(Mark One)
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|
|
☒
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|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the quarterly period ended:
|
January 31, 2020
|
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|
Or
|
☐
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from to
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Commission file number
|
001-37483
|
Delaware
|
|
47-3298624
|
(State or other jurisdiction of
incorporation or organization)
|
|
(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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||
(650)
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687-5817
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|||
(Registrant's telephone number, including area code)
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Securities registered pursuant to Section 12(b) of the Exchange Act:
|
||||
Title of each class
|
|
Trading Symbol(s)
|
|
Name of each exchange on which registered
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Common stock, par value $0.01 per share
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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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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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|
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Emerging growth company
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☐
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Page
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|||
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|||
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Three Months Ended January 31,
|
||||||
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2020
|
|
2019
|
||||
|
In millions, except per share amounts
|
||||||
Net revenue:
|
|
|
|
|
|
||
Products
|
$
|
4,247
|
|
|
$
|
4,791
|
|
Services
|
2,589
|
|
|
2,650
|
|
||
Financing income
|
113
|
|
|
112
|
|
||
Total net revenue
|
6,949
|
|
|
7,553
|
|
||
Costs and expenses:
|
|
|
|
|
|
||
Cost of products
|
2,910
|
|
|
3,369
|
|
||
Cost of services
|
1,684
|
|
|
1,765
|
|
||
Financing interest
|
73
|
|
|
73
|
|
||
Research and development
|
485
|
|
|
466
|
|
||
Selling, general and administrative
|
1,218
|
|
|
1,211
|
|
||
Amortization of intangible assets
|
120
|
|
|
72
|
|
||
Transformation costs
|
89
|
|
|
78
|
|
||
Acquisition, disposition and other related charges
|
22
|
|
|
63
|
|
||
Total costs and expenses
|
6,601
|
|
|
7,097
|
|
||
Earnings from operations
|
348
|
|
|
456
|
|
||
Interest and other, net
|
(19
|
)
|
|
(51
|
)
|
||
Tax indemnification adjustments
|
(21
|
)
|
|
219
|
|
||
Non-service net periodic benefit credit
|
37
|
|
|
16
|
|
||
Earnings from equity interests
|
33
|
|
|
15
|
|
||
Earnings before taxes
|
378
|
|
|
655
|
|
||
Provision for taxes
|
(45
|
)
|
|
(478
|
)
|
||
Net earnings
|
$
|
333
|
|
|
$
|
177
|
|
Net earnings per share:
|
|
|
|
|
|
||
Basic
|
$
|
0.26
|
|
|
$
|
0.13
|
|
Diluted
|
$
|
0.25
|
|
|
$
|
0.13
|
|
Weighted-average shares used to compute net earnings per share:
|
|
|
|
|
|
||
Basic
|
1,300
|
|
|
1,401
|
|
||
Diluted
|
1,315
|
|
|
1,412
|
|
|
Three Months Ended
January 31, |
||||||
|
2020
|
|
2019
|
||||
|
In millions
|
||||||
Net earnings
|
$
|
333
|
|
|
$
|
177
|
|
Other comprehensive income (loss) before taxes:
|
|
|
|
|
|
||
Change in net unrealized (losses) gains on available-for-sale securities:
|
|
|
|
|
|
||
Net unrealized gains (losses) arising during the period
|
2
|
|
|
2
|
|
||
(Gains) losses reclassified into earnings
|
(3
|
)
|
|
(3
|
)
|
||
|
(1
|
)
|
|
(1
|
)
|
||
Change in net unrealized gains (losses) on cash flow hedges:
|
|
|
|
|
|
||
Net unrealized gains (losses) arising during the period
|
75
|
|
|
34
|
|
||
Net (gains) losses reclassified into earnings
|
(69
|
)
|
|
(133
|
)
|
||
|
6
|
|
|
(99
|
)
|
||
Change in unrealized components of defined benefit plans:
|
|
|
|
|
|
||
Net unrealized gains (losses) arising during the period
|
17
|
|
|
(55
|
)
|
||
Amortization of net actuarial loss and prior service benefit
|
61
|
|
|
52
|
|
||
Curtailments, settlements and other
|
—
|
|
|
5
|
|
||
|
78
|
|
|
2
|
|
||
Change in cumulative translation adjustment
|
(4
|
)
|
|
12
|
|
||
Other comprehensive income (loss) before taxes
|
79
|
|
|
(86
|
)
|
||
(Provision) benefit for taxes
|
(9
|
)
|
|
10
|
|
||
Other comprehensive income (loss), net of taxes
|
70
|
|
|
(76
|
)
|
||
Comprehensive income
|
$
|
403
|
|
|
$
|
101
|
|
|
Three Months Ended January 31,
|
||||||
|
2020
|
|
2019
|
||||
|
In millions
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||
Net earnings
|
$
|
333
|
|
|
$
|
177
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
|
|
||
Depreciation and amortization
|
690
|
|
|
639
|
|
||
Stock-based compensation expense
|
93
|
|
|
75
|
|
||
Provision for inventory and doubtful accounts
|
41
|
|
|
42
|
|
||
Restructuring charges
|
84
|
|
|
33
|
|
||
Deferred taxes on earnings
|
(28
|
)
|
|
370
|
|
||
Earnings from equity interests
|
(33
|
)
|
|
(15
|
)
|
||
Other, net
|
(36
|
)
|
|
46
|
|
||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
||
Accounts receivable
|
82
|
|
|
113
|
|
||
Financing receivables
|
(104
|
)
|
|
(156
|
)
|
||
Inventory
|
(204
|
)
|
|
99
|
|
||
Accounts payable
|
(250
|
)
|
|
(256
|
)
|
||
Taxes on earnings
|
(27
|
)
|
|
(107
|
)
|
||
Restructuring
|
(87
|
)
|
|
(110
|
)
|
||
Other assets and liabilities
|
(633
|
)
|
|
(568
|
)
|
||
Net cash (used in) provided by operating activities
|
(79
|
)
|
|
382
|
|
||
Cash flows from investing activities:
|
|
|
|
|
|
||
Investment in property, plant and equipment
|
(568
|
)
|
|
(729
|
)
|
||
Proceeds from sale of property, plant and equipment
|
462
|
|
|
157
|
|
||
Purchases of available-for-sale securities and other investments
|
(59
|
)
|
|
(5
|
)
|
||
Maturities and sales of available-for-sale securities and other investments
|
8
|
|
|
1
|
|
||
Financial collateral posted
|
(48
|
)
|
|
(245
|
)
|
||
Financial collateral received
|
147
|
|
|
281
|
|
||
Payments made in connection with business acquisitions, net of cash acquired
|
(6
|
)
|
|
(76
|
)
|
||
Net cash used in investing activities
|
(64
|
)
|
|
(616
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|
||
Short-term borrowings with original maturities less than 90 days, net
|
127
|
|
|
(12
|
)
|
||
Proceeds from debt, net of issuance costs
|
340
|
|
|
389
|
|
||
Payment of debt
|
(450
|
)
|
|
(334
|
)
|
||
Proceeds related to stock-based award activities, net
