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Price
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(Mark One)
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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended: January 31, 2019
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Or
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
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Commission file number 001-37483
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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, San Jose, 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) 687-5817
(Registrant's telephone number, including area code)
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a smaller
reporting company)
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Smaller reporting company
o
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Emerging growth company
o
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Page
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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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2019
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2018
|
||||
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In millions, except per share amounts
|
||||||
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Net revenue:
|
|
|
|
|
|
||
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Products
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$
|
4,791
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|
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$
|
4,860
|
|
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Services
|
2,650
|
|
|
2,703
|
|
||
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Financing income
|
112
|
|
|
111
|
|
||
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Total net revenue
|
7,553
|
|
|
7,674
|
|
||
|
Costs and expenses:
|
|
|
|
|
|
||
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Cost of products
|
3,369
|
|
|
3,595
|
|
||
|
Cost of services
|
1,765
|
|
|
1,842
|
|
||
|
Financing interest
|
73
|
|
|
68
|
|
||
|
Research and development
|
466
|
|
|
389
|
|
||
|
Selling, general and administrative
|
1,211
|
|
|
1,218
|
|
||
|
Amortization of intangible assets
|
72
|
|
|
78
|
|
||
|
Restructuring charges
|
—
|
|
|
5
|
|
||
|
Transformation costs
|
78
|
|
|
245
|
|
||
|
Acquisition, disposition and other related charges
|
63
|
|
|
30
|
|
||
|
Separation costs
|
—
|
|
|
(24
|
)
|
||
|
Total costs and expenses
|
7,097
|
|
|
7,446
|
|
||
|
Earnings from continuing operations
|
456
|
|
|
228
|
|
||
|
Interest and other, net
|
(51
|
)
|
|
(21
|
)
|
||
|
Tax indemnification adjustments
|
219
|
|
|
(919
|
)
|
||
|
Non-service net periodic benefit credit
|
16
|
|
|
33
|
|
||
|
Earnings from equity interests
|
15
|
|
|
22
|
|
||
|
Earnings (loss) from continuing operations before taxes
|
655
|
|
|
(657
|
)
|
||
|
(Provision) benefit for taxes
|
(478
|
)
|
|
2,139
|
|
||
|
Net earnings from continuing operations
|
177
|
|
|
1,482
|
|
||
|
Net loss from discontinued operations
|
—
|
|
|
(46
|
)
|
||
|
Net earnings
|
$
|
177
|
|
|
$
|
1,436
|
|
|
Net earnings (loss) per share:
|
|
|
|
|
|
||
|
Basic
|
|
|
|
||||
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Continuing operations
|
$
|
0.13
|
|
|
$
|
0.93
|
|
|
Discontinued operations
|
—
|
|
|
(0.03
|
)
|
||
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Total basic net earnings (loss) per share
|
$
|
0.13
|
|
|
$
|
0.90
|
|
|
Diluted
|
|
|
|
||||
|
Continuing operations
|
$
|
0.13
|
|
|
$
|
0.92
|
|
|
Discontinued operations
|
—
|
|
|
(0.03
|
)
|
||
|
Total diluted net earnings (loss) per share
|
$
|
0.13
|
|
|
$
|
0.89
|
|
|
Cash dividends declared per share
|
$
|
0.1125
|
|
|
$
|
0.1500
|
|
|
Weighted-average shares used to compute net earnings (loss) per share:
|
|
|
|
|
|
||
|
Basic
|
1,401
|
|
|
1,591
|
|
||
|
Diluted
|
1,412
|
|
|
1,619
|
|
||
|
|
Three Months Ended
January 31, |
||||||
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|
2019
|
|
2018
|
||||
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In millions
|
||||||
