take such action as may reasonably be necessary to carry out the intent of this Grant Agreement.
|
(c)
|
The Plan is incorporated herein by reference. The Plan and this Grant Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Employee with respect to the subject matter hereof, other than the terms of any severance plan applicable to the Employee that provides more favorable vesting. Notwithstanding the foregoing, nothing in the Plan or this Grant Agreement shall affect the validity or interpretation of any duly authorized written agreement between the Company and the Employee under which an award properly granted under and pursuant to the Plan serves as any part of the consideration furnished to the Employee. This Grant Agreement is governed by the laws of the state of Delaware without regard to its conflict of law provisions.
|
(d)
|
If the Employee has received this or any other document related to the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.
|
(e)
|
The provisions of this Grant Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.
|
(f)
|
Notwithstanding Section 17(e), the Company’s obligations under this Grant Agreement and the Employee’s agreement to the terms of an arbitration agreement and/or an ARCIPD, if any, are mutually dependent. In the event that the Employee breaches the arbitration agreement or the Employee’s ARCIPD is breached or found not to be binding upon the Employee for any reason by a court of law, then the Company will have no further obligation or duty to perform under the Plan or this Grant Agreement.
|
(g)
|
A waiver by the Company of a breach of any provision of this Grant Agreement shall not operate or be construed as a waiver of any other provision of this Grant Agreement, or of any subsequent breach by the Employee or any other Awardee.
|
(h)
|
The Employee acknowledges that, depending on his or her country, the Employee may be subject to insider trading restrictions and/or market abuse laws, which may affect the Employee's ability to acquire or sell Shares or rights to Shares (
e.g.,
RSUs) under the Plan during such times as the Employee is considered to have “inside information” regarding the Company (as defined by the laws in the Employee’s country). Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. The Employee is responsible for ensuring compliance with any applicable restrictions and is advised to consult his or her personal legal advisor on this matter.
|
(i)
|
The Company reserves the right to impose other requirements on the Employee’s participation in the Plan, on the RSUs and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require the Employee to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.
|
(j)
|
Any notice required or permitted hereunder to the Employee shall be given in writing and shall be deemed effectively given upon delivery to the Employee at the address then on file with the Company.
|
(k)
|
Any notice to be given under the terms of this Grant Agreement to the Company will be addressed in care of Attn: Global Equity Administration at HP Inc., 1501 Page Mill, Palo Alto, California 94304, USA.
|
(l)
|
The Employee acknowledges that there may be certain foreign asset and/or account reporting requirements which may affect his or her ability to acquire or hold Shares acquired under the Plan or cash received from participating in the Plan (including from any dividends or dividend equivalent payments) in a brokerage or bank account outside the Employee's country. The Employee may be required to report such accounts, assets or transactions to the tax or other authorities in his or her country. The Employee also may be required to repatriate sale proceeds or other funds received as a result of the Employee's participation in the Plan to his or her country through a designated bank or broker within a certain time after receipt. The Employee acknowledges that it is his or her responsibility to be compliant with such regulations, and the Employee is advised to consult his or her personal legal advisor for any details.
|
(a)
|
To participate in the Plan, Employee must comply with all Applicable Laws and regulations in Russia.
|
Applicable Segment
|
Performance Period
|
Service Period
|
Segment 1
|
Year 1 EPS; 2-year TSR
|
2 years
|
Segment 2
|
Years 2 and 3 EPS and 3-year TSR
|
3 years
|
1.
|
Section 1.2 shall be amended to add the following to the end thereof, to read as follows:
|
2.
|
The last sentence of Section 5.2(B) shall be amended in its entirety to read as follows:
|
3.
|
The first sentence of Section 5.6 shall be amended in its entirety to read as follows:
|
4.
|
Section 9.4 shall be amended in its entirety to read as follows:
|
5.
|
Section 9.16 shall be amended in its entirety to read as follows:
|
6.
|
Section 9.19 shall be amended in its entirety to read as follows:
|
1.
|
The second sentence of Section 1 of the Plan shall be amended in its entirety to read as follows:
|
2.
|
Section 1 of the Plan shall be amended to add the following paragraph to the end thereof, to read as follows:
|
3.
|
Section 2(d) of the Plan shall be amended in its entirety to read as follows:
|
4.
|
Section 2(e) of the Plan shall be amended in its entirety to read as follows:
|
5.