|
(43
|
)
|
|
(17
|
)
|
||
Repurchase of common stock
|
(204
|
)
|
|
(814
|
)
|
||
Contributions from non-controlling interests
|
1
|
|
|
—
|
|
||
Cash dividends paid
|
(156
|
)
|
|
(157
|
)
|
||
Net cash used in financing activities
|
(385
|
)
|
|
(945
|
)
|
||
Decrease in cash, cash equivalents and restricted cash
|
(528
|
)
|
|
(1,179
|
)
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
4,076
|
|
|
5,084
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
3,548
|
|
|
$
|
3,905
|
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Three Months Ended January 31, 2020
|
Number of Shares
|
|
Par Value
|
|
Additional Paid-in Capital
|
|
Accumulated Deficit
|
|
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, 2019
|
1,294,369
|
|
|
$
|
13
|
|
|
$
|
28,444
|
|
|
$
|
(7,632
|
)
|
|
$
|
(3,727
|
)
|
|
$
|
17,098
|
|
|
$
|
51
|
|
|
$
|
17,149
|
|
Net earnings
|
|
|
|
|
|
|
333
|
|
|
|
|
333
|
|
|
2
|
|
|
335
|
|
|||||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
70
|
|
|
70
|
|
|
|
|
|
70
|
|
|||||||||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
403
|
|
|
2
|
|
|
405
|
|
||||||||||||
Issuance of common stock in connection with employee stock plans and other
|
11,361
|
|
|
|
|
|
(46
|
)
|
|
1
|
|
|
|
|
(45
|
)
|
|
1
|
|
|
(44
|
)
|
||||||||
Repurchases of common stock
|
(12,827
|
)
|
|
|
|
|
(204
|
)
|
|
|
|
|
|
|
(204
|
)
|
|
|
|
(204
|
)
|
|||||||||
Cash dividends declared ($0.12 per share)
|
|
|
|
|
|
|
(156
|
)
|
|
|
|
(156
|
)
|
|
|
|
(156
|
)
|
||||||||||||
Effects of adoption of accounting standard update(1)
|
|
|
|
|
|
|
43
|
|
|
(43
|
)
|
|
—
|
|
|
|
|
—
|
|
|||||||||||
Stock-based compensation expense
|
|
|
|
|
93
|
|
|
|
|
|
|
93
|
|
|
|
|
93
|
|
||||||||||||
Balance at January 31, 2020
|
1,292,903
|
|
|
$
|
13
|
|
|
$
|
28,287
|
|
|
$
|
(7,411
|
)
|
|
$
|
(3,700
|
)
|
|
$
|
17,189
|
|
|
$
|
54
|
|
|
$
|
17,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Three Months Ended January 31, 2019
|
Number of Shares
|
|
Par Value
|
|
Additional Paid-in Capital
|
|
Accumulated Deficit
|
|
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, 2018
|
1,423,303
|
|
|
$
|
14
|
|
|
$
|
30,342
|
|
|
$
|
(5,899
|
)
|
|
$
|
(3,218
|
)
|
|
$
|
21,239
|
|
|
$
|
35
|
|
|
$
|
21,274
|
|
Net earnings
|
|
|
|
|
|
|
177
|
|
|
|
|
177
|
|
|
7
|
|
|
184
|
|
|||||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
(76
|
)
|
|
(76
|
)
|
|
|
|
|
(76
|
)
|
|||||||||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
101
|
|
|
7
|
|
|
108
|
|
||||||||||||
Issuance of common stock in connection with employee stock plans and other
|
8,653
|
|
|
|
|
|
(17
|
)
|
|
|
|
|
|
(17
|
)
|
|
|
|
|
(17
|
)
|
|||||||||
Repurchases of common stock
|
(53,851
|
)
|
|
|
|
|
(795
|
)
|
|
|
|
|
|
|
(795
|
)
|
|
|
|
(795
|
)
|
|||||||||
Cash dividends declared ($0.1125 per share)
|
|
|
|
|
|
|
(150
|
)
|
|
|
|
(150
|
)
|
|
|
|
(150
|
)
|
||||||||||||
Effects of adoption of accounting standard updates(1)
|
|
|
|
|
|
|
(2,162
|
)
|
|
|
|
(2,162
|
)
|
|
|
|
(2,162
|
)
|
||||||||||||
Stock-based compensation expense
|
|
|
|
|
77
|
|
|
|
|
|
|
77
|
|
|
|
|
77
|
|
||||||||||||
Balance at January 31, 2019
|
1,378,105
|
|
|
$
|
14
|
|
|
$
|
29,607
|
|
|
$
|
(8,034
|
)
|
|
$
|
(3,294
|
)
|
|
$
|
18,293
|
|
|
$
|
42
|
|
|
$
|
18,335
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compute
|
|
HPC & MCS
|
|
Storage
|
|
A & PS
|
|
Intelligent Edge
|
|
Financial
Services |
|
Corporate
Investments |
|
Total
|
||||||||||||||||
|
In millions
|
||||||||||||||||||||||||||||||
Three months ended January 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net revenue
|
$
|
2,963
|
|
|
$
|
816
|
|
|
$
|
1,235
|
|
|
$
|
242
|
|
|
$
|
715
|
|
|
$
|
857
|
|
|
$
|
121
|
|
|
$
|
6,949
|
|
Intersegment net revenue
|
48
|
|
|
7
|
|
|
15
|
|
|
1
|
|
|
5
|
|
|
2
|
|
|
—
|
|
|
78
|
|
||||||||
Total segment net revenue
|
$
|
3,011
|
|
|
$
|
823
|
|
|
$
|
1,250
|
|
|
$
|
243
|
|
|
$
|
720
|
|
|
$
|
859
|
|
|
$
|
121
|
|
|
$
|
7,027
|
|
Segment earnings (loss) from operations
|
$
|
286
|
|
|
$
|
49
|
|
|
$
|
226
|
|
|
$
|
(2
|
)
|
|
$
|
70
|
|
|
$
|
73
|
|
|
$
|
(27
|
)
|
|
$
|
675
|
|
Three months ended January 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net revenue
|
$
|
3,509
|
|
|
$
|
728
|
|
|
$
|
1,337
|
|
|
$
|
239
|
|
|
$
|
706
|
|
|
$
|
916
|
|
|
$
|
118
|
|
|
$
|
7,553
|
|
Intersegment net revenue
|
66
|
|
|
51
|
|
|
19
|
|
|
2
|
|
|
(1
|
)
|
|
3
|
|
|
—
|
|
|
140
|
|
||||||||
Total segment net revenue
|
$
|
3,575
|
|
|
$
|
779
|
|
|
$
|
1,356
|
|
|
$
|
241
|
|
|
$
|
705
|
|
|
$
|
919
|
|
|
$
|
118
|
|
|
$
|
7,693
|
|
Segment earnings (loss) from operations
|
$
|
340
|
|
|
$
|
98
|
|
|
$
|
254
|
|
|
$
|
(32
|
)
|
|
$
|
24
|
|
|
$
|
77
|
|
|
$
|
(28
|
)
|
|
$
|
733
|
|
|
Three Months Ended
January 31, |
||||||
|
2020
|
|
2019
|
||||
|
In millions
|
||||||
Net Revenue:
|
|
|
|
|
|||
Total segments
|
$
|
7,027
|
|
|
$
|
7,693
|
|
Eliminations of intersegment net revenue
|
(78
|
)
|
|
(140
|
)
|
||
Total Hewlett Packard Enterprise condensed consolidated net revenue
|
$
|
6,949
|
|
|
$
|
7,553
|
|
Earnings before taxes:
|
|
|
|
|
|
||
Total segment earnings from operations
|
$
|
675
|
|
|
$
|
733
|
|
Unallocated corporate costs and eliminations
|
(52
|
)
|
|
(50
|
)
|
||
Unallocated stock-based compensation expense
|
(21
|
)
|
|
(14
|
)
|
||
Amortization of initial direct costs
|
(3
|
)
|
|
—
|
|
||
Amortization of intangible assets
|
(120
|
)
|
|
(72
|
)
|
||
Transformation costs
|
(89
|
)
|
|
(78
|
)
|
||
Acquisition, disposition and other related charges(1)
|
(42
|
)
|
|
(63
|
)
|
||
Interest and other, net
|
(19
|
)
|
|
(51
|
)
|
||
Tax indemnification adjustments
|
(21
|
)
|
|
219
|
|
||
Non-service net periodic benefit credit
|
37
|
|
|
16
|
|
||
Earnings from equity interests
|
33
|
|
|
15
|
|
||
Total Hewlett Packard Enterprise consolidated earnings before taxes
|
$
|
378
|
|
|
$
|
655
|
|
|
|
As of
|
||||||
|
January 31, 2020
|
|
October 31, 2019
|
||||
|
In millions
|
||||||
Compute
|
$
|
14,159
|
|
|
$
|
14,066
|
|
HPC & MCS
|
6,568
|
|
|
6,819
|
|
||
Storage
|
6,848
|
|
|
7,214
|
|
||
A & PS
|
455
|
|
|
440
|
|
||
Intelligent Edge
|
3,338
|
|
|
3,318
|
|
||
Financial Services
|
14,610
|
|
|
14,700
|
|
||
Corporate Investments
|
438
|
|
|
461
|
|
||
Corporate and unallocated assets
|
5,828
|
|
|
4,785
|
|
||
Total Hewlett Packard Enterprise consolidated assets
|
$
|
52,244
|
|
|
$
|
51,803
|
|
|
Three Months Ended January 31,
|
||||||
|
2020
|
|
2019
|
||||
|
In millions
|
||||||
Americas:
|
|
|
|
||||
United States
|
$
|
2,318
|
|
|
$
|
2,501
|
|
Americas excluding U.S.
