|
(Mark One)
|
|
|
☒
|
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the fiscal year ended
|
||
October 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
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|
94304
|
|
Palo Alto,
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California
|
|
(Zip code)
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(Address of principal executive offices)
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|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
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Common stock, par value $0.01 per share
|
HPQ
|
New York Stock Exchange
|
|
Large accelerated filer
|
☒
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
Emerging growth company
|
☐
|
DOCUMENTS INCORPORATED BY REFERENCE
|
||
DOCUMENT DESCRIPTION
|
|
10-K PART
|
Portions of the Registrant’s definitive proxy statement related to its 2020 Annual Meeting of Stockholders to be filed pursuant to Regulation 14A within 120 days after Registrant’s fiscal year end of October 31, 2019 are incorporated by reference into Part III of this Report.
|
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III
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Page
|
|
||
|
PART I
|
|
Item 1.
|
||
Item 1A.
|
||
Item 1B.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
PART II
|
|
Item 5.
|
||
Item 6.
|
||
Item 7.
|
||
Item 7A.
|
||
Item 8.
|
||
Item 9.
|
||
Item 9A.
|
||
Item 9B.
|
||
|
PART III
|
|
Item 10.
|
||
Item 11.
|
||
Item 12.
|
||
Item 13.
|
||
Item 14.
|
||
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PART IV
|
|
Item 15.
|
||
Item 16.
|
•
|
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.
|
•
|
Commercial Hardware consists of office printing solutions, graphics solutions and 3D Printing and Digital Manufacturing, 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 and Digital Manufacturing supplies, for recurring use in consumer and commercial hardware.
|
•
|
retailers that sell our products to the public through their own physical or internet stores;
|
•
|
resellers that sell our products and services, frequently with their own value-added products or services, to targeted customer groups;
|
•
|
distribution partners that supply our products and solutions to resellers; and
|
•
|
system integrators and other business intermediaries that provide various levels of services, including systems integration work and as-a-service solutions, and typically partner with us on client solutions that require our products and services.
|
•
|
Use 30% post-consumer recycled content plastic (“RCP”) across our personal systems and print portfolio by 2025 (which refers to RCP as a percentage of total plastic used in all HP personal systems, printer hardware, and print cartridges shipped during the reporting year);
|
•
|
Use 100% renewable electricity in our global operations by 2035, with an interim goal of 60% by 2025;
|
•
|
Consistent with a science-based reduction target in line with 1.5℃, reduce Scope 1 and Scope 2 greenhouse gas (“GHG”) emissions in our global operations by 60% by 2025, compared to 2015;
|
•
|
Reduce the GHG emissions intensity of HP’s product portfolio use (which refers to per unit GHG emissions during anticipated product lifetime use weighted by contribution of personal systems and printing products to overall revenue arising from the use of more than 99% of HP product units shipped each year) by 30% by 2025, compared to 2015;
|
•
|
Reduce first-tier production supplier and product transportation-related GHG emissions intensity (which refers to the portion of first-tier production and product transportation suppliers’ reported GHG emissions attributable to HP divided by HP’s annual net revenue) by 10% by 2025, compared to 2015;
|
•
|
Help suppliers cut 2 million tonnes of carbon dioxide equivalent (CO2e) emissions between 2010 and 2025;
|
•
|
Achieve zero deforestation associated with HP brand paper and paper-based product packaging (which includes the box that comes with the product and all paper inside the box) by 2020;
|
•
|
Recycle 1.2 million tonnes of hardware and supplies by 2025, since the beginning of 2016; and
|
•
|
Reduce potable water consumption in global operations by 15% by 2025, compared to 2015;
|
•
|
Develop skills and improve well-being of 500,000 factory workers by 2025, since the beginning of 2015;
|
•
|
Double factory participation in our supply chain sustainability programs by 2025, compared to 2015; and
|
•
|
Maintain greater than 99% completion rate of annual Integrity at HP (formerly Standards of Business Conduct) training among active HP employees and the Board of Directors.
|
•
|
Enable better learning outcomes for 100 million people by 2025, since the beginning of 2015;
|
•
|
Enroll 1 million HP LIFE (Learning Initiative for Entrepreneurs) users between 2016 and 2025;
|
•
|
Contribute $100 million in HP Foundation and employee community giving cumulatively by 2025 since the beginning of 2016; and
|
•
|
Contribute 1.5 million employee volunteering hours cumulatively by 2025, since the beginning of 2016.
|
•
|
Component shortages. We may experience a shortage of, or a delay in receiving, certain components as a result of strong demand, capacity constraints, supplier financial weaknesses, the inability of suppliers to borrow funds, disputes with suppliers (some of whom are also our customers), disruptions in the operations of component suppliers, other problems experienced by suppliers or problems faced during the transition to new suppliers. For example, our PC business relies heavily upon OMs to manufacture its products and is therefore dependent upon the continuing operations of those OMs to fulfill demand for our PC products. We represent a substantial portion of the business of some of these OMs, and any changes to the nature or volume of our business transactions with a particular OM could adversely affect the operations and financial condition of the OM and lead to shortages or delays in receiving products from that OM. If shortages or delays persist, the price of certain components may increase, we may be exposed to quality issues or the components may not be available at all. We may not be able to secure enough components at reasonable prices or of acceptable quality to build products or provide services in a timely manner in the quantities needed or according to our specifications. Accordingly, our business, cash flows, results of operations and financial condition could suffer if we lose time-sensitive sales, incur additional freight costs or are unable to pass on price increases to our customers. If we cannot adequately address supply issues, we might have to re-engineer some product or service offerings, which could result in further costs and delays.
|
•
|
Excess supply. In order to secure components for our products or services, at times we may make advance payments to suppliers or enter into non-cancelable commitments with vendors. In addition, we may purchase components strategically in advance of demand to take advantage of favorable pricing or to address concerns about the availability of future components. If we fail to anticipate customer demand properly, a temporary oversupply could result in excess or obsolete components, which could adversely affect our business and financial performance.
|
•
|
Contractual terms. As a result of binding long-term price or purchase commitments with vendors, we may be obligated to purchase components or services at prices that are higher than those available in the current market and be limited in our ability to respond to changing market conditions. If we commit to purchasing components or
|
•
|
Contingent workers. We also rely on third-party suppliers for the provision of contingent workers, and our failure to manage our use of such workers effectively could adversely affect our results of operations. We have been exposed to various legal claims relating to the status of contingent workers in the past and could face similar claims in the future. We may be subject to shortages, oversupply or fixed contractual terms relating to contingent workers. Our ability to manage the size of, and costs associated with, the contingent workforce may be subject to additional constraints imposed by local laws.
|
•
|
Working conditions and materials sourcing. We work with our suppliers to improve their labor practices and working conditions, such as by including requirements in our agreements with our suppliers that workers receive fair treatment, safe working conditions and freely chosen employment, that materials are responsibly sourced and that business operations are conducted in an environmentally responsible and ethical way. Brand perception and customer loyalty could be adversely impacted by a supplier’s improper practices or failure to comply with the above-mentioned requirements or those included in our Supplier Code of Conduct, General Specification for the Environment and other related provisions and requirements of our procurement contracts, including supplier audits, reporting of smelters, wood fiber certification (for HP brand paper and product packaging) and GHG emissions, water and waste data.
|
•
|
Single-source suppliers. We obtain a significant number of components from single sources due to technology, availability, price, quality or other considerations. For example, we rely on Canon for certain laser printer engines and laser toner cartridges. We also rely on Intel to provide us with a sufficient supply of processors for many of our PCs and workstations, and we rely on AMD to provide us with a sufficient supply of processors for other products. Some of those processors are customized for our products. New products that we introduce may utilize custom components obtained from only one source initially until we have evaluated whether there is a need for additional suppliers. Replacing a single-source supplier could delay production of some products as replacement suppliers may be subject to capacity constraints or other output limitations. For some components, such as customized components and some of the processors that we obtain from Intel, or the laser printer engines and toner cartridges that we obtain from Canon, alternative sources either may not exist or may be unable to produce the quantities of those components necessary to satisfy our production requirements. In addition, we sometimes purchase components from single-source suppliers under short-term agreements that contain favorable pricing and other terms but that may be unilaterally modified or terminated by the supplier with limited notice and with little or no penalty. The performance of such single-source suppliers under those agreements (and the renewal or extension of those agreements upon similar terms) may affect the quality, quantity and price of our components. The loss of a single-source supplier, the deterioration of our relationship with a single-source supplier, or any unilateral modification to the contractual terms under which we are supplied components by a single-source supplier could adversely affect our business and financial performance.
|
•
|
Managing business combination and investment transactions requires varying levels of management resources, which may divert our attention from other business operations.
|
•
|
We may not fully realize all of the anticipated benefits of any particular business combination and investment transaction, and the timeframe for realizing the benefits of a particular business combination and investment transaction may depend partially upon the actions of employees, advisors, suppliers, other third-parties or market trends.
|
•
|
Certain prior business combination and investment transactions resulted, and in the future any such transactions may result, in significant costs and expenses, including those related to severance pay, early retirement costs, employee benefit costs, goodwill and asset impairment charges, charges from the elimination of duplicative facilities and contracts, asset impairment charges, inventory adjustments, assumed litigation and other liabilities, legal, accounting and financial advisory fees, and required payments to executive officers and key employees under retention plans.
|
•
|
Any increased or unexpected costs, unanticipated delays or failures to meet contractual obligations could make business combination and investment transactions less profitable than anticipated or unprofitable.
|
•
|
Our ability to conduct due diligence with respect to business combination and investment transactions, and our ability to evaluate the results of such due diligence, is dependent upon the veracity and completeness of statements and disclosures made or actions taken by third parties or their representatives.
|
•
|
Our due diligence process may fail to identify significant issues with the acquired company’s product quality, financial disclosures, accounting practices or internal controls.
|
•
|
The pricing and other terms of our contracts for business combination and investment transactions require us to make estimates and assumptions at the time we enter into these contracts, and, during the course of our due diligence, we may not identify all of the factors necessary to estimate accurately our costs, timing and other matters or we may incur costs if a business combination and investment transaction is not consummated.
|
•
|
In order to complete a business combination and investment transaction, we may issue common stock, potentially creating dilution for our existing stockholders.
|
•
|
We may borrow to finance business combination and investment transactions, and the amount and terms of any potential acquisition-related or other borrowings, as well as other factors, could affect our liquidity and financial condition.
|
•
|
Our effective tax rate on an ongoing basis is uncertain, and business combination and investment transactions could adversely impact our effective tax rate.
|
•
|
Any announced business combination and investment transaction may not close on the expected timeframe or at all, which may cause our financial results to differ from expectations in a given quarter.
|
•
|
Business combination and investment transactions may lead to litigation, which could impact our financial condition and results of operations.
|
•
|
If we fail to identify and successfully complete and integrate business combination and investment transactions that further our strategic objectives, we may be required to expend resources to develop products, services and technology internally, which may put us at a competitive disadvantage.
|
•
|
successfully combining product and service offerings and entering or expanding into markets in which we are not experienced or are developing expertise;
|
•
|
convincing both our customers and distributors and those of the acquired business that the transaction will not diminish client service standards or business focus;
|
•
|
persuading both our customers and distributors and those of the acquired business not to defer purchasing decisions or switch to other suppliers (which could result in our incurring additional obligations in order to address customer uncertainty), minimizing sales force attrition and expanding and coordinating sales, marketing and distribution efforts;
|
•
|
consolidating and rationalizing corporate IT infrastructure, which may include multiple legacy systems from various acquisitions and integrating software code and business processes;
|
•
|
minimizing the diversion of management attention from ongoing business concerns;
|
•
|
persuading employees that business cultures are compatible, maintaining employee morale and retaining key employees, engaging with employee works councils representing an acquired company’s non-U.S. employees, integrating employees, correctly estimating employee benefit costs and implementing restructuring programs;
|
•
|
coordinating and combining administrative, manufacturing, research and development and other operations, subsidiaries, facilities and relationships with third-parties in accordance with local laws and other obligations while maintaining adequate standards, controls and procedures;
|
•
|
achieving savings from supply chain integration; and
|
•
|
managing integration issues shortly after or pending the completion of other independent transactions.
|
•
|
ongoing instability or changes in a country’s or region’s economic, regulatory or political conditions, including inflation, recession, interest rate fluctuations, changes or uncertainty in fiscal or monetary policy and actual or anticipated military or political conflicts or any other change resulting from Brexit;
|
•
|
longer collection cycles and financial instability among customers, the imposition by governments of additional taxes, tariffs or other restrictions on foreign trade or changes in restrictions on trade between the United States and other countries, including the impact of recently imposed tariffs between the United States and China on a wide variety of products;
|
•
|
trade regulations and procedures and actions affecting production, shipping, pricing and marketing of products, including policies adopted by the United States or other countries that may champion or otherwise favor domestic companies and technologies over foreign competitors;
|
•
|
political or nationalist sentiment impacting global trade, including the willingness of non-U.S. consumers to purchase goods or services from U.S. corporations;
|
•
|
local labor conditions and regulations, including local labor issues faced by specific suppliers and Original Equipment Manufacturers (“OEMs”), or changes to immigration and labor law which may adversely impact our access to technical and professional talent;
|
•
|
managing a geographically dispersed workforce;
|
•
|
changes or uncertainty in the international, national or local regulatory and legal environments;
|
•
|
differing technology standards or customer requirements;
|
•
|
import, export or other business licensing requirements or requirements relating to making foreign direct investments, which could increase our cost of doing business in certain jurisdictions, prevent us from shipping products to particular countries or markets, affect our ability to obtain favorable terms for components, increase our operating costs or lead to penalties or restrictions;
|
•
|
stringent privacy and data protection policies, such as the European Union’s General Data Protection Regulation (“GDPR”);
|
•
|
changes in tax laws; and
|
•
|
fluctuations in freight costs, limitations on shipping and receiving capacity, and other disruptions in the transportation and shipping infrastructure at important geographic points of exit and entry for our products and shipments.
|
•
|
speculation, coverage or sentiment in the media or the investment community about, or actual changes in, our business, strategic position, market share, organizational structure, operations, financial condition, financial reporting and results, effectiveness of cost-cutting efforts, value or liquidity of our investments, exposure to market volatility, prospects, business combination or investment transactions, future stock price performance, board of directors, executive team, our competitors or our industry in general;
|
•
|
the announcement of new, planned or contemplated products, services, technological innovations, acquisitions, divestitures or other significant transactions by us or our competitors;
|
•
|
quarterly increases or decreases in net revenue, gross margin, earnings or cash flows, changes in estimates by the investment community or our financial outlook and variations between actual and estimated financial results;
|
•
|
announcements of actual and anticipated financial results by our competitors and other companies in the IT industry;
|
•
|
developments relating to pending investigations, claims and disputes;
|
•
|
developments relating to the acquisition proposal made to us by Xerox Holdings Corporation; and
|
•
|
the timing and amount of our share repurchases.
|
•
|
authorizing blank check preferred stock, which we could issue with voting, liquidation, dividend and other rights superior to our common stock;
|
•
|
limiting the liability of, and providing indemnification to, our directors and officers;
|
•
|
specifying that our stockholders may take action only at a duly called annual or special meeting of stockholders and otherwise in accordance with our bylaws and limiting the ability of our stockholders to call special meetings;
|
•
|
requiring advance notice of proposals by our stockholders for business to be conducted at stockholder meetings and for nominations of candidates for election to our Board of Directors; and
|
•
|
controlling the procedures for conduct of our Board of Directors and stockholder meetings and election, appointment and removal of our directors.
|
|
Fiscal year ended October 31, 2019
|
|||||||
|
Owned
|
|
Leased
|
|
Total
|
|||
|
(square feet in millions)
|
|||||||
Administration and support
|
2.0
|
|
|
6.5
|
|
|
8.5
|
|
(Percentage)
|
24
|
%
|
|
76
|
%
|
|
100
|
%
|
Core data centers, manufacturing plants, research and development facilities and warehouse operations
|
2.5
|
|
|
6.0
|
|
|
8.5
|
|
(Percentage)
|
29
|
%
|
|
71
|
%
|
|
100
|
%
|
Total(1)
|
4.5
|
|
|
12.5
|
|
|
17.0
|
|
(Percentage)
|
26
|
%
|
|
74
|
%
|
|
100
|
%
|
(1)
|
Excludes 1.3 million square feet of vacated space, of which 0.9 million square feet is leased to third parties.
