|
(Mark One)
|
|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the quarterly period ended
|
|
July 31, 2019
|
|
Or
|
|
☐
|
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
|
|
94304
|
|
Palo Alto,
|
California
|
|
(Zip Code)
|
(Address of principal executive offices)
|
|
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common stock, par value $0.01 per share
|
HPQ
|
New York Stock Exchange
|
|
|
|
Page
|
|
||
|
||
|
||
|
||
|
|
Page
|
|
Three months ended July 31
|
|
Nine months ended July 31
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
In millions, except per share amounts
|
||||||||||||||
Net revenue
|
$
|
14,603
|
|
|
$
|
14,586
|
|
|
$
|
43,349
|
|
|
$
|
43,106
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of revenue
|
11,698
|
|
|
11,898
|
|
|
35,103
|
|
|
35,134
|
|
||||
Research and development
|
413
|
|
|
347
|
|
|
1,110
|
|
|
1,050
|
|
||||
Selling, general and administrative
|
1,376
|
|
|
1,289
|
|
|
3,963
|
|
|
3,836
|
|
||||
Restructuring and other charges
|
17
|
|
|
4
|
|
|
141
|
|
|
92
|
|
||||
Acquisition-related (credits) charges
|
(9
|
)
|
|
10
|
|
|
12
|
|
|
97
|
|
||||
Amortization of intangible assets
|
29
|
|
|
20
|
|
|
87
|
|
|
60
|
|
||||
Total costs and expenses
|
13,524
|
|
|
13,568
|
|
|
40,416
|
|
|
40,269
|
|
||||
Earnings from operations
|
1,079
|
|
|
1,018
|
|
|
2,933
|
|
|
2,837
|
|
||||
Interest and other, net
|
(831
|
)
|
|
—
|
|
|
(902
|
)
|
|
(831
|
)
|
||||
Earnings before taxes
|
248
|
|
|
1,018
|
|
|
2,031
|
|
|
2,006
|
|
||||
Benefit from (provision for) taxes
|
931
|
|
|
(138
|
)
|
|
733
|
|
|
1,870
|
|
||||
Net earnings
|
$
|
1,179
|
|
|
$
|
880
|
|
|
$
|
2,764
|
|
|
$
|
3,876
|
|
|
|
|
|
|
|
|
|
||||||||
Net earnings per share:
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
$
|
0.79
|
|
|
$
|
0.55
|
|
|
$
|
1.81
|
|
|
$
|
2.38
|
|
Diluted
|
$
|
0.78
|
|
|
$
|
0.54
|
|
|
$
|
1.80
|
|
|
$
|
2.36
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares used to compute net earnings per share:
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
1,499
|
|
|
1,601
|
|
|
1,528
|
|
|
1,627
|
|
||||
Diluted
|
1,508
|
|
|
1,618
|
|
|
1,537
|
|
|
1,645
|
|
|
Three months ended July 31
|
|
Nine months ended July 31
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
In millions
|
||||||||||||||
Net earnings
|
$
|
1,179
|
|
|
$
|
880
|
|
|
$
|
2,764
|
|
|
$
|
3,876
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
||||
Change in unrealized components of available-for-sale debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unrealized gains (losses) arising during the period
|
—
|
|
|
2
|
|
|
—
|
|
|
(3
|
)
|
||||
Losses (gains) reclassified into earnings
|
—
|
|
|
—
|
|
|
3
|
|
|
(5
|
)
|
||||
|
—
|
|
|
2
|
|
|
3
|
|
|
(8
|
)
|
||||
Change in unrealized components of cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unrealized gains arising during the period
|
180
|
|
|
273
|
|
|
271
|
|
|
19
|
|
||||
(Gains) losses reclassified into earnings
|
(86
|
)
|
|
17
|
|
|
(259
|
)
|
|
363
|
|
||||
|
94
|
|
|
290
|
|
|
12
|
|
|
382
|
|
||||
Change in unrealized components of defined benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
||||
(Losses) gains arising during the period
|
(16
|
)
|
|
2
|
|
|
(20
|
)
|
|
2
|
|
||||
Amortization of actuarial loss and prior service benefit
|
11
|
|
|
11
|
|
|
34
|
|
|
36
|
|
||||
Curtailments, settlements and other
|
41
|
|
|
1
|
|
|
40
|
|
|
2
|
|
||||
|
36
|
|
|
14
|
|
|
54
|
|
|
40
|
|
||||
Change in cumulative translation adjustment
|
(30
|
)
|
|
—
|
|
|
(22
|
)
|
|
—
|
|
||||
Other comprehensive income before taxes
|
100
|
|
|
306
|
|
|
47
|
|
|
414
|
|
||||
Provision for taxes
|
(63
|
)
|
|
(31
|
)
|
|
(65
|
)
|
|
(35
|
)
|
||||
Other comprehensive income (loss), net of taxes
|
37
|
|
|
275
|
|
|
(18
|
)
|
|
379
|
|
||||
Comprehensive income
|
$
|
1,216
|
|
|
$
|
1,155
|
|
|
$
|
2,746
|
|
|
$
|
4,255
|
|
|
Nine months ended July 31
|
||||||
|
2019
|
|
2018
|
||||
|
In millions
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||
Net earnings
|
$
|
2,764
|
|
|
$
|
3,876
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
|
|
||
Depreciation and amortization
|
539
|
|
|
388
|
|
||
Stock-based compensation expense
|
233
|
|
|
203
|
|
||
Restructuring and other charges
|
141
|
|
|
92
|
|
||
Deferred taxes on earnings
|
325
|
|
|
(3,167
|
)
|
||
Other, net
|
176
|
|
|
234
|
|
||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
||
Accounts receivable
|
(22
|
)
|
|
23
|
|
||
Inventory
|
(24
|
)
|
|
(121
|
)
|
||
Accounts payable
|
(138
|
)
|
|
910
|
|
||
Taxes on earnings
|
(1,123
|
)
|
|
801
|
|
||
Restructuring and other
|
(122
|
)
|
|
(207
|
)
|
||
Other assets and liabilities
|
1,317
|
|
|
528
|
|
||
Net cash provided by operating activities
|
4,066
|
|
|
3,560
|
|
||
Cash flows from investing activities:
|
|
|
|
|
|
||
Investment in property, plant and equipment
|
(475
|
)
|
|
(359
|
)
|
||
Proceeds from sale of property, plant and equipment
|
—
|
|
|
110
|
|
||
Purchases of available-for-sale securities and other investments
|
(80
|
)
|
|
(320
|
)
|
||
Maturities and sales of available-for-sale securities and other investments
|
771
|
|
|
588
|
|
||
Collateral posted for derivative instruments
|
(32
|
)
|
|
(1,141
|
)
|
||
Collateral returned for derivative instruments
|
32
|
|
|
1,355
|
|
||
Payment made in connection with business acquisitions, net of cash acquired
|
(427
|
)
|
|
(1,036
|
)
|
||
Net cash used in investing activities
|
(211
|
)
|
|
(803
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|
||
(Payments of) Proceeds from short-term borrowings with original maturities less than 90 days, net
|
(856
|
)
|
|
1,577
|
|
||
Proceeds from short-term borrowings with original maturities greater than 90 days
|
—
|
|
|
712
|
|
||
Proceeds from debt, net of issuance costs
|
94
|
|
|
—
|
|
||
Payment of short-term borrowings with original maturities greater than 90 days
|
—
|
|
|
(1,184
|
)
|
||
Payment of debt
|
(604
|
)
|
|
(2,059
|
)
|
||
Stock-based award activities
|
(58
|
)
|
|
34
|
|
||
Repurchase of common stock
|
(1,944
|
)
|
|
(1,959
|
)
|
||
Cash dividends paid
|
(734
|
)
|
|
(680
|
)
|
||
Net cash used in financing activities
|
(4,102
|
)
|
|
(3,559
|
)
|
||
Decrease in cash and cash equivalents
|
(247
|
)
|
|
(802
|
)
|
||
Cash and cash equivalents at beginning of period
|
5,166
|
|
|
6,997
|
|
||
Cash and cash equivalents at end of period
|
$
|
4,919
|
|
|
$
|
6,195
|
|
Supplemental schedule of non-cash activities:
|
|
|
|
|
|
||
Purchase of assets under capital leases
|
$
|
253
|
|
|
$
|
183
|
|
|
Common Stock
|
|
Additional
Paid-in Capital |
|
|
|
Accumulated
Other Comprehensive Loss |
|
Total Stockholders' Deficit
|
|||||||||||||
|
Number of Shares
|
|
Par Value
|
|
|
Accumulated Deficit
|
|
|
||||||||||||||
|
In millions, except number of shares in thousands
|
|||||||||||||||||||||
Balance April 30, 2018
|
1,610,512
|
|
|
$
|
16
|
|
|
$
|
510
|
|
|
$
|
(1,075
|
)
|
|
$
|
(1,314
|
)
|
|
$
|
(1,863
|
)
|
Net earnings
|
|
|
|
|
|
|
880
|
|
|
|
|
880
|
|
|||||||||
Other comprehensive income, net of taxes
|
|
|
|
|
|
|
|
|
275
|
|
|
275
|
|
|||||||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
1,155
|
|
||||||||||
Issuance of common stock in connection with employee stock plans and other
|
2,517
|
|
|
|
|
30
|
|
|
|
|
|
|
30
|
|
||||||||
Repurchases of common stock
|
(30,621
|
)
|
|
|
|
(9
|
)
|
|
(692
|
)
|
|
|
|
(701
|
)
|
|||||||
Cash dividends ($0.28 per common share)
|
|
|
|
|
|
|
(443
|
)
|
|
|
|
(443
|
)
|
|||||||||
Stock-based compensation expense
|
|
|
|
|
55
|
|
|
|
|
|
|
55
|
|
|||||||||
Balance July 31, 2018
|
1,582,408
|
|
|
$
|
16
|
|
|
$
|
586
|
|
|
$
|
(1,330
|
)
|
|
$
|
(1,039
|
)
|
|
$
|
(1,767
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance April 30, 2019
|
1,506,292
|
|
|
$
|
15
|
|
|
$
|
723
|
|
|
$
|
(1,325
|
)
|
|
$
|
(900
|
)
|
|
$
|
(1,487
|
)
|
Net earnings
|
|
|
|
|
|
|
|
|
|
1,179
|
|
|
|
|
|
1,179
|
|
|||||
Other comprehensive income, net of taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
37
|
|
|
37
|
|
|||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,216
|
|
|||||
Issuance of common stock in connection with employee stock plans and other
|
1,683
|
|
|
|
|
|
17
|
|
|
|
|
|
|
|
|
17
|
|
|||||
Repurchases of common stock
|
(26,061
|
)
|
|
|
|
|
(14
|
)
|
|
(513
|
)
|
|
|
|
|
(527
|
)
|
|||||
Cash dividends ($0.32 per common share)
|
|
|
|
|
|
|
|
|
|
(478
|
)
|
|
|
|
|
(478
|
)
|
|||||
Stock-based compensation expense
|
|
|
|
|
|
|
59
|
|
|
|
|
|
|
|
|
59
|
|
|||||
Adjustment for adoption of accounting standards (Note 1)
|
|
|
|
|
|
|
69
|
|
|
|
|
69
|
|
|||||||||
Balance July 31, 2019
|
1,481,914
|
|
|
$
|
15
|
|
|
$
|
785
|
|
|
$
|
(1,068
|
)
|
|
$
|
(863
|
)
|
|
$
|
(1,131
|
)
|
|
Common Stock
|
|
Additional
Paid-in Capital |
|
|
|
Accumulated
Other Comprehensive Loss |
|
Total Stockholders' Deficit
|
|||||||||||||
|
Number of Shares
|
|
Par Value
|
|
|
Accumulated Deficit
|
|
|
||||||||||||||
|
In millions, except number of shares in thousands
|
|||||||||||||||||||||
Balance October 31, 2017
|
1,649,580
|
|
|
$
|
16
|
|
|
$
|
380
|
|
|
$
|
(2,386
|
)
|
|
$
|
(1,418
|
)
|
|
$
|
(3,408
|
)
|
Net earnings
|
|
|
|
|
|
|
|
|
|
3,876
|
|
|
|
|
|
3,876
|
|
|||||
Other comprehensive income, net of taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
379
|
|
|
379
|
|
|||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,255
|
|
|||||
Issuance of common stock in connection with employee stock plans and other
|
19,198
|
|
|
|
|
|
26
|
|
|
|
|
|
|
|
|
26
|
|
|||||
Repurchases of common stock
|
(86,370
|
)
|
|
|
|
|
(23
|
)
|
|
(1,920
|
)
|
|
|
|
|
(1,943
|
)
|
|||||
Cash dividends ($0.56 per common share)
|
|
|
|
|
|
|
|
|
|
(900
|
)
|
|
|
|
|
(900
|
)
|
|||||
Stock-based compensation expense
|
|
|
|
|
|
|
203
|
|
|
|
|
|
|
|
|
203
|
|
|||||
Balance July 31, 2018
|
1,582,408
|
|
|
$
|
16
|
|
|
$
|
586
|
|
|
$
|
(1,330
|
)
|
|
$
|
(1,039
|
)
|
|
$
|
(1,767
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance October 31, 2018
|
1,560,270
|
|
|
$
|
16
|
|
|
$
|
663
|
|
|
$
|
(473
|
)
|
|
$
|
(845
|
)
|
|
$
|
(639
|
)
|
Net earnings
|
|
|
|
|
|
|
|
|
|
2,764
|
|
|
|
|
|
2,764
|
|
|||||
Other comprehensive loss, net of taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
(18
|
)
|
|
(18
|
)
|
|||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,746
|
|
|||||
Issuance of common stock in connection with employee stock plans and other
|
13,827
|
|
|
|
|
|
(69
|
)
|
|
|
|
|
|
|
|
(69
|
)
|
|||||
Repurchases of common stock
|
(92,183
|
)
|
|
(1
|
)
|
|
(41
|
)
|
|
(1,894
|
)
|
|
|
|
|
(1,936
|
)
|
|||||
Cash dividends ($0.64 per common share)
|
|
|
|
|
|
|
|
|
|
(971
|
)
|
|
|
|
|
(971
|
)
|
|||||
Stock-based compensation expense
|
|
|
|
|
|
|
232
|
|
|
|
|
|
|
|
|
232
|
|
|||||
Adjustment for adoption of accounting standards (Note 1)
|
|
|
|
|
|
|
|
|
|
(494
|
)
|
|
|
|
|
(494
|
)
|
|||||
Balance July 31, 2019
|
1,481,914
|
|
|
$
|
15
|
|
|
$
|
785
|
|
|
$
|
(1,068
|
)
|
|
$
|
(863
|
)
|
|
$
|
(1,131
|
)
|
1.
