|
(Mark One)
|
|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the quarterly period ended
|
|
April 30, 2020
|
|
Or
|
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from to
|
|
Commission file number
|
|
1-4423
|
Delaware
|
|
94-1081436
|
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. employer
identification no.)
|
|
1501 Page Mill Road
|
|
94304
|
|
Palo Alto,
|
California
|
|
(Zip code)
|
(Address of principal executive offices)
|
|
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common stock, par value $0.01 per share
|
HPQ
|
New York Stock Exchange
|
Preferred Share Purchase Rights
|
|
New York Stock Exchange
|
|
|
|
Page
|
|
||
|
||
|
||
|
||
|
|
Page
|
|
Three months ended April 30
|
|
Six months ended April 30
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
In millions, except per share amounts
|
||||||||||||||
Net revenue
|
$
|
12,469
|
|
|
$
|
14,036
|
|
|
$
|
27,087
|
|
|
$
|
28,746
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|||||||
Cost of revenue
|
9,976
|
|
|
11,307
|
|
|
21,722
|
|
|
23,405
|
|
||||
Research and development
|
338
|
|
|
353
|
|
|
738
|
|
|
697
|
|
||||
Selling, general and administrative
|
1,216
|
|
|
1,339
|
|
|
2,506
|
|
|
2,587
|
|
||||
Restructuring and other charges
|
81
|
|
|
69
|
|
|
372
|
|
|
124
|
|
||||
Acquisition-related charges
|
3
|
|
|
11
|
|
|
3
|
|
|
21
|
|
||||
Amortization of intangible assets
|
29
|
|
|
29
|
|
|
55
|
|
|
58
|
|
||||
Total costs and expenses
|
11,643
|
|
|
13,108
|
|
|
25,396
|
|
|
26,892
|
|
||||
Earnings from operations
|
826
|
|
|
928
|
|
1,691
|
|
|
1,854
|
|
|||||
Interest and other, net
|
—
|
|
|
(45
|
)
|
|
13
|
|
|
(71
|
)
|
||||
Earnings before taxes
|
826
|
|
|
883
|
|
1,704
|
|
|
1,783
|
|
|||||
Provision for taxes
|
(62
|
)
|
|
(101
|
)
|
|
(262
|
)
|
|
(198
|
)
|
||||
Net earnings
|
$
|
764
|
|
|
$
|
782
|
|
|
$
|
1,442
|
|
|
$
|
1,585
|
|
|
|
|
|
|
|
|
|
||||||||
Net earnings per share:
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
$
|
0.53
|
|
|
$
|
0.51
|
|
|
$
|
1.00
|
|
|
$
|
1.03
|
|
Diluted
|
$
|
0.53
|
|
|
$
|
0.51
|
|
|
$
|
0.99
|
|
|
$
|
1.02
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares used to compute net earnings per share:
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
1,435
|
|
|
1,529
|
|
|
1,444
|
|
|
1,543
|
|
||||
Diluted
|
1,440
|
|
|
1,536
|
|
|
1,450
|
|
|
1,551
|
|
|
Three months ended April 30
|
|
Six months ended April 30
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
In millions
|
||||||||||||||
Net earnings
|
$
|
764
|
|
|
$
|
782
|
|
|
$
|
1,442
|
|
|
$
|
1,585
|
|
Other comprehensive income (loss) before taxes:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Change in unrealized components of available-for-sale debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unrealized losses arising during the period
|
(2
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||
Losses reclassified into earnings
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||
|
(2
|
)
|
|
3
|
|
|
(1
|
)
|
|
3
|
|
||||
Change in unrealized components of cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unrealized gains arising during the period
|
231
|
|
|
198
|
|
|
291
|
|
|
91
|
|
||||
(Gains) losses reclassified into earnings
|
(53
|
)
|
|
6
|
|
|
(112
|
)
|
|
(173
|
)
|
||||
|
178
|
|
|
204
|
|
|
179
|
|
|
(82
|
)
|
||||
Change in unrealized components of defined benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Losses arising during the period
|
(1
|
)
|
|
(4
|
)
|
|
(1
|
)
|
|
(4
|
)
|
||||
Amortization of actuarial loss and prior service benefit
|
21
|
|
|
12
|
|
|
41
|
|
|
23
|
|
||||
Curtailments, settlements and other
|
1
|
|
|
1
|
|
|
1
|
|
|
(1
|
)
|
||||
|
21
|
|
|
9
|
|
|
41
|
|
|
18
|
|
||||
Change in cumulative translation adjustment
|
(17
|
)
|
|
13
|
|
|
(11
|
)
|
|
8
|
|
||||
Other comprehensive income (loss) before taxes
|
180
|
|
|
229
|
|
|
208
|
|
|
(53
|
)
|
||||
Provision for taxes
|
(22
|
)
|
|
(42
|
)
|
|
(33
|
)
|
|
(2
|
)
|
||||
Other comprehensive income (loss), net of taxes
|
158
|
|
|
187
|
|
|
175
|
|
|
(55
|
)
|
||||
Comprehensive income
|
$
|
922
|
|
|
$
|
969
|
|
|
$
|
1,617
|
|
|
$
|
1,530
|
|
|
Six months ended April 30
|
||||||
|
2020
|
|
2019
|
||||
|
In millions
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||
Net earnings
|
$
|
1,442
|
|
|
$
|
1,585
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
|
|
||
Depreciation and amortization
|
396
|
|
|
349
|
|
||
Stock-based compensation expense
|
172
|
|
|
173
|
|
||
Restructuring and other charges
|
372
|
|
|
124
|
|
||
Deferred taxes on earnings
|
114
|
|
|
118
|
|
||
Other, net
|
153
|
|
|
113
|
|
||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
||
Accounts receivable
|
856
|
|
|
(103
|
)
|
||
Inventory
|
(645
|
)
|
|
362
|
|
||
Accounts payable
|
(518
|
)
|
|
(963
|
)
|
||
Net investment in leases
|
(85
|
)
|
|
—
|
|
||
Taxes on earnings
|
(149
|
)
|
|
—
|
|
||
Restructuring and other
|
(337
|
)
|
|
(79
|
)
|
||
Other assets and liabilities
|
(996
|
)
|
|
44
|
|
||
Net cash provided by operating activities
|
775
|
|
|
1,723
|
|
||
Cash flows from investing activities:
|
|
|
|
|
|
||
Investment in property, plant and equipment
|
(347
|
)
|
|
(303
|
)
|
||
Proceeds from sale of property, plant and equipment
|
3
|
|
|
—
|
|
||
Purchases of available-for-sale securities and other investments
|
(303
|
)
|
|
(69
|
)
|
||
Maturities and sales of available-for-sale securities and other investments
|
303
|
|
|
754
|
|
||
Collateral posted for derivative instruments
|
—
|
|
|
(32
|
)
|
||
Collateral returned for derivative instruments
|
—
|
|
|
32
|
|
||
Payment made in connection with business acquisitions, net of cash acquired
|
(36
|
)
|
|
(404
|
)
|
||
Net cash used in investing activities
|
(380
|
)
|
|
(22
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|
||
Payments of short-term borrowings with original maturities less than 90 days, net
|
613
|
|
|
(856
|
)
|
||
Proceeds from short-term borrowings with original maturities greater than 90 days
|
11
|
|
|
—
|
|
||
Proceeds from debt, net of issuance costs
|
58
|
|
|
64
|
|
||
Payment of debt
|
(126
|
)
|
|
(538
|
)
|
||
Stock-based award activities
|
(112
|
)
|
|
(76
|
)
|
||
Repurchase of common stock
|
(814
|
)
|
|
(1,411
|
)
|
||
Cash dividends paid
|
(508
|
)
|
|
(494
|
)
|
||
Net cash used in financing activities
|
(878
|
)
|
|
(3,311
|
)
|
||
Decrease in cash and cash equivalents
|
(483
|
)
|
|
(1,610
|
)
|
||
Cash and cash equivalents at beginning of period
|
4,537
|
|
|
5,166
|
|
||
Cash and cash equivalents at end of period
|
$
|
4,054
|
|
|
$
|
3,556
|
|
Supplemental schedule of non-cash activities:
|
|
|
|
|
|
||
Purchase of assets under finance leases
|
$
|
19
|
|
|
$
|
165
|
|
|
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 January 31, 2019
|
1,539,372
|
|
|
$
|
15
|
|
|
$
|
666
|
|
|
$
|
(1,431
|
)
|
|
$
|
(1,087
|
)
|
|
$
|
(1,837
|
)
|
Net earnings
|
|
|
|
|
|
|
782
|
|
|
|
|
782
|
|
|||||||||
Other comprehensive income, net of taxes
|
|
|
|
|
|
|
|
|
187
|
|
|
187
|
|
|||||||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
969
|
|
||||||||||
Issuance of common stock in connection with employee stock plans and other
|
765
|
|
|
|
|
5
|
|
|
|
|
|
|
5
|
|
||||||||
Repurchases of common stock
|
(33,845
|
)
|
|
|
|
(14
|
)
|
|
(679
|
)
|
|
|
|
(693
|
)
|
|||||||
Cash dividends
|
|
|
|
|
|
|
3
|
|
|
|
|
3
|
|
|||||||||
Stock-based compensation expense
|
|
|
|
|
66
|
|
|
|
|
|
|
66
|
|
|||||||||
Balance April 30, 2019
|
1,506,292
|
|
|
$
|
15
|
|
|
$
|
723
|
|
|
$
|
(1,325
|
)
|
|
$
|
(900
|
)
|
|
$
|
(1,487
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance January 31, 2020
|
1,433,346
|
|
|
$
|
14
|
|
|
$
|
866
|
|
|
$
|
(1,306
|
)
|
|
$
|
(1,208
|
)
|
|
$
|
(1,634
|
)
|
Net earnings
|
|
|
|
|
|
|
764
|
|
|
|
|
764
|
|
|||||||||
Other comprehensive income, net of taxes
|
|
|
|
|
|
|
|
|
158
|
|
|
158
|
|
|||||||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
922
|
|
||||||||||
Issuance of common stock in connection with employee stock plans and other
|
954
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
||||||||
Repurchases of common stock
|
(4,343
|
)
|
|
|
|
|
(3
|
)
|
|
(94
|
)
|
|
|
|
(97
|
)
|
||||||
Cash dividends
|
|
|
|
|
|
|
3
|
|
|
|
|
3
|
|
|||||||||
Stock-based compensation expense
|
|
|
|
|
63
|
|
|
|
|
|
|
63
|
|
|||||||||
Balance April 30, 2020
|
1,429,957
|
|
|
$
|
14
|
|
|
$
|
926
|
|
|
$
|
(633
|
)
|
|
$
|
(1,050
|
)
|
|
$
|
(743
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
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, 2018
|
1,560,270
|
|
|
$
|
16
|
|
|
$
|
663
|
|
|
$
|
(473
|
)
|
|
$
|
(845
|
)
|
|
$
|
(639
|
)
|
Net earnings
|
|
|
|
|
|
|
|
|
|
1,585
|
|
|
|
|
|
1,585
|
|
|||||
Other comprehensive loss, net of taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
(55
|
)
|
|
(55
|
)
|
|||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,530
|
|
|||||
Issuance of common stock in connection with employee stock plans and other
|
12,144
|
|
|
|
|
|
(86
|
)
|
|
|
|
|
|
|
|
(86
|
)
|
|||||
Repurchases of common stock
|
(66,122
|
)
|
|
(1
|
)
|
|
(27
|
)
|
|
(1,381
|
)
|
|
|
|
|
(1,409
|
)
|
|||||
Cash dividends ($0.32 per common share)
|
|
|
|
|
|
|
|
|
|
(493
|
)
|
|
|
|
|
(493
|
)
|
|||||
Stock-based compensation expense
|
|
|
|
|
|
|
173
|
|
|
|
|
|
|
|
|
173
|
|
|||||
Adjustment for adoption of accounting standards
|
|
|
|
|
|
|
|
|
|
(563
|
)
|
|
|
|
|
(563
|
)
|
|||||
Balance April 30, 2019
|
1,506,292
|
|
|
$
|
15
|
|
|
$
|
723
|
|
|
$
|
(1,325
|
)
|
|
$
|
(900
|
)
|
|
$
|
(1,487
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance October 31, 2019
|
1,457,719
|
|
|
$
|
15
|
|
|
$
|
835
|
|
|
$
|
(818
|
)
|
|
$
|
(1,225
|
)
|
|
$
|
(1,193
|
)
|
Net earnings
|
|
|
|
|
|
|
|
|
|
1,442
|
|
|
|
|
|
1,442
|
|
|||||
Other comprehensive income, net of taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
175
|
|
|
175
|
|
|||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,617
|
|
|||||
Issuance of common stock in connection with employee stock plans and other
|
10,763
|
|
|
|
|
|
(58
|
)
|
|
|
|
|
|
|
|
(58
|
)
|
|||||
Repurchases of common stock
|
(38,525
|
)
|
|
(1
|
)
|
|
(23
|
)
|
|
(776
|
)
|
|
|
|
|
(800
|
)
|
|||||
Cash dividends ($0.35 per common share)
|
|
|
|
|
|
|
|
|
|
(508
|
)
|
|
|
|
|
(508
|
)
|
|||||
Stock-based compensation expense
|
|
|
|
|
|
|
172
|
|
|
|
|
|
|
|
|
172
|
|
|||||
Adjustment for adoption of accounting standards (Note 1)
|
|
|
|
|
|
|
|
|
|
27
|
|
|
|
|
|
27
|
|
|||||
Balance April 30, 2020
|
1,429,957
|
|
|
$
|
14
|
|
|
$
|
926
|
|
|
$
|
(633
|
)
|
|
$
|
(1,050
|
)
|
|
$
|
(743
|
)
|
•
|
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 OEM hardware and solutions, and some Samsung-branded supplies. 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. It also includes some Samsung-branded supplies.