|
Americas
|
|
Europe, Middle East, Africa
|
|
Asia Pacific
|
Palo Alto, United States
|
|
Geneva, Switzerland
|
|
Singapore
|
Americas
United States—Corvallis, San Diego, Boise, Vancouver,
Spring, Aguadilla, Puerto Rico
|
|
Europe, Middle East, Africa
Israel—Kiryat-Gat, Rehovot, Netanya
Spain—Barcelona
|
Asia Pacific
China—Weihai, Chongqing, Shanghai
India—Pantnagar, Bangalore
Malaysia—Penang
Singapore—Singapore
South Korea—Suwon
Taiwan—Taipei
|
|
Technology office (HP Labs)
United Kingdom—Bristol
United States—Palo Alto
|
|
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
|
|||||||||||
Period
|
|
|
|
|
|
|
||||||
August 2019
|
7,109
|
|
|
$
|
19.15
|
|
7,109
|
|
|
$
|
1,823,046
|
|
September 2019
|
7,908
|
|
|
$
|
18.66
|
|
7,908
|
|
|
$
|
6,675,457
|
|
October 2019
|
10,253
|
|
|
$
|
17.25
|
|
10,253
|
|
|
$
|
6,498,622
|
|
Total
|
25,270
|
|
|
|
25,270
|
|
|
|
|
10/14
|
|
10/15
|
|
10/16
|
|
10/17
|
|
10/18
|
|
10/19
|
||||||||||||
HP Inc.(1)
|
$
|
100.00
|
|
|
$
|
76.72
|
|
|
$
|
94.44
|
|
|
$
|
144.77
|
|
|
$
|
166.11
|
|
|
$
|
123.40
|
|
S&P 500 Index
|
$
|
100.00
|
|
|
$
|
105.19
|
|
|
$
|
109.93
|
|
|
$
|
135.89
|
|
|
$
|
145.86
|
|
|
$
|
166.75
|
|
S&P Information Technology Index
|
$
|
100.00
|
|
|
$
|
111.19
|
|
|
$
|
123.23
|
|
|
$
|
171.24
|
|
|
$
|
192.31
|
|
|
$
|
235.74
|
|
|
For the fiscal years ended October 31
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
In millions, except per share amounts
|
||||||||||||||||||
Net revenue
|
$
|
58,756
|
|
|
$
|
58,472
|
|
|
$
|
52,056
|
|
|
$
|
48,238
|
|
|
$
|
51,463
|
|
Earnings from continuing operations(1)
|
$
|
3,877
|
|
|
$
|
3,831
|
|
|
$
|
3,368
|
|
|
$
|
3,549
|
|
|
$
|
3,920
|
|
Net (loss) earnings from discontinued operations net of taxes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(170
|
)
|
|
$
|
836
|
|
Net earnings(1)
|
$
|
3,152
|
|
|
$
|
5,327
|
|
|
$
|
2,526
|
|
|
$
|
2,496
|
|
|
$
|
4,554
|
|
Net earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Continuing operations
|
$
|
2.08
|
|
|
$
|
3.30
|
|
|
$
|
1.50
|
|
|
$
|
1.54
|
|
|
$
|
2.05
|
|
Discontinued operations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.10
|
)
|
|
$
|
0.46
|
|
Total basic net earnings per share
|
$
|
2.08
|
|
|
$
|
3.30
|
|
|
$
|
1.50
|
|
|
$
|
1.44
|
|
|
$
|
2.51
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Continuing operations
|
$
|
2.07
|
|
|
$
|
3.26
|
|
|
$
|
1.48
|
|
|
$
|
1.53
|
|
|
$
|
2.02
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
(0.10
|
)
|
|
$
|
0.46
|
|
|||
Total diluted net earnings per share
|
$
|
2.07
|
|
|
$
|
3.26
|
|
|
$
|
1.48
|
|
|
$
|
1.43
|
|
|
$
|
2.48
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends declared per share
|
$
|
0.64
|
|
|
$
|
0.56
|
|
|
$
|
0.53
|
|
|
$
|
0.50
|
|
|
$
|
0.67
|
|
At year-end:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total assets(2)
|
$
|
33,467
|
|
|
$
|
34,622
|
|
|
$
|
32,913
|
|
|
$
|
28,987
|
|
|
$
|
106,853
|
|
Long-term debt(3)
|
$
|
4,780
|
|
|
$
|
4,524
|
|
|
$
|
6,747
|
|
|
$
|
6,735
|
|
|
$
|
6,648
|
|
(1)
|
Earnings from continuing operations and net earnings include the following items:
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
In millions
|
||||||||||||||||||
Restructuring and other charges
|
$
|
275
|
|
|
$
|
132
|
|
|
$
|
362
|
|
|
$
|
205
|
|
|
$
|
63
|
|
Acquisition-related charges
|
35
|
|
|
123
|
|
|
125
|
|
|
7
|
|
|
1
|
|
|||||
Amortization of intangible assets
|
116
|
|
|
80
|
|
|
1
|
|
|
16
|
|
|
102
|
|
|||||
Total charges before taxes
|
$
|
426
|
|
|
$
|
335
|
|
|
$
|
488
|
|
|
$
|
228
|
|
|
$
|
166
|
|
Total charges, net of taxes
|
$
|
334
|
|
|
$
|
258
|
|
|
$
|
362
|
|
|
$
|
161
|
|
|
$
|
137
|
|
(2)
|
Total assets for fiscal year 2015 include the total assets of Hewlett Packard Enterprise.
|
(3)
|
The decrease in Long-term debt in fiscal year 2018 was due to the payment for the repurchase of approximately $1.85 billion in aggregate principal amount of U.S. Dollar Global Notes.
|
•
|
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 financial results comparing fiscal year 2019 to fiscal year 2018 and fiscal year 2018 to fiscal year 2017. 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.
|
•
|
In Personal Systems, our strategic focus is on profitable growth through 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 DaaS 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 focus is on Contractual solutions and Graphics, as well as expanding our footprint in the 3D printing and digital manufacturing marketplace. In Contractual solutions we have a continued focus on Managed Print Services and Instant Ink. In Graphics, we are focused on innovations such as our Indigo and Latex product offerings.
|
•
|
In Personal Systems, we face challenges with industry component availability and a competitive pricing environment.
|
•
|
In Printing, 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 present challenges. 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. We also obtain many Printing 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.
|
|
Change in Net Periodic
Benefit Cost
in millions
|
||
Assumptions:
|
|
|
|
Discount rate
|
$
|
9
|
|
Expected increase in compensation levels
|
$
|
2
|
|
Expected long-term return on plan assets
|
$
|
28
|
|
|
For the fiscal years ended October 31
|
|||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
|
Dollars
|
|
% of Net Revenue
|
|
Dollars
|
|
% of Net Revenue
|
|
Dollars
|
|
% of Net Revenue
|
|||||||||
|
Dollars in millions
|
|||||||||||||||||||
Net revenue
|
$
|
58,756
|
|
|
100.0
|
%
|
|
$
|
58,472
|
|
|
100.0
|
%
|
|
$
|
52,056
|
|
|
100.0
|
%
|
Cost of revenue
|
47,586
|
|
|
81.0
|
%
|
|
47,803
|
|
|
81.8
|
%
|
|
42,478
|
|
|
81.6
|
%
|
|||
Gross profit
|
11,170
|
|
|
19.0
|
%
|
|
10,669
|
|
|
18.2
|
%
|
|
9,578
|
|
|
18.4
|
%
|
|||
Research and development
|
1,499
|
|
|
2.6
|
%
|
|
1,404
|
|
|
2.4
|
%
|
|
1,190
|
|
|
2.3
|
%
|
|||
Selling, general and administrative
|
5,368
|
|
|
9.1
|
%
|
|
5,099
|
|
|
8.7
|
%
|
|
4,532
|
|
|
8.7
|
%
|
|||
Restructuring and other charges
|
275
|
|
|
0.4
|
%
|
|
132
|
|
|
0.2
|
%
|
|
362
|
|
|
0.7
|
%
|
|||
Acquisition-related charges
|
35
|
|
|
0.1
|
%
|
|
123
|
|
|
0.2
|
%
|
|
125
|
|
|
0.2
|
%
|
|||
Amortization of intangible assets
|
116
|
|
|
0.2
|
%
|
|
80
|
|
|
0.1
|
%
|
|
1
|
|
|
—
|
%
|
|||
Earnings from operations
|
3,877
|
|
|
6.6
|
%
|
|
3,831
|
|
|
6.6
|
%
|
|
3,368
|
|
|
6.5
|
%
|
|||
Interest and other, net
|
(1,354
|
)
|
|
(2.3
|
)%
|
|
(818
|
)
|
|
(1.4
|
)%
|
|
(92
|
)
|
|
(0.2
|
)%
|
|||
Earnings before taxes
|
2,523
|
|
|
4.3
|
%
|
|
3,013
|
|
|
5.2
|
%
|
|
3,276
|
|
|
6.3
|
%
|
|||
Benefit from (provision for) taxes
|
629
|
|
|
1.1
|
%
|
|
2,314
|
|
|
3.9
|
%
|
|
(750
|
)
|
|
(1.4
|
)%
|
|||
Net earnings
|
$
|
3,152
|
|
|
5.4
|
%
|
|
$
|
5,327
|
|
|
9.1
|
%
|
|
$
|
2,526
|
|
|
4.9
|
%
|
|
For the fiscal years ended October 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
Dollars in millions
|
||||||||||
Net revenue
|
$
|
38,694
|
|
|
$
|
37,661
|
|
|
$
|
33,321
|
|
Earnings from operations
|
$
|
1,898
|
|
|
$
|
1,402
|
|
|
$
|
1,206
|
|
Earnings from operations as a % of net revenue
|
4.9
|
%
|
|
3.7
|
%
|
|
3.6
|
%
|
|
For the fiscal years ended October 31
|
|
|
|
|
||||||||||||
|
Net Revenue
|
|
Weighted Net Revenue Change
Percentage Points (1) |
||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
||||||||
|
In millions
|
|
|
|
|
||||||||||||
Notebooks
|
$
|
22,928
|
|
|
$
|
22,547
|
|
|
$
|
19,782
|
|
|
1.0
|
|
|
8.3
|
|
Desktops
|
12,046
|
|
|
11,567
|
|
|
10,298
|
|
|
1.3
|
|
|
3.8
|
|
|||
Workstations
|
2,389
|
|
|
2,246
|
|
|
2,042
|
|
|
0.4
|
|
|
0.6
|
|
|||
Other
|
1,331
|
|
|
1,301
|
|
|
1,199
|
|
|
—
|
|
|
0.3
|
|
|||
Total Personal Systems
|
$
|
38,694
|
|
|
$
|
37,661
|
|
|
$
|
33,321
|
|
|
2.7
|
|
|
13.0
|
|
|
For the fiscal years ended October 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
Dollars in millions
|
||||||||||
Net revenue
|
$
|
20,066
|
|
|
$
|
20,805
|
|
|
$
|
18,728
|
|
Earnings from operations
|
$
|
3,202
|
|
|
$
|
3,314
|
|
|
$
|
3,142
|
|
Earnings from operations as a % of net revenue
|
16.0
|
%
|
|
15.9
|
%
|
|
16.8
|
%
|
|
For the fiscal years ended October 31
|
|
|
|
|
||||||||||||
|
Net Revenue
|
|
Weighted Net Revenue Change Percentage Points(1)
|
||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
||||||||
|
In millions
|
|
|
|
|
||||||||||||
Supplies
|
$
|
12,921
|
|
|
$
|
13,575
|
|
|
$
|
12,524
|
|
|
(3.2
|
)
|
|
5.6
|
|
Commercial Hardware
|
4,612
|
|
|
4,514
|
|
|
3,792
|
|
|
0.5
|
|
|
3.9
|
|
|||
Consumer Hardware
|
2,533
|
|
|
2,716
|
|
|
2,412
|
|
|
(0.9
|
)
|
|
1.6
|
|
|||
Total Printing
|
$
|
20,066
|
|
|
$
|
20,805
|
|
|
$
|
18,728
|
|
|
(3.6
|
)
|
|
11.1
|
|
|
As of October 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In billions
|
||||||||||
Cash and cash equivalents
|
$
|
4.5
|
|
|
$
|
5.2
|
|
|
$
|
7.0
|
|
Marketable debt securities(1)
|
$
|
—
|
|
|
$
|
0.7
|
|
|
$
|
1.1
|
|
Total debt
|
$
|
5.1
|
|
|
$
|
6.0
|
|
|
$
|
7.8
|
|
(1)
|
Includes highly liquid U.S. treasury notes, U.S. agency securities, non-U.S. government bonds, corporate debt securities, money market and other funds. We classify these investments within Other current assets in Consolidated Balance Sheets, including those with maturity dates beyond one year, based on their highly liquid nature and availability for use in current operations.
|
|
For the fiscal years ended October 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
In millions
|
|
|
||||||
Net cash provided by operating activities
|
$
|
4,654
|
|
|
$
|
4,528
|
|
|
$
|
3,677
|
|
Net cash used in investing activities
|
(438
|
)
|
|
(716
|
)
|
|
(1,717
|
)
|
|||
Net cash used in financing activities
|
(4,845
|
)
|
|
(5,643
|
)
|
|
(1,251
|
)
|
|||
Net (decrease) increase in cash and cash equivalents
|
$
|
(629
|
)
|
|
$
|
(1,831
|
)
|
|
$
|
709
|
|
|
As of October 31
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
Days of sales outstanding in accounts receivable (“DSO”)
|
35
|
|
|
30
|
|
|
29
|
|
Days of supply in inventory (“DOS”)
|
41
|
|
|
43
|
|
|
46
|
|
Days of purchases outstanding in accounts payable (“DPO”)
|
(107
|
)
|
|
(105
|
)
|
|
(105
|
)
|
Cash conversion cycle
|
(31
|
)
|
|
(32
|
)
|
|
(30
|
)
|
|
As of October 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
Dollars in millions
|
||||||||||
Short-term debt
|
$
|
357
|
|
|
$
|
1,463
|
|
|
$
|
1,072
|
|
Long-term debt
|
$
|
4,780
|
|
|
$
|
4,524
|
|
|
$
|
6,747
|
|
Debt-to-equity ratio
|
(4.3)x
|
|
|
(9.4)x
|
|
|
(2.3)x
|
|
|||
Weighted-average interest rate
|
4.6
|
%
|
|
4.3
|
%
|
|
4.0
|
%
|
|
As of October 31, 2019
|
||
|
In millions
|
||
2016 Shelf Registration Statement
|
Unspecified
|
|
|
Uncommitted lines of credit
|
$
|
724
|
|
|
|
|
Payments Due by Period
|
||||||||||||||||
|
Total
|
|
1 Year or
Less
|
|
1-3 Years
|
|
3-5 Years
|
|
More than 5 Years
|
||||||||||
|
In millions
|
||||||||||||||||||
Principal payments on debt(1)
|
$
|
4,539
|
|
|
$
|
129
|
|
|
$
|
1,955
|
|
|
$
|
1,245
|
|
|
$
|
1,210
|
|
Interest payments on debt(2)
|
1,890
|
|
|
214
|
|
|
273
|
|
|
157
|
|
|
1,246
|
|
|||||
Purchase obligations(3)
|
372
|
|
|
176
|
|
|
178
|
|
|
18
|
|
|
—
|
|
|||||
Operating lease obligations(4)
|
1,340
|
|
|
284
|
|
|
399
|
|
|
262
|
|
|
395
|
|
|||||
Capital lease obligations(5)
|
676
|
|
|
249
|
|
|
344
|
|
|
80
|
|
|
3
|
|
|||||
Total(6)(7)(8)(9)
|
$
|
8,817
|
|
|
$
|
1,052
|
|
|
$
|
3,149
|
|
|
$
|
1,762
|
|
|
$
|
2,854
|
|
(1)
|
Amounts represent the principal cash payments relating to our short-term and long-term debt and do not include any fair value adjustments, discounts or premiums.
|
(2)
|
Amounts represent the expected interest payments relating to our short-term and long-term debt. We have outstanding interest rate swap agreements accounted for as fair value hedges that have the economic effect of changing fixed interest rates associated with some of our U.S. Dollar Global Notes to variable interest rates. The impact of our outstanding interest rate swaps at October 31, 2019 was factored into the calculation of the future interest payments on debt.
|
(3)
|
Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding on us and that specify all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. These purchase obligations are related principally to inventory and other items. Purchase obligations exclude agreements that are cancelable without penalty. Purchase obligations also exclude open purchase orders that are routine arrangements entered into in the ordinary course of business as they are difficult to quantify in a meaningful way. Even though open purchase orders are considered enforceable and legally binding, the terms generally allow us the option to cancel, reschedule, and adjust terms based on our business needs prior to the delivery of goods or performance of services.
|
(4)
|
Amounts represent the operating lease obligations, net of total sublease income of $130 million.
|
(5)
|
Amounts represent the capital lease obligations, including total capital lease interest obligations of $64 million.
|
(6)
|
Retirement and Post-Retirement Benefit Plan Contributions. In fiscal year 2020, we expect to contribute approximately $76 million to non-U.S. pension plans, $36 million to cover benefit payments to U.S. non-qualified plan participants and $6 million to cover benefit claims for our post-retirement benefit plans. Our policy is to fund our pension plans so that we meet at least the minimum contribution required by local government, funding and taxing authorities. Expected contributions and payments to our pension and post-retirement benefit plans are excluded from the contractual obligations table because they do not represent contractual cash outflows as they are dependent on numerous factors which may result in a wide range of outcomes. For more information on our retirement and post-retirement benefit plans, see Note 4, “Retirement and Post-Retirement Benefit Plans”, to the Consolidated Financial Statements in Item 8, which is incorporated herein by reference.
|
(7)
|
Cost Savings Plans. As a result of our approved restructuring plans, including the Fiscal 2020 plan, we expect to make future cash payments of approximately $1.0 billion. We expect to make future cash payments of $418 million in fiscal year 2020 with remaining cash payments through fiscal year 2023. These payments have been excluded from the contractual obligations table because they do not represent contractual cash outflows and there is uncertainty as to the timing of these payments. For more information on our restructuring activities that are part of our cost improvements, see Note 3, “Restructuring and Other Charges”, to the Consolidated Financial Statements in Item 8, which is incorporated herein by reference.
|
(8)
|
Uncertain Tax Positions. As of October 31, 2019, we had approximately $509 million of recorded liabilities and related interest and penalties pertaining to uncertain tax positions. We are unable to make a reasonable estimate as to when cash settlement with the tax authorities might occur due to the uncertainties related to these tax matters. Payments of these obligations would result from settlements with taxing authorities. For more information on our uncertain tax positions, see Note 6, “Taxes on Earnings”, to the Consolidated Financial Statements in Item 8, which is incorporated herein by reference.
|
(9)
|
Payment of one-time transition taxes under the TCJA. The TCJA made significant changes to U.S. tax law resulting in a one-time gross transition tax of $3.0 billion on accumulated foreign earnings. We expect the actual cash payments for the tax to be much lower as we expect to reduce the overall liability by more than half once existing and future credits and other balance sheet tax attributes are used. The payments associated with this one-time transition tax will be paid over eight years and began in fiscal year 2019.
|
|
|
|
Page
|
|
|
How We Addressed the Matter in Our Audit
|
We tested relevant controls over the identified risks related to the Company’s implementation of the new revenue recognition standard and the accounting for revenue recognition, including the controls to evaluate the appropriate accounting treatment for contracts containing non-standard terms and conditions and multiple performance obligations and the controls related to the estimation process to record the variable consideration related to certain sales incentives.