|
Identify the contract with a customer - A contract with customer exists when (i) it is approved and signed by all parties, (ii) each party’s rights and obligations can be identified, (iii) payment terms are defined, (iv) it has commercial substance and (v) the customer has the ability and intent to pay. HP evaluates customers’ ability to pay based on various factors like historical payment experience, financial metrics and customer credit scores.
|
2.
|
Identify the performance obligations in the contract - HP evaluates each performance obligation in an arrangement to determine whether it represents a separate unit of accounting, such as hardware and/or service. A performance obligation constitutes a separate unit of accounting when the customer can benefit from the goods or services either on its own or together with other resources that are readily available to the customer and the performance obligation is distinct within the context of the contract.
|
3.
|
Determine the transaction price - Transaction price is the amount of consideration to which HP expects to be entitled in exchange for transferring goods or services to the customer. If the transaction price includes a variable amount, HP estimates the amount it expects to be entitled to using either the expected value or most likely amount method.
|
4.
|
Allocate the transaction price to performance obligations in the contract - When a sales arrangement contains multiple performance obligations, such as hardware and/or services, HP allocates revenue to each performance obligation in proportion to their selling price. The selling price for each performance obligation is based on its standalone selling price (“SSP”). HP establishes SSP using the price charged for a performance obligation when sold separately (“observable price”) and, in some instances, using the price established by management having the relevant authority. When observable price is not available, HP establishes SSP based on management judgment considering internal factors such as margin objectives, pricing practices and controls, customer segment pricing strategies and the product life-cycle. Consideration is also given to market conditions such as competitor pricing strategies and technology industry life cycles.
|
5.
|
Recognize revenue when (or as) the performance obligation is satisfied - Revenue is recognized when, or as, a performance obligation is satisfied by transferring control of a promised good or service to a customer. HP generally invoices the customer upon delivery of the goods or services and the payments are due as per contract terms. For fixed price support or maintenance contracts that are in the nature of stand-ready obligations, payments are generally received in advance from customers and revenue is recognized on a straight-line basis over time for the duration of the contract.
|
|
As of July 31, 2019
|
||||||||||
CONSOLIDATED CONDENSED BALANCE SHEET ITEMS
|
As Reported
|
|
Effect of Adoption
|
|
Balances Without Adoption of Topic 606
|
||||||
|
In millions
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|||
Accounts receivable, net
|
$
|
5,295
|
|
|
$
|
(212
|
)
|
|
$
|
5,083
|
|
Inventory
|
5,716
|
|
|
186
|
|
|
5,902
|
|
|||
Other current assets
|
3,753
|
|
|
(186
|
)
|
|
3,567
|
|
|||
Other non-current assets
|
$
|
3,930
|
|
|
$
|
(31
|
)
|
|
$
|
3,899
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
||||||
Taxes on earnings
|
$
|
144
|
|
|
$
|
35
|
|
|
$
|
179
|
|
Other accrued liabilities
|
8,503
|
|
|
(465
|
)
|
|
8,038
|
|
|||
Accumulated deficit
|
$
|
(1,068
|
)
|
|
$
|
187
|
|
|
$
|
(881
|
)
|
|
Three months ended July 31, 2019
|
|
Nine months ended July 31, 2019
|
||||||||||||||||||||
CONSOLIDATED CONDENSED STATEMENT OF EARNINGS ITEMS
|
As Reported
|
|
Effect of Adoption
|
|
Balances Without Adoption of Topic 606
|
|
As Reported
|
|
Effect of Adoption
|
|
Balances Without Adoption of Topic 606
|
||||||||||||
|
In millions
|
||||||||||||||||||||||
Net revenue
|
$
|
14,603
|
|
|
$
|
17
|
|
|
$
|
14,620
|
|
|
$
|
43,349
|
|
|
$
|
(31
|
)
|
|
$
|
43,318
|
|
Earnings from operations
|
1,079
|
|
|
17
|
|
|
1,096
|
|
|
2,933
|
|
|
(31
|
)
|
|
2,902
|
|
||||||
Earnings before taxes
|
248
|
|
|
17
|
|
|
265
|
|
|
2,031
|
|
|
(31
|
)
|
|
2,000
|
|
||||||
Benefit from (provision for) taxes
|
931
|
|
|
(3
|
)
|
|
928
|
|
|
733
|
|
|
6
|
|
|
739
|
|
||||||
Net earnings
|
$
|
1,179
|
|
|
$
|
14
|
|
|
$
|
1,193
|
|
|
$
|
2,764
|
|
|
$
|
(25
|
)
|
|
$
|
2,739
|
|
|
As Reported on
October 31, 2018 |
|
Adjustments under Topic 606
|
|
Other (1)
|
|
As Restated on
November 1, 2018 |
||||||||
|
In millions
|
||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|||||
Accounts receivable, net
|
$
|
5,113
|
|
|
$
|
213
|
|
|
$
|
—
|
|
|
$
|
5,326
|
|
Inventory
|
6,062
|
|
|
(203
|
)
|
|
—
|
|
|
5,859
|
|
||||
Other current assets
|
5,046
|
|
|
203
|
|
|
(90
|
)
|
|
5,159
|
|
||||
Other non-current assets
|
$
|
5,069
|
|
|
$
|
33
|
|
|
$
|
(263
|
)
|
|
$
|
4,839
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
||||||||
Taxes on earnings
|
$
|
340
|
|
|
$
|
(39
|
)
|
|
$
|
—
|
|
|
$
|
301
|
|
Other accrued liabilities
|
7,376
|
|
|
497
|
|
|
—
|
|
|
7,873
|
|
||||
Accumulated other comprehensive loss
|
(845
|
)
|
|
—
|
|
|
(2
|
)
|
|
(847
|
)
|
||||
Accumulated deficit
|
$
|
(473
|
)
|
|
$
|
(212
|
)
|
|
$
|
(351
|
)
|
|
$
|
(1,036
|
)
|
•
|
Commercial PCs are optimized for use by customers, including enterprise, public sector and SMB customers, with a focus on robust designs, security, serviceability, connectivity, reliability and manageability in networked and cloud-based environments. Additionally, HP offers a range of services and solutions to enterprise, public sector and SMB customers to help them manage the lifecycle of their PC and mobility installed base.
|
•
|
Consumer PCs are optimized for consumer usage, focusing on gaming, consuming multi-media for entertainment, personal life activities, staying connected, sharing information, getting things done for work including creating content, staying informed and security.
|
•
|
Notebooks consists of Consumer notebooks, Commercial notebooks, Mobile workstations and Commercial mobility devices;
|
•
|
Desktops includes Consumer desktops, Commercial desktops, thin clients, and retail POS systems;
|
•
|
Workstations consists of desktop workstations and accessories; and
|
•
|
Other consists of Consumer and Commercial services as well as other Personal Systems capabilities.
|
•
|
Office Printing Solutions delivers HP’s office printers, services and solutions to SMBs and large enterprises. It also includes some Samsung-branded and OEM hardware and solutions. HP goes to market through its extensive channel network and directly with HP sales. Ongoing key initiatives include the shift to contractual through our Managed Print Service (“MPS”) and solutions offerings for the A3 copier and multifunction printer market, printer security solutions, PageWide solutions and award-winning JetIntelligence LaserJet products.
|
•
|
Home Printing Solutions delivers innovative printing products, services and solutions for the home, home business and micro business customers utilizing both HP’s Ink and Laser technologies (including laser technology from some Samsung-branded products). Initiatives such as Instant Ink subscription services and Continuous Ink and Toner Supply Systems provide business model innovation to benefit and expand HP’s existing customer base, while technologies like Photo Lifestyle, HP Smart App and HP SmartTasks drive print relevance for a mobile generation.
|
•
|
Graphics Solutions delivers large-format, commercial and industrial solutions to print service providers and packaging converters through a wide portfolio of printers and presses (HP DesignJet, HP Latex, HP Stitch, HP Scitex, HP Indigo and HP PageWide Web Presses). Ongoing key initiatives include accelerating the transformation of industrial prints from analog to digital.
|
•
|
3D Printing delivers the HP 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.
|
•
|
Commercial Hardware consists of Office Printing Solutions, Graphics Solutions and 3D Printing, excluding Supplies;
|
•
|
Consumer Hardware consists of Home Printing Solutions, excluding Supplies; and
|
•
|
Supplies comprises a set of highly innovative consumable products, ranging from Ink and Laser cartridges to media, graphics supplies and 3D printing supplies, for recurring use in Consumer and Commercial Hardware.