|
•
|
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).
|
•
|
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.
|
|
Three months ended April 30
|
|
Six months ended April 30
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
In millions
|
||||||||||||||
Net revenue:
|
|
|
|
|
|||||||||||
Notebooks
|
$
|
5,083
|
|
|
$
|
5,099
|
|
|
$
|
11,057
|
|
|
$
|
11,018
|
|
Desktops
|
2,409
|
|
|
2,940
|
|
|
5,332
|
|
|
5,797
|
|
||||
Workstations
|
439
|
|
|
569
|
|
|
1,033
|
|
|
1,131
|
|
||||
Other
|
382
|
|
|
313
|
|
|
783
|
|
|
632
|
|
||||
Personal Systems
|
8,313
|
|
|
8,921
|
|
|
18,205
|
|
|
18,578
|
|
||||
Supplies
|
2,841
|
|
|
3,331
|
|
|
5,882
|
|
|
6,598
|
|
||||
Commercial Hardware
|
808
|
|
|
1,179
|
|
|
1,884
|
|
|
2,269
|
|
||||
Consumer Hardware
|
509
|
|
|
606
|
|
|
1,116
|
|
|
1,305
|
|
||||
Printing
|
4,158
|
|
|
5,116
|
|
|
8,882
|
|
|
10,172
|
|
||||
Corporate Investments
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Total segment net revenue
|
12,471
|
|
|
14,037
|
|
|
27,088
|
|
|
28,751
|
|
||||
Other
|
(2
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(5
|
)
|
||||
Total net revenue
|
$
|
12,469
|
|
|
$
|
14,036
|
|
|
$
|
27,087
|
|
|
$
|
28,746
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Earnings before taxes:
|
|
|
|
|
|
|
|
||||||||
Personal Systems
|
$
|
552
|
|
|
$
|
385
|
|
|
$
|
1,214
|
|
|
$
|
795
|
|
Printing
|
548
|
|
|
839
|
|
|
1,302
|
|
|
1,660
|
|
||||
Corporate Investments
|
(14
|
)
|
|
(24
|
)
|
|
(27
|
)
|
|
(48
|
)
|
||||
Total segment earnings from operations
|
$
|
1,086
|
|
|
$
|
1,200
|
|
|
$
|
2,489
|
|
|
$
|
2,407
|
|
Corporate and unallocated costs and other
|
(84
|
)
|
|
(97
|
)
|
|
(196
|
)
|
|
(177
|
)
|
||||
Stock-based compensation expense
|
(63
|
)
|
|
(66
|
)
|
|
(172
|
)
|
|
(173
|
)
|
||||
Restructuring and other charges
|
(81
|
)
|
|
(69
|
)
|
|
(372
|
)
|
|
(124
|
)
|
||||
Acquisition-related charges
|
(3
|
)
|
|
(11
|
)
|
|
(3
|
)
|
|
(21
|
)
|
||||
Amortization of intangible assets
|
(29
|
)
|
|
(29
|
)
|
|
(55
|
)
|
|
(58
|
)
|
||||
Interest and other, net
|
—
|
|
|
(45
|
)
|
|
13
|
|
|
(71
|
)
|
||||
Total earnings before taxes
|
$
|
826
|
|
|
$
|
883
|
|
|
$
|
1,704
|
|
|
$
|
1,783
|
|
|
Fiscal 2020 Plan
|
|
|
|
||||||||||||
|
Severance and EER
|
|
Non-labor
|
|
Other prior-year Plans (1)
|
|
Total
|
|||||||||
|
In millions
|
|||||||||||||||
Accrued balance as of October 31, 2019
|
$
|
76
|
|
|
$
|
—
|
|
|
$
|
66
|
|
|
$
|
142
|
|
|
Charges
|
282
|
|
|
2
|
|
|
1
|
|
|
285
|
|
|||||
Cash payments
|
(205
|
)
|
|
(2
|
)
|
|
(40
|
)
|
|
(247
|
)
|
|||||
Non-cash and other adjustments
|
(49
|
)
|
(2
|
)
|
—
|
|
|
(3
|
)
|
|
(52
|
)
|
||||
Accrued balance as of April 30, 2020
|
$
|
104
|
|
|
$
|
—
|
|
|
$
|
24
|
|
|
$
|
128
|
|
|
Total costs incurred to date as of April 30, 2020
|
$
|
364
|
|
|
$
|
2
|
|
|
$
|
1,817
|
|
|
$
|
2,183
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Reflected in Consolidated Condensed Balance Sheets
|
|
|
|
|
|
|
|
|||||||||
Other current liabilities
|
$
|
104
|
|
|
$
|
—
|
|
|
$
|
24
|
|
|
$
|
128
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Accrued balance as of October 31, 2018
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
59
|
|
|
$
|
59
|
|
|
Charges
|
—
|
|
|
—
|
|
|
116
|
|
|
116
|
|
|||||
Cash payments
|
—
|
|
|
—
|
|
|
(72
|
)
|
|
(72
|
)
|
|||||
Non-cash and other adjustments
|
—
|
|
|
—
|
|
|
(14
|
)
|
|
(14
|
)
|
|||||
Accrued balance as of April 30, 2019
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
89
|
|
|
$
|
89
|
|
|
Fiscal 2020 Plan
|
|
|
|
|
||||||||||
|
Severance and EER
|
|
Non-labor
|
|
Other prior-year plans(1)
|
|
Total
|
||||||||
|
In millions
|
||||||||||||||
For the three months ended April 30, 2020
|
$
|
26
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
28
|
|
(1)
|
Primarily includes the fiscal 2017 plan along with other legacy plans, all of which are substantially complete. HP does not expect any further material activity associated with these plans.
|
(2)
|
Includes reclassification of liability related to the Enhanced Early Retirement (“EER”) plan of $44 million for certain healthcare and medical savings account benefits to pension and post-retirement plans. See Note 4 “Retirement and Post -Retirement Benefit Plans” for further information.
|
|
Three months ended April 30
|
||||||||||||||||||||||
|
U.S. Defined Benefit Plans
|
|
Non-U.S. Defined Benefit Plans
|
|
Post-Retirement Benefit Plans
|
||||||||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||||||
|
In millions
|
||||||||||||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15
|
|
|
$
|
15
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Interest cost
|
103
|
|
|
123
|
|
|
4
|
|
|
6
|
|
|
2
|
|
|
4
|
|
||||||
Expected return on plan assets
|
(175
|
)
|
|
(146
|
)
|
|
(10
|
)
|
|
(9
|
)
|
|
(5
|
)
|
|
(5
|
)
|
||||||
Amortization and deferrals:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Actuarial loss (gain)
|
16
|
|
|
15
|
|
|
11
|
|
|
8
|
|
|
(3
|
)
|
|
(8
|
)
|
||||||
Prior service benefit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
||||||
Net periodic (credit) benefit cost
|
(56
|
)
|
|
(8
|
)
|
|
20
|
|
|
20
|
|
|
(8
|
)
|
|
(12
|
)
|
||||||
Settlement loss
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total periodic (credit) benefit cost
|
$
|
(55
|
)
|
|
$
|
(7
|
)
|
|
$
|
20
|
|
|
$
|
20
|
|
|
$
|
(8
|
)
|
|
$
|
(12
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Six months ended April 30
|
||||||||||||||||||||||
|
U.S. Defined Benefit Plans
|
|
Non-U.S. Defined Benefit Plans
|
|
Post- Retirement Benefit Plans
|
||||||||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||||||
|
In millions
|
||||||||||||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
31
|
|
|
$
|
29
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Interest cost
|
206
|
|
|
246
|
|
|
9
|
|
|
12
|
|
|
5
|
|
|
8
|
|
||||||
Expected return on plan assets
|
(350
|
)
|
|
(291
|
)
|
|
(21
|
)
|
|
(19
|
)
|
|
(11
|
)
|
|
(10
|
)
|
||||||
Amortization and deferrals:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Actuarial loss (gain)
|
32
|
|
|
30
|
|
|
21
|
|
|
16
|
|
|
(5
|
)
|
|
(16
|
)
|
||||||
Prior service benefit
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
(6
|
)
|
|
(6
|
)
|
||||||
Net periodic (credit) benefit cost
|
(112
|
)
|
|
(15
|
)
|
|
39
|
|
|
37
|
|
|
(16
|
)
|
|
(24
|
)
|
||||||
Settlement loss
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Special termination benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44
|
|
|
—
|
|
||||||
Total periodic (credit) benefit cost
|
$
|
(111
|
)
|
|
$
|
(14
|
)
|
|
$
|
39
|
|
|
$
|
37
|
|
|
$
|
28
|
|
|
$
|
(24
|
)
|
|
As of
|
||||||
|
April 30, 2020
|
|
October 31, 2019
|
||||
|
In millions
|
||||||
Accounts receivable
|
$
|
5,266
|
|
|
$
|
6,142
|
|
Allowance for doubtful accounts
|
(120
|
)
|
|
(111
|
)
|
||
|
$
|
5,146
|
|
|
$
|
6,031
|
|
|
Six months ended April 30, 2020
|
||
|
In millions
|
||
Balance at beginning of period
|
$
|
111
|
|
Provision for doubtful accounts
|
32
|
|
|
Deductions, net of recoveries
|
(23
|
)
|
|
Balance at end of period
|
$
|
120
|
|
|
Three months ended April 30
|
|
Six months ended April 30
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
In millions
|
||||||||||||||
Balance at beginning of period(1)
|
$
|
88
|
|
|
$
|
194
|
|
|
$
|
235
|
|
|
$
|
165
|
|
Trade receivables sold
|
2,323
|
|
|
2,490
|
|
|
5,181
|
|
|
5,525
|
|
||||
Cash receipts
|
(2,286
|
)
|
|
(2,498
|
)
|
|
(5,291
|
)
|
|
(5,507
|
)
|
||||
Foreign currency and other
|
(1
|
)
|
|
(4
|
)
|
|
(1
|
)
|
|
(1
|
)
|
||||
Balance at end of period(1)
|
$
|
124
|
|
|
$
|
182
|
|
|
$
|
124
|
|
|
$
|
182
|
|
(1)
|
Amounts outstanding from third parties reported in Accounts Receivable in the Consolidated Condensed Balance Sheets.