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Net earnings
|
$
|
177
|
|
|
$
|
1,436
|
|
|
Other comprehensive loss before taxes:
|
|
|
|
|
|
||
|
Change in net unrealized (losses) gains on available-for-sale securities:
|
|
|
|
|
|
||
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Net unrealized gains arising during the period
|
2
|
|
|
1
|
|
||
|
(Gains) losses reclassified into earnings
|
(3
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)
|
|
8
|
|
||
|
|
(1
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)
|
|
9
|
|
||
|
Change in net unrealized losses on cash flow hedges:
|
|
|
|
|
|
||
|
Net unrealized gains (losses) arising during the period
|
34
|
|
|
(181
|
)
|
||
|
Net (gains) losses reclassified into earnings
|
(133
|
)
|
|
30
|
|
||
|
|
(99
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)
|
|
(151
|
)
|
||
|
Change in unrealized components of defined benefit plans:
|
|
|
|
|
|
||
|
(Losses) gains arising during the period
|
(55
|
)
|
|
2
|
|
||
|
Amortization of actuarial loss and prior service benefit
|
52
|
|
|
47
|
|
||
|
Curtailments, settlements and other
|
5
|
|
|
—
|
|
||
|
|
2
|
|
|
49
|
|
||
|
Change in cumulative translation adjustment
|
12
|
|
|
26
|
|
||
|
Other comprehensive loss before taxes
|
(86
|
)
|
|
(67
|
)
|
||
|
Benefit for taxes
|
10
|
|
|
7
|
|
||
|
Other comprehensive loss, net of taxes
|
(76
|
)
|
|
(60
|
)
|
||
|
Comprehensive income
|
$
|
101
|
|
|
$
|
1,376
|
|
|
|
As of
|
||||||
|
|
January 31, 2019
|
|
October 31, 2018
|
||||
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In millions, except par
value |
||||||
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ASSETS
|
|
|
|
|
|
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Current assets:
|
|
|
|
|
|
||
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Cash and cash equivalents
|
$
|
3,781
|
|
|
$
|
4,880
|
|
|
Accounts receivable, net of allowance for doubtful accounts
(1)
|
3,183
|
|
|
3,263
|
|
||
|
Financing receivables
|
3,487
|
|
|
3,396
|
|
||
|
Inventory
|
2,300
|
|
|
2,447
|
|
||
|
Assets held for sale
|
14
|
|
|
6
|
|
||
|
Other current assets
|
2,667
|
|
|
3,280
|
|
||
|
Total current assets
|
15,432
|
|
|
17,272
|
|
||
|
Property, plant and equipment
|
6,141
|
|
|
6,138
|
|
||
|
Long-term financing receivables and other assets
|
9,438
|
|
|
11,359
|
|
||
|
Investments in equity interests
|
2,413
|
|
|
2,398
|
|
||
|
Goodwill
|
17,588
|
|
|
17,537
|
|
||
|
Intangible assets
|
746
|
|
|
789
|
|
||
|
Total assets
|
$
|
51,758
|
|
|
$
|
55,493
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
||
|
Current liabilities:
|
|
|
|
|
|
||
|
Notes payable and short-term borrowings
|
$
|
2,073
|
|
|
$
|
2,005
|
|
|
Accounts payable
|
5,789
|
|
|
6,092
|
|
||
|
Employee compensation and benefits
|
1,142
|
|
|
1,412
|
|
||
|
Taxes on earnings
|
295
|
|
|
378
|
|
||
|
Deferred revenue
|
3,152
|
|
|
3,177
|
|
||
|
Accrued restructuring
|
239
|
|
|
294
|
|
||
|
Other accrued liabilities
|
3,769
|
|
|
3,840
|
|
||
|
Total current liabilities
|
16,459
|
|
|
17,198
|
|
||
|
Long-term debt
|
10,280
|
|
|
10,136
|
|
||
|
Other non-current liabilities
|
6,684
|
|
|
6,885
|
|
||
|
Commitments and contingencies
|
|
|
|
||||
|
Stockholders' equity
|
|
|
|
|
|
||
|
HPE stockholders' equity:
|
|
|
|
|
|
||
|
Preferred stock, $0.01 par value (300 shares authorized; none issued and outstanding at January 31, 2019)
|
—
|
|
|
—
|
|
||
|
Common stock, $0.01 par value (9,600 shares authorized; 1,378 and 1,423 shares issued and outstanding at January 31, 2019 and October 31, 2018, respectively)
|
14
|
|
|
14
|
|
||
|
Additional paid-in capital
|
29,607
|
|
|
30,342
|
|
||
|
Accumulated deficit
|
(8,034
|
)
|
|
(5,899
|
)
|
||
|
Accumulated other comprehensive loss
|
(3,294
|
)
|
|
(3,218
|
)
|
||
|
Total HPE stockholders' equity
|
18,293
|
|
|
21,239
|
|
||
|
Non-controlling interests
|
42
|
|
|
35
|
|
||
|
Total stockholders' equity
|
18,335
|
|
|
21,274
|
|
||
|
Total liabilities and stockholders' equity
|
$
|
51,758
|
|
|
$
|
55,493
|
|
|
|
|
(1)
|
The allowance for doubtful accounts related to accounts receivable was $
37 million
and
$39 million
at
January 31, 2019
and
October 31, 2018
, respectively.