|
|
Three months ended July 31
|
|
Nine months ended July 31
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
In millions
|
||||||||||||||
Net Revenue:
|
|
|
|
|
|||||||||||
Personal Systems
|
$
|
9,690
|
|
|
$
|
9,395
|
|
|
$
|
28,268
|
|
|
$
|
27,597
|
|
Printing
|
4,912
|
|
|
5,188
|
|
|
15,084
|
|
|
15,505
|
|
||||
Corporate Investments
|
1
|
|
|
1
|
|
|
2
|
|
|
3
|
|
||||
Total segments
|
$
|
14,603
|
|
|
$
|
14,584
|
|
|
$
|
43,354
|
|
|
$
|
43,105
|
|
Other
|
—
|
|
|
2
|
|
|
(5
|
)
|
|
1
|
|
||||
Total net revenue
|
$
|
14,603
|
|
|
$
|
14,586
|
|
|
$
|
43,349
|
|
|
$
|
43,106
|
|
Earnings before taxes:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Personal Systems
|
$
|
547
|
|
|
$
|
362
|
|
|
$
|
1,342
|
|
|
$
|
1,026
|
|
Printing
|
765
|
|
|
829
|
|
|
2,425
|
|
|
2,465
|
|
||||
Corporate Investments
|
(23
|
)
|
|
(22
|
)
|
|
(71
|
)
|
|
(62
|
)
|
||||
Total segment earnings from operations
|
$
|
1,289
|
|
|
$
|
1,169
|
|
|
$
|
3,696
|
|
|
$
|
3,429
|
|
Corporate and unallocated costs and other
|
(113
|
)
|
|
(62
|
)
|
|
(290
|
)
|
|
(140
|
)
|
||||
Stock-based compensation expense
|
(60
|
)
|
|
(55
|
)
|
|
(233
|
)
|
|
(203
|
)
|
||||
Restructuring and other charges
|
(17
|
)
|
|
(4
|
)
|
|
(141
|
)
|
|
(92
|
)
|
||||
Acquisition-related credits (charges)
|
9
|
|
|
(10
|
)
|
|
(12
|
)
|
|
(97
|
)
|
||||
Amortization of intangible assets
|
(29
|
)
|
|
(20
|
)
|
|
(87
|
)
|
|
(60
|
)
|
||||
Interest and other, net
|
(831
|
)
|
|
—
|
|
|
(902
|
)
|
|
(831
|
)
|
||||
Total earnings before taxes
|
$
|
248
|
|
|
$
|
1,018
|
|
|
$
|
2,031
|
|
|
$
|
2,006
|
|
|
Three months ended July 31
|
|
Nine months ended July 31
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
In millions
|
||||||||||||||
Notebooks
|
$
|
5,630
|
|
|
$
|
5,634
|
|
|
$
|
16,648
|
|
|
$
|
16,382
|
|
Desktops
|
3,111
|
|
|
2,869
|
|
|
8,908
|
|
|
8,576
|
|
||||
Workstations
|
609
|
|
|
588
|
|
|
1,740
|
|
|
1,669
|
|
||||
Other
|
340
|
|
|
304
|
|
|
972
|
|
|
970
|
|
||||
Personal Systems
|
9,690
|
|
|
9,395
|
|
|
28,268
|
|
|
27,597
|
|
||||
Supplies
|
3,164
|
|
|
3,405
|
|
|
9,762
|
|
|
10,190
|
|
||||
Commercial Hardware
|
1,160
|
|
|
1,129
|
|
|
3,429
|
|
|
3,311
|
|
||||
Consumer Hardware
|
588
|
|
|
654
|
|
|
1,893
|
|
|
2,004
|
|
||||
Printing
|
4,912
|
|
|
5,188
|
|
|
15,084
|
|
|
15,505
|
|
||||
Corporate Investments
|
1
|
|
|
1
|
|
|
2
|
|
|
3
|
|
||||
Total segment net revenue
|
14,603
|
|
|
14,584
|
|
|
43,354
|
|
|
43,105
|
|
||||
Other
|
—
|
|
|
2
|
|
|
(5
|
)
|
|
1
|
|
||||
Total net revenue
|
$
|
14,603
|
|
|
$
|
14,586
|
|
|
$
|
43,349
|
|
|
$
|
43,106
|
|
|
Fiscal 2017 Plan
|
|
|
||||||||||||
|
Severance
|
|
Infrastructure and other
|
|
Other prior-year plans(1)
|
|
Total
|
||||||||
|
In millions
|
||||||||||||||
Accrued balance as of October 31, 2018
|
$
|
50
|
|
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
59
|
|
Charges
|
110
|
|
|
20
|
|
|
—
|
|
|
130
|
|
||||
Cash payments
|
(100
|
)
|
|
(9
|
)
|
|
(3
|
)
|
|
(112
|
)
|
||||
Non-cash and other adjustments
|
(4
|
)
|
|
(11
|
)
|
|
—
|
|
|
(15
|
)
|
||||
Accrued balance as of July 31, 2019
|
$
|
56
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
62
|
|
Total costs incurred to date as of July 31, 2019
|
$
|
363
|
|
|
$
|
101
|
|
|
$
|
1,317
|
|
|
$
|
1,781
|
|
|
|
|
|
|
|
|
|
||||||||
Reflected in Consolidated Condensed Balance Sheets
|
|
|
|
|
|
|
|
||||||||
Other accrued liabilities
|
56
|
|
|
—
|
|
|
5
|
|
|
61
|
|
||||
Other non-current liabilities
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Accrued balance as of October 31, 2017
|
76
|
|
|
19
|
|
|
13
|
|
|
108
|
|
||||
Charges (reversals)
|
72
|
|
|
(16
|
)
|
|
—
|
|
|
56
|
|
||||
Cash payments
|
(110
|
)
|
|
(32
|
)
|
|
(4
|
)
|
|
(146
|
)
|
||||
Non-cash and other adjustments
|
(2
|
)
|
|
29
|
|
|
1
|
|
|
28
|
|
||||
Accrued balance as of July 31, 2018
|
$
|
36
|
|
|
$
|
—
|
|
|
$
|
10
|
|
|
$
|
46
|
|
|
Fiscal 2017 Plan
|
|
|
|
|
||||||||||
|
Severance
|
|
Infrastructure and other
|
|
Other prior-year plans(1)
|
|
Total
|
||||||||
|
In millions
|
||||||||||||||
For the three months ended July 31, 2019
|
$
|
13
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
14
|
|
(1)
|
Includes prior-year plans which are considered substantially complete. HP does not expect any further material activity associated with these plans.
|
|
Three months ended July 31
|
||||||||||||||||||||||
|
U.S. Defined Benefit Plans
|
|
Non-U.S. Defined Benefit Plans
|
|
Post-Retirement Benefit Plans
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||
|
In millions
|
||||||||||||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14
|
|
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
123
|
|
|
113
|
|
|
6
|
|
|
6
|
|
|
4
|
|
|
4
|
|
||||||
Expected return on plan assets
|
(146
|
)
|
|
(180
|
)
|
|
(9
|
)
|
|
(10
|
)
|
|
(5
|
)
|
|
(6
|
)
|
||||||
Amortization and deferrals:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Actuarial loss (gain)
|
15
|
|
|
14
|
|
|
8
|
|
|
7
|
|
|
(8
|
)
|
|
(4
|
)
|
||||||
Prior service benefit
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
(5
|
)
|
||||||
Net periodic (credit) benefit cost
|
(8
|
)
|
|
(53
|
)
|
|
18
|
|
|
16
|
|
|
(12
|
)
|
|
(11
|
)
|
||||||
Curtailment gain
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Settlement loss
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total periodic (credit) benefit cost
|
$
|
(7
|
)
|
|
$
|
(52
|
)
|
|
$
|
9
|
|
|
$
|
16
|
|
|
$
|
(12
|
)
|
|
$
|
(11
|
)
|
|
Nine months ended July 31
|
||||||||||||||||||||||
|
U.S. Defined Benefit Plans
|
|
Non-U.S. Defined Benefit Plans
|
|
Post- Retirement Benefit Plans
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||
|
In millions
|
||||||||||||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
43
|
|
|
$
|
42
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
369
|
|
|
339
|
|
|
18
|
|
|
18
|
|
|
12
|
|
|
12
|
|
||||||
Expected return on plan assets
|
(437
|
)
|
|
(540
|
)
|
|
(28
|
)
|
|
(30
|
)
|
|
(15
|
)
|
|
(18
|
)
|
||||||
Amortization and deferrals:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Actuarial loss (gain)
|
45
|
|
|
45
|
|
|
24
|
|
|
21
|
|
|
(24
|
)
|
|
(12
|
)
|
||||||
Prior service benefit
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(3
|
)
|
|
(9
|
)
|
|
(15
|
)
|
||||||
Net periodic (credit) benefit cost
|
(23
|
)
|
|
(156
|
)
|
|
55
|
|
|
48
|
|
|
(36
|
)
|
|
(33
|
)
|
||||||
Curtailment gain
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Settlement loss
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total periodic (credit) benefit cost
|
$
|
(21
|
)
|
|
$
|
(154
|
)
|
|
$
|
46
|
|
|
$
|
48
|
|
|
$
|
(36
|
)
|
|
$
|
(33
|
)
|
|
As of
|
||||||
|
July 31, 2019
|
|
October 31, 2018
|
||||
|
In millions
|
||||||
Accounts receivable
|
$
|
5,410
|
|
|
$
|
5,242
|
|
Allowance for doubtful accounts
|
(115
|
)
|
|
(129
|
)
|
||
|
$
|
5,295
|
|
|
$
|
5,113
|
|
|
Nine months ended July 31, 2019
|
||
|
In millions
|
||
Balance at beginning of period
|
$
|
129
|
|
Provision for doubtful accounts
|
47
|
|
|
Deductions, net of recoveries
|
(61
|
)
|
|
Balance at end of period
|
$
|
115
|
|
|
Three months ended July 31
|
|
Nine months ended July 31
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
In millions
|
||||||||||||||
Balance at beginning of period(1)
|
$
|
182
|
|
|
$
|
171
|
|
|
$
|
165
|
|
|
$
|
147
|
|
Trade receivables sold
|
2,311
|
|
|
2,404
|
|
|
7,836
|
|
|
7,773
|
|
||||
Cash receipts
|
(2,330
|
)
|
|
(2,427
|
)
|
|
(7,838
|
)
|
|
(7,778
|
)
|
||||
Foreign currency and other
|
(4
|
)
|
|
(5
|
)
|
|
(4
|
)
|
|
1
|
|
||||
Balance at end of period(1)
|
$
|
159
|
|
|
$
|
143
|
|
|
$
|
159
|
|
|
$
|
143
|
|
(1)
|
Amounts outstanding from third parties reported in Accounts Receivable, net in the Consolidated Condensed Balance Sheets.
|
|
As of
|
||||||
|
July 31, 2019
|
|
October 31, 2018
|
||||
|
In millions
|
||||||
Finished goods
|
$
|
3,902
|
|
|
$
|
4,019
|
|
Purchased parts and fabricated assemblies
|
1,814
|
|
|
2,043
|
|
||
|
$
|
5,716
|
|
|
$
|
6,062
|
|
|
As of
|
||||||
|
July 31, 2019
|
|
October 31, 2018
|
||||
|
In millions
|
||||||
Supplier and other receivables
|
$
|
1,776
|
|
|
$
|
2,025
|
|
Prepaid and other current assets
|
1,145
|
|
|
1,445
|
|
||
Value-added taxes receivable
|
832
|
|
|
865
|
|
||
Available-for-sale investments(1)
|
—
|
|
|
711
|
|
||
|
$
|
3,753
|
|
|
$
|
5,046
|
|
(1)
|
See Note 8, “Financial Instruments” for detailed information.