|
|
As of
|
||||||
|
April 30, 2020
|
|
October 31, 2019
|
||||
|
In millions
|
||||||
Finished goods
|
$
|
3,874
|
|
|
$
|
3,855
|
|
Purchased parts and fabricated assemblies
|
2,480
|
|
|
1,879
|
|
||
|
$
|
6,354
|
|
|
$
|
5,734
|
|
|
As of
|
||||||
|
April 30, 2020
|
|
October 31, 2019
|
||||
|
In millions
|
||||||
Supplier and other receivables
|
$
|
2,094
|
|
|
$
|
1,951
|
|
Prepaid and other current assets
|
1,173
|
|
|
967
|
|
||
Value-added taxes receivable
|
839
|
|
|
957
|
|
||
|
$
|
4,106
|
|
|
$
|
3,875
|
|
|
As of
|
||||||
|
April 30, 2020
|
|
October 31, 2019
|
||||
|
In millions
|
||||||
Land, buildings and leasehold improvements
|
$
|
2,046
|
|
|
$
|
1,977
|
|
Machinery and equipment, including equipment held for lease
|
5,201
|
|
|
5,060
|
|
||
|
7,247
|
|
|
7,037
|
|
||
Accumulated depreciation
|
(4,533
|
)
|
|
(4,243
|
)
|
||
|
$
|
2,714
|
|
|
$
|
2,794
|
|
|
As of
|
||||||
|
April 30, 2020
|
|
October 31, 2019
|
||||
|
In millions
|
||||||
Deferred tax assets
|
$
|
2,452
|
|
|
$
|
2,620
|
|
Right-of-use assets from operating leases, net(1)
|
1,111
|
|
|
—
|
|
||
Intangible assets
|
592
|
|
|
661
|
|
||
Tax indemnifications receivable
|
35
|
|
|
42
|
|
||
Other(2)
|
839
|
|
|
801
|
|
||
|
$
|
5,029
|
|
|
$
|
4,124
|
|
(1)
|
See Note 1, “Basis of Presentation” and Note 14, “Leases” for detailed information.
|
(2)
|
Includes marketable equity securities and mutual funds classified as available-for-sale investments of $52 million and $56 million as of April 30, 2020 and October 31, 2019, respectively. See Note 8, “Financial Instruments” for detailed information.
|
|
As of
|
||||||
|
April 30, 2020
|
|
October 31, 2019
|
||||
|
In millions
|
||||||
Sales and marketing programs
|
$
|
3,029
|
|
|
$
|
3,361
|
|
Deferred revenue
|
1,208
|
|
|
1,178
|
|
||
Other accrued taxes
|
907
|
|
|
1,060
|
|
||
Employee compensation and benefit
|
795
|
|
|
1,103
|
|
||
Warranty
|
645
|
|
|
663
|
|
||
Operating lease liabilities(1)
|
242
|
|
|
—
|
|
||
Tax liability
|
192
|
|
|
237
|
|
||
Other
|
2,512
|
|
|
2,541
|
|
||
|
$
|
9,530
|
|
|
$
|
10,143
|
|
(1)
|
See Note 1, “Basis of Presentation” and Note 14, “Leases” for detailed information.
|
|
As of
|
||||||
|
April 30, 2020
|
|
October 31, 2019
|
||||
|
In millions
|
||||||
Pension, post-retirement, and post-employment liabilities
|
$
|
1,599
|
|
|
$
|
1,762
|
|
Deferred revenue
|
1,042
|
|
|
1,069
|
|
||
Operating lease liabilities(1)
|
899
|
|
|
—
|
|
||
Tax liability
|
843
|
|
|
848
|
|
||
Deferred tax liability
|
62
|
|
|
60
|
|
||
Other
|
854
|
|
|
848
|
|
||
|
$
|
5,299
|
|
|
$
|
4,587
|
|
|
Three months ended April 30
|
|
Six months ended April 30
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
In millions
|
||||||||||||||
Tax indemnifications
|
$
|
1
|
|
|
$
|
5
|
|
|
$
|
1
|
|
|
$
|
15
|
|
Interest expense on borrowings
|
(64
|
)
|
|
(61
|
)
|
|
(122
|
)
|
|
(125
|
)
|
||||
Other, net
|
63
|
|
|
11
|
|
|
134
|
|
|
39
|
|
||||
|
$
|
—
|
|
|
$
|
(45
|
)
|
|
$
|
13
|
|
|
$
|
(71
|
)
|
|
Three months ended April 30
|
|
Six months ended April 30
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
In millions
|
||||||||||||||
Americas
|
$
|
5,205
|
|
|
$
|
5,785
|
|
|
$
|
11,164
|
|
|
$
|
11,817
|
|
Europe, Middle East and Africa
|
4,654
|
|
|
5,110
|
|
|
9,886
|
|
|
10,468
|
|
||||
Asia-Pacific and Japan
|
2,610
|
|
|
3,141
|
|
|
6,037
|
|
|
6,461
|
|
||||
Total net revenue
|
$
|
12,469
|
|
|
$
|
14,036
|
|
|
$
|
27,087
|
|
|
$
|
28,746
|
|
•
|
the contract has an original expected duration of one year or less; or
|
•
|
the revenue from the performance obligation is recognized over time on an as-invoiced basis when the amount corresponds directly with the value to the customer; or
|
•
|
the portion of the transaction price that is variable in nature is allocated entirely to a wholly unsatisfied performance obligation.
|
|
As of April 30, 2020
|
|
As of October 31, 2019
|
||||||||||||||||||||||||||||
|
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
|
$
|
—
|
|
|
$
|
622
|
|
|
$
|
—
|
|
|
$
|
622
|
|
|
$
|
—
|
|
|
$
|
1,283
|
|
|
$
|
—
|
|
|
$
|
1,283
|
|
Government debt(1)
|
2,207
|
|
|
—
|
|
|
—
|
|
|
2,207
|
|
|
2,422
|
|
|
—
|
|
|
—
|
|
|
2,422
|
|
||||||||
Available-for-Sale Investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Marketable equity securities and Mutual funds
|
4
|
|
|
48
|
|
|
—
|
|
|
52
|
|
|
6
|
|
|
50
|
|
|
—
|
|
|
56
|
|
||||||||
Derivative Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Interest rate contracts
|
—
|
|
|
14
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
||||||||
Foreign currency contracts
|
—
|
|
|
538
|
|
|
—
|
|
|
538
|
|
|
—
|
|
|
381
|
|
|
—
|
|
|
381
|
|
||||||||
Other derivatives
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
||||||||
Total Assets
|
$
|
2,211
|
|
|
$
|
1,234
|
|
|
$
|
—
|
|
|
$
|
3,445
|
|
|
$
|
2,428
|
|
|
$
|
1,725
|
|
|
$
|
—
|
|
|
$
|
4,153
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency contracts
|
—
|
|
|
135
|
|
|
—
|
|
|
135
|
|
|
—
|
|
|
165
|
|
|
—
|
|
|
165
|
|
||||||||
Other derivatives
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||||
Total Liabilities
|
$
|
—
|
|
|
$
|
144
|
|
|
$
|
—
|
|
|
$
|
144
|
|
|
$
|
—
|
|
|
$
|
166
|
|
|
$
|
—
|
|
|
$
|
166
|
|
|
As of April 30, 2020
|
|
As of October 31, 2019
|
||||||||||||||||||||||||||||
|
Cost
|
|
Gross Unrealized Gain
|
|
Gross Unrealized Loss
|
|
Fair Value
|
|
Cost
|
|
Gross Unrealized Gain
|
|
Gross Unrealized Loss
|
|
Fair Value
|
||||||||||||||||
|
In millions
|
||||||||||||||||||||||||||||||
Cash Equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Corporate debt
|
$
|
622
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
622
|
|
|
$
|
1,283
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,283
|
|
Government debt
|
2,207
|
|
|
—
|
|
|
—
|
|
|
2,207
|
|
|
2,422
|
|
|
—
|
|
|
—
|
|
|
2,422
|
|
||||||||
Total cash equivalents
|
2,829
|
|
|
—
|
|
|
—
|
|
|
2,829
|
|
|
3,705
|
|
|
—
|
|
|
—
|
|
|
3,705
|
|
||||||||
Available-for-Sale Investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Marketable equity securities and Mutual funds
|
39
|
|
|
13
|
|
|
—
|
|
|
52
|
|
|
40
|
|
|
16
|
|
|
—
|
|
|
56
|
|
||||||||
Total available-for-sale investments
|
39
|
|
|
13
|
|
|
—
|
|
|
52
|
|
|
40
|
|
|
16
|
|
|
—
|
|
|
56
|
|
||||||||
Total cash equivalents and available-for-sale investments
|
$
|
2,868
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
2,881
|
|
|
$
|
3,745
|
|
|
$
|
16
|
|
|
$
|
—
|
|
|
$
|
3,761
|
|
|
As of April 30, 2020
|
|
As of October 31, 2019
|
||||||||||||||||||||||||||||||||||||
|
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
|
|
|
$
|
—
|
|
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
750
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency contracts
|
15,530
|
|
|
388
|
|
|
131
|
|
|
81
|
|
|
21
|
|
|
15,639
|
|
|
260
|
|
|
111
|
|
|
123
|
|
|
28
|
|
||||||||||
Interest rate contracts
|
750
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Total derivatives designated as hedging instruments
|
17,030
|
|
|
388
|
|
|
145
|
|
|
89
|
|
|
21
|
|
|
16,389
|
|
|
260
|
|
|
115
|
|
|
123
|
|
|
28
|
|
||||||||||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency contracts
|
4,666
|
|
|
19
|
|
|
—
|
|
|
33
|
|
|
—
|
|
|
7,146
|
|
|
10
|
|
|
—
|
|
|
14
|
|
|
—
|
|
||||||||||
Other derivatives
|
119
|
|
|
12
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
134
|
|
|
7
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||||||||
Total derivatives not designated as hedging instruments
|
4,785
|
|
|
31
|
|
|
—
|
|
|
34
|
|
|
—
|
|
|
7,280
|
|
|
17
|
|
|
—
|
|
|
15
|
|
|
—
|
|
||||||||||
Total derivatives
|
$
|
21,815
|
|
|
$
|
419
|
|
|
$
|
145
|
|
|
$
|
123
|
|
|
$
|
21
|
|
|
$
|
23,669
|
|
|
$
|
277
|
|
|
$
|
115
|
|
|
$
|
138
|
|
|
$
|
28
|
|
|
In the Consolidated Condensed Balance Sheets
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
Gross Amounts Not Offset
|
|
|
|
|
||||||||||||||
|
Gross Amount
Recognized
(i)
|
Gross Amount
Offset
(ii)
|
Net Amount
Presented
(iii) = (i)–(ii)
|
|
Derivatives
(iv)
|
|
Financial
Collateral
(v)
|
|
|
|
Net Amount
(vi) = (iii)–(iv)–(v)
|
||||||||||||||
|
In millions
|
||||||||||||||||||||||||
As of April 30, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Derivative assets
|
$
|
564
|
|
|
$
|
—
|
|
|
$
|
564
|
|
|
$
|
112
|
|
|
$
|
497
|
|
(1)
|
|
$
|
(45
|
)
|
|
Derivative liabilities
|
$
|
144
|
|
|
$
|
—
|
|
|
$
|
144
|
|
|
$
|
112
|
|
|
$
|
29
|
|
(2)
|
|
$
|
3
|
|
|
As of October 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Derivative assets
|
$
|
392
|
|
|
$
|
—
|
|
|
$
|
392
|
|
|
$
|
113
|
|
|
$
|
259
|
|
(1)
|
|
$
|
20
|
|
|
Derivative liabilities
|
$
|
166
|
|
|
$
|
—
|
|
|
$
|
166
|
|
|
$
|
113
|
|
|
$
|
43
|
|
(2)
|
|
$
|
10
|
|
(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.