Our audit procedures included, among others, evaluating how the Company applied the new revenue recognition standard to its contracts and assessing how the Company applied judgment to determine the transition amount and disclosures, inspection of contracts entered into during the period, evaluation of management’s judgments related to the interpretation of certain contract provisions including the identification of performance obligations, the method of allocating the transaction price to the performance obligations in the arrangement, and the assessment of the appropriateness of the amount of revenue recognized. We also evaluated the Company’s key assumptions and judgments and tested the completeness and accuracy of the underlying data used to determine the variable consideration for sales incentives. This included analyzing data related to the historical experience of sales incentive payments as well as understanding the current market dynamics that can affect the estimate of variable consideration to assess the Company’s judgments and estimates.
|
/s/ ENRIQUE LORES
|
|
/s/ STEVE FIELER
|
Enrique Lores
President and Chief Executive Officer
December 12, 2019
|
|
Steve Fieler
Chief Financial Officer
December 12, 2019
|
|
For the fiscal years ended October 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions, except per share amounts
|
||||||||||
Net revenue
|
$
|
58,756
|
|
|
$
|
58,472
|
|
|
$
|
52,056
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|||
Cost of revenue
|
47,586
|
|
|
47,803
|
|
|
42,478
|
|
|||
Research and development
|
1,499
|
|
|
1,404
|
|
|
1,190
|
|
|||
Selling, general and administrative
|
5,368
|
|
|
5,099
|
|
|
4,532
|
|
|||
Restructuring and other charges
|
275
|
|
|
132
|
|
|
362
|
|
|||
Acquisition-related charges
|
35
|
|
|
123
|
|
|
125
|
|
|||
Amortization of intangible assets
|
116
|
|
|
80
|
|
|
1
|
|
|||
Total costs and expenses
|
54,879
|
|
|
54,641
|
|
|
48,688
|
|
|||
Earnings from operations
|
3,877
|
|
|
3,831
|
|
|
3,368
|
|
|||
Interest and other, net
|
(1,354
|
)
|
|
(818
|
)
|
|
(92
|
)
|
|||
Earnings before taxes
|
2,523
|
|
|
3,013
|
|
|
3,276
|
|
|||
Benefit from (provision for) taxes
|
629
|
|
|
2,314
|
|
|
(750
|
)
|
|||
Net earnings
|
$
|
3,152
|
|
|
$
|
5,327
|
|
|
$
|
2,526
|
|
|
|
|
|
|
|
||||||
Net earnings per share:
|
|
|
|
|
|
|
|
|
|||
Basic
|
$
|
2.08
|
|
|
$
|
3.30
|
|
|
$
|
1.50
|
|
Diluted
|
$
|
2.07
|
|
|
$
|
3.26
|
|
|
$
|
1.48
|
|
|
|
|
|
|
|
||||||
Weighted-average shares used to compute net earnings per share:
|
|
|
|
|
|
|
|
|
|||
Basic
|
1,515
|
|
|
1,615
|
|
|
1,688
|
|
|||
Diluted
|
1,524
|
|
|
1,634
|
|
|
1,702
|
|
|
For the fiscal years ended October 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions
|
||||||||||
Net earnings
|
$
|
3,152
|
|
|
$
|
5,327
|
|
|
$
|
2,526
|
|
Other comprehensive (loss) income before taxes:
|
|
|
|
|
|
|
|
|
|||
Change in unrealized components of available-for-sale debt securities:
|
|
|
|
|
|
|
|
|
|||
Unrealized gains (losses) arising during the period
|
1
|
|
|
(3
|
)
|
|
4
|
|
|||
Losses (gains) reclassified into earnings
|
3
|
|
|
(5
|
)
|
|
—
|
|
|||
|
4
|
|
|
(8
|
)
|
|
4
|
|
|||
Change in unrealized components of cash flow hedges:
|
|
|
|
|
|
|
|
|
|||
Unrealized gains (losses) arising during the period
|
252
|
|
|
341
|
|
|
(651
|
)
|
|||
(Gains) losses reclassified into earnings
|
(380
|
)
|
|
258
|
|
|
199
|
|
|||
|
(128
|
)
|
|
599
|
|
|
(452
|
)
|
|||
Change in unrealized components of defined benefit plans:
|
|
|
|
|
|
|
|
|
|||
(Losses) gains arising during the period
|
(303
|
)
|
|
11
|
|
|
455
|
|
|||
Amortization of actuarial loss and prior service benefit
|
43
|
|
|
48
|
|
|
74
|
|
|||
Curtailments, settlements and other
|
42
|
|
|
3
|
|
|
3
|
|
|||
|
(218
|
)
|
|
62
|
|
|
532
|
|
|||
Change in cumulative translation adjustment
|
4
|
|
|
—
|
|
|
—
|
|
|||
Other comprehensive (loss) income before taxes
|
(338
|
)
|
|
653
|
|
|
84
|
|
|||
Provision for taxes
|
(42
|
)
|
|
(80
|
)
|
|
(64
|
)
|
|||
Other comprehensive (loss) income, net of taxes
|
(380
|
)
|
|
573
|
|
|
20
|
|
|||
Comprehensive income
|
$
|
2,772
|
|
|
$
|
5,900
|
|
|
$
|
2,546
|
|
|
As of October 31
|
||||||
|
2019
|
|
2018
|
||||
|
In millions, except par value
|
||||||
ASSETS
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
4,537
|
|
|
$
|
5,166
|
|
Accounts receivable, net
|
6,031
|
|
|
5,113
|
|
||
Inventory
|
5,734
|
|
|
6,062
|
|
||
Other current assets
|
3,875
|
|
|
5,046
|
|
||
Total current assets
|
20,177
|
|
|
21,387
|
|
||
Property, plant and equipment, net
|
2,794
|
|
|
2,198
|
|
||
Goodwill
|
6,372
|
|
|
5,968
|
|
||
Other non-current assets
|
4,124
|
|
|
5,069
|
|
||
Total assets
|
$
|
33,467
|
|
|
$
|
34,622
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Notes payable and short-term borrowings
|
$
|
357
|
|
|
$
|
1,463
|
|
Accounts payable
|
14,793
|
|
|
14,816
|
|
||
Other current liabilities
|
10,143
|
|
|
8,852
|
|
||
Total current liabilities
|
25,293
|
|
|
25,131
|
|
||
Long-term debt
|
4,780
|
|
|
4,524
|
|
||
Other non-current liabilities
|
4,587
|
|
|
5,606
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Stockholders’ deficit:
|
|
|
|
|
|
||
Preferred stock, $0.01 par value (300 shares authorized; none issued)
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value (9,600 shares authorized; 1,458 and 1,560 shares issued and outstanding at October 31, 2019, and 2018 respectively)
|
15
|
|
|
16
|
|
||
Additional paid-in capital
|
835
|
|
|
663
|
|
||
Accumulated deficit
|
(818
|
)
|
|
(473
|
)
|
||
Accumulated other comprehensive loss
|
(1,225
|
)
|
|
(845
|
)
|
||
Total stockholders’ deficit
|
(1,193
|
)
|
|
(639
|
)
|
||
Total liabilities and stockholders’ deficit
|
$
|
33,467
|
|
|
$
|
34,622
|
|
|
For the fiscal years ended October 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|||
Net earnings
|
$
|
3,152
|
|
|
$
|
5,327
|
|
|
$
|
2,526
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
744
|
|
|
528
|
|
|
354
|
|
|||
Stock-based compensation expense
|
297
|
|
|
268
|
|
|
224
|
|
|||
Restructuring and other charges
|
275
|
|
|
132
|
|
|
362
|
|
|||
Deferred taxes on earnings
|
133
|
|
|
(3,653
|
)
|
|
238
|
|
|||
Other, net
|
254
|
|
|
319
|
|
|
134
|
|
|||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
||||||
Accounts receivable
|
(761
|
)
|
|
(491
|
)
|
|
(453
|
)
|
|||
Inventory
|
(68
|
)
|
|
(136
|
)
|
|
(1,346
|
)
|
|||
Accounts payable
|
(53
|
)
|
|
1,429
|
|
|
2,161
|
|
|||
Taxes on earnings
|
(851
|
)
|
|
389
|
|
|
73
|
|
|||
Restructuring and other
|
(154
|
)
|
|
(237
|
)
|
|
(233
|
)
|
|||
Other assets and liabilities
|
1,686
|
|
|
653
|
|
|
(363
|
)
|
|||
Net cash provided by operating activities
|
4,654
|
|
|
4,528
|
|
|
3,677
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|||
Investment in property, plant and equipment
|
(671
|
)
|
|
(546
|
)
|
|
(402
|
)
|
|||
Proceeds from sale of property, plant and equipment
|
—
|
|
|
172
|
|
|
69
|
|
|||
Purchases of available-for-sale securities and other investments
|
(80
|
)
|
|
(367
|
)
|
|
(1,400
|
)
|
|||
Maturities and sales of available-for-sale securities and other investments
|
771
|
|
|
847
|
|
|
231
|
|
|||
Collateral posted for derivative instruments
|
(32
|
)
|
|
(1,165
|
)
|
|
(1,170
|
)
|
|||
Collateral returned for derivative instruments
|
32
|
|
|
1,379
|
|
|
955
|
|
|||
Payments made in connection with business acquisitions, net of cash acquired
|
(458
|
)
|
|
(1,036
|
)
|
|
—
|
|
|||
Net cash used in investing activities
|
(438
|
)
|
|
(716
|
)
|
|
(1,717
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|||
(Payments of) Proceeds from short-term borrowings with original maturities less than 90 days, net
|
(856
|
)
|
|
743
|
|
|
202
|
|
|||
Proceeds from short-term borrowings with original maturities greater than 90 days
|
—
|
|
|
712
|
|
|
887
|
|
|||
Proceeds from debt, net of issuance costs
|
127
|
|
|
—
|
|
|
5
|
|
|||
Payment of short-term borrowings with original maturities greater than 90 days
|
—
|
|
|
(1,596
|
)
|
|
(3
|
)
|
|||
Payment of debt
|
(680
|
)
|
|
(2,098
|
)
|
|
(84
|
)
|
|||
Settlement of cash flow hedges
|
—
|
|
|
—
|
|
|
(9
|
)
|
|||
Stock-based award activities
|
(61
|
)
|
|
52
|
|
|
57
|
|
|||
Repurchase of common stock
|
(2,405
|
)
|
|
(2,557
|
)
|
|
(1,412
|
)
|
|||
Cash dividends paid
|
(970
|
)
|
|
(899
|
)
|
|
(894
|
)
|
|||
Net cash used in financing activities
|
(4,845
|
)
|
|
(5,643
|
)
|
|
(1,251
|
)
|
|||
(Decrease) Increase in cash and cash equivalents
|
(629
|
)
|
|
(1,831
|
)
|
|
709
|
|
|||
Cash and cash equivalents at beginning of period
|
5,166
|
|
|
6,997
|
|
|
6,288
|
|
|||
Cash and cash equivalents at end of period
|
$
|
4,537
|
|
|
$
|
5,166
|
|
|
$
|
6,997
|
|
Supplemental cash flow disclosures:
|
|
|
|
|
|
|
|
|
|||
Income taxes paid, net of refunds
|
$
|
89
|
|
|
$
|
951
|
|
|
$
|
438
|
|
Interest expense paid
|
$
|
240
|
|
|
$
|
329
|
|
|
$
|
322
|
|
Supplemental schedule of non-cash activities:
|
|
|
|
|
|
|
|
|
|||
Purchase of assets under capital leases
|
$
|
366
|
|
|
$
|
258
|
|
|
$
|
200
|
|
|
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, 2016
|
1,712,091
|
|
|
$
|
17
|
|
|
$
|
1,030
|
|
|
$
|
(3,498
|
)
|
|
$
|
(1,438
|
)
|
|
$
|
(3,889
|
)
|
Net earnings
|
|
|
|
|
|
|
|
|
|
2,526
|
|
|
|
|
|
2,526
|
|
|||||
Other comprehensive income, net of taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
20
|
|
|
20
|
|
|||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,546
|
|
|||||
Issuance of common stock in connection with employee stock plans and other
|
18,532
|
|
|
|
|
|
52
|
|
|
|
|
|
|
|
|
52
|
|
|||||
Repurchases of common stock
|
(81,043
|
)
|
|
(1
|
)
|
|
(926
|
)
|
|
(520
|
)
|
|
|
|
|
(1,447
|
)
|
|||||
Cash dividends ($0.53 per common share)
|
|
|
|
|
|
|
|
|
|
(894
|
)
|
|
|
|
|
(894
|
)
|
|||||
Stock-based compensation expense
|
|
|
|
|
|
|
224
|
|
|
|
|
|
|
|
|
224
|
|
|||||
Balance October 31, 2017
|
1,649,580
|
|
|
$
|
16
|
|
|
$
|
380
|
|
|
$
|
(2,386
|
)
|
|
$
|
(1,418
|
)
|
|
$
|
(3,408
|
)
|
Net earnings
|
|
|
|
|
|
|
|
|
|
5,327
|
|
|
|
|
|
5,327
|
|
|||||
Other comprehensive income, net of taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
573
|
|
|
573
|
|
|||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,900
|
|
|||||
Issuance of common stock in connection with employee stock plans and other
|
21,728
|
|
|
|
|
|
47
|
|
|
|
|
|
|
|
|
47
|
|
|||||
Repurchases of common stock
|
(111,038
|
)
|
|
|
|
|
(32
|
)
|
|
(2,515
|
)
|
|
|
|
|
(2,547
|
)
|
|||||
Cash dividends ($0.56 per common share)
|
|
|
|
|
|
|
|
|
|
(899
|
)
|
|
|
|
|
(899
|
)
|
|||||
Stock-based compensation expense
|
|
|
|
|
|
|
268
|
|
|
|
|
|
|
|
|
268
|
|
|||||
Balance October 31, 2018
|
1,560,270
|
|
|
$
|
16
|
|
|
$
|
663
|
|
|
$
|
(473
|
)
|
|
$
|
(845
|
)
|
|
$
|
(639
|
)
|
Net earnings
|
|
|
|
|
|
|
|
|
|
3,152
|
|
|
|
|
|
3,152
|
|
|||||
Other comprehensive loss, net of taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
(380
|
)
|
|
(380
|
)
|
|||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,772
|
|
|||||
Issuance of common stock in connection with employee stock plans and other
|
15,047
|
|
|
|
|
|
(69
|
)
|
|
|
|
|
|
|
|
(69
|
)
|
|||||
Repurchases of common stock
|
(117,598
|
)
|
|
(1
|
)
|
|
(55
|
)
|
|
(2,340
|
)
|
|
|
|
|
(2,396
|
)
|
|||||
Cash dividends ($0.64 per common share)
|
|
|
|
|
|
|
|
|
|
(968
|
)
|
|
|
|
|
(968
|
)
|
|||||
Stock-based compensation expense
|
|
|
|
|
|
|
296
|
|
|
|
|
|
|
|
|
296
|
|
|||||
Adjustment for adoption of accounting standards (Note 1)
|
—
|
|
|
—
|
|
|
—
|
|
|
(189
|
)
|
|
—
|
|
|
(189
|
)
|
|||||
Balance October 31, 2019
|
1,457,719
|
|
|
$
|
15
|
|
|
$
|
835
|
|
|
$
|
(818
|
)
|
|
$
|
(1,225
|
)
|
|
$
|
(1,193
|
)
|
|
As of October 31, 2019
|
||||||||||||||||
CONSOLIDATED BALANCE SHEET ITEMS
|
As Reported
|
|
Effect of Adoption
|
|
Balances Without Adoption of Topic 606
|
||||||||||||
|
In millions
|
||||||||||||||||
ASSETS
|
|
|
|
|
|
||||||||||||
Accounts receivable, net
|
$
|
6,031
|
|
|
$
|
(218
|
)
|
|
|
$
|
5,813
|
|
|
||||
Inventory
|
5,734
|
|
|
188
|
|
|
|
5,922
|
|
|
|||||||
Other current assets
|
3,875
|
|
|
(188
|
)
|
|
|
3,687
|
|
|
|||||||
Other non-current assets
|
$
|
4,124
|
|
|
$
|
(31
|
)
|
|
|
$
|
4,093
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
||||||||||||
Other current liabilities
|
$
|
10,143
|
|
|
$
|
(435
|
)
|
|
|
$
|
9,708
|
|
|
||||
Accumulated deficit
|
$
|
(818
|
)
|
|
$
|
186
|
|
|
|
$
|
(632
|
)
|
|
|
|
For the fiscal year ended October 31, 2019
|
||||||||||||||||
CONSOLIDATED STATEMENT OF EARNINGS ITEMS
|
|
As Reported
|
|
Effect of Adoption
|
|
Balances Without Adoption of Topic 606
|
||||||||||||
|
In millions
|
|||||||||||||||||
Net revenue
|
|
$
|
58,756
|
|
|
|
$
|
(33
|
)
|
|
|
$
|
58,723
|
|
|
|||
Earnings from operations
|
|
3,877
|
|
|
|
(33
|
)
|
|
|
3,844
|
|
|
||||||
Earnings before taxes
|
|
2,523
|
|
|
|
(33
|
)
|
|
|
2,490
|
|
|
||||||
Benefit from taxes
|
|
629
|
|
|
|
7
|
|
|
|
636
|
|
|
||||||
Net earnings
|
|
$
|
3,152
|
|
|
|
$
|
(26
|
)
|
|
|
$
|
3,126
|
|
|
|
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
|
|
|
|
$
|
43
|
|
|
|
$
|
5,145
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
||||||||||||||||
Other current liabilities
|
$
|
8,852
|
|
|
|
$
|
458
|
|
|
|
$
|
—
|
|
|
|
$
|
9,310
|
|
|
||||
Accumulated other comprehensive loss
|
(845
|
)
|
|
|
—
|
|
|
|
(2
|
)
|
|
|
(847
|
)
|
|
||||||||
Accumulated deficit
|
$
|
(473
|
)
|
|
|
$
|
(212
|
)
|
|
|
$
|
(45
|
)
|
|
|
$
|
(730
|
)
|
|
•
|
Commercial PCs are optimized for use by 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, managing 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;
|
•
|
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, supplies, 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.
|
•
|
Home Printing Solutions delivers innovative printing products, supplies, 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).
|
•
|
Graphics Solutions delivers large-format, commercial and industrial solutions and supplies to print service providers and packaging converters through a wide portfolio of printers and presses (HP DesignJet, HP Latex, HP Stitch, HP Indigo and HP PageWide Web Presses) and related components.
|
•
|
3D Printing & Digital Manufacturing offers a portfolio of additive manufacturing solutions and supplies to help customers succeed in their additive and digital manufacturing journey. HP offers complete solutions in collaboration with an ecosystem of partners.
|
•
|
Commercial Hardware consists of office printing solutions, graphics solutions and 3D Printing & Digital Manufacturing, 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 & Digital Manufacturing supplies, for recurring use in consumer and commercial hardware.