|
|
As of
|
||||||
|
July 31, 2019
|
|
October 31, 2018
|
||||
|
In millions
|
||||||
Land, buildings and leasehold improvements
|
$
|
1,944
|
|
|
$
|
1,893
|
|
Machinery and equipment, including equipment held for lease
|
4,671
|
|
|
4,216
|
|
||
|
6,615
|
|
|
6,109
|
|
||
Accumulated depreciation
|
(4,153
|
)
|
|
(3,911
|
)
|
||
|
$
|
2,462
|
|
|
$
|
2,198
|
|
|
As of
|
||||||
|
July 31, 2019
|
|
October 31, 2018
|
||||
|
In millions
|
||||||
Deferred tax assets
|
$
|
2,105
|
|
|
$
|
2,431
|
|
Tax indemnifications receivable(1)
|
152
|
|
|
953
|
|
||
Intangible assets(2)
|
663
|
|
|
453
|
|
||
Other(3)
|
1,010
|
|
|
1,232
|
|
||
|
$
|
3,930
|
|
|
$
|
5,069
|
|
(1)
|
See Note 13, “Guarantees, Indemnifications and Warranties” for detailed information.
|
(2)
|
See Note 15, “Intangible Assets” for detailed information.
|
(3)
|
Includes marketable equity securities and mutual funds classified as available-for-sale investments of $55 million and $53 million as of July 31, 2019 and October 31, 2018, respectively. See Note 8, “Financial Instruments” for detailed information
|
|
As of
|
||||||
|
July 31, 2019
|
|
October 31, 2018
|
||||
|
In millions
|
||||||
Sales and marketing programs
|
$
|
3,327
|
|
|
$
|
2,758
|
|
Deferred revenue
|
1,139
|
|
|
1,095
|
|
||
Other accrued taxes
|
862
|
|
|
982
|
|
||
Warranty
|
648
|
|
|
673
|
|
||
Other
|
2,527
|
|
|
1,868
|
|
||
|
$
|
8,503
|
|
|
$
|
7,376
|
|
|
As of
|
||||||
|
July 31, 2019
|
|
October 31, 2018
|
||||
|
In millions
|
||||||
Tax liability(1)
|
$
|
775
|
|
|
$
|
2,063
|
|
Pension, post-retirement, and post-employment liabilities
|
1,522
|
|
|
1,645
|
|
||
Deferred revenue
|
1,034
|
|
|
1,005
|
|
||
Deferred tax liability
|
73
|
|
|
100
|
|
||
Other
|
823
|
|
|
793
|
|
||
|
$
|
4,227
|
|
|
$
|
5,606
|
|
(1)
|
See Note 5, “Taxes on Earnings” for detailed information.
|
|
Three months ended July 31
|
|
Nine months ended July 31
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
In millions
|
||||||||||||||
Tax indemnifications(1)
|
$
|
(784
|
)
|
|
$
|
(3
|
)
|
|
$
|
(769
|
)
|
|
$
|
(676
|
)
|
Loss on extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
(126
|
)
|
||||
Interest expense on borrowings
|
(57
|
)
|
|
(66
|
)
|
|
(182
|
)
|
|
(241
|
)
|
||||
Other, net
|
10
|
|
|
69
|
|
|
49
|
|
|
212
|
|
||||
|
$
|
(831
|
)
|
|
$
|
—
|
|
|
$
|
(902
|
)
|
|
$
|
(831
|
)
|
(1)
|
Includes an adjustment of $764 million for the three and nine months ended July 31, 2019 and $676 million for the nine months ended July 31, 2018, primarily related to indemnification receivables, pursuant to resolution of various tax matters. See Note 13, “Guarantees, Indemnifications and Warranties” for further information.
|
|
Three months ended July 31
|
|
Nine months ended July 31
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
In millions
|
||||||||||||||
Americas
|
$
|
6,574
|
|
|
$
|
6,630
|
|
|
$
|
18,391
|
|
|
$
|
18,794
|
|
Europe, Middle East and Africa
|
4,746
|
|
|
4,907
|
|
|
15,214
|
|
|
15,267
|
|
||||
Asia-Pacific and Japan
|
3,283
|
|
|
3,049
|
|
|
9,744
|
|
|
9,045
|
|
||||
Total net revenue
|
$
|
14,603
|
|
|
$
|
14,586
|
|
|
$
|
43,349
|
|
|
$
|
43,106
|
|
•
|
the contract has an original expected duration of one year or less; or
|
•
|
the revenue from the performance obligation is recognized over time on an as-invoiced basis when the amount corresponds directly with the value to the customer; or
|
•
|
the portion of the transaction price that is variable in nature is allocated entirely to a wholly unsatisfied performance obligation.
|
|
As of July 31, 2019
|
|
As of October 31, 2018
|
||||||||||||||||||||||||||||
|
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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Corporate debt
|
$
|
—
|
|
|
$
|
1,188
|
|
|
$
|
—
|
|
|
$
|
1,188
|
|
|
$
|
—
|
|
|
$
|
1,620
|
|
|
$
|
—
|
|
|
$
|
1,620
|
|
Financial institution instruments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
||||||||
Government debt(1)
|
2,929
|
|
|
—
|
|
|
—
|
|
|
2,929
|
|
|
2,217
|
|
|
150
|
|
|
—
|
|
|
2,367
|
|
||||||||
Available-for-Sale Investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate debt
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
366
|
|
|
—
|
|
|
366
|
|
||||||||
Financial institution instruments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32
|
|
|
—
|
|
|
32
|
|
||||||||
Government debt(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
313
|
|
|
—
|
|
|
313
|
|
||||||||
Mutual funds
|
49
|
|
|
—
|
|
|
—
|
|
|
49
|
|
|
47
|
|
|
—
|
|
|
—
|
|
|
47
|
|
||||||||
Marketable equity securities
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||||||
Derivative Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Foreign currency contracts
|
—
|
|
|
469
|
|
|
—
|
|
|
469
|
|
|
—
|
|
|
508
|
|
|
7
|
|
|
515
|
|
||||||||
Other derivatives
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total Assets
|
$
|
2,984
|
|
|
$
|
1,663
|
|
|
$
|
—
|
|
|
$
|
4,647
|
|
|
$
|
2,270
|
|
|
$
|
2,998
|
|
|
$
|
7
|
|
|
$
|
5,275
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
23
|
|
|
$
|
—
|
|
|
$
|
23
|
|
Foreign currency contracts
|
—
|
|
|
104
|
|
|
—
|
|
|
104
|
|
|
—
|
|
|
164
|
|
|
—
|
|
|
164
|
|
||||||||
Other derivatives
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
||||||||
Total Liabilities
|
$
|
—
|
|
|
$
|
105
|
|
|
$
|
—
|
|
|
$
|
105
|
|
|
$
|
—
|
|
|
$
|
195
|
|
|
$
|
—
|
|
|
$
|
195
|
|
(1)
|
Government debt includes instruments such as U.S. treasury notes, U.S agency securities and non-U.S. government bonds. Money market funds invested in government debt and traded in active markets are included in Level 1.
|
|
As of July 31, 2019
|
|
As of October 31, 2018
|
||||||||||||||||||||||||||||
|
Cost
|
|
Gross Unrealized Gain
|
|
Gross Unrealized Loss
|
|
Fair Value
|
|
Cost
|
|
Gross Unrealized Gain
|
|
Gross Unrealized Loss
|
|
Fair Value
|
||||||||||||||||
|
In millions
|
||||||||||||||||||||||||||||||
Cash Equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Corporate debt
|
$
|
1,188
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,188
|
|
|
$
|
1,620
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,620
|
|
Financial institution instruments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
9
|
|
||||||||
Government debt
|
2,929
|
|
|
—
|
|
|
—
|
|
|
2,929
|
|
|
2,367
|
|
|
—
|
|
|
—
|
|
|
2,367
|
|
||||||||
Total cash equivalents
|
4,117
|
|
|
—
|
|
|
—
|
|
|
4,117
|
|
|
3,996
|
|
|
—
|
|
|
—
|
|
|
3,996
|
|
||||||||
Available-for-Sale Investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Corporate debt(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
368
|
|
|
—
|
|
|
(2
|
)
|
|
366
|
|
||||||||
Financial institution instruments(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32
|
|
|
—
|
|
|
—
|
|
|
32
|
|
||||||||
Government debt(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
314
|
|
|
—
|
|
|
(1
|
)
|
|
313
|
|
||||||||
Marketable equity securities
|
4
|
|
|
2
|
|
|
—
|
|
|
6
|
|
|
4
|
|
|
2
|
|
|
—
|
|
|
6
|
|
||||||||
Mutual funds
|
38
|
|
|
11
|
|
|
—
|
|
|
49
|
|
|
38
|
|
|
9
|
|
|
—
|
|
|
47
|
|
||||||||
Total available-for-sale investments
|
42
|
|
|
13
|
|
|
—
|
|
|
55
|
|
|
756
|
|
|
11
|
|
|
(3
|
)
|
|
764
|
|
||||||||
Total cash equivalents and available-for-sale investments
|
$
|
4,159
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
4,172
|
|
|
$
|
4,752
|
|
|
$
|
11
|
|
|
$
|
(3
|
)
|
|
$
|
4,760
|
|
(1)
|
HP classifies its marketable debt securities as available-for-sale investments within Other current assets on the Consolidated Condensed Balance Sheets, including those with maturity dates beyond one year, based on their highly liquid nature and availability for use in current operations.
|
|
As of July 31, 2019
|
|
As of October 31, 2018
|
||||||||||||||||||||||||||||||||||||
|
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
|
$
|
750
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency contracts
|
15,930
|
|
|
330
|
|
|
130
|
|
|
68
|
|
|
23
|
|
|
17,147
|
|
|
386
|
|
|
107
|
|
|
86
|
|
|
52
|
|
||||||||||
Total derivatives designated as hedging instruments
|
16,680
|
|
|
330
|
|
|
130
|
|
|
68
|
|
|
23
|
|
|
18,147
|
|
|
386
|
|
|
107
|
|
|
86
|
|
|
75
|
|
||||||||||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency contracts
|
5,072
|
|
|
9
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
5,437
|
|
|
22
|
|
|
—
|
|
|
26
|
|
|
—
|
|
||||||||||
Other derivatives
|
136
|
|
|
6
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
122
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
||||||||||
Total derivatives not designated as hedging instruments
|
5,208
|
|
|
15
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
5,559
|
|
|
22
|
|
|
—
|
|
|
34
|
|
|
—
|
|
||||||||||
Total derivatives
|
$
|
21,888
|
|
|
$
|
345
|
|
|
$
|
130
|
|
|
$
|
82
|
|
|
$
|
23
|
|
|
$
|
23,706
|
|
|
$
|
408
|
|
|
$
|
107
|
|
|
$
|
120
|
|
|
$
|
75
|
|
|
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 July 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Derivative assets
|
$
|
475
|
|
|
$
|
—
|
|
|
$
|
475
|
|
|
$
|
63
|
|
|
$
|
341
|
|
(1)
|
|
$
|
71
|
|
|
Derivative liabilities
|
$
|
105
|
|
|
$
|
—
|
|
|
$
|
105
|
|
|
$
|
63
|
|
|
$
|
36
|
|
(2)
|
|
$
|
6
|
|
|
As of October 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Derivative assets
|
$
|
515
|
|
|
$
|
—
|
|
|
$
|
515
|
|
|
$
|
112
|
|
|
$
|
299
|
|
(1)
|
|
$
|
104
|
|
|
Derivative liabilities
|
$
|
195
|
|
|
$
|
—
|
|
|
$
|
195
|
|
|
$
|
112
|
|
|
$
|
69
|
|
(2)
|
|
$
|
14
|
|
(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.