|
|
|
|
|
Total amounts of income/ (expense) line items presented in the statement of financial performance in which the effects of fair value hedges are recorded
|
|
Gain/(Loss) Recognized in Earnings on Derivative Instrument
|
|
|
|
|
|
Gain/(Loss) Recognized in Earnings on Derivative and Related Hedged Item
|
||||||||
Derivative Instrument
|
|
Location
|
|
Three months ended April 30, 2020
|
|
Three months ended April 30, 2020
|
|
Hedged Item
|
|
Location
|
|
Three months ended April 30, 2020
|
||||||||
|
|
|
|
In millions
|
|
|
|
|
|
In millions
|
||||||||||
Interest rate contracts
|
|
Interest and other, net
|
|
$
|
—
|
|
|
$
|
10
|
|
|
Fixed-rate debt
|
|
Interest and other, net
|
|
$
|
(10
|
)
|
|
|
|
|
Total amounts of income/ (expense) line items presented in the statement of financial performance in which the effects of fair value hedges are recorded
|
|
Gain/(Loss) Recognized in Earnings on Derivative Instrument
|
|
|
|
|
|
Gain/(Loss) Recognized in Earnings on Derivative and Related Hedged Item
|
||||||||
Derivative Instrument
|
|
Location
|
|
Six months ended April 30, 2020
|
|
Six months ended April 30, 2020
|
|
Hedged Item
|
|
Location
|
|
Six months ended April 30, 2020
|
||||||||
|
|
|
|
In millions
|
|
|
|
|
|
In millions
|
||||||||||
Interest rate contracts
|
|
Interest and other, net
|
|
$
|
13
|
|
|
$
|
10
|
|
|
Fixed-rate debt
|
|
Interest and other, net
|
|
$
|
(10
|
)
|
|
|
|
|
Total amounts of income/ (expense) line items presented in the statement of financial performance in which the effects of fair value hedges are recorded
|
|
Gain/(Loss) Recognized in Earnings on Derivative Instrument
|
|
|
|
|
|
Gain/(Loss) Recognized in Earnings on Derivative and Related Hedged Item
|
||||||||
Derivative Instrument
|
|
Location
|
|
Three months ended April 30, 2019
|
|
Three months ended April 30, 2019
|
|
Hedged Item
|
|
Location
|
|
Three months ended April 30, 2019
|
||||||||
|
|
|
|
In millions
|
|
|
|
|
|
In millions
|
||||||||||
Interest rate contracts
|
|
Interest and other, net
|
|
$
|
(45
|
)
|
|
$
|
4
|
|
|
Fixed-rate debt
|
|
Interest and other, net
|
|
$
|
(4
|
)
|
|
|
|
|
Total amounts of income/ (expense) line items presented in the statement of financial performance in which the effects of fair value hedges are recorded
|
|
Gain/(Loss) Recognized in Earnings on Derivative Instrument
|
|
|
|
|
|
Gain/(Loss) Recognized in Earnings on Derivative and Related Hedged Item
|
||||||||
Derivative Instrument
|
|
Location
|
|
Six months ended April 30, 2019
|
|
Six months ended April 30, 2019
|
|
Hedged Item
|
|
Location
|
|
Six months ended April 30, 2019
|
||||||||
|
|
|
|
In millions
|
|
|
|
|
|
In millions
|
||||||||||
Interest rate contracts
|
|
Interest and other, net
|
|
$
|
(71
|
)
|
|
$
|
16
|
|
|
Fixed-rate debt
|
|
Interest and other, net
|
|
$
|
(16
|
)
|
|
Gain/(Loss) Recognized in AOCI on Derivatives
|
|
|
Total amounts of income and expense line items presented in the statement of financial performance in which the effects of cash flow hedges are recorded
|
|
Gain /(Loss) Reclassified from AOCI Into
Earnings |
|||||||
|
Three months ended April 30, 2020
|
|
Location
|
|
Three months ended April 30, 2020
|
||||||||
|
In millions
|
|
|
In millions
|
|||||||||
Cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|||
Foreign currency contracts
|
$
|
239
|
|
|
Net revenue
|
|
$
|
12,469
|
|
|
$
|
62
|
|
Interest rate contracts
|
(8
|
)
|
|
Cost of revenue
|
|
(9,976
|
)
|
|
(10
|
)
|
|||
|
|
|
|
Operating expenses
|
|
(1,667
|
)
|
|
1
|
|
|||
Total
|
$
|
231
|
|
|
|
|
|
|
$
|
53
|
|
|
Gain/(Loss) Recognized in AOCI on Derivatives
|
|
|
Total amounts of income and expense line items presented in the statement of financial performance in which the effects of cash flow hedges are recorded
|
|
Gain /(Loss) Reclassified from AOCI Into
Earnings |
|||||||
|
Six months ended April 30, 2020
|
|
Location
|
|
Six months ended April 30, 2020
|
||||||||
|
In millions
|
|
|
In millions
|
|||||||||
Cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|||
Foreign currency contracts
|
$
|
299
|
|
|
Net revenue
|
|
$
|
27,087
|
|
|
$
|
123
|
|
Interest rate contracts
|
(8
|
)
|
|
Cost of revenue
|
|
(21,722
|
)
|
|
(11
|
)
|
|||
|
|
|
|
Operating expenses
|
|
(3,674
|
)
|
|
—
|
|
|||
Total
|
$
|
291
|
|
|
|
|
|
|
$
|
112
|
|
|
Gain/(Loss) Recognized in AOCI on Derivatives
|
|
|
Total amounts of income and expense line items presented in the statement of financial performance in which the effects of cash flow hedges are recorded
|
|
Gain /(Loss) Reclassified from AOCI Into
Earnings |
|||||||
|
Three months ended April 30, 2019
|
|
Location
|
|
Three months ended April 30, 2019
|
||||||||
|
In millions
|
|
|
In millions
|
|||||||||
Cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|||
Foreign currency contracts
|
$
|
198
|
|
|
Net revenue
|
|
$
|
14,036
|
|
|
$
|
—
|
|
|
|
|
|
Cost of revenue
|
|
(11,307
|
)
|
|
(6
|
)
|
|||
|
|
|
|
Operating expenses
|
|
(1,801
|
)
|
|
—
|
|
|||
Total
|
$
|
198
|
|
|
|
|
|
|
$
|
(6
|
)
|
|
Gain/(Loss) Recognized in AOCI on Derivatives
|
|
|
Total amounts of income and expense line items presented in the statement of financial performance in which the effects of cash flow hedges are recorded
|
|
Gain /(Loss) Reclassified from AOCI Into
Earnings |
|||||||
|
Six months ended April 30, 2019
|
|
Location
|
|
Six months ended April 30, 2019
|
||||||||
|
In millions
|
|
|
In millions
|
|||||||||
Cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|||
Foreign currency contracts
|
$
|
91
|
|
|
Net revenue
|
|
$
|
28,746
|
|
|
$
|
191
|
|
|
|
|
|
Cost of revenue
|
|
(23,405
|
)
|
|
(16
|
)
|
|||
|
|
|
|
Operating expenses
|
|
(3,487
|
)
|
|
(2
|
)
|
|||
Total
|
$
|
91
|
|
|
|
|
|
|
$
|
173
|
|
|
Three months ended April 30
|
|
Six months ended April 30
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
In millions
|
||||||||||||||
Foreign currency contracts
|
$
|
25
|
|
|
$
|
(18
|
)
|
|
$
|
17
|
|
|
$
|
(58
|
)
|
Other derivatives
|
—
|
|
|
5
|
|
|
5
|
|
|
19
|
|
||||
Total
|
$
|
25
|
|
|
$
|
(13
|
)
|
|
$
|
22
|
|
|
$
|
(39
|
)
|
|
As of April 30, 2020
|
|
As of October 31, 2019
|
||||||||||
|
Amount
Outstanding |
|
Weighted-Average
Interest Rate |
|
Amount
Outstanding |
|
Weighted-Average
Interest Rate |
||||||
|
In millions
|
|
|
|
In millions
|
|
|
||||||
Commercial paper
|
$
|
613
|
|
|
2.3
|
%
|
|
$
|
—
|
|
|
—
|
%
|
Current portion of long-term debt
|
881
|
|
|
3.7
|
%
|
|
307
|
|
|
3.6
|
%
|
||
Notes payable to banks, lines of credit and other
|
57
|
|
|
0.9
|
%
|
|
50
|
|
|
2.0
|
%
|
||
|
$
|
1,551
|
|
|
|
|
|
$
|
357
|
|
|
|
|
|
As of
|
||||||
|
April 30, 2020
|
|
October 31, 2019
|
||||
|
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
|
$
|
649
|
|
|
$
|
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
|
|
|
695
|
|
||
$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
|
|
||
|
4,247
|
|
|
4,246
|
|
||
Other borrowings at 0.51%-9.00%, due in calendar years 2020-2027
|
575
|
|
|
853
|
|
||
Fair value adjustment related to hedged debt
|
14
|
|
|
4
|
|
||
Unamortized debt issuance cost
|
(14
|
)
|
|
(16
|
)
|
||
Current portion of long-term debt
|
(881
|
)
|
|
(307
|
)
|
||
Total long-term debt
|
$
|
3,941
|
|
|
$
|
4,780
|
|
(1)
|
HP may redeem some or all of the fixed-rate U.S. Dollar Global Notes at any time in accordance with the terms thereof. The U.S. Dollar Global Notes are senior unsecured debt.