|
Section 2(h) of the Plan shall be amended in its entirety to read as follows:
|
Name:
|
|
Employee ID:
|
|
|
|
|
|
|
|
|
Grant Date:
|
|
Grant ID:
|
|
Target Amount:
|
|
|
|
Plan:
|
|
|
|
Target Amount
|
0 Shares
|
Performance Period
|
01 November 2016 – 31 October 2019
|
Segment 1 - Year 1 EPS
|
01 November 2016 – 31 October 2017
|
Segment 2 – Year 2 EPS
|
01 November 2017 – 31 October 2018
|
Segment 2 – Year 3 EPS
|
01 November 2018 – 31 October 2019
|
Segment 1 – 2-year TSR
|
01 November 2016 – 31 October 2018
|
Segment 2 – 3-year TSR
|
01 November 2016 – 31 October 2019
|
1.
|
Grant of Performance-Adjusted Restricted Stock Units.
|
2.
|
Performance Criteria and Performance Periods.
|
3.
|
Crediting of Units For Each Segment.
|
(a)
|
EPS Units. 50% of the Target Amount of units will be determined based upon performance against the EPS goals, as certified by the Committee (the “EPS Units”). One-third of the EPS Units will be determined based upon performance against the EPS goals for Year 1, one-third of the EPS Units will be determined based upon performance against the EPS goals for Year 2, and the remaining one-third will be determined based upon performance against the EPS goals for Year 3. The relevant number of EPS Units shall be credited in the Employee's name, based on the Company’s performance during the relevant Segment as follows: 0% if performance is below minimum level, 50% if performance is at minimum level, 100% if performance is at target level and 200% if performance is at or above maximum level. For performance between the minimum level and target level or between target level and the maximum level, a proportionate percentage will be applied based on straight-line interpolation between levels. Any units achieved in Year 1 will not be credited in the Employee’s name until the end of Year 2, and any units achieved in Years 2 and 3 will not be credited in the Employee’s name until the end of Year 3.
|
(b)
|
TSR Units. 50% of the Target Amount of units for each Segment (i.e., 25% of the total Target Amount of units) will be determined based upon performance against the TSR goal for that Segment, as certified by the Committee (the “TSR Units”). The TSR Units shall be credited in the Employee’s name based on the Company’s performance during the relevant Segment as follows: 0% if performance is below the minimum level, 50% if performance is at the minimum level, 100% if performance is at target level and 200% if performance is at or above the maximum level. For performance between minimum and target, or between target and the maximum levels, a proportionate percentage will be applied based on straight-line interpolation between levels.
|
(c)
|
Service Requirement. Notwithstanding (a) and (b) above, the Employee must be employed on the last day of the relevant Segment in order to be credited with any PARSUs for that Segment.
|
4.
|
Payout of Performance-Adjusted Restricted Stock Units and Dividend Equivalents.
|
(a)
|
a number of Shares corresponding to the number of PARSUs that have become vested pursuant to Section 3 (and Section 9 through 11, as applicable); plus
|
(1)
|
Multiplying, separately, the number of PARSUs that became vested as determined in Section 3 by the dividend per Share on each dividend payment date between the Grant Date and the date the PARSUs vested to determine the dividend equivalent amount for each applicable dividend payment date; and
|
(2)
|
dividing the amount determined in (1) above by the Fair Market Value of a Share on the dividend payment date to determine the number of additional whole and fractional RSUs to be credited to the Employee;
|
5.
|
Restrictions.
|
6.
|
Custody of Performance-Adjusted Restricted Stock
Units.
|
7.
|
No Stockholder Rights.
|
8.
|
Termination of Employment.
|
9.
|
Benefit in Event of Death of the Employee.
|
10.
|
Retirement of the Employee.
|
11.
|
Total and Permanent Disability of the Employee.
|
12.
|
Section 409A.
|
13.
|
Taxes.
|
(a)
|
The Employee shall be liable for any and all taxes, including income tax, social insurance, fringe benefit tax, payroll tax, payment on account, employer taxes or other tax-related items related to the Employee’s participation in the Plan and legally applicable to or otherwise recoverable from the Employee by the Company and/or, if different, the Employee’s employer (the “Employer”) whether incurred at grant, vesting, sale, prior to vesting or at any other time (“Tax-Related Items”). In the event that the Company or the Employer (which, for purposes of this Section 13, shall include a former employer) is required, allowed or permitted to withhold taxes as a result of the grant or vesting of PARSUs (including dividend equivalents) or the issuance or subsequent sale of Shares acquired pursuant to such PARSUs, or due upon receipt of dividend equivalent payments or dividends, the Employee shall surrender a sufficient number of whole Shares, make a cash payment or make adequate arrangements satisfactory to the Company and/or the Employer to withhold such taxes from the Employee’s wages or other cash compensation paid to the Employee by the Company and/or the Employer at the election of the Company, in its sole discretion, or, if permissible under local law, the Company may sell or arrange for the sale of Shares that Employee acquires as necessary to cover all Tax-Related Items that the Company or the Employer has to withhold or that are legally recoverable from the Employee (such as fringe benefit tax) at the time the restrictions on the PARSUs lapse, unless the Company, in its sole discretion, has established alternative procedures for such payment. However, with respect to any PARSUs subject to Section 409A, the Employer shall limit the surrender of Shares to the minimum number of Shares permitted to avoid a prohibited acceleration under Section 409A. The Employee will receive a cash refund for any fraction of a surrendered Share or Shares in excess of any and all Tax-Related Items. To the extent that any surrender of Shares or payment of cash or alternative procedure for such payment is insufficient, the Employee authorizes the Company, its Affiliates and Subsidiaries, which are qualified to deduct tax at source, to deduct from the Employee’s compensation all Tax-Related Items. The Employee agrees to pay any Tax-Related Items that cannot be satisfied from wages or other cash compensation, to the extent permitted by Applicable Law.