|
|
|
Three Months Ended
January 31, |
||||||
|
|
2019
|
|
2018
|
||||
|
|
In millions
|
||||||
|
Cash flows from operating activities:
|
|
|
|
|
|
||
|
Net earnings
|
$
|
177
|
|
|
$
|
1,436
|
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
|
|
||
|
Depreciation and amortization
|
639
|
|
|
635
|
|
||
|
Stock-based compensation expense
|
75
|
|
|
103
|
|
||
|
Provision for inventory and doubtful accounts
|
42
|
|
|
41
|
|
||
|
Restructuring charges
|
33
|
|
|
174
|
|
||
|
Deferred taxes on earnings
|
370
|
|
|
(1,335
|
)
|
||
|
Earnings from equity interests
|
(15
|
)
|
|
(22
|
)
|
||
|
Other, net
|
46
|
|
|
102
|
|
||
|
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
||
|
Accounts receivable
|
113
|
|
|
(34
|
)
|
||
|
Financing receivables
|
(156
|
)
|
|
(287
|
)
|
||
|
Inventory
|
99
|
|
|
(146
|
)
|
||
|
Accounts payable
|
(256
|
)
|
|
(107
|
)
|
||
|
Taxes on earnings
|
(107
|
)
|
|
(1,009
|
)
|
||
|
Restructuring
|
(110
|
)
|
|
(226
|
)
|
||
|
Other assets and liabilities
|
(568
|
)
|
|
817
|
|
||
|
Net cash provided by operating activities
|
382
|
|
|
142
|
|
||
|
Cash flows from investing activities:
|
|
|
|
|
|
||
|
Investment in property, plant and equipment
|
(729
|
)
|
|
(669
|
)
|
||
|
Proceeds from sale of property, plant and equipment
|
157
|
|
|
115
|
|
||
|
Purchases of available-for-sale securities and other investments
|
(5
|
)
|
|
(3
|
)
|
||
|
Maturities and sales of available-for-sale securities and other investments
|
1
|
|
|
—
|
|
||
|
Financial collateral posted
|
(245
|
)
|
|
(738
|
)
|
||
|
Financial collateral returned
|
281
|
|
|
164
|
|
||
|
Payments made in connection with business acquisitions, net of cash acquired
|
(76
|
)
|
|
—
|
|
||
|
Net cash used in investing activities
|
(616
|
)
|
|
(1,131
|
)
|
||
|
Cash flows from financing activities:
|
|
|
|
|
|
||
|
Short-term borrowings with original maturities less than 90 days, net
|
(12
|
)
|
|
(3
|
)
|
||
|
Proceeds from debt, net of issuance costs
|
389
|
|
|
270
|
|
||
|
Payment of debt
|
(334
|
)
|
|
(253
|
)
|
||
|
Net proceeds related to stock-based award activities
|
(17
|
)
|
|
17
|
|
||
|
Repurchase of common stock
|
(814
|
)
|
|
(742
|
)
|
||
|
Net transfer of cash and cash equivalents to Everett
|
—
|
|
|
(28
|
)
|
||
|
Net transfer of cash and cash equivalents to Seattle
|
—
|
|
|
(70
|
)
|
||
|
Cash dividends paid
|
(157
|
)
|
|
(120
|
)
|
||
|
Net cash used in financing activities
|
(945
|
)
|
|
(929
|
)
|
||
|
Decrease in cash, cash equivalents and restricted cash
|
(1,179
|
)
|
|
(1,918
|
)
|
||
|
Cash, cash equivalents and restricted cash at beginning of period
|
5,084
|
|
|
9,592
|
|
||
|
Cash, cash equivalents and restricted cash at end of period
|
$
|
3,905
|
|
|
$
|
7,674
|
|
|
|
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
|
|
|
44
|
|
|
11,403
|
|
|||
|
Subtotal assets
|
$
|
20,349
|
|
|
$
|
118
|
|
|
$
|
20,467
|
|
|
Liabilities
|
|
|
|
|
|
||||||
|
Taxes on earnings
|
$
|
378
|
|
|
$
|
10
|
|
|
$
|
388
|
|
|
Deferred revenue
|
3,177
|
|
|
(36
|
)
|
|
3,141
|
|
|||
|
Other accrued liabilities
|
3,840
|
|
|
31
|
|
|
3,871
|
|
|||
|
Other non-current liabilities
|
6,885
|
|
|
(30
|
)
|
|
6,855
|
|
|||
|
Subtotal liabilities
|
$
|
14,280
|
|
|
$
|
(25
|
)
|
|
$
|
14,255
|
|
|
Stockholders' equity
|
|
|
|
|
|
||||||
|
Accumulated deficit
|
$
|
(5,899
|
)
|
|
$
|
143
|
|
|
$
|
(5,756
|
)
|
|
Subtotal stockholders' equity
|
$
|
(5,899
|
)
|
|
$
|
143
|
|
|
$
|
(5,756
|
)
|
|
Subtotal liabilities and stockholders' equity
|
$
|
8,381
|
|
|
$
|
118
|
|
|
$
|
8,499
|
|
|
•
|
Hybrid IT Product includes Compute and Storage.
