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(Mark One)
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☒
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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47-3298624
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. employer
identification no.)
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6280 America Center Drive,
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San Jose,
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California
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95002
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(Address of principal executive offices)
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(Zip code)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common stock, par value $0.01 per share
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HPE
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New York Stock Exchange
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated filer
(Do not check if a smaller
reporting company)
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☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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DOCUMENTS INCORPORATED BY REFERENCE
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DOCUMENT DESCRIPTION
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10-K PART
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Portions of the Registrant's 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
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•
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Through HPE Pointnext Services, we have the expertise to assess, design, implement, optimize and manage our customers’ digital transformation.
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•
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We have the right tools to help customers accelerate their business - be it automation, AI, security or predictive analytics.
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We have the as-a-Service consumption model to provide flexibility and optimize IT investments.
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Through Financial Services, we can help customers manage and monetize their existing assets in new ways and free up capital for innovation.
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•
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Hybrid IT provides a broad portfolio of services-led and software-enabled infrastructure and solutions including secure, software-defined servers, storage and HPE Pointnext services, thereby combining HPE's hardware, software and services capabilities to make Hybrid IT simple for its customers.
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•
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Intelligent Edge provides a portfolio of secure Edge-to-Cloud solutions operating under the Aruba brand that include wireless local area network ("LAN"), campus and data center switching, software-defined wide-area-networking, security, and associated services to enable secure connectivity for businesses of any size.
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Financial Services ("FS") enables flexible IT consumption models, financial architectures and customized investment solutions for our customers.
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Corporate Investments includes Communication and Media Solutions ("CMS"), Hewlett Packard Labs and certain business incubation projects.
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Hybrid IT Product includes Compute and Storage.
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◦
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Compute. We offer both Industry Standard Servers ("ISS"), which are general purpose servers for multi-workload computing, as well as Mission Critical Servers ("MCS"), which are servers optimized for particular workloads, to address the full array of the customers' computing needs. Our general purpose servers include the HPE ProLiant, secure and versatile rack and tower servers; HPE BladeSystem, a modular infrastructure that converges server, storage and networking; and HPE Synergy, a composable infrastructure for traditional and cloud-native applications. Our workload optimized server portfolio includes the HPE Apollo and products from the acquisition of Cray, for high performance computing and artificial intelligence, HPE Cloudline for cloud data centers, HPE Edgeline for computing at the network edge and HPE Integrity for mission-critical applications.
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◦
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Storage. With storage offerings that are AI-driven and built for cloud environments with as-a-service consumption and flexible investment options, HPE provides the right workload optimized destinations for data. Powered by HPE InfoSight advanced analytics and machine learning and HPE Cloud Volumes data mobility, HPE delivers intelligent storage for hybrid cloud environments so that customers can unlock data’s full potential and derive business insights. Key solutions include HPE SimpliVity, a hyper-converged platform for virtualization,
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•
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HPE Pointnext Services creates preferred IT experiences that power the digital business. The HPE Pointnext Services team and our extensive partner network provide value across the IT life cycle delivering advice, transformation projects, professional services, support services and operational services for Hybrid IT and the Intelligent Edge. HPE Pointnext Services is also a provider of on-premises flexible consumption models, such as HPE GreenLake, that enable IT agility, simplify operations and align cost to business value. HPE Pointnext Services offerings includes Operational Services and Advisory and Professional Services.
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◦
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HPE Aruba Product includes wired and wireless LAN, wide area network ("WAN"), data center networking such as Wi-Fi access points, switches, routers, sensors, and software products that include cloud-based management, network management, network access control, analytics and assurance, and location services.
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◦
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HPE Aruba Services includes professional and support services, as well as as-a-Service ("aaS") and consumption models for the Intelligent Edge portfolio of products.
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Strong solutions portfolio that spans edge to cloud. We combine our software-defined infrastructure and services capabilities to provide what we believe is the strongest portfolio of enterprise solutions in the IT industry. Our ability to deliver a comprehensive IT strategy, and connect our customers’ data from edge to cloud, through our high-quality products and high-value consulting and support services in a single package-is one of our principal differentiators.
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•
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Multi-year innovation roadmap. We have been in the technology and innovation business for over 75 years. Our vast intellectual property portfolio and global research and development capabilities are part of a broader innovation roadmap designed to help organizations take advantage of the expanding amount of data available and leverage the latest technology
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•
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Ability to deliver flexible consumption-based IT solutions. We have developed IT consumption models to facilitate the delivery of our products and services to our customers that includes pay-per-use or subscription-based options with a sophisticated set of metering, financial and managed services components. We have a head start over other companies that has allowed us to build capabilities and partnerships that are unique in the industry including the ability to deliver our as-a-Service portfolio in more than 50 countries and with over 500 channel partners that can sell the as-a-Service portfolio.
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Global distribution and partner ecosystem. We are experts in delivering innovative technological solutions to our customers in complex multi-country, multi-vendor and/or multi-language environments. We have one of the largest go-to-market capabilities in our industry, including a large ecosystem of channel partners, which enables us to market and deliver our product offerings to customers located virtually anywhere in the world.
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Custom financial solutions. Through Financial Services we can help customers manage and monetize their existing assets in new ways and free up capital for innovation. Financial Services is unique in its ability to help customers address the entire product lifecycle to reduce the cost and resource demands of IT, in what we call the “circular economy.” Through Financial Services’ Global Asset Recovery Centers, we are processing more than 4 million assets every year, which also helps our customers achieve their own sustainability goals.
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Experienced leadership team with track record of successful performance. Our management team has an extensive track record of performance and execution. We are led by our President and Chief Executive Officer, Antonio Neri, who has proven experience in developing transformative business models, building global brands and driving sustained growth and expansion in the technology industry. Mr. Neri's experience includes over 20 years combined at HPE and HP Co. in various leadership positions. Our senior management team has many years of experience in our industry and possesses extensive knowledge of and experience in the enterprise IT business and the markets in which we compete. Moreover, we have a deep bench of management and technology talent that we believe provides us with an unparalleled pipeline of future leaders and innovators.
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Open Platforms. Many of our competitors want to lock customers into one flavor of cloud and cloud stack. We believe that the cloud experience should be open and seamless across all our customers’ clouds - and the best cloud transformation partner is one who is unbiased, offers choice, neutral without an agenda. We are unique in our ability to enable any hybrid cloud strategy and a consistent experience that is open to any cloud and differentiated with our partner integrations.
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resellers that sell our products and services, frequently with their own value-added products or services, to targeted customer groups;
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distribution partners that supply our solutions to resellers;
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original equipment manufacturers ("OEMs") that integrate our products and services with their own products and services, and sell the integrated solution;
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independent software vendors that provide their clients with specialized software products and often assist us in selling our products and services to clients purchasing their products;
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systems integrators that provide expertise in designing and implementing custom IT solutions and often partner with us to extend their expertise or influence the sale of our products and services; and
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•
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advisory firms that provide various levels of management and IT consulting, including some systems integration work, and typically partner with us on client solutions that require our unique products and services.
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Name
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Age
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Position
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Antonio Neri
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52
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President and Chief Executive Officer
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Philip Davis
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52
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President, Hybrid IT
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Kirt P. Karros
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50
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Senior Vice President, Finance and Treasurer
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Alan May
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61
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Executive Vice President and Chief People Officer
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Keerti Melkote
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49
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President, Intelligent Edge
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Jeff T. Ricci
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58
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Senior Vice President, Controller and Principal Accounting Officer
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Tarek Robbiati
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54
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Executive Vice President and Chief Financial Officer
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Irv Rothman
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73
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President and Chief Executive Officer, HPE Financial Services
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John Schultz
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55
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Executive Vice President, Chief Legal and Administrative Officer and Secretary
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•
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ongoing instability or changes in a country's or region's economic or political conditions, including inflation, recession, interest rate fluctuations and actual or anticipated military or political conflicts, including uncertainties and instability in economic and market conditions caused by the United Kingdom’s vote to exit the European Union;
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•
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longer collection cycles and financial instability among customers;
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trade regulations and procedures and actions affecting production, pricing and marketing of products, including policies adopted by countries that may champion or otherwise favor domestic companies and technologies over foreign competitors, or federal and state tax reforms;
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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 policies which may adversely impact our access to technical and professional talent;
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managing our geographically dispersed workforce;
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changes in the international, national or local regulatory and legal environments;
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differing technology standards or customer requirements;
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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;
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•
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difficulties associated with repatriating earnings in restricted countries, and changes in tax laws; and
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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.
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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.
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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 services for prices in excess of the then-current market price, we may be at a disadvantage to competitors who have access to components or services at lower prices, our gross margin could suffer, and we could incur additional charges relating to inventory obsolescence. Any of these developments could adversely affect our future results of operations and financial condition.
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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.
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•
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Single-source suppliers. We obtain a significant number of components from single sources due to technology, availability, price, quality, scale or customization needs. 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, 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.
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Managing business combination and investment transactions requires varying levels of management resources, which may divert our attention from other business operations.
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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.
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Certain previous business combination and investment transactions have resulted, and in the future any such transactions by us may result, in significant costs and expenses, including those related to severance pay, early retirement costs, employee benefit costs, charges from the elimination of duplicative facilities and contracts, 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.
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•
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Any increased or unexpected costs, unanticipated delays or failure to meet contractual obligations could make business combination and investment transactions less profitable or unprofitable.
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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.
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Our due diligence process may fail to identify significant issues with the acquired company's product quality, financial disclosures, accounting practices or internal control deficiencies.
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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 is not consummated.
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In order to complete a business combination and investment transaction, we may issue common stock, potentially creating dilution for our existing stockholders.
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We may borrow to finance business combination and investment transactions, and the amount and terms of any potential future acquisition-related or other borrowings, as well as other factors, could affect our liquidity and financial condition.
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Our effective tax rate on an ongoing basis is uncertain, and business combination and investment transactions could adversely impact our effective tax rate.
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An 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.
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Business combination and investment transactions may lead to litigation, which could impact our financial condition and results of operations.
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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.
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successfully combining product and service offerings, including under the single Hewlett Packard Enterprise brand, and entering or expanding into markets in which we are not experienced or are developing expertise;
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convincing customers and distributors that the transaction will not diminish customer service standards or business focus;
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persuading customers and distributors to not 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;
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consolidating and rationalizing corporate IT infrastructure, which may include multiple legacy systems from various acquisitions and integrating software code and business processes;
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minimizing the diversion of management attention from ongoing business concerns;
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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;
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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;
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achieving savings from supply chain integration; and
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•
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managing integration issues shortly after or pending the completion of other independent transactions.
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•
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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;
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the announcement of new, planned or contemplated products, services, technological innovations, acquisitions, divestitures or other significant transactions by Hewlett Packard Enterprise or its competitors;
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•
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quarterly increases or decreases in revenue, gross margin, earnings or cash flows, changes in estimates by the investment community or financial outlook provided by Hewlett Packard Enterprise and variations between actual and estimated financial results;
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•
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announcements of actual and anticipated financial results by Hewlett Packard Enterprise's competitors and other companies in the IT industry;
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•
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developments relating to pending investigations, claims and disputes; and
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•
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the timing and amount of share repurchases by Hewlett Packard Enterprise.
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•
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requiring a substantial portion of our cash flow from operations to make principal and interest payments;
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•
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making it more difficult to satisfy other obligations;
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•
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increasing the risk of a future credit ratings downgrade of our debt, which could increase future debt costs and limit the future availability of debt financing;
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•
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increasing our vulnerability to general adverse economic and industry conditions;
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•
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reducing the cash flows available to fund capital expenditures and other corporate purposes and to grow our business;
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•
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limiting our flexibility in planning for, or reacting to, changes in our business and industry; and
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•
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limiting our ability to borrow additional funds as needed or take advantage of business opportunities as they arise, pay cash dividends or repurchase our common stock.
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•
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authorizing blank check preferred stock, which we could issue with voting, liquidation, dividend and other rights superior to our common stock;
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•
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limiting the liability of, and providing indemnification to, our directors and officers;
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•
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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;
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•
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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
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•
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controlling the procedures for conduct of our Board of Directors and stockholder meetings and election, appointment and removal of our directors.
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•
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was insolvent;
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•
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was rendered insolvent by reason of the Separation and distribution;
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•
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had remaining assets constituting unreasonably small capital; or
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•
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intended to incur, or believed it would incur, debts beyond its ability to pay these debts as they matured, then the court could void the Separation and distribution, in whole or in part, as a fraudulent conveyance or transfer. The court could then require our stockholders to return to HP Inc. some or all of the shares of Hewlett Packard Enterprise common stock issued in the distribution, or require HP Inc. or Hewlett Packard Enterprise, as the case may be, to fund liabilities of the other company for the benefit of creditors. The measure of insolvency will vary depending upon the jurisdiction whose law is being applied. Generally, however, an entity would be considered insolvent if the fair value of its assets was less than the amount of its liabilities, or if it incurred debt beyond its ability to repay the debt as it matures.
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As of October 31, 2019
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|||||||
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Owned
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Leased
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Total
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|||
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(Square feet in millions)
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|||||||
Administration and support
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4
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7
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11
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(Percentage)
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38
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%
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62
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%
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100
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%
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Core data centers, manufacturing plants, research and development facilities, and warehouse operations
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1
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|
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1
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|
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2
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(Percentage)
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48
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%
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52
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%
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100
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%
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Total
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5
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|
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8
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|
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13
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(Percentage)
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40
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%
|
|
60
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%
|
|
100
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%
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Americas
Puerto Rico—Aguadilla
United States—Alpharetta, Andover, Austin, Carrollton, Chippewa Falls, Colorado Springs, Fremont, Fort Collins, Houston, Milpitas, Palo Alto, Roseville, San Jose, Santa Clara, Sunnyvale
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Europe, Middle East, Africa
United Kingdom—Bristol, Erskine
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Asia Pacific
China—Beijing, Shanghai
India—Bangalore
Japan—Tokyo
Singapore—Singapore
Taiwan—Taipei
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Market Price Per Share
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||||||||||||||
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2019
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2018
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||||||||||||
Fiscal Quarter
|
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High
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Low
|
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High
|
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Low
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||||||||
First quarter
|
|
$
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16.52
|
|
|
$
|
12.09
|
|
|
$
|
17.07
|
|
|
$
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12.82
|
|
Second quarter
|
|
$
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16.97
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|
|
$
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15.05
|
|
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$
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19.48
|
|
|
$
|
14.66
|
|
Third quarter
|
|
$
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16.07
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|
|
$
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13.55
|
|
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$
|
17.82
|
|
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$
|
14.46
|
|
Fourth quarter
|
|
$
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16.55
|
|
|
$
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12.52
|
|
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$
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17.59
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|
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$
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14.36
|
|
|
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2019
|
||||||||||||||
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Q1
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Q2
|
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Q3
|
|
Q4
|
||||||||
Dividends declared
|
|
$
|
0.1125
|
|
|
$
|
0.1125
|
|
|
$
|
0.1125
|
|
|
$
|
0.1200
|
|
Dividends paid
|
|
$
|
0.1125
|
|
|
$
|
0.1125
|
|
|
$
|
0.1125
|
|
|
$
|
0.1125
|
|
|
|
2018
|
||||||||||||||
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
||||||||
Dividends declared
|
|
$
|
0.1500
|
|
|
$
|
0.1125
|
|
|
$
|
0.1125
|
|
|
$
|
0.1125
|
|
Dividends paid
|
|
$
|
0.0750
|
|
|
$
|
0.0750
|
|
|
$
|
0.1125
|
|
|
$
|
0.1125
|
|
|
11/2015
|
|
10/2016
|
|
10/2017
|
|
10/2018
|
|
10/2019
|
||||||||||
Hewlett Packard Enterprise
|
$
|
100.00
|
|
|
$
|
157.00
|
|
|
$
|
169.80
|
|
|
$
|
190.36
|
|
|
$
|
211.12
|
|
S&P 500 Index
|
$
|
100.00
|
|
|
$
|
103.27
|
|
|
$
|
127.67
|
|
|
$
|
137.04
|
|
|
$
|
156.66
|
|
S&P Information Technology Index
|
$
|
100.00
|
|
|
$
|
109.74
|
|
|
$
|
152.49
|
|
|
$
|
171.25
|
|
|
$
|
209.93
|
|
|
For the fiscal years ended October 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
In millions, except per share amounts
|
||||||||||||||||||
Statements of Earnings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net revenue
|
$
|
29,135
|
|
|
$
|
30,852
|
|
|
$
|
28,871
|
|
|
$
|
30,280
|
|
|
$
|
31,077
|
|
Earnings from continuing operations(1)
|
$
|
1,274
|
|
|
$
|
1,737
|
|
|
$
|
564
|
|
|
$
|
3,741
|
|
|
$
|
1,903
|
|
Net earnings from continuing operations
|
$
|
1,049
|
|
|
$
|
2,012
|
|
|
$
|
436
|
|
|
$
|
3,237
|
|
|
$
|
2,640
|
|
Net loss from discontinued operations
|
—
|
|
|
(104
|
)
|
|
(92
|
)
|
|
(76
|
)
|
|
(179
|
)
|
|||||
Net earnings
|
$
|
1,049
|
|
|
$
|
1,908
|
|
|
$
|
344
|
|
|
$
|
3,161
|
|
|
$
|
2,461
|
|
Net earnings (loss) per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
0.78
|
|
|
$
|
1.32
|
|
|
$
|
0.26
|
|
|
$
|
1.89
|
|
|
$
|
1.46
|
|
Discontinued operations
|
—
|
|
|
(0.07
|
)
|
|
(0.05
|
)
|
|
(0.05
|
)
|
|
(0.10
|
)
|
|||||
Total basic net earnings per share
|
$
|
0.78
|
|
|
$
|
1.25
|
|
|
$
|
0.21
|
|
|
$
|
1.84
|
|
|
$
|
1.36
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
0.77
|
|
|
$
|
1.30
|
|
|
$
|
0.26
|
|
|
$
|
1.86
|
|
|
$
|
1.44
|
|
Discontinued operations
|
—
|
|
|
(0.07
|
)
|
|
(0.05
|
)
|
|
(0.04
|
)
|
|
(0.10
|
)
|
|||||
Total diluted net earnings per share
|
$
|
0.77
|
|
|
$
|
1.23
|
|
|
$
|
0.21
|
|
|
$
|
1.82
|
|
|
$
|
1.34
|
|
Cash dividends declared per share
|
$
|
0.4575
|
|
|
$
|
0.4875
|
|
|
$
|
0.2600
|
|
|
$
|
0.2200
|
|
|
$
|
—
|
|
Basic shares outstanding
|
1,353
|
|
|
1,529
|
|
|
1,646
|
|
|
1,715
|
|
|
1,804
|
|
|||||
Diluted shares outstanding
|
1,366
|
|
|
1,553
|
|
|
1,674
|
|
|
1,739
|
|
|
1,834
|
|
|||||
Balance Sheets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
At year-end:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total assets
|
$
|
51,803
|
|
|
$
|
55,493
|
|
|
$
|
61,406
|
|
|
$
|
79,629
|
|
|
$
|
79,862
|
|
Long-term debt
|
$
|
9,395
|
|
|
$
|
10,136
|
|
|
$
|
10,182
|
|
|
$
|
12,168
|
|
|
$
|
14,679
|
|
Total debt
|
$
|
13,820
|
|
|
$
|
12,141
|
|
|
$
|
14,032
|
|
|
$
|
15,693
|
|
|
$
|
15,353
|
|
|
(1)
|
Effective at the beginning of the first quarter of fiscal 2019, in connection with the adoption of the accounting standards update for retirement benefits (Topic 715), the Company reclassified its non-service net periodic benefit credit from operating expense to other income and expense in its Consolidated Statements of Earnings. The Company reflected these changes retrospectively, by transferring the non-service net periodic benefit credit, a portion of which was previously allocated to the segments, and the remainder of which was reported within Unallocated corporate costs and eliminations, Restructuring charges, Transformation costs, Separation costs and Defined benefit plan remeasurement benefit.
|
•
|
Overview. A discussion of our business and overall analysis of financial and other highlights affecting the Company to provide context for the remainder of MD&A. The overview analysis compares fiscal 2019 to fiscal 2018.
|
•
|
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 2019 and fiscal 2018 to the prior-year periods. A discussion of the results of operations at the consolidated level is followed by a discussion of the results of operations at the segment level.
|
•
|
Liquidity and Capital Resources. An analysis of changes in our cash flows and a discussion of our financial condition and liquidity.
|
•
|
Contractual and Other Obligations. An overview of contractual obligations, retirement and post-retirement benefit plan funding, restructuring plans, uncertain tax positions, off-balance sheet arrangements, cross-indemnifications with HP Inc. (formerly known as "Hewlett-Packard Company" and also referred to in this Annual Report as "former Parent"), and cross-indemnifications with DXC Technology Company ("DXC") and Micro Focus International plc (“Micro Focus”).
|
|
HPE
Consolidated |
|
Hybrid IT
|
|
Intelligent Edge
|
|
Financial Services
|
|
Corporate
Investments |
||||||||||
|
Dollars in millions, except for per share amounts
|
||||||||||||||||||
Net revenue(1)
|
$
|
29,135
|
|
|
$
|
22,825
|
|
|
$
|
2,837
|
|
|
$
|
3,581
|
|
|
$
|
507
|
|
Year-over-year change %
|
(5.6
|
) %
|
|
(6.8
|
) %
|
|
(2.8
|
) %
|
|
(2.5
|
) %
|
|
(6.6
|
) %
|
|||||
Earnings (loss) from continuing operations(2)
|
$
|
1,274
|
|
|
$
|
2,804
|
|
|
$
|
95
|
|
|
$
|
305
|
|
|
$
|
(108
|
)
|
Earnings (loss) from continuing operations as a % of net revenue
|
4.4
|
%
|
|
12.3
|
%
|
|
3.3
|
%
|
|
8.5
|
%
|
|
(21.3
|
) %
|
|||||
Year-over-year change percentage points
|
(1.2
|
)pts
|
|
2.1
|
pts
|
|
(6.2
|
)pts
|
|
0.7
|
pts
|
|
(4.5
|
)pts
|
|||||
Net earnings from continuing operations
|
$
|
1,049
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic net EPS from continuing operations
|
$
|
0.78
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Diluted net EPS from continuing operations
|
$
|
0.77
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
HPE consolidated net revenue excludes intersegment net revenue.
|
(2)
|
Segment earnings from operations exclude certain unallocated corporate costs and eliminations, stock-based compensation expense related to corporate and certain global functions, transformation costs, amortization of intangible assets, acquisition, dispositions and other related charges, restructuring charges, separation costs, impairment of goodwill and disaster recoveries.