|
468
|
|
|
504
|
|
||
Total Americas
|
2,786
|
|
|
3,005
|
|
||
Europe, Middle East and Africa
|
2,560
|
|
|
2,910
|
|
||
Asia Pacific and Japan
|
1,603
|
|
|
1,638
|
|
||
Total Hewlett Packard Enterprise consolidated net revenue
|
$
|
6,949
|
|
|
$
|
7,553
|
|
|
Three months ended January 31,
|
||||||
|
2020
|
|
2019
|
||||
|
In millions
|
||||||
Program management(1)
|
$
|
11
|
|
|
$
|
11
|
|
IT costs
|
28
|
|
|
27
|
|
||
Restructuring charges
|
84
|
|
|
33
|
|
||
Gain on real estate sales
|
(34
|
)
|
|
—
|
|
||
Other(2)
|
—
|
|
|
12
|
|
||
Total
|
$
|
89
|
|
|
$
|
83
|
|
|
(1)
|
Primarily consists of consulting fees and other direct costs attributable to the design and implementation of the HPE Next initiative.
|
(2)
|
Primarily consists of site relocation costs in connection with the HPE Next initiative.
|
|
Employee
Severance |
|
Infrastructure
and other |
||||
|
In millions
|
||||||
Liability as of October 31, 2019
|
$
|
178
|
|
|
$
|
42
|
|
Charges
|
51
|
|
|
33
|
|
||
Cash payments
|
(67
|
)
|
|
(12
|
)
|
||
Non-cash items
|
—
|
|
|
(4
|
)
|
||
Liability as of January 31, 2020
|
$
|
162
|
|
|
$
|
59
|
|
Total costs incurred to date, as of January 31, 2020
|
$
|
971
|
|
|
$
|
159
|
|
Total costs expected to be incurred, as of January 31, 2020
|
$
|
1,200
|
|
|
$
|
180
|
|
|
Three months ended January 31,
|
||||||
|
2020
|
|
2019
|
||||
|
In millions
|
||||||
Service cost
|
$
|
23
|
|
|
$
|
21
|
|
Interest cost(1)
|
36
|
|
|
55
|
|
||
Expected return on plan assets(1)
|
(135
|
)
|
|
(130
|
)
|
||
Amortization and deferrals(1):
|
|
|
|
|
|
||
Actuarial loss
|
64
|
|
|
57
|
|
||
Prior service benefit
|
(3
|
)
|
|
(4
|
)
|
||
Net periodic benefit credit
|
(15
|
)
|
|
(1
|
)
|
||
Settlement loss(1)
|
—
|
|
|
5
|
|
||
Net benefit (credit) cost
|
$
|
(15
|
)
|
|
$
|
4
|
|
|
(1)
|
These non-service components of net periodic benefit cost were included in Non-service net periodic benefit credit in the Condensed Consolidated Statements of Earnings.
|
|
As of
|
||||||
|
January 31, 2020
|
|
October 31, 2019
|
||||
|
In millions
|
||||||
Deferred tax assets
|
$
|
1,529
|
|
|
$
|
1,515
|
|
Deferred tax liabilities
|
(311
|
)
|
|
(311
|
)
|
||
Deferred tax assets net of deferred tax liabilities
|
$
|
1,218
|
|
|
$
|
1,204
|
|
|
As of
|
||||||
|
January 31, 2020
|
|
October 31, 2019
|
||||
|
In millions
|
||||||
Cash and cash equivalents
|
$
|
3,171
|
|
|
$
|
3,753
|
|
Restricted cash(1)
|
377
|
|
|
323
|
|
||
Cash, cash equivalents and restricted cash
|
$
|
3,548
|
|
|
$
|
4,076
|
|
|
|
As of
|
||||||
|
January 31, 2020
|
|
October 31, 2019
|
||||
|
In millions
|
||||||
Finished goods
|
$
|
1,245
|
|
|
$
|
1,198
|
|
Purchased parts and fabricated assemblies
|
1,315
|
|
|
1,189
|
|
||
Total
|
$
|
2,560
|
|
|
$
|
2,387
|
|
|
As of
|
||||||
|
January 31, 2020
|
|
October 31, 2019
|
||||
|
In millions
|
||||||
Land
|
$
|
90
|
|
|
$
|
241
|
|
Buildings and leasehold improvements
|
1,898
|
|
|
2,196
|
|
||
Machinery and equipment, including equipment held for lease
|
9,542
|
|
|
9,464
|
|
||
|
11,530
|
|
|
11,901
|
|
||
Accumulated depreciation
|
(5,819
|
)
|
|
(5,847
|
)
|
||
Total
|
$
|
5,711
|
|
|
$
|
6,054
|
|
|
As of
|
||||||
|
January 31, 2020
|
|
October 31, 2019
|
||||
|
In millions
|
||||||
Current portion of long-term debt
|
$
|
3,399
|
|
|
$
|
3,441
|
|
FS commercial paper
|
696
|
|
|
698
|
|
||
Notes payable to banks, lines of credit and other
|
415
|
|
|
286
|
|
||
Total
|
$
|
4,510
|
|
|
$
|
4,425
|
|
|
Three Months Ended
January 31, 2020 |
||
|
In millions
|
||
Balance at beginning of period
|
$
|
400
|
|
Charges
|
67
|
|
|
Settlements made
|
(77
|
)
|
|
Balance at end of period
|
$
|
390
|
|
|
As of
|
||||||
|
January 31, 2020
|
|
October 31, 2019
|
||||
|
In millions
|
||||||
Accounts receivable, net
|
|
|
|
||||
Accounts receivable
|
$
|
2,684
|
|
|
$
|
2,782
|
|
Unbilled receivables
|
218
|
|
|
206
|
|
||
Allowance for doubtful accounts
|
(38
|
)
|
|
(31
|
)
|
||
Total
|
$
|
2,864
|
|
|
$
|
2,957
|
|
|
Three months ended January 31, 2020
|
||
|
in millions
|
||
Operating lease cost
|
$
|
58
|
|
Finance lease cost
|
2
|
|
|
Sublease rental income
|
(16
|
)
|
|
Total lease cost
|
$
|
44
|
|
|
Balance Sheet Classification
|
|
January 31, 2020
|
|
|
|
|
|
In millions
|
||
Operating Leases
|
|
|
|
||
ROU Assets
|
Long-term financing receivables and other assets
|
|
$
|
1,053
|
|
Lease Liabilities:
|
|
|
|
||
Operating lease liabilities - current
|
Other accrued liabilities
|
|
$
|
203
|
|
Operating lease liabilities - non-current
|
Other non-current liabilities
|
|
940
|
|
|
Total operating lease liabilities
|
|
|
$
|
1,143
|
|
|
|
|
|
||
Finance Leases
|
|
|
|
||
Finance lease ROU Assets:
|
Property, plant and equipment
|
|
|
||
Gross finance lease ROU assets
|
|
|
$
|
53
|
|
Less: Accumulated depreciation
|
|
|
(1
|
)
|
|
Net finance lease ROU assets
|
|
|
$
|
52
|
|
Lease Liabilities:
|
|
|
|
||
Finance lease liabilities - current
|
Notes payable and short-term borrowings
|
|
$
|
4
|
|
Finance lease liabilities - non-current
|
Long-term debt
|
|
56
|
|
|
Total finance lease liabilities
|
|
|
$
|
60
|
|
|
|
|
|
||
Total ROU assets
|
|
|
$
|
1,105
|
|
Total lease liabilities
|
|
|
$
|
1,203
|
|
|
Operating Leases
|
|
Finance Leases
|
||
Weighted-average remaining lease term (in years)
|
7.3
|
|
|
10.3
|
|
Weighted-average discount rate
|
2.8
|
%
|
|
3.5
|
%
|
|
Cash Flow Statement Activity
|
|
Three months ended January 31, 2020
|
||
|
|
|
In millions
|
||
Cash outflows from operating leases
|
Net cash used in operating activities
|
|
$
|
56
|
|
ROU assets obtained in exchange for new operating lease liabilities
|
Non-cash activities
|
|
$
|
172
|
|
|
As of January 31, 2020
|
||
Fiscal year
|
In millions
|
||
Remainder of fiscal 2020
|
$
|
179
|
|
2021
|
195
|
|
|
2022
|
174
|
|
|
2023
|
157
|
|
|
2024
|
135
|
|
|
Thereafter
|
437
|
|
|
Total future lease payments
|
$
|
1,277
|
|
Less: imputed interest
|
(134
|
)
|
|
Total lease liability balance
|
$
|
1,143
|
|
|
As of January 31, 2020
|
||
Fiscal year
|
In millions
|
||
Remainder of fiscal 2020
|
$
|
5
|
|
2021
|
6
|
|
|
2022
|
6
|
|
|
2023
|
7
|
|
|
2024
|
7
|
|
|
Thereafter
|
41
|
|
|
Total future lease payments
|
$
|
72
|
|
Less: imputed interest
|
(12
|
)
|
|
Total lease liability balance
|
$
|
60
|
|
|
As of
|
||||||
|
January 31, 2020
|
|
October 31, 2019
|
||||
|
In millions
|
||||||
Minimum lease payments receivable
|
$
|
9,144
|
|
|
$
|
9,070
|
|
Unguaranteed residual value
|
344
|
|
|
336
|
|
||
Unearned income
|
(752
|
)
|
|
(754
|
)
|
||
Financing receivables, gross
|
8,736
|
|
|
8,652
|
|
||
Allowance for doubtful accounts
|
(133
|
)
|
|
(131
|
)
|
||
Financing receivables, net
|
8,603
|
|
|
8,521
|
|
||
Less: current portion(1)
|
(3,591
|
)
|
|
(3,572
|
)
|
||
Amounts due after one year, net(1)
|
$
|
5,012
|
|
|
$
|
4,949
|
|
|
(1)
|
The Company includes the current portion in Financing receivables, net of allowance for doubtful accounts, and amounts due after one year, net in Long-term financing receivables and other assets, in the accompanying Condensed Consolidated Balance Sheets.