|
|
◦
|
Compute.
To address the full array of the customers' computing needs, HPE's compute portfolio 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 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 HPE Apollo for high performance computing and artificial intelligence, HPE Cloudline for cloud data centers, HPE Edgeline for computing at the network edge, HPE Integrity for mission-critical applications, and HPE SimpliVity, a hyperconverged infrastructure for virtualized workloads.
|
|
◦
|
Storage.
With storage offerings that are AI-driven and built for cloud environments, 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 3PAR Storage and HPE Nimble Storage all-flash arrays for mission critical workloads and general purpose workloads, respectively, and big data solutions running on HPE Apollo Servers. Storage also provides comprehensive data protection with HPE StoreOnce and HPE Recovery Manager Central, solutions for secondary workloads and traditional tape, storage networking and disk products, such as HPE MSA and HPE XP.
|
|
•
|
HPE Pointnext creates preferred IT experiences that power the digital business. The HPE Pointnext 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. HPE Pointnext 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 offerings includes Operational Services, and Advisory and Professional Services.
|
|
•
|
HPE Aruba Product includes wired and wireless local area network hardware products such as Wi-Fi access points, switches, routers, sensors, and software products that include network management, network access control, analytics and assurance, and location services software.
|
|
•
|
HPE Aruba Services offers professional and support services for the Intelligent Edge portfolio of products.
|
|
|
Hybrid IT
|
|
Intelligent Edge
|
|
Financial
Services |
|
Corporate
Investments |
|
Total
|
||||||||||
|
|
In millions
|
||||||||||||||||||
|
Three months ended January 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Net revenue
|
$
|
5,832
|
|
|
$
|
687
|
|
|
$
|
916
|
|
|
$
|
118
|
|
|
$
|
7,553
|
|
|
Intersegment net revenue and other
|
138
|
|
|
(1
|
)
|
|
3
|
|
|
—
|
|
|
140
|
|
|||||
|
Total segment net revenue
|
$
|
5,970
|
|
|
$
|
686
|
|
|
$
|
919
|
|
|
$
|
118
|
|
|
$
|
7,693
|
|
|
Segment earnings (loss) from operations
|
$
|
675
|
|
|
$
|
9
|
|
|
$
|
77
|
|
|
$
|
(28
|
)
|
|
$
|
733
|
|
|
Three months ended January 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Net revenue
|
$
|
6,000
|
|
|
$
|
652
|
|
|
$
|
886
|
|
|
$
|
136
|
|
|
$
|
7,674
|
|
|
Intersegment net revenue and other
|
158
|
|
|
4
|
|
|
2
|
|
|
—
|
|
|
164
|
|
|||||
|
Total segment net revenue
|
$
|
6,158
|
|
|
$
|
656
|
|
|
$
|
888
|
|
|
$
|
136
|
|
|
$
|
7,838
|
|
|
Segment earnings (loss) from operations
|
$
|
572
|
|
|
$
|
34
|
|
|
$
|
71
|
|
|
$
|