|
|
For the fiscal years ended October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
In millions
|
|
|
||||||
Net revenue:
|
|
|
|
|
|
|
|
|
|||
Notebooks
|
$
|
22,928
|
|
|
$
|
22,547
|
|
|
$
|
19,782
|
|
Desktops
|
12,046
|
|
|
11,567
|
|
|
10,298
|
|
|||
Workstations
|
2,389
|
|
|
2,246
|
|
|
2,042
|
|
|||
Other
|
1,331
|
|
|
1,301
|
|
|
1,199
|
|
|||
Personal Systems
|
38,694
|
|
|
37,661
|
|
|
33,321
|
|
|||
Supplies
|
12,921
|
|
|
13,575
|
|
|
12,524
|
|
|||
Commercial Hardware
|
4,612
|
|
|
4,514
|
|
|
3,792
|
|
|||
Consumer Hardware
|
2,533
|
|
|
2,716
|
|
|
2,412
|
|
|||
Printing
|
20,066
|
|
|
20,805
|
|
|
18,728
|
|
|||
Corporate Investments
|
2
|
|
|
5
|
|
|
8
|
|
|||
Total segment net revenue
|
58,762
|
|
|
58,471
|
|
|
52,057
|
|
|||
Other
|
(6
|
)
|
|
1
|
|
|
(1
|
)
|
|||
Total net revenue
|
$
|
58,756
|
|
|
$
|
58,472
|
|
|
$
|
52,056
|
|
|
|
|
|
|
|
||||||
Earnings before taxes:
|
|
|
|
|
|
|
|
||||
Personal Systems
|
$
|
1,898
|
|
|
$
|
1,402
|
|
|
$
|
1,206
|
|
Printing
|
3,202
|
|
|
3,314
|
|
|
3,142
|
|
|||
Corporate Investments
|
(96
|
)
|
|
(82
|
)
|
|
(87
|
)
|
|||
Total segment earnings from operations
|
$
|
5,004
|
|
|
$
|
4,634
|
|
|
$
|
4,261
|
|
Corporate and unallocated costs and other
|
(404
|
)
|
|
(200
|
)
|
|
(181
|
)
|
|||
Stock-based compensation expense
|
(297
|
)
|
|
(268
|
)
|
|
(224
|
)
|
|||
Restructuring and other charges
|
(275
|
)
|
|
(132
|
)
|
|
(362
|
)
|
|||
Acquisition-related charges
|
(35
|
)
|
|
(123
|
)
|
|
(125
|
)
|
|||
Amortization of intangible assets
|
(116
|
)
|
|
(80
|
)
|
|
(1
|
)
|
|||
Interest and other, net
|
(1,354
|
)
|
|
(818
|
)
|
|
(92
|
)
|
|||
Total earnings before taxes
|
$
|
2,523
|
|
|
$
|
3,013
|
|
|
$
|
3,276
|
|
|
As of October 31
|
||||||
|
2019
|
|
2018
|
||||
|
In millions
|
||||||
Personal Systems
|
$
|
14,092
|
|
|
$
|
13,447
|
|
Printing
|
14,309
|
|
|
13,706
|
|
||
Corporate Investments
|
4
|
|
|
5
|
|
||
Corporate and unallocated assets
|
5,062
|
|
|
7,464
|
|
||
Total assets
|
$
|
33,467
|
|
|
$
|
34,622
|
|
|
For the fiscal years ended October 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
In millions
|
|
|
||||||
United States
|
$
|
20,605
|
|
|
$
|
20,602
|
|
|
$
|
19,321
|
|
Other countries
|
38,151
|
|
|
37,870
|
|
|
32,735
|
|
|||
Total net revenue
|
$
|
58,756
|
|
|
$
|
58,472
|
|
|
$
|
52,056
|
|
|
As of October 31
|
||||||
|
2019
|
|
2018
|
||||
|
In millions
|
||||||
United States
|
$
|
1,260
|
|
|
$
|
935
|
|
Singapore
|
372
|
|
|
371
|
|
||
Other countries
|
1,162
|
|
|
892
|
|
||
Total property, plant and equipment, net
|
$
|
2,794
|
|
|
$
|
2,198
|
|
|
Fiscal 2020 Plan
|
|
Fiscal 2017 Plan
|
|
Other prior year plans (2)
|
Total
|
||||||||||||||||||
|
Severance and EER
|
|
Infrastructure and other
|
|
Severance
|
|
Infrastructure and other (1)
|
|
||||||||||||||||
|
In millions
|
|||||||||||||||||||||||
Accrued balance as of October 31, 2016
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
24
|
|
|
$
|
—
|
|
|
$
|
34
|
|
|
$
|
58
|
|
|
Charges
|
—
|
|
|
—
|
|
|
117
|
|
|
94
|
|
|
16
|
|
|
227
|
|
|||||||
Cash payments
|
—
|
|
|
—
|
|
|
(68
|
)
|
|
(23
|
)
|
|
(43
|
)
|
|
(134
|
)
|
|||||||
Non-cash and other adjustments
|
—
|
|
|
—
|
|
|
3
|
|
|
(52
|
)
|
|
6
|
|
|
(43
|
)
|
|||||||
Accrued balance as of October 31, 2017
|
—
|
|
|
—
|
|
|
76
|
|
|
19
|
|
|
13
|
|
|
108
|
|
|||||||
Charges (reversals)
|
—
|
|
|
—
|
|
|
112
|
|
|
(13
|
)
|
|
—
|
|
|
99
|
|
|||||||
Cash payments
|
—
|
|
|
—
|
|
|
(136
|
)
|
|
(35
|
)
|
|
(4
|
)
|
|
(175
|
)
|
|||||||
Non-cash and other adjustments
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
29
|
|
|
—
|
|
|
27
|
|
|||||||
Accrued balance as of October 31, 2018
|
—
|
|
|
—
|
|
|
50
|
|
|
—
|
|
|
9
|
|
|
59
|
|
|||||||
Charges
|
82
|
|
|
—
|
|
|
137
|
|
|
28
|
|
|
—
|
|
|
247
|
|
|||||||
Cash payments
|
—
|
|
|
—
|
|
|
(122
|
)
|
|
(15
|
)
|
|
(3
|
)
|
|
(140
|
)
|
|||||||
Non-cash and other adjustments
|
(6
|
)
|
(3
|
)
|
—
|
|
|
(7
|
)
|
|
(11
|
)
|
|
—
|
|
|
(24
|
)
|
||||||
Accrued balance as of October 31, 2019
|
$
|
76
|
|
|
$
|
—
|
|
|
$
|
58
|
|
|
$
|
2
|
|
|
$
|
6
|
|
|
$
|
142
|
|
|
Total costs incurred to date as of October 31, 2019
|
$
|
82
|
|
|
$
|
—
|
|
|
$
|
390
|
|
|
$
|
109
|
|
|
$
|
1,317
|
|
|
$
|
1,898
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Reflected in Consolidated Balance Sheets:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Other current liabilities
|
$
|
76
|
|
|
$
|
—
|
|
|
$
|
58
|
|
|
$
|
2
|
|
|
$
|
5
|
|
|
$
|
141
|
|
|
Other non-current liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
1
|
|
(1)
|
Infrastructure and other includes adjustment of carrying amount of held for sale assets of $52 million in fiscal year 2017 and reversal of adjustments of $29 million for the fiscal year 2018 associated with the consolidation of manufacturing into global hubs.
|
(2)
|
Includes prior-year plans which are substantially complete. HP does not expect any further material activity associated with these plans.
|
(3)
|
Includes reclassification of liability related to the Enhanced Early Retirement (“EER”) plan of $6M for certain healthcare and medical savings account benefits to pension and other post retirement plans. See Note 4 “Retirement and Post-Retirement Benefit Plans” for further information.
|
|
For the fiscal years ended October 31
|
||||||||||||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||||
|
U.S. Defined
Benefit Plans |
|
Non-U.S. Defined
Benefit Plans |
|
Post-Retirement
Benefit Plans |
||||||||||||||||||||||||||||||
|
In millions
|
||||||||||||||||||||||||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
57
|
|
|
$
|
55
|
|
|
$
|
48
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Interest cost
|
491
|
|
|
452
|
|
|
469
|
|
|
24
|
|
|
24
|
|
|
18
|
|
|
17
|
|
|
15
|
|
|
18
|
|
|||||||||
Expected return on plan assets
|
(581
|
)
|
|
(717
|
)
|
|
(677
|
)
|
|
(37
|
)
|
|
(39
|
)
|
|
(31
|
)
|
|
(22
|
)
|
|
(23
|
)
|
|
(26
|
)
|
|||||||||
Amortization and deferrals:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Actuarial loss (gain)
|
59
|
|
|
58
|
|
|
73
|
|
|
31
|
|
|
28
|
|
|
40
|
|
|
(31
|
)
|
|
(17
|
)
|
|
(17
|
)
|
|||||||||
Prior service benefit
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
|
(3
|
)
|
|
(13
|
)
|
|
(18
|
)
|
|
(19
|
)
|
|||||||||
Net periodic (credit) benefit cost
|
(31
|
)
|
|
(207
|
)
|
|
(135
|
)
|
|
72
|
|
|
65
|
|
|
72
|
|
|
(48
|
)
|
|
(42
|
)
|
|
(43
|
)
|
|||||||||
Curtailment gain
|
—
|
|
|
—
|
|
|
—
|
|
|
(22
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Settlement loss
|
2
|
|
|
2
|
|
|
3
|
|
|
1
|
|
|
5
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Special termination benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|||||||||
Total (credit) benefit cost
|
$
|
(29
|
)
|
|
$
|
(205
|
)
|
|
$
|
(132
|
)
|
|
$
|
51
|
|
|
$
|
70
|
|
|
$
|
74
|
|
|
$
|
(42
|
)
|
|
$
|
(42
|
)
|
|
$
|
(43
|
)
|
|
For the fiscal years ended October 31
|
|||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
|||||||||
|
U.S. Defined
Benefit Plans |
|
Non-U.S. Defined
Benefit Plans |
|
Post-Retirement
Benefit Plans |
|||||||||||||||||||||
Discount rate
|
4.5
|
%
|
|
3.8
|
%
|
|
4.0
|
%
|
|
2.0
|
%
|
|
2.1
|
%
|
|
1.6
|
%
|
|
4.4
|
%
|
|
3.5
|
%
|
|
3.4
|
%
|
Expected increase in compensation levels
|
2.0
|
%
|
|
2.0
|
%
|
|
2.0
|
%
|
|
2.5
|
%
|
|
2.5
|
%
|
|
2.7
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
Expected long-term return on plan assets
|
6.0
|
%
|
|
6.9
|
%
|
|
6.9
|
%
|
|
4.4
|
%
|
|
4.5
|
%
|
|
4.4
|
%
|
|
6.0
|
%
|
|
7.1
|
%
|
|
7.3
|
%
|
|
As of October 31
|
||||||||||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||
|
U.S. Defined
Benefit Plans |
|
Non-U.S. Defined
Benefit Plans |
|
Post-Retirement
Benefit Plans |
||||||||||||||||||
|
In millions
|
||||||||||||||||||||||
Change in fair value of plan assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fair value of assets — beginning of year
|
$
|
10,018
|
|
|
$
|
10,838
|
|
|
$
|
850
|
|
|
$
|
815
|
|
|
$
|
388
|
|
|
$
|
351
|
|
Acquisition/ deletion of plan
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
40
|
|
|
—
|
|
|
—
|
|
||||||
Actual return on plan assets
|
2,499
|
|
|
(267
|
)
|
|
85
|
|
|
(2
|
)
|
|
44
|
|
|
76
|
|
||||||
Employer contributions
|
32
|
|
|
33
|
|
|
44
|
|
|
33
|
|
|
5
|
|
|
4
|
|
||||||
Participant contributions
|
—
|
|
|
—
|
|
|
17
|
|
|
11
|
|
|
36
|
|
|
59
|
|
||||||
Benefits paid
|
(523
|
)
|
|
(575
|
)
|
|
(28
|
)
|
|
(10
|
)
|
|
(69
|
)
|
|
(102
|
)
|
||||||
Settlement
|
(9
|
)
|
|
(11
|
)
|
|
(4
|
)
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
||||||
Currency impact
|
—
|
|
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
—
|
|
|
—
|
|
||||||
Transfers
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Fair value of assets — end of year
|
$
|
12,017
|
|
|
$
|
10,018
|
|
|
$
|
969
|
|
|
$
|
850
|
|
|
$
|
404
|
|
|
$
|
388
|
|
Change in benefits obligation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Projected benefit obligation — beginning of year
|
$
|
11,167
|
|
|
$
|
12,266
|
|
|
$
|
1,227
|
|
|
$
|
1,132
|
|
|
$
|
397
|
|
|
$
|
463
|
|
Acquisition/ deletion of plan
|
—
|
|
|
—
|
|
|
—
|
|
|
40
|
|
|
—
|
|
|
—
|
|
||||||
Service cost
|
—
|
|
|
—
|
|
|
57
|
|
|
55
|
|
|
1
|
|
|
1
|
|
||||||
Interest cost
|
491
|
|
|
452
|
|
|
24
|
|
|
24
|
|
|
17
|
|
|
15
|
|
||||||
Participant contributions
|
—
|
|
|
—
|
|
|
17
|
|
|
11
|
|
|
36
|
|
|
59
|
|
||||||
Actuarial loss (gain)
|
2,065
|
|
|
(965
|
)
|
|
219
|
|
|
21
|
|
|
35
|
|
|
(39
|
)
|
||||||
Benefits paid
|
(523
|
)
|
|
(575
|
)
|
|
(28
|
)
|
|
(10
|
)
|
|
(69
|
)
|
|
(102
|
)
|
||||||
Plan amendments
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
(33
|
)
|
|
—
|
|
||||||
Curtailment
|
—
|
|
|
—
|
|
|
(63
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Settlement
|
(9
|
)
|
|
(11
|
)
|
|
(4
|
)
|
|
(13
|
)
|
|
—
|
|
|
—
|
|
||||||
Special termination benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
||||||
Transfers
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Currency impact
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(33
|
)
|
|
—
|
|
|
—
|
|
||||||
Projected benefit obligation — end of year
|
$
|
13,191
|
|
|
$
|
11,167
|
|
|
$
|
1,457
|
|
|
$
|
1,227
|
|
|
$
|
390
|
|
|
$
|
397
|
|
Funded status at end of year
|
$
|
(1,174
|
)
|
|
$
|
(1,149
|
)
|
|
$
|
(488
|
)
|
|
$
|
(377
|
)
|
|
$
|
14
|
|
|
$
|
(9
|
)
|
Accumulated benefit obligation
|
$
|
13,191
|
|
|
$
|
11,167
|
|
|
$
|
1,320
|
|
|
$
|
1,099
|
|
|
|
|
|
|
|
|
For the fiscal years ended October 31
|
||||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||
|
U.S. Defined
Benefit Plans |
|
Non-U.S. Defined
Benefit Plans |
|
Post-Retirement
Benefit Plans |
||||||||||||
Discount rate
|
3.2
|
%
|
|
4.5
|
%
|
|
1.3
|
%
|
|
2.0
|
%
|
|
2.9
|
%
|
|
4.4
|
%
|
Expected increase in compensation levels
|
2.0
|
%
|
|
2.0
|
%
|
|
2.5
|
%
|
|
2.5
|
%
|
|
—
|
|
|
—
|
|
|
As of October 31
|
||||||||||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||
|
U.S. Defined
Benefit Plans |
|
Non-U.S. Defined
Benefit Plans |
|
Post-Retirement
Benefit Plans |
||||||||||||||||||
|
In millions
|
||||||||||||||||||||||
Other non-current assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14
|
|
|
$
|
10
|
|
|
$
|
21
|
|
|
$
|
11
|
|
Other current liabilities
|
(36
|
)
|
|
(32
|
)
|
|
(7
|
)
|
|
(9
|
)
|
|
(6
|
)
|
|
(6
|
)
|
||||||
Other non-current liabilities
|
(1,138
|
)
|
|
(1,117
|
)
|
|
(495
|
)
|
|
(378
|
)
|
|
(1
|
)
|
|
(14
|
)
|
||||||
Funded status at end of year
|
$
|
(1,174
|
)
|
|
$
|
(1,149
|
)
|
|
$
|
(488
|
)
|
|
$
|
(377
|
)
|
|
$
|
14
|
|
|
$
|
(9
|
)
|
|
As of October 31, 2019
|
||||||||||
|
U.S. Defined
Benefit Plans |
|
Non-U.S. Defined
Benefit Plans |
|
Post-Retirement
Benefit Plans |
||||||
|
In millions
|
||||||||||
Net actuarial loss (gain)
|
$
|
1,371
|
|
|
$
|
413
|
|
|
$
|
(135
|
)
|
Prior service benefit
|
—
|
|
|
(12
|
)
|
|
(94
|
)
|
|||
Total recognized in Accumulated other comprehensive loss (gain)
|
$
|
1,371
|
|
|
$
|
401
|
|
|
$
|
(229
|
)
|
|
U.S. Defined
Benefit Plans |
|
Non-U.S. Defined
Benefit Plans |
|
Post-Retirement
Benefit Plans |
||||||
|
In millions
|
||||||||||
Net actuarial loss (gain)
|
$
|
65
|
|
|
$
|
42
|
|
|
$
|
(10
|
)
|
Prior service benefit
|
—
|
|
|
(2
|
)
|
|
(12
|
)
|
|||
Total expected to be recognized in net periodic benefit cost (credit)
|
$
|
65
|
|
|
$
|
40
|
|
|
$
|
(22
|
)
|
|
As of October 31, 2019
|
||||||||||||||||||||||||||||||||||||||||||||||
|
U.S. Defined Benefit Plans
|
|
Non-U.S. Defined Benefit Plans
|
|
Post-Retirement Benefit Plans
|
||||||||||||||||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||||||||||
|
In millions
|
||||||||||||||||||||||||||||||||||||||||||||||
Asset Category:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity securities(1)
|
$
|
697
|
|
|
$
|
58
|
|
|
$
|
—
|
|
|
$
|
755
|
|
|
$
|
132
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
140
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Debt securities(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporate
|
—
|
|
|
6,098
|
|
|
—
|
|
|
6,098
|
|
|
—
|
|
|
139
|
|
|
—
|
|
|
139
|
|
|
—
|
|
|
40
|
|
|
—
|
|
|
40
|
|
||||||||||||
Government
|
—
|
|
|
2,979
|
|
|
—
|
|
|
2,979
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
61
|
|
|
—
|
|
|
61
|
|
||||||||||||
Real Estate Funds
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
69
|
|
|
—
|
|
|
70
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Insurance Contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
78
|
|
|
—
|
|
|
78
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Common Collective Trusts and 103-12 Investments Entities(3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Investment Funds(4)
|
324
|
|
|
—
|
|
|
—
|
|
|
324
|
|
|
—
|
|
|
311
|
|
|
—
|
|
|
311
|
|
|
57
|
|
|
—
|
|
|
—
|
|
|
57
|
|
||||||||||||
Cash and Cash Equivalents(5)
|
4
|
|
|
62
|
|
|
—
|
|
|
66
|
|
|
18
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||||||||||
Other(6)
|
(517
|
)
|
|
(488
|
)
|
|
—
|
|
|
(1,005
|
)
|
|
1
|
|
|
16
|
|
|
—
|
|
|
17
|
|
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
||||||||||||
Net plan assets subject to leveling
|
$
|
508
|
|
|
$
|
8,709
|
|
|
$
|
—
|
|
|
$
|
9,217
|
|
|
$
|
152
|
|
|
$
|
647
|
|
|
$
|
—
|
|
|
$
|
799
|
|
|
$
|
41
|
|
|
$
|
104
|
|
|
$
|
—
|
|
|
$
|
145
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investments using NAV as a Practical Expedient:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Alternative Investments(7)
|
|
|
|
|
|
|
975
|
|
|
|
|
|
|
|
|
21
|
|
|
|
|
|
|
|
|
196
|
|
|||||||||||||||||||||
Common Contractual Funds(8)
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
111
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||||||||||||||
Common Collective Trusts and 103-12 Investment Entities(3)
|
|
|
|
|
|
|
1,155
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
54
|
|
|||||||||||||||||||||
Investment Funds(4)
|
|
|
|
|
|
|
670
|
|
|
|
|
|
|
|
|
38
|
|
|
|
|
|
|
|
|
9
|
|
|||||||||||||||||||||
Investments at Fair Value
|
|
|
|
|
|
|
$
|
12,017
|
|
|
|
|
|
|
|
|
$
|
969
|
|
|
|
|
|
|
|
|
$
|
404
|
|
|
As of October 31, 2018
|
||||||||||||||||||||||||||||||||||||||||||||||
|
U.S. Defined Benefit Plans
|
|
Non-U.S. Defined Benefit Plans
|
|
Post-Retirement Benefit Plans
|
||||||||||||||||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||||||||||
|
In millions
|
||||||||||||||||||||||||||||||||||||||||||||||
Asset Category:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity securities(1)
|
$
|
794
|
|
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
842
|
|
|
$
|
114
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
120
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Debt securities(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporate
|
—
|
|
|
4,941
|
|
|
—
|
|
|
4,941
|
|
|
—
|
|
|
110
|
|
|
—
|
|
|
110
|
|
|
—
|
|
|
40
|
|
|
—
|
|
|
40
|
|
||||||||||||
Government
|
—
|
|
|
1,637
|
|
|
—
|
|
|
1,637
|
|
|
—
|
|
|
28
|
|
|
—
|
|
|
28
|
|
|
—
|
|
|
54
|
|
|
—
|
|
|
54
|
|
||||||||||||
Real Estate Funds
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
60
|
|
|
—
|
|
|
63
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Insurance Contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50
|
|
|
—
|
|
|
50
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Common Collective Trusts and 103-12s(3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Investment Funds(4)
|
253
|
|
|
—
|
|
|
—
|
|
|
253
|
|
|
—
|
|
|
279
|
|
|
—
|
|
|
279
|
|
|
55
|
|
|
—
|
|
|
—
|
|
|
55
|
|
||||||||||||
Cash and Cash Equivalents(5)
|
5
|
|
|
139
|
|
|
—
|
|
|
144
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
||||||||||||
Other(6)
|
(108
|
)
|
|
(233
|
)
|
|
—
|
|
|
(341
|
)
|
|
2
|
|
|
13
|
|
|
—
|
|
|
15
|
|
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
||||||||||||
Net plan assets subject to leveling
|
$
|
944
|
|
|
$
|
6,532
|
|
|
$
|
—
|
|
|
$
|
7,476
|
|
|
$
|
138
|
|
|
$
|
553
|
|
|
$
|
—
|
|
|
$
|
691
|
|
|
$
|
43
|
|
|
$
|
98
|
|
|
$
|
—
|
|
|
$
|
141
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investments using NAV as a Practical Expedient:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Alternative Investments(7)
|
|
|
|
|
|
|
|
|
|
1,319
|
|
|
|
|
|
|
|
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
220
|
|
||||||||||||
Common Contractual Funds(8)
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
110
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
||||||||||||
Common Collective Trusts and 103-12 Investment Entities(3)
|
|
|
|
|
|
|
|
|
|
683
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
21
|
|
||||||||||||
Investment Funds(4)
|
|
|
|
|
|
|
|
|
|
540
|
|
|
|
|
|
|
|
|
|
|
|
35
|
|
|
|
|
|
|
|
|
|
|
|
6
|
|
||||||||||||
Investments at Fair Value
|
|
|
|
|
|
|
|
|
|
$
|
10,018
|
|
|
|
|
|
|
|
|
|
|
|
$
|
850
|
|
|
|
|
|
|
|
|
|
|
|
$
|
388
|
|
(1)
|
Investments in publicly-traded equity securities are valued using the closing price on the measurement date as reported on the stock exchange on which the individual securities are traded.