|
Fiscal year
|
In millions
|
||
Remainder of fiscal 2020
|
$
|
3,142
|
|
2021
|
2,728
|
|
|
2022
|
1,835
|
|
|
2023
|
922
|
|
|
2024
|
419
|
|
|
Thereafter
|
98
|
|
|
Total undiscounted cash flows
|
$
|
9,144
|
|
Present value of lease payments (recognized as finance receivables)
|
$
|
8,337
|
|
Difference between undiscounted cash flows and discounted cash flows
|
$
|
807
|
|
Fiscal year
|
In millions
|
||
2020
|
$
|
3,939
|
|
2021
|
2,449
|
|
|
2022
|
1,555
|
|
|
2023
|
752
|
|
|
2024
|
306
|
|
|
Thereafter
|
69
|
|
|
Total
|
$
|
9,070
|
|
|
As of
|
||||||
|
January 31, 2020
|
|
October 31, 2019
|
||||
|
In millions
|
||||||
Risk Rating:
|
|
|
|
|
|
||
Low
|
$
|
4,435
|
|
|
$
|
4,432
|
|
Moderate
|
4,005
|
|
|
3,933
|
|
||
High
|
296
|
|
|
287
|
|
||
Total
|
$
|
8,736
|
|
|
$
|
8,652
|
|
|
As of
|
||||||
|
January 31, 2020
|
|
October 31, 2019
|
||||
|
In millions
|
||||||
Balance at beginning of period
|
$
|
131
|
|
|
$
|
120
|
|
Provision for doubtful accounts
|
5
|
|
|
33
|
|
||
Write-offs
|
(3
|
)
|
|
(22
|
)
|
||
Balance at end of period
|
$
|
133
|
|
|
$
|
131
|
|
|
As of
|
||||||
|
January 31, 2020
|
|
October 31, 2019
|
||||
|
In millions
|
||||||
Gross financing receivables collectively evaluated for loss
|
$
|
8,250
|
|
|
$
|
8,255
|
|
Gross financing receivables individually evaluated for loss(1)
|
486
|
|
|
397
|
|
||
Total
|
$
|
8,736
|
|
|
$
|
8,652
|
|
Allowance for financing receivables collectively evaluated for loss
|
$
|
86
|
|
|
$
|
84
|
|
Allowance for financing receivables individually evaluated for loss
|
47
|
|
|
47
|
|
||
Total
|
$
|
133
|
|
|
$
|
131
|
|
|
(1)
|
Includes billed operating lease receivables and billed and unbilled sales-type and direct-financing lease receivables.
|
|
As of
|
||||||
|
January 31, 2020
|
|
October 31, 2019
|
||||
|
In millions
|
||||||
Billed:(1)
|
|
|
|
|
|
||
Current 1-30 days
|
$
|
350
|
|
|
$
|
301
|
|
Past due 31-60 days
|
53
|
|
|
62
|
|
||
Past due 61-90 days
|
32
|
|
|
15
|
|
||
Past due > 90 days
|
111
|
|
|
88
|
|
||
Unbilled sales-type and direct-financing lease receivables
|
8,190
|
|
|
8,186
|
|
||
Total gross financing receivables
|
$
|
8,736
|
|
|
$
|
8,652
|
|
Gross financing receivables on non-accrual status(2)
|
$
|
322
|
|
|
$
|
276
|
|
Gross financing receivables 90 days past due and still accruing interest(2)
|
$
|
164
|
|
|
$
|
121
|
|
|
(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
|
||||||
|
January 31, 2020
|
|
October 31, 2019
|
||||
|
In millions
|
||||||
Equipment leased to customers
|
$
|
7,097
|
|
|
$
|
7,185
|
|
Accumulated depreciation
|
(3,117
|
)
|
|
(3,101
|
)
|
||
Total
|
$
|
3,980
|
|
|
$
|
4,084
|
|
Fiscal year
|
In millions
|
||
Remainder of fiscal 2020
|
$
|
1,445
|
|
2021
|
1,295
|
|
|
2022
|
556
|
|
|
2023
|
113
|
|
|
2024
|
28
|
|
|
Thereafter
|
2
|
|
|
Total
|
$
|
3,439
|
|
|
In millions
|
||
Sales-type leases and direct financing leases:
|
|
||
Interest income
|
$
|
113
|
|
Lease income - operating leases
|
625
|
|
|
Total lease income
|
$
|
738
|
|
|
As of
|
||||||
|
January 31, 2020
|
|
October 31, 2019
|
||||
Assets held by VIE
|
In millions
|
||||||
Other current assets
|
$
|
25
|
|
|
$
|
76
|
|
Financing receivables
|
|
|
|
||||
Short-term
|
$
|
183
|
|
|
$
|
194
|
|
Long-term
|
$
|
194
|
|
|
$
|
229
|
|
Property, plant and equipment
|
$
|
267
|
|
|
$
|
303
|
|
Liabilities held by VIE
|
|
|
|
||||
Notes payable and short-term borrowings, net of unamortized debt issuance costs
|
$
|
319
|
|
|
$
|
385
|
|
Long-term debt, net of unamortized debt issuance costs
|
$
|
307
|
|
|
$
|
370
|
|
|
Compute
|
|
HPC & MCS
|
|
Storage
|
|
Intelligent Edge
|
|
Financial Services
|
|
Total
|
||||||||||||
|
In millions
|
||||||||||||||||||||||
Balance at October 31, 2019(1) (2)
|
$
|
7,532
|
|
|
$
|
4,478
|
|
|
$
|
4,158
|
|
|
$
|
1,994
|
|
|
$
|
144
|
|
|
$
|
18,306
|
|
Goodwill adjustments
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||||
Balance at January 31, 2020(2)
|
$
|
7,532
|
|
|
$
|
4,478
|
|
|
$
|
4,157
|
|
|
$
|
1,994
|
|
|
$
|
144
|
|
|
$
|
18,305
|
|
|
(1)
|
As a result of the organizational realignments which were effective as of November 1, 2019, (described in Note 1, "Overview and Summary of Significant Accounting Policies"), goodwill was reallocated to the respective segments as of the beginning of the period using a relative fair value approach.
|
(2)
|
Goodwill is net of an accumulated impairment loss of $88 million related to the Corporate Investments segment which was recorded during the fourth quarter of fiscal 2018. There is no remaining goodwill in the Corporate Investments segment.