(26
|
)
|
|
$
|
651
|
|
|
|
Three Months Ended
January 31, |
||||||
|
|
2019
|
|
2018
|
||||
|
|
In millions
|
||||||
|
Net Revenue:
|
|
|
|
|
|||
|
Total segments
|
$
|
7,693
|
|
|
$
|
7,838
|
|
|
Eliminations of intersegment net revenue and other
|
(140
|
)
|
|
(164
|
)
|
||
|
Total Hewlett Packard Enterprise condensed consolidated net revenue
|
$
|
7,553
|
|
|
$
|
7,674
|
|
|
Earnings before taxes:
|
|
|
|
|
|
||
|
Total segment earnings from operations
|
$
|
733
|
|
|
$
|
651
|
|
|
Unallocated corporate costs and eliminations
|
(50
|
)
|
|
(59
|
)
|
||
|
Unallocated stock-based compensation expense
|
(14
|
)
|
|
(30
|
)
|
||
|
Amortization of intangible assets
|
(72
|
)
|
|
(78
|
)
|
||
|
Restructuring charges
|
—
|
|
|
(5
|
)
|
||
|
Transformation costs
|
(78
|
)
|
|
(245
|
)
|
||
|
Acquisition, disposition and other related charges
|
(63
|
)
|
|
(30
|
)
|
||
|
Separation costs
|
—
|
|
|
24
|
|
||
|
Interest and other, net
|
(51
|
)
|
|
(21
|
)
|
||
|
Tax indemnification adjustments
|
219
|
|
|
(919
|
)
|
||
|
Non-service net periodic benefit credit
|
16
|
|
|
33
|
|
||
|
Earnings from equity interests
|
15
|
|
|
22
|
|
||
|
Total Hewlett Packard Enterprise condensed consolidated earnings (loss) from continuing operations before taxes
|
$
|
655
|
|
|
$
|
(657
|
)
|
|
|
Three Months Ended
January 31, |
||||||
|
|
2019
|
|
2018
|
||||
|
|
In millions
|
||||||
|
Hybrid IT
|
|
|
|
||||
|
Hybrid IT Product
|
|
|
|
||||
|
Compute
|
$
|
3,402
|
|
|
$
|
3,518
|
|
|
Storage
|
975
|
|
|
948
|
|
||
|
Total Hybrid IT Product
|
4,377
|
|
|
4,466
|
|
||
|
HPE Pointnext
|
1,593
|
|
|
1,692
|
|
||
|
Total Hybrid IT
|
5,970
|
|
|
6,158
|
|
||
|
Intelligent Edge
|
|
|
|
||||
|
HPE Aruba Product
|
597
|
|
|
582
|
|
||
|
HPE Aruba Services
|
89
|
|
|
74
|
|
||
|
Total Intelligent Edge
|
686
|
|
|
656
|
|
||
|
Financial Services
|
919
|
|
|
888
|
|
||
|
Corporate Investments
|
118
|
|
|
136
|
|
||
|
Total segment net revenue
|
7,693
|
|
|
7,838
|
|
||
|
Eliminations of intersegment net revenue and other
|
(140
|
)
|
|
(164
|
)
|
||
|
Total Hewlett Packard Enterprise condensed consolidated net revenue
(1)
|
$
|
7,553
|
|
|
$
|
7,674
|
|
|
|
|
(1)
|
Revenue from leasing arrangements within FS and Eliminations of intersegment net revenue and other are not subject to the new revenue standard.
|
|
|
Three Months Ended
January 31, |
||||||
|
|
2019
|
|
2018
|
||||
|
|
In millions
|
||||||
|
Americas
|
$
|
3,005
|
|
|
$
|
3,002
|
|
|
Europe, Middle East and Africa
|
2,910
|
|
|
2,837
|
|
||
|
Asia Pacific and Japan
|
1,638
|
|
|
1,835
|
|
||
|
Total Hewlett Packard Enterprise condensed consolidated net revenue
(1)
|
$
|
7,553
|
|
|
$
|
7,674
|
|
|
|
|
(1)
|
Revenue from leasing arrangements within FS and Eliminations of intersegment net revenue and other are not subject to the new revenue standard.