|
(2)
|
The fair value of corporate, government and asset-backed debt securities is based on observable inputs of comparable market transactions. Also included in this category is debt issued by national, state and local governments and agencies.
|
(3)
|
Department of Labor 103-12 IE (Investment Entity) designation is for plan assets held by two or more unrelated employee benefit plans which includes limited partnerships and venture capital partnerships. Certain common collective trusts and interests in 103-12 entities are valued using NAV as a practical expedient.
|
(4)
|
Includes publicly traded funds of investment companies that are registered with the SEC, funds that are not publicly traded and a non-U.S. fund-of-fund arrangement. The non-U.S. fund-of-fund arrangement is a custom portfolio valued at NAV consisting primarily of fixed income and common contractual funds.
|
(5)
|
Includes cash and cash equivalents such as short-term marketable securities. Cash and cash equivalents include money market funds, which are valued based on NAV. Other assets were classified in the fair value hierarchy based on the lowest level input (e.g., quoted prices and observable inputs) that is significant to the fair value measure in its entirety.
|
(6)
|
Includes primarily reverse repurchase agreements, unsettled transactions, and derivative instruments.
|
(7)
|
Alternative Investments primarily include private equities and hedge funds. The valuation of alternative investments, such as limited partnerships and joint ventures, may require significant management judgment. For alternative investments, valuation is based on NAV as reported by the asset manager or investment company and adjusted for cash flows, if necessary. In making such an assessment, a variety of factors are reviewed by management, including but not limited to the timeliness of NAV as reported by the asset manager and changes in general economic and market conditions subsequent to the last NAV reported by the asset manager.
|
•
|
Private equities include limited partnerships such as equity, buyout, venture capital, real estate and other similar funds that invest in the United States and internationally where foreign currencies are hedged.
|
•
|
Hedge funds include limited partnerships that invest both long and short primarily in common stocks and credit, relative value, event-driven equity, distressed debt and macro strategies. Management of the hedge funds has the ability to shift investments from value to growth strategies, from small to large capitalization stocks and bonds, and
|
(8)
|
The Common Contractual Fund is an investment arrangement in which institutional investors pool their assets. Units may be acquired in different sub-funds focused on equities, fixed income, alternative investments and emerging markets. Each sub-fund is invested in accordance with the fund’s investment objective and units are issued in relation to each sub-fund. While the sub-funds are not publicly traded, the custodian strikes a NAV either once or twice a month, depending on the sub-fund. These assets are valued using NAV as a practical expedient.
|
|
|
2019 Target Allocation
|
|||||||
Asset Category
|
|
U.S. Defined Benefit Plans
|
|
Non-U.S. Defined
Benefit Plans |
|
Post-Retirement
Benefit Plans |
|||
Equity-related investments
|
|
29.4
|
%
|
|
40.6
|
%
|
|
48.2
|
%
|
Debt securities
|
|
70.6
|
%
|
|
36.0
|
%
|
|
36.1
|
%
|
Real estate
|
|
—
|
|
|
6.2
|
%
|
|
—
|
|
Cash and cash equivalents
|
|
—
|
|
|
2.4
|
%
|
|
15.7
|
%
|
Other
|
|
—
|
|
|
14.8
|
%
|
|
—
|
|
Total
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Fiscal year
|
|
U.S. Defined
Benefit Plans
|
|
Non-U.S.
Defined
Benefit Plans
|
|
Post-Retirement
Benefit Plans
|
||||||
|
|
In millions
|
||||||||||
2020
|
|
$
|
730
|
|
|
$
|
40
|
|
|
$
|
40
|
|
2021
|
|
752
|
|
|
34
|
|
|
36
|
|
|||
2022
|
|
769
|
|
|
39
|
|
|
32
|
|
|||
2023
|
|
788
|
|
|
40
|
|
|
29
|
|
|||
2024
|
|
809
|
|
|
45
|
|
|
28
|
|
|||
Next five fiscal years to October 31, 2029
|
|
4,020
|
|
|
276
|
|
|
135
|
|
|
For the fiscal years ended October 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions
|
||||||||||
Stock-based compensation expense
|
$
|
297
|
|
|
$
|
268
|
|
|
$
|
224
|
|
Income tax benefit
|
(47
|
)
|
|
(59
|
)
|
|
(71
|
)
|
|||
Stock-based compensation expense, net of tax
|
$
|
250
|
|
|
$
|
209
|
|
|
$
|
153
|
|
|
For the fiscal years ended October 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Weighted-average fair value(1)
|
$
|
27
|
|
|
$
|
24
|
|
|
$
|
20
|
|
Expected volatility(2)
|
26.5
|
%
|
|
29.5
|
%
|
|
30.5
|
%
|
|||
Risk-free interest rate(3)
|
2.7
|
%
|
|
1.9
|
%
|
|
1.4
|
%
|
|||
Expected performance period in years(4)
|
2.9
|
|
|
2.9
|
|
|
2.9
|
|
(1)
|
The weighted-average fair value was based on performance-adjusted restricted stock units granted during the period.
|
(2)
|
The expected volatility was estimated using the historical volatility derived from HP’s common stock.
|
(3)
|
The risk-free interest rate was estimated based on the yield on U.S. Treasury zero-coupon issues.
|
(4)
|
The expected performance period was estimated based on the length of the remaining performance period from the grant date.
|
|
As of October 31
|
|||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
|
Shares
|
|
Weighted-
Average Grant Date Fair Value Per Share |
|
Shares
|
|
Weighted-
Average Grant Date Fair Value Per Share |
|
Shares
|
|
Weighted-
Average Grant Date Fair Value Per Share |
|||||||||
|
In thousands
|
|
|
|
In thousands
|
|
|
|
In thousands
|
|
|
|||||||||
Outstanding at beginning of year
|
30,784
|
|
|
$
|
18
|
|
|
31,822
|
|
|
$
|
14
|
|
|
28,710
|
|
|
$
|
13
|
|
Granted
|
17,216
|
|
|
$
|
22
|
|
|
16,364
|
|
|
$
|
21
|
|
|
15,858
|
|
|
$
|
16
|
|
Vested
|
(16,934
|
)
|
|
$
|
16
|
|
|
(15,339
|
)
|
|
$
|
15
|
|
|
(11,915
|
)
|
|
$
|
14
|
|
Forfeited
|
(1,106
|
)
|
|
$
|
20
|
|
|
(2,063
|
)
|
|
$
|
17
|
|
|
(831
|
)
|
|
$
|
14
|
|
Outstanding at end of year
|
29,960
|
|
|
$
|
21
|
|
|
30,784
|
|
|
$
|
18
|
|
|
31,822
|
|
|
$
|
14
|
|
|
For the fiscal years ended
October 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Weighted-average fair value(1)
|
$
|
3
|
|
|
$
|
5
|
|
|
$
|
4
|
|
Expected volatility(2)
|
29.8
|
%
|
|
29.4
|
%
|
|
28.0
|
%
|
|||
Risk-free interest rate(3)
|
1.7
|
%
|
|
2.5
|
%
|
|
1.9
|
%
|
|||
Expected dividend yield(4)
|
3.7
|
%
|
|
2.6
|
%
|
|
2.8
|
%
|
|||
Expected term in years(5)
|
6.0
|
|
|
5.0
|
|
|
5.5
|
|
(1)
|
The weighted-average fair value was based on stock options granted during the period.
|
(2)
|
For all awards granted in fiscal year 2019 and 2018, expected volatility was estimated based on a blended volatility (50% historical volatility and 50% implied volatility from traded options on HP's common stock). For the awards granted in
|
(3)
|
The risk-free interest rate was estimated based on the yield on U.S. Treasury zero-coupon issues.
|
(4)
|
The expected dividend yield represents a constant dividend yield applied for the duration of the expected term of the award.
|
(5)
|
For awards subject to service-based vesting, the expected term was estimated using a simplified method; and for performance-contingent awards, the expected term represents an output from the lattice model.
|
|
As of October 31
|
|||||||||||||||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||||||||||||||||||||
|
Shares
|
|
Weighted-
Average Exercise Price |
|
Weighted-
Average Remaining Contractual Term |
|
Aggregate
Intrinsic Value |
|
Shares
|
|
Weighted-
Average Exercise Price |
|
Weighted-
Average Remaining Contractual Term |
|
Aggregate
Intrinsic Value |
|
Shares
|
|
Weighted-
Average Exercise Price |
|
Weighted-
Average Remaining Contractual Term |
|
Aggregate
Intrinsic Value |
|||||||||||||||
|
In
thousands |
|
|
|
In years
|
|
In
millions |
|
In
thousands |
|
|
|
In years
|
|
In
millions |
|
In
thousands |
|
|
|
In years
|
|
In
millions |
|||||||||||||||
Outstanding at beginning of year
|
7,086
|
|
|
$
|
14
|
|
|
|
|
|
|
|
18,067
|
|
|
$
|
13
|
|
|
|
|
|
|
|
28,218
|
|
|
$
|
12
|
|
|
|
|
|
|
|||
Granted
|
2,451
|
|
|
$
|
17
|
|
|
|
|
|
|
|
54
|
|
|
$
|
21
|
|
|
|
|
|
|
|
104
|
|
|
$
|
19
|
|
|
|
|
|
|
|||
Exercised
|
(2,429
|
)
|
|
$
|
13
|
|
|
|
|
|
|
|
(10,644
|
)
|
|
$
|
13
|
|
|
|
|
|
|
|
(9,407
|
)
|
|
$
|
11
|
|
|
|
|
|
|
|||
Forfeited/cancelled/expired
|
(15
|
)
|
|
$
|
10
|
|
|
|
|
|
|
|
(391
|
)
|
|
$
|
16
|
|
|
|
|
|
|
|
(848
|
)
|
|
$
|
17
|
|
|
|
|
|
|
|||
Outstanding at end of year
|
7,093
|
|
|
$
|
16
|
|
|
5.7
|
|
$
|
15
|
|
|
7,086
|
|
|
$
|
14
|
|
|
4.2
|
|
$
|
73
|
|
|
18,067
|
|
|
$
|
13
|
|
|
4.2
|
|
$
|
152
|
|
Vested and expected to vest
|
7,093
|
|
|
$
|
16
|
|
|
5.7
|
|
$
|
15
|
|
|
7,084
|
|
|
$
|
14
|
|
|
4.2
|
|
$
|
73
|
|
|
17,692
|
|
|
$
|
13
|
|
|
4.1
|
|
$
|
149
|
|
Exercisable
|
4,707
|
|
|
$
|
14
|
|
|
3.6
|
|
$
|
15
|
|
|
4,707
|
|
|
$
|
14
|
|
|
3.7
|
|
$
|
49
|
|
|
10,898
|
|
|
$
|
12
|
|
|
3.1
|
|
$
|
102
|
|
|
As of October 31
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
|
In thousands
|
|||||||
Shares available for future grant
|
265,135
|
|
|
305,767
|
|
|
419,071
|
|
Shares reserved for future issuance
|
301,608
|
|
|
343,076
|
|
|
468,531
|
|
|
For the fiscal years ended October 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions
|
||||||||||
U.S.
|
$
|
(1,021
|
)
|
|
$
|
242
|
|
|
$
|
(14
|
)
|
Non-U.S.