|
|
As of January 31, 2020
|
|
As of October 31, 2019
|
||||||||||||||||||||||||||||
|
Fair Value
Measured Using
|
|
|
|
Fair Value
Measured Using
|
|
|
||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
|
In millions
|
||||||||||||||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cash Equivalents and Investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Time deposits
|
$
|
—
|
|
|
$
|
671
|
|
|
$
|
—
|
|
|
$
|
671
|
|
|
$
|
—
|
|
|
$
|
803
|
|
|
$
|
—
|
|
|
$
|
803
|
|
Money market funds
|
607
|
|
|
—
|
|
|
—
|
|
|
607
|
|
|
859
|
|
|
—
|
|
|
—
|
|
|
859
|
|
||||||||
Foreign bonds
|
1
|
|
|
123
|
|
|
—
|
|
|
124
|
|
|
7
|
|
|
126
|
|
|
—
|
|
|
133
|
|
||||||||
Other debt securities
|
—
|
|
|
—
|
|
|
31
|
|
|
31
|
|
|
—
|
|
|
—
|
|
|
32
|
|
|
32
|
|
||||||||
Derivative Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
—
|
|
|
96
|
|
|
—
|
|
|
96
|
|
|
—
|
|
|
73
|
|
|
—
|
|
|
73
|
|
||||||||
Foreign exchange contracts
|
—
|
|
|
399
|
|
|
—
|
|
|
399
|
|
|
—
|
|
|
392
|
|
|
—
|
|
|
392
|
|
||||||||
Other derivatives
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||||||
Total assets
|
$
|
608
|
|
|
$
|
1,290
|
|
|
$
|
31
|
|
|
$
|
1,929
|
|
|
$
|
866
|
|
|
$
|
1,397
|
|
|
$
|
32
|
|
|
$
|
2,295
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
11
|
|
Foreign exchange contracts
|
—
|
|
|
123
|
|
|
—
|
|
|
123
|
|
|
—
|
|
|
136
|
|
|
—
|
|
|
136
|
|
||||||||
Other derivatives
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total liabilities
|
$
|
—
|
|
|
$
|
130
|
|
|
$
|
—
|
|
|
$
|
130
|
|
|
$
|
—
|
|
|
$
|
147
|
|
|
$
|
—
|
|
|
$
|
147
|
|
|
As of January 31, 2020
|
|
As of October 31, 2019
|
||||||||||||||||||||
|
Cost
|
|
Gross Unrealized Gain
|
|
Fair
Value
|
|
Cost
|
|
Gross Unrealized Gain
|
|
Fair
Value
|
||||||||||||
|
In millions
|
||||||||||||||||||||||
Cash Equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Time deposits
|
$
|
671
|
|
|
$
|
—
|
|
|
$
|
671
|
|
|
$
|
803
|
|
|
$
|
—
|
|
|
$
|
803
|
|
Money market funds
|
607
|
|
|
—
|
|
|
607
|
|
|
859
|
|
|
—
|
|
|
859
|
|
||||||
Total cash equivalents
|
1,278
|
|
|
—
|
|
|
1,278
|
|
|
1,662
|
|
|
—
|
|
|
1,662
|
|
||||||
Available-for-Sale Investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign bonds
|
103
|
|
|
21
|
|
|
124
|
|
|
110
|
|
|
23
|
|
|
133
|
|
||||||
Other debt securities
|
30
|
|
|
1
|
|
|
31
|
|
|
32
|
|
|
—
|
|
|
32
|
|
||||||
Total available-for-sale investments
|
133
|
|
|
22
|
|
|
155
|
|
|
142
|
|
|
23
|
|
|
165
|
|
||||||
Total cash equivalents and available-for-sale debt investments
|
$
|
1,411
|
|
|
$
|
22
|
|
|
$
|
1,433
|
|
|
$
|
1,804
|
|
|
$
|
23
|
|
|
$
|
1,827
|
|
|
January 31, 2020
|
||||||
|
Amortized Cost
|
|
Fair Value
|
||||
|
In millions
|
||||||
Due in one to five years
|
$
|
9
|
|
|
$
|
9
|
|
Due in more than five years
|
124
|
|
|
146
|
|
||
|
$
|
133
|
|
|
$
|
155
|
|
|
As of January 31, 2020
|
|
As of October 31, 2019
|
||||||||||||||||||||||||||||||||||||
|
|
|
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
|
|
|
$
|
—
|
|
|
$
|
96
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
6,850
|
|
|
$
|
—
|
|
|
$
|
72
|
|
|
$
|
11
|
|
|
$
|
—
|
|
Cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency contracts
|
8,401
|
|
|
148
|
|
|
136
|
|
|
42
|
|
|
29
|
|
|
8,578
|
|
|
164
|
|
|
141
|
|
|
45
|
|
|
27
|
|
||||||||||
Interest rate contracts
|
500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
500
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||||||||
Net investment hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Foreign currency contracts
|
1,790
|
|
|
39
|
|
|
44
|
|
|
17
|
|
|
10
|
|
|
1,766
|
|
|
31
|
|
|
36
|
|
|
18
|
|
|
10
|
|
||||||||||
Total derivatives designated as hedging instruments
|
17,541
|
|
|
187
|
|
|
276
|
|
|
65
|
|
|
39
|
|
|
17,694
|
|
|
195
|
|
|
250
|
|
|
74
|
|
|
37
|
|
||||||||||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency contracts
|
6,653
|
|
|
29
|
|
|
3
|
|
|
25
|
|
|
—
|
|
|
6,398
|
|
|
17
|
|
|
3
|
|
|
33
|
|
|
3
|
|
||||||||||
Other derivatives
|
114
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
97
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Total derivatives not designated as hedging instruments
|
6,767
|
|
|
30
|
|
|
3
|
|
|
26
|
|
|
—
|
|
|
6,495
|
|
|
20
|
|
|
3
|
|
|
33
|
|
|
3
|
|
||||||||||
Total derivatives
|
$
|
24,308
|
|
|
$
|
217
|
|
|
$
|
279
|
|
|
$
|
91
|
|
|
$
|
39
|
|
|
$
|
24,189
|
|
|
$
|
215
|
|
|
$
|
253
|
|
|
$
|
107
|
|
|
$
|
40
|
|
|
As of January 31, 2020
|
|||||||||||||||||||||||
|
In the Condensed 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
|
|
|
$
|
118
|
|
|
$
|
349
|
|
(1)
|
|
$
|
29
|
|
Derivative liabilities
|
$
|
130
|
|
|
$
|
—
|
|
|
$
|
130
|
|
|
$
|
118
|
|
|
$
|
6
|
|
(2)
|
|
$
|
6
|
|
|
As of October 31, 2019
|
|||||||||||||||||||||||
|
In the Condensed 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
|
|
|
(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 the 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 January 31, 2020, $6 million of collateral posted was entirely in cash. As of October 31, 2019, $19 million of collateral posted was entirely by way of re-use of counterparty collateral.
|
|
Gains (Losses) Recognized in OCI on Derivatives
|
||||||
|
Three months ended January 31, 2020
|
|
Three months ended January 31, 2019
|
||||
|
In millions
|
||||||
Derivatives in Cash Flow Hedging relationship
|
|
|
|
||||
Foreign exchange contracts
|
$
|
76
|
|
|
$
|
34
|
|
Interest rate contracts
|
(1
|
)
|
|
—
|
|
||
Derivatives in Net Investment Hedging relationship
|
|
|
|
||||
Foreign exchange contracts
|
21
|
|
|
(43
|
)
|
||
Total
|
$
|
96
|
|
|
$
|
(9
|
)
|
|
Gains (Losses) Recognized in Income
|
||||||||||||||
|
Three months ended January 31, 2020
|
|
Three months ended January 31, 2019
|
||||||||||||
|
Net revenue
|
|
Interest and other, net
|
|
Net revenue
|
|
Interest and other, net
|
||||||||
|
In millions
|
||||||||||||||
Total amounts of income and expense line items presented in the Condensed Consolidated Statements of Earnings in which the effects of fair value hedges, cash flow hedges and derivatives not designated as hedging instruments are recorded
|
$
|
6,949
|
|
|
$
|
(19
|
)
|
|
$
|
7,553
|
|
|
$
|
(51
|
)
|
Gains (losses) on derivatives in fair value hedging relationships
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
|
|
|
|
|
|
|
||||||||
Hedged items
|
$
|
—
|
|
|
$
|
(29
|
)
|
|
$
|
—
|
|
|
$
|
(158
|
)
|
Derivatives designated as hedging instruments
|
—
|
|
|
29
|
|
|
—
|
|
|
158
|
|
||||
Gains (losses) on derivatives in cash flow hedging relationships