|
|
Change in basis
points
|
|
Change in Net Periodic Benefit Cost
|
|||
|
|
|
In millions
|
|||
Assumptions:
|
|
|
|
|
|
|
Discount rate
|
(25
|
)
|
|
$
|
25
|
|
Expected increase in compensation levels
|
25
|
|
|
$
|
4
|
|
Expected long-term return on plan assets
|
(25
|
)
|
|
$
|
31
|
|
|
For the fiscal years ended October 31,
|
|||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
|
Dollars
|
|
% of Revenue
|
|
Dollars
|
|
% of Revenue
|
|
Dollars
|
|
% of Revenue
|
|||||||||
|
Dollars in millions
|
|||||||||||||||||||
Net revenue
|
$
|
29,135
|
|
|
100.0
|
%
|
|
$
|
30,852
|
|
|
100.0
|
%
|
|
$
|
28,871
|
|
|
100.0
|
%
|
Cost of sales
|
19,642
|
|
|
67.4
|
|
|
21,621
|
|
|
70.1
|
|
|
20,202
|
|
|
70.0
|
|
|||
Gross profit
|
9,493
|
|
|
32.6
|
|
|
9,231
|
|
|
29.9
|
|
|
8,669
|
|
|
30.0
|
|
|||
Research and development
|
1,842
|
|
|
6.3
|
|
|
1,667
|
|
|
5.4
|
|
|
1,490
|
|
|
5.2
|
|
|||
Selling, general and administrative
|
4,907
|
|
|
16.9
|
|
|
4,921
|
|
|
15.9
|
|
|
5,012
|
|
|
17.3
|
|
|||
Amortization of intangible assets
|
267
|
|
|
0.8
|
|
|
294
|
|
|
1.0
|
|
|
321
|
|
|
1.1
|
|
|||
Impairment of goodwill
|
—
|
|
|
—
|
|
|
88
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|||
Restructuring charges
|
—
|
|
|
—
|
|
|
19
|
|
|
0.1
|
|
|
388
|
|
|
1.3
|
|
|||
Transformation costs
|
453
|
|
|
1.6
|
|
|
414
|
|
|
1.3
|
|
|
359
|
|
|
1.2
|
|
|||
Disaster (recoveries) charges
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
93
|
|
|
0.3
|
|
|||
Acquisition, disposition and other related charges
|
757
|
|
|
2.6
|
|
|
82
|
|
|
0.3
|
|
|
203
|
|
|
0.7
|
|
|||
Separation costs
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
248
|
|
|
0.9
|
|
|||
Defined benefit plan remeasurement benefit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|||
Earnings from continuing operations
|
1,274
|
|
|
4.4
|
|
|
1,737
|
|
|
5.6
|
|
|
564
|
|
|
2.0
|
|
|||
Interest and other, net
|
(177
|
)
|
|
(0.6
|
)
|
|
(274
|
)
|
|
(0.9
|
)
|
|
(327
|
)
|
|
(1.1
|
)
|
|||
Tax indemnification adjustments
|
377
|
|
|
1.3
|
|
|
(1,354
|
)
|
|
(4.3
|
)
|
|
(3
|
)
|
|
—
|
|
|||
Non-service net periodic benefit credit
|
59
|
|
|
0.2
|
|
|
121
|
|
|
0.4
|
|
|
61
|
|
|
0.2
|
|
|||
Earnings (loss) from equity interests
|
20
|
|
|
—
|
|
|
38
|
|
|
0.1
|
|
|
(23
|
)
|
|
(0.1
|
)
|
|||
Earnings from continuing operations before taxes
|
1,553
|
|
|
5.3
|
|
|
268
|
|
|
0.9
|
|
|
272
|
|
|
1.0
|
|
|||
(Provision) benefit for taxes
|
(504
|
)
|
|
(1.7
|
)
|
|
1,744
|
|
|
5.6
|
|
|
164
|
|
|
0.5
|
|
|||
Net earnings from continuing operations
|
1,049
|
|
|
3.6
|
|
|
2,012
|
|
|
6.5
|
|
|
436
|
|
|
1.5
|
|
|||
Net loss from discontinued operations
|
—
|
|
|
—
|
|
|
(104
|
)
|
|
(0.3
|
)
|
|
(92
|
)
|
|
(0.3
|
)
|
|||
Net earnings
|
$
|
1,049
|
|
|
3.6
|
%
|
|
$
|
1,908
|
|
|
6.2
|
%
|
|
$
|
344
|
|
|
1.2
|
%
|
|
For the fiscal years ended October 31,
|
|||
|
2019
|
|
2018
|
|
|
Percentage Points
|
|||
Hybrid IT
|
(5.4
|
)
|
|
5.5
|
Intelligent Edge
|
(0.3
|
)
|
|
0.7
|
Financial Services
|
(0.3
|
)
|
|
0.2
|
Corporate Investments/Other(1)
|
0.4
|
|
|
0.5
|
Total HPE
|
(5.6
|
)
|
|
6.9
|
|
•
|
Hybrid IT net revenue decreased, led by Compute, due primarily to a decline in Tier-1 server sales and lower revenue from China as we continue to exit less profitable product categories and certain markets, and unfavorable currency fluctuations. Also, weak demand in the enterprise market led to lower revenue from ISS core products, resulting from longer sales cycles, and lower HPE Pointnext revenue, which also experienced unfavorable currency fluctuations. Storage revenue declined due to the overall weakness in the storage market;
|
•
|
Intelligent Edge net revenue decreased due primarily to lower sales of our WLAN and switching products within HPE Aruba Products driven by sales execution issues, particularly in the North America region, weaker demand and unfavorable foreign currency fluctuations; and
|
•
|
FS net revenue decreased due primarily to a decrease in rental revenue and unfavorable currency fluctuations.
|
•
|
Hybrid IT net revenue increased due to growth in Compute from ISS core products as a result of higher average unit prices ("AUPs"), growth from edge products, increased market demand for IT products, favorable currency fluctuations, and growth in Storage primarily as a result of the Nimble Storage acquistion;
|
•
|
Intelligent Edge net revenue increased due primarily to growth in HPE Aruba Product from campus switching; and
|
•
|
FS net revenue increased due primarily to favorable foreign currency fluctuations and higher asset management revenue.
|
•
|
Hybrid IT gross margin increased due primarily to a combination of factors including the year-over-year decrease in commodity costs, lower costs of services and products due to our cost management initiatives and a lower mix of revenue from lower-margin Tier-1 server sales coupled with a higher mix of revenue from higher-margin products;
|
•
|
Intelligent Edge gross margin increased due primarily to a higher mix of revenue from higher-margin products and HPE Aruba Services, and cost management activities; and
|
•
|
FS gross margin increased due primarily to higher margins from lease extensions and lease buyouts and lower bad debt expense.
|
•
|
Hybrid IT gross margin decreased due primarily to a higher mix of lower-margin solutions and higher variable compensation expense;
|
•
|
Intelligent Edge gross margin increased due primarily to a higher mix of revenue from higher-margin products; and
|
•
|
FS gross margin increased due primarily to favorable foreign currency fluctuations, higher asset management activity related to lease extensions and higher margins on lease buyouts.
|
|
For the fiscal years ended October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
Dollars in millions
|
||||||||||
Net revenue
|
$
|
22,825
|
|
|
$
|
24,498
|
|
|
$
|
22,939
|
|
Earnings from operations
|
$
|
2,804
|
|
|
$
|
2,503
|
|
|
$
|
2,183
|
|
Earnings from operations as a % of net revenue
|
12.3
|
%
|
|
10.2
|
%
|
|
9.5
|
%
|
|
For the fiscal years ended October 31,
|
||||||||||||||||
|
Net Revenue
|
|
Weighted Net Revenue Change
Percentage Points |
||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
||||||||
|
Dollars in millions
|
|
|
|
|
||||||||||||
Compute
|
$
|
12,879
|
|
|
$
|
14,057
|
|
|
$
|
12,913
|
|
|
(4.8
|
)
|
|
4.9
|
|
Storage
|
3,609
|
|
|
3,706
|
|
|
3,280
|
|
|
(0.4
|
)
|
|
1.9
|
|
|||
Hybrid IT Product
|
$
|
16,488
|
|
|
$
|
17,763
|
|
|
$
|
16,193
|
|
|
(5.2
|
)
|
|
6.8
|
|
HPE Pointnext
|
6,337
|
|
|
6,735
|
|
|
6,746
|
|
|
(1.6
|
)
|
|
—
|
|
|||
Total Hybrid IT
|
$
|
22,825
|
|
|
$
|
24,498
|
|
|
$
|
22,939
|
|
|
(6.8
|
)
|
|
6.8
|
|
•
|
The net revenue decrease in Compute was due primarily to a decline in Tier-1 server sales and a decline in revenue from China. Revenue from ISS core products decreased due to a decline in unit shipments as a result of demand weakness, primarily in the blade, tower and rack product categories, partially offset by higher AUPs in the tower and rack product categories. Mission Critical Servers ("MCS") experienced a net revenue decline driven by lower revenue from Itanium and NonStop products.
|
•
|
The net revenue decrease in Storage was due primarily to a decline in Converged storage, driven by lower revenue in 3PAR and Big Data products, partially offset by growth from HPE Nimble Storage. Traditional storage experienced a revenue decline compared to the prior year period due primarily to lower revenues from Modular Storage Array ("MSA") and tape products.
|
•
|
The net revenue increase in Compute was due primarily to growth in ISS core products along with favorable currency fluctuations, growth in edge compute products and higher revenue from the MCS business. The increase in Compute net revenue was partially offset by a decline in Tier-1 server sales as we continue to exit less profitable product categories. The growth in core ISS revenue was driven by an increase in AUPs across most core products due to several factors including the cost of certain commodities, Generation 10 servers representing a higher mix of overall ISS core server products and improved server configurations. The increase in AUPs was partially offset by a decline in unit shipments, primarily in the rack, tower and blade categories. MCS revenue increased as a result of higher revenue from NonStop products.
|
•
|
The net revenue increase in Storage was driven by growth in our converged and traditional storage products. Converged storage revenue growth was due primarily to revenue from HPE Nimble Storage and growth in big data products. Traditional storage revenue increased as a result of growth in networking and MSA products.
|
|
For the fiscal years ended October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
Dollars in millions
|
||||||||||
Net revenue
|
$
|
2,837
|
|
|
$
|
2,920
|
|
|
$
|
2,722
|
|
Earnings from operations
|
$
|
95
|
|
|
$
|
277
|
|
|
$
|
291
|
|
Earnings from operations as a % of net revenue
|
3.3
|
%
|
|
9.5
|
%
|
|
10.7
|
%
|
|
For the fiscal years ended October 31,
|
|||||||||||||||
|
Net Revenue
|
|
Weighted Net Revenue Change
Percentage Points |
|||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|||||||
|
Dollars in millions
|
|
|
|
|
|||||||||||
HPE Aruba Product
|
$
|
2,462
|
|
|
$
|
2,599
|
|
|
$
|
2,435
|
|
|
(4.6
|
)
|
|
6.1
|
HPE Aruba Services
|
375
|
|
|
321
|
|
|
287
|
|
|
1.8
|
|
|
1.2
|
|||
Total Intelligent Edge
|
$
|
2,837
|
|
|
$
|
2,920
|
|
|
$
|
2,722
|
|
|
(2.8
|
)
|
|
7.3
|
|
For the fiscal years ended October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
Dollars in millions
|
||||||||||
Net revenue
|
$
|
3,581
|
|
|
$
|
3,671
|
|
|
$
|
3,602
|
|
Earnings from operations
|
$
|
305
|
|
|
$
|
286
|
|
|
$
|
301
|
|
Earnings from operations as a % of net revenue
|
8.5
|
%
|
|
7.8
|
%
|
|
8.4
|
%
|
|
For the fiscal years ended October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
Dollars in millions
|
||||||||||
Total financing volume
|
$
|
6,200
|
|
|
$
|
6,521
|
|
|
$
|
6,085
|
|
|
As of October 31,
|
||||||
|
2019
|
|
2018
|
||||
|
Dollars in millions
|
||||||
Financing receivables, gross
|
$
|
8,652
|
|
|
$
|
8,256
|
|
Net equipment under operating leases
|
4,084
|
|
|
4,212
|
|
||
Capitalized profit on intercompany equipment transactions(1)
|
382
|
|
|
502
|
|
||
Intercompany leases(1)
|
100
|
|
|
125
|
|
||
Gross portfolio assets
|
13,218
|
|
|
13,095
|
|
||
Allowance for doubtful accounts(2)
|
131
|
|
|
120
|
|
||
Operating lease equipment reserve
|
60
|
|
|
63
|
|
||
Total reserves
|
191
|
|
|
183
|
|
||
Net portfolio assets
|
$
|
13,027
|
|
|
$
|
12,912
|
|
Reserve coverage
|
1.4
|
%
|
|
1.4
|
%
|
||
Debt-to-equity ratio(3)
|
7.0x
|
|
|
7.0x
|
|
|
(1)
|
Intercompany activity is eliminated in consolidation.
|
(2)
|
Allowance for doubtful accounts for financing receivables includes both the short- and long-term portions.
|
(3)
|
Debt benefiting FS consists of intercompany equity that is treated as debt for segment reporting purposes, intercompany debt, and borrowing- and funding-related activity associated with FS and its subsidiaries. Debt benefiting FS totaled $11.4 billion at October 31, 2019 and 2018, respectively, and was determined by applying an assumed debt-to-equity ratio, which management believes to be comparable to that of other similar financing companies. FS equity at both October 31, 2019 and October 31, 2018 was $1.6 billion.
|
|
For the fiscal years ended October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
Dollars in millions
|
||||||||||
Net revenue
|
$
|
507
|
|
|
$
|
543
|
|
|
$
|
553
|
|
Loss from operations
|
$
|
(108
|
)
|
|
$
|
(91
|
)
|
|
$
|
(91
|
)
|
Loss from operations as a % of net revenue
|
(21.3
|
)%
|
|
(16.8
|
)%
|
|
(16.5
|
)%
|
|
As of October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions
|
||||||||||
Cash, cash equivalents and restricted cash
|
$
|
4,076
|
|
|
$
|
5,084
|
|
|
$
|
9,592
|
|
Total debt
|
$
|
13,820
|
|
|
$
|
12,141
|
|
|
$
|
14,032
|
|
Available borrowing resources
|
$
|
10,389
|
|
|
$
|
9,757
|
|
|
$
|
9,891
|
|
|
For the fiscal years ended October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions
|
||||||||||
Net cash provided by operating activities
|
$
|
3,997
|
|
|
$
|
2,964
|
|
|
$
|
1,335
|
|
Net cash used in investing activities
|
(3,457
|
)
|
|
(1,880
|
)
|
|
(5,349
|
)
|
|||
Net cash (used in) provided by financing activities
|
(1,548
|
)
|
|
(5,592
|
)
|
|
164
|
|
|||
Net (decrease) in cash, cash equivalents and restricted cash
|
$
|
(1,008
|
)
|
|
$
|
(4,508
|
)
|
|
$
|
(3,850
|
)
|
|
As of October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
Dollars in millions
|
||||||||||
Short-term debt
|
$
|
4,425
|
|
|
$
|
2,005
|
|
|
$
|
3,850
|
|
Long-term debt
|
$
|
9,395
|
|
|
$
|
10,136
|
|
|
$
|
10,182
|
|
Weighted-average interest rate
|
4.1
|
%
|
|
4.5
|
%
|
|
3.8
|
%
|
|
As of
October 31, 2019 |
||
|
In millions
|
||
Commercial paper programs
|
$
|
4,302
|
|
Uncommitted lines of credit
|
$
|
1,337
|
|
Revolving credit facility
|
$
|
4,750
|
|
|
|
|
Payments Due by Period
|
||||||||||||||||
|
Total
|
|
1 Year or
Less |
|
1-3 Years
|
|
3-5 Years
|
|
More than
5 Years |
||||||||||
|
In millions
|
||||||||||||||||||
Principal payments on long-term debt(1)
|
$
|
12,773
|
|
|
$
|
3,453
|
|
|
$
|
3,557
|
|
|
$
|
1,013
|
|
|
$
|
4,750
|
|
Interest payments on long-term debt(2)
|
4,459
|
|
|
538
|
|
|
750
|
|
|
538
|
|
|
2,633
|
|
|||||
Operating lease obligations (net of sublease rental income)
|
1,243
|
|
|
190
|
|
|
301
|
|
|
241
|
|
|
511
|
|
|||||
Purchase obligations and other(3)
|
296
|
|
|
138
|
|
|
99
|
|
|
18
|
|
|
41
|
|
|||||
Capital lease obligations (includes interest)
|
73
|
|
|
6
|
|
|
13
|
|
|
13
|
|
|
41
|
|
|||||
Total(4)(5)(6)(7)(8)
|
$
|
18,844
|
|
|
$
|
4,325
|
|
|
$
|
4,720
|
|
|
$
|
1,823
|
|
|
$
|
7,976
|
|
|
(1)
|
Amounts represent the principal cash payments relating to our long-term debt and do not include fair value adjustments, discounts or premiums and debt issuance costs. As of October 31, 2019, the future principal payments related to asset-backed debt securities were expected to be $390 million in fiscal 2020, $248 million in fiscal 2021 and $125 million in fiscal 2022. For more information on our debt, see Note 15, "Borrowings", to the Consolidated Financial Statements in Item 8, which is incorporated herein by reference.
|
(2)
|
Amounts represent the expected interest payments relating to our long-term debt. We use interest rate swaps to mitigate the exposure of our fixed rate debt to changes in fair value resulting from changes in interest rates, or hedge the variability of cash flows in the interest payments associated with our variable-rate debt. The impact of our outstanding interest rate swaps at October 31, 2019 was factored into the calculation of the future interest payments on long-term debt.
|
(3)
|
Purchase obligations and other 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, as well as settlements that we have reached with third parties, requiring us to pay determined amounts over a specific period of time. These purchase obligations are related principally to software maintenance and support services 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)
|
In fiscal 2020, we anticipate making contributions of $182 million to our non-U.S. pension plans. Our policy is to fund pension plans so that we meet at least the minimum contribution requirements, as established 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 6, "Retirement and Post-Retirement Benefit Plans", to the Consolidated Financial Statements in Item 8, which is incorporated herein by reference.
|
(5)
|
As of October 31, 2019, we expect future cash payments of approximately $597 million in connection with our approved restructuring plans, which includes $380 million expected to be paid in fiscal 2020 and $217 million expected to be paid through fiscal 2022. Payments for restructuring activities 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, see Note 4, "Restructuring", and Note 5, "HPE Next", to the Consolidated Financial Statements in Item 8, which is incorporated herein by reference.
|
(6)
|
As of October 31, 2019, we had approximately $536 million of recorded liabilities and related interest and penalties pertaining to uncertain tax positions. These liabilities and related interest and penalties include $3 million expected to be paid within one year. For the remaining amount, 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 8, "Taxes on Earnings", to the Consolidated Financial Statements in Item 8, which is incorporated herein by reference.
|
(7)
|
In connection with the Separation, the Company entered into a Separation and Distribution Agreement with HP Inc., effective November 1, 2015, whereby the Company agreed to indemnify HP Inc., each of its subsidiaries and each of their respective directors, officers and employees from and against all liabilities relating to, arising out of or resulting from, among other matters, the liabilities allocated to the Company as part of the Separation. HP Inc. similarly agreed to indemnify the Company, each of its subsidiaries and each of their respective directors, officers and employees from and against all claims and liabilities relating to, arising out of or resulting from, among other matters, the liabilities allocated to HP Inc. as part of the Separation. Additionally, in connection with the Separation, the Company entered into a Tax Matters Agreement (the "Tax Matters Agreement") with HP Inc., effective November 1, 2015, that governs the rights and obligations of the Company and HP Inc. for certain pre-Separation tax liabilities. The Tax Matters Agreement provides that the Company and HP Inc. will share certain pre-Separation income tax liabilities that arise from adjustments made by tax authorities to the Company and HP Inc.'s U.S. and certain non-U.S. income tax returns. On October 30, 2019, the Company and HP Inc. entered into a Termination and Mutual Release Agreement to terminate the Tax Matters Agreement. Under the Termination and Mutual Release Agreement, HP Inc. paid the Company $200 million and agreed to pay $50 million on or before October 31, 2020 and October 31, 2021, each. The Company and HP Inc. also agreed to release each other from certain claims and liabilities related to the Tax Matters Agreement. As of October 31, 2019, we had approximately $231 million of recorded net receivables, pertaining to income tax indemnification with HP Inc., including $131 million related to certain state income tax liabilities for which the Company is joint and severally liable. For the amounts related to the joint and several state tax liabilities, we are unable to make a reasonable estimate as to when cash settlement with HP Inc. might occur due to the uncertainties related to the underlying tax matters. Realization of these obligations would result from payments to taxing authorities and the resulting settlements with HP Inc. under the Termination and Mutual Release Agreement. For more information on our general cross-indemnification, Tax Matters Agreement and other joint and several liability income tax matters with HP Inc., see Note 19, "Guarantees, Indemnifications and Warranties", to the Consolidated Financial Statements in Item 8, which is incorporated herein by reference.
|
(8)
|
In connection with the Everett and Seattle Transactions, the Company entered into a Separation and Distribution Agreement with each of DXC, effective May 24, 2016, and Seattle, effective September 7, 2016, whereby DXC and Seattle, as applicable, agreed to indemnify HPE, each of its subsidiaries and each of their respective directors, officers and employees from and against all losses relating to, arising out of or resulting from, among other matters, the liabilities allocated to DXC and Seattle as part of the Everett Transaction and Seattle Transaction, respectively. HPE similarly agreed to indemnify DXC and Seattle, each of their subsidiaries and each of their respective directors, officers and employees from and against all losses relating to, arising out of or resulting from, among other matters, the liabilities allocated to the Company as part of the Everett Transaction and Seattle Transaction, respectively. Additionally, in connection with the Everett and Seattle Transactions, HPE entered into a Tax Matters Agreement with DXC and affiliates, effective March 31, 2017, (the "DXC Tax Matters
|
|
Page
|
|
|
Deferred Tax Asset Valuation Allowance
|
|
|
|
Description of the matter
|
|
At October 31, 2019, the Company had gross deferred assets relating to deductible temporary differences and loss and credit carryforwards of $10.0 billion with an offsetting valuation allowance of $8.2 billion. As discussed in Note 8, the Company reduces its deferred tax assets by a valuation allowance if, based upon the weight of all available evidence, it is more likely than not that some portion, or all, of the deferred tax assets will not be realized.