|
|
Three months ended April 30
|
|
Six months ended April 30
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
In millions
|
||||||||||||||
Tax effect on change in unrealized components of cash flow hedges:
|
|
|
|
|
|
|
|
|
|
||||||
Tax provision on unrealized gains arising during the period
|
$
|
(33
|
)
|
|
$
|
(36
|
)
|
|
$
|
(49
|
)
|
|
$
|
(16
|
)
|
Tax provision (benefit) on losses (gains) reclassified into earnings
|
16
|
|
|
(2
|
)
|
|
26
|
|
|
20
|
|
||||
|
(17
|
)
|
|
(38
|
)
|
|
(23
|
)
|
|
4
|
|
||||
Tax effect on change in unrealized components of defined benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Tax benefit on losses arising during the period
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Tax provision on amortization of actuarial loss and prior service benefit
|
(5
|
)
|
|
(3
|
)
|
|
(10
|
)
|
|
(6
|
)
|
||||
Tax benefit on curtailments, settlements and other
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
|
(5
|
)
|
|
(2
|
)
|
|
(10
|
)
|
|
(4
|
)
|
||||
Tax effect on change in cumulative translation adjustment
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
||||
Tax provision on other comprehensive income (loss)
|
$
|
(22
|
)
|
|
$
|
(42
|
)
|
|
$
|
(33
|
)
|
|
$
|
(2
|
)
|
|
Three months ended April 30
|
|
Six months ended April 30
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
In millions
|
||||||||||||||
Other comprehensive income (loss), net of taxes:
|
|
|
|
|
|
|
|
|
|
||||||
Change in unrealized components of available-for-sale debt securities:
|
|
|
|
|
|
|
|
|
|
||||||
Unrealized losses arising during the period
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
Losses reclassified into earnings
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||
|
(2
|
)
|
|
3
|
|
|
(1
|
)
|
|
3
|
|
||||
Change in unrealized components of cash flow hedges:
|
|
|
|
|
|
|
|
|
|||||||
Unrealized gains arising during the period
|
198
|
|
|
162
|
|
|
242
|
|
|
75
|
|
||||
(Gains) losses reclassified into earnings
|
(37
|
)
|
|
4
|
|
|
(86
|
)
|
|
(153
|
)
|
||||
|
161
|
|
|
166
|
|
|
156
|
|
|
(78
|
)
|
||||
Change in unrealized components of defined benefit plans:
|
|
|
|
|
|
|
|
|
|
||||||
Losses arising during the period
|
(1
|
)
|
|
(3
|
)
|
|
(1
|
)
|
|
(3
|
)
|
||||
Amortization of actuarial loss and prior service benefit(1)
|
16
|
|
|
9
|
|
|
31
|
|
|
17
|
|
||||
Curtailments, settlements and other
|
1
|
|
|
1
|
|
|
1
|
|
|
—
|
|
||||
|
16
|
|
|
7
|
|
|
31
|
|
|
14
|
|
||||
Change in cumulative translation adjustment
|
(17
|
)
|
|
11
|
|
|
(11
|
)
|
|
6
|
|
||||
Other comprehensive income (loss), net of taxes
|
$
|
158
|
|
|
$
|
187
|
|
|
$
|
175
|
|
|
$
|
(55
|
)
|
(1)
|
These components are included in the computation of net pension and post-retirement benefit (credit) charges in Note 4, “Retirement and Post-Retirement Benefit Plans”.
|
|
Six months ended April 30, 2020
|
||||||||||||||||||
|
Net unrealized
gains on available-for-sale debt securities |
|
Net unrealized
gains (losses) on cash flow hedges |
|
Unrealized
components of defined benefit plans |
|
Change in cumulative
translation adjustment |
|
Accumulated
other comprehensive loss |
||||||||||
|
In millions
|
||||||||||||||||||
Balance at beginning of period
|
$
|
9
|
|
|
$
|
172
|
|
|
$
|
(1,410
|
)
|
|
$
|
4
|
|
|
$
|
(1,225
|
)
|
Other comprehensive income (loss) before reclassifications
|
(1
|
)
|
|
242
|
|
|
(1
|
)
|
|
(11
|
)
|
|
229
|
|
|||||
Reclassifications of (gains) losses into earnings
|
—
|
|
|
(86
|
)
|
|
31
|
|
|
—
|
|
|
(55
|
)
|
|||||
Reclassifications of settlements into earnings
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Balance at end of period
|
$
|
8
|
|
|
$
|
328
|
|
|
$
|
(1,379
|
)
|
|
$
|
(7
|
)
|
|
$
|
(1,050
|
)
|
|
Three months ended April 30
|
|
Six months ended April 30
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
In millions, except per share amounts
|
||||||||||||||
Numerator:
|
|
|
|
|
|
|
|
|
|
||||||
Net earnings
|
$
|
764
|
|
|
$
|
782
|
|
|
$
|
1,442
|
|
|
$
|
1,585
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
||||||
Weighted-average shares used to compute basic net EPS
|
1,435
|
|
|
1,529
|
|
|
1,444
|
|
|
1,543
|
|
||||
Dilutive effect of employee stock plans
|
5
|
|
|
7
|
|
|
6
|
|
|
8
|
|
||||
Weighted-average shares used to compute diluted net EPS
|
1,440
|
|
|
1,536
|
|
|
1,450
|
|
|
1,551
|
|
||||
Net earnings per share:
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
$
|
0.53
|
|
|
$
|
0.51
|
|
|
$
|
1.00
|
|
|
$
|
1.03
|
|
Diluted
|
$
|
0.53
|
|
|
$
|
0.51
|
|
|
$
|
0.99
|
|
|
1.02
|
|
|
Anti-dilutive weighted-average stock-based compensation awards(1)
|
14
|
|
|
8
|
|
|
12
|
|
|
6
|
|
(1)
|
HP excludes from the calculation of diluted net EPS stock options and restricted stock units where the assumed proceeds exceed the average market price, because their effect would be anti-dilutive. The assumed proceeds of a stock option include the sum of its exercise price, and average unrecognized compensation cost. The assumed proceeds of a restricted stock unit represent unrecognized compensation cost.
|
|
Six months ended April 30, 2020
|
||
|
In millions
|
||
Balance at beginning of period
|
$
|
922
|
|
Accruals for warranties issued
|
446
|
|
|
Adjustments related to pre-existing warranties (including changes in estimates)
|
(3
|
)
|
|
Settlements made (in cash or in kind)
|
(467
|
)
|
|
Balance at end of period
|
$
|
898
|
|
|
Three months ended April 30, 2020
|
|
Six months ended April 30, 2020
|
||||
|
In millions
|
||||||
Operating lease cost
|
$
|
53
|
|
|
$
|
120
|
|
Variable cost
|
31
|
|
|
57
|
|
||
Total lease expense
|
$
|
84
|
|
|
$
|
177
|
|
|
Six months ended April 30, 2020
|
||
|
In millions
|
||
Cash paid for amount included in the measurement of lease liabilities
|
$
|
123
|
|
Right-of-use assets obtained in exchange of lease liabilities(1)
|
$
|
95
|
|
|
As of April 30, 2020
|
|
Weighted-average remaining lease term in years
|
7
|
|
Weighted-average discount rate
|
2.7
|
%
|
Fiscal year
|
In millions
|
||
2020
|
$
|
137
|
|
2021
|
245
|
|
|
2022
|
198
|
|
|
2023
|
152
|
|
|
2024
|
119
|
|
|
Thereafter
|
402
|
|
|
Total lease payments
|
1,253
|
|
|
Less: Imputed interest
|
(112
|
)
|
|
Total lease liabilities
|
$
|
1,141
|
|
Fiscal year
|
In millions
|
||
Less than 1 year
|
$
|
284
|
|
1-3 years
|
399
|
|
|
3-5 years
|
262
|
|
|
More than 5 years
|
395
|
|
|
Total (1)
|
$
|
1,340
|
|
•
|
Overview. A discussion of our business and other highlights affecting the Company to provide context for the remainder of this MD&A.
|
•
|
Critical Accounting Policies and Estimates. A discussion of accounting policies and estimates that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results.
|
•
|
Results of Operations. An analysis of our operations financial results comparing the three and six months ended April 30, 2020 to the prior-year period. A discussion of the results of operations is followed by a more detailed discussion of the results of operations by segment.
|
•
|
Liquidity and Capital Resources. An analysis of changes in our cash flows and a discussion of our liquidity and financial condition.
|
•
|
Contractual and Other Obligations. An overview of contractual obligations, retirement and post-retirement benefit plan contributions, cost-saving plans, uncertain tax positions and off-balance sheet arrangements of our operations.
|
•
|
In Personal Systems, our strategic focus is on profitable growth through market segmentation. This focus is with respect to enhanced innovation in multi-operating systems, multi-architecture, geography, customer segments and other key attributes. Additionally, we are investing in endpoint services and solutions. We are focused on services, including Device as a Service, as the market begins to shift to contractual solutions. We believe that we are well positioned due to our competitive product lineup.
|
•
|
In Printing, our strategic focus is on contractual solutions to serve consumers, SMBs and large enterprises through our Instant Ink Services and Managed Print Services (“MPS”) offerings, providing digital printing solutions for graphics segments and applications including commercial publishing, labels, packaging and textiles; as well as expanding our footprint in the 3D printing and digital manufacturing marketplace.
|
•
|
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 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.
|
•
|
Our employees. We have been focused on protecting the health and safety of our employees during the COVID-19 pandemic, and we quickly pivoted the vast majority of our employees to work from home in response to this. These arrangements have been designed to allow for continued operation of non-production business-critical functions, including financial reporting systems and internal controls. For those in manufacturing and other critical functions that could not transition to a remote model, we quickly implemented social distancing and additional safety and hygiene protocols, to protect the employees in our labs or manufacturing and production facilities.
|
•
|
Our community. We are committed to taking actions to protect the communities we serve. We are also putting our resources behind efforts to support local communities and to assist in the public health response. We have
|
◦
|
We have mobilized our 3D Printing team and Digital Manufacturing Partner Network to design, validate, and produce essential parts, such as face shields, respirators and other items. Along with our partners we have produced millions of essential parts. We are also ramping up production of 3D printed nasal swabs to help widespread testing.
|
◦
|
We are deploying HP BioPrinters and associated supply cassettes, free of charge, to NGOs, state and local government agencies, and pharmaceutical companies to accelerate drug and vaccine research to combat COVID-19.
|
◦
|
We made HP Sure Click Pro security software freely available through September 2020 to help protect against cyber threats for both HP and non-HP Windows 10 PCs as a large portion of the population is currently working from home.
|
◦
|
We have committed to donating millions of dollars in products and grants to support blended learning in local communities impacted by COVID-19 around the globe as a large portion of the world’s students are currently learning from home.
|
•
|
Our customers and partners. We are committed to our customers and partners and to meeting their needs. We have taken meaningful actions to remain close to our customers and partners, including implementing a variety of relief initiatives to help them navigate their operational and financial challenges. We have provided a variety of financing and leasing options for end customers. We have provided short-term market and country-specific incentives for partners. Offers vary by geography and are dependent on partner and customer eligibility. We are also offering online, on-demand learning options across a variety of topics including sales skills education, product training and industry-leading certifications, through HP University, to provide our partners with the skills and knowledge required to optimize revenue and future-proof their business. Partners can opt in for customized online digital learning paths designed to meet their specific priorities.