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
|
|
|
|
|
|
|
||||||||
Amount of gains (losses) reclassified from accumulated other comprehensive income into income
|
26
|
|
|
43
|
|
|
80
|
|
|
53
|
|
||||
Gains (losses) on derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
—
|
|
|
(54
|
)
|
|
—
|
|
|
(231
|
)
|
||||
Other derivatives
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
10
|
|
||||
Total gains (losses)
|
$
|
26
|
|
|
$
|
(14
|
)
|
|
$
|
80
|
|
|
$
|
(168
|
)
|
|
Three months ended January 31,
|
||||||
|
2020
|
|
2019
|
||||
|
In millions
|
||||||
Taxes on change in net unrealized gains (losses) on cash flow hedges:
|
|
|
|
|
|
||
Tax (provision) benefit on net unrealized gains (losses) arising during the period
|
$
|
(10
|
)
|
|
$
|
(1
|
)
|
Tax provision (benefit) on net (gains) losses reclassified into earnings
|
9
|
|
|
16
|
|
||
|
(1
|
)
|
|
15
|
|
||
Taxes on change in unrealized components of defined benefit plans:
|
|
|
|
|
|
||
Tax benefit (provision) on net unrealized gains (losses) arising during the period
|
—
|
|
|
10
|
|
||
Tax (provision) benefit on amortization of net actuarial loss and prior service benefit
|
(4
|
)
|
|
(3
|
)
|
||
Tax (provision) benefit on curtailments, settlements and other
|
(5
|
)
|
|
(9
|
)
|
||
|
(9
|
)
|
|
(2
|
)
|
||
Tax benefit (provision) on change in cumulative translation adjustment
|
1
|
|
|
(3
|
)
|
||
Tax (provision) benefit on other comprehensive income (loss)
|
$
|
(9
|
)
|
|
$
|
10
|
|
|
Three months ended January 31,
|
||||||
|
2020
|
|
2019
|
||||
|
In millions
|
||||||
Other comprehensive income (loss), net of taxes:
|
|
|
|
|
|
||
Change in net unrealized (losses) gains on available-for-sale securities:
|
|
|
|
|
|
||
Net unrealized gains (losses) arising during the period
|
$
|
2
|
|
|
$
|
2
|
|
(Gains) losses reclassified into earnings
|
(3
|
)
|
|
(3
|
)
|
||
|
(1
|
)
|
|
(1
|
)
|
||
Change in net unrealized gains (losses) on cash flow hedges:
|
|
|
|
|
|
||
Net unrealized gains (losses) arising during the period
|
65
|
|
|
33
|
|
||
Net (gains) losses reclassified into earnings
|
(60
|
)
|
|
(117
|
)
|
||
|
5
|
|
|
(84
|
)
|
||
Change in unrealized components of defined benefit plans:
|
|
|
|
|
|
||
Net unrealized gains (losses) arising during the period
|
17
|
|
|
(45
|
)
|
||
Amortization of net actuarial loss and prior service benefit
|
57
|
|
|
49
|
|
||
Curtailments, settlements and other
|
(5
|
)
|
|
(4
|
)
|
||
|
69
|
|
|
—
|
|
||
Change in cumulative translation adjustment
|
(3
|
)
|
|
9
|
|
||
Other comprehensive income (loss), net of taxes
|
$
|
70
|
|
|
$
|
(76
|
)
|
|
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
|
$
|
23
|
|
|
$
|
53
|
|
|
$
|
(3,366
|
)
|
|
$
|
(437
|
)
|
|
$
|
(3,727
|
)
|
Effect of change in accounting principle (1)
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
(33
|
)
|
|
(43
|
)
|
|||||
Other comprehensive income (loss) before reclassifications
|
2
|
|
|
65
|
|
|
17
|
|
|
(3
|
)
|
|
81
|
|
|||||
Reclassifications of (gains) losses into earnings
|
(3
|
)
|
|
(60
|
)
|
|
52
|
|
|
—
|
|
|
(11
|
)
|
|||||
Balance at end of period
|
$
|
22
|
|
|
$
|
48
|
|
|
$
|
(3,297
|
)
|
|
$
|
(473
|
)
|
|
$
|
(3,700
|
)
|
|
(1)
|
Reflects the adoption of the FASB guidance on stranded tax effects. Refer Note 1 for more information.
|
|
Three months ended January 31,
|
||||||
|
2020
|
|
2019
|
||||
|
In millions, except per share amounts
|
||||||
Numerator:
|
|
|
|
|
|
||
Net earnings
|
$
|
333
|
|
|
$
|
177
|
|
Denominator:
|
|
|
|
|
|
||
Weighted-average shares used to compute basic net EPS
|
1,300
|
|
|
1,401
|
|
||
Dilutive effect of employee stock plans
|
15
|
|
|
11
|
|
||
Weighted-average shares used to compute diluted net EPS
|
1,315
|
|
|
1,412
|
|
||
Net earnings per share:
|
|
|
|
|
|
||
Basic
|
$
|
0.26
|
|
|
$
|
0.13
|
|
Diluted
|
$
|
0.25
|
|
|
$
|
0.13
|
|
Anti-dilutive weighted-average stock awards(1)
|
1
|
|
|
7
|
|
|
(1)
|
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 per share, as their effect, if included, would have been anti-dilutive for the periods presented.
|
•
|
Overview. A discussion of our business and overall analysis of financial and other highlights, including non-GAAP financial measures, affecting the Company to provide context for the remainder of MD&A. The overview analysis compares the three months ended January 31, 2020 to the prior-year period.
|
•
|
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 the three months ended January 31, 2020 to the prior-year period. 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, cross-indemnifications with HP Inc. (formerly known as "Hewlett-Packard Company"), DXC Technology Company ("DXC"), and Micro Focus International plc ("Micro Focus") and off-balance sheet arrangements.
|
|
HPE Consolidated
|
|
Compute
|
|
HPC & MCS
|
|
Storage
|
|
A & PS
|
|
Intelligent Edge
|
|
Financial Services
|
|
Corporate Investments
|
||||||||||||||||
|
Dollars in millions, except for per share amounts
|
||||||||||||||||||||||||||||||
Net revenue(1)
|
$
|
6,949
|
|
|
$
|
3,011
|
|
|
$
|
823
|
|
|
$
|
1,250
|
|
|
$
|
243
|
|
|
$
|
720
|
|
|
$
|
859
|
|
|
$
|
121
|
|
Year-over-year change %
|
(8.0
|
)%
|
|
(15.8
|
)%
|
|
5.6
|
%
|
|
(7.8
|
)%
|
|
0.8
|
%
|
|
2.1
|
%
|
|
(6.5
|
)%
|
|
2.5
|
%
|
||||||||
Earnings (loss) from operations(2)
|
$
|
348
|
|
|
$
|
286
|
|
|
$
|
49
|
|
|
$
|
226
|
|
|
$
|
(2
|
)
|
|
$
|
70
|
|
|
$
|
73
|
|
|
$
|
(27
|
)
|
Earnings (loss) from operations as a % of net revenue
|
5.0
|
%
|
|
9.5
|
%
|
|
6.0
|
%
|
|
18.1
|
%
|
|
(0.8
|
)%
|
|
9.7
|
%
|
|
8.5
|
%
|
|
(22.3
|
)%
|
||||||||
Year-over-year change percentage points
|
(1.0) pts
|
|
|
—
|
|
|
(6.6) pts
|
|
|
(0.6) pts
|
|
|
12.5 pts
|
|
|
6.3 pts
|
|
|
0.1 pts
|
|
|
1.4 pts
|
|
||||||||
Net earnings
|
$
|
333
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Diluted net earnings per share
|
$
|
0.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Supplemental Non-GAAP information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Non-GAAP earnings from operations
|
$
|
602
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Non-GAAP earnings from operations as a % of net revenue
|
8.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Non-GAAP net earnings
|
$
|
575
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Non-GAAP diluted net earnings per share
|
$
|
0.44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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, amortization of intangible assets, amortization of initial direct costs, transformation costs, and acquisition, disposition and other related charges.