|
|
Gain Recognized in Other Comprehensive Income ("OCI") on Derivatives (Effective Portion)
|
|
Gain (Loss) Reclassified from Accumulated OCI Into
Earnings (Effective Portion) |
||||||||||||||
|
Three months ended July 31, 2019
|
|
Nine months ended July 31, 2019
|
|
Location
|
|
Three months ended July 31, 2019
|
|
Nine months ended July 31, 2019
|
||||||||
|
In millions
|
|
|
|
In millions
|
||||||||||||
Cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency contracts
|
$
|
180
|
|
|
$
|
271
|
|
|
Net revenue
|
|
$
|
98
|
|
|
$
|
289
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
(12
|
)
|
|
(28
|
)
|
||||
|
|
|
|
|
|
|
Operating expenses
|
|
—
|
|
|
(2
|
)
|
||||
Total
|
$
|
180
|
|
|
$
|
271
|
|
|
|
|
$
|
86
|
|
|
$
|
259
|
|
|
Three months ended July 31
|
|
Nine months ended July 31
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
In millions
|
||||||||||||||
Foreign currency contracts
|
$
|
(59
|
)
|
|
$
|
5
|
|
|
$
|
(116
|
)
|
|
$
|
(4
|
)
|
Other derivatives
|
(3
|
)
|
|
1
|
|
|
(12
|
)
|
|
1
|
|
||||
Total
|
$
|
(62
|
)
|
|
$
|
6
|
|
|
$
|
(128
|
)
|
|
$
|
(3
|
)
|
|
As of July 31, 2019
|
|
As of October 31, 2018
|
||||||||||
|
Amount
Outstanding |
|
Weighted-Average
Interest Rate |
|
Amount
Outstanding |
|
Weighted-Average
Interest Rate |
||||||
|
In millions
|
|
|
|
In millions
|
|
|
||||||
Commercial paper
|
$
|
—
|
|
|
—
|
%
|
|
$
|
854
|
|
|
2.5
|
%
|
Current portion of long-term debt
|
295
|
|
|
3.6
|
%
|
|
565
|
|
|
3.1
|
%
|
||
Notes payable to banks, lines of credit and other
|
33
|
|
|
2.0
|
%
|
|
44
|
|
|
1.7
|
%
|
||
|
$
|
328
|
|
|
|
|
|
$
|
1,463
|
|
|
|
|
|
As of
|
||||||
|
July 31, 2019
|
|
October 31, 2018
|
||||
|
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
|
667
|
|
|
667
|
|
||
$1,000 issued at discount to par at a price of 99.816% in September 2011 at 4.375%, due September 2021
|
538
|
|
|
538
|
|
||
$1,500 issued at discount to par at a price of 99.707% in December 2011 at 4.65%, due December 2021
|
695
|
|
|
694
|
|
||
$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
|
|
||
$1,250 issued at discount to par at a price of 99.954% in January 2014 at 2.75%, due January 2019
|
—
|
|
|
300
|
|
||
|
4,246
|
|
|
4,647
|
|
||
Other, including capital lease obligations, at 0.51%-8.44%, due in calendar years 2019-2029
|
797
|
|
|
487
|
|
||
Fair value adjustment related to hedged debt
|
(3
|
)
|
|
(28
|
)
|
||
Unamortized debt issuance cost
|
(15
|
)
|
|
(17
|
)
|
||
Current portion of long-term debt
|
(295
|
)
|
|
(565
|
)
|
||
Total long-term debt
|
$
|
4,730
|
|
|
$
|
4,524
|
|
(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.
|
|
Three months ended July 31
|
|
Nine months ended July 31
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
In millions
|
||||||||||||||
Tax effect on change in unrealized components of available-for-sale debt securities:
|
|
|
|
|
|
|
|
|
|
||||||
Tax benefit on unrealized losses arising during the period
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Tax effect on change in unrealized components of cash flow hedges:
|
|
|
|
|
|
|
|
|
|||||||
Tax (provision) benefit on unrealized gains (losses) arising during the period
|
(7
|
)
|
|
(26
|
)
|
|
(23
|
)
|
|
7
|
|
||||
Tax provision (benefit) on (gains) losses reclassified into earnings
|
14
|
|
|
(2
|
)
|
|
34
|
|
|
(34
|
)
|
||||
|
7
|
|
|
(28
|
)
|
|
11
|
|
|
(27
|
)
|
||||
Tax effect on change in unrealized components of defined benefit plans:
|
|
|
|
|
|
|
|
|
|
||||||
Tax benefit (provision) on gains (losses) arising during the period
|
4
|
|
|
(1
|
)
|
|
5
|
|
|
(1
|
)
|
||||
Tax provision on amortization of actuarial loss and prior service benefit
|
(3
|
)
|
|
(2
|
)
|
|
(9
|
)
|
|
(8
|
)
|
||||
Tax provision on curtailments, settlements and other(1)
|
(79
|
)
|
|
—
|
|
|
(78
|
)
|
|
—
|
|
||||
|
(78
|
)
|
|
(3
|
)
|
|
(82
|
)
|
|
(9
|
)
|
||||
Tax effect on change in cumulative translation adjustment
|
8
|
|
|
—
|
|
|
6
|
|
|
—
|
|
||||
Tax provision on other comprehensive income (loss)
|
$
|
(63
|
)
|
|
$
|
(31
|
)
|
|
$
|
(65
|
)
|
|
$
|
(35
|
)
|
(1)
|
See Note 1, “Basis of Presentation” for detailed information around adoption of FASB issued guidance, eliminating the stranded tax effects in other comprehensive income resulting from the TCJA.
|
|
Three months ended July 31
|
|
Nine months ended July 31
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
In millions
|
||||||||||||||
Other comprehensive income (loss), net of taxes:
|
|
|
|
|
|
|
|
|
|
||||||
Change in unrealized components of available-for-sale debt securities:
|
|
|
|
|
|
|
|
|
|
||||||
Unrealized gains (losses) arising during the period
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
Losses (gains) reclassified into earnings
|
—
|
|
|
—
|
|
|
3
|
|
|
(5
|
)
|
||||
|
—
|
|
|
2
|
|
|
3
|
|
|
(7
|
)
|
||||
Change in unrealized components of cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|||||
Unrealized gains arising during the period
|
173
|
|
|
247
|
|
|
248
|
|
|
26
|
|
||||
(Gains) losses reclassified into earnings
|
(72
|
)
|
|
15
|
|
|
(225
|
)
|
|
329
|
|
||||
|
101
|
|
|
262
|
|
|
23
|
|
|
355
|
|
||||
Change in unrealized components of defined benefit plans:
|
|
|
|
|
|
|
|
|
|
||||||
(Losses) gains arising during the period
|
(12
|
)
|
|
1
|
|
|
(15
|
)
|
|
1
|
|
||||
Amortization of actuarial loss and prior service benefit(1)
|
8
|
|
|
9
|
|
|
25
|
|
|
28
|
|
||||
Curtailments, settlements and other
|
(38
|
)
|
|
1
|
|
|
(38
|
)
|
|
2
|
|
||||
|
(42
|
)
|
|
11
|
|
|
(28
|
)
|
|
31
|
|
||||
Change in cumulative translation adjustment
|
(22
|
)
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
||||
Other comprehensive income (loss), net of taxes
|
$
|
37
|
|
|
$
|
275
|
|
|
$
|
(18
|
)
|
|
$
|
379
|
|
(1)
|
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”.
|
|
Nine months ended July 31, 2019
|
||||||||||||||||||
|
Net unrealized
gains on available-for-sale debt securities |
|
Net unrealized
gains (losses) on cash flow hedges |
|
Unrealized
components of defined benefit plans |
|
Change in cumulative
translation adjustment |
|
Accumulated
other comprehensive loss |
||||||||||
|
In millions
|
||||||||||||||||||
Balance at beginning of period
|
$
|
5
|
|
|
$
|
291
|
|
|
$
|
(1,141
|
)
|
|
$
|
—
|
|
|
$
|
(845
|
)
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
|
248
|
|
|
(15
|
)
|
|
(5
|
)
|
|
228
|
|
|||||
Reclassifications of losses (gains) into earnings
|
3
|
|
|
(225
|
)
|
|
25
|
|
|
(11
|
)
|
|
(208
|
)
|
|||||
Reclassifications of curtailments, settlements and other into earnings
|
—
|
|
|
—
|
|
|
(38
|
)
|
|
—
|
|
|
(38
|
)
|
|||||
Balance at end of period
|
$
|
8
|
|
|
$
|
314
|
|
|
$
|
(1,169
|
)
|
|
$
|
(16
|
)
|
|
$
|
(863
|
)
|
|
Three months ended July 31
|
|
Nine months ended July 31
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
In millions, except per share amounts
|
||||||||||||||
Numerator:
|
|
|
|
|
|
|
|
|
|
||||||
Net earnings
|
$
|
1,179
|
|
|
$
|
880
|
|
|
$
|
2,764
|
|
|
$
|
3,876
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
||||||
Weighted-average shares used to compute basic net EPS
|
1,499
|
|
|
1,601
|
|
|
1,528
|
|
|
1,627
|
|
||||
Dilutive effect of employee stock plans
|
9
|
|
|
17
|
|
|
9
|
|
|
18
|
|
||||
Weighted-average shares used to compute diluted net EPS
|
1,508
|
|
|
1,618
|
|
|
1,537
|
|
|
1,645
|
|
||||
Net earnings per share:
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
$
|
0.79
|
|
|
$
|
0.55
|
|
|
$
|
1.81
|
|
|
$
|
2.38
|
|
Diluted
|
$
|
0.78
|
|
|
$
|
0.54
|
|
|
$
|
1.80
|
|
|
$
|
2.36
|
|
Anti-dilutive weighted-average stock-based compensation awards(1)
|
7
|
|
|
—
|
|
|
6
|
|
|
—
|
|
(1)
|
HP excludes from the calculation of diluted net EPS stock options and restricted stock units where the assumed proceeds exceed the average market price, 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 represent unrecognized compensation cost.
|
|
Nine months ended July 31, 2019
|
||
|
In millions
|
||
Balance at beginning of period
|
$
|
915
|
|
Accruals for warranties issued
|
777
|
|
|
Adjustments related to pre-existing warranties (including changes in estimates)
|
(1
|
)
|
|
Settlements made (in cash or in kind)
|
(786
|
)
|
|
Balance at end of period
|
$
|
905
|
|
|
In millions
|
||
Goodwill
|
$
|
375
|
|
Amortizable intangible assets
|
300
|
|
|
Net liabilities assumed
|
(197
|
)
|
|
Total fair value of consideration
|
$
|
478
|
|
|
As of July 31, 2019
|
|
As of October 31, 2018
|
||||||||||||||||||||
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
||||||||||||
|
In millions
|
||||||||||||||||||||||
Customer contracts, customer lists and distribution agreements
|
$
|
375
|
|
|
$
|
113
|
|
|
$
|
262
|
|
|
$
|
112
|
|
|
$
|
88
|
|
|
$
|
24
|
|
Technology, patents and trade name
|
634
|
|
|
233
|
|
|
401
|
|
|
601
|
|
|
172
|
|
|
429
|
|
||||||
Total intangible assets
|
$
|
1,009
|
|
|
$
|
346
|
|
|
$
|
663
|
|
|
$
|
713
|
|
|
$
|
260
|
|
|
$
|
453
|
|
|
Weighted-Average Useful Life
|
Customer contracts, customer lists and distribution agreements
|
9
|
Technology, patents and trade name
|
7
|
Fiscal year
|
In millions
|
||
Remainder of 2019
|
$
|
29
|
|
2020
|
118
|
|
|
2021
|
117
|
|
|
2022
|
116
|
|
|
2023
|
115
|
|
|
Thereafter
|
168
|
|
|
Total
|
$
|
663
|
|
•
|
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 operations financial results comparing the three and nine months ended July 31, 2019 to the prior-year period. A discussion of the results of 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 financial condition.
|
•
|
Contractual and Other Obligations. An overview of contractual obligations, retirement and post-retirement benefit plan contributions, cost-saving plans, uncertain tax positions and off-balance sheet arrangements of our operations.