|
•
|
Supply chain. In the three months ended April 30, 2020, we experienced disruptions in our manufacturing and supply chain. This included temporary factory closures in China and Southeast Asia that impacted our own factories as well as those of our suppliers and outsourcing partners, resulting in temporary supply shortages. Additionally, we also experienced logistics challenges, including delays in delivering to our channels and end-customers as countries went into lockdown. This affected our ability to fulfill demand for Personal Systems and Printing worldwide. Manufacturing capacity returned to normalized levels in April through early May 2020.
|
•
|
Demand. COVID-19 has created new and different demand dynamics in the market. This is creating both challenges and opportunities across our businesses and geographies. In Personal Systems, we saw increased demand globally as the focus moved to keeping people connected, productive and secure and it reemphasized the essential role that PC plays in everyday life. In Printing, we saw a significant slowdown in Office and Graphics as offices closed and large events were canceled. During this same time, we also saw increased demand for hardware and ink supplies on the Consumer Printing side as countries went into lockdown and customers set up home office for remote working and school environments for remote learning.
|
•
|
Liquidity. The global disruptions caused by the COVID-19 pandemic have negatively impacted our cash flow from operations in the three months ended April 30, 2020. While the impacts from COVID-19 pandemic are currently expected to be temporary, there is uncertainty around the extent and duration of the disruption. As a result, our liquidity and working capital needs may be impacted in future periods. We believe that our businesses are strong cash flow generators and we maintain a strong balance sheet to meet our liquidity needs. Our current cash and cash equivalents, cash flow from operating activities, available commercial paper authorization, new borrowings, and our credit facilities will be sufficient to meet our operating cash requirements, planned capital expenditures, interest and principal payments on all borrowings, pension and post-retirement funding requirements, authorized share repurchases and annual dividend payments.
|
|
Three months ended April 30
|
|
Six months ended April 30
|
||||||||||||||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||||||||||||||
|
Dollars
|
|
% of Net Revenue
|
|
Dollars
|
|
% of Net Revenue
|
|
Dollars
|
|
% of Net Revenue
|
|
Dollars
|
|
% of Net Revenue
|
||||||||||||
|
Dollars in millions
|
||||||||||||||||||||||||||
Net revenue
|
$
|
12,469
|
|
|
100.0
|
%
|
|
$
|
14,036
|
|
|
100.0
|
%
|
|
$
|
27,087
|
|
|
100.0
|
%
|
|
$
|
28,746
|
|
|
100.0
|
%
|
Cost of revenue
|
(9,976
|
)
|
|
(80.0
|
)%
|
|
(11,307
|
)
|
|
(80.6
|
)%
|
|
(21,722
|
)
|
|
(80.2
|
)%
|
|
(23,405
|
)
|
|
(81.4
|
)%
|
||||
Gross profit
|
2,493
|
|
|
20.0
|
%
|
|
2,729
|
|
|
19.4
|
%
|
|
5,365
|
|
|
19.8
|
%
|
|
5,341
|
|
|
18.6
|
%
|
||||
Research and development
|
(338
|
)
|
|
(2.7
|
)%
|
|
(353
|
)
|
|
(2.5
|
)%
|
|
(738
|
)
|
|
(2.7
|
)%
|
|
(697
|
)
|
|
(2.4
|
)%
|
||||
Selling, general and administrative
|
(1,216
|
)
|
|
(9.8
|
)%
|
|
(1,339
|
)
|
|
(9.5
|
)%
|
|
(2,506
|
)
|
|
(9.3
|
)%
|
|
(2,587
|
)
|
|
(9.0
|
)%
|
||||
Restructuring and other charges
|
(81
|
)
|
|
(0.7
|
)%
|
|
(69
|
)
|
|
(0.5
|
)%
|
|
(372
|
)
|
|
(1.4
|
)%
|
|
(124
|
)
|
|
(0.5
|
)%
|
||||
Acquisition-related charges
|
(3
|
)
|
|
—
|
%
|
|
(11
|
)
|
|
(0.1
|
)%
|
|
(3
|
)
|
|
—
|
%
|
|
(21
|
)
|
|
(0.1
|
)%
|
||||
Amortization of intangible assets
|
(29
|
)
|
|
(0.2
|
)%
|
|
(29
|
)
|
|
(0.2
|
)%
|
|
(55
|
)
|
|
(0.2
|
)%
|
|
(58
|
)
|
|
(0.2
|
)%
|
||||
Earnings from operations
|
826
|
|
|
6.6
|
%
|
|
928
|
|
|
6.6
|
%
|
|
1,691
|
|
|
6.2
|
%
|
|
1,854
|
|
|
6.4
|
%
|
||||
Interest and other, net
|
—
|
|
|
—
|
%
|
|
(45
|
)
|
|
(0.3
|
)%
|
|
13
|
|
|
0.1
|
%
|
|
(71
|
)
|
|
(0.2
|
)%
|
||||
Earnings before taxes
|
826
|
|
|
6.6
|
%
|
|
883
|
|
|
6.3
|
%
|
|
1,704
|
|
|
6.3
|
%
|
|
1,783
|
|
|
6.2
|
%
|
||||
Provision for taxes
|
(62
|
)
|
|
(0.5
|
)%
|
|
(101
|
)
|
|
(0.7
|
)%
|
|
(262
|
)
|
|
(1.0
|
)%
|
|
(198
|
)
|
|
(0.7
|
)%
|
||||
Net earnings
|
$
|
764
|
|
|
6.1
|
%
|
|
$
|
782
|
|
|
5.6
|
%
|
|
$
|
1,442
|
|
|
5.3
|
%
|
|
$
|
1,585
|
|
|
5.5
|
%
|
|
Three months ended April 30
|
|
Six months ended April 30
|
||||||||||||||||||
|
2020
|
|
2019
|
|
% Change
|
|
2020
|
|
2019
|
|
% Change
|
||||||||||
|
Dollars in millions
|
||||||||||||||||||||
Net revenue
|
$
|
8,313
|
|
|
$
|
8,921
|
|
|
(6.8
|
)%
|
|
$
|
18,205
|
|
|
$
|
18,578
|
|
|
(2.0
|
)%
|
Earnings from operations
|
$
|
552
|
|
|
$
|
385
|
|
|
43.4
|
%
|
|
$
|
1,214
|
|
|
$
|
795
|
|
|
52.7
|
%
|
Earnings from operations as a % of net revenue
|
6.6
|
%
|
|
4.3
|
%
|
|
|
|
|
6.7
|
%
|
|
4.3
|
%
|
|
|
|
|
Three months ended April 30
|
|
Six months ended April 30
|
||||||||||||||||||
|
Net Revenue
|
|
Weighted Net Revenue Change(1)
|
|
Net Revenue
|
|
Weighted Net Revenue Change(1)
|
||||||||||||||
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
||||||||||||
|
Dollars in millions
|
|
Percentage Points
|
|
Dollars in millions
|
|
Percentage Points
|
||||||||||||||
Notebooks
|
$
|
5,083
|
|
|
$
|
5,099
|
|
|
(0.2
|
)
|
|
$
|
11,057
|
|
|
$
|
11,018
|
|
|
0.2
|
|
Desktops
|
2,409
|
|
|
2,940
|
|
|
(5.9
|
)
|
|
5,332
|
|
|
5,797
|
|
|
(2.5
|
)
|
||||
Workstations
|
439
|
|
|
569
|
|
|
(1.5
|
)
|
|
1,033
|
|
|
1,131
|
|
|
(0.5
|
)
|
||||
Other
|
382
|
|
|
313
|
|
|
0.8
|
|
|
783
|
|
|
632
|
|
|
0.8
|
|
||||
Total Personal Systems
|
$
|
8,313
|
|
|
$
|
8,921
|
|
|
(6.8
|
)
|
|
$
|
18,205
|
|
|
$
|
18,578
|
|
|
(2.0
|
)
|
|
Three months ended April 30
|
|
Six months ended April 30
|
||||||||||||||||||
|
2020
|
|
2019
|
|
% Change
|
|
2020
|
|
2019
|
|
% Change
|
||||||||||
|
Dollars in millions
|
||||||||||||||||||||
Net revenue
|
$
|
4,158
|
|
|
$
|
5,116
|
|
|
(18.7
|
)%
|
|
$
|
8,882
|
|
|
$
|
10,172
|
|
|
(12.7
|
)%
|
Earnings from operations
|
$
|
548
|
|
|
$
|
839
|
|
|
(34.7
|
)%
|
|
$
|
1,302
|
|
|
$
|
1,660
|
|
|
(21.6
|
)%
|
Earnings from operations as a % of net revenue
|
13.2
|
%
|
|
16.4
|
%
|
|
|
|
|
14.7
|
%
|
|
16.3
|
%
|
|
|
|
|
Three months ended April 30
|
|
Six months ended April 30
|
||||||||||||||||||
|
Net Revenue
|
|
Weighted Net Revenue Change(1)
|
|
Net Revenue
|
|
Weighted Net Revenue Change(1)
|
||||||||||||||
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
||||||||||||
|
Dollars in millions
|
|
Percentage Points
|
|
Dollars in millions
|
|
Percentage Points
|
||||||||||||||
Supplies
|
$
|
2,841
|
|
|
$
|
3,331
|
|
|
(9.6
|
)
|
|
$
|
5,882
|
|
|
$
|
6,598
|
|
|
(7.0
|
)
|
Commercial Hardware
|
808
|
|
|
1,179
|
|
|
(7.2
|
)
|
|
1,884
|
|
|
2,269
|
|
|
(3.8
|
)
|
||||
Consumer Hardware
|
509
|
|
|
606
|
|
|
(1.9
|
)
|
|
1,116
|
|
|
1,305
|
|
|
(1.9
|
)
|
||||
Total Printing
|
$
|
4,158
|
|
|
$
|
5,116
|
|
|
(18.7
|
)
|
|
$
|
8,882
|
|
|
$
|
10,172
|
|
|
(12.7
|
)
|
|
Six months ended April 30
|
||||||
|
2020
|
|
2019
|
||||
|
In millions
|
||||||
Net cash provided by operating activities
|
$
|
775
|
|
|
$
|
1,723
|
|
Net cash used in investing activities
|
(380
|
)
|
|
(22
|
)
|
||
Net cash used in financing activities
|
(878
|
)
|
|
(3,311
|
)
|
||
Net decrease in cash and cash equivalents
|
$
|
(483
|
)
|
|
$
|
(1,610
|
)
|
|
As of
|
|
As of
|
|
|
|||||||||||||||
|
April 30, 2020
|
|
October 31, 2019
|
|
Change
|
|
April 30, 2019
|
|
October 31, 2018
|
|
Change
|
|
Y/Y Change
|
|||||||
Days of sales outstanding in accounts receivable (“DSO”)
|
37
|
|
|
35
|
|
|
2
|
|
|
35
|
|
|
30
|
|
|
5
|
|
|
2
|
|
Days of supply in inventory (“DOS”)
|
57
|
|
|
41
|
|
|
16
|
|
|
43
|
|
|
43
|
|
|
—
|
|
|
14
|
|
Days of purchases outstanding in accounts payable (“DPO”)
|
(128
|
)
|
|
(107
|
)
|
|
(21
|
)
|
|
(110
|
)
|
|
(105
|
)
|
|
(5
|
)
|
|
(18
|
)
|
Cash conversion cycle
|
(34
|
)
|
|
(31
|
)
|
|
(3
|
)
|
|
(32
|
)
|
|
(32
|
)
|
|
—
|
|
|
(2
|
)
|
|
As of April 30, 2020
|
||
|
In millions
|
||
2019 Shelf Registration Statement
|
Unspecified
|
|
|
Uncommitted lines of credit
|
$
|
725
|
|
Period
|
Total
Number of Shares Purchased |
|
Average
Price Paid per Share |
|
Total Number of
Shares Purchased as Part of Publicly Announced Plans or Programs |
|
Approximate Dollar
Value of Shares that May Yet Be Purchased under the Plans or Programs |
||||||
|
In thousands, except per share amounts
|
||||||||||||
February 2020
|
4,953
|
|
|
$
|
22.02
|
|
|
4,953
|
|
|
$
|
14,985,487
|
|
March 2020
|
649
|
|
|
$
|
21.24
|
|
|
649
|
|
|
$
|
14,971,698
|
|
April 2020
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
14,971,698
|
|
Total
|
5,603
|
|
|
|
|
|
5,603
|
|
|
|
|
|
HP INC.