Auditing management's analysis of the realizability of the deferred tax assets was complex and highly judgmental because the assessment process involves significant judgment and subjective evaluation of assumptions that may be affected by future operations of the Company, market or economic conditions.
|
|
|
|
How we addressed the matter in our audit
|
|
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls that address the risks of material misstatement relating to the realizability of deferred tax assets, including controls over management’s evaluation of loss and other carryback attributes, projections of the future reversal of existing taxable temporary differences and future taxable income, and management’s identification and use of available tax planning strategies.
We evaluated the Company's assessment of the realizability of deferred tax assets and the resultant valuation allowance. Among other audit procedures performed, we evaluated the assumptions used by the Company to predict reversal of existing taxable temporary differences and to project future taxable income by jurisdiction. For example, we compared the projections of future taxable income with the actual results of prior periods and assessed management's consideration of current industry and economic trends. We also compared the projections of future taxable income with other forecasted financial information prepared by the Company. Further, we tested the completeness and accuracy of the underlying data used in the Company’s projections. We involved our tax professionals to evaluate the application of tax law in the Company’s available tax planning strategies, the Company’s assessment of its ability to carry back losses or other attributes, the scheduling of the reversal of existing temporary taxable differences and carryforward amounts, and the evaluation of the carryforward lives of its deferred tax assets.
|
|
|
|
|
|
Estimation of variable consideration
|
|
|
|
Description of the matter
|
|
As described in Note 1 to the consolidated financial statements, the Company recognizes revenue for sales to its customers after deducting management’s estimates of variable consideration which may include various rebates, volume-based discounts, cooperative marketing, price protection, and other incentive programs that are offered to customers, partners and distributors. Estimated variable consideration is presented within other accrued liabilities on the consolidated balance sheet and totaled $1.1 billion at October 31, 2019. Auditing the estimates of variable consideration was complex and judgmental due to the level of uncertainty involved in management’s estimate of expected usage of these programs.
|
|
|
|
How we addressed
the matter in our audit
|
|
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s process for estimating variable consideration, including controls over management’s review of the significant assumptions described above.
To test the Company’s determination of variable consideration we performed audit procedures that included, among others, evaluating the methodologies, testing the significant assumptions discussed above and testing the completeness and accuracy of the underlying data used by the Company in its analyses. We compared the significant assumptions to historical experience of the Company to develop an expectation of the variable consideration associated with product remaining in the distribution channel at October 31, 2019 which we compared to management’s recorded amount. In addition, we inspected the underlying agreements and compared the incentive rates used in the Company’s analyses with contractual rates. We assessed the historical accuracy of management’s estimates by comparing previous estimates of variable consideration to the amount of actual payments in subsequent periods.
|
/s/ ANTONIO F. NERI
|
|
/s/ TAREK A. ROBBIATI
|
Antonio F. Neri
President and Chief Executive Officer
|
|
Tarek A. Robbiati
Executive Vice President and Chief Financial Officer
|
December 12, 2019
|
|
December 12, 2019
|
|
For the fiscal years ended October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions, except per share amounts
|
||||||||||
Net revenue:
|
|
|
|
|
|
|
|
|
|||
Products
|
$
|
18,170
|
|
|
$
|
19,504
|
|
|
$
|
17,597
|
|
Services
|
10,507
|
|
|
10,901
|
|
|
10,878
|
|
|||
Financing income
|
458
|
|
|
447
|
|
|
396
|
|
|||
Total net revenue
|
29,135
|
|
|
30,852
|
|
|
28,871
|
|
|||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|||
Cost of products
|
12,533
|
|
|
14,090
|
|
|
12,709
|
|
|||
Cost of services
|
6,812
|
|
|
7,253
|
|
|
7,228
|
|
|||
Financing interest
|
297
|
|
|
278
|
|
|
265
|
|
|||
Research and development
|
1,842
|
|
|
1,667
|
|
|
1,490
|
|
|||
Selling, general and administrative
|
4,907
|
|
|
4,921
|
|
|
5,012
|
|
|||
Amortization of intangible assets
|
267
|
|
|
294
|
|
|
321
|
|
|||
Impairment of goodwill
|
—
|
|
|
88
|
|
|
—
|
|
|||
Restructuring charges
|
—
|
|
|
19
|
|
|
388
|
|
|||
Transformation costs
|
453
|
|
|
414
|
|
|
359
|
|
|||
Disaster (recoveries) charges
|
(7
|
)
|
|
—
|
|
|
93
|
|
|||
Acquisition, disposition and other related charges
|
757
|
|
|
82
|
|
|
203
|
|
|||
Separation costs
|
—
|
|
|
9
|
|
|
248
|
|
|||
Defined benefit plan remeasurement benefit
|
—
|
|
|
—
|
|
|
(9
|
)
|
|||
Total costs and expenses
|
27,861
|
|
|
29,115
|
|
|
28,307
|
|
|||
Earnings from continuing operations
|
1,274
|
|
|
1,737
|
|
|
564
|
|
|||
Interest and other, net
|
(177
|
)
|
|
(274
|
)
|
|
(327
|
)
|
|||
Tax indemnification adjustments
|
377
|
|
|
(1,354
|
)
|
|
(3
|
)
|
|||
Non-service net periodic benefit credit
|
59
|
|
|
121
|
|
|
61
|
|
|||
Earnings (loss) from equity interests
|
20
|
|
|
38
|
|
|
(23
|
)
|
|||
Earnings from continuing operations before taxes
|
1,553
|
|
|
268
|
|
|
272
|
|
|||
(Provision) benefit for taxes
|
(504
|
)
|
|
1,744
|
|
|
164
|
|
|||
Net earnings from continuing operations
|
1,049
|
|
|
2,012
|
|
|
436
|
|
|||
Net loss from discontinued operations
|
—
|
|
|
(104
|
)
|
|
(92
|
)
|
|||
Net earnings
|
$
|
1,049
|
|
|
$
|
1,908
|
|
|
$
|
344
|
|
Net earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|||
Basic
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
0.78
|
|
|
$
|
1.32
|
|
|
$
|
0.26
|
|
Discontinued operations
|
—
|
|
|
(0.07
|
)
|
|
(0.05
|
)
|
|||
Total basic net earnings per share
|
$
|
0.78
|
|
|
$
|
1.25
|
|
|
$
|
0.21
|
|
Diluted
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
0.77
|
|
|
$
|
1.30
|
|
|
$
|
0.26
|
|
Discontinued operations
|
—
|
|
|
(0.07
|
)
|
|
(0.05
|
)
|
|||
Total diluted net earnings per share
|
$
|
0.77
|
|
|
$
|
1.23
|
|
|
$
|
0.21
|
|
Weighted-average shares used to compute net earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|||
Basic
|
1,353
|
|
|
1,529
|
|
|
1,646
|
|
|||
Diluted
|
1,366
|
|
|
1,553
|
|
|
1,674
|
|
|
For the fiscal years ended October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions
|
||||||||||
Net earnings
|
$
|
1,049
|
|
|
$
|
1,908
|
|
|
$
|
344
|
|
Other comprehensive (loss) income before taxes:
|
|
|
|
|
|
|
|
|
|||
Change in net unrealized gains (losses) on available-for-sale securities:
|
|
|
|
|
|
|
|
|
|||
Net unrealized gains (losses) arising during the period
|
9
|
|
|
(3
|
)
|
|
(8
|
)
|
|||
Gains reclassified into earnings
|
(3
|
)
|
|
(9
|
)
|
|
(4
|
)
|
|||
|
6
|
|
|
(12
|
)
|
|
(12
|
)
|
|||
Change in net unrealized (losses) gains on cash flow hedges:
|
|
|
|
|
|
|
|
|
|||
Net unrealized gains arising during the period
|
308
|
|
|
169
|
|
|
46
|
|
|||
Net (gains) losses reclassified into earnings
|
(371
|
)
|
|
8
|
|
|
(145
|
)
|
|||
|
(63
|
)
|
|
177
|
|
|
(99
|
)
|
|||
Change in unrealized components of defined benefit plans:
|
|
|
|
|
|
|
|
|
|||
Net unrealized (losses) gains arising during the period
|
(701
|
)
|
|
(423
|
)
|
|
944
|
|
|||
Amortization of net actuarial loss and prior service benefit
|
216
|
|
|
191
|
|
|
285
|
|
|||
Curtailments, settlements and other
|
15
|
|
|
22
|
|
|
15
|
|
|||
|
(470
|
)
|
|
(210
|
)
|
|
1,244
|
|
|||
Change in cumulative translation adjustment:
|
|
|
|
|
|
||||||
Cumulative translation adjustment arising during the period
|
(18
|
)
|
|
(70
|
)
|
|
(14
|
)
|
|||
Release of cumulative translation adjustment as a result of divestitures and country exits
|
—
|
|
|
20
|
|
|
—
|
|
|||
|
(18
|
)
|
|
(50
|
)
|
|
(14
|
)
|
|||
Other comprehensive (loss) income before taxes
|
(545
|
)
|
|
(95
|
)
|
|
1,119
|
|
|||
Benefit (provision) for taxes
|
36
|
|
|
(42
|
)
|
|
(145
|
)
|
|||
Other comprehensive (loss) income, net of taxes
|
(509
|
)
|
|
(137
|
)
|
|
974
|
|
|||
Comprehensive income
|
$
|
540
|
|
|
$
|
1,771
|
|
|
$
|
1,318
|
|
|
As of October 31,
|
||||||
|
2019
|
|
2018
|
||||
|
In millions, except par value
|
||||||
ASSETS
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
3,753
|
|
|
$
|
4,880
|
|
Accounts receivable, net of allowance for doubtful accounts
|
2,957
|
|
|
3,263
|
|
||
Financing receivables, net of allowance for doubtful accounts
|
3,572
|
|
|
3,396
|
|
||
Inventory
|
2,387
|
|
|
2,447
|
|
||
Assets held for sale
|
46
|
|
|
6
|
|
||
Other current assets
|
2,428
|
|
|
3,280
|
|
||
Total current assets
|
15,143
|
|
|
17,272
|
|
||
Property, plant and equipment
|
6,054
|
|
|
6,138
|
|
||
Long-term financing receivables and other assets
|
8,918
|
|
|
11,359
|
|
||
Investments in equity interests
|
2,254
|
|
|
2,398
|
|
||
Goodwill
|
18,306
|
|
|
17,537
|
|
||
Intangible assets
|
1,128
|
|
|
789
|
|
||
Total assets
|
$
|
51,803
|
|
|
$
|
55,493
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Notes payable and short-term borrowings
|
$
|
4,425
|
|
|
$
|
2,005
|
|
Accounts payable
|
5,595
|
|
|
6,092
|
|
||
Employee compensation and benefits
|
1,522
|
|
|
1,412
|
|
||
Taxes on earnings
|
186
|
|
|
378
|
|
||
Deferred revenue
|
3,234
|
|
|
3,177
|
|
||
Accrued restructuring
|
195
|
|
|
294
|
|
||
Other accrued liabilities
|
4,002
|
|
|
3,840
|
|
||
Total current liabilities
|
19,159
|
|
|
17,198
|
|
||
Long-term debt
|
9,395
|
|
|
10,136
|
|
||
Other non-current liabilities
|
6,100
|
|
|
6,885
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Stockholders' equity
|
|
|
|
|
|
||
HPE stockholders' equity:
|
|
|
|
||||
Preferred stock, $0.01 par value (300 shares authorized; none issued)
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value (9,600 shares authorized; 1,294 and 1,423 issued and outstanding at October 31, 2019 and October 31, 2018, respectively)
|
13
|
|
|
14
|
|
||
Additional paid-in capital
|
28,444
|
|
|
30,342
|
|
||
Accumulated deficit
|
(7,632
|
)
|
|
(5,899
|
)
|
||
Accumulated other comprehensive loss
|
(3,727
|
)
|
|
(3,218
|
)
|
||
Total HPE stockholders' equity
|
17,098
|
|
|
21,239
|
|
||
Non-controlling interests
|
51
|
|
|
35
|
|
||
Total stockholders' equity
|
17,149
|
|
|
21,274
|
|
||
Total liabilities and stockholders' equity
|
$
|
51,803
|
|
|
$
|
55,493
|
|
|
For the fiscal years ended October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|||
Net earnings
|
$
|
1,049
|
|
|
$
|
1,908
|
|
|
$
|
344
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
|
|
|
|
||||
Depreciation and amortization
|
2,535
|
|
|
2,576
|
|
|
3,051
|
|
|||
Impairment of goodwill
|
—
|
|
|
88
|
|
|
—
|
|
|||
Stock-based compensation expense
|
268
|
|
|
286
|
|
|
428
|
|
|||
Provision for inventory and doubtful accounts
|
240
|
|
|
198
|
|
|
129
|
|
|||
Restructuring charges
|
221
|
|
|
550
|
|
|
964
|
|
|||
Deferred taxes on earnings
|
1,079
|
|
|
2,229
|
|
|
(1,122
|
)
|
|||
(Earnings) loss from equity interests
|
(20
|
)
|
|
(38
|
)
|
|
23
|
|
|||
Dividends received from equity investee
|
156
|
|
|
164
|
|
|
98
|
|
|||
Other, net
|
204
|
|
|
(158
|
)
|
|
543
|
|
|||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
|
|
||||
Accounts receivable
|
374
|
|
|
(220
|
)
|
|
457
|
|
|||
Financing receivables
|
(410
|
)
|
|
(366
|
)
|
|
(462
|
)
|
|||
Inventory
|
46
|
|
|
(260
|
)
|
|
(542
|
)
|
|||
Accounts payable
|
(525
|
)
|
|
(27
|
)
|
|
992
|
|
|||
Taxes on earnings
|
(1,093
|
)
|
|
(4,516
|
)
|
|
(265
|
)
|
|||
Restructuring
|
(331
|
)
|
|
(647
|
)
|
|
(800
|
)
|
|||
Other assets and liabilities(1)
|
204
|
|
|
1,197
|
|
|
(2,503
|
)
|
|||
Net cash provided by operating activities
|
3,997
|
|
|
2,964
|
|
|
1,335
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|||
Investment in property, plant and equipment
|
(2,856
|
)
|
|
(2,956
|
)
|
|
(3,137
|
)
|
|||
Proceeds from sale of property, plant and equipment
|
597
|
|
|
1,094
|
|
|
679
|
|
|||
Purchases of available-for-sale securities and other investments
|
(39
|
)
|
|
(33
|
)
|
|
(45
|
)
|
|||
Maturities and sales of available-for-sale securities and other investments
|
26
|
|
|
98
|
|
|
38
|
|
|||
Financial collateral posted
|
(403
|
)
|
|
(1,625
|
)
|
|
(1,234
|
)
|
|||
Financial collateral received
|
744
|
|
|
1,736
|
|
|
572
|
|
|||
Payments made in connection with business acquisitions, net of cash acquired
|
(1,526
|
)
|
|
(207
|
)
|
|
(2,202
|
)
|
|||
Proceeds from business divestitures, net
|
—
|
|
|
13
|
|
|
(20
|
)
|
|||
Net cash used in investing activities
|
(3,457
|
)
|
|
(1,880
|
)
|
|
(5,349
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|||
Short-term borrowings with original maturities less than 90 days, net
|
(53
|
)
|
|
5
|
|
|
18
|
|
|||
Proceeds from debt, net of issuance costs
|
3,517
|
|
|
2,457
|
|
|
2,259
|
|
|||
Payment of debt
|
(2,203
|
)
|
|
(4,138
|
)
|
|
(3,783
|
)
|
|||
Settlement of cash flow hedge
|
—
|
|
|
—
|
|
|
5
|
|
|||
Net proceeds related to stock-based award activities
|
48
|
|
|
116
|
|
|
108
|
|
|||
Repurchase of common stock
|
(2,249
|
)
|
|
(3,568
|
)
|
|
(2,556
|
)
|
|||
Net transfer of cash and cash equivalents to Everett
|
—
|
|
|
(41
|
)
|
|
(711
|
)
|
|||
Net transfer of cash and cash equivalents from (to) Seattle
|
—
|
|
|
156
|
|
|
(227
|
)
|
|||
Cash dividend from Everett(2)
|
—
|
|
|
—
|
|
|
3,008
|
|
|||
Cash dividend from Seattle(3)
|
—
|
|
|
—
|
|
|
2,500
|
|
|||
Restricted cash transfer(4)
|
—
|
|
|
—
|
|
|
(29
|
)
|
|||
Cash dividends paid to non-controlling interests
|
—
|
|
|
(9
|
)
|
|
—
|
|
|||
Cash dividends paid
|
(608
|
)
|
|
(570
|
)
|
|
(428
|
)
|
|||
Net cash (used in) provided by financing activities
|
(1,548
|
)
|
|
(5,592
|
)
|
|
164
|
|
|||
(Decrease) in cash, cash equivalents and restricted cash
|
(1,008
|
)
|
|
(4,508
|
)
|
|
(3,850
|
)
|
|||
Cash, cash equivalents and restricted cash at beginning of period
|
5,084
|
|
|
9,592
|
|
|
13,442
|
|
|||
Cash, cash equivalents and restricted cash at end of period
|
$
|
4,076
|
|
|
$
|
5,084
|
|
|
$
|
9,592
|
|
Supplemental cash flow disclosures:
|
|
|
|
|
|
|
|
|
|||
Income taxes paid, net of refunds
|
$
|
518
|
|
|
$
|
538
|
|
|
$
|
836
|
|
Interest expense paid
|
$
|
593
|
|
|
$
|
609
|
|
|
$
|
415
|
|
Supplemental schedule of non-cash investing and financing activities:
|
|
|
|
|
|
|
|
||||
Net assets transferred to Everett and Seattle
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,946
|
|
|
(1)
|
For fiscal 2017, the amount includes $1.9 billion of pension funding payments associated with the separation and merger of Everett SpinCo, Inc. with Computer Sciences Corporation.
|
(2)
|
In fiscal 2017, represents a $3.0 billion cash dividend payment from Everett SpinCo, Inc. to HPE, the proceeds of which were funded from the issuance of $3.5 billion of debt by Everett SpinCo, Inc. The debt was retained by Everett SpinCo, Inc.
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Number of Shares
|
|
Par Value
|
|
Additional Paid-in Capital
|
|
(Accumulated Deficit) Retained Earnings
|
|
Accumulated
Other Comprehensive Loss |
|
Equity
Attributable to the Company |
|
Non-
controlling Interests |
|
Total
Equity |
|||||||||||||||
|
In millions, except number of shares in thousands
|
|||||||||||||||||||||||||||||
Balance at October 31, 2016
|
1,666,332
|
|
|
$
|
17
|
|
|
$
|
35,248
|
|
|
$
|
2,782
|
|
|
$
|
(6,599
|
)
|
|
$
|
31,448
|
|
|
$
|
70
|
|
|
$
|
31,518
|
|
Everett Transaction
|
|
|
|
|
|
|
(3,671
|
)
|
|
2,579
|
|
|
(1,092
|
)
|
|
(30
|
)
|
|
(1,122
|
)
|
||||||||||
Seattle Transaction
|
|
|
|
|
|
|
|
|
|
(6,182
|
)
|
|
151
|
|
|
(6,031
|
)
|
|
|
|
(6,031
|
)
|
||||||||
Net earnings
|
|
|
|
|
|
|
344
|
|
|
|
|
344
|
|
|
(1
|
)
|
|
343
|
|
|||||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
974
|
|
|
974
|
|
|
—
|
|
|
974
|
|
|||||||||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
1,318
|
|
|
(1
|
)
|
|
1,317
|
|
||||||||||||
Issuance of common stock in connection with employee stock plans and other
|
66,618
|
|
|
|
|
75
|
|
|
|
|
|
|
75
|
|
|
|
|
75
|
|
|||||||||||
Repurchases of common stock
|
(137,789
|
)
|
|
(1
|
)
|
|
(2,497
|
)
|
|
(82
|
)
|
|
|
|
(2,580
|
)
|
|
|
|
(2,580
|
)
|
|||||||||
Tax benefit from employee stock plans
|
|
|
|
|
137
|
|
|
|
|
|
|
137
|
|
|
|
|
137
|
|
||||||||||||
Cash dividends declared ($0.26 per common share)
|
|
|
|
|
|
|
(429
|
)
|
|
|
|
(429
|
)
|
|
|
|
(429
|
)
|
||||||||||||
Stock-based compensation expense
|
|
|
|
|
620
|
|
|
|
|
|
|
620
|
|
|
|
|
620
|
|
||||||||||||
Balance at October 31, 2017
|
1,595,161
|
|
|
$
|
16
|
|
|
$
|
33,583
|
|
|
$
|
(7,238
|
)
|
|
$
|
(2,895
|
)
|
|
$
|
23,466
|
|
|
$
|
39
|
|
|
$
|
23,505
|
|
Activity related to separation and merger transactions
|
|
|
|
|
|
|
164
|
|
|
(186
|
)
|
|
(22
|
)
|
|
|
|
(22
|
)
|
|||||||||||
Net earnings
|
|
|
|
|
|
|
1,908
|
|
|
|
|
1,908
|
|
|
(4
|
)
|
|
1,904
|
|
|||||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
(137
|
)
|
|
(137
|
)
|
|
—
|
|
|
(137
|
)
|
|||||||||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
1,771
|
|
|
(4
|
)
|
|
1,767
|
|
||||||||||||
Issuance of common stock in connection with employee stock plans and other
|
50,369
|
|
|
|
|
27
|
|
|
|
|
|
|
27
|
|
|
|
|
27
|
|
|||||||||||
Repurchases of common stock
|
(222,227
|
)
|
|
(2
|
)
|
|
(3,577
|
)
|
|
|
|
|
|
(3,579
|
)
|
|
|
|
(3,579
|
)
|
||||||||||
Cash dividends declared ($0.4875 per common share)
|
|
|
|
|
|
|
(733
|
)
|
|
|
|
(733
|
)
|
|
|
|
(733
|
)
|
||||||||||||
Stock-based compensation expense
|
|
|
|
|
309
|
|
|
|
|
|
|
309
|
|
|
|
|
309
|
|
||||||||||||
Balance at October 31, 2018
|
1,423,303
|
|
|
$
|
14
|
|
|
$
|
30,342
|
|
|
$
|
(5,899
|
)
|
|
$
|
(3,218
|
)
|
|
$
|
21,239
|
|
|
$
|
35
|
|
|
$
|
21,274
|
|
Net earnings
|
|
|
|
|
|
|
1,049
|
|
|
|
|
1,049
|
|
|
16
|
|
|
1,065
|
|
|||||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
(509
|
)
|
|
(509
|
)
|
|
—
|
|
|
(509
|
)
|
|||||||||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
540
|
|
|
16
|
|
|
556
|
|
||||||||||||
Issuance of common stock in connection with employee stock plans and other
|
19,093
|
|
|
—
|
|
|
52
|
|
|
|
|
|
|
52
|
|
|
|
|
52
|
|
||||||||||
Repurchases of common stock
|
(148,027
|
)
|
|
(1
|
)
|
|
(2,220
|
)
|
|
—
|
|
|
|
|
(2,221
|
)
|
|
|
|
(2,221
|
)
|
|||||||||
Cash dividends declared ($0.4575 per common share)
|
|
|
|
|
|
|
(601
|
)
|
|
|
|
(601
|
)
|
|
|
|
(601
|
)
|
Effects of adoption of accounting standard updates (1)
|
|
|
|
|
|
|
(2,181
|
)
|
|
|
|
(2,181
|
)
|
|
|
|
(2,181
|
)
|
||||||||||||
Stock-based compensation expense
|
|
|
|
|
270
|
|
|
|
|
|
|
270
|
|
|
|
|
270
|
|
||||||||||||
Balance at October 31, 2019
|
1,294,369
|
|
|
$
|
13
|
|
|
$
|
28,444
|
|
|
$
|
(7,632
|
)
|
|
$
|
(3,727
|
)
|
|
$
|
17,098
|
|
|
$
|
51
|
|
|
$
|
17,149
|
|
|
•
|
Separation and Distribution Agreement;
|
•
|
Transition Services Agreement;
|
•
|
Tax Matters Agreement;
|
•
|
Employee Matters Agreement;
|
•
|
Real Estate Matters Agreement;
|
•
|
Master Commercial Agreement; and
|
•
|
Information Technology Service Agreement.