|
(b)
|
Regardless of any action the Company or the Employer takes with respect to any or all Tax-Related Items, the Employee acknowledges and agrees that the ultimate liability for all Tax-Related Items is and remains the Employee’s responsibility and may exceed the amount actually withheld by the Company or the Employer. The Employee further acknowledges that the Company and/or the Employer: (i) make no representations nor undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of this grant of PARSUs, including, but not limited to, the grant, vesting or settlement of PARSUs, the subsequent delivery of Shares and/or cash upon settlement of such PARSUs or the subsequent sale of any Shares acquired pursuant to such PARSUs and receipt of any dividends or dividend equivalent payments; and (ii) notwithstanding Section 12, do not commit to and are under no obligation to structure the terms or any aspect of this grant of PARSUs to reduce or eliminate the Employee’s liability for Tax-Related Items or to achieve any particular tax result. Further, if the Employee has become subject to tax in more than one jurisdiction, the Employee acknowledges that the Company and/or the Employer may be required to withhold or account for Tax-Related Items in more than one jurisdiction. The Employee shall pay the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of the Employee’s participation in the Plan or the Employee’s receipt of PARSUs that cannot be satisfied by the means previously described. The Company may refuse to deliver the benefit described herein if the Employee fails to comply with the Employee’s obligations in connection with the Tax-Related Items.
|
(c)
|
In accepting the PARSUs, the Employee consents and agrees that in the event the PARSUs become subject to an employer tax that is legally permitted to be recovered from the Employee, as may be determined by the Company and/or the Employer at their sole discretion, and whether or not the Employee’s employment with the Company and/or the Employer is continuing at the time such tax becomes recoverable, the Employee will assume any liability for any such taxes that may be payable by the Company and/or the Employer in connection with the PARSUs. Further, by accepting the PARSUs, the Employee agrees that the Company
|
14.
|
Data Privacy Consent.
|
(a)
|
The Employee hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of the Employee’s personal data as described in this Grant Agreement and any other materials by and among, as applicable, the Company, the Employer and its other Subsidiaries and Affiliates for the exclusive purpose of implementing, administering and managing the Employee’s participation in the Plan.
|
(b)
|
The Employee understands that the Company, the Employer and its other Subsidiaries and Affiliates may hold certain personal information about the Employee, including, but not limited to, name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, residency, status, job title, any shares of stock or directorships held in the Company, details of all PARSUs, options or any other entitlement to shares of stock granted, canceled, purchased, exercised, vested, unvested or outstanding in the Employee’s favor (“Data”) for the exclusive purpose of implementing, managing and administering the Plan.
|
(c)
|
The Employee understands that Data will be transferred to the Company or one or more stock plan service providers as may be selected by the Company from time to time, which is assisting the Company with the implementation, administration and management of the Plan. The Employee understands that the recipients of the Data may be located in the United States or elsewhere, and that the recipient’s country of operation (e.g., the United States) may have different data privacy laws and protections than the Employee’s country. The Employee understands that if he or she resides outside the United States, the Employee may request a list with the names and addresses of any potential recipients of the Data by contacting his or her local human resources representative. The Employee authorizes the Company and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purposes of implementing, administering and managing the Employee’s participation in the Plan. The Employee understands that Data will be held only as long as is necessary to implement, administer and manage the Employee’s participation in the Plan. The Employee understands that if he or she resides outside the United States, the Employee may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing his or her local human resources representative.