|
•
|
In Personal Systems, our strategic focus is on profitable growth through hyper market segmentation with respect to enhanced innovation in multi-operating systems, multi-architecture, geography, customer segments and other key attributes. Additionally, we are investing in end point services and solutions. We are focused on Services including Device as a Service as the market begins to shift to contractual solutions. We believe that we are well positioned due to our competitive product lineup.
|
•
|
In Printing, our strategic growth focus is on shift to contractual solutions and Graphics, as well as expanding our footprint in the 3D printing marketplace. The shift to contractual solutions includes a continued focus on MPS and Instant Ink, supporting our strategy of placing higher value printer units (including our A3 products and solutions) which offer strong annuity of toner and ink. In Graphics, we are focused on innovations such as our Indigo and Latex product offerings, which support growth in our Graphics solutions business. We continue to execute on our key initiatives of focusing on high-value products targeted at high usage categories and introducing new revenue delivery models.
|
•
|
In Personal Systems, we face challenges with industry component availability and a competitive pricing environment.
|
•
|
In Printing, we obtain many components from single sources due to technology, availability, price, quality or other considerations. For instance, we source the majority of our A4 and a portion of our A3 portfolio of 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 anticipate renewal of this agreement. We also face challenges in Printing due to our multi-tier distribution network, primarily in EMEA, including limiting grey marketing and the potential misuse of pricing programs. A competitive pricing environment, including from non-original supplies (which includes imitation, refill or remanufactured alternatives), and a weakened market in certain geographies with associated pricing sensitivity of our customers also present challenges in Printing.
|
|
Three months ended July 31
|
|
Nine months ended July 31
|
||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||||||||||
|
Dollars
|
|
% of Net Revenue
|
|
Dollars
|
|
% of Net Revenue
|
|
Dollars
|
|
% of Net Revenue
|
|
Dollars
|
|
% of Net Revenue
|
||||||||||||
|
Dollars in millions
|
||||||||||||||||||||||||||
Net revenue
|
$
|
14,603
|
|
|
100.0
|
%
|
|
$
|
14,586
|
|
|
100.0
|
%
|
|
$
|
43,349
|
|
|
100.0
|
%
|
|
$
|
43,106
|
|
|
100.0
|
%
|
Cost of revenue
|
(11,698
|
)
|
|
(80.1
|
)%
|
|
(11,898
|
)
|
|
(81.6
|
)%
|
|
(35,103
|
)
|
|
(81.0
|
)%
|
|
(35,134
|
)
|
|
(81.5
|
)%
|
||||
Gross profit
|
2,905
|
|
|
19.9
|
%
|
|
2,688
|
|
|
18.4
|
%
|
|
8,246
|
|
|
19.0
|
%
|
|
7,972
|
|
|
18.5
|
%
|
||||
Research and development
|
(413
|
)
|
|
(2.8
|
)%
|
|
(347
|
)
|
|
(2.4
|
)%
|
|
(1,110
|
)
|
|
(2.6
|
)%
|
|
(1,050
|
)
|
|
(2.4
|
)%
|
||||
Selling, general and administrative
|
(1,376
|
)
|
|
(9.5
|
)%
|
|
(1,289
|
)
|
|
(8.8
|
)%
|
|
(3,963
|
)
|
|
(9.1
|
)%
|
|
(3,836
|
)
|
|
(8.9
|
)%
|
||||
Restructuring and other charges
|
(17
|
)
|
|
(0.1
|
)%
|
|
(4
|
)
|
|
—
|
%
|
|
(141
|
)
|
|
(0.3
|
)%
|
|
(92
|
)
|
|
(0.3
|
)%
|
||||
Acquisition-related credits (charges)
|
9
|
|
|
0.1
|
%
|
|
(10
|
)
|
|
(0.1
|
)%
|
|
(12
|
)
|
|
—
|
%
|
|
(97
|
)
|
|
(0.2
|
)%
|
||||
Amortization of intangible assets
|
(29
|
)
|
|
(0.2
|
)%
|
|
(20
|
)
|
|
(0.1
|
)%
|
|
(87
|
)
|
|
(0.2
|
)%
|
|
(60
|
)
|
|
(0.1
|
)%
|
||||
Earnings from operations
|
1,079
|
|
|
7.4
|
%
|
|
1,018
|
|
|
7.0
|
%
|
|
2,933
|
|
|
6.8
|
%
|
|
2,837
|
|
|
6.6
|
%
|
||||
Interest and other, net
|
(831
|
)
|
|
(5.7
|
)%
|
|
—
|
|
|
—
|
%
|
|
(902
|
)
|
|
(2.1
|
)%
|
|
(831
|
)
|
|
(1.9
|
)%
|
||||
Earnings before taxes
|
248
|
|
|
1.7
|
%
|
|
1,018
|
|
|
7.0
|
%
|
|
2,031
|
|
|
4.7
|
%
|
|
2,006
|
|
|
4.7
|
%
|
||||
Benefit from (provision for) taxes
|
931
|
|
|
6.4
|
%
|
|
(138
|
)
|
|
(1.0
|
)%
|
|
733
|
|
|
1.7
|
%
|
|
1,870
|
|
|
4.3
|
%
|
||||
Net earnings
|
$
|
1,179
|
|
|
8.1
|
%
|
|
$
|
880
|
|
|
6.0
|
%
|
|
$
|
2,764
|
|
|
6.4
|
%
|
|
$
|
3,876
|
|
|
9.0
|
%
|
|
Three months ended July 31
|
|
Nine months ended July 31
|
||||||||||||||||||
|
2019
|
|
2018
|
|
% Change
|
|
2019
|
|
2018
|
|
% Change
|
||||||||||
|
Dollars in millions
|
||||||||||||||||||||
Net revenue
|
$
|
9,690
|
|
|
$
|
9,395
|
|
|
3.1
|
%
|
|
$
|
28,268
|
|
|
$
|
27,597
|
|
|
2.4
|
%
|
Earnings from operations
|
$
|
547
|
|
|
$
|
362
|
|
|
51.1
|
%
|
|
$
|
1,342
|
|
|
$
|
1,026
|
|
|
30.8
|
%
|
Earnings from operations as a % of net revenue
|
5.6
|
%
|
|
3.9
|
%
|
|
|
|
|
4.7
|
%
|
|
3.7
|
%
|
|
|
|
|
Three months ended July 31
|
|
Nine months ended July 31
|
||||||||||||||||||
|
Net Revenue
|
|
Weighted Net Revenue Change
|
|
Net Revenue
|
|
Weighted Net Revenue Change
|
||||||||||||||
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
||||||||||||
|
Dollars in millions
|
|
Percentage Points
|
|
Dollars in millions
|
|
Percentage Points
|
||||||||||||||
Notebooks
|
$
|
5,630
|
|
|
$
|
5,634
|
|
|
—
|
|
|
$
|
16,648
|
|
|
$
|
16,382
|
|
|
1.0
|
|
Desktops
|
3,111
|
|
|
2,869
|
|
|
2.5
|
|
|
8,908
|
|
|
8,576
|
|
|
1.2
|
|
||||
Workstations
|
609
|
|
|
588
|
|
|
0.2
|
|
|
1,740
|
|
|
1,669
|
|
|
0.2
|
|
||||
Other
|
340
|
|
|
304
|
|
|
0.4
|
|
|
972
|
|
|
970
|
|
|
—
|
|
||||
Total Personal Systems
|
$
|
9,690
|
|
|
$
|
9,395
|
|
|
3.1
|
|
|
$
|
28,268
|
|
|
$
|
27,597
|
|
|
2.4
|
|
|
Three months ended July 31
|
|
Nine months ended July 31
|
||||||||||||||||||
|
2019
|
|
2018
|
|
% Change
|
|
2019
|
|
2018
|
|
% Change
|
||||||||||
|
Dollars in millions
|
||||||||||||||||||||
Net revenue
|
$
|
4,912
|
|
|
$
|
5,188
|
|
|
(5.3
|
)%
|
|
$
|
15,084
|
|
|
$
|
15,505
|
|
|
(2.7
|
)%
|
Earnings from operations
|
$
|
765
|
|
|
$
|
829
|
|
|
(7.7
|
)%
|
|
$
|
2,425
|
|
|
$
|
2,465
|
|
|
(1.6
|
)%
|
Earnings from operations as a % of net revenue
|
15.6
|
%
|
|
16.0
|
%
|
|
|
|
|
16.1
|
%
|
|
15.9
|
%
|
|
|
|
|
Three months ended July 31
|
|
Nine months ended July 31
|
||||||||||||||||||
|
Net Revenue
|
|
Weighted Net Revenue Change
|
|
Net Revenue
|
|
Weighted Net Revenue Change
|
||||||||||||||
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
||||||||||||
|
Dollars in millions
|
|
Percentage Points
|
|
Dollars in millions
|
|
Percentage Points
|
||||||||||||||
Supplies
|
$
|
3,164
|
|
|
$
|
3,405
|
|
|
(4.6)
|
|
|
$
|
9,762
|
|
|
$
|
10,190
|
|
|
(2.8)
|
|
Commercial Hardware
|
1,160
|
|
|
1,129
|
|
|
0.6
|
|
|
3,429
|
|
|
3,311
|
|
|
0.8
|
|
||||
Consumer Hardware
|
588
|
|
|
654
|
|
|
(1.3)
|
|
|
1,893
|
|
|
2,004
|
|
|
(0.7)
|
|
||||
Total Printing
|
$
|
4,912
|
|
|
$
|
5,188
|
|
|
(5.3)
|
|
|
$
|
15,084
|
|
|
$
|
15,505
|
|
|
(2.7)
|
|
|
Nine months ended July 31
|
||||||
|
2019
|
|
2018
|
||||
|
In millions
|
||||||
Net cash provided by operating activities
|
$
|
4,066
|
|
|
$
|
3,560
|
|
Net cash used in investing activities
|
(211
|
)
|
|
(803
|
)
|
||
Net cash used in financing activities
|
(4,102
|
)
|
|
(3,559
|
)
|
||
Net decrease in cash and cash equivalents
|
$
|
(247
|
)
|
|
$
|
(802
|
)
|
|
As of
|
|
As of
|
|
|
|||||||||||||||
|
July 31, 2019
|
|
October 31, 2018
|
|
Change
|
|
July 31, 2018
|
|
October 31, 2017
|
|
Change
|
|
Y/Y Change
|
|||||||
Days of sales outstanding in accounts receivable (“DSO”)
|
33
|
|
|
30
|
|
|
3
|
|
|
28
|
|
|
29
|
|
|
(1
|
)
|
|
5
|
|
Days of supply in inventory (“DOS”)
|
44
|
|
|
43
|
|
|
1
|
|
|
46
|
|
|
46
|
|
|
—
|
|
|
(2
|
)
|
Days of purchases outstanding in accounts payable (“DPO”)
|
(113
|
)
|
|
(105
|
)
|
|
(8
|
)
|
|
(108
|
)
|
|
(105
|
)
|
|
(3
|
)
|
|
(5
|
)
|
Cash conversion cycle
|
(36
|
)
|
|
(32
|
)
|
|
(4
|
)
|
|
(34
|
)
|
|
(30
|
)
|
|
(4
|
)
|
|
(2
|
)
|
|
As of July 31, 2019
|
||
|
In millions
|
||
2016 Shelf Registration Statement
|
Unspecified
|
|
|
Uncommitted lines of credit
|
$
|
695
|
|
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
|
||||||||||||
May 2019
|
10,230
|
|
|
$
|
19.38
|
|
|
10,230
|
|
|
$
|
2,293,889
|
|
June 2019
|
8,053
|
|
|
$
|
19.92
|
|
|
8,053
|
|
|
$
|
2,133,491
|
|
July 2019
|
8,228
|
|
|
$
|
21.18
|
|
|
8,228
|
|
|
$
|
1,959,192
|
|
Total
|
26,511
|
|
|
|
|
|
26,511
|
|
|
|
|
|
HP INC.