|
•
|
Separation and Distribution Agreement;
|
•
|
Transition Services Agreement;
|
•
|
Tax Matters Agreement;
|
•
|
Employee Matters Agreement;
|
•
|
Real Estate Matters Agreement;
|
•
|
Intellectual Property Matters Agreement
|
•
|
Information Technology Service Agreement; and
|
•
|
Preferred Vendor Agreements.
|
|
Fiscal year ended October 31, 2018
|
|
Fiscal year ended October 31, 2017
|
||||
|
In millions
|
||||||
Cost of products and services
|
$
|
61
|
|
|
$
|
25
|
|
Research and development
|
4
|
|
|
4
|
|
||
Selling, general and administrative
|
70
|
|
|
6
|
|
||
Restructuring charges and transformation costs
|
(14
|
)
|
|
26
|
|
||
|
$
|
121
|
|
|
$
|
61
|
|
|
Historical Accounting
Method |
|
Effect of Adoption
|
|
As Adjusted
|
||||||
|
In millions
|
||||||||||
Assets
|
|
|
|
|
|
||||||
Accounts receivable
|
$
|
3,263
|
|
|
$
|
38
|
|
|
$
|
3,301
|
|
Inventory
|
2,447
|
|
|
(14)
|
|
|
2,433
|
|
|||
Other current assets
|
3,280
|
|
|
50
|
|
|
3,330
|
|
|||
Long-term financing receivables and other assets
|
11,359
|
|
|
46
|
|
|
11,405
|
|
|||
Subtotal assets
|
$
|
20,349
|
|
|
$
|
120
|
|
|
$
|
20,469
|
|
Liabilities
|
|
|
|
|
|
||||||
Taxes on earnings
|
$
|
378
|
|
|
$
|
10
|
|
|
$
|
388
|
|
Deferred revenue
|
3,177
|
|
|
(36)
|
|
|
3,141
|
|
|||
Other accrued liabilities
|
3,840
|
|
|
52
|
|
|
3,892
|
|
|||
Other non-current liabilities
|
6,885
|
|
|
(30)
|
|
|
6,855
|
|
|||
Subtotal liabilities
|
$
|
14,280
|
|
|
$
|
(4
|
)
|
|
$
|
14,276
|
|
Stockholders' equity
|
|
|
|
|
|
||||||
Accumulated deficit
|
$
|
(5,899
|
)
|
|
$
|
124
|
|
|
$
|
(5,775
|
)
|
Subtotal stockholders' equity
|
$
|
(5,899
|
)
|
|
$
|
124
|
|
|
$
|
(5,775
|
)
|
Subtotal liabilities and stockholders' equity
|
$
|
8,381
|
|
|
$
|
120
|
|
|
$
|
8,501
|
|
|
Fiscal years ended October 31,
|
||||||
|
2018
|
|
2017
|
||||
|
In millions
|
||||||
Net revenue
|
$
|
—
|
|
|
$
|
8,511
|
|
Cost of revenue(1)
|
—
|
|
|
5,890
|
|
||
Expenses(2)
|
51
|
|
|
3,063
|
|
||
Interest and other, net
|
58
|
|
|
39
|
|
||
Loss from discontinued operations before taxes
|
(109
|
)
|
|
(481
|
)
|
||
Benefit for taxes
|
5
|
|
|
389
|
|
||
Net loss from discontinued operations
|
$
|
(104
|
)
|
|
$
|
(92
|
)
|
|
(1)
|
Cost of revenue includes cost of products and services.
|
(2)
|
For the periods following the Everett and Seattle Transactions in fiscal 2017, expenses primarily consist of separation costs, which relate to third-party consulting, contractor fees and other incremental costs arising from the transactions. Prior to the Everett and Seattle Transactions, expenses in fiscal 2017 primarily consist of selling, general and administrative (“SG&A”) expenses, research and development (“R&D”) expenses, restructuring charges, separation costs, amortization of intangible assets, acquisition and other related charges, and defined benefit plan remeasurement benefit.
|
•
|
Hybrid IT Product includes Compute and Storage
|
◦
|
Compute HPE offers both Industry Standard Servers ("ISS"), which are general purpose servers for multi-workload computing, as well as Mission Critical Servers ("MCS"), which are servers optimized for particular workloads. HPE's general purpose servers include the HPE ProLiant, secure and versatile rack and tower servers; HPE BladeSystem, a modular infrastructure that converges server, storage and networking; and HPE Synergy, a composable infrastructure for traditional and cloud-native applications. The Company's workload optimized server portfolio includes the HPE Apollo, and products from the acquisition of Cray, for high performance computing and artificial intelligence, HPE Cloudline for cloud data centers, HPE Edgeline for computing at the network edge and HPE Integrity for mission-critical applications.
|
•
|
HPE Pointnext Services creates preferred IT experiences that power the digital business. The HPE Pointnext Services team and the Company's extensive partner network provide value across the IT life cycle delivering advice, transformation projects, professional services, support services and operational services for Hybrid IT and the Intelligent Edge. HPE Pointnext Services is also a provider of on-premises flexible consumption models, such as HPE GreenLake, that enable IT agility, simplify operations and align cost to business value. HPE Pointnext Service offerings includes Operational Services and Advisory and Professional Services.
|
◦
|
HPE Aruba Product includes wired and wireless local area network, wide area network, data center networking such as Wi-Fi access points, switches, routers, sensors, and software products that include cloud-based management, network management, network access control, analytics and assurance, and location services.
|
◦
|
HPE Aruba Services includes professional and support services, as well as as-a-service (aaS) and consumption models for the Intelligent Edge portfolio of products.
|
|
Hybrid IT
|
|
Intelligent Edge
|
|
Financial Services
|
|
Corporate Investments
|
|
Total
|
||||||||||
|
In millions
|
||||||||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net revenue
|
$
|
22,230
|
|
|
$
|
2,828
|
|
|
$
|
3,570
|
|
|
$
|
507
|
|
|
$
|
29,135
|
|
Intersegment net revenue
|
595
|
|
|
9
|
|
|
11
|
|
|
—
|
|
|
615
|
|
|||||
Total segment net revenue
|
$
|
22,825
|
|
|
$
|
2,837
|
|
|
$
|
3,581
|
|
|
$
|
507
|
|
|
$
|
29,750
|
|
Segment earnings (loss) from operations
|
$
|
2,804
|
|
|
$
|
95
|
|
|
$
|
305
|
|
|
$
|
(108
|
)
|
|
$
|
3,096
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net revenue
|
$
|
23,750
|
|
|
$
|
2,903
|
|
|
$
|
3,656
|
|
|
$
|
543
|
|
|
$
|
30,852
|
|
Intersegment net revenue
|
748
|
|
|
17
|
|
|
15
|
|
|
—
|
|
|
780
|
|
|||||
Total segment net revenue
|
$
|
24,498
|
|
|
$
|
2,920
|
|
|
$
|
3,671
|
|
|
$
|
543
|
|
|
$
|
31,632
|
|
Segment earnings (loss) from operations
|
$
|
2,503
|
|
|
$
|
277
|
|
|
$
|
286
|
|
|
$
|
(91
|
)
|
|
$
|
2,975
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net revenue
|
$
|
22,063
|
|
|
$
|
2,680
|
|
|
$
|
3,574
|
|
|
$
|
554
|
|
|
$
|
28,871
|
|
Intersegment net revenue(1)
|
876
|
|
|
42
|
|
|
28
|
|
|
(1
|
)
|
|
945
|
|
|||||
Total segment net revenue
|
$
|
22,939
|
|
|
$
|
2,722
|
|
|
$
|
3,602
|
|
|
$
|
553
|
|
|
$
|
29,816
|
|
Segment earnings (loss) from operations
|
$
|
2,183
|
|
|
$
|
291
|
|
|
$
|
301
|
|
|
$
|
(91
|
)
|
|
$
|
2,684
|
|
|
(1)
|
For the periods prior to the Everett and Seattle Transactions presented above, the amounts include the elimination of pre-separation intercompany sales to the former ES and Software segments, which are included within Net loss from discontinued operations in the Consolidated Statements of Earnings.
|
|
For the fiscal years ended October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions
|
||||||||||
Net Revenue:
|
|
|
|
|
|
|
|
|
|||
Total segments
|
$
|
29,750
|
|
|
$
|
31,632
|
|
|
$
|
29,816
|
|
Elimination of intersegment net revenue
|
(615
|
)
|
|
(780
|
)
|
|
(945
|
)
|
|||
Total Hewlett Packard Enterprise consolidated net revenue
|
$
|
29,135
|
|
|
$
|
30,852
|
|
|
$
|
28,871
|
|
Earnings before taxes:(1)
|
|
|
|
|
|
|
|
|
|||
Total segment earnings from operations
|
$
|
3,096
|
|
|
$
|
2,975
|
|
|
$
|
2,684
|
|
Unallocated corporate costs and eliminations
|
(286
|
)
|
|
(259
|
)
|
|
(407
|
)
|
|||
Unallocated stock-based compensation expense
|
(59
|
)
|
|
(73
|
)
|
|
(110
|
)
|
|||
Amortization of intangible assets
|
(267
|
)
|
|
(294
|
)
|
|
(321
|
)
|
|||
Impairment of goodwill
|
—
|
|
|
(88
|
)
|
|
—
|
|
|||
Restructuring charges
|
—
|
|
|
(19
|
)
|
|
(388
|
)
|
|||
Transformation costs
|
(453
|
)
|
|
(414
|
)
|
|
(359
|
)
|
|||
Disaster recoveries (charges)
|
7
|
|
|
—
|
|
|
(93
|
)
|
|||
Acquisition, disposition and other related charges(2)
|
(764
|
)
|
|
(82
|
)
|
|
(203
|
)
|
|||
Separation costs
|
—
|
|
|
(9
|
)
|
|
(248
|
)
|
|||
Defined benefit plan remeasurement benefit
|
—
|
|
|
—
|
|
|
9
|
|
|||
Interest and other, net
|
(177
|
)
|
|
(274
|
)
|
|
(327
|
)
|
|||
Tax indemnification adjustments
|
377
|
|
|
(1,354
|
)
|
|
(3
|
)
|
|||
Non-service net periodic benefit credit
|
59
|
|
|
121
|
|
|
61
|
|
|||
Earnings (loss) from equity interests
|
20
|
|
|
38
|
|
|
(23
|
)
|
|||
Total Hewlett Packard Enterprise consolidated earnings from continuing operations before taxes
|
$
|
1,553
|
|
|
$
|
268
|
|
|
$
|
272
|
|
|
(1)
|
Effective at the beginning of the first quarter of fiscal 2019, in connection with the adoption of the accounting standards update for retirement benefits (Topic 715), the Company reclassified its non-service net periodic benefit credit from operating expense to other income and expense in its Consolidated Statements of Earnings. The Company reflected these changes retrospectively, by transferring the non-service net periodic benefit credit, a portion of which was previously allocated to the segments, and the remainder of which was reported within Unallocated corporate costs and eliminations, Restructuring charges, Transformation costs, Separation costs and Defined benefit plan remeasurement benefit.
|
(2)
|
Includes acquisition, disposition and other related charges of $7 million related to a non-cash inventory fair value adjustment in connection with the acquisition of Cray Inc., which was included in Cost of products.
|
|
As of October 31,
|
||||||
|
2019
|
|
2018
|
||||
|
In millions
|
||||||
Hybrid IT
|
$
|
28,866
|
|
|
$
|
29,342
|
|
Intelligent Edge
|
3,052
|
|
|
3,244
|
|
||
Financial Services
|
14,717
|
|
|
14,559
|
|
||
Corporate Investments
|
451
|
|
|
414
|
|
||
Corporate and unallocated assets
|
4,717
|
|
|
7,934
|
|
||
Total Hewlett Packard Enterprise consolidated assets
|
$
|
51,803
|
|
|
$
|
55,493
|
|
|
For the fiscal years ended October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions
|
||||||||||
Americas
|
|
|
|
|
|
||||||
U.S.
|
$
|
9,582
|
|
|
$
|
10,192
|
|
|
$
|
10,022
|
|
Americas excluding U.S.
|
1,922
|
|
|
2,135
|
|
|
2,067
|
|
|||
Total Americas
|
11,504
|
|
|
12,327
|
|
|
12,089
|
|
|||
Europe, Middle East and Africa
|
10,828
|
|
|
11,295
|
|
|
10,024
|
|
|||
Asia Pacific and Japan
|
6,803
|
|
|
7,230
|
|
|
6,758
|
|
|||
Total Hewlett Packard Enterprise consolidated net revenue
|
$
|
29,135
|
|
|
$
|
30,852
|
|
|
$
|
28,871
|
|
|
As of October 31,
|
||||||
|
2019
|
|
2018
|
||||
|
In millions
|
||||||
U.S.
|
$
|
2,894
|
|
|
$
|
2,813
|
|
Other countries
|
3,160
|
|
|
3,325
|
|
||
Total net property, plant and equipment
|
$
|
6,054
|
|
|
$
|
6,138
|
|
|
For the fiscal years ended October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions
|
||||||||||
Hybrid IT
|
|
|
|
|
|
|
|
|
|||
Hybrid IT Product
|
|
|
|
|
|
|
|
|
|||
Compute
|
$
|
12,879
|
|
|
$
|
14,057
|
|
|
$
|
12,913
|
|
Storage
|
3,609
|
|
|
3,706
|
|
|
3,280
|
|
|||
Total Hybrid IT Product
|
16,488
|
|
|
17,763
|
|
|
16,193
|
|
|||
HPE Pointnext
|
6,337
|
|
|
6,735
|
|
|
6,746
|
|
|||
Total Hybrid IT
|
22,825
|
|
|
24,498
|
|
|
22,939
|
|
|||
Intelligent Edge
|
|
|
|
|
|
|
|
|
|||
HPE Aruba Product
|
2,462
|
|
|
2,599
|
|
|
2,435
|
|
|||
HPE Aruba Services
|
375
|
|
|
321
|
|
|
287
|
|
|||
Total Intelligent Edge
|
2,837
|
|
|
2,920
|
|
|
2,722
|
|
|||
Financial Services
|
3,581
|
|
|
3,671
|
|
|
3,602
|
|
|||
Corporate Investments
|
507
|
|
|
543
|
|
|
553
|
|
|||
Total segment net revenue
|
29,750
|
|
|
31,632
|
|
|
29,816
|
|
|||
Eliminations of intersegment net revenue
|
(615
|
)
|
|
(780
|
)
|
|
(945
|
)
|
|||
Total net revenue
|
$
|
29,135
|
|
|
$
|
30,852
|
|
|
$
|
28,871
|
|
|
Fiscal 2015 Plan
|
|
Fiscal 2012 Plan
|
|
|
||||||||||||||
|
Employee
Severance |
|
Infrastructure
and other |
|
Employee Severance and EER
|
|
Infrastructure
and other |
|
Total
|
||||||||||
|
In millions
|
||||||||||||||||||
Liability as of October 31, 2016
|
$
|
234
|
|
|
$
|
13
|
|
|
$
|
37
|
|
|
$
|
14
|
|
|
$
|
298
|
|
Charges
|
374
|
|
|
37
|
|
|
6
|
|
|
—
|
|
|
417
|
|
|||||
Cash payments
|
(355
|
)
|
|
(19
|
)
|
|
(32
|
)
|
|
(6
|
)
|
|
(412
|
)
|
|||||
Non-cash items
|
(34
|
)
|
|
(14
|
)
|
|
5
|
|
|
(6
|
)
|
|
(49
|
)
|
|||||
Liability as of October 31, 2017
|
$
|
219
|
|
|
$
|
17
|
|
|
$
|
16
|
|
|
$
|
2
|
|
|
$
|
254
|
|
Charges
|
9
|
|
|
(2
|
)
|
|
13
|
|
|
(1
|
)
|
|
19
|
|
|||||
Cash payments
|
(158
|
)
|
|
(8
|
)
|
|
(15
|
)
|
|
—
|
|
|
(181
|
)
|
|||||
Non-cash items
|
(8
|
)
|
|
3
|
|
|
(3
|
)
|
|
—
|
|
|
(8
|
)
|
|||||
Liability as of October 31, 2018
|
$
|
62
|
|
|
$
|
10
|
|
|
$
|
11
|
|
|
$
|
1
|
|
|
$
|
84
|
|
Cash payments
|
(29
|
)
|
|
(3
|
)
|
|
(6
|
)
|
|
—
|
|
|
(38
|
)
|
|||||
Non-cash items
|
(2
|
)
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
(2
|
)
|
|||||
Liability as of October 31, 2019
|
$
|
31
|
|
|
$
|
7
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
44
|
|
Total costs incurred to date as of October 31, 2019
|
$
|
751
|
|
|
$
|
78
|
|
|
$
|
1,268
|
|
|
$
|
145
|
|
|
$
|
2,242
|
|
Total expected costs to be incurred as of October 31, 2019
|
$
|
751
|
|
|
$
|
78
|
|
|
$
|
1,268
|
|
|
$
|
145
|
|
|
$
|
2,242
|
|
|
Fiscal years ended October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions
|
||||||||||
Program management
|
$
|
29
|
|
|
$
|
95
|
|
|
$
|
57
|
|
IT costs
|
134
|
|
|
148
|
|
|
34
|
|
|||
Restructuring charges(1)
|
219
|
|
|
531
|
|
|
296
|
|
|||
Gains on real estate sales
|
(7
|
)
|
|
(405
|
)
|
|
(28
|
)
|
|||
Impairment on real estate assets
|
47
|
|
|
—
|
|
|
—
|
|
|||
Other
|
40
|
|
|
56
|
|
|
—
|
|
|||
Total Transformation Costs
|
$
|
462
|
|
|
$
|
425
|
|
|
$
|
359
|
|
|
(1)
|
For fiscal 2019 and 2018, a portion of these costs were recorded in Non-service net periodic benefit credit in the Consolidated Statements of Earnings as described above.
|
|
Employee
Severance |
|
Infrastructure
and other |
||||
|
In millions
|
||||||
Liability as of October 31, 2016
|
$
|
—
|
|
|
$
|
—
|
|
Charges
|
296
|
|
|
—
|
|
||
Liability as of October 31, 2017
|
$
|
296
|
|
|
$
|
—
|
|
Charges
|
470
|
|
|
61
|
|
||
Cash payments
|
(452
|
)
|
|
(14
|
)
|
||
Non-cash items
|
(23
|
)
|
|
(14
|
)
|
||
Liability as of October 31, 2018
|
$
|
291
|
|
|
$
|
33
|
|
Charges
|
154
|
|
|
65
|
|
||
Cash payments
|
(256
|
)
|
|
(37
|
)
|
||
Non-cash items
|
(11
|
)
|
|
(19
|
)
|
||
Liability as of October 31, 2019
|
$
|
178
|
|
|
$
|
42
|
|
Total costs incurred to date as of October 31, 2019
|
$
|
920
|
|
|
$
|
126
|
|
Total expected costs to be incurred as of October 31, 2019
|
$
|
1,200
|
|
|
$
|
180
|
|
|
As of October 31,
|
||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||
|
Defined
Benefit Plans |
|
Post-Retirement
Benefit Plans |
||||||||||||||||||||
|
In millions
|
||||||||||||||||||||||
Service cost
|
$
|
85
|
|
|
$
|
105
|
|
|
$
|
139
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
3
|
|
Interest cost(1)
|
215
|
|
|
225
|
|
|
213
|
|
|
7
|
|
|
7
|
|
|
6
|
|
||||||
Expected return on plan assets(1)
|
(511
|
)
|
|
(567
|
)
|
|
(548
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
||||||
Amortization and deferrals(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Actuarial loss (gain)
|
235
|
|
|
211
|
|
|
264
|
|
|
(4
|
)
|
|
(3
|
)
|
|
(2
|
)
|
||||||
Prior service benefit
|
(15
|
)
|
|
(17
|
)
|
|
(17
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net periodic benefit cost
|
9
|
|
|
(43
|
)
|
|
51
|
|
|
3
|
|
|
4
|
|
|
5
|
|
||||||
Curtailment gain(1)
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Settlement loss(1)
|
13
|
|
|
20
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Special termination benefits(1)
|
2
|
|
|
6
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Plan credit allocation(2)
|
—
|
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||||
Net benefit (credit) cost from continuing operations(3)
|
24
|
|
|
(18
|
)
|
|
56
|
|
|
3
|
|
|
4
|
|
|
4
|
|
||||||
Summary of net benefit (credit) cost:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Continuing operations
|
24
|
|
|
(18
|
)
|
|
56
|
|
|
3
|
|
|
4
|
|
|
4
|
|
||||||
Discontinued operations
|
—
|
|
|
—
|
|
|
81
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Total net benefit (credit) cost
|
$
|
24
|
|
|
$
|
(18
|
)
|
|
$
|
137
|
|
|
$
|
3
|
|
|
$
|
4
|
|
|
$
|
5
|
|
|
(1)
|
These non-service components of net periodic benefit cost were included in Non-service net periodic benefit credit in the Consolidated Statements of Earnings.
|
(2)
|
Plan credit allocation represents the net cost impact of employees of HPE covered under Everett or Seattle plans and employees of Everett or Seattle covered under HPE plans.
|
(3)
|
Net benefit cost from continuing operations for the Company's U.S. defined benefit plans, included in the table above, was not material for fiscal 2019, 2018 and 2017.