|
|
Three months ended January 31, 2020
|
|
Diluted net earnings per share
|
||||
|
In millions
|
||||||
GAAP net earnings
|
$
|
333
|
|
|
$
|
0.25
|
|
Non-GAAP adjustments:
|
|
|
|
||||
Amortization of initial direct costs
|
3
|
|
|
—
|
|
||
Amortization of intangible assets
|
120
|
|
|
0.09
|
|
||
Transformation costs
|
89
|
|
|
0.07
|
|
||
Acquisition, disposition and other related charges(1)
|
42
|
|
|
0.03
|
|
||
Tax indemnification adjustments
|
21
|
|
|
0.02
|
|
||
Non-service net periodic benefit credit
|
(37
|
)
|
|
(0.03
|
)
|
||
Earnings from equity interests
|
37
|
|
|
0.03
|
|
||
Adjustments for taxes
|
(33
|
)
|
|
(0.02
|
)
|
||
Non-GAAP net earnings
|
$
|
575
|
|
|
$
|
0.44
|
|
GAAP earnings from operations
|
$
|
348
|
|
|
|
||
Non-GAAP adjustments related to operations:
|
|
|
|
||||
Amortization of initial direct costs
|
3
|
|
|
|
|||
Amortization of intangible assets
|
120
|
|
|
|
|||
Transformation costs
|
89
|
|
|
|
|||
Acquisition and other related charges
|
42
|
|
|
|
|||
Non-GAAP earnings from operations
|
$
|
602
|
|
|
|
||
GAAP earnings from operations as a % of net revenue
|
5.0
|
%
|
|
|
|||
Non-GAAP earnings from operations as a % of net revenue
|
8.7
|
%
|
|
|
|
|
Three months ended January 31,
|
||||||||||||
|
2020
|
|
2019
|
||||||||||
|
Dollars
|
|
% of
Revenue |
|
Dollars
|
|
% of
Revenue |
||||||
|
Dollars in millions
|
||||||||||||
Net revenue
|
$
|
6,949
|
|
|
100.0
|
%
|
|
$
|
7,553
|
|
|
100.0
|
%
|
Cost of sales
|
4,667
|
|
|
67.2
|
|
|
5,207
|
|
|
68.9
|
|
||
Gross profit
|
2,282
|
|
|
32.8
|
|
|
2,346
|
|
|
31.1
|
|
||
Research and development
|
485
|
|
|
7.0
|
|
|
466
|
|
|
6.2
|
|
||
Selling, general and administrative
|
1,218
|
|
|
17.5
|
|
|
1,211
|
|
|
16.0
|
|
||
Amortization of intangible assets
|
120
|
|
|
1.7
|
|
|
72
|
|
|
1.0
|
|
||
Transformation costs
|
89
|
|
|
1.3
|
|
|
78
|
|
|
1.1
|
|
||
Acquisition, disposition and other related charges
|
22
|
|
|
0.3
|
|
|
63
|
|
|
0.8
|
|
||
Earnings from operations
|
348
|
|
|
5.0
|
|
|
456
|
|
|
6.0
|
|
||
Interest and other, net
|
(19
|
)
|
|
(0.3
|
)
|
|
(51
|
)
|
|
(0.7
|
)
|
||
Tax indemnification adjustments
|
(21
|
)
|
|
(0.3
|
)
|
|
219
|
|
|
3.0
|
|
||
Non-service net periodic benefit credit
|
37
|
|
|
0.5
|
|
|
16
|
|
|
0.2
|
|
||
Earnings from equity interests
|
33
|
|
|
0.5
|
|
|
15
|
|
|
0.2
|
|
||
Earnings before taxes
|
378
|
|
|
5.4
|
|
|
655
|
|
|
8.7
|
|
||
Provision for taxes
|
(45
|
)
|
|
(0.6
|
)
|
|
(478
|
)
|
|
(6.4
|
)
|
||
Net earnings
|
$
|
333
|
|
|
4.8
|
%
|
|
$
|
177
|
|
|
2.3
|
%
|
|
Three months ended January 31,
|
||||||
|
2020
|
|
2019
|
||||
|
In millions
|
||||||
Cost of sales
|
$
|
13
|
|
|
$
|
12
|
|
Research and development
|
27
|
|
|
21
|
|
||
Selling, general and administrative
|
53
|
|
|
42
|
|
||
Transformation costs
|
—
|
|
|
2
|
|
||
Stock-based compensation expense
|
$
|
93
|
|
|
$
|
77
|
|
|
Three months ended January 31, 2020
|
|
|
Percentage points
|
|
Compute
|
(7.5
|
)
|
Storage
|
(1.4
|
)
|
Financial Services
|
(0.8
|
)
|
A & PS
|
—
|
|
Intelligent Edge
|
0.2
|
|
HPC & MCS
|
0.6
|
|
Corporate Investments/Other (1)
|
0.9
|
|
Total HPE
|
(8.0
|
)
|
|
•
|
Compute net revenue declined due to weak market demand resulting in lower unit shipments, commodity and North American manufacturing capacity constraints and lower average selling prices, and lower Tier-1 server sales;
|
•
|
HPC & MCS net revenue increased due to revenue from Cray;
|
•
|
Storage net revenue decreased due primarily to weak market demand and commodity constraints, including North American manufacturing capacity constraints;
|
•
|
A & PS net revenue increased due primarily to strength in the Asia Pacific Japan region;
|
•
|
Intelligent Edge net revenue increased due primarily to increased revenue from WLAN products and higher support revenue; and
|
•
|
HPE Financial Services net revenue decreased due primarily to a decrease in rental revenue due to lower average operating leases and lower lease equipment buyout revenue.
|
•
|
we created the Compute segment consisting of the general purpose server and workload optimized server portfolios that were previously a part of the Hybrid IT-Compute business unit and the related operational services business that was previously a part of the Hybrid IT-HPE Pointnext business unit;
|
•
|
we created the HPC & MCS segment consisting of the high performance compute, mission-critical systems and edge compute offerings that were previously a part of the Hybrid IT-Compute business unit and the related operational services business that was previously a part of the Hybrid IT-HPE Pointnext business unit;
|
•
|
we created the Storage segment consisting of the former Hybrid IT-Storage business unit and the related operational services business that was previously a part of the Hybrid IT-HPE Pointnext business unit and the hyperconverged infrastructure products that were previously a part of the Hybrid IT-Compute business unit;
|
•
|
we created the A & PS segment consisting of the consultative-led services that were previously a part of the Hybrid IT-HPE Pointnext business unit; and
|
•
|
we transferred the DC Networking operational services business that was previously a part of the Hybrid IT-HPE Pointnext business unit to the Intelligent Edge segment.
|
|
Three months ended January 31,
|
|||||||||
|
2020
|
|
2019
|
|
% Change
|
|||||
|
Dollars in millions
|
|
|
|||||||
Net revenue
|
$
|
3,011
|
|
|
$
|
3,575
|
|
|
(15.8
|
)%
|
Earnings from operations
|
$
|
286
|
|
|
$
|
340
|
|
|
(15.9
|
)%
|
Earnings from operations as a % of net revenue
|
9.5
|
%
|
|
9.5
|
%
|
|
|
|
|
|
|
|
|
|
|
Three months ended January 31,
|
|||||||||
|
2020
|
|
2019
|
|
% Change
|
|||||
|
Dollars in millions
|
|
|
|||||||
Net revenue
|
$
|
823
|
|
|
$
|
779
|
|
|
5.6
|
%
|
Earnings from operations
|
$
|
49
|
|
|
$
|
98
|
|
|
(50.0
|
)%
|
Earnings from operations as a % of net revenue
|
6.0
|
%
|
|
12.6
|
%
|
|
|
|
Three months ended January 31,
|
|||||||||
|
2020
|
|
2019
|
|
% Change
|
|||||
|
Dollars in millions
|
|
|
|||||||
Net revenue
|
$
|
1,250
|
|
|
$
|
1,356
|
|
|
(7.8
|
)%
|
Earnings from operations
|
$
|
226
|
|
|
$
|
254
|
|
|
(11.0
|
)%
|
Earnings from operations as a % of net revenue
|
18.1
|
%
|
|
18.7
|
%
|
|
|
|
Three months ended January 31,
|
|||||||||
|
2020
|
|
2019
|
|
% Change
|
|||||
|
Dollars in millions
|
|
|
|||||||
Net revenue
|
$
|
243
|
|
|
$
|
241
|
|
|
0.8
|
%
|
Earnings from operations
|
$
|
(2
|
)
|
|
$
|
(32
|
)
|
|
(93.8
|
)%
|
Earnings from operations as a % of net revenue
|
(0.8
|
)%
|
|
(13.3
|
)%
|
|
|
|
Three months ended January 31,
|
|||||||||
|
2020
|
|
2019
|
|
% Change
|
|||||
|
Dollars in millions
|
|
|
|||||||
Net revenue
|
$
|
720
|
|
|
$
|
705
|
|
|
2.1
|
%
|
Earnings from operations
|
$
|
70
|
|
|
$
|
24
|
|
|
191.7
|
%
|
Earnings from operations as a % of net revenue
|
9.7
|
%
|
|
3.4
|
%
|
|
|
|
|
Three months ended January 31,
|
|||||||||
|
2020
|
|
2019
|
|
% Change
|
|||||
|
Dollars in millions
|
|
|
|||||||
Net revenue
|
$
|
859
|
|
|
$
|
919
|
|
|
(6.5
|
)%
|
Earnings from operations
|
$
|
73
|
|
|
$
|
77
|
|
|
(5.2
|
)%
|
Earnings from operations as a % of net revenue
|
8.5
|
%
|
|
8.4
|
%
|
|
|
|
|
|
|
|
|
|
|
Three months ended January 31,
|
||||||
|
2020
|
|
2019
|
||||
|
In millions
|
||||||
Total financing volume
|
$
|
1,408
|
|
|
$
|
1,389
|
|
|
As of
|
||||||
|
January 31, 2020
|
|
October 31, 2019
|
||||
|
Dollars in millions
|
||||||
Financing receivables, gross
|
$
|
8,736
|
|
|
$
|
8,652
|
|
Net equipment under operating leases
|
3,980
|
|
|
4,084
|
|
||
Capitalized profit on intercompany equipment transactions(1)
|
342
|
|
|
382
|
|
||
Intercompany leases(1)
|
106
|
|
|
100
|
|
||
Gross portfolio assets
|
13,164
|
|
|
13,218
|
|
||
Allowance for doubtful accounts(2)
|
133
|
|
|
131
|
|
||
Operating lease equipment reserve
|
58
|
|
|
60
|
|
||
Total reserves
|
191
|
|
|
191
|
|
||
Net portfolio assets
|
$
|
12,973
|
|
|
$
|
13,027
|
|
Reserve coverage
|
1.5
|
%
|
|
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 $11.7 billion and $11.4 billion at January 31, 2020 and October 31, 2019, 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 January 31, 2020 and October 31, 2019 was $1.7 billion and $1.6 billion, respectively.