|
(d)
|
Further, the Employee understands that he or she is providing the consents herein on a purely voluntary basis. If the Employee does not consent, or if the Employee later seeks to revoke his or her consent, the Employee's employment and career with the Employer will not be affected; the only consequence of refusing or withdrawing the Employee’s consent is that the Company would not be able to grant PARSUs or other equity awards to the Employee or administer or maintain such awards. Therefore, the Employee understands that refusing or withdrawing the consent may affect the Employee’s ability to participate in the Plan. For more information on the consequences of the Employee’s refusal to consent or withdrawal of consent, the Employee understands that he or she may contact his or her local human resources representative.
|
15.
|
Plan Information.
|
16.
|
Acknowledgment and Waiver.
|
(a)
|
this Grant Agreement and its incorporated documents reflect all agreements on its subject matters and the Employee is not accepting this Grant Agreement based on any promises, representations or inducements other than those reflected in this Grant Agreement;
|
(b)
|
all good faith decisions and interpretations of the Committee regarding the Plan and Awards granted under the Plan are binding, conclusive and final;
|
(c)
|
the Plan is established voluntarily by the Company, it is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time;
|
(d)
|
the grant of PARSUs is exceptional, voluntary and occasional and does not create any contractual or other right to receive future grants of PARSUs or other awards, or benefits in lieu of PARSUs, even if Shares or PARSUs have been granted in the past;
|
(e)
|
all decisions with respect to future grants, if any, will be at the sole discretion of the Company;
|
(f)
|
the Employee’s participation in the Plan shall not create a right to further employment with the Employer and shall not interfere with the ability of the Employer to terminate the Employee’s employment relationship at any time and it is expressly agreed and understood that employment is terminable at the will of either party;
|
(g)
|
the Employee is voluntarily participating in the Plan;
|
(h)
|
PARSUs and their resulting benefits are extraordinary items that are outside the scope of the Employee’s employment contract, if any;
|
(i)
|
PARSUs and their resulting benefits are not intended to replace any pension rights or compensation;
|
(j)
|
PARSUs and their resulting benefits are not part of normal or expected compensation or salary for any purposes, including, but not limited to calculating any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, holiday pay, long-service awards, pension or retirement or welfare benefits or similar payments;
|
(k)
|
unless otherwise agreed by the Company, the PARSUs and their resulting benefits are not granted as consideration for, or in connection with, the service the Employee may provide as a director of Subsidiary or Affiliate;
|
(l)
|
this grant of PARSUs will not be interpreted to form an employment contract or relationship with the Company, and furthermore, this grant of PARSUs will not be interpreted to form an employment contract with any Subsidiary or Affiliate;
|
(m)
|
the future value of the underlying Shares is unknown, indeterminable and cannot be predicted with certainty;
|
(n)
|
no claim or entitlement to compensation or damages shall arise from forfeiture of the PARSUs resulting from termination of Employee’s employment (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where the Employee is employed or retained or the terms of the Employee's employment or service agreement, if any), and in consideration of the grant of the PARSUs to which the Employee is otherwise not entitled, the Employee irrevocably agrees never to institute any claim against the Company, the Employer or any other Subsidiary or Affiliate and releases the Company, the Employer and any other Subsidiary and Affiliate from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, the Employee shall be deemed irrevocably to have agreed not to pursue such claim and to have agreed to execute any and all documents necessary to request dismissal or withdrawal of such claims;
|
(o)
|
the Company, the Employer or any other Subsidiary or Affiliate will not be liable for any foreign exchange rate fluctuation between the Employee’s local currency and the United States dollar that may affect the value of the PARSUs or any amounts due to the Employee pursuant to the settlement of the PARSUs or the subsequent sale of any Shares acquired upon settlement;
|
(p)
|
if the Company's performance is below minimum levels as set forth in this Grant Agreement, no PARSUs or dividend equivalents will vest and no Shares will be delivered to the Employee;
|
(q)
|
if the Company determines that the Employee has engaged in misconduct prohibited by Applicable Law or any applicable policy of the Company, as in effect from time to time, or the Company is required to make recovery from the Employee under Applicable Law or a Company policy adopted to comply with applicable legal requirements, then the Company may, in its sole discretion, to the extent it determines appropriate, (i) recover from the Employee the proceeds from PARSUs vested up to three (3) years prior to the Employee’s termination of employment or any time thereafter, (ii) cancel the Employee’s outstanding PARSUs, and (iii) take any other action it deems to be required and appropriate; and
|
(r)
|
the delivery of any documents related to the Plan or Awards granted under the Plan, including the Plan, this Grant Agreement, the Plan prospectus and any reports of the Company generally provided to the Company’s stockholders, may be made by electronic delivery. Such means of electronic delivery may include the delivery of a link to a Company intranet or the Internet site of a third party involved in administering the Plan, the delivery of the document via electronic mail or other such means of electronic delivery specified by the Company. The Employee may receive from the Company a paper copy of any documents delivered electronically at no cost to the Employee by contacting the Company in writing in accordance with Section 19(l). If the attempted electronic delivery of any document fails, the Employee will be provided with a paper copy of such document. The Employee may revoke his or her consent to the electronic delivery of documents or may change the electronic mail address to which such documents are to be delivered (if the Employee has provided an electronic mail address) at any time by notifying the Company of such revoked consent or revised electronic mail address in accordance with Section 19(l). The Employee is not required to consent to the electronic delivery of documents.