|
|
As of October 31,
|
||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
Defined
Benefit Plans
|
|
Post-Retirement
Benefit Plans
|
||||||||||||||
Discount rate used to determine benefit obligation
|
2.1
|
%
|
|
2.0
|
%
|
|
2.0
|
%
|
|
4.9
|
%
|
|
4.5
|
%
|
|
4.2
|
%
|
Discount rate used to determine service cost
|
2.3
|
%
|
|
2.4
|
%
|
|
2.0
|
%
|
|
4.4
|
%
|
|
3.7
|
%
|
|
3.7
|
%
|
Discount rate used to determine interest cost
|
1.8
|
%
|
|
1.7
|
%
|
|
1.8
|
%
|
|
4.7
|
%
|
|
4.2
|
%
|
|
3.8
|
%
|
Expected increase in compensation levels
|
2.5
|
%
|
|
2.3
|
%
|
|
2.4
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
Expected long-term return on plan assets
|
4.3
|
%
|
|
4.4
|
%
|
|
4.4
|
%
|
|
2.6
|
%
|
|
2.6
|
%
|
|
3.1
|
%
|
|
As of October 31,
|
||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
Defined
Benefit Plans |
|
Post-Retirement
Benefit Plans |
||||||||||||
|
In millions
|
||||||||||||||
Change in fair value of plan assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fair value—beginning of year
|
$
|
12,167
|
|
|
$
|
12,610
|
|
|
$
|
52
|
|
|
$
|
50
|
|
Transfers
|
(5
|
)
|
|
6
|
|
|
—
|
|
|
—
|
|
||||
Addition/deletion of plans(1)
|
(14
|
)
|
|
181
|
|
|
—
|
|
|
—
|
|
||||
Actual return on plan assets
|
1,542
|
|
|
93
|
|
|
1
|
|
|
1
|
|
||||
Employer contributions
|
166
|
|
|
158
|
|
|
5
|
|
|
6
|
|
||||
Participant contributions
|
24
|
|
|
25
|
|
|
4
|
|
|
4
|
|
||||
Benefits paid
|
(387
|
)
|
|
(450
|
)
|
|
(8
|
)
|
|
(9
|
)
|
||||
Settlement
|
(67
|
)
|
|
(104
|
)
|
|
—
|
|
|
—
|
|
||||
Currency impact
|
8
|
|
|
(352
|
)
|
|
—
|
|
|
—
|
|
||||
Fair value—end of year(2)
|
$
|
13,434
|
|
|
$
|
12,167
|
|
|
$
|
54
|
|
|
$
|
52
|
|
Change in benefit obligation:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Projected benefit obligation—beginning of year
|
$
|
12,668
|
|
|
$
|
13,069
|
|
|
$
|
160
|
|
|
$
|
170
|
|
Transfers
|
(7
|
)
|
|
5
|
|
|
—
|
|
|
—
|
|
||||
Addition/deletion of plans(1)
|
(12
|
)
|
|
181
|
|
|
—
|
|
|
—
|
|
||||
Service cost
|
85
|
|
|
105
|
|
|
1
|
|
|
1
|
|
||||
Interest cost
|
215
|
|
|
225
|
|
|
7
|
|
|
7
|
|
||||
Participant contributions
|
24
|
|
|
25
|
|
|
4
|
|
|
4
|
|
||||
Actuarial (gain) loss
|
1,710
|
|
|
(40
|
)
|
|
17
|
|
|
(9
|
)
|
||||
Benefits paid
|
(387
|
)
|
|
(450
|
)
|
|
(8
|
)
|
|
(9
|
)
|
||||
Plan amendments
|
12
|
|
|
22
|
|
|
—
|
|
|
—
|
|
||||
Curtailment
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
||||
Settlement
|
(67
|
)
|
|
(104
|
)
|
|
—
|
|
|
—
|
|
||||
Special termination benefits
|
2
|
|
|
6
|
|
|
—
|
|
|
—
|
|
||||
Currency impact
|
(18
|
)
|
|
(372
|
)
|
|
(2
|
)
|
|
(4
|
)
|
||||
Projected benefit obligation—end of year(2)
|
$
|
14,225
|
|
|
$
|
12,668
|
|
|
$
|
179
|
|
|
$
|
160
|
|
Funded status at end of year
|
$
|
(791
|
)
|
|
$
|
(501
|
)
|
|
$
|
(125
|
)
|
|
$
|
(108
|
)
|
Accumulated benefit obligation
|
$
|
13,995
|
|
|
$
|
12,446
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
(1)
|
Includes the addition/deletion of plans resulting from acquisitions. Fiscal 2018 amounts relate primarily to the addition of a Belgium plan.
|
(2)
|
As of October 31, 2019 and 2018, the Company's U.S. defined benefit plans had zero plan assets and a projected benefit obligation of $6 and $5 million, respectively.
|
|
As of October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
|
Defined Benefit Plans
|
|
Post-Retirement Benefit Plans
|
||||||||
Discount rate
|
1.2
|
%
|
|
2.1
|
%
|
|
3.4
|
%
|
|
4.9
|
%
|
Expected increase in compensation levels
|
2.5
|
%
|
|
2.5
|
%
|
|
—
|
|
|
—
|
|
|
As of October 31,
|
||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
Defined Benefit Plans
|
|
Post-Retirement Benefit Plans
|
||||||||||||
|
In millions
|
||||||||||||||
Non-current assets
|
$
|
864
|
|
|
$
|
829
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Current liabilities
|
(45
|
)
|
|
(40
|
)
|
|
(6
|
)
|
|
(6
|
)
|
||||
Non-current liabilities
|
(1,610
|
)
|
|
(1,290
|
)
|
|
(119
|
)
|
|
(102
|
)
|
||||
Funded status at end of year
|
$
|
(791
|
)
|
|
$
|
(501
|
)
|
|
$
|
(125
|
)
|
|
$
|
(108
|
)
|
|
As of October 31, 2019
|
||||||
|
Defined
Benefit Plans |
|
Post-Retirement
Benefit Plans |
||||
|
In millions
|
||||||
Net actuarial loss
|
$
|
3,300
|
|
|
$
|
9
|
|
Prior service benefit
|
(40
|
)
|
|
—
|
|
||
Total recognized in accumulated other comprehensive loss
|
$
|
3,260
|
|
|
$
|
9
|
|
|
As of October 31, 2019
|
||||||
|
Defined
Benefit Plans |
|
Post-Retirement
Benefit Plans |
||||
|
In millions
|
||||||
Net actuarial loss (gain)
|
$
|
261
|
|
|
$
|
(1
|
)
|
Prior service benefit
|
(14
|
)
|
|
—
|
|
||
Total expected to be recognized in net periodic benefit cost (credit)
|
$
|
247
|
|
|
$
|
(1
|
)
|
|
As of October 31,
|
||||||
|
2019
|
|
2018
|
||||
|
In millions
|
||||||
Aggregate fair value of plan assets
|
$
|
3,585
|
|
|
$
|
2,314
|
|
Aggregate projected benefit obligation
|
$
|
5,238
|
|
|
$
|
3,644
|
|
|
As of October 31,
|
||||||
|
2019
|
|
2018
|
||||
|
In millions
|
||||||
Aggregate fair value of plan assets
|
$
|
3,574
|
|
|
$
|
2,291
|
|
Aggregate accumulated benefit obligation
|
$
|
5,088
|
|
|
$
|
3,495
|
|
|
As of
October 31, 2019 |
|
As of
October 31, 2018 |
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
|
In millions
|
||||||||||||||||||||||||||||||
Asset Category:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
U.S.
|
$
|
172
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
180
|
|
|
$
|
187
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
194
|
|
Non-U.S.
|
836
|
|
|
222
|
|
|
—
|
|
|
1,058
|
|
|
344
|
|
|
225
|
|
|
—
|
|
|
569
|
|
||||||||
Non-U.S. at NAV(1)
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
473
|
|
||||||||||||||
Debt securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Corporate
|
—
|
|
|
1,702
|
|
|
—
|
|
|
1,702
|
|
|
—
|
|
|
1,221
|
|
|
—
|
|
|
1,221
|
|
||||||||
Government(2)
|
—
|
|
|
5,254
|
|
|
—
|
|
|
5,254
|
|
|
—
|
|
|
4,621
|
|
|
—
|
|
|
4,621
|
|
||||||||
Government at NAV(3)
|
|
|
|
|
|
|
897
|
|
|
|
|
|
|
|
|
692
|
|
||||||||||||||
Alternative investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Private Equity
|
—
|
|
|
2
|
|
|
42
|
|
|
44
|
|
|
—
|
|
|
2
|
|
|
40
|
|
|
42
|
|
||||||||
Hybrids(4)
|
—
|
|
|
1,343
|
|
|
472
|
|
|
1,815
|
|
|
—
|
|
|
1,259
|
|
|
132
|
|
|
1,391
|
|
||||||||
Hybrids at NAV(5)
|
|
|
|
|
|
|
|
|
|
491
|
|
|
|
|
|
|
|
|
|
|
|
506
|
|
||||||||
Common Contractual Funds at NAV(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Equities at NAV
|
|
|
|
|
|
|
|
|
|
1,398
|
|
|
|
|
|
|
|
|
|
|
|
1,929
|
|
||||||||
Fixed Income at NAV
|
|
|
|
|
|
|
|
|
|
724
|
|
|
|
|
|
|
|
|
|
|
|
639
|
|
||||||||
Emerging Markets at NAV
|
|
|
|
|
|
|
|
|
|
318
|
|
|
|
|
|
|
|
|
|
|
|
275
|
|
||||||||
Alternative investments at NAV
|
|
|
|
|
|
|
|
|
|
379
|
|
|
|
|
|
|
|
|
|
|
|
378
|
|
||||||||
Real Estate Funds
|
8
|
|
|
203
|
|
|
39
|
|
|
250
|
|
|
6
|
|
|
186
|
|
|
37
|
|
|
229
|
|
||||||||
Insurance Group Annuity Contracts
|
—
|
|
|
54
|
|
|
37
|
|
|
91
|
|
|
—
|
|
|
59
|
|
|
38
|
|
|
97
|
|
||||||||
Cash and Cash Equivalents
|
252
|
|
|
310
|
|
|
—
|
|
|
562
|
|
|
167
|
|
|
256
|
|
|
—
|
|
|
423
|
|
||||||||
Other(7)
|
30
|
|
|
302
|
|
|
1
|
|
|
333
|
|
|
39
|
|
|
250
|
|
|
1
|
|
|
290
|
|
||||||||
Obligation to return cash received from repurchase agreements(2)
|
—
|
|
|
(2,062
|
)
|
|
—
|
|
|
(2,062
|
)
|
|
—
|
|
|
(1,802
|
)
|
|
—
|
|
|
(1,802
|
)
|
||||||||
Total
|
$
|
1,298
|
|
|
$
|
7,338
|
|
|
$
|
591
|
|
|
$
|
13,434
|
|
|
$
|
743
|
|
|
$
|
6,284
|
|
|
$
|
248
|
|
|
$
|
12,167
|
|
|
(1)
|
In fiscal 2018, included various worldwide equity index funds with the objective to provide returns that are consistent with the FTSE All World indexes. While the funds were not publicly traded, the custodians stroke a net asset value at least monthly. There were no redemption restrictions or future commitments on these investments. The funds were liquidated during fiscal year 2019.
|
(2)
|
Repurchase agreements, primarily in the UK, represent the plans' short-term borrowing to hedge against interest rate and inflation risks. Investments in approximately $4 billion of government bonds collateralize this short-term borrowing at October 31, 2019 and 2018. The plans have an obligation to return the cash after the term of the agreements. Due to the short-term nature of the agreements, the outstanding balance of the obligation approximates fair value.
|
(3)
|
Includes a fund that invests in various government bonds issued by worldwide governments, interest rate swaps, and cash, to match or slightly outperform the benchmark of the future liabilities of the funds. While the funds are not publicly traded, the custodians strike a net asset value daily. There are no redemption restrictions or future commitments on these investments.
|
(4)
|
Includes funds, primarily in the UK, that invest in both private and public equities, as well as emerging markets across all sectors. The funds also hold fixed income and derivative instruments to hedge interest rate and inflation risk. In addition, the funds include units in transferable securities, collective investment schemes, money market funds, asset-backed income, private debt, cash, and deposits.
|
(5)
|
Includes pooled funds that invest in asset-backed securities awaiting investment into non-liquid secured income opportunities. Units are available for subscription on the first day of each calendar month at net asset value. There are no redemption restrictions or future commitments on these investments.
|
(6)
|
HPE Invest Common Contractual Funds (CCFs) are investment arrangements in which institutional investors pool their assets. Units may be acquired in four 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 net asset value either once or twice a month, depending on the sub-fund. There are no redemption restrictions or future commitments on these investments.
|
(7)
|
Includes international insured contracts, derivative instruments, mortgage backed securities, and unsettled transactions.
|
|
Fiscal year ended October 31, 2019
|
|||||||||||||||||||||
|
Alternative
Investments |
|
|
|
|
|
|
|
|
|||||||||||||
|
Private
Equity |
Hybrids
|
|
Real
Estate Funds |
|
Insurance
Group Annuities |
|
Other
|
|
Total
|
||||||||||||
|
In millions
|
|||||||||||||||||||||
Balance at beginning of year
|
$
|
40
|
|
$
|
132
|
|
|
$
|
37
|
|
|
$
|
38
|
|
|
$
|
1
|
|
|
$
|
248
|
|
Actual return on plan assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Relating to assets held at the reporting date
|
1
|
|
69
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
72
|
|
||||||
Relating to assets sold during the period
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Purchases, sales, and settlements
|
1
|
|
271
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
271
|
|
||||||
Transfers in and/or out of Level 3
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Balance at end of year
|
$
|
42
|
|
$
|
472
|
|
|
$
|
39
|
|
|
$
|
37
|
|
|
$
|
1
|
|
|
$
|
591
|
|
|
Fiscal year ended October 31, 2018
|
|||||||||||||||||||||
|
Alternative
Investments |
|
|
|
|
|
|
|
|
|||||||||||||
|
Private
Equity |
Hybrids
|
|
Real
Estate Funds |
|
Insurance
Group Annuities |
|
Other
|
|
Total
|
||||||||||||
|
In millions
|
|||||||||||||||||||||
Balance at beginning of year
|
$
|
33
|
|
$
|
—
|
|
|
$
|
57
|
|
|
$
|
52
|
|
|
$
|
1
|
|
|
$
|
143
|
|
Actual return on plan assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Relating to assets held at the reporting date
|
6
|
|
2
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
1
|
|
||||||
Relating to assets sold during the period
|
5
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||||
Purchases, sales, and settlements
|
(4
|
)
|
130
|
|
|
(20
|
)
|
|
(7
|
)
|
|
—
|
|
|
99
|
|
||||||
Transfers in and/or out of Level 3
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Balance at end of year
|
$
|
40
|
|
$
|
132
|
|
|
$
|
37
|
|
|
$
|
38
|
|
|
$
|
1
|
|
|
$
|
248
|
|
|
Defined
Benefit Plans |
|||||||
|
|
|
Plan Assets
|
|||||
Asset Category
|
2019
Target Allocation |
|
2019
|
|
2018
|
|||
Public equity securities
|
|
|
|
22.0
|
%
|
|
28.7
|
%
|
Private/hybrid equity securities
|
|
|
|
20.3
|
%
|
|
18.7
|
%
|
Real estate and other
|
|
|
|
4.3
|
%
|
|
4.2
|
%
|
Equity-related investments
|
49.8
|
%
|
|
46.6
|
%
|
|
51.6
|
%
|
Debt securities
|
48.9
|
%
|
|
49.2
|
%
|
|
44.9
|
%
|
Cash and cash equivalents
|
1.3
|
%
|
|
4.2
|
%
|
|
3.5
|
%
|
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Fiscal year
|
Defined
Benefit Plans
|
|
Post-Retirement
Benefit Plans
|
||||
|
In millions
|
||||||
2020
|
$
|
471
|
|
|
$
|
10
|
|
2021
|
445
|
|
|
10
|
|
||
2022
|
467
|
|
|
10
|
|
||
2023
|
486
|
|
|
10
|
|
||
2024
|
503
|
|
|
11
|
|
||
Next five fiscal years to October 31, 2029
|
2,740
|
|
|
58
|
|
|
Fiscal years ended October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions
|
||||||||||
Stock-based compensation expense from continuing operations
|
$
|
270
|
|
|
$
|
309
|
|
|
$
|
454
|
|
Income tax benefit
|
(50
|
)
|
|
(56
|
)
|
|
(159
|
)
|
|||
Stock-based compensation expense from continuing operations, net of tax
|
$
|
220
|
|
|
$
|
253
|
|
|
$
|
295
|
|
Stock-based compensation expense from discontinued operations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
166
|
|
|
For the fiscal years ended October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions
|
||||||||||
Cost of sales
|
$
|
37
|
|
|
$
|
39
|
|
|
$
|
41
|
|
Research and development
|
70
|
|
|
73
|
|
|
74
|
|
|||
Selling, general and administrative
|
161
|
|
|
174
|
|
|
242
|
|
|||
Restructuring charges
|
—
|
|
|
—
|
|
|
33
|
|
|||
Transformation costs
|
2
|
|
|
3
|
|
|
—
|
|
|||
Acquisition, disposition and other related charges
|
—
|
|
|
10
|
|
|
23
|
|
|||
Separation costs
|
—
|
|
|
10
|
|
|
41
|
|
|||
Stock-based compensation expense from continuing operations
|
$
|
270
|
|
|
$
|
309
|
|
|
$
|
454
|
|
|
Fiscal years ended 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
|
32,417
|
|
|
$
|
14
|
|
|
48,517
|
|
|
$
|
14
|
|
|
57,321
|
|
|
$
|
15
|
|
Granted and assumed through acquisition(1)
|
23,400
|
|
|
$
|
15
|
|
|
22,131
|
|
|
$
|
15
|
|
|
23,980
|
|
|
$
|
21
|
|
Additional shares granted due to post-spin adjustments(2)
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
25,543
|
|
|
$
|
9
|
|
Vested(3)
|
(12,794
|
)
|
|
$
|
14
|
|
|
(32,659
|
)
|
|
$
|
14
|
|
|
(51,976
|
)
|
|
$
|
16
|
|
Forfeited/canceled
|
(3,323
|
)
|
|
$
|
15
|
|
|
(5,572
|
)
|
|
$
|
14
|
|
|
(6,351
|
)
|
|
$
|
16
|
|
Outstanding at end of year
|
39,700
|
|
|
$
|
14
|
|
|
32,417
|
|
|
$
|
14
|
|
|
48,517
|
|
|
$
|
14
|
|
|
(1)
|
Fiscal 2017 includes approximately 11 million restricted stock units assumed by the Company through acquisition with a weighted-average grant date fair value of $18 per share.
|
(2)
|
Additional shares granted as a result of the post-spin exercise price adjustments made related to the Everett and Seattle Transactions, as permitted by the Plan, in order to preserve the intrinsic value of outstanding awards prior to the close of the transactions.
|
(3)
|
Fiscal 2018 includes approximately 6 million restricted stock units, with a weighted-average grant date fair value of $14 per share, which were accelerated to vest on June 1, 2018 as part of the Everett Transaction. Fiscal 2017 includes approximately 14 million restricted stock units, with a weighted-average grant date fair value of $17 per share, which were accelerated as part of the Everett and Seattle Transactions.
|
|
Fiscal year ended October 31, 2017
|
||
Weighted-average fair value(1)
|
$
|
6
|
|
Expected volatility(2)
|
25.7
|
%
|
|
Risk-free interest rate(3)
|
2.0
|
%
|
|
Expected dividend yield(4)
|
1.0
|
%
|
|
Expected term in years(5)
|
6.1
|
|
|
(1)
|
The weighted-average fair value was based on the fair value of stock options granted under the Plan during the respective periods.
|
(2)
|
Expected volatility was estimated using the average historical volatility of selected peer companies.
|
(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 option.
|
(5)
|
For options granted subject to service-based vesting, the expected term was estimated using the simplified method detailed in SEC Staff Accounting Bulletin No. 110.
|
|
Fiscal years ended 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
|
18,263
|
|
|
$
|
10
|
|
|
|
|
|
|
49,274
|
|
|
$
|
10
|
|
|
|
|
|
|
|
57,498
|
|
|
$
|
15
|
|
|
|
|
|
|
||||
Granted and assumed through acquisition
|
170
|
|
|
$
|
9
|
|
|
|
|
|
|
316
|
|
|
$
|
10
|
|
|
|
|
|
|
|
6,074
|
|
|
$
|
23
|
|
|
|
|
|
|
||||
Additional shares granted due to post-spin adjustments(1)
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
24,523
|
|
|
$
|
11
|
|
|
|
|
|
||||||
Exercised
|
(7,841
|
)
|
|
$
|
9
|
|
|
|
|
|
|
(26,476
|
)
|
|
$
|
9
|
|
|
|
|
|
|
|
(29,492
|
)
|
|
$
|
12
|
|
|
|
|
|
|
||||
Forfeited/canceled/expired(2)
|
(430
|
)
|
|
$
|
13
|
|
|
|
|
|
|
(4,851
|
)
|
|
$
|
13
|
|
|
|
|
|
|
|
(9,329
|
)
|
|
$
|
16
|
|
|
|
|
|
|
||||
Outstanding at end of year(3)
|
10,162
|
|
|
$
|
11
|
|
|
3.8
|
|
$
|
57
|
|
|
18,263
|
|
|
$
|
10
|
|
|
4.2
|
|
$
|
92
|
|
|
49,274
|
|
|
$
|
10
|
|
|
4.6
|
|
$
|
207
|
|
Vested and expected to vest at end of year(3)
|
10,130
|
|
|
$
|
11
|
|
|
3.8
|
|
$
|
57
|
|
|
18,038
|
|
|
$
|
10
|
|
|
4.2
|
|
$
|
91
|
|
|
48,566
|
|
|
$
|
10
|
|
|
4.6
|
|
$
|
205
|
|
Exercisable at end of year(3)
|
8,764
|
|
|
$
|
11
|
|
|
3.5
|
|
$
|
52
|
|
|
14,896
|
|
|
$
|
10
|
|
|
3.7
|
|
$
|
85
|
|
|
24,736
|
|
|
$
|
9
|
|
|
3.0
|
|
$
|
123
|
|
|
(1)
|
Additional shares granted as a result of the post-spin exercise price adjustments made related to the Everett and Seattle Transactions, as permitted by the Plan, in order to preserve the intrinsic value of the awards prior to the close of the transaction.
|
(2)
|
Fiscal 2017 includes approximately 8 million stock options, with a weighted-average exercise price of $16 per share, related to the former ES and Software segments, which were canceled by HPE in connection with the Everett and Seattle Transactions, and in accordance with the respective Employee Matters Agreements.