|
3,544
|
|
|
2,771
|
|
|
3,290
|
|
|||
|
$
|
2,523
|
|
|
$
|
3,013
|
|
|
$
|
3,276
|
|
|
For the fiscal years ended October 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions
|
||||||||||
U.S. federal taxes:
|
|
|
|
|
|
|
|
|
|||
Current
|
$
|
(987
|
)
|
|
$
|
751
|
|
|
$
|
189
|
|
Deferred
|
149
|
|
|
(3,132
|
)
|
|
197
|
|
|||
Non-U.S. taxes:
|
|
|
|
|
|
|
|
|
|||
Current
|
386
|
|
|
528
|
|
|
302
|
|
|||
Deferred
|
(3
|
)
|
|
(563
|
)
|
|
4
|
|
|||
State taxes:
|
|
|
|
|
|
|
|
|
|||
Current
|
(160
|
)
|
|
61
|
|
|
20
|
|
|||
Deferred
|
(14
|
)
|
|
41
|
|
|
38
|
|
|||
|
$
|
(629
|
)
|
|
$
|
(2,314
|
)
|
|
$
|
750
|
|
|
For the fiscal years ended October 31
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
U.S. federal statutory income tax rate from operations
|
21.0
|
%
|
|
23.3
|
%
|
|
35.0
|
%
|
State income taxes from operations, net of federal tax benefit
|
1.5
|
%
|
|
0.5
|
%
|
|
1.4
|
%
|
Impact of foreign earnings, net
|
(6.4
|
)%
|
|
(10.9
|
)%
|
|
(13.2
|
)%
|
Foreign-derived intangible income deduction
|
(2.3
|
)%
|
|
—
|
%
|
|
—
|
%
|
Global Minimum Tax
|
4.3
|
%
|
|
—
|
%
|
|
—
|
%
|
U.S. Tax Reform impacts
|
(2.6
|
)%
|
|
(35.8
|
)%
|
|
—
|
%
|
Research and development (“R&D”) credit
|
(1.1
|
)%
|
|
(0.7
|
)%
|
|
(0.5
|
)%
|
Valuation allowances
|
(3.7
|
)%
|
|
(9.3
|
)%
|
|
(1.9
|
)%
|
Uncertain tax positions and audit settlements
|
(41.1
|
)%
|
|
(50.3
|
)%
|
|
0.4
|
%
|
Indemnification related items
|
6.8
|
%
|
|
5.2
|
%
|
|
(0.3
|
)%
|
Other, net
|
(1.3
|
)%
|
|
1.2
|
%
|
|
2.0
|
%
|
|
(24.9
|
)%
|
|
(76.8
|
)%
|
|
22.9
|
%
|
|
For the fiscal years ended October 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions
|
||||||||||
Balance at beginning of year
|
$
|
7,771
|
|
|
$
|
10,808
|
|
|
$
|
10,858
|
|
Increases:
|
|
|
|
|
|
|
|
||||
For current year’s tax positions
|
79
|
|
|
66
|
|
|
52
|
|
|||
For prior years’ tax positions
|
172
|
|
|
101
|
|
|
85
|
|
|||
Decreases:
|
|
|
|
|
|
|
|
||||
For prior years’ tax positions
|
(37
|
)
|
|
(248
|
)
|
|
(181
|
)
|
|||
Statute of limitations expirations
|
(15
|
)
|
|
(3
|
)
|
|
(1
|
)
|
|||
Settlements with taxing authorities
|
(7,041
|
)
|
|
(2,953
|
)
|
|
(5
|
)
|
|||
Balance at end of year
|
$
|
929
|
|
|
$
|
7,771
|
|
|
$
|
10,808
|
|
|
As of October 31
|
||||||
|
2019
|
|
2018
|
||||
|
In millions
|
||||||
Deferred Tax Assets
|
|
|
|
||||
Loss and credit carryforwards
|
$
|
7,856
|
|
|
$
|
8,204
|
|
Intercompany transactions—excluding inventory
|
714
|
|
|
994
|
|
||
Fixed assets
|
115
|
|
|
151
|
|
||
Warranty
|
195
|
|
|
194
|
|
||
Employee and retiree benefits
|
396
|
|
|
401
|
|
||
Deferred Revenue
|
145
|
|
|
164
|
|
||
Capitalized research and development
|
193
|
|
|
—
|
|
||
Intangible assets
|
420
|
|
|
—
|
|
||
Other
|
556
|
|
|
422
|
|
||
Gross Deferred Tax Assets
|
10,590
|
|
|
10,530
|
|
||
Valuation allowances
|
(7,930
|
)
|
|
(7,906
|
)
|
||
Total Deferred Tax Assets
|
2,660
|
|
|
2,624
|
|
||
|
|
|
|
||||
Deferred Tax Liabilities
|
|
|
|
||||
Unremitted earnings of foreign subsidiaries
|
(27
|
)
|
|
(31
|
)
|
||
Intangible assets
|
—
|
|
|
(229
|
)
|
||
Other
|
(73
|
)
|
|
(33
|
)
|
||
Total Deferred Tax Liabilities
|
(100
|
)
|
|
(293
|
)
|
||
Net Deferred Tax Assets
|
$
|
2,560
|
|
|
$
|
2,331
|
|
|
As of October 31
|
||||||
|
2019
|
|
2018
|
||||
|
In millions
|
||||||
Deferred tax assets
|
$
|
2,620
|
|
|
$
|
2,431
|
|
Deferred tax liabilities
|
(60
|
)
|
|
(100
|
)
|
||
Total
|
$
|
2,560
|
|
|
$
|
2,331
|
|
|
Gross NOLs
|
|
Deferred Taxes on NOLs
|
|
Valuation allowance
|
Initial Year of Expiration
|
||||||
|
In millions
|
|
||||||||||
Federal
|
$
|
372
|
|
|
$
|
78
|
|
|
$
|
(19
|
)
|
2023
|
State
|
2,634
|
|
|
167
|
|
|
(62
|
)
|
2019
|
|||
Foreign
|
26,317
|
|
|
7,434
|
|
|
(7,357
|
)
|
2021
|
|||
Balance at end of year
|
$
|
29,323
|
|
|
$
|
7,679
|
|
|
$
|
(7,438
|
)
|
|
|
Carryforward
|
|
Valuation
Allowance |
|
Initial
Year of Expiration |
||||
|
In millions
|
|
|
||||||
Tax credits in state and foreign jurisdictions
|
$
|
307
|
|
|
$
|
(42
|
)
|
|
2021
|
Balance at end of year
|
$
|
307
|
|
|
$
|
(42
|
)
|
|
|
|
For the fiscal years ended October 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions
|
||||||||||
Balance at beginning of year
|
$
|
7,906
|
|
|
$
|
8,807
|
|
|
$
|
8,520
|
|
Income tax (benefit) expense
|
(339
|
)
|
|
(897
|
)
|
|
297
|
|
|||
Other comprehensive income, currency translation and charges to other accounts
|
363
|
|
|
(4
|
)
|
|
(10
|
)
|
|||
Balance at end of year
|
$
|
7,930
|
|
|
$
|
7,906
|
|
|
$
|
8,807
|
|
|
As of October 31
|
||||||
|
2019
|
|
2018
|
||||
|
In millions
|
||||||
Accounts receivable
|
$
|
6,142
|
|
|
$
|
5,242
|
|
Allowance for doubtful accounts
|
(111
|
)
|
|
(129
|
)
|
||
|
$
|
6,031
|
|
|
$
|
5,113
|
|
|
For the fiscal years ended October 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions
|
||||||||||
Balance at beginning of year
|
$
|
129
|
|
|
$
|
101
|
|
|
$
|
107
|
|
Provision for doubtful accounts
|
60
|
|
|
57
|
|
|
30
|
|
|||
Deductions, net of recoveries
|
(78
|
)
|
|
(29
|
)
|
|
(36
|
)
|
|||
Balance at end of year
|
$
|
111
|
|
|
$
|
129
|
|
|
$
|
101
|
|
|
For the fiscal years ended October 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions
|
||||||||||
Balance at beginning of year (1)
|
$
|
165
|
|
|
$
|
147
|
|
|
$
|
149
|
|
Trade receivables sold
|
10,257
|
|
|
10,224
|
|
|
9,553
|
|
|||
Cash receipts
|
(10,186
|
)
|
|
(10,202
|
)
|
|
(9,562
|
)
|
|||
Foreign currency and other
|
(1
|
)
|
|
(4
|
)
|
|
7
|
|
|||
Balance at end of year (1)
|
$
|
235
|
|
|
$
|
165
|
|
|
$
|
147
|
|
|
As of October 31
|
||||||
|
2019
|
|
2018
|
||||
|
In millions
|
||||||
Finished goods
|
$
|
3,855
|
|
|
$
|
4,019
|
|
Purchased parts and fabricated assemblies
|
1,879
|
|
|
2,043
|
|
||
|
$
|
5,734
|
|
|
$
|
6,062
|
|
|
As of October 31
|
||||||
|
2019
|
|
2018
|
||||
|
In millions
|
||||||
Supplier and other receivables
|
$
|
1,951
|
|
|
$
|
2,025
|
|
Prepaid and other current assets
|
967
|
|
|
1,445
|
|
||
Value-added taxes receivable
|
957
|
|
|
865
|
|
||
Available-for-sale investments (1)
|
—
|
|
|
711
|
|
||
|
$
|
3,875
|
|
|
$
|
5,046
|
|
(1)
|
See Note 9 “Fair Value” and Note 10, “Financial Instruments” for detailed information.
|
|
As of October 31
|
||||||
|
2019
|
|
2018
|
||||
|
In millions
|
||||||
Land, buildings and leasehold improvements
|
$
|
1,977
|
|
|
$
|
1,893
|
|
Machinery and equipment, including equipment held for lease
|
5,060
|
|
|
4,216
|
|
||
|
7,037
|
|
|
6,109
|
|
||
Accumulated depreciation
|
(4,243
|
)
|
|
(3,911
|
)
|
||
|
$
|
2,794
|
|
|
$
|
2,198
|
|
|
As of October 31
|
||||||
|
2019
|
|
2018
|
||||
|
In millions
|
||||||
Deferred tax assets(1)
|
$
|
2,620
|
|
|
$
|
2,431
|
|
Tax indemnifications receivable(2)
|
42
|
|
|
953
|
|
||
Intangible assets(3)
|
661
|
|
|
453
|
|
||
Other(4)
|
801
|
|
|
1,232
|
|
||
|
$
|
4,124
|
|
|
$
|
5,069
|
|
(1)
|
See Note 6, “Taxes on Earnings” for detailed information.
|
(2)
|
See Note 15, “Guarantees, Indemnifications and Warranties” for detailed information.
|
(3)
|
See Note 8, “Goodwill and Intangible Assets” for detailed information.
|
(4)
|
Includes marketable equity securities and mutual funds classified as available-for-sale investments of $56 million and $53 million at October 31, 2019 and 2018, respectively. See Note 10, “Financial Instruments” for detailed information
|
|
As of October 31
|
||||||
|
2019
|
|
2018
|
||||
|
In millions
|
||||||
Sales and marketing programs
|
$
|
3,361
|
|
|
$
|
2,758
|
|
Deferred revenue
|
1,178
|
|
|
1,095
|
|
||
Employee compensation and benefits
|
1,103
|
|
|
1,136
|
|
||
Other accrued taxes
|
1,060
|
|
|
982
|
|
||
Warranty
|
663
|
|
|
673
|
|
||
Tax liability
|
237
|
|
|
340
|
|
||
Other
|
2,541
|
|
|
1,868
|
|
||
|
$
|
10,143
|
|
|
$
|
8,852
|
|
|
As of October 31
|
||||||
|
2019
|
|
2018
|
||||
|
In millions
|
||||||
Tax liability(1)
|
$
|
848
|
|
|
$
|
2,063
|
|
Pension, post-retirement, and post-employment liabilities
|
1,762
|
|
|
1,645
|
|
||
Deferred revenue
|
1,069
|
|
|
1,005
|
|
||
Deferred tax liability(1)
|
60
|
|
|
100
|
|
||
Other
|
848
|
|
|
793
|
|
||
|
$
|
4,587
|
|
|
$
|
5,606
|
|
(1)
|
See Note 6, “Taxes on Earnings” for detailed information.
|
|
For the fiscal years ended October 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions
|
||||||||||
Tax indemnifications(1)
|
$
|
(1,186
|
)
|
|
$
|
(662
|
)
|
|
$
|
47
|
|
Loss on extinguishment of debt
|
—
|
|
|
(126
|
)
|
|
—
|
|
|||
Interest expense on borrowings
|
(242
|
)
|
|
(312
|
)
|
|
(309
|
)
|
|||
Other, net
|
74
|
|
|
282
|
|
|
170
|
|
|||
|
$
|
(1,354
|
)
|
|
$
|
(818
|
)
|
|
$
|
(92
|
)
|
(1)
|
Fiscal year ended October 31, 2019 and 2018, includes an adjustment of $764 million and $676 million respectively, of indemnification receivable, primarily related to resolution of various income tax audit settlements. Fiscal year ended October 31, 2019, also includes an adjustment of $417 million pursuant to the termination of the TMA with Hewlett Packard Enterprise. See Note 15, “Guarantees, Indemnifications and Warranties” for further information.
|
|
For the fiscal years ended October 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions
|
||||||||||
Americas
|
$
|
25,244
|
|
|
$
|
25,644
|
|
|
$
|
23,891
|
|
Europe, Middle East and Africa
|
20,275
|
|
|
20,470
|
|
|
17,507
|
|
|||
Asia-Pacific and Japan
|
13,237
|
|
|
12,358
|
|
|
10,658
|
|
|||
Total net revenue
|
$
|
58,756
|
|
|
$
|
58,472
|
|
|
$
|
52,056
|
|
•
|
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.
|
|
Personal Systems
|
|
Printing
|
|
Total
|
||||||
|
In millions
|
||||||||||
Balance at October 31, 2017(1)
|
$
|
2,593
|
|
|
$
|
3,029
|
|
|
$
|
5,622
|
|
Acquisitions
|
7
|
|
|
339
|
|
|
346
|
|
|||
Balance at October 31, 2018(1)
|
2,600
|
|
|
3,368
|
|
|
5,968
|
|
|||
Acquisitions
|
13
|
|
|
386
|
|
|
399
|
|
|||
Foreign currency translation
|
—
|
|
|
5
|
|
|
5
|
|
|||
Balance at October 31, 2019(1)
|
$
|
2,613
|
|
|
$
|
3,759
|
|
|
$
|
6,372
|
|
(1)
|
Goodwill is net of accumulated impairment losses of $0.8 billion related to Corporate Investments.
|
|
|
As of October 31, 2019
|
|
As of October 31, 2018
|
||||||||||||||||||||
|
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
||||||||||||
|
|
In millions
|
||||||||||||||||||||||
Customer contracts, customer lists and distribution agreements
|
|
$
|
385
|
|
|
$
|
122
|
|
|
$
|
263
|
|
|
$
|
112
|
|
|
$
|
88
|
|
|
$
|
24
|
|
Technology, patents and trade name
|
|
652
|
|
|
254
|
|
|
398
|
|
|
601
|
|
|
172
|
|
|
429
|
|
||||||
Total intangible assets
|
|
$
|
1,037
|
|
|
$
|
376
|
|
|
$
|
661
|
|
|
$
|
713
|
|
|
$
|
260
|
|
|
$
|
453
|
|
|
Weighted-Average Useful Life
|
Customer contracts, customer lists and distribution agreements
|
10
|
Technology, patents and trade name
|
7
|
Fiscal year
|
In millions
|
||
2020
|
$
|
114
|
|
2021
|
116
|
|
|
2022
|
116
|
|
|
2023
|
114
|
|
|
2024
|
80
|
|
|
Thereafter
|
121
|
|
|
Total
|
$
|
661
|
|
|
As of October 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
|
$
|
—
|
|
|
$
|
1,283
|
|
|
$
|
—
|
|
|
$
|
1,283
|
|
|
$
|
—
|
|
|
$
|
1,620
|
|
|
$
|
—
|
|
|
$
|
1,620
|
|
Financial institution instruments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
||||||||
Government debt(1)
|
2,422
|
|
|
—
|
|
|
—
|
|
|
2,422
|
|
|
2,217
|
|
|
150
|
|
|
—
|
|
|
2,367
|
|
||||||||
Available-for-Sale Investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Corporate debt
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
366
|
|
|
—
|
|
|
366
|
|
||||||||
Financial institution instruments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32
|
|
|
—
|
|
|
32
|
|
||||||||
Government debt(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
313
|
|
|
—
|
|
|
313
|
|
||||||||
Marketable equity securities and Mutual funds
|
6
|
|
|
50
|
|
|
—
|
|
|
56
|
|
|
53
|
|
|
—
|
|
|
—
|
|
|
53
|
|
||||||||
Derivative Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Foreign currency contracts
|
—
|
|
|
381
|
|
|
—
|
|
|
381
|
|
|
—
|
|
|
508
|
|
|
7
|
|
|
515
|
|
||||||||
Other derivatives
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total Assets
|
$
|
2,428
|
|
|
$
|
1,725
|
|
|
$
|
—
|
|
|
$
|
4,153
|
|
|
$
|
2,270
|
|
|
$
|
2,998
|
|
|
$
|
7
|
|
|
$
|
5,275
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
23
|
|
|
$
|
—
|
|
|
$
|
23
|
|
Foreign currency contracts
|
—
|
|
|
165
|
|
|
—
|
|
|
165
|
|
|
—
|
|
|
164
|
|
|
—
|
|
|
164
|
|
||||||||
Other derivatives
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
||||||||
Total Liabilities
|
$
|
—
|
|
|
$
|
166
|
|
|
$
|
—
|
|
|
$
|
166
|
|
|
$
|
—
|
|
|
$
|
195
|
|
|
$
|
—
|
|
|
$
|
195
|
|
|
As of October 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
|
$
|
1,283
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,283
|
|
|
$
|
1,620
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,620
|
|
Financial institution instruments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
9
|
|
||||||||
Government debt
|
2,422
|
|
|
—
|
|
|
—
|
|
|
2,422
|
|
|
2,367
|
|
|
—
|
|
|
—
|
|
|
2,367
|
|
||||||||
Total cash equivalents
|
3,705
|
|
|
—
|
|
|
—
|
|
|
3,705
|
|
|
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 and Mutual funds
|
40
|
|
|
16
|
|
|
—
|
|
|
56
|
|
|
42
|
|
|
11
|
|
|
—
|
|
|
53
|
|
||||||||
Total available-for-sale investments
|
40
|
|
|
16
|
|
|
—
|
|
|
56
|
|
|
756
|
|
|
11
|
|
|
(3
|
)
|
|
764
|
|
||||||||
Total cash equivalents and available-for-sale investments
|
$
|
3,745
|
|
|
$
|
16
|
|
|
$
|
—
|
|
|
$
|
3,761
|
|
|
$
|
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 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 October 31, 2019
|
|
As of October 31, 2018
|
||||||||||||||||||||||||||||||||||||
|
Outstanding
Gross
Notional
|
|
Other
Current
Assets
|
|
Other
Non-Current
Assets
|
|
Other
Current
Liabilities
|
|
Other
Non-Current
Liabilities
|
|
Outstanding
Gross
Notional
|
|
Other
Current
Assets
|
|
Other
Non-Current
Assets
|
|
Other
Current
Liabilities
|
|
Other
Non-Current
Liabilities
|
||||||||||||||||||||
|
In millions
|
||||||||||||||||||||||||||||||||||||||
Derivatives designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fair value hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate contracts
|
$
|
750
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
23
|
|
Cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Foreign currency contracts
|
15,639
|
|
|
260
|
|
|
111
|
|
|
123
|
|
|
28
|
|
|
17,147
|
|
|
386
|
|
|
107
|
|
|
86
|
|
|
52
|
|
||||||||||
Total derivatives designated as hedging instruments
|
16,389
|
|
|
260
|
|
|
115
|
|
|
123
|
|
|
28
|
|
|
18,147
|
|
|
386
|
|
|
107
|
|
|
86
|
|
|
75
|
|
||||||||||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency contracts
|
7,146
|
|
|
10
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
5,437
|
|
|
22
|
|
|
—
|
|
|
26
|
|
|
—
|
|
||||||||||
Other derivatives
|
134
|
|
|
7
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
122
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
||||||||||
Total derivatives not designated as hedging instruments
|
7,280
|
|
|
17
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
5,559
|
|
|
22
|
|
|
—
|
|
|
34
|
|
|
—
|
|
||||||||||
Total derivatives
|
$
|
23,669
|
|
|
$
|
277
|
|
|
$
|
115
|
|
|
$
|
138
|
|
|
$
|
28
|
|
|
$
|
23,706
|
|
|
$
|
408
|
|
|
$
|
107
|
|
|
$
|
120
|
|
|
$
|
75
|
|
|
In the Consolidated Balance Sheets
|
|
|
|
|
||||||||||||||||||||
|
(i)
|
|
(ii)
|
|
(iii) = (i)–(ii)
|
|
(iv)
|
|
(v)
|
|
|
|
(vi) = (iii)–(iv)–(v)
|
||||||||||||
|
Gross Amount
Recognized
|
|
Gross Amount
Offset
|
|
Net Amount
Presented
|
|
Gross Amounts
Not Offset
|
|
|
|
|
||||||||||||||
|
|
|
|
Derivatives
|
|
Financial
Collateral
|
|
|
|
Net Amount
|
|||||||||||||||
|
In millions
|
||||||||||||||||||||||||
As of October 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Derivative assets
|
$
|
392
|
|
|
$
|
—
|
|
|
$
|
392
|
|
|
$
|
113
|
|
|
$
|
259
|
|
|
(1)
|
|
$
|
20
|
|
Derivative liabilities
|
$
|
166
|
|
|
$
|
—
|
|
|
$
|
166
|
|
|
$
|
113
|
|
|
$
|
43
|
|
|
(2)
|
|
$
|
10
|
|
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 (Loss) Recognized in Income on Derivative Instruments and Related Hedged Items
|
||||||||||||||||||||||||||||
Derivative Instrument
|
|
Location
|
|
2019
|
|
2018
|
|
2017
|
|
Hedged Item
|
|
Location
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||
|
|
|
|
In millions
|
|
|
|
|
|
In millions
|
||||||||||||||||||||
Interest rate contracts
|
|
Interest and other, net
|
|
$
|
27
|
|
|
$
|
(11
|
)
|
|
$
|
(60
|
)
|
|
Fixed-rate debt
|
|
Interest and other, net
|
|
$
|
(27
|
)
|
|
$
|
11
|
|
|
$
|
60
|
|
Gain (Loss) Recognized in OCI
on Derivatives (Effective Portion) |
Gain (Loss) Reclassified from Accumulated OCI
Into Earnings (Effective Portion) |
||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||
|
In millions
|
|
|
|
In millions
|
||||||||||||||||||||
Cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency contracts
|
$
|
252
|
|
|
$
|
341
|
|
|
$
|
(651
|
)
|
|
Net revenue
|
|
$
|
425
|
|
|
$
|
(239
|
)
|
|
$
|
(156
|
)
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
(43
|
)
|
|
(18
|
)
|
|
(35
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
Other operating expenses
|
|
(2
|
)
|
|
(1
|
)
|
|
1
|
|
||||||
|
|
|
|
|
|
|
|
|
|
Interest and other, net
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
||||||
Total
|
$
|
252
|
|
|
$
|
341
|
|
|
$
|
(651
|
)
|
|
Total
|
|
$
|
380
|
|
|
$
|
(258
|
)
|
|
$
|
(199
|
)
|
|
(Loss) Gain Recognized in Income on Derivatives
|
||||||||||||
|
Location
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
In millions
|
||||||||||
Foreign currency contracts
|
Interest and other, net
|
|
$
|
(119
|
)
|
|
$
|
35
|
|
|
$
|
(32
|
)
|
Other derivatives
|
Interest and other, net
|
|
14
|
|
|
(9
|
)
|
|
3
|
|
|||
Total
|
|
|
$
|
(105
|
)
|
|
$
|
26
|
|
|
$
|
(29
|
)
|
|
As of October 31
|
||||||||||||
|
2019
|
|
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
|
307
|
|
|
3.6
|
%
|
|
565
|
|
|
3.1
|
%
|
||
Notes payable to banks, lines of credit and other
|
50
|
|
|
2.0
|
%
|
|
44
|
|
|
1.7
|
%
|
||
|
$
|
357
|
|
|
|
|
|
$
|
1,463
|
|
|
|
|
|
As of October 31
|
||||||
|
2019
|
|
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%-8.43%, due in calendar years 2019-2029
|
853
|
|
|
487
|
|
||
Fair value adjustment related to hedged debt
|
4
|
|
|
(28
|
)
|
||
Unamortized debt issuance cost
|
(16
|
)
|
|
(17
|
)
|
||
Current portion of long-term debt
|
(307
|
)
|
|
(565
|
)
|
||
Total long-term debt
|
$
|
4,780
|
|
|
$
|
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.