|
|
/s/ STEVE FIELER
|
|
Steve Fieler
Chief Financial Officer
(Principal Financial Officer and
Authorized Signatory)
|
Exhibit
Number
|
|
|
|
Incorporated by Reference
|
||||||
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit(s)
|
|
Filing Date
|
||
2(a)
|
|
|
8-K
|
|
001-04423
|
|
2.1
|
|
November 5, 2015
|
|
2(b)
|
|
|
8-K
|
|
001-04423
|
|
2.2
|
|
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
|
|
3(f)
|
|
|
8-K
|
|
001-04423
|
|
3.1
|
|
February 20, 2020
|
|
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)
|
|
|
10-K
|
|
001-04423
|
|
4(j)
|
|
December 12, 2019
|
|
4(k)
|
|
|
8-K
|
|
001-04423
|
|
4.1
|
|
February 20, 2020
|
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(p)(p)
|
|
March 5, 2020
|
|
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-Q
|
|
001-04423
|
|
10(w)(w)
|
|
March 2, 2017
|
|
10(w)(w)
|
|
|
10-Q
|
|
001-04423
|
|
10(x)(x)
|
|
March 2, 2017
|
|
10(x)(x)
|
|
|
10-Q
|
|
001-04423
|
|
10(y)(y)
|
|
March 2, 2017
|
|
10(y)(y)
|
|
|
10-Q
|
|
001-04423
|
|
10(z)(z)
|
|
March 2, 2017
|
|
10(z)(z)
|
|
|
10-Q
|
|
001-04423
|
|
10(a)(a)(a)
|
|
March 2, 2017
|
|
10(a)(a)(a)
|
|
|
10-Q
|
|
001-04423
|
|
10(b)(b)(b)
|
|
March 1, 2018
|
|
10(b)(b)(b)
|
|
|
10-Q
|
|
001-04423
|
|
10(c)(c)(c)
|
|
March 1, 2018
|
|
10(c)(c)(c)
|
|
|
10-Q
|
|
001-04423
|
|
10(d)(d)(d)
|
|
March 1, 2018
|
|
10(d)(d)(d)
|
|
|
10-Q
|
|
001-04423
|
|
10(e)(e)(e)
|
|
March 1, 2018
|
|
10(e)(e)(e)
|
|
|
10-Q
|
|
001-04423
|
|
10(f)(f)(f)
|
|
March 1, 2018
|
|
10(f)(f)(f)
|
|
|
10-K
|
|
001-04423
|
|
10(g)(g)(g)
|
|
December 13, 2018
|
|
10(g)(g)(g)
|
|
|
10-K
|
|
001-04423
|
|
10(h)(h)(h)
|
|
December 13, 2018
|
Exhibit
Number
|
|
|
|
Incorporated by Reference
|
|||||||
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit(s)
|
|
Filing Date
|
||
10(h)(h)(h)
|
|
|
|
10-Q
|
|
001-04423
|
|
10(j)(j)(j)
|
|
March 5, 2019
|
|
10(i)(i)(i)
|
|
|
|
10-Q
|
|
001-04423
|
|
10(k)(k)(k)
|
|
March 5, 2019
|
|
10(j)(j)(j)
|
|
|
|
10-Q
|
|
001-04423
|
|
10(l)(l)(l)
|
|
August 29, 2019
|
|
10(k)(k)(k)
|
|
|
|
10-K
|
|
001-04423
|
|
10(m)(m)(m)
|
|
December 12, 2019
|
|
10(l)(l)(l)
|
|
|
|
10-K
|
|
001-04423
|
|
10(n)(n)(n)
|
|
December 12, 2019
|
|
10(m)(m)(m)
|
|
|
|
10-Q
|
|
001-04423
|
|
10(m)(m)(m)
|
|
March 5, 2020
|
|
10(n)(n)(n)
|
|
|
|
10-Q
|
|
001-04423
|
|
10(n)(n)(n)
|
|
March 5, 2020
|
|
10(o)(o)(o)
|
|
|
|
10-Q
|
|
001-04423
|
|
10(o)(o)(o)
|
|
March 5, 2020
|
|
10(p)(p)(p)
|
|
|
|
10-Q
|
|
001-04423
|
|
10(p)(p)(p)
|
|
March 5, 2020
|
|
10(q)(q)(q)
|
|
|
|
10-Q
|
|
001-04423
|
|
10(q)(q)(q)
|
|
March 5, 2020
|
|
10(r)(r)(r)
|
|
|
|
|
|
|
|
|
|
|
|
10(s)(s)(s)
|
|
|
|
|
|
|
|
|
|
|
|
10(t)(t)(t)
|
|
|
|
|
|
|
|
|
|
|
|
10(u)(u)(u)
|
|
|
|
|
|
|
|
|
|
|
|
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 Quarterly Report on Form 10-Q for the quarter ended April 30, 2020, formatted in Inline XBRL (included within the Exhibit 101 attachments).‡
|
|
|
|
|
|
|
|
|
1.
|
Section 13(b)(i) is hereby amended to add the following to the end thereof:
|
|
HP INC.
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Tracy Keogh
|
|
|
Its:
|
Chief Human Resources Officer
|
|
|
|
|
|
1.
|
Section 3.4 is hereby amended in its entirety to read as follows:
|
|
HP INC.
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Tracy Keogh
|
|
|
Its:
|
Chief Human Resources Officer
|
|
|
|
|
|
(a)
|
"Affiliate" shall mean any (i) Subsidiary and (ii) any other entity other than the Corporation in an unbroken chain of entities beginning with the Corporation if, at the time of the granting of the option, each of the entities, other than the last entity in the unbroken chain, owns or controls 50 percent or more of the total ownership interest in one of the other entities in such chain.
|
(b)
|
"Board" shall mean the Board of Directors of the Corporation.
|
(c)
|
"Code" shall mean the Internal Revenue Code of 1986, of the USA, as amended. Any reference to a section of the Code herein shall be a reference to any successor or amended section of the Code.
|
(d)
|
“Code Section 423 Plan” shall mean an employee stock purchase plan which is designed to meet the requirements set forth in Code Section 423.
|
(e)
|
"Committee" shall mean the committee appointed by the Board in accordance with Section 14 of the Plan.
|
(f)
|
"Common Stock" shall mean the Common Stock of the Corporation, or any stock into which such Common Stock may be converted.
|
(g)
|
"Compensation" shall mean an Employee's base cash compensation, commissions and shift premiums paid on account of personal services rendered by the Employee to the Corporation or a Designated Affiliate, but shall exclude payments for overtime, incentive compensation, incentive payments and bonuses, with any modifications determined by the Committee. The Committee shall have the authority to determine and approve all forms of pay to be included in the definition of Compensation and may change the definition on a prospective basis.
|
(h)
|
“Contributions” shall mean the payroll deductions (to the extent permitted under applicable local law) and other additional payments that the Corporation may allow to be made by a Participant to fund the exercise of options granted pursuant to the Plan if payroll deductions are not permitted under applicable local law.
|
(i)
|
"Corporation" shall mean HP Inc., a Delaware corporation.
|
(j)
|
"Designated Affiliate" shall mean an Affiliate that has been designated by the Committee as eligible to participate in the Plan with respect to its Employees. In the event the Designated Affiliate is not a Subsidiary, it shall be designated for participation in the Non-423 Plan.
|
(k)
|
"Employee" shall mean an individual classified as an employee (within the meaning of Code Section 3401(c) and the regulations thereunder or as otherwise determined under applicable local law) by the Corporation or a Designated Affiliate on the Corporation's or such Designated Affiliate's payroll records during the relevant participation period. Employees shall not include individuals whose customary employment is for not more than five (5) months in any calendar year (except those Employees in such category the exclusion of whom is not permitted under applicable local law) or individuals classified as independent contractors.
|
(l)
|
"Entry Date" shall mean the first Trading Day of the Offering Period.
|
(m)
|
"Fair Market Value" shall be the closing sales price for the Common Stock (or the closing bid, if no sales were reported) as quoted on the New York Stock Exchange on the date of determination if that date is a Trading Day, or if the date of determination is not a Trading Day, the last market Trading Day prior to the date of determination, as reported in The Wall Street Journal or such other source as the Committee deems reliable.
|
(n)
|
“Non-423 Plan” shall mean an employee stock purchase plan which does not meet the requirements set forth in Code Section 423.
|
(o)
|
"Offering Period" shall mean the period of six (6) months during which an option granted pursuant to the Plan may be exercised, commencing on the first Trading Day on or after May 1 and November 1, respectively. The duration and timing of Offering Periods may be changed or modified by the Committee.
|
(p)
|
"Participant" shall mean a participant in the Plan as described in Section 5 of the Plan.
|
(q)
|
"Plan" shall mean this Employee Stock Purchase Plan which includes: (i) a Code Section 423 Plan and (ii) a Non-423 Plan.
|
(r)
|
"Purchase Date" shall mean the last Trading Day of each Offering Period.
|
(s)
|
"Purchase Price" shall mean 95% of the Fair Market Value of a share of Common Stock on the Purchase Date; provided however, that the Purchase Price may be adjusted by the Committee pursuant to Section 7.4.
|
(t)
|
"Shareowner" shall mean a record holder of shares entitled to vote shares of Common Stock under the Corporation's by‑laws.
|
(u)
|
"Subsidiary" shall mean any corporation (other than the Corporation) in an unbroken chain of corporations beginning with the Corporation, as described in Code Section 424(f).
|
(v)
|
"Trading Day" shall mean a day on which U.S. national stock exchanges and the national market system are open for trading.
|
13.1
|
The Plan shall continue until May 1, 2031 unless otherwise terminated in accordance with Section 13.2.
|
13.2
|
The Board may, in its sole discretion, insofar as permitted by law, terminate or suspend the Plan, or revise or amend it in any respect whatsoever, except that, without approval of the Shareowners, no such revision or amendment shall increase the number of shares subject to the Plan, other than an adjustment under Section 10 of the Plan.