|
(3)
|
The weighted average exercise price reflects the impact of the post-spin adjustments to the exercise price related to the Everett and Seattle Transactions.
|
|
For the fiscal years ended October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions
|
||||||||||
U.S.(1)
|
$
|
(1,067
|
)
|
|
$
|
(2,805
|
)
|
|
$
|
(1,929
|
)
|
Non-U.S.(1)
|
2,620
|
|
|
3,073
|
|
|
2,201
|
|
|||
|
$
|
1,553
|
|
|
$
|
268
|
|
|
$
|
272
|
|
|
(1)
|
Fiscal 2017 amount has been reclassified to conform with the current period presentation.
|
|
For the fiscal years ended October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions
|
||||||||||
U.S. federal taxes:
|
|
|
|
|
|
|
|
|
|||
Current
|
$
|
(763
|
)
|
|
$
|
(2,177
|
)
|
|
$
|
560
|
|
Deferred
|
1,046
|
|
|
150
|
|
|
(1,366
|
)
|
|||
Non-U.S. taxes:
|
|
|
|
|
|
|
|
|
|||
Current
|
246
|
|
|
419
|
|
|
64
|
|
|||
Deferred
|
101
|
|
|
(188
|
)
|
|
25
|
|
|||
State taxes:
|
|
|
|
|
|
|
|
|
|||
Current
|
(58
|
)
|
|
52
|
|
|
(107
|
)
|
|||
Deferred
|
(68
|
)
|
|
—
|
|
|
660
|
|
|||
|
$
|
504
|
|
|
$
|
(1,744
|
)
|
|
$
|
(164
|
)
|
|
For the fiscal years ended October 31,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
U.S. federal statutory income tax rate
|
21.0
|
%
|
|
23.3
|
%
|
|
35.0
|
%
|
State income taxes, net of federal tax benefit
|
(0.1
|
)%
|
|
4.3
|
%
|
|
3.0
|
%
|
Lower rates in other jurisdictions, net
|
(7.3
|
)%
|
|
(121.4
|
)%
|
|
(426.3
|
)%
|
Valuation allowance
|
5.8
|
%
|
|
(59.8
|
)%
|
|
310.0
|
%
|
U.S. permanent differences
|
6.0
|
%
|
|
39.3
|
%
|
|
27.8
|
%
|
Uncertain tax positions
|
(14.7
|
)%
|
|
(694.8
|
)%
|
|
(8.4
|
)%
|
Impacts of the Tax Act(1)
|
24.5
|
%
|
|
158.0
|
%
|
|
—
|
%
|
Other, net
|
(2.7
|
)%
|
|
0.4
|
%
|
|
(1.4
|
)%
|
|
32.5
|
%
|
|
(650.7
|
)%
|
|
(60.3
|
)%
|
|
(1)
|
Impacts of the Tax Act is inclusive of valuation allowances recorded as a result of the U.S. law change under SAB 118.
|
|
As of October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions
|
||||||||||
Balance at beginning of year
|
$
|
8,826
|
|
|
$
|
11,262
|
|
|
$
|
11,411
|
|
Increases:
|
|
|
|
|
|
|
|
|
|||
For current year's tax positions
|
43
|
|
|
163
|
|
|
28
|
|
|||
For prior years' tax positions
|
37
|
|
|
66
|
|
|
311
|
|
|||
Decreases:
|
|
|
|
|
|
|
|
|
|||
For prior years' tax positions
|
(17
|
)
|
|
(82
|
)
|
|
(202
|
)
|
|||
Statute of limitations expiration
|
(38
|
)
|
|
(86
|
)
|
|
(70
|
)
|
|||
Settlements with taxing authorities
|
(7
|
)
|
|
(2
|
)
|
|
(216
|
)
|
|||
Settlements related to joint and several positions of former Parent
|
(6,575
|
)
|
|
(2,495
|
)
|
|
—
|
|
|||
Balance at end of year
|
$
|
2,269
|
|
|
$
|
8,826
|
|
|
$
|
11,262
|
|
|
As of October 31,
|
||||||
|
2019
|
|
2018
|
||||
|
In millions
|
||||||
Deferred tax assets:
|
|
|
|
||||
Loss and credit carry-forwards
|
$
|
8,110
|
|
|
$
|
9,149
|
|
Inventory valuation
|
59
|
|
|
77
|
|
||
Intercompany prepayments
|
179
|
|
|
48
|
|
||
Other intercompany transactions
|
41
|
|
|
63
|
|
||
Warranty
|
72
|
|
|
81
|
|
||
Employee and retiree benefits
|
584
|
|
|
498
|
|
||
Restructuring
|
65
|
|
|
101
|
|
||
Deferred revenue
|
531
|
|
|
518
|
|
||
Intangible assets
|
130
|
|
|
48
|
|
||
Other
|
243
|
|
|
432
|
|
||
Total deferred tax assets
|
10,014
|
|
|
11,015
|
|
||
Valuation allowance
|
(8,225
|
)
|
|
(8,209
|
)
|
||
Total deferred tax assets net of valuation allowance
|
1,789
|
|
|
2,806
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Unremitted earnings of foreign subsidiaries
|
(233
|
)
|
|
(161
|
)
|
||
Fixed assets
|
(352
|
)
|
|
(470
|
)
|
||
Total deferred tax liabilities
|
(585
|
)
|
|
(631
|
)
|
||
Net deferred tax assets and liabilities
|
$
|
1,204
|
|
|
$
|
2,175
|
|
|
As of October 31,
|
||||||
|
2019
|
|
2018
|
||||
|
In millions
|
||||||
Long-term deferred tax assets
|
$
|
1,515
|
|
|
$
|
2,403
|
|
Long-term deferred tax liabilities
|
(311
|
)
|
|
(228
|
)
|
||
Net deferred tax assets net of deferred tax liabilities
|
$
|
1,204
|
|
|
$
|
2,175
|
|
|
Carryforward
|
|
Valuation Allowance
|
|
Initial Year of Expiration
|
||||
|
In millions
|
|
|
||||||
U.S. foreign tax credits
|
$
|
1,271
|
|
|
$
|
(1,227
|
)
|
|
2026
|
U.S. research and development and other credits
|
149
|
|
|
(2
|
)
|
|
2021
|
||
Tax credits in state and foreign jurisdictions
|
174
|
|
|
(91
|
)
|
|
2022
|
||
Balance at end of year
|
$
|
1,594
|
|
|
$
|
(1,320
|
)
|
|
|
|
As of October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions
|
||||||||||
Balance at beginning of year
|
$
|
8,209
|
|
|
$
|
2,789
|
|
|
$
|
2,095
|
|
Income tax expense
|
(10
|
)
|
|
(166
|
)
|
|
848
|
|
|||
Income tax expense related to the Tax Act
|
488
|
|
|
687
|
|
|
—
|
|
|||
Valuation allowance offsetting current activity
|
(738
|
)
|
|
5,028
|
|
|
—
|
|
|||
Other comprehensive income, currency translation and charges to other accounts
|
276
|
|
|
(129
|
)
|
|
(154
|
)
|
|||
Balance at end of year
|
$
|
8,225
|
|
|
$
|
8,209
|
|
|
$
|
2,789
|
|
|
As of October 31,
|
||||||
|
2019
|
|
2018
|
||||
|
In millions
|
||||||
Cash and cash equivalents
|
$
|
3,753
|
|
|
$
|
4,880
|
|
Restricted cash
|
323
|
|
|
204
|
|
||
Cash, cash equivalents and restricted cash
|
$
|
4,076
|
|
|
$
|
5,084
|
|
|
As of October 31,
|
||||||
|
2019
|
|
2018
|
||||
|
In millions
|
||||||
Unbilled receivable
|
$
|
206
|
|
|
$
|
185
|
|
Accounts receivable
|
2,782
|
|
|
3,117
|
|
||
Allowance for doubtful accounts
|
(31
|
)
|
|
(39
|
)
|
||
Total
|
$
|
2,957
|
|
|
$
|
3,263
|
|
|
As of October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions
|
||||||||||
Balance at beginning of year
|
$
|
39
|
|
|
$
|
42
|
|
|
$
|
49
|
|
Provision for doubtful accounts
|
9
|
|
|
20
|
|
|
16
|
|
|||
Deductions, net of recoveries
|
(17
|
)
|
|
(23
|
)
|
|
(23
|
)
|
|||
Balance at end of year
|
$
|
31
|
|
|
$
|
39
|
|
|
$
|
42
|
|
|
As of October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions
|
||||||||||
Balance at beginning of period(1)
|
$
|
166
|
|
|
$
|
121
|
|
|
$
|
145
|
|
Trade receivables sold
|
4,533
|
|
|
4,844
|
|
|
3,910
|
|
|||
Cash receipts
|
(4,710
|
)
|
|
(4,794
|
)
|
|
(3,937
|
)
|
|||
Foreign currency and other
|
1
|
|
|
(5
|
)
|
|
3
|
|
|||
Balance at end of period(1)
|
$
|
(10
|
)
|
|
$
|
166
|
|
|
$
|
121
|
|
|
(1)
|
Beginning and ending balances represent amounts for trade receivables sold but not yet collected. The ending credit balance at October 31, 2019 represents credit memos issued but not applied to trade receivables prior to cash remittance.
|
|
As of October 31,
|
||||||
|
2019
|
|
2018
|
||||
|
In millions
|
||||||
Finished goods
|
$
|
1,198
|
|
|
$
|
1,274
|
|
Purchased parts and fabricated assemblies
|
1,189
|
|
|
1,173
|
|
||
Total
|
$
|
2,387
|
|
|
$
|
2,447
|
|
|
As of October 31,
|
||||||
|
2019
|
|
2018
|
||||
|
In millions
|
||||||
Value-added taxes receivable
|
$
|
627
|
|
|
$
|
811
|
|
Short-term tax receivables and prepaid taxes
|
223
|
|
|
535
|
|
||
Manufacturer and other receivables
|
532
|
|
|
937
|
|
||
Prepaid and other current assets
|
723
|
|
|
793
|
|
||
Restricted cash
|
323
|
|
|
204
|
|
||
Total
|
$
|
2,428
|
|
|
$
|
3,280
|
|
|
As of October 31,
|
||||||
|
2019
|
|
2018
|
||||
|
In millions
|
||||||
Land
|
$
|
241
|
|
|
$
|
294
|
|
Buildings and leasehold improvements
|
2,196
|
|
|
2,103
|
|
||
Machinery and equipment, including equipment held for lease
|
9,464
|
|
|
9,419
|
|
||
|
11,901
|
|
|
11,816
|
|
||
Accumulated depreciation
|
(5,847
|
)
|
|
(5,678
|
)
|
||
Total
|
$
|
6,054
|
|
|
$
|
6,138
|
|
|
As of October 31,
|
||||||
|
2019
|
|
2018
|
||||
|
In millions
|
||||||
Financing receivables, net
|
$
|
4,949
|
|
|
$
|
4,740
|
|
Deferred tax assets
|
1,515
|
|
|
2,403
|
|
||
Indemnification receivables
|
202
|
|
|
16
|
|
||
Prepaid taxes (1)
|
228
|
|
|
2,340
|
|
||
Prepaid pension assets
|
864
|
|
|
829
|
|
||
Other
|
1,160
|
|
|
1,031
|
|
||
Total
|
$
|
8,918
|
|
|
$
|
11,359
|
|
|
(1)
|
For the fiscal year ended October 31, 2019, the decrease in prepaid taxes was primarily a result of the adoption of the accounting standard for the recognition of income tax consequences for intra-entity transfers of assets other than inventory.
|
|
As of October 31,
|
||||||
|
2019
|
|
2018
|
||||
|
In millions
|
||||||
Accrued taxes - other
|
$
|
806
|
|
|
$
|
1,010
|
|
Warranty
|
199
|
|
|
241
|
|
||
Sales and marketing programs
|
1,065
|
|
|
910
|
|
||
Other
|
1,932
|
|
|
1,679
|
|
||
Total
|
$
|
4,002
|
|
|
$
|
3,840
|
|
|
As of October 31,
|
||||||
|
2019
|
|
2018
|
||||
|
In millions
|
||||||
Pension, post-retirement, and post-employment liabilities
|
$
|
1,772
|
|
|
$
|
1,434
|
|
Deferred revenue
|
2,751
|
|
|
2,646
|
|
||
Tax liability
|
538
|
|
|
1,485
|
|
||
Other long-term liabilities
|
1,039
|
|
|
1,320
|
|
||
Total
|
$
|
6,100
|
|
|
$
|
6,885
|
|
|
As of October 31,
|
||||||
|
2019
|
|
2018
|
||||
|
In millions
|
||||||
Minimum lease payments receivable
|
$
|
9,070
|
|
|
$
|
8,691
|
|
Unguaranteed residual value
|
336
|
|
|
297
|
|
||
Unearned income
|
(754
|
)
|
|
(732
|
)
|
||
Financing receivables, gross
|
8,652
|
|
|
8,256
|
|
||
Allowance for doubtful accounts
|
(131
|
)
|
|
(120
|
)
|
||
Financing receivables, net
|
8,521
|
|
|
8,136
|
|
||
Less: current portion(1)
|
(3,572
|
)
|
|
(3,396
|
)
|
||
Amounts due after one year, net(1)
|
$
|
4,949
|
|
|
$
|
4,740
|
|
|
(1)
|
The Company includes the current portion in Financing receivables, and amounts due after one year, net, in Long-term financing receivables and other assets in the accompanying Consolidated Balance Sheets.
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
|
Total
|
||||||||||||||
|
In millions
|
||||||||||||||||||||||||||
Scheduled maturities of minimum lease payments receivable
|
$
|
3,939
|
|
|
$
|
2,449
|
|
|
$
|
1,555
|
|
|
$
|
752
|
|
|
$
|
306
|
|
|
$
|
69
|
|
|
$
|
9,070
|
|
|
As of October 31,
|
||||||
|
2019
|
|
2018
|
||||
|
In millions
|
||||||
Risk Rating:
|
|
|
|
|
|
||
Low
|
$
|
4,432
|
|
|
$
|
4,238
|
|
Moderate
|
3,933
|
|
|
3,805
|
|
||
High
|
287
|
|
|
213
|
|
||
Total
|
$
|
8,652
|
|
|
$
|
8,256
|
|
|
As of October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions
|
||||||||||
Balance at beginning of year
|
$
|
120
|
|
|
$
|
86
|
|
|
$
|
89
|
|
Provision for doubtful accounts
|
33
|
|
|
49
|
|
|
23
|
|
|||
Write-offs
|
(22
|
)
|
|
(15
|
)
|
|
(26
|
)
|
|||
Balance at end of year
|
$
|
131
|
|
|
$
|
120
|
|
|
$
|
86
|
|
|
As of October 31,
|
||||||
|
2019
|
|
2018
|
||||
|
In millions
|
||||||
Gross financing receivables collectively evaluated for loss
|
$
|
8,255
|
|
|
$
|
7,917
|
|
Gross financing receivables individually evaluated for loss(1)
|
397
|
|
|
339
|
|
||
Total
|
$
|
8,652
|
|
|
$
|
8,256
|
|
Allowance for financing receivables collectively evaluated for loss
|
$
|
84
|
|
|
$
|
78
|
|
Allowance for financing receivables individually evaluated for loss
|
47
|
|
|
42
|
|
||
Total
|
$
|
131
|
|
|
$
|
120
|
|
|
(1)
|
Includes billed operating lease receivables and billed and unbilled sales-type and direct-financing lease receivables.
|
|
As of October 31,
|
||||||
|
2019
|
|
2018
|
||||
|
In millions
|
||||||
Billed:(1)
|
|
|
|
|
|
||
Current 1-30 days
|
$
|
301
|
|
|
$
|
275
|
|
Past due 31-60 days
|
62
|
|
|
42
|
|
||
Past due 61-90 days
|
15
|
|
|
13
|
|
||
Past due >90 days
|
88
|
|
|
74
|
|
||
Unbilled sales-type and direct-financing lease receivables
|
8,186
|
|
|
7,852
|
|
||
Total gross financing receivables
|
$
|
8,652
|
|
|
$
|
8,256
|
|
Gross financing receivables on non-accrual status(2)
|
$
|
276
|
|
|
$
|
226
|
|
Gross financing receivables 90 days past due and still accruing interest(2)
|
$
|
121
|
|
|
$
|
113
|
|
|
(1)
|
Includes billed operating lease receivables and billed sales-type and direct-financing lease receivables.
|
(2)
|
Includes billed operating lease receivables and billed and unbilled sales-type and direct-financing lease receivables.
|
|
As of October 31, 2019
|
||
Assets held by VIE
|
In millions
|
||
Other current assets
|
$
|
76
|
|
Financing receivables
|
|
||
Short-term
|
$
|
194
|
|
Long-term
|
$
|
229
|
|
Property, plant and equipment
|
$
|
303
|
|
Liabilities held by VIE
|
|
||
Notes payable and short-term borrowings, net of unamortized debt issuance costs
|
$
|
385
|
|
Long-term debt, net of unamortized debt issuance costs
|
$
|
370
|
|
|
As of October 31,
|
||||||
|
2019
|
|
2018
|
||||
|
In millions
|
||||||
Equipment leased to customers
|
$
|
7,185
|
|
|
$
|
7,290
|
|
Accumulated depreciation
|
(3,101
|
)
|
|
(3,078
|
)
|
||
Total
|
$
|
4,084
|
|
|
$
|
4,212
|
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
|
Total
|
||||||||||||||
|
In millions
|
||||||||||||||||||||||||||
Minimum future rentals on non-cancelable operating leases
|
$
|
1,847
|
|
|
$
|
1,162
|
|
|
$
|
437
|
|
|
$
|
91
|
|
|
$
|
27
|
|
|
$
|
2
|
|
|
$
|
3,566
|
|
|
In millions
|
||
|
|
||
Goodwill
|
$
|
767
|
|
Amortizable intangible assets
|
465
|
|
|
In-process research and development
|
141
|
|
|
Net tangible assets assumed
|
239
|
|
|
Total fair value consideration
|
$
|
1,612
|
|
|
In millions
|
||
|
|
||
Goodwill
|
$
|
1,433
|
|
Amortizable intangible assets
|
603
|
|
|
In-process research and development
|
85
|
|
|
Net tangible assets assumed
|
334
|
|
|
Total fair value consideration
|
$
|
2,455
|
|
|
Hybrid IT(1)
|
|
Intelligent
Edge(1) |
|
Financial
Services |
|
Corporate Investments(1)
|
|
Total
|
||||||||||
|
In millions
|
||||||||||||||||||
Balance at October 31, 2017
|
$
|
15,373
|
|
|
$
|
1,911
|
|
|
$
|
144
|
|
|
$
|
88
|
|
|
$
|
17,516
|
|
Goodwill acquired during the period
|
101
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
104
|
|
|||||
Impairment of goodwill
|
—
|
|
|
—
|
|
|
—
|
|
|
(88
|
)
|
|
(88
|
)
|
|||||
Changes due to foreign currency
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||
Goodwill adjustments
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|||||
Balance at October 31, 2018
|
15,479
|
|
|
1,914
|
|
|
144
|
|
|
—
|
|
|
17,537
|
|
|||||
Goodwill acquired during the period
|
767
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
767
|
|
|||||
Goodwill adjustments
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||
Balance at October 31, 2019
|
$
|
16,248
|
|
|
$
|
1,914
|
|
|
$
|
144
|
|
|
$
|
—
|
|
|
$
|
18,306
|
|
|
(1)
|
Effective at the beginning of the first quarter of fiscal 2019, the Company implemented organizational changes to align its segment financial reporting more closely with its current business structure, which are described in detail in Note 3, "Segment Information". Goodwill was reclassified to the respective segments using a relative fair value approach.