|
Fiscal year
|
In millions
|
||
2020
|
$
|
357
|
|
2021
|
251
|
|
|
2022
|
2,015
|
|
|
2023
|
1,273
|
|
|
2024
|
42
|
|
|
Thereafter
|
1,213
|
|
|
Total
|
$
|
5,151
|
|
|
For the fiscal years ended
October 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions
|
||||||||||
Tax effect on change in unrealized components of available-for-sale debt securities:
|
|
|
|
|
|
|
|
|
|||
Tax (provision) benefit on unrealized gains (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
|
(37
|
)
|
|
(42
|
)
|
|
42
|
|
|||
Tax provision (benefit) on (gains) losses reclassified into earnings
|
46
|
|
|
(26
|
)
|
|
(16
|
)
|
|||
|
9
|
|
|
(68
|
)
|
|
26
|
|
|||
Tax effect on change in unrealized components of defined benefit plans:
|
|
|
|
|
|
|
|
||||
Tax benefit (provision) on (losses) gains arising during the period
|
64
|
|
|
—
|
|
|
(140
|
)
|
|||
Tax provision on amortization of actuarial loss and prior service benefit
|
(11
|
)
|
|
(11
|
)
|
|
(21
|
)
|
|||
Tax (provision) benefit on curtailments, settlements and other
|
(104
|
)
|
|
(2
|
)
|
|
72
|
|
|||
|
(51
|
)
|
|
(13
|
)
|
|
(89
|
)
|
|||
Tax effect on change in cumulative translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|||
Tax (provision) benefit on other comprehensive (loss) income
|
$
|
(42
|
)
|
|
$
|
(80
|
)
|
|
$
|
(64
|
)
|
|
For the fiscal years ended
October 31 |
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions
|
||||||||||
Other comprehensive (loss) income, net of taxes:
|
|
|
|
|
|
|
|
|
|||
Change in unrealized components of available-for-sale debt securities:
|
|
|
|
|
|
|
|
|
|||
Unrealized gains (losses) arising during the period
|
$
|
1
|
|
|
$
|
(2
|
)
|
|
$
|
3
|
|
Losses (gains) reclassified into earnings
|
3
|
|
|
(5
|
)
|
|
—
|
|
|||
|
4
|
|
|
(7
|
)
|
|
3
|
|
|||
Change in unrealized components of cash flow hedges:
|
|
|
|
|
|
|
|
|
|||
Unrealized gains (losses) arising during the period
|
215
|
|
|
299
|
|
|
(609
|
)
|
|||
(Gains) losses reclassified into earnings
|
(334
|
)
|
|
232
|
|
|
183
|
|
|||
|
(119
|
)
|
|
531
|
|
|
(426
|
)
|
|||
Change in unrealized components of defined benefit plans:
|
|
|
|
|
|
|
|
|
|||
(Losses) gains arising during the period
|
(239
|
)
|
|
11
|
|
|
315
|
|
|||
Amortization of actuarial loss and prior service benefit(1)
|
32
|
|
|
37
|
|
|
53
|
|
|||
Curtailments, settlements and other
|
(62
|
)
|
|
1
|
|
|
75
|
|
|||
|
(269
|
)
|
|
49
|
|
|
443
|
|
|||
Change in cumulative translation adjustment:
|
4
|
|
|
—
|
|
|
—
|
|
|||
Other comprehensive (loss) income, net of taxes
|
$
|
(380
|
)
|
|
$
|
573
|
|
|
$
|
20
|
|
(1)
|
These components are included in the computation of net pension and post-retirement benefit (credit) charges in Note 4,
|
|
Net unrealized
gains on available-for-sale 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 (loss) income before reclassifications
|
1
|
|
|
215
|
|
|
(239
|
)
|
|
4
|
|
|
(19
|
)
|
|||||
Reclassifications of losses (gains) into earnings
|
3
|
|
|
(334
|
)
|
|
32
|
|
|
—
|
|
|
(299
|
)
|
|||||
Reclassifications of curtailments, settlements and other into earnings
|
—
|
|
|
—
|
|
|
(62
|
)
|
|
—
|
|
|
(62
|
)
|
|||||
Balance at end of period
|
$
|
9
|
|
|
$
|
172
|
|
|
$
|
(1,410
|
)
|
|
$
|
4
|
|
|
$
|
(1,225
|
)
|
|
For the fiscal years ended
October 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions, except per share amounts
|
||||||||||
Numerator:
|
|
|
|
|
|
|
|
|
|||
Net earnings
|
$
|
3,152
|
|
|
$
|
5,327
|
|
|
$
|
2,526
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|||
Weighted-average shares used to compute basic net EPS
|
1,515
|
|
|
1,615
|
|
|
1,688
|
|
|||
Dilutive effect of employee stock plans
|
9
|
|
|
19
|
|
|
14
|
|
|||
Weighted-average shares used to compute diluted net EPS
|
1,524
|
|
|
1,634
|
|
|
1,702
|
|
|||
Net earnings per share:
|
|
|
|
|
|
|
|
|
|||
Basic
|
$
|
2.08
|
|
|
$
|
3.30
|
|
|
$
|
1.50
|
|
Diluted
|
$
|
2.07
|
|
|
$
|
3.26
|
|
|
$
|
1.48
|
|
Anti-dilutive weighted-average stock-based compensation awards(1)
|
7
|
|
|
—
|
|
|
1
|
|
(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.
|
|
For the fiscal years ended October 31
|
||||||
|
2019
|
|
2018
|
||||
|
In millions
|
||||||
Balance at beginning of year
|
$
|
915
|
|
|
$
|
898
|
|
Accruals for warranties issued
|
1,051
|
|
|
1,042
|
|
||
Adjustments related to pre-existing warranties (including changes in estimates)
|
(3
|
)
|
|
(15
|
)
|
||
Settlements made (in cash or in kind)
|
(1,041
|
)
|
|
(1,010
|
)
|
||
Balance at end of year
|
$
|
922
|
|
|
$
|
915
|
|
Fiscal year
|
In millions
|
||
2020
|
$
|
310
|
|
2021
|
242
|
|
|
2022
|
192
|
|
|
2023
|
162
|
|
|
2024
|
126
|
|
|
Thereafter
|
438
|
|
|
Less: Sublease rental income
|
(130
|
)
|
|
Total
|
$
|
1,340
|
|
Fiscal year
|
In millions
|
||
2020
|
$
|
176
|
|
2021
|
111
|
|
|
2022
|
67
|
|
|
2023
|
18
|
|
|
2024
|
—
|
|
|
Thereafter
|
—
|
|
|
Total
|
$
|
372
|
|
|
In millions
|
||
Goodwill
|
$
|
382
|
|
Amortizable intangible assets
|
292
|
|
|
Net liabilities assumed
|
(196
|
)
|
|
Total fair value of consideration
|
$
|
478
|
|
|
In millions
|
||
Goodwill
|
$
|
339
|
|
Amortizable intangible assets
|
521
|
|
|
Net assets assumed
|
191
|
|
|
Total fair value of consideration
|
$
|
1,051
|
|
|
For the three-month fiscal periods
ended in fiscal year 2019 |
||||||||||||||
|
January 31
|
|
April 30
|
|
July 31
|
|
October 31
|
||||||||
Net revenue
|
$
|
14,710
|
|
|
$
|
14,036
|
|
|
$
|
14,603
|
|
|
$
|
15,407
|
|
Cost of revenue
|
12,098
|
|
|
11,307
|
|
|
11,698
|
|
|
12,483
|
|
||||
Earnings from operations
|
926
|
|
|
928
|
|
|
1,079
|
|
|
944
|
|
||||
Net earnings
|
$
|
803
|
|
|
$
|
782
|
|
|
$
|
1,179
|
|
|
$
|
388
|
|
Net earnings per share:(1)
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.52
|
|
|
$
|
0.51
|
|
|
$
|
0.79
|
|
|
$
|
0.26
|
|
Diluted
|
$
|
0.51
|
|
|
$
|
0.51
|
|
|
$
|
0.78
|
|
|
$
|
0.26
|
|
|
|
|
|
|
|
|
|
||||||||
Cash dividends paid per share
|
$
|
0.16
|
|
|
$
|
0.16
|
|
|
$
|
0.16
|
|
|
$
|
0.16
|
|
|
For the three-month fiscal periods
ended in fiscal year 2018
|
||||||||||||||
|
January 31
|
|
April 30
|
|
July 31
|
|
October 31
|
||||||||
Net revenue
|
$
|
14,517
|
|
|
$
|
14,003
|
|
|
$
|
14,586
|
|
|
$
|
15,366
|
|
Cost of revenue
|
11,935
|
|
|
11,301
|
|
|
11,898
|
|
|
12,669
|
|
||||
Earnings from operations
|
913
|
|
|
906
|
|
|
1,018
|
|
|
994
|
|
||||
Net earnings
|
$
|
1,938
|
|
|
$
|
1,058
|
|
|
$
|
880
|
|
|
$
|
1,451
|
|
Net earnings per share:(1)
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.17
|
|
|
$
|
0.65
|
|
|
$
|
0.55
|
|
|
$
|
0.92
|
|
Diluted
|
$
|
1.16
|
|
|
$
|
0.64
|
|
|
$
|
0.54
|
|
|
$
|
0.91
|
|
|
|
|
|
|
|
|
|
||||||||
Cash dividends paid per share
|
$
|
0.14
|
|
|
$
|
0.14
|
|
|
$
|
0.14
|
|
|
$
|
0.14
|
|
(1)
|
Net EPS for each quarter is computed using the weighted-average number of shares outstanding during that quarter, while EPS for the fiscal year is computed using the weighted-average number of shares outstanding during the year. Hence, the sum of the EPS for each of the four quarters may not equal the EPS for the fiscal year.
|
•
|
Information regarding directors of HP who are standing for reelection and any persons nominated to become directors of HP is set forth under “Corporate Governance—Management Proposal No. 1 Election of Directors.”
|
•
|
Information regarding HP’s Audit Committee and designated “audit committee financial experts” is set forth under “Corporate Governance—Management Proposal No. 1 Election of Directors—Audit Committee.”
|
•
|
Information on HP’s code of business conduct and ethics for directors, officers and employees, also known as “Integrity at HP”, is set forth under “Corporate Governance—Management Proposal No. 1 Election of Directors—Code of Conduct” and information on HP’s Corporate Governance Guidelines is set forth under “—Director Nominees and Director Nominees’ Experience and Qualifications” and “—Director Independence.”
|
•
|
Information regarding HP’s compensation of its named executive officers is set forth under “Executive Compensation.”
|
•
|
Information regarding HP’s compensation of its directors is set forth under “Corporate Governance—Management Proposal No. 1 Election of Directors—Director Compensation and Stock Ownership Guidelines.”
|
•
|
The report of HP’s HR and Compensation Committee is set forth under “Executive Compensation—Management Proposal No. 3 Advisory Vote to Approve Executive Compensation—HR and Compensation Committee Report on Executive Compensation.”
|
•
|
Information regarding security ownership of certain beneficial owners, directors and executive officers is set forth under “Ownership of Our Stock—Common Stock Ownership of Certain Beneficial Owners and Management.”
|
•
|
Information regarding HP’s equity compensation plans, including both stockholder approved plans and non-stockholder approved plans, is set forth in the section entitled “Executive Compensation—Management Proposal No. 3 Advisory Vote to Approve Executive Compensation—Equity Compensation Plan Information.”
|
•
|
Information regarding transactions with related persons is set forth under “Corporate Governance—Management Proposal No. 1 Election of Directors—Fiscal 2019 Related-Person Transactions.”
|
•
|
Information regarding director independence is set forth under “Corporate Governance—Management Proposal No. 1 Election of Directors—Director Independence.”
|
(a)
|
The following documents are filed as part of this report:
|
|
|
2.
|
Financial Statement Schedules:
|
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
|
|
2.2
|
|
November 5, 2015
|
|
2(d)
|
|
|
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
|
|
4(h)
|
|
|
8-K/A
|
|
001-04423
|
|
4.1
|
|
June 23, 2006
|
|
4(i)
|
|
|
10-Q
|
|
001-04423
|
|
4(j)
|
|
June 5, 2018
|
|
4(j)
|
|
|
|
|
|
|
|
|
|
Exhibit
Number
|
|
|
|
Incorporated by Reference
|
||||||
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit(s)
|
|
Filing Date
|
||
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
|
|
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
|
Exhibit
Number
|
|
|
|
Incorporated by Reference
|
||||||
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit(s)
|
|
Filing Date
|
||
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
|
|
10(z)
|
|
|
10-Q
|
|
001-04423
|
|
10(b)(b)(b)
|
|
March 11, 2014
|
|
10(a)(a)
|
|
|
10-K
|
|
001-04423
|
|
10(c)(c)(c)
|
|
March 11, 2015
|
|
10(b)(b)
|
|
|
10-K
|
|
001-04423
|
|
10(d)(d)(d)
|
|
March 11, 2015
|
|
10(c)(c)
|
|
|
10-K
|
|
001-04423
|
|
10(e)(e)(e)
|
|
March 11, 2015
|
|
10(d)(d)
|
|
|
8-K
|
|
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
|
|
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
|
Exhibit
Number
|
|
|
|
Incorporated by Reference
|
||||||
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit(s)
|
|
Filing Date
|
|
10(o)(o)
|
|
|
10-K/A
|
|
001-04423
|
|
10(n)(n)
|
|
December 15, 2017
|
|
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
|
Exhibit
Number
|
|
|
|
Incorporated by Reference
|
|||||||
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit(s)
|
|
Filing Date
|
||
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)
|
|
|
|
10-Q
|
|
001-04423
|
|
10.(l)(l)(l)
|
|
August 29, 2019
|
|
10(m)(m)(m)
|
|
|
|
|
|
|
|
|
|
|
|
10(n)(n)(n)
|
|
|
|
|
|
|
|
|
|
|
|
21
|
|
|
|
|
|
|
|
|
|
|
|
23
|
|
|
|
|
|
|
|
|
|
|
|
24
|
|
|
Power of Attorney (included on the signature page).
|
|
|
|
|
|
|
|
|
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
|
|
|
Inline XBRL Taxonomy Extension Schema Document.†
|
|
|
|
|
|
|
|
|
101.CAL
|
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document.†
|
|
|
|
|
|
|
|
|
101.DEF
|
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document.†
|
|
|
|
|
|
|
|
|
101.LAB
|
|
|
Inline XBRL Taxonomy Extension Label Linkbase Document.†
|
|
|
|
|
|
|
|
|
101.PRE
|
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document.†
|
|
|
|
|
|
|
|
|
104
|
|
|
The cover page from the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2019, formatted in Inline XBRL (included within the Exhibit 101 attachments).
|
|
|
|
|
|
|
|
|
Date: December 12, 2019
|
HP INC.
|
|
|
By:
|
/s/ STEVE FIELER
|
|
|
Steve Fieler
Chief Financial Officer
|
Signature
|
|
Title(s)
|
|
Date
|
/s/ ENRIQUE LORES
|
|
President and Chief Executive Officer and Director
(Principal Executive Officer)
|
|
December 12, 2019
|
Enrique Lores
|
|
|
|
|
|
|
|
|
|
/s/ STEVE FIELER
|
|
Chief Financial Officer
(Principal Financial Officer)
|
|
December 12, 2019
|
Steve Fieler
|
|
|
|
|
|
|
|
|
|
/s/ CLAIRE BRAMLEY
|
|
Global Controller
(Principal Accounting Officer)
|
|
December 12, 2019
|
Claire Bramley
|
|
|
|
|
|
|
|
|
|
/s/ AIDA ALVAREZ
|
|
Director
|
|
December 12, 2019
|
Aida Alvarez
|
|
|
|
|
|
|
|
|
|
/s/ SHUMEET BANERJI
|
|
Director
|
|
December 12, 2019
|
Shumeet Banerji
|
|
|
|
|
|
|
|
|
|
/s/ ROBERT R. BENNETT
|
|
Director
|
|
December 12, 2019
|
Robert R. Bennett
|
|
|
|
|
|
|
|
|
|
/s/ CHARLES V. BERGH
|
|
Director
|
|
December 12, 2019
|
Charles V. Bergh
|
|
|
|
|
|
|
|
|
|
/s/ STACY BROWN-PHILPOT
|
|
Director
|
|
December 12, 2019
|
Stacy Brown-Philpot
|
|
|
|
|
|
|
|
|
|
/s/ STEPHANIE BURNS
|
|
Director
|
|
December 12, 2019
|
Stephanie Burns
|
|
|
|
|
|
|
|
|
|
/s/ MARY ANNE CITRINO
|
|
Director
|
|
December 12, 2019
|
Mary Anne Citrino
|
|
|
|
|
|
|
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/s/ YOKY MATSUOKA
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Director
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December 12, 2019
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Yoky Matsuoka
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/s/ STACEY MOBLEY
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Director
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December 12, 2019
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Stacey Mobley
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/s/ SUBRA SURESH
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Director
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December 12, 2019
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Subra Suresh
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/s/ DION WEISLER
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Director
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December 12, 2019
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Dion Weisler
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•
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the number of shares in that series;
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•
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the dividend rate and whether dividends on that series of preferred stock will be cumulative, non-cumulative or partially cumulative;
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•
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the voting rights, if any;
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•
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conversion privileges, if any;
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•
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whether that series will be redeemable;
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•
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whether that series will have a sinking fund for the redemption or purchase of shares of that series;
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•
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the liquidation preference per share of that series, if any; and
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•
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any other relative rights, preferences and limitations.