|
|
|
2015 Plan
|
|
2012 Plan
|
|
|
||||||||||||||
|
|
Employee
Severance
|
|
Infrastructure
and other
|
|
Employee
Severance
and EER
|
|
Infrastructure
and other
|
|
Total
|
||||||||||
|
|
In millions
|
||||||||||||||||||
|
Liability as of October 31, 2018
|
$
|
62
|
|
|
$
|
10
|
|
|
$
|
11
|
|
|
$
|
1
|
|
|
$
|
84
|
|
|
Cash payments
|
(9
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
—
|
|
|
(12
|
)
|
|||||
|
Liability as of January 31, 2019
|
$
|
53
|
|
|
$
|
9
|
|
|
$
|
9
|
|
|
$
|
1
|
|
|
$
|
72
|
|
|
Total costs incurred to date, as of January 31, 2019
|
$
|
751
|
|
|
$
|
78
|
|
|
$
|
1,268
|
|
|
$
|
145
|
|
|
$
|
2,242
|
|
|
Total costs expected to be incurred, as of January 31, 2019
|
$
|
751
|
|
|
$
|
78
|
|
|
$
|
1,268
|
|
|
$
|
145
|
|
|
$
|
2,242
|
|
|
|
Three months ended January 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
In millions
|
||||||
|
Program management
(1)
|
$
|
11
|
|
|
$
|
24
|
|
|
IT costs
|
27
|
|
|
33
|
|
||
|
Restructuring charges
(2)
|
33
|
|
|
171
|
|
||
|
Gain on real estate sales
|
—
|
|
|
(1
|
)
|
||
|
Other
(3)
|
12
|
|
|
18
|
|
||
|
Total
|
$
|
83
|
|
|
$
|
245
|
|
|
|
|
(1)
|
Primarily consists of consulting fees and other direct costs attributable to the design and implementation of the HPE Next initiative.
|
|
(2)
|
For the three months ended January 31, 2019,
$5 million
of these costs were recorded in Non-service net periodic benefit credit in the Condensed Consolidated Statement of Earnings.
|
|
(3)
|
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, 2018
|
$
|
291
|
|
|
$
|
33
|
|
|
Charges
|
28
|
|
|
5
|
|
||
|
Cash payments
|
(91
|
)
|
|
(7
|
)
|
||
|
Non-cash items
|
(4
|
)
|
|
(2
|
)
|
||
|
Liability as of January 31, 2019
|
$
|
224
|
|
|
$
|
29
|
|
|
Total costs incurred to date, as of January 31, 2019
|
$
|
794
|
|
|
$
|
66
|
|
|
Total costs expected to be incurred, as of January 31, 2019
|
$
|
1,200
|
|
|
$
|
180
|
|
|
|
Three months ended January 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
In millions
|
||||||
|
Service cost
|
$
|
21
|
|
|
$
|
26
|
|
|
Interest cost
(1)
|
55
|
|
|
55
|
|
||
|
Expected return on plan assets
(1)
|
(130
|
)
|
|
(139
|
)
|
||
|
Amortization and deferrals
(1)
:
|
|
|
|
|
|
||
|
Actuarial loss
|
57
|
|
|
52
|
|
||
|
Prior service benefit
|
(4
|
)
|
|
(4
|
)
|
||
|
Net periodic benefit (credit) cost
(1)
|
(1
|
)
|
|
(10
|
)
|
||
|
Settlement loss
(1)
|
5
|
|
|
—
|
|
||
|
Special termination benefits
(1)
|
—
|
|
|
2
|
|
||
|
Net benefit cost (credit) cost
|
$
|
4
|
|
|
$
|
(8
|
)
|
|
|
|
(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, 2019
|
|
October 31, 2018
|
||||
|
|
In millions
|
||||||
|
Deferred tax assets - long-term
|
$
|
2,210
|
|
|
$
|
2,403
|
|
|
Deferred tax liabilities - long-term
|
(300
|
)
|
|
(228
|
)
|
||
|
Deferred tax assets net of deferred tax liabilities