|
|
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
|
$
|
312
|
|
|
$
|
(96
|
)
|
|
$
|
216
|
|
|
$
|
272
|
|
|
$
|
(142
|
)
|
|
$
|
130
|
|
Developed and core technology and patents
|
1,371
|
|
|
(719
|
)
|
|
652
|
|
|
1,121
|
|
|
(525
|
)
|
|
596
|
|
||||||
Trade name and trade marks
|
163
|
|
|
(44
|
)
|
|
119
|
|
|
87
|
|
|
(42
|
)
|
|
45
|
|
||||||
In-process research and development
|
141
|
|
|
—
|
|
|
141
|
|
|
18
|
|
|
—
|
|
|
18
|
|
||||||
Total intangible assets
|
$
|
1,987
|
|
|
$
|
(859
|
)
|
|
$
|
1,128
|
|
|
$
|
1,498
|
|
|
$
|
(709
|
)
|
|
$
|
789
|
|
Finite-Lived Intangible Assets
|
Weighted-Average
Remaining Useful Lives |
|
In years
|
Customer contracts, customer lists and distribution agreements
|
3
|
Developed and core technology and patents
|
4
|
Trade name and trade marks
|
5
|
Fiscal year
|
In millions
|
||
2020
|
$
|
325
|
|
2021
|
251
|
|
|
2022
|
172
|
|
|
2023
|
138
|
|
|
2024
|
87
|
|
|
Thereafter
|
14
|
|
|
Total
|
$
|
987
|
|
|
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 and Investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Time deposits
|
$
|
—
|
|
|
$
|
803
|
|
|
$
|
—
|
|
|
$
|
803
|
|
|
$
|
—
|
|
|
$
|
781
|
|
|
$
|
—
|
|
|
$
|
781
|
|
Money market funds
|
859
|
|
|
—
|
|
|
—
|
|
|
859
|
|
|
2,340
|
|
|
—
|
|
|
—
|
|
|
2,340
|
|
||||||||
Foreign bonds
|
7
|
|
|
126
|
|
|
—
|
|
|
133
|
|
|
7
|
|
|
124
|
|
|
—
|
|
|
131
|
|
||||||||
Other debt securities
|
—
|
|
|
—
|
|
|
32
|
|
|
32
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|
25
|
|
||||||||
Derivative Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
—
|
|
|
73
|
|
|
—
|
|
|
73
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Foreign exchange contracts
|
—
|
|
|
392
|
|
|
—
|
|
|
392
|
|
|
—
|
|
|
496
|
|
|
—
|
|
|
496
|
|
||||||||
Other derivatives
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total assets
|
$
|
866
|
|
|
$
|
1,397
|
|
|
$
|
32
|
|
|
$
|
2,295
|
|
|
$
|
2,347
|
|
|
$
|
1,401
|
|
|
$
|
25
|
|
|
$
|
3,773
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
353
|
|
|
$
|
—
|
|
|
$
|
353
|
|
Foreign exchange contracts
|
—
|
|
|
136
|
|
|
—
|
|
|
136
|
|
|
—
|
|
|
117
|
|
|
—
|
|
|
117
|
|
||||||||
Other derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
||||||||
Total liabilities
|
$
|
—
|
|
|
$
|
147
|
|
|
$
|
—
|
|
|
$
|
147
|
|
|
$
|
—
|
|
|
$
|
476
|
|
|
$
|
—
|
|
|
$
|
476
|
|
|
As of
October 31, 2019 |
|
As of
October 31, 2018 |
||||||||||||||||||||||||||||
|
Cost
|
|
Gross
Unrealized Gains |
|
Gross
Unrealized Losses |
|
Fair
Value |
|
Cost
|
|
Gross
Unrealized Gains |
|
Gross
Unrealized Losses |
|
Fair
Value |
||||||||||||||||
|
In millions
|
||||||||||||||||||||||||||||||
Cash Equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Time deposits
|
$
|
803
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
803
|
|
|
$
|
781
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
781
|
|
Money market funds
|
859
|
|
|
—
|
|
|
—
|
|
|
859
|
|
|
2,340
|
|
|
—
|
|
|
—
|
|
|
2,340
|
|
||||||||
Total cash equivalents
|
1,662
|
|
|
—
|
|
|
—
|
|
|
1,662
|
|
|
3,121
|
|
|
—
|
|
|
—
|
|
|
3,121
|
|
||||||||
Available-for-Sale Investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign bonds
|
110
|
|
|
23
|
|
|
—
|
|
|
133
|
|
|
113
|
|
|
18
|
|
|
—
|
|
|
131
|
|
||||||||
Other debt securities
|
32
|
|
|
—
|
|
|
—
|
|
|
32
|
|
|
26
|
|
|
—
|
|
|
(1
|
)
|
|
25
|
|
||||||||
Total available-for-sale investments
|
142
|
|
|
23
|
|
|
—
|
|
|
165
|
|
|
139
|
|
|
18
|
|
|
(1
|
)
|
|
156
|
|
||||||||
Total cash equivalents and available-for-sale investments
|
$
|
1,804
|
|
|
$
|
23
|
|
|
$
|
—
|
|
|
$
|
1,827
|
|
|
$
|
3,260
|
|
|
$
|
18
|
|
|
$
|
(1
|
)
|
|
$
|
3,277
|
|
|
As of
October 31, 2019 |
||||||
|
Amortized Cost
|
|
Fair Value
|
||||
|
In millions
|
||||||
Due in one to five years
|
$
|
9
|
|
|
$
|
9
|
|
Due in more than five years
|
133
|
|
|
156
|
|
||
|
$
|
142
|
|
|
$
|
165
|
|
|
As of
October 31, 2019 |
|
As of
October 31, 2018 |
||||||||||||||||||||||||||||||||||||
|
|
|
Fair Value
|
|
|
|
Fair Value
|
||||||||||||||||||||||||||||||||
|
Outstanding
Gross Notional |
|
Other
Current Assets |
|
Long-Term
Financing Receivables and Other Assets |
|
Other
Accrued Liabilities |
|
Long-Term
Other Liabilities |
|
Outstanding
Gross Notional |
|
Other
Current Assets |
|
Long-Term
Financing Receivables and Other Assets |
|
Other
Accrued Liabilities |
|
Long-Term
Other Liabilities |
||||||||||||||||||||
|
In millions
|
||||||||||||||||||||||||||||||||||||||
Derivatives designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fair value hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate contracts
|
$
|
6,850
|
|
|
$
|
—
|
|
|
$
|
72
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
6,850
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
353
|
|
Cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency contracts
|
8,578
|
|
|
164
|
|
|
141
|
|
|
45
|
|
|
27
|
|
|
8,423
|
|
|
270
|
|
|
107
|
|
|
11
|
|
|
15
|
|
||||||||||
Interest rate contracts
|
500
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Net investment hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency contracts
|
1,766
|
|
|
31
|
|
|
36
|
|
|
18
|
|
|
10
|
|
|
1,737
|
|
|
32
|
|
|
41
|
|
|
13
|
|
|
11
|
|
||||||||||
Total derivatives designated as hedging instruments
|
17,694
|
|
|
195
|
|
|
250
|
|
|
74
|
|
|
37
|
|
|
17,010
|
|
|
302
|
|
|
148
|
|
|
24
|
|
|
379
|
|
||||||||||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency contracts
|
6,398
|
|
|
17
|
|
|
3
|
|
|
33
|
|
|
3
|
|
|
6,780
|
|
|
41
|
|
|
5
|
|
|
55
|
|
|
12
|
|
||||||||||
Other derivatives
|
97
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
104
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
||||||||||
Total derivatives not designated as hedging instruments
|
6,495
|
|
|
20
|
|
|
3
|
|
|
33
|
|
|
3
|
|
|
6,884
|
|
|
41
|
|
|
5
|
|
|
61
|
|
|
12
|
|
||||||||||
Total derivatives
|
$
|
24,189
|
|
|
$
|
215
|
|
|
$
|
253
|
|
|
$
|
107
|
|
|
$
|
40
|
|
|
$
|
23,894
|
|
|
$
|
343
|
|
|
$
|
153
|
|
|
$
|
85
|
|
|
$
|
391
|
|
|
As of
October 31, 2019 |
||||||||||||||||||||||||
|
In the Consolidated Balance Sheets
|
|
|
|
|
||||||||||||||||||||
|
(i)
|
|
(ii)
|
|
(iii) = (i)–(ii)
|
|
(iv)
|
|
(v)
|
|
|
|
(vi) = (iii)–(iv)–(v)
|
||||||||||||
|
|
|
|
|
|
|
Gross Amounts
Not Offset |
|
|
|
|
||||||||||||||
|
Gross
Amount Recognized |
|
Gross
Amount Offset |
|
Net Amount
Presented |
|
Derivatives
|
|
Financial
Collateral |
|
|
|
Net Amount
|
||||||||||||
|
In millions
|
||||||||||||||||||||||||
Derivative assets
|
$
|
468
|
|
|
$
|
—
|
|
|
$
|
468
|
|
|
$
|
123
|
|
|
$
|
263
|
|
|
(1)
|
|
$
|
82
|
|
Derivative liabilities
|
$
|
147
|
|
|
$
|
—
|
|
|
$
|
147
|
|
|
$
|
123
|
|
|
$
|
19
|
|
|
(2)
|
|
$
|
5
|
|
|
As of
October 31, 2018 |
||||||||||||||||||||||||
|
In the Consolidated Balance Sheets
|
|
|
|
|
||||||||||||||||||||
|
(i)
|
|
(ii)
|
|
(iii) = (i)–(ii)
|
|
(iv)
|
|
(v)
|
|
(vi) = (iii)–(iv)–(v)
|
||||||||||||||
|
|
|
|
|
|
|
Gross Amounts
Not Offset |
|
|
|
|
||||||||||||||
|
Gross
Amount Recognized |
|
Gross
Amount Offset |
|
Net Amount
Presented |
|
Derivatives
|
|
Financial
Collateral |
|
|
|
Net Amount
|
||||||||||||
|
In millions
|
||||||||||||||||||||||||
Derivative assets
|
$
|
496
|
|
|
$
|
—
|
|
|
$
|
496
|
|
|
$
|
179
|
|
|
$
|
205
|
|
|
(1)
|
|
$
|
112
|
|
Derivative liabilities
|
$
|
476
|
|
|
$
|
—
|
|
|
$
|
476
|
|
|
$
|
179
|
|
|
$
|
302
|
|
|
(2)
|
|
$
|
(5
|
)
|
|
(1)
|
Represents the cash collateral posted by counterparties as of the respective reporting date for the Company'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 the Company in cash or through re-use of counterparty cash collateral as of the respective reporting date for the Company's liability position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date. As of Oct 31, 2019, $19 million of collateral posted was entirely by way of re-use of counterparty collateral. As of Oct 31, 2018, $302 million of collateral posted was entirely in cash.
|
|
Gains (Losses) Recognized in Income on Derivative and Related Hedged Item
|
||||||||||||||||||||||||||||
Derivative Instrument
|
Location
|
|
2019
|
|
2018
|
|
2017
|
|
Hedged Item
|
|
Location
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||
|
|
|
In millions
|
|
|
|
|
|
In millions
|
||||||||||||||||||||
Interest rate contracts
|
Interest and other, net
|
|
$
|
414
|
|
|
$
|
(211
|
)
|
|
$
|
(245
|
)
|
|
Fixed-rate debt
|
|
Interest and other, net
|
|
$
|
(414
|
)
|
|
$
|
211
|
|
|
$
|
245
|
|
|
Gains (Losses)
Recognized in OCI on Derivatives (Effective Portion) |
|
Gains (Losses) Reclassified from Accumulated OCI
Into Earnings (Effective Portion) |
||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
Location
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||
|
In millions
|
|
|
|
In millions
|
||||||||||||||||||||
Cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency contracts
|
$
|
109
|
|
|
$
|
163
|
|
|
$
|
(113
|
)
|
|
Net revenue
|
|
$
|
233
|
|
|
$
|
(24
|
)
|
|
$
|
(68
|
)
|
Foreign currency contracts
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
Cost of products
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Foreign currency contracts
|
198
|
|
|
6
|
|
|
159
|
|
|
Interest and other, net
|
|
138
|
|
|
16
|
|
|
170
|
|
||||||
Interest rate contracts
|
1
|
|
|
—
|
|
|
—
|
|
|
Interest and other, net
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Subtotal
|
308
|
|
|
169
|
|
|
45
|
|
|
Net earnings from continuing operations
|
|
371
|
|
|
(8
|
)
|
|
102
|
|
||||||
Foreign currency contracts
|
—
|
|
|
—
|
|
|
1
|
|
|
Net loss from discontinued operations
|
|
—
|
|
|
—
|
|
|
43
|
|
||||||
Total cash flow hedges
|
$
|
308
|
|
|
$
|
169
|
|
|
$
|
46
|
|
|
Net earnings
|
|
$
|
371
|
|
|
$
|
(8
|
)
|
|
$
|
145
|
|
Net investment hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency contracts
|
$
|
2
|
|
|
$
|
81
|
|
|
$
|
(71
|
)
|
|
Interest and other, net
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Gains (Losses) Recognized in Income on Derivatives
|
||||||||||||
|
Location
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
In millions
|
||||||||||
Foreign currency contracts
|
Interest and other, net
|
|
$
|
(134
|
)
|
|
$
|
301
|
|
|
$
|
(443
|
)
|
Other derivatives
|
Interest and other, net
|
|
8
|
|
|
(6
|
)
|
|
3
|
|
|||
Total
|
|
|
$
|
(126
|
)
|
|
$
|
295
|
|
|
$
|
(440
|
)
|
|
As of October 31,
|
||||||||||||
|
2019
|
|
2018
|
||||||||||
|
Amount
Outstanding |
|
Weighted-Average
Interest Rate |
|
Amount
Outstanding |
|
Weighted-Average
Interest Rate |
||||||
|
Dollars in millions
|
||||||||||||
Current portion of long-term debt(1)
|
$
|
3,441
|
|
|
4.1
|
%
|
|
$
|
1,196
|
|
|
2.2
|
%
|
FS Commercial paper
|
698
|
|
|
(0.1
|
)%
|
|
392
|
|
|
(0.2
|
)%
|
||
Notes payable to banks, lines of credit and other(2)
|
286
|
|
|
2.7
|
%
|
|
417
|
|
|
2.5
|
%
|
||
Total notes payable and short-term borrowings
|
$
|
4,425
|
|
|
|
|
|
$
|
2,005
|
|
|
|
|
|
(1)
|
As of October 31, 2019, Current portion of long-term debt includes $390 million associated with the Company issued asset-backed debt securities.
|
(2)
|
Notes payable to banks, lines of credit and other includes $204 million and $361 million at October 31, 2019 and 2018, respectively, of borrowing- and funding-related activity associated with FS and its subsidiaries.
|
|
As of October 31,
|
||||||
|
2019
|
|
2018
|
||||
|
In millions
|
||||||
Hewlett Packard Enterprise Senior Notes
|
|
|
|
|
|
||
$1,100 issued at discount to par at a price of 99.994% in September 2017 at 2.10%, paid October 4, 2019, interest payable semi-annually on April 4 and October 4 of each year
|
$
|
—
|
|
|
$
|
1,100
|
|
$3,000 issued at discount to par at a price of 99.972% in October 2015 at 3.6%, due October 15, 2020, interest payable semi-annually on April 15 and October 15 of each year
|
3,000
|
|
|
3,000
|
|
||
$500 issued at par in September 2019 at three-month USD LIBOR plus 0.68% due March 12, 2021, interest payable quarterly on March 12, June 12, September 12 and December 12 of each year
|
500
|
|
|
—
|
|
||
$500 issued at discount to par at a price of 99.861% in September 2018 at 3.5%, due October 5, 2021, interest payable semi-annually on April 5 and October 5 of each year
|
500
|
|
|
499
|
|
||
$800 issued at par in September 2018 at three-month USD LIBOR plus 0.72% due October 5, 2021, interest payable semi-annually on April 5 and October 5 of each year
|
800
|
|
|
800
|
|
||
$1,350 issued at discount to par at a price of 99.802% in October 2015 at 4.4%, due October 15, 2022, interest payable semi-annually on April 15 and October 15 of each year
|
1,349
|
|
|
1,348
|
|
||
$1,000 issued at discount to par at a price of 99.979% in September 2019 at 2.25%, due April 1, 2023, interest payable semi-annually on April 1 and October 1 of each year
|
1,000
|
|
|
—
|
|
||
$2,500 issued at discount to par at a price of 99.725% in October 2015 at 4.9%, due October 15, 2025, interest payable semi-annually on April 15 and October 15 of each year
|
2,495
|
|
|
2,495
|
|
||
$750 issued at discount to par at a price of 99.942% in October 2015 at 6.2%, due October 15, 2035, interest payable semi-annually on April 15 and October 15 of each year
|
750
|
|
|
750
|
|
||
$1,500 issued at discount to par at a price of 99.932% in October 2015 at 6.35%, due October 15, 2045, interest payable semi-annually on April 15 and October 15 of each year
|
1,499
|
|
|
1,499
|
|
||
Other, including capital lease obligations, at 0.00%-5.52%, due in calendar years 2019-2030(1)
|
166
|
|
|
236
|
|
||
Asset backed securities(2)
|
763
|
|
|
—
|
|
||
Fair value adjustment related to hedged debt
|
61
|
|
|
(353
|
)
|
||
Unamortized debt issuance costs
|
(47
|
)
|
|
(42
|
)
|
||
Less: current portion
|
(3,441
|
)
|
|
(1,196
|
)
|
||
Total long-term debt
|
$
|
9,395
|
|
|
$
|
10,136
|
|
|
(1)
|
Other, including capital lease obligations includes $80 million and $131 million as of October 31, 2019 and 2018, respectively, of borrowing- and funding-related activity associated with FS and its subsidiaries that are collateralized by receivables and underlying assets associated with the related capital and operating leases. For both the periods presented, the carrying amount of the assets approximated the carrying amount of the borrowings.
|
(2)
|
In September 2019, the Company issued $763 million asset-backed debt securities in six tranches at a discount to par, at a weighted average price of 99.99% and a weighted average interest rate of 2.31%, payable monthly from November 2019. For more information on the asset-backed debt securities, see Note 10 “Financing Receivables and Operating Leases”.
|
|
|
|
Fiscal years ended October 31,
|
||||||||||
Expense
|
Location
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
In millions
|
||||||||||
Financing interest
|
Financing interest
|
|
$
|
297
|
|
|
$
|
278
|
|
|
$
|
265
|
|
Interest expense
|
Interest and other, net
|
|
311
|
|
|
353
|
|
|
334
|
|
|||
Total interest expense
|
|
|
$
|
608
|
|
|
$
|
631
|
|
|
$
|
599
|
|
Fiscal year
|
In millions
|
||
2020
|
$
|
3,456
|
|
2021
|
2,078
|
|
|
2022
|
1,487
|
|
|
2023
|
1,017
|
|
|
2024
|
5
|
|
|
Thereafter
|
4,786
|
|
|
Total
|
$
|
12,829
|
|
|
Fiscal years ended October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions
|
||||||||||
Taxes on net unrealized gain (losses) on available-for-sale securities:
|
|
|
|
|
|
|
|
|
|||
Tax provision on net unrealized gains (losses) arising during the period
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
Tax provision on gains reclassified into earnings
|
—
|
|
|
—
|
|
|
1
|
|
|||
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||
Taxes on change in net unrealized (losses) gains on cash flow hedges:
|
|
|
|
|
|
|
|
|
|||
Tax (provision) benefit on net unrealized gains arising during the period
|
(33
|
)
|
|
(22
|
)
|
|
6
|
|
|||
Tax provision (benefit) on net (gains) losses reclassified into earnings
|
43
|
|
|
(1
|
)
|
|
10
|
|
|||
|
10
|
|
|
(23
|
)
|
|
16
|
|
|||
Taxes on change in unrealized components of defined benefit plans:
|
|
|
|
|
|
|
|
|
|||
Tax benefit (provision) on net unrealized (losses) gains arising during the period
|
40
|
|
|
2
|
|
|
(49
|
)
|
|||
Tax provision on amortization of net actuarial loss and prior service benefit
|
(13
|
)
|
|
(14
|
)
|
|
(19
|
)
|
|||
Tax provision on curtailments, settlements and other
|
(1
|
)
|
|
(10
|
)
|
|
(91
|
)
|
|||
|
26
|
|
|
(22
|
)
|
|
(159
|
)
|
|||
Taxes on change in cumulative translation adjustment:
|
|
|
|
|
|
||||||
Tax benefit (provision) on cumulative translation adjustment arising during the period
|
—
|
|
|
3
|
|
|
(1
|
)
|
|||
|
—
|
|
|
3
|
|
|
(1
|
)
|
|||
Tax benefit (provision) on other comprehensive (loss) income
|
$
|
36
|
|
|
$
|
(42
|
)
|
|
$
|
(145
|
)
|
|
Fiscal years ended October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions
|
||||||||||
Other comprehensive (loss) income, net of taxes:
|
|
|
|
|
|
|
|
|
|||
Change in net unrealized gains (losses) on available-for-sale securities:
|
|
|
|
|
|
|
|
|
|||
Net unrealized gains (losses) arising during the period
|
$
|
9
|
|
|
$
|
(3
|
)
|
|
$
|
(10
|
)
|
Gains reclassified into earnings
|
(3
|
)
|
|
(9
|
)
|
|
(3
|
)
|
|||
|
6
|
|
|
(12
|
)
|
|
(13
|
)
|
|||
Change in net unrealized (losses) gains on cash flow hedges:
|
|
|
|
|
|
|
|
|
|||
Net unrealized gains arising during the period
|
275
|
|
|
147
|
|
|
52
|
|
|||
Net (gains) losses reclassified into earnings(1)
|
(328
|
)
|
|
7
|
|
|
(135
|
)
|
|||
|
(53
|
)
|
|
154
|
|
|
(83
|
)
|
|||
Change in unrealized components of defined benefit plans:
|
|
|
|
|
|
|
|
|
|||
Net unrealized (losses) gains arising during the period
|
(661
|
)
|
|
(421
|
)
|
|
895
|
|
|||
Amortization of net actuarial loss and prior service benefit(2)
|
203
|
|
|
177
|
|
|
266
|
|
|||
Curtailments, settlements and other
|
14
|
|
|
12
|
|
|
(76
|
)
|
|||
|
(444
|
)
|
|
(232
|
)
|
|
1,085
|
|
|||
Change in cumulative translation adjustment:
|
|
|
|
|
|
||||||
Cumulative translation adjustment arising during the period
|
(18
|
)
|
|
(67
|
)
|
|
(15
|
)
|
|||
Release of cumulative translation adjustment as a result of divestitures and country exits
|
—
|
|
|
20
|
|
|
—
|
|
|||
|
(18
|
)
|
|
(47
|
)
|
|
(15
|
)
|
|||
Other comprehensive (loss) income, net of taxes
|
$
|
(509
|
)
|
|
$
|
(137
|
)
|
|
$
|
974
|
|
|
(1)
|
For more details on reclassification of pre-tax (gains) losses on cash flow hedges into the Consolidated Statements of Earnings, see Note 14, "Financial Instruments".
|
(2)
|
These components are included in the computation of net pension and post-retirement benefit (credit) cost in Note 6, "Retirement and Post-Retirement Benefit Plans".
|
|
Net unrealized
gains (losses) on available-for-sale securities |
|
Net unrealized
gains (losses) on cash flow hedges |
|
Unrealized
components of defined benefit plans |
|
Cumulative
translation adjustment |
|
Accumulated
other comprehensive loss |
||||||||||
|
In millions
|
||||||||||||||||||
Balance at beginning of period
|
$
|
17
|
|
|
$
|
106
|
|
|
$
|
(2,922
|
)
|
|
$
|
(419
|
)
|
|
$
|
(3,218
|
)
|
Other comprehensive income (loss) before reclassifications
|
9
|
|
|
275
|
|
|
(661
|
)
|
|
(18
|
)
|
|
(395
|
)
|
|||||
Reclassifications of (gains) losses into earnings
|
(3
|
)
|
|
(328
|
)
|
|
217
|
|
|
—
|
|
|
(114
|
)
|
|||||
Balance at end of period
|
$
|
23
|
|
|
$
|
53
|
|
|
$
|
(3,366
|
)
|
|
$
|
(437
|
)
|
|
$
|
(3,727
|
)
|
|
Fiscal years ended October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions, except per share amounts
|
||||||||||
Numerator:
|
|
|
|
|
|
|
|
|
|||
Net earnings from continuing operations
|
$
|
1,049
|
|
|
$
|
2,012
|
|
|
$
|
436
|
|
Net loss from discontinued operations
|
—
|
|
|
(104
|
)
|
|
(92
|
)
|
|||
Net earnings
|
$
|
1,049
|
|
|
$
|
1,908
|
|
|
$
|
344
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|||
Weighted-average shares used to compute basic net EPS
|
1,353
|
|
|
1,529
|
|
|
1,646
|
|
|||
Dilutive effect of employee stock plans
|
13
|
|
|
24
|
|
|
28
|
|
|||
Weighted-average shares used to compute diluted net EPS
|
1,366
|
|
|
1,553
|
|
|
1,674
|
|
|||
Basic net earnings (loss) per share:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
0.78
|
|
|
$
|
1.32
|
|
|
$
|
0.26
|
|
Discontinued operations
|
—
|
|
|
(0.07
|
)
|
|
(0.05
|
)
|
|||
Basic net earnings per share
|
$
|
0.78
|
|
|
$
|
1.25
|
|
|
$
|
0.21
|
|
Diluted net earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|||
Continuing operations
|
$
|
0.77
|
|
|
$
|
1.30
|
|
|
$
|
0.26
|
|
Discontinued operations(1)
|
—
|
|
|
(0.07
|
)
|
|
(0.05
|
)
|
|||
Diluted net earnings per share
|
$
|
0.77
|
|
|
$
|
1.23
|
|
|
$
|
0.21
|
|
Anti-dilutive weighted-average stock awards(2)
|
4
|
|
|
2
|
|
|
8
|
|
|
(1)
|
U.S. GAAP requires the denominator used in the diluted net EPS calculation for discontinued operations to be the same as that of continuing operations, regardless of net earnings (loss) from continuing operations.