|
|
/s/ STEVE FIELER
|
|
Steve Fieler
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)
|
|
|
8-K
|
|
001-04423
|
|
2.1
|
|
November 5, 2015
|
|
2(b)
|
|
|
8-K
|
|
001-04423
|
|
2.3
|
|
November 5, 2015
|
|
2(c)
|
|
|
8-K
|
|
001-04423
|
|
2.4
|
|
November 5, 2015
|
|
3(a)
|
|
|
10-Q
|
|
001-04423
|
|
3(a)
|
|
June 12, 1998
|
|
3(b)
|
|
|
10-Q
|
|
001-04423
|
|
3(b)
|
|
March 16, 2001
|
3(c)
|
|
|
8-K
|
|
001-04423
|
|
3.2
|
|
October 22, 2015
|
|
3(d)
|
|
|
8-K
|
|
001-04423
|
|
3.1
|
|
April 7, 2016
|
|
3(e)
|
|
|
8-K
|
|
001-04423
|
|
3.1
|
|
February 7, 2019
|
|
4(a)
|
|
|
S-3
|
|
333-215116
|
|
4.1
|
|
December 15, 2016
|
|
4(b)
|
|
|
S-3
|
|
333-21516
|
|
4.2
|
|
December 15, 2016
|
|
4(c)
|
|
|
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
|
|
|
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
|
|
|
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
|
|
|
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
|
|
|
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
|
|
|
January 14, 2014
|
|
4(i)
|
|
|
8-K/A
|
|
001-04423
|
|
4.1
|
|
June 23, 2006
|
|
4(j)
|
|
|
10-Q
|
|
001-04423
|
|
4(j)
|
|
June 5, 2018
|
|
10(a)
|
|
|
S-8
|
|
333-114253
|
|
4.1
|
|
April 7, 2004
|
|
10(b)
|
|
|
8-K
|
|
001-04423
|
|
10.2
|
|
September 21, 2006
|
|
10(c)
|
|
|
8-K
|
|
001-04423
|
|
99.3
|
|
November 23, 2005
|
|
10(d)
|
|
|
10-K
|
|
001-04423
|
|
10(h)
|
|
December 14, 2011
|
|
10(e)
|
|
|
10-Q
|
|
001-04423
|
|
10(u)(u)
|
|
June 13, 2002
|
|
10(f)
|
|
|
10-Q
|
|
001-04423
|
|
10(v)(v)
|
|
June 13, 2002
|
|
10(g)
|
|
|
8-K
|
|
001-04423
|
|
10.2
|
|
March 22, 2005
|
|
10(h)
|
|
|
8-K
|
|
001-04423
|
|
10.2
|
|
January 24, 2008
|
|
10(i)
|
|
|
10-Q
|
|
001-04423
|
|
10(o)(o)
|
|
March 10, 2008
|
|
10(j)
|
|
|
10-Q
|
|
001-04423
|
|
10(p)(p)
|
|
March 10, 2008
|
|
10(k)
|
|
|
10-Q
|
|
001-04423
|
|
10(t)(t)
|
|
June 6, 2008
|
|
10(1)
|
|
|
10-Q
|
|
001-04423
|
|
10(u)(u)
|
|
June 6, 2008
|
|
10(m)
|
|
|
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)
|
|
|
10-Q
|
|
001-04423
|
|
10(b)(b)(b)
|
|
March 10, 2009
|
|
10(o)
|
|
|
10-K
|
|
001-04423
|
|
10(i)(i)(i)
|
|
December 15, 2010
|
|
10(p)
|
|
|
10-K
|
|
001-04423
|
|
10(j)(j)(j)
|
|
December 15, 2010
|
|
10(q)
|
|
|
10-K
|
|
001-04423
|
|
10(k)(k)(k)
|
|
December 15, 2010
|
|
10(r)
|
|
|
8-K
|
|
001-04423
|
|
10.2
|
|
March 21, 2013
|
|
10(s)
|
|
|
10-Q
|
|
001-04423
|
|
10(u)(u)
|
|
March 11, 2014
|
|
10(t)
|
|
|
10-Q
|
|
001-04423
|
|
10(v)(v)
|
|
March 11, 2014
|
|
10(u)
|
|
|
10-Q
|
|
001-04423
|
|
10(w)(w)
|
|
March 11, 2014
|
|
10(v)
|
|
|
10-Q
|
|
001-04423
|
|
10(x)(x)
|
|
March 11, 2014
|
|
10(w)
|
|
|
10-Q
|
|
001-04423
|
|
10(y)(y)
|
|
March 11, 2014
|
|
10(x)
|
|
|
10-Q
|
|
001-04423
|
|
10(z)(z)
|
|
March 11, 2014
|
|
10(y)
|
|
|
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)
|
|
|
10-Q
|
|
001-04423
|
|
10(b)(b)(b)
|
|
March 11, 2014
|
|
10(a)(a)
|
|
|
10-Q
|
|
001-04423
|
|
10(c)(c)(c)
|
|
March 11, 2015
|
|
10(b)(b)
|
|
|
10-Q
|
|
001-04423
|
|
10(d)(d)(d)
|
|
March 11, 2015
|
|
10(c)(c)
|
|
|
10-Q
|
|
001-04423
|
|
10(e)(e)(e)
|
|
March 11, 2015
|
|
10(d)(d)
|
|
|
10-Q
|
|
001-04423
|
|
10(f)(f)(f)
|
|
March 11, 2015
|
|
10(e)(e)
|
|
|
10-Q
|
|
001-04423
|
|
10(g)(g)(g)
|
|
March 11, 2015
|
|
10(f)(f)
|
|
|
10-Q
|
|
001-04423
|
|
10(h)(h)(h)
|
|
March 11, 2015
|
|
10(g)(g)
|
|
|
10-Q
|
|
001-04423
|
|
10(i)(i)(i)
|
|
March 11, 2015
|
|
10(h)(h)
|
|
|
10-Q
|
|
001-04423
|
|
10(b)(b)(b)
|
|
June 8, 2015
|
|
10(i)(i)
|
|
|
10-Q
|
|
001-04423
|
|
10(c)(c)(c)
|
|
June 8, 2015
|
|
10(j)(j)
|
|
|
10-Q
|
|
001-04423
|
|
10.(j)(j)
|
|
June 5, 2018
|
Exhibit
Number
|
|
|
|
Incorporated by Reference
|
||||||
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit(s)
|
Filing Date
|
||
10(k)(k)
|
|
|
|
10-Q
|
|
001-04423
|
|
10(k)(k)
|
March 5, 2019
|
|
10(l)(l)
|
|
|
|
10-K
|
|
001-04423
|
|
10(e)(e)(e)
|
December 16, 2015
|
|
10(m)(m)
|
|
|
|
10-K
|
|
001-04423
|
|
10(f)(f)(f)
|
December 16, 2015
|
|
10(n)(n)
|
|
|
|
10-K
|
|
001-04423
|
|
10(g)(g)(g)
|
December 16, 2015
|
|
10(o)(o)
|
|
|
|
10-Q
|
|
001-04423
|
|
10(n)(n)
|
March 3, 2016
|
|
10(p)(p)
|
|
|
|
10-Q
|
|
001-04423
|
|
10(o)(o)
|
March 3, 2016
|
|
10(q)(q)
|
|
|
|
10-Q
|
|
001-04423
|
|
10(p)(p)
|
March 3, 2016
|
|
10(r)(r)
|
|
|
|
10-Q
|
|
001-04423
|
|
10(q)(q)
|
March 3, 2016
|
|
10(s)(s)
|
|
|
|
10-Q
|
|
001-04423
|
|
10(r)(r)
|
March 3, 2016
|
|
10(t)(t)
|
|
|
|
10-Q
|
|
001-04423
|
|
10(s)(s)
|
March 3, 2016
|
|
10(u)(u)
|
|
|
|
10-Q
|
|
001-04423
|
|
10(t)(t)
|
March 3, 2016
|
|
10(v)(v)
|
|
|
|
10-K
|
|
001-04423
|
|
10(u)(u)
|
December 15, 2016
|
|
10(w)(w)
|
|
|
|
10-Q
|
|
001-04423
|
|
10(v)(v)
|
March 2, 2017
|
|
10(x)(x)
|
|
|
|
10-Q
|
|
001-04423
|
|
10(w)(w)
|
March 2, 2017
|
|
10(y)(y)
|
|
|
|
10-Q
|
|
001-04423
|
|
10(x)(x)
|
March 2, 2017
|
|
10(z)(z)
|
|
|
|
10-Q
|
|
001-04423
|
|
10(y)(y)
|
March 2, 2017
|
|
10(a)(a)(a)
|
|
|
|
10-Q
|
|
001-04423
|
|
10(z)(z)
|
March 2, 2017
|
|
10(b)(b)(b)
|
|
|
|
10-Q
|
|
001-04423
|
|
10(a)(a)(a)
|
March 2, 2017
|
10(c)(c)(c)
|
|
|
|
10-Q
|
|
001-04423
|
|
10(b)(b)(b)
|
March 1, 2018
|
|
10(d)(d)(d)
|
|
|
|
10-Q
|
|
001-04423
|
|
10(c)(c)(c)
|
March 1, 2018
|
|
10(e)(e)(e)
|
|
|
|
10-Q
|
|
001-04423
|
|
10(d)(d)(d)
|
March 1, 2018
|
|
10(f)(f)(f)
|
|
|
|
10-Q
|
|
001-04423
|
|
10(e)(e)(e)
|
March 1, 2018
|
|
10(g)(g)(g)
|
|
|
|
10-Q
|
|
001-04423
|
|
10(f)(f)(f)
|
March 1, 2018
|
|
10(h)(h)(h)
|
|
|
|
10-K
|
|
001-04423
|
|
10(g)(g)(g)
|
December 13, 2018
|
|
10(i)(i)(i)
|
|
|
|
10-K
|
|
001-04423
|
|
10(h)(h)(h)
|
December 13, 2018
|
|
10(j)(j)(j)
|
|
|
|
10-Q
|
|
001-04423
|
|
10(j)(j)(j)
|
March 5, 2019
|
|
10(k)(k)(k)
|
|
|
|
10-Q
|
|
001-04423
|
|
10(k)(k)(k)
|
March 5, 2019
|
|
10(l)(l)(l)
|
|
|
|
|
|
|
|
|
|
|
31.1
|
|
|
|
|
|
|
|
|
|
|
31.2
|
|
|
|
|
|
|
|
|
|
|
32
|
|
|
|
|
|
|
|
|
|
|
101.INS
|
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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.‡
|
|
|
|
|
|
|
|
104
|
|
|
The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended July 31, 2019, formatted in Inline XBR.‡
|
|
|
|
|
|
|
|
Name:
|
fld_NAME_AC
|
Employee ID:
|
fld_EMPLID
|
|
|
|
|
|
|
|
Grant Date:
|
expGRANT_DATE
|
Grant ID:
|
fld_GRANT_NBR
|
Amount:
|
0
|
Plan:
|
fld_DESCR
|
Vesting Schedule:
|
fld_HTMLAREA1
|
1.
|
Grant of Restricted Stock Units.
|
2.
|
Vesting Schedule.
|
3.
|
Benefit Upon Settlement.
|
(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 the per share cash dividend paid by the Company on its Shares by the total number of RSUs that are outstanding as of the record date for the dividend; 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;
|
4.
|
Restrictions.
|
5.
|
Custody of Restricted Stock Units.
|
6.
|
No Stockholder Rights.
|
7.
|
Termination of Employment.
|
8.
|
Disability of the Employee.
|
9.
|
Death of the Employee.
|
10.
|
Section 409A.
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11.
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Taxes.