|
$
|
1,910
|
|
|
$
|
2,175
|
|
|
|
As of
|
||||||
|
|
January 31, 2019
|
|
October 31, 2018
|
||||
|
|
In millions
|
||||||
|
Cash and cash equivalents
|
$
|
3,781
|
|
|
$
|
4,880
|
|
|
Restricted cash
(1)
|
124
|
|
|
204
|
|
||
|
Cash, cash equivalents and restricted cash
(2)
|
$
|
3,905
|
|
|
$
|
5,084
|
|
|
|
|
|
As of
|
||||||
|
|
January 31, 2019
|
|
October 31, 2018
|
||||
|
|
In millions
|
||||||
|
Finished goods
|
$
|
1,283
|
|
|
$
|
1,274
|
|
|
Purchased parts and fabricated assemblies
|
1,017
|
|
|
1,173
|
|
||
|
Total
|
$
|
2,300
|
|
|
$
|
2,447
|
|
|
|
As of
|
||||||
|
|
January 31, 2019
|
|
October 31, 2018
|
||||
|
|
In millions
|
||||||
|
Land
|
$
|
294
|
|
|
$
|
294
|
|
|
Buildings and leasehold improvements
|
2,135
|
|
|
2,103
|
|
||
|
Machinery and equipment, including equipment held for lease
|
9,368
|
|
|
9,419
|
|
||
|
|
11,797
|
|
|
11,816
|
|
||
|
Accumulated depreciation
|
(5,656
|
)
|
|
(5,678
|
)
|
||
|
Total
|
$
|
6,141
|
|
|
$
|
6,138
|
|
|
|
As of
|
||||||
|
|
January 31, 2019
|
|
October 31, 2018
|
||||
|
|
In millions
|
||||||
|
Current portion of long-term debt
|
$
|
1,196
|
|
|
$
|
1,196
|
|
|
FS commercial paper
|
459
|
|
|
392
|
|
||
|
Notes payable to banks, lines of credit and other
(1)
|
418
|
|
|
417
|
|
||
|
Total
|
$
|
2,073
|
|
|
$
|
2,005
|
|
|
|
|
(1)
|
As of
January 31, 2019
and
October 31, 2018
, notes payable to banks, lines of credit and other includes
$359 million
and
$361 million
, respectively, of borrowing and funding-related activity associated with FS and its subsidiaries.
|
|
|
Three Months Ended
January 31, 2019 |
||
|
|
In millions
|
||
|
Balance at beginning of period
|
$
|
430
|
|
|
Accruals for warranties issued
|
59
|
|
|
|
Adjustments related to pre-existing warranties
|
(3
|
)
|
|
|
Settlements made
|
(74
|
)
|
|
|
Balance at end of period
|
$
|
412
|
|
|
|
As of
|
||||||
|
|
January 31, 2019
|
|
October 31, 2018
|
||||
|
|
In millions
|
||||||
|
Accounts receivable, net
|
|
|
|
||||
|
Accounts receivable
|
$
|
3,023
|
|
|
$
|
3,117
|
|
|
Unbilled receivables
|
197
|
|
|
185
|
|
||
|
Allowance for doubtful accounts
|
(37
|
)
|
|
(39
|
)
|
||
|
Total
|
$
|
3,183
|
|
|
$
|
3,263
|
|
|
|
As of
|
||||||
|
|
January 31, 2019
|
|
October 31, 2018
|
||||
|
|
In millions
|
||||||
|
Minimum lease payments receivable
|
$
|
8,868
|
|
|
$
|
8,691
|
|
|
Unguaranteed residual value
|
309
|
|
|
297
|
|
||
|
Unearned income
|
(766
|
)
|
|
(732
|
)
|
||
|
Financing receivables, gross
|
8,411
|
|
|
8,256
|
|
||
|
Allowance for doubtful accounts
|
(127
|
)
|
|
(120
|
)
|
||
|
Financing receivables, net
|
8,284
|
|
|
8,136
|
|
||
|
Less: current portion
(1)
|
(3,487
|
)
|
|
(3,396
|
)
|
||
|
Amounts due after one year, net
(1)
|
$
|
4,797
|
|
|
$
|
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 Condensed Consolidated Balance Sheets.