|
|
Three months ended January 31,
|
|||||||||
|
2020
|
|
2019
|
|
% Change
|
|||||
|
Dollars in millions
|
|
|
|||||||
Net revenue
|
$
|
121
|
|
|
$
|
118
|
|
|
2.5
|
%
|
Loss from operations
|
$
|
(27
|
)
|
|
$
|
(28
|
)
|
|
3.6
|
%
|
Loss from operations as a % of net revenue
|
(22.3
|
)%
|
|
(23.7
|
)%
|
|
|
|
|
|
|
|
|
|
Three months ended January 31, 2020
|
||||||
|
2020
|
|
2019
|
||||
|
In millions
|
||||||
Net cash (used in) provided by operating activities
|
$
|
(79
|
)
|
|
$
|
382
|
|
Net cash used in investing activities
|
(64
|
)
|
|
(616
|
)
|
||
Net cash used in financing activities
|
(385
|
)
|
|
(945
|
)
|
||
Net decrease in cash, cash equivalents and restricted cash
|
$
|
(528
|
)
|
|
$
|
(1,179
|
)
|
|
Three months ended January 31,
|
|||||||
|
2020
|
|
2019
|
|
Change
|
|||
Days of sales outstanding in accounts receivable ("DSO")
|
37
|
|
|
38
|
|
|
(1
|
)
|
Days of supply in inventory ("DOS")
|
49
|
|
|
40
|
|
|
9
|
|
Days of purchases outstanding in accounts payable ("DPO")
|
(103
|
)
|
|
(100
|
)
|
|
(3
|
)
|
Cash conversion cycle
|
(17
|
)
|
|
(22
|
)
|
|
5
|
|
|
As of
January 31, 2020 |
||
|
In millions
|
||
Commercial paper programs
|
$
|
4,304
|
|
Uncommitted lines of credit
|
$
|
1,149
|
|
Period
|
Total Number
of Shares
Purchased
|
|
Average
Price Paid
per Share
|
|
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans
or Programs
|
|
Approximate Dollar Value of
Shares that May Yet Be
Purchased under the Plans
or Programs
|
||||||
|
In thousands, except per share amounts
|
||||||||||||
Month 1 (November 2019)
|
3,713
|
|
|
$
|
16.92
|
|
|
3,713
|
|
|
$
|
2,402,350
|
|
Month 2 (December 2019)
|
4,238
|
|
|
$
|
15.93
|
|
|
4,238
|
|
|
$
|
2,334,844
|
|
Month 3 (January 2020)
|
4,800
|
|
|
$
|
15.35
|
|
|
4,800
|
|
|
$
|
2,261,154
|
|
Total
|
12,751
|
|
|
$
|
16.00
|
|
|
12,751
|
|
|
|
|
|
|
|
|
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
|
|
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
|
|
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
|
|
4.2
|
|
September 13, 2019
|
|
4.10
|
|
|
8-K
|
|
001-37483
|
|
4.3
|
|
September 13, 2019
|
|
4.11
|
|
|
8-K
|
|
001-37483
|
|
4.12
|
|
October 13, 2015
|
|
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
|
|
333-207679
|
|
4.3
|
|
March 6, 2017
|
|
10.14
|
|
|
S-8
|
|
001-37483
|
|
4.3
|
|
April 18, 2017
|
|
10.15
|
|
|
S-8
|
|
001-37483
|
|
4.4
|
|
April 18, 2017
|
|
10.16
|
|
|
S-8
|
|
001-37483
|
|
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 31, 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
|
|
10.26
|
|
|
10-Q
|
|
001-37483
|
|
10.27
|
|
December 12, 2018
|
|
10.27
|
|
|
10-Q
|
|
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
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333-234033
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4.3
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October 1, 2019
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10.31
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10-K
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001-37483
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10.31
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December 13, 2019
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10.32
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31.1
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31.2
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32
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101.INS
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XBRL Instance Document‡
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101.SCH
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XBRL Taxonomy Extension Schema Document‡
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document‡
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document‡
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document‡
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document‡
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*
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Indicates management contract or compensation plan, contract or arrangement
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‡
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Filed herewith
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†
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Furnished herewith
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HEWLETT PACKARD ENTERPRISE COMPANY
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/s/ TAREK A. ROBBIATI
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Tarek A. Robbiati
Executive Vice President and Chief Financial Officer
(Principal Financial Officer and Authorized
Signatory)
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1)
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Fuel, oil, lubricants and other additives
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2)
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Travel expenses of the crew, including food, lodging and ground transportation.
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3)
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Hangar and tie down costs away from the Aircraft’s base of operation.
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4)
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Insurance obtained for the specific flight.
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5)
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Landing fees, airport taxes and similar assessments.
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6)
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Customs, foreign permit, and similar fees directly related to the flight.
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7)
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In-flight food and beverages.
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8)
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Passenger ground transportation.
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9)
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Flight planning and weather contract services.
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10)
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An additional charge equal to 100% of the expenses listed in (1) of this subsection.
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9.
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Truth-in-Leasing. In accordance with FAR Section 91.23, the parties state as follows:
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a.
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OPERATOR HEREBY CERTIFIES THAT THE AIRCRAFT HAS BEEN INSPECTED AND MAINTAINED WITHIN THE 12-MONTH PERIOD PRECEDING THE DATE OF THIS AGREEMENT (OR SUCH SHORTER PERIOD TO THE EXTENT THE AIRCRAFT IS LESS THAN 12 MONTHS OLD), AND WILL CONTINUE TO BE MAINTAINED AND INSPECTED, IN ACCORDANCE WITH THE PROVISIONS OF FAR PARTS 91 AND 135, IF APPLICABLE, AND ALL APPLICABLE REQUIREMENTS FOR MAINTENANCE AND INSPECTION THEREUNDER HAVE BEEN COMPLIED WITH.
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b.
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LESSEE AGREES, CERTIFIES AND KNOWINGLY ACKNOWLEDGES THAT WHEN LESSEE OPERATES THE AIRCRAFT UNDER THIS AGREEMENT, IT SHALL BE KNOWN AS, CONSIDERED, AND IN FACT WILL BE THE OPERATOR OF THE AIRCRAFT AS PROVIDED HEREIN.
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c.
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AN EXPLANATION OF FACTORS BEARING ON OPERATIONAL CONTROL AND PERTINENT FARs CAN BE OBTAINED FROM THE NEAREST FAA FLIGHT STANDARDS DISTRICT OFFICE, GENERAL AVIATION DISTRICT OFFICE OR AIR CARRIER DISTRICT OFFICE. LESSEE ACKNOWLEDGES SHE UNDERSTANDS AND AGREES TO ABIDE BY THESE REGULATIONS.
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d.
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THE PARTIES HERETO CERTIFY THAT A TRUE COPY OF THIS AGREEMENT SHALL BE CARRIED ON THE AIRCRAFT AT ALL TIMES, AND SHALL BE MADE AVAILABLE FOR INSPECTION UPON REQUEST BY AN APPROPRIATELY CONSTITUTED IDENTIFIED REPRESENTATIVE OF THE ADMINISTRATOR OF THE FAA.
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Hewlett Packard Enterprise Company;
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2.
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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;
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3.
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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;
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4.
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The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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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):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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/s/ ANTONIO F. NERI
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Antonio F. Neri
President and Chief Executive Officer
(Principal Executive Officer)
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Hewlett Packard Enterprise Company;
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2.
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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;
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3.
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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;
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4.
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The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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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):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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/s/ TAREK A. ROBBIATI
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Tarek A. Robbiati
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
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By:
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/s/ ANTONIO F. NERI
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Antonio F. Neri
President and Chief Executive Officer
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By:
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/s/ TAREK A. ROBBIATI
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Tarek A. Robbiati
Executive Vice President and Chief Financial Officer
|