|
17.
|
No Advice Regarding Grant.
|
18.
|
Additional Eligibility Requirements Permitted.
|
19.
|
Miscellaneous.
|
(a)
|
The Company shall not be required to treat as owner of PARSUs and associated benefits hereunder any transferee to whom such PARSUs or benefits shall have been transferred in violation of any of the provisions of this Grant Agreement.
|
(b)
|
The parties agree to execute such further instruments and to take such action as may reasonably be necessary to carry out the intent of this Grant Agreement.
|
(c)
|
The Plan is incorporated herein by reference. The Plan and this Grant Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Employee with respect to the subject matter hereof, other than the terms of any severance plan applicable to the Employee that provides more favorable vesting, and may not be modified adversely to the Employee's interest except by means of a writing signed by the Company and the Employee. Notwithstanding the foregoing, nothing in the Plan or this Grant Agreement shall affect the validity or interpretation of any duly authorized written agreement between the Company and the Employee under which an award properly granted under and pursuant to the Plan serves as any part of the consideration furnished to the Employee, including without limitation, any agreement that imposes restrictions during or after employment regarding confidential information and proprietary developments. This Grant Agreement is governed by the laws of the state of Delaware without regard to its conflict of law provisions.
|
(d)
|
If the Employee has received this or any other document related to the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.
|
(e)
|
The provisions of this Grant Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.
|
(f)
|
Notwithstanding Section 19(e), the Company’s obligations under this Grant Agreement and the Employee’s agreement to the terms of an arbitration agreement and/or an ARCIPD, if any, are mutually dependent. In the event that the Employee breaches the arbitration agreement or the Employee’s ARCIPD is breached or found not to be binding upon the Employee for any reason by a court of law, then the Company will have no further obligation or duty to perform under the Plan or this Grant Agreement.
|
(g)
|
A waiver by the Company of a breach of any provision of this Grant Agreement shall not operate or be construed as a waiver of any other provision of this Grant Agreement, or of any subsequent breach by the Employee or any other Awardee.
|
(h)
|
The Employee acknowledges that, depending on his or her country, the Employee may be subject to insider trading restrictions and/or market abuse laws, which may affect the Employee's ability to acquire or sell Shares or rights to Shares (
e.g.,
PARSUs) under the Plan during such times as the Employee is considered to have “inside information” regarding the Company (as defined by the laws in the Employee’s country). Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. The Employee is responsible for ensuring compliance with any applicable restrictions and is advised to consult his or her personal legal advisor on this matter.
|
(i)
|
Notwithstanding any provisions in this Grant Agreement, the grant of the PARSUs shall be subject to any special terms and conditions set forth in the Appendix to this Grant Agreement for the Employee’s country, if any. Moreover, if the Employee relocates to one of the countries included in the Appendix, the special terms and conditions for such country will apply to the Employee, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. The Appendix, if any, constitutes part of this Grant Agreement.
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(j)
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The Company reserves the right to impose other requirements on the Employee’s participation in the Plan, on the PARSUs and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require the Employee to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.
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(k)
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Any notice required or permitted hereunder to the Employee shall be given in writing and shall be deemed effectively given upon delivery to the Employee at the address then on file with the Company.
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(l)
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Any notice to be given under the terms of this Grant Agreement to the Company will be addressed in care of Attn: Global Equity Administration at HP Inc., 1501 Page Mill, Palo Alto, California 94304, USA.
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(m)
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The Employee acknowledges that there may be certain foreign asset and/or account reporting requirements which may affect his or her ability to acquire or hold Shares acquired under the Plan or cash received from participating in the Plan (including from
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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/s/ DION J. WEISLER
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Dion J. Weisler
President and Chief Executive Officer
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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/s/ CATHERINE A. LESJAK
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Catherine A. Lesjak
Chief Financial Officer
(Principal Financial Officer)
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/s/ DION J. WEISLER
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By:
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Dion J. Weisler
President and Chief Executive Officer
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/s/ CATHERINE A. LESJAK
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By:
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Catherine A. Lesjak
Chief Financial Officer
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