|
15.1
|
The Committee may adopt rules or procedures relating to the operation and administration of the Plan to accommodate the specific requirements of local laws and procedures. Without limiting the generality of the foregoing, the Committee is specifically authorized to adopt rules and procedures regarding handling of
|
15.2
|
The Committee may also adopt rules, procedures or sub-plans applicable to particular Affiliates or locations, which rules, procedures or sub-plans may be designed to be outside the scope of Code Section 423. The terms of such rules, procedures or sub-plans may take precedence over other provisions of this Plan, with the exception of Section 7.1, but unless otherwise expressly superseded by the terms of such rule, procedure or sub-plan, the provisions of this Plan shall govern the operation of the Plan. To the extent inconsistent with the requirements of Code Section 423, such rules, procedures or sub-plans shall be considered part of the Non-423 Plan, and the options granted thereunder shall not be considered to comply with Section 423.
|
|
TABLE OF CONTENTS
|
|
||
|
|
|
|
|
|
|
ARTICLE I
|
|
|
|
|
|
|
|
|
Definitions
|
|
||
SECTION 1.01
|
Defined Terms
|
1
|
||
SECTION 1.02
|
Classification of Loans and Borrowings
|
26
|
||
SECTION 1.03
|
Terms Generally
|
26
|
||
SECTION 1.04
|
Accounting Terms; GAAP
|
27
|
||
SECTION 1.05
|
Divisions
|
27
|
||
SECTION 1.06
|
LIBO Rate
|
28
|
||
|
|
|
|
|
|
|
ARTICLE II
|
|
|
|
|
|
|
|
|
The Credits
|
|
||
SECTION 2.01
|
Commitments
|
28
|
||
SECTION 2.02
|
Loans and Borrowings
|
29
|
||
SECTION 2.03
|
Requests for Borrowings
|
29
|
||
SECTION 2.04
|
[Intentionally Omitted.]
|
30
|
||
SECTION 2.05
|
Funding of Borrowings
|
30
|
||
SECTION 2.06
|
Interest Elections
|
31
|
||
SECTION 2.07
|
Termination and Reduction of Commitments
|
32
|
||
SECTION 2.08
|
Repayment of Loans; Evidence of Debt
|
32
|
||
SECTION 2.09
|
Prepayment of Loans
|
33
|
||
SECTION 2.10
|
Fees
|
34
|
||
SECTION 2.11
|
Interest
|
34
|
||
SECTION 2.12
|
Alternate Rate of Interest
|
35
|
||
SECTION 2.13
|
Increased Costs
|
37
|
||
SECTION 2.14
|
Break Funding Payments
|
38
|
||
SECTION 2.15
|
Taxes
|
39
|
||
SECTION 2.16
|
Payments Generally; Pro Rata Treatment; Sharing of Setoffs
|
43
|
||
SECTION 2.17
|
Mitigation Obligations; Replacement of Lenders
|
44
|
||
SECTION 2.18
|
Defaulting Lenders
|
45
|
||
|
|
|
|
|
|
|
ARTICLE III
|
|
|
|
|
|
|
|
|
Representations and Warranties
|
|
||
SECTION 3.01
|
Organization; Powers
|
46
|
||
SECTION 3.02
|
Authorization; Enforceability
|
46
|
||
SECTION 3.03
|
Governmental Approvals; No Conflicts
|
46
|
||
SECTION 3.04
|
Financial Condition; No Material Adverse Change
|
46
|
||
SECTION 3.05
|
Litigation and Environmental Matters
|
47
|
||
SECTION 3.06
|
Compliance with Laws and Agreements
|
47
|
||
SECTION 3.07
|
Investment Company Status
|
47
|
SECTION 3.08
|
Taxes
|
47
|
||
SECTION 3.09
|
ERISA
|
47
|
||
SECTION 3.10
|
Federal Reserve Regulations
|
48
|
||
SECTION 3.11
|
Pari Passu Status
|
48
|
||
SECTION 3.12
|
Anti-Corruption Laws and Sanctions
|
48
|
||
SECTION 3.13
|
Affected Financial Institution
|
48
|
||
|
|
|
|
|
|
|
ARTICLE IV
|
|
|
|
|
|
|
|
|
Conditions
|
|
||
SECTION 4.01
|
Effective Date
|
48
|
||
SECTION 4.02
|
Each Credit Event
|
50
|
||
|
|
|
|
|
|
|
ARTICLE V
|
|
|
|
|
|
|
|
|
Affirmative Covenants
|
|
||
SECTION 5.01
|
Financial Statements and Other Information
|
50
|
||
SECTION 5.02
|
Notices of Material Events
|
52
|
||
SECTION 5.03
|
Existence; Conduct of Business
|
52
|
||
SECTION 5.04
|
Payment of Obligations
|
53
|
||
SECTION 5.05
|
Maintenance of Properties; Insurance
|
53
|
||
SECTION 5.06
|
Books and Records; Inspection Rights
|
53
|
||
SECTION 5.07
|
Compliance with Laws
|
53
|
||
SECTION 5.08
|
Use of Proceeds
|
54
|
||
|
|
|
|
|
|
|
ARTICLE VI
|
|
|
|
|
|
|
|
|
Negative Covenants
|
|
||
SECTION 6.01
|
Subsidiary Indebtedness
|
54
|
||
SECTION 6.02
|
Liens
|
56
|
||
SECTION 6.03
|
[Intentionally Omitted.]
|
57
|
||
SECTION 6.04
|
Fundamental Changes
|
57
|
||
SECTION 6.05
|
Financial Covenants
|
58
|
||
|
|
|
|
|
|
|
ARTICLE VII
|
|
|
|
|
|
|
|
|
Events of Default
|
|
||
|
|
|
|
|
|
|
ARTICLE VIII
|
|
|
|
|
|
|
|
|
The Administrative Agent
|
|
||
|
|
|
|
|
|
|
ARTICLE IX
|
|
|
|
|
|
|
|
|
Miscellaneous
|
|
||
SECTION 9.01
|
Notices
|
64
|
SECTION 9.02
|
Waivers; Amendments
|
65
|
||
SECTION 9.03
|
Expenses; Limitation of Liability; Indemnity; Etc.
|
66
|
||
SECTION 9.04
|
Successors and Assigns
|
69
|
||
SECTION 9.05
|
Survival
|
71
|
||
SECTION 9.06
|
Counterparts; Integration; Effectiveness; Electronic Execution
|
72
|
||
SECTION 9.07
|
Severability
|
73
|
||
SECTION 9.08
|
Right of Setoff
|
73
|
||
SECTION 9.09
|
Governing Law; Jurisdiction; Consent to Service of Process
|
74
|
||
SECTION 9.10
|
WAIVER OF JURY TRIAL
|
75
|
||
SECTION 9.11
|
Headings
|
75
|
||
SECTION 9.12
|
Confidentiality
|
75
|
||
SECTION 9.13
|
Authorization to Distribute Certain Materials to Public-Siders; Material Non-Public Information
|
76
|
||
SECTION 9.14
|
USA PATRIOT Act and Beneficial Ownership Regulation
|
77
|
||
SECTION 9.15
|
No Fiduciary Duty
|
77
|
||
SECTION 9.16
|
Acknowledgement and Consent to Bail-In of Affected Financial Institutions
|
77
|
||
SECTION 9.17
|
Certain ERISA Matters
|
78
|
||
|
|
|
|
|
SCHEDULES:
|
|
|
|
|
Schedule 2.01 -
|
Commitments
|
|
||
Schedule 3.05 -
|
Litigation and Environmental Matters
|
|
||
Schedule 6.01 -
|
Existing Subsidiary Indebtedness
|
|
||
|
|
|
|
|
EXHIBITS:
|
|
|
|
|
Exhibit A -
|
Form of Assignment and Assumption
|
|
||
Exhibit B -
|
Form of Opinion of Borrower’s Counsel
|
|
||
Exhibit C-1 -
|
Form of U.S. Tax Certificate for Non-U.S. Lenders that are not Partnerships for U.S. Federal Income Tax Purposes
|
|
||
Exhibit C-2 -
|
Form of U.S. Tax Certificate for Non-U.S. Lenders that are Partnerships for U.S. Federal Income Tax Purposes
|
|
||
Exhibit C-3 -
|
Form of U.S. Tax Certificate for Non-U.S. Participants that are not Partnerships for U.S. Federal Income Tax Purposes
|
|
||
Exhibit C-4 -
|
Form of U.S. Tax Certificate for Non-U.S. Participants that are Partnerships for U.S. Federal Income Tax Purposes
|
|
||
|
|
|
|
|
Index Debt Ratings:
|
ABR
Spread
|
Eurocurrency
Spread
|
Commitment Fee
Rate
|
Category 1
Rating of A-, A3 or A- (or higher)
|
50.0
|
150.0
|
20.0
|
Category 2
Rating of BBB+, Baa1 or BBB+
|
62.5
|
162.5
|
25.0
|
Category 3
Rating of BBB, Baa2 or BBB
|
75
|
175
|
30.0
|
Category 4
Rating of BBB-, Baa3 or BBB-
|
100
|
200
|
35.0
|
Category 5
Rating of BB+, Ba1 or BB+ (or lower)
|
125
|
225
|
40.0
|
(A)
|
any Lender that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed originals of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax;
|
(B)
|
any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:
|
(1)
|
in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed originals of IRS Form W-8BEN or W-8BEN-E, as applicable, establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN or W-8BEN-E, as applicable, establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;
|
(2)
|
executed originals of IRS Form W-8ECI;
|
(3)
|
in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit C-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed originals of IRS Form W-8BEN or W-8BEN-E, as applicable; or
|
(4)
|
to the extent a Foreign Lender is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or W-8BEN-E, a U.S. Tax Compliance Certificate substantially in the form of Exhibit C-2 or Exhibit C-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit C-4 on behalf of each such direct and indirect partner
|
Lender
|
Commitment
|
JPMorgan Chase Bank, N.A.
|
$166,666,666.70
|
BNP Paribas
|
$166,666,666.66
|
Goldman Sachs Bank USA
|
$166,666,666.66
|
HSBC Bank USA, National Association
|
$166,666,666.66
|
Morgan Stanley Bank, N.A.
|
$166,666,666.66
|
Wells Fargo Bank, N.A.
|
$166,666,666.66
|
Total
|
$1,000,000,000.00
|
|
Aggregate Amount of Commitment/Loans of all Lenders
|
Amount of Commitment/Loans Assigned
|
Percentage Assigned of Commitment/ Loans2
|
Commitment
|
$
|
$
|
%
|
Loans
|
$
|
$
|
%
|
[NAME OF ASSIGNOR], as
Assignor,
|
|
by
|
|
|
Name:
|
|
Title:
|
[NAME OF ASSIGNEE]3, as
Assignee,
|
|
by
|
|
|
Name:
|
|
Title:
|
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent,
|
|
by
|
|
|
Name:
|
|
Title:
|
[HP INC.,
as Borrower,
|
|
by
|
|
|
Name:
|
|
Title:]5
|
[NAME OF LENDER]
|
|
By:
|
|
|
Name:
|
|
Title:
|
[NAME OF PARTICIPANT]
|
|
By:
|
|
|
Name:
|
|
Title:
|
[NAME OF PARTICIPANT]
|
|
By:
|
|
|
Name:
|
|
Title:
|
[NAME OF LENDER]
|
|
By:
|
|
|
Name:
|
|
Title:
|
(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
|
(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
|
|
(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
|
(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
|
|
|
By:
|
|
Enrique Lores
President and Chief Executive Officer
|
|
|
|
|
/s/ STEVE FIELER
|
|
|
By:
|
|
Steve Fieler
Chief Financial Officer
|
|