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(a)
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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 grant or vesting of RSUs or the issuance or subsequent sale of 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.
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(b)
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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.
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(c)
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Depending on the withholding method, the Company may withhold or account for Tax-Related Items by considering applicable statutory withholding rates or other applicable withholding rates, including maximum applicable rates in the Employee’s jurisdiction(s), in which case the Employee will receive a refund of any over-withheld amount in cash and will have no entitlement to the Share equivalent. If the obligation for Tax-Related Items is satisfied by withholding in Shares, for tax purposes, the Employee is deemed to have been issued the full number of shares of Common Stock subject to the vested RSUs, notwithstanding that a number of the shares of Common Stock are held back solely for the purpose of paying the Tax-Related Items.
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(d)
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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.
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(e)
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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 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 RSUs and dividend equivalents. Further, the Employee agrees that the Company
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12.
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Data Privacy Consent.
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(a)
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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, its Subsidiaries or Affiliates, and the Employer for the exclusive purpose of implementing, administering and managing the Employee’s participation in the Plan.
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(b)
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The Employee understands that the Company, its Subsidiaries and Affiliates, and the Employer may hold certain personal information about the Employee, including, but not limited to, name, home address, email address and telephone number, date of birth, social insurance number, passport 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.
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(c)
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The Employee understands that Data may be transferred to Merrill Lynch and any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in the Employee’s country or elsewhere, and that the recipient’s country may have different data privacy laws and protections than the Employee’s country. The Company is committed to protecting the privacy of Data in such cases. The Employee understands that by contract both with the Company and/or any of its Subsidiaries or Affiliates and with Merrill Lynch and/or the Company’s other vendors, the people and companies that have access to the Employee’s Data are bound to handle such Data in a manner consistent with the Company’s privacy policy and law. The Company periodically performs due diligence and audits on its vendors in accordance with good commercial practices to ensure their capabilities and compliance with those commitments. The Employee further understands that Data will be held only as long as is necessary to implement, administer and manage the Employee’s participation in the Plan.
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(d)
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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. 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 status or service with the Company or his or her 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 the Employee RSUs or other equity awards or administer and manage the Employee’s participation in the Plan. Therefore, the Employee understands that refusing or withdrawing his or her 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.
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(e)
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Further, the Employee understands that the Company may rely on a different legal basis for the processing and/or transfer of Data in the future and/or request that the Employee provide another data privacy consent. If applicable and upon request of the Company or a Subsidiary or Affiliate, the Employee agrees to provide an executed data privacy consent or acknowledgement (or any other consents, acknowledgements or agreements) to the Company or a Subsidiary or Affiliate that the Company and/or a Subsidiary or Affiliate may deem necessary to obtain under the data privacy laws in the Employee’s country of employment, either now or in the future. The Employee understands that he or she may be unable to participate in the Plan if he or she fails to execute any such acknowledgement, agreement or consent requested by the Company and/or a Subsidiary or Affiliate.
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13.
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Plan Information.
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14.
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Acknowledgment and Waiver.
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(a)
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except as provided in Sections 8 and 9, the vesting of the RSUs is earned only by continuing employment with the Company or one of its Subsidiaries or Affiliates and that being hired and granted RSUs will not result in the RSUs vesting;
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(b)
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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;
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(c)
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all good faith decisions and interpretations of the Committee regarding the Plan and RSUs granted under the Plan are binding, conclusive and final;
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(d)
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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;
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(e)
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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;
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(f)
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all decisions with respect to future grants, if any, will be at the sole discretion of the Company;
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(g)
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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;
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(h)
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the Employee is voluntarily participating in the Plan;
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(i)
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RSUs and their resulting benefits are extraordinary items that are outside the scope of the Employee’s employment contract, if any;
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(j)
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RSUs and their resulting benefits are not intended to replace any pension rights or compensation;
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(k)
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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;
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(l)
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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;
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(m)
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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;
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(n)
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the future value of the underlying Shares is unknown, indeterminable and cannot be predicted with certainty;
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(o)
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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;
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(p)
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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;
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(q)
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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
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(r)
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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
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15.
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No Advice Regarding Grant.
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16.
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Additional Eligibility Requirements Permitted.
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17.
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Miscellaneous.
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(a)
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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.
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(b)
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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.
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(c)
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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, 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.
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(d)
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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.
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(e)
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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.
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(f)
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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.
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(g)
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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.
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(h)
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The Employee acknowledges that, depending on the Employee or broker’s country of residence or where the Company Shares are listed, the Employee may be subject to insider trading restrictions and/or market abuse laws, which may affect the Employee's ability to acquire, sell or otherwise dispose of Shares or rights to Shares during times the Employee is considered to have “inside information” regarding the Company (as defined by the laws in the Employee’s country). Local insider trading laws and regulations may prohibit the cancellation or amendment of orders the Employee placed before he or she possessed inside information. Furthermore, the Employee cold be prohibited from (i) disclosing the inside information to any third party (other than on a “need to know” basis) and (ii) “tipping” third parties or causing them otherwise to buy or sell securities. Keep in mind that third parties include fellow employees. 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 acknowledges that it is his or her
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(i)
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Notwithstanding any provisions in this Grant Agreement, for any Employee who resides and/or works in a country other than the United States, the grant of the RSUs shall be subject to any special terms and conditions set forth in the Appendix to this Grant Agreement for the Employee’s country of employment (account of residence, if different), 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, regulatory, tax 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 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.
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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 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 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.
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The Employee hereby explicitly, voluntarily and unambiguously consents to the collection, use and transfer, in electronic or other form, of the Employee’s personal data as described in this Agreement and any other Plan materials by and among, as applicable, the Employer, the Company and its Subsidiaries for the exclusive purpose of implementing, administering and managing the Employee’s participation in the Plan.
The Employee understands that the Company and the Employer may hold certain personal information about the Employee, including, but not limited to, the Employee’s name, home address, email address and telephone number, date of birth, social insurance number, passport or other identification number), salary, nationality, job title, any shares of stock or directorships held in the Company, details of any entitlement to shares awarded, cancelled, exercised, vested, unvested or outstanding in the Employee’s favor for the purpose of implementing, administering and managing the Plan (“Data”).
The Employee understands that the Data will be transferred to Merrill Lynch or such other stock plan providers as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan. The Employee understands that those receiving the Data may be located in the United States or elsewhere, and that the applicable country (e.g., the United States) may have different data privacy laws and protections than the Employee’s country. The Employee understands that he or she may request a list with the names and addresses of any potential Employees of Data by contacting his or her human resources representative. The Employee authorizes the Company, and any other possible Employees who may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess use retain and transfer Data, in electronic or other form, for the sole purpose 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 his or her participation in the Plan. The Employee understands that he or she 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 your local human resources representative, whose contact details are shelly.rajpal@hp.com.
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 later seeks to revoke the consent, the Employee’s employment status or service with the Employer will not be affected; the only consequence of refusing or withdrawing the consent is that the Company would not be able to grant the RSUs or other equity awards under the Plan, or administer or maintain such awards. Therefore, the Employee understands that refusing or withdrawing his or her consent may affect the Employee’s ability to participate in the Plan. The refusal and/or withdrawal of consent will have no further impact. For more information on the consequences of the refusal to consent or withdrawal of consent, the Employee understands that he or she may contact his or her human resources representative.
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Penerima dengan ini secara eksplicit, secara sukarela dan tanpa sebarang keraguan mengizinkan pengumpulan, penggunaan dan pemindahan, dalam bentuk elektronik atau lain-lain, data peribadi Penerima seperti yang dinyatakan dalam Perjanjian ini dan apa-apa bahan Pelan, oleh dan di antara, sebagaimana yang berkenaan, Majikan, Syarikat, dan anak-anak syarikat bagi tujuan ekslusif untuk melaksanakan, mentadbir, dan menguruskan penyertaan Penerima dalam Pelan tersebut.
Penerima memahami bahawa Syarikat dan Majikan mungkin memegang maklumat peribadi tertentu tentang Penerima, termasuk, tetapi tidak terhad kepada, nama, alamat rumah, alamat emel dan nombor telefon, , tarikh lahir, insurans sosial, nombor pasport atau nombor pengenalan lain, gaji, kewarganegaraan, jawatan Penerima, apa-apa syer dalam saham atau jawatan pengarah yang dipegang dalam Syarikat, butir-butir apa-apa hak untuk syer yang dianugerahkan, dibatalkan, dilaksanakan, terletak hak, tidak diletak hak ataupun tertunggak bagi faedah Penerima untuk melaksanakan, mentadbir dan menguruskan Pelan tersebut (“Data”).
Penerima memahami bahawa Data akan dipindah kepada Merrill Lynch atau pembekal-pembekal pelan saham yang lain sebagaimana yang dipilih oleh Syarikat pada masa depan, yang membantu Syarikat dalam pelaksanaan, pentadbiran dan pengurusan Pelan tersebut. Penerima memahami bahawa mereka yang menerima Data mungkin berada di Amerika Syarikat atau di tempat lain, dan negara yang berkenaan (contohnya, Amerika Syarikat) mungkin mempunyai undang-undang privasi data dan perlindungan yang berbeza daripada negara Penerima. Penerima memahami bahawa dia boleh meminta senarai nama dan alamat mana-mana pihak yang mungkin menerima Data dengan menghubungi wakil sumber manusianya. Penerima memberi kuasa kepada Syarikat, dan mana-mana penerima lain yang mungkin membantu Syarikat (masa sekarang atau pada masa depan) untuk melaksanakan, mentadbir dan menguruskan Pelan tersebut untuk menerima, memiliki, menggunakan, mengekalkan dan memindahkan Data, dalam bentuk elektronik atau lain-lain, semata-mata dengan tujuan untuk melaksanakan, mentadbir dan menguruskan penyertaan Penerima dalam Pelan tersebut. Penerima memahami bahawa Data akan dipegang hanya untuk tempoh yang diperlukan untuk melaksanakan, mentadbir dan menguruskan penyertaannya dalam Pelan tersebut. Penerima memahami bahawa dia boleh, pada bila-bila masa, melihat data, meminta maklumat tambahan mengenai penyimpanan dan pemprosesan Data, meminta apa-apa pindaan dilaksanakan ke atas Data atau menolak atau menarik balik persetujuan dalam ini, dalam mana-mana kes, tanpa kos, dengan menghubungi secara bertulis wakil sumber manusianya, di mana butir-butir hubungannya adalah shelly.rajpal@hp.com.
Selanjutnya, Penerima memahami bahawa dia memberikan persetujuan di sini secara sukarela. Jika Penerima tidak bersetuju, kemudian membatalkan persetujuannya, status dan perkhidmatan pekerjaan Penerima dengan Majikan tidak akan terjejas; satunya akibat jika dia tidak bersetuju atau menarik balik persetujuannya adalah bahawa Syarikat tidak akan dapat memberikan Unit Saham Terbatas (“UST”) atau anugerah ekuiti lain atau mentadbir atau mengekalkan anugerah tersebut. Oleh itu, Penerima memahami bahawa keengganan atau penarikan balik persetujuannya boleh menjejaskan keupayaan Penerima untuk mengambil bahagian dalam Pelan tersebut. Untuk maklumat lanjut mengenai akibat keengganannya untuk memberikan keizinan atau penarikan balik keizinan, Penerima memahami bahawa dia boleh menghubungi wakil sumber manusianya.
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i.
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the Grant Agreement, including this Appendix, which sets forth the terms and conditions of the grant of RSUs;
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ii.
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a copy of the Plan and its accompanying prospectus; and
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iii.
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a copy of the Company’s most recent annual report and most recent financial statements.
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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)
|
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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|
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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)
|
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)
|
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/ STEVE FIELER
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Steve Fieler
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/ STEVE FIELER
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By:
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Steve Fieler
Chief Financial Officer
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