|
(2)
|
The Company excludes shares potentially issuable under employee stock plans that could dilute basic net EPS in the future from the calculation of diluted net earnings (loss) per share, as their effect, if included, would have been anti-dilutive for the periods presented.
|
|
As of October 31,
|
||||||
|
2019
|
|
2018
|
||||
|
In millions
|
||||||
Litigation matters and other contingencies
|
|
|
|
||||
Receivable
|
$
|
85
|
|
|
$
|
104
|
|
Payable
|
$
|
55
|
|
|
$
|
83
|
|
|
|
|
|
||||
Income tax-related indemnification(1)
|
|
|
|
||||
Net indemnification receivable - long-term(2)
|
$
|
202
|
|
|
$
|
16
|
|
Net indemnification receivable - short-term(2)
|
$
|
63
|
|
|
$
|
17
|
|
Net indemnification payable - long-term
|
$
|
9
|
|
|
$
|
9
|
|
Net indemnification payable - short-term(2)
|
$
|
—
|
|
|
$
|
26
|
|
|
(1)
|
The actual amount that the Company may receive or pay could vary depending upon the outcome of certain unresolved tax matters, which may not be resolved for several years.
|
(2)
|
The change in the income tax related indemnification accounts is primarily related to the termination of the Tax Matters Agreement with HP Inc., as well as the impact of the settlement of the U.S. federal income tax audit of fiscal years 2013 through 2015 for HP Inc.
|
|
Fiscal years ended October 31,
|
||||||
|
2019
|
|
2018
|
||||
|
In millions
|
||||||
Balance at beginning of year
|
$
|
430
|
|
|
$
|
475
|
|
Accruals for warranties issued
|
239
|
|
|
265
|
|
||
Adjustments related to pre-existing warranties
|
6
|
|
|
(10
|
)
|
||
Settlements made
|
(275
|
)
|
|
(300
|
)
|
||
Balance at end of year(1)
|
$
|
400
|
|
|
$
|
430
|
|
|
(1)
|
The Company includes the current portion in Other accrued liabilities, and amounts due after one year in Other non-current liabilities in the accompanying Consolidated Balance Sheets.
|
Fiscal Year
|
In millions
|
||
2020
|
$
|
233
|
|
2021
|
187
|
|
|
2022
|
164
|
|
|
2023
|
149
|
|
|
2024
|
127
|
|
|
Thereafter
|
541
|
|
|
Less: Sublease rental income
|
(158
|
)
|
|
Total
|
$
|
1,243
|
|
Fiscal Year
|
In millions
|
||
2020
|
$
|
138
|
|
2021
|
79
|
|
|
2022
|
20
|
|
|
2023
|
10
|
|
|
2024
|
8
|
|
|
Thereafter
|
41
|
|
|
Total
|
$
|
296
|
|
|
In millions
|
||
Equity method goodwill
|
$
|
1,674
|
|
Intangible assets
|
749
|
|
|
In-process research and development
|
188
|
|
|
Deferred tax liabilities
|
(152
|
)
|
|
Other
|
75
|
|
|
Basis difference
|
$
|
2,534
|
|
|
Fiscal years ended October 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
In millions
|
||||||||||
Earnings from equity interests, net of taxes
|
$
|
167
|
|
|
$
|
192
|
|
|
$
|
127
|
|
Basis difference amortization
|
(152
|
)
|
|
(151
|
)
|
|
(155
|
)
|
|||
Elimination of profit on intra-entity sales adjustment
|
5
|
|
|
(3
|
)
|
|
5
|
|
|||
Earnings (loss) from equity interests
|
$
|
20
|
|
|
$
|
38
|
|
|
$
|
(23
|
)
|
|
For the three-month periods
ended in fiscal 2019 |
||||||||||||||
|
January 31
|
|
April 30
|
|
July 31
|
|
October 31
|
||||||||
Net revenue
|
$
|
7,553
|
|
|
$
|
7,150
|
|
|
$
|
7,217
|
|
|
$
|
7,215
|
|
Cost of sales
|
$
|
5,207
|
|
|
$
|
4,845
|
|
|
$
|
4,768
|
|
|
$
|
4,822
|
|
Earnings (loss) from operations
|
$
|
456
|
|
|
$
|
434
|
|
|
$
|
(76
|
)
|
|
$
|
460
|
|
Net earnings (loss)
|
$
|
177
|
|
|
$
|
419
|
|
|
$
|
(27
|
)
|
|
$
|
480
|
|
Net earnings (loss) per share - basic
|
$
|
0.13
|
|
|
$
|
0.31
|
|
|
$
|
(0.02
|
)
|
|
$
|
0.37
|
|
Net earnings (loss) per share - diluted
|
$
|
0.13
|
|
|
$
|
0.30
|
|
|
$
|
(0.02
|
)
|
|
$
|
0.36
|
|
|
For the three-month periods
ended in fiscal 2018 |
||||||||||||||
|
January 31
|
|
April 30
|
|
July 31
|
|
October 31
|
||||||||
Net revenue
|
$
|
7,674
|
|
|
$
|
7,468
|
|
|
$
|
7,764
|
|
|
$
|
7,946
|
|
Cost of sales
|
$
|
5,505
|
|
|
$
|
5,210
|
|
|
$
|
5,399
|
|
|
$
|
5,507
|
|
Earnings from continuing operations
|
$
|
228
|
|
|
$
|
366
|
|
|
$
|
490
|
|
|
$
|
653
|
|
Net earnings (loss) from continuing operations
|
$
|
1,482
|
|
|
$
|
850
|
|
|
$
|
452
|
|
|
$
|
(772
|
)
|
Net earnings (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Continuing operations - basic
|
$
|
0.93
|
|
|
$
|
0.55
|
|
|
$
|
0.30
|
|
|
$
|
(0.53
|
)
|
Continuing operations - diluted
|
$
|
0.92
|
|
|
$
|
0.54
|
|
|
$
|
0.29
|
|
|
$
|
(0.53
|
)
|
•
|
Information regarding directors of Hewlett Packard Enterprise including those who are standing for reelection and any persons nominated to become directors of Hewlett Packard Enterprise is set forth under "Corporate Governance—Board Leadership Structure" and/or "Proposals to be Voted On—Proposal No. 1—Election of Directors".
|
•
|
Information regarding Hewlett Packard Enterprise's Audit Committee and designated "audit committee financial experts" is set forth under "Board Structure and Committee Composition—Audit Committee".
|
•
|
Information on Hewlett Packard Enterprise's code of business conduct and ethics for directors, officers and employees, also known as the "Standards of Business Conduct," and on Hewlett Packard Enterprise's Corporate Governance Guidelines is set forth under "Corporate Governance Principles and Board Matters".
|
•
|
Information regarding Hewlett Packard Enterprise's compensation of its named executive officers is set forth under "Executive Compensation".
|
•
|
Information regarding Hewlett Packard Enterprise's compensation of its directors is set forth under "Director Compensation and Stock Ownership Guidelines".
|
•
|
The report of Hewlett Packard Enterprise's HR and Compensation Committee is set forth under "HR and Compensation Committee Report on Executive Compensation".
|
•
|
Information regarding security ownership of certain beneficial owners, directors and executive officers is set forth under "Common Stock Ownership of Certain Beneficial Owners and Management".
|
•
|
Information regarding Hewlett Packard Enterprise's equity compensation plans, including both stockholder approved plans and non-stockholder approved plans, is set forth in the section entitled "Equity Compensation Plan Information".
|
•
|
Information regarding transactions with related persons is set forth under "Transactions with Related Persons".
|
•
|
Information regarding director independence is set forth under "Corporate Governance Principles and Board Matters—Director Independence".
|
(a)
|
The following documents are filed as part of this report:
|
|
|
|
|
Incorporated by Reference
|
|||||||
Exhibit
Number
|
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit(s)
|
|
Filing Date
|
|
2.1
|
|
|
|
8-K
|
|
001-37483
|
|
2.1
|
|
November 5, 2015
|
|
2.2
|
|
|
|
8-K
|
|
001-37483
|
|
2.2
|
|
November 5, 2015
|
|
2.3
|
|
|
|
8-K
|
|
001-37483
|
|
2.4
|
|
November 5, 2015
|
|
2.4
|
|
|
|
8-K
|
|
001-37483
|
|
2.5
|
|
November 5, 2015
|
|
2.5
|
|
|
|
8-K
|
|
001-37483
|
|
2.6
|
|
November 5, 2015
|
|
2.6
|
|
|
|
8-K
|
|
001-37483
|
|
2.7
|
|
November 5, 2015
|
|
2.7
|
|
|
|
8-K
|
|
001-37483
|
|
2.1
|
|
May 26, 2016
|
|
2.8
|
|
|
|
8-K
|
|
001-37483
|
|
2.2
|
|
May 26, 2016
|
|
2.9
|
|
|
|
8-K
|
|
001-37483
|
|
2.1
|
|
September 7, 2016
|
|
2.10
|
|
|
|
8-K
|
|
001-37483
|
|
2.2
|
|
September 7, 2016
|
|
2.11
|
|
|
|
8-K
|
|
001-37483
|
|
2.3
|
|
September 7, 2016
|
|
2.12
|
|
|
|
8-K
|
|
001-37483
|
|
2.1
|
|
November 2, 2016
|
|
2.13
|
|
|
|
8-K
|
|
001-37483
|
|
2.2
|
|
November 2, 2016
|
|
2.14
|
|
|
|
8-K
|
|
001-37483
|
|
99.1
|
|
March 7, 2017
|
|
|
|
|
Incorporated by Reference
|
|||||||
Exhibit
Number
|
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit(s)
|
|
Filing Date
|
|
2.15
|
|
|
|
8-K
|
|
001-37483
|
|
99.2
|
|
March 7, 2017
|
|
2.16
|
|
|
|
8-K
|
|
001-38033
|
|
2.1
|
|
April 6, 2017
|
|
2.17
|
|
|
|
8-K
|
|
001-38033
|
|
2.2
|
|
April 6, 2017
|
|
2.18
|
|
|
|
8-K
|
|
001-38033
|
|
2.3
|
|
April 6, 2017
|
|
2.19
|
|
|
|
8-K
|
|
001-38033
|
|
2.4
|
|
April 6, 2017
|
|
2.20
|
|
|
|
8-K
|
|
001-38033
|
|
2.5
|
|
April 6, 2017
|
|
2.21
|
|
|
|
8-K
|
|
001-38033
|
|
2.6
|
|
April 6, 2017
|
|
2.22
|
|
|
|
8-K
|
|
001-37483
|
|
2.1
|
|
September 1, 2017
|
|
2.23
|
|
|
|
8-K
|
|
001-37483
|
|
2.2
|
|
September 1, 2017
|
|
2.24
|
|
|
|
8-K
|
|
001-37483
|
|
2.3
|
|
September 1, 2017
|
|
2.25
|
|
|
|
8-K
|
|
001-37483
|
|
2.4
|
|
September 1, 2017
|
|
2.26
|
|
|
|
8-K
|
|
001-37483
|
|
2.1
|
|
May 17, 2019
|
|
3.1
|
|
|
|
8-K
|
|
001-37483
|
|
3.1
|
|
November 5, 2015
|
|
3.2
|
|
|
|
8-K
|
|
001-37483
|
|
3.2
|
|
November 5, 2015
|
|
3.3
|
|
|
|
8-K
|
|
001-37483
|
|
3.1
|
|
March 20, 2017
|
|
|
|
|
Incorporated by Reference
|
|||||||
Exhibit
Number
|
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit(s)
|
|
Filing Date
|
|
3.4
|
|
|
|
8-K
|
|
001-37483
|
|
3.2
|
|
March 20, 2017
|
|
4.1
|
|
|
|
8-K
|
|
001-37483
|
|
4.1
|
|
October 13, 2015
|
|
4.2
|
|
|
|
8-K
|
|
001-37483
|
|
4.4
|
|
October 13, 2015
|
|
4.3
|
|
|
|
8-K
|
|
001-37483
|
|
4.5
|
|
October 13, 2015
|
|
4.4
|
|
|
|
8-K
|
|
001-37483
|
|
4.6
|
|
October 13, 2015
|
|
4.5
|
|
|
|
8-K
|
|
001-37483
|
|
4.7
|
|
October 13, 2015
|
|
4.6
|
|
|
|
8-K
|
|
001-37483
|
|
4.8
|
|
October 13, 2015
|
|
4.7
|
|
|
|
8-K
|
|
001-37483
|
|
4.2
|
|
September 19, 2018
|
|
4.8
|
|
|
|
8-K
|
|
001-37483
|
|
4.3
|
|
September 19, 2018
|
|
4.9
|
|
|
|
8-K
|
|
001-37483
|
|
4.20
|
|
September 13, 2019
|
|
4.10
|
|
|
|
8-K
|
|
001-37483
|
|
4.30
|
|
September 13, 2019
|
|
4.11
|
|
|
|
8-K
|
|
001-37483
|
|
4.12
|
|
October 13, 2015
|
|
|
|
|
Incorporated by Reference
|
|||||||
Exhibit
Number
|
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit(s)
|
|
Filing Date
|
|
4.12
|
|
|
|
S-3ASR
|
|
333-222102
|
|
4.5
|
|
December 15, 2017
|
|
10.1
|
|
|
|
8-K
|
|
001-37483
|
|
10.1
|
|
January 30, 2017
|
|
10.2
|
|
|
|
10
|
|
001-37483
|
|
10.4
|
|
September 28, 2015
|
|
10.3
|
|
|
|
S-8
|
|
333-207679
|
|
4.3
|
|
October 30, 2015
|
|
10.4
|
|
|
|
S-8
|
|
333-207679
|
|
4.4
|
|
October 30, 2015
|
|
10.5
|
|
|
|
8-K
|
|
001-37483
|
|
10.4
|
|
November 5, 2015
|
|
10.6
|
|
|
|
8-K
|
|
001-37483
|
|
10.7
|
|
November 5, 2015
|
|
10.7
|
|
|
|
8-K
|
|
001-37483
|
|
10.8
|
|
November 5, 2015
|
|
10.8
|
|
|
|
8-K
|
|
001-37483
|
|
10.9
|
|
November 5, 2015
|
|
10.9
|
|
|
|
8-K
|
|
001-37483
|
|
10.10
|
|
November 5, 2015
|
|
10.10
|
|
|
|
10-Q
|
|
001-37483
|
|
10.14
|
|
March 10, 2016
|
|
10.11
|
|
|
|
10-Q
|
|
001-37483
|
|
10.15
|
|
March 10, 2016
|
|
10.12
|
|
|
|
8-K
|
|
001-37483
|
|
10.1
|
|
May 26, 2016
|
|
10.13
|
|
|
|
S-8
|
|
333-216481
|
|
4.3
|
|
March 6, 2017
|
|
10.14
|
|
|
|
S-8
|
|
333-217349
|
|
4.3
|
|
April 18, 2017
|
|
10.15
|
|
|
|
S-8
|
|
333-217349
|
|
4.4
|
|
April 18, 2017
|
|
10.16
|
|
|
|
S-8
|
|
333-217438
|
|
4.3
|
|
April 24, 2017
|
|
10.17
|
|
|
|
10-Q
|
|
000-51333
|
|
10.1
|
|
January 29, 2016
|
|
10.18
|
|
|
|
10-K
|
|
000-51333
|
|
10.48
|
|
February 28, 2007
|
|
10.19
|
|
|
|
10-K
|
|
000-51333
|
|
10.3
|
|
September 10, 2012
|
|
10.20
|
|
|
|
S-1
|
|
000-51333
|
|
10.10
|
|
February 4, 2005
|
|
10.21
|
|
|
|
S-8
|
|
333-221254
|
|
4.3
|
|
October, 31 2017
|
|
10.22
|
|
|
|
S-8
|
|
333-221254
|
|
4.4
|
|
October 21, 2017
|
|
10.23
|
|
|
|
S-8
|
|
333-226181
|
|
4.3
|
|
July 16, 2018
|
|
10.24
|
|
|
|
10-Q
|
|
001-37483
|
|
10.29
|
|
September, 4, 2018
|
|
10.25
|
|
|
|
10-Q
|
|
001-37483
|
|
10.30
|
|
September, 4, 2018
|
|
|
|
|
Incorporated by Reference
|
|||||||
Exhibit
Number
|
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit(s)
|
|
Filing Date
|
|
10.26
|
|
|
|
10-K
|
|
001-37483
|
|
10.27
|
|
December 12, 2018
|
|
10.27
|
|
|
|
10-K
|
|
001-37483
|
|
10.29
|
|
December 12, 2018
|
|
10.28
|
|
|
|
S-8
|
|
333-229449
|
|
4.3
|
|
January 31, 2019
|
|
10.29
|
|
|
|
8-K
|
|
001-37483
|
|
10.1
|
|
August 20, 2019
|
|
10.30
|
|
|
|
S-8
|
|
333-234033
|
|
4.3
|
|
October 1, 2019
|
|
10.31
|
|
|
|
|
|
|
|
|
|
|
|
21
|
|
|
|
|
|
|
|
|
|
|
|
23.1
|
|
|
|
|
|
|
|
|
|
|
|
24
|
|
|
|
|
|
|
|
|
|
|
|
31.1
|
|
|
|
|
|
|
|
|
|
|
|
31.2
|
|
|
|
|
|
|
|
|
|
|
|
32
|
|
|
|
|
|
|
|
|
|
|
|
101.INS
|
|
|
XBRL Instance Document‡
|
|
|
|
|
|
|
|
|
101.SCH
|
|
|
XBRL Taxonomy Extension Schema Document‡
|
|
|
|
|
|
|
|
|
101.CAL
|
|
|
XBRL Taxonomy Extension Calculation Linkbase Document‡
|
|
|
|
|
|
|
|
|
101.DEF
|
|
|
XBRL Taxonomy Extension Definition Linkbase Document‡
|
|
|
|
|
|
|
|
|
101.LAB
|
|
|
XBRL Taxonomy Extension Label Linkbase Document‡
|
|
|
|
|
|
|
|
|
101.PRE
|
|
|
XBRL Taxonomy Extension Presentation Linkbase Document‡
|
|
|
|
|
|
|
|
|
|
Date:
|
December 12, 2019
|
|
HEWLETT PACKARD ENTERPRISE COMPANY
|
|
|
|
|
By:
|
/s/ Tarek A. Robbiati
|
|
|
|
|
Tarek A. Robbiati
Executive Vice President and
Chief Financial Officer
|
Signature
|
|
Title(s)
|
|
Date
|
|
|
|
|
|
/s/ Antonio F. Neri
|
|
President and Chief Executive Officer
(Principal Executive Officer)
|
|
December 12, 2019
|
Antonio F. Neri
|
|
|
||
/s/ Tarek A. Robbiati
|
|
Executive Vice President and Chief
Financial Officer
(Principal Financial Officer)
|
|
December 12, 2019
|
Tarek A. Robbiati
|
|
|
||
/s/ Jeff T. Ricci
|
|
Senior Vice President and Controller
(Principal Accounting Officer)
|
|
December 12, 2019
|
Jeff T. Ricci
|
|
|
||
/s/ Patricia F. Russo
|
|
Chairman
|
|
December 12, 2019
|
Patricia F. Russo
|
|
|
||
/s/ Daniel L. Ammann
|
|
Director
|
|
December 12, 2019
|
Daniel L. Ammann
|
|
|
||
/s/ Michael J. Angelakis
|
|
Director
|
|
December 12, 2019
|
Michael J. Angelakis
|
|
|
||
/s/ Pamela L. Carter
|
|
Director
|
|
December 12, 2019
|
Pamela L. Carter
|
|
|
||
/s/ Jean M. Hobby
|
|
Director
|
|
December 12, 2019
|
Jean M. Hobby
|
|
|
||
/s/ George R. Kurtz
|
|
Director
|
|
December 12, 2019
|
George R. Kurtz
|
|
|
||
/s/ Raymond J. Lane
|
|
Director
|
|
December 12, 2019
|
Raymond J. Lane
|
|
|
||
/s/ Ann M. Livermore
|
|
Director
|
|
December 12, 2019
|
Ann M. Livermore
|
|
|
||
/s/ Raymond E. Ozzie
|
|
Director
|
|
December 12, 2019
|
Raymond E. Ozzie
|
|
|
||
/s/ Gary M. Reiner
|
|
Director
|
|
December 12, 2019
|
Gary M. Reiner
|
|
|
||
/s/ Lip-Bu Tan
|
|
Director
|
|
December 12, 2019
|
Lip-Bu Tan
|
|
|
||
/s/ Mary Agnes Wilderotter
|
|
Director
|
|
December 12, 2019
|
Mary Agnes Wilderotter
|
|
|
Due Date
|
Amount of Installment
|
First Installment:
On or before October 31, 2019
|
$200,000,000.00
|
Second Installment:
On or before October 31, 2020, but no earlier than November 1, 2019
|
$50,000,000.00
|
Third Installment:
On or before October 31, 2021, but no earlier than November 1, 2019
|
$50,000,000.00
|
HP INC.
By: /s/ Steven J. Fieler
Name: Steven J. Fieler Title: Chief Financial Officer, HP Inc. |
HEWLETT PACKARD ENTERPRISE COMPANY
By: /s/ Tarek Robbiati
Name: Tarek Robbiati Title: Chief Financial Officer, Hewlett Packard Enterprise Company |
1.
|
I have reviewed this Annual Report on Form 10-K of Hewlett Packard Enterprise Company;
|
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)) 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/ Antonio F. Neri
|
|
Antonio F. Neri
President and Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this Annual Report on Form 10-K of Hewlett Packard Enterprise Company;
|
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)) 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/ Tarek A. Robbiati
|
|
Tarek A. Robbiati
Executive Vice President and Chief Financial Officer
(Principal Financial Officer and Authorized Signatory)
|
|
|
/s/ Antonio F. Neri
|
|
By:
|
Antonio F. Neri
President and Chief Executive Officer
|
|
|
/s/ Tarek A. Robbiati
|
|
By:
|
Tarek A. Robbiati
Executive Vice President and Chief Financial Officer
|