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•
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by persons who are directors and also officers; and
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•
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by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or
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(1)
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any merger or consolidation involving (i) the corporation or a direct or indirect majority-owned subsidiary of the corporation and (ii) the interested stockholder or any other corporation, partnership or entity if the merger or consolidation is caused by the interested stockholder and as a result of such merger or consolidation any of (a), (b) or (c) above is not applicable to the surviving entity;
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(2)
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any sale, lease, exchange, mortgage, transfer, pledge or other disposition of 10% or more of the assets or outstanding stock of the corporation or any direct or indirect majority-owned subsidiary of the corporation to or with the interested stockholder;
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(3)
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subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation or any direct or indirect majority-owned subsidiary of the corporation of any stock of the corporation or such subsidiary to the interested stockholder;
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(4)
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any transaction involving the corporation or any direct or indirect majority-owned subsidiary of the corporation that has the effect of increasing the proportionate share of the stock of any class or series, or securities convertible into the stock of any class or series, of the corporation or any such subsidiary which is beneficially owned by the interested stockholder; or
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(5)
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the receipt by the interested stockholder of the benefit, directly or indirectly, of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation or any direct or indirect majority-owned subsidiary of the corporation.
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Name:
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Fld_NAME_AC
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Employee ID:
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Fld_EMPLID
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Grant Date:
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expGRANT_DATE
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Grant ID:
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Fld_GRANT_NBR
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Grant Price:
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$ fld_NAME1_AC
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Amount:
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0
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Plan:
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Fld_DESCR
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Vesting Schedule:
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Fld_HTMLAREA1
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1.
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Grant of Stock Options.
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2.
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Grant Price.
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3.
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Restrictions on Transfer.
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4.
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Vesting Schedule.
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5.
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Expiration Date.
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6.
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Method of Exercise.
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7.
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Termination of Employment.
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8.
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Death of Employee.
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9.
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Disability or Retirement of the Employee.
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10.
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Termination for Cause.
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11.
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Taxes.
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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 Stock Options, including, but not limited to, the grant, vesting, exercise or settlement of the Stock Options, the subsequent issuance of Shares and/or cash upon settlement of such Stock Options or the subsequent sale of any Shares acquired pursuant to such Stock Options and receipt of any dividends; and (ii) do not commit to and are under no obligation to structure the terms or any aspect of this grant of Stock Options 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 (or former employer, as applicable) 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 exercised Stock Options, 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, vesting or exercise of Stock Options or subsequent sale of the Shares acquired on exercise, or at any other time, that cannot be satisfied by the means previously described. The Company may refuse to deliver the benefit described herein if the Employee fails to comply with the Employee’s obligations in connection with the Tax-Related Items.
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(e)
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In accepting the Stock Option, the Employee consents and agrees that in the event the Stock Option becomes 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 Stock Option. Further, by accepting the Stock Option, the Employee agrees that the Company and/or the Employer may collect any such taxes from the Employee by any of the means set forth in this Section 11. The Employee further agrees to execute any other consents or elections required to accomplish the above promptly upon request of the Company.
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12.
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Acknowledgement and Waiver.
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(a)
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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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(b)
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the grant of Stock Options is voluntary and occasional and does not create any contractual or other right to receive future grants of Stock Options, or benefits in lieu of Stock Options, even if Stock Options have been granted repeatedly in the past;
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(c)
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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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(d)
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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, insofar as permitted by Applicable Law;
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(e)
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the Employee is participating voluntarily in the Plan;
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(f)
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Stock Options and their resulting benefits are not intended to replace any pension rights or compensation;
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(g)
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Stock Options 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, long-service awards, pension or retirement or welfare benefits or similar payments insofar as permitted by Applicable Law and in no event should be considered as compensation for, or relating in any way to, past services for the Company, the Employer or any Subsidiary or Affiliate;
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(h)
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unless otherwise agreed with the Company, the Stock Options and the Shares subject to the Stock Options, and the income and value of same, are not granted as consideration for, or in connection with, the service the Employee may provide as a director of any Subsidiary or Affiliate;
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(i)
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this grant of Stock Options will not be interpreted to form an employment contract or relationship with the Company, and furthermore, this Stock Option will not be interpreted to form an employment contract with the Employer or any Subsidiary or Affiliate;
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(j)
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the future value of the underlying Shares is unknown, indeterminable and cannot be predicted with certainty;
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(k)
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no claim or entitlement to compensation or damages shall arise from forfeiture of the Stock Options resulting from termination of Employee’s employment by the Company or the Employer (for any reason whatsoever and whether or not in breach of local labor laws), and in consideration of the grant of the Stock Options to which the Employee is otherwise not entitled, the Employee irrevocably agrees never to institute any claim against the Company or the Employer and releases the Company and the Employer 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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(l)
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notwithstanding any terms or conditions of the Plan to the contrary, in the event of termination of the Employee’s employment (whether or not in breach of local labor laws), the Employee’s right to exercise or otherwise to receive benefits under this Grant Agreement after termination of employment, if any, will be measured by the date of termination of Employee’s active employment and will not be extended by any notice period mandated under local law (e.g., active employment would not include a period of “garden leave” or similar period pursuant to local law); the Committee shall have the exclusive discretion to determine when the Employee is no longer actively employed for purposes of the Stock Options;
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(m)
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neither the Company, the Employer, nor any Subsidiary or Affiliate will 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 Stock Options or any amounts due to the Employee pursuant to the settlement of the Stock Options or the subsequent sale of any Shares acquired upon settlement; and
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(n)
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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 and to the extent permitted under Applicable Law, (a) recover from the Employee the proceeds from Stock Options exercised up to three years prior to the Employee’s termination of employment or any time thereafter, (b) cancel the Employee’s outstanding Stock Options whether or not vested, and (c) take any other action required or permitted by Applicable Law.
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13.
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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 restricted stock units, Stock 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 Stock Units 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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14.
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No Advice Regarding Grant.
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15.
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Plan Information.
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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 Plan is incorporated herein by reference. The Plan and this Grant Agreement, including the Appendix, 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 or extended post-termination exercise periods, and may not be modified adversely to the Employee's interest except by means of a writing signed by the Company and the Employee. Notwithstanding the foregoing, nothing in the Plan or this Grant Agreement shall affect the validity or interpretation of any duly authorized written agreement between the Company and the Employee under which an award properly granted under and pursuant to the Plan serves as any part of the consideration furnished to the Employee. 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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(b)
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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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(c)
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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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(d)
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Notwithstanding Section 17(c), 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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(e)
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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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(f)
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Notwithstanding any provisions in this Grant Agreement, the grant of the Stock Options shall be subject to any special terms and conditions set forth in the Appendix to this Grant Agreement for the Employee’s country. 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 in order to comply with local law or facilitate the administration of the Plan. The Appendix constitutes part of this Grant Agreement.
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(g)
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The Company reserves the right to impose other requirements on the Employee’s participation in the Plan, on the Stock Options and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable in order to comply with local law or facilitate the administration of the Plan, and to require the Employee to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.
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(h)
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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 employee participating in the Plan.
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(i)
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The Company shall not be required to treat as owner of Stock Options, or to provide any associated benefits hereunder, any transferee to whom such Stock Options or benefits shall have been transferred in violation of any of the provisions of this Grant Agreement.
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(j)
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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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(k)
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All rights granted and/or Shares issued under this Grant Agreement are subject to claw back under the Company policy as in effect from time to time.
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(l)
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Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon delivery to the Employee at his address then on file with the Company.
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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 Stock Options;
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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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Name:
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Fld_NAME_AC
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Employee ID:
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Fld_EMPLID
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Grant Date:
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expGRANT_DATE
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Grant ID:
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Fld_GRANT_NBR
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Grant Price:
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$ fld_NAME1_AC
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Amount:
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0
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|
|
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Plan:
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Fld_DESCR
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Vesting Schedule:
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Fld_HTMLAREA1
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1.
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Grant of Stock Options.
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2.
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Grant Price.
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3.
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Restrictions on Transfer.
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4.
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Vesting Schedule.
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5.
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Expiration Date.
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6.
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Method of Exercise.
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7.
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Termination of Employment.
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8.
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Death of Employee.
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9.
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Disability of the Employee.
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10.
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Termination for Cause.
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11.
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Taxes.
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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 Stock Options, including, but not limited to, the grant, vesting, exercise or settlement of the Stock Options, the subsequent issuance of Shares and/or cash upon settlement of such Stock Options or the subsequent sale of any Shares acquired pursuant to such Stock Options and receipt of any dividends; and (ii) do not commit to and are under no obligation to structure the terms or any aspect of this grant of Stock Options 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 (or former employer, as applicable) 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 exercised Stock Options, 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, vesting or exercise of Stock Options or subsequent sale of the Shares acquired on exercise, or at any other time, that cannot be satisfied by the means previously described. The Company may refuse to deliver the benefit described herein if the Employee fails to comply with the Employee’s obligations in connection with the Tax-Related Items.
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(e)
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In accepting the Stock Option, the Employee consents and agrees that in the event the Stock Option becomes 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 Stock Option. Further, by accepting the Stock Option, the Employee agrees that the Company and/or the Employer may collect any such taxes from the Employee by any of the means set forth in this Section 11. The Employee further agrees to execute any other consents or elections required to accomplish the above promptly upon request of the Company.
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12.
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Acknowledgement and Waiver.
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(a)
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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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(b)
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the grant of Stock Options is voluntary and occasional and does not create any contractual or other right to receive future grants of Stock Options, or benefits in lieu of Stock Options, even if Stock Options have been granted repeatedly in the past;
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(c)
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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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(d)
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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, insofar as permitted by Applicable Law;
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(e)
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the Employee is participating voluntarily in the Plan;
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(f)
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Stock Options and their resulting benefits are not intended to replace any pension rights or compensation;
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(g)
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Stock Options 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, long-service awards, pension or retirement or welfare benefits or similar payments insofar as permitted by Applicable Law and in no event should be considered as compensation for, or relating in any way to, past services for the Company, the Employer or any Subsidiary or Affiliate;
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(h)
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unless otherwise agreed with the Company, the Stock Options and the Shares subject to the Stock Options, and the income and value of same, are not granted as consideration for, or in connection with, the service the Employee may provide as a director of any Subsidiary or Affiliate;
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(i)
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this grant of Stock Options will not be interpreted to form an employment contract or relationship with the Company, and furthermore, this Stock Option will not be interpreted to form an employment contract with the Employer or any Subsidiary or Affiliate;
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(j)
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the future value of the underlying Shares is unknown, indeterminable and cannot be predicted with certainty;
|
(k)
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no claim or entitlement to compensation or damages shall arise from forfeiture of the Stock Options resulting from termination of Employee’s employment by the Company or the Employer (for any reason whatsoever and whether or not in breach of local labor laws), and in consideration of the grant of the Stock Options to which the Employee is otherwise not entitled, the Employee irrevocably agrees never to institute any claim against the Company or the Employer and releases the Company and the Employer 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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(l)
|
notwithstanding any terms or conditions of the Plan to the contrary, in the event of termination of the Employee’s employment (whether or not in breach of local labor laws), the Employee’s right to exercise or otherwise to receive benefits under this Grant Agreement after termination of employment, if any, will be measured by the date of termination of Employee’s active employment and will not be extended by any notice period mandated under local law (e.g., active employment would not include a period of “garden leave” or similar period pursuant to local law); the Committee shall have the exclusive discretion to determine when the Employee is no longer actively employed for purposes of the Stock Options;
|
(m)
|
neither the Company, the Employer, nor any Subsidiary or Affiliate will 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 Stock Options or any amounts due to the Employee pursuant to the settlement of the Stock Options or the subsequent sale of any Shares acquired upon settlement; and
|
(n)
|
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 and to the extent permitted under Applicable Law, (a) recover from the Employee the proceeds from Stock Options exercised up to three years prior to the Employee’s termination of employment or any time thereafter, (b) cancel the Employee’s outstanding Stock Options whether or not vested, and (c) take any other action required or permitted by Applicable Law.
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13.
|
Data Privacy Consent.
|
(a)
|
The Employee hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of the Employee’s personal data as described in this Grant Agreement and any other materials by and among, as applicable, the Company, its Subsidiaries or Affiliates, and the Employer for the exclusive purpose of implementing, administering and managing the Employee’s participation in the Plan.
|
(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 restricted stock units, Stock Options or any other entitlement to shares of stock granted, canceled, purchased, exercised, vested, unvested or outstanding in the Employee’s favor (“Data”) for the exclusive purpose of implementing, managing and administering the Plan.
|
(c)
|
The Employee understands that Data 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.
|
(d)
|
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 Stock Units 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.
|
(e)
|
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
|
14.
|
No Advice Regarding Grant.
|
15.
|
Plan Information.
|
16.
|
Additional Eligibility Requirements Permitted.
|
17.
|
Miscellaneous.
|
(a)
|
The Plan is incorporated herein by reference. The Plan and this Grant Agreement, including the Appendix, 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 or extended post-termination exercise periods, and may not be modified adversely to the Employee's interest except by means of a writing signed by the Company and the Employee. Notwithstanding the foregoing, nothing in the Plan or this Grant Agreement shall affect the validity or interpretation of any duly authorized written agreement between the Company and the Employee under which an award properly granted under and pursuant to the Plan serves as any part of the consideration furnished to the Employee. This Grant Agreement is governed by the laws of the state of Delaware without regard to its conflict of law provisions.
|
(b)
|
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.
|
(c)
|
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.
|
(d)
|
Notwithstanding Section 17(c), 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.
|
(e)
|
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 responsibility to comply with any applicable restrictions and that the Employee should to consult his or her personal advisor on this matter.
|
(f)
|
Notwithstanding any provisions in this Grant Agreement, the grant of the Stock Options shall be subject to any special terms and conditions set forth in the Appendix to this Grant Agreement for the Employee’s country. 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 in order to comply with local law or facilitate the administration of the Plan. The Appendix constitutes part of this Grant Agreement.
|
(g)
|
The Company reserves the right to impose other requirements on the Employee’s participation in the Plan, on the Stock Options and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable in order to comply with local law or facilitate the administration of the Plan, and to require the Employee to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.
|
(h)
|
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 employee participating in the Plan.
|
(i)
|
The Company shall not be required to treat as owner of Stock Options, or to provide any associated benefits hereunder, any transferee to whom such Stock Options or benefits shall have been transferred in violation of any of the provisions of this Grant Agreement.
|
(j)
|
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.
|
(k)
|
All rights granted and/or Shares issued under this Grant Agreement are subject to claw back under the Company policy as in effect from time to time.
|
(l)
|
Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon delivery to the Employee at his address then on file with the Company.
|
i.
|
the Grant Agreement, including this Appendix, which sets forth the terms and conditions of the grant of Stock Options;
|
ii.
|
a copy of the Plan and its accompanying prospectus; and
|
iii.
|
a copy of the Company’s most recent annual report and most recent financial statements.
|
(1)
|
Registration Statement (Form S-8 No. 333-124281) pertaining to the Executive Deferred Compensation Plan,
|
(2)
|
Registration Statement (Form S-8 No. 333-114253) pertaining to the 2004 Stock Incentive Plan,
|
(3)
|
Registration Statement (Form S-8 No. 333-35836) pertaining to the 2000 Stock Plan,
|
(4)
|
Registration Statement (Form S-8 No. 333-124282) pertaining to the 2005 Executive Deferred Compensation Plan,
|
(5)
|
Registration Statement (Form S-8 No. 002-92331) pertaining to the Hewlett-Packard Company 401(k) Plan,
|
(6)
|
Registration Statement (Form S-8 No. 033-31496) pertaining to the Employee Stock Purchase Plan and Service Anniversary Stock Plan,
|
(7)
|
Registration Statement (Form S-8 No. 333-142175) pertaining to the PolyServe, Inc. 2000 Stock Plan,
|
(8)
|
Registration Statement (Form S-8 No. 333-153302) pertaining to the Amended and Restated 2003 Incentive Plan of Electronic Data Systems Corporation and the 1997 Nonqualified Stock Option Plan of Electronic Data Systems Corporation,
|
(9)
|
Registration Statement (Form S-8 No. 333-166270) pertaining to the Amended and Restated Hewlett-Packard Company 2004 Stock Incentive Plan,
|
(10)
|
Registration Statement (Form S-8 No. 333-168101) pertaining to the Palm, Inc. 2009 Stock Plan, as amended, and the Amended and Restated Palm, Inc. 1999 Stock Plan,
|
(11)
|
Registration Statement (Form S-8 No. 333-169854) pertaining to the Amended and Restated 3PAR Inc. 2007 Equity Incentive Plan, the 3PARDATA, Inc. 2000 Management Stock Option Plan, as amended, and the 3PARDATA, Inc. 1999 Stock Plan, as amended,
|
(12)
|
Registration Statement (Form S-8 No. 333-173784) pertaining to the Hewlett-Packard Company 2011 Employee Stock Purchase Plan,
|
(13)
|
Registration Statement (Form S-8 No. 333-188108) pertaining to the Second Amended and Restated Hewlett-Packard Company 2004 Stock Incentive Plan, and
|
(14)
|
Registration Statement (Form S-3ASR No. 333-215116) pertaining to an unspecified amount of debt securities, common stock, preferred stock, depositary shares and warrants;
|
1.
|
I have reviewed this Annual Report on Form 10-K of HP Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
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;
|
b)
|
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;
|
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
|
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
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
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
|
b)
|
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.
|
|
/s/ ENRIQUE LORES
|
|
|
Enrique Lores
President and Chief Executive Officer
(Principal Executive Officer)
|
|
1.
|
I have reviewed this Annual Report on Form 10-K of HP Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
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;
|
b)
|
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;
|
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
|
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
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
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
|
b)
|
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.
|
|
/s/ STEVE FIELER
|
|
|
Steve Fieler
Chief Financial Officer
(Principal Financial Officer)
|
|
|
/s/ ENRIQUE LORES
|
|
|
Enrique Lores
President and Chief Executive Officer
(Principal Executive Officer)
|
|
|
/s/ STEVE FIELER
|
|
|
Steve Fieler
Chief Financial Officer
(Principal Financial Officer)
|
|