|
|
|
As of
|
||||||
|
|
January 31, 2019
|
|
October 31, 2018
|
||||
|
|
In millions
|
||||||
|
Risk Rating:
|
|
|
|
|
|
||
|
Low
|
$
|
4,268
|
|
|
$
|
4,238
|
|
|
Moderate
|
3,920
|
|
|
3,805
|
|
||
|
High
|
223
|
|
|
213
|
|
||
|
Total
|
$
|
8,411
|
|
|
$
|
8,256
|
|
|
|
As of
|
||||||
|
|
January 31, 2019
|
|
October 31, 2018
|
||||
|
|
In millions
|
||||||
|
Balance at beginning of period
|
$
|
120
|
|
|
$
|
86
|
|
|
Provision for doubtful accounts
|
8
|
|
|
49
|
|
||
|
Write-offs
|
(1
|
)
|
|
(15
|
)
|
||
|
Balance at end of period
|
$
|
127
|
|
|
$
|
120
|
|
|
|
As of
|
||||||
|
|
January 31, 2019
|
|
October 31, 2018
|
||||
|
|
In millions
|
||||||
|
Gross financing receivables collectively evaluated for loss
|
$
|
8,026
|
|
|
$
|
7,917
|
|
|
Gross financing receivables individually evaluated for loss
|
385
|
|
|
339
|
|
||
|
Total
|
$
|
8,411
|
|
|
$
|
8,256
|
|
|
Allowance for financing receivables collectively evaluated for loss
|
$
|
81
|
|
|
$
|
78
|
|
|
Allowance for financing receivables individually evaluated for loss
|
46
|
|
|
42
|
|
||
|
Total
|
$
|
127
|
|
|
$
|
120
|
|
|
|
As of
|
||||||
|
|
January 31, 2019
|
|
October 31, 2018
|
||||
|
|
In millions
|
||||||
|
Billed:
(1)
|
|
|
|
|
|
||
|
Current 1-30 days
|
$
|
300
|
|
|
$
|
275
|
|
|
Past due 31-60 days
|
45
|
|
|
42
|
|
||
|
Past due 61-90 days
|
25
|
|
|
13
|
|
||
|
Past due > 90 days
|
87
|
|
|
74
|
|
||
|
Unbilled sales-type and direct-financing lease receivables
|
7,954
|
|
|
7,852
|
|
||
|
Total gross financing receivables
|
$
|
8,411
|
|
|
$
|
8,256
|
|
|
Gross financing receivables on non-accrual status
(2)
|
$
|
261
|
|
|
$
|
226
|
|
|
Gross financing receivables 90 days past due and still accruing interest
(2)
|
$
|
124
|
|
|
$
|
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
|
||||||
|
|
January 31, 2019
|
|
October 31, 2018
|
||||
|
|
In millions
|
||||||
|
Equipment leased to customers
|
$
|
7,167
|
|
|
$
|
7,290
|
|
|
Accumulated depreciation
|
(3,000
|
)
|
|
(3,078
|
)
|
||
|
Total
|
$
|
4,167
|
|
|
$
|
4,212
|
|
|
|
Hybrid IT
|
|
Intelligent Edge
|
|
Financial Services
|
|
Total
|
||||||||
|
|
In millions
|
||||||||||||||
|
Balance at October 31, 2018
(1) (2)
|
$
|
15,479
|
|
|
$
|
1,914
|
|
|
$
|
144
|
|
|
$
|
17,537
|
|
|
Goodwill acquired during the period
(3)
|
49
|
|
|
—
|
|
|
—
|
|
|
49
|
|
||||
|
Goodwill adjustments
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
|
Balance at January 31, 2019
(2)
|
$
|
15,530
|
|
|
$
|
1,914
|
|
|
$
|
144
|
|
|
$
|
17,588
|
|
|
|
|
(1)
|
As a result of the organizational realignments effective during the first quarter of fiscal 2019, which are described in detail in Note 2, "Segment Information", goodwill was reclassified to the respective segments as of the beginning of the period using a relative fair value approach.
|
|
(2)
|
Goodwill is net of 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.
|
|
(3)
|
Goodwill acquired in connection with the acquisition of BlueData.
|
|
|
As of January 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
|
$
|
—
|
|
|
$
|
521
|
|
|
$
|
—
|
|
|
$
|
521
|
|
|
$
|
—
|
|
|
$
|
781
|
|
|
$
|
—
|
|
|
$
|
781
|
|
|
Money market funds
|
1,722
|
|
|
—
|
|
|
—
|
|
|
1,722
|
|
|
2,340
|
|
|
—
|
|
|
—
|
|
|
2,340
|
|
||||||||
|
Foreign bonds
|
7
|
|
|
124
|
|
|
—
|
|
|
131
|
|
|
7
|
|
|
124
|
|
|
—
|
|
|
131
|
|
||||||||
|
Other debt securities
|
—
|
|
|
—
|
|
|
24
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|
25
|
|
||||||||
|
Derivative Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Foreign exchange contracts
|
—
|
|
|
274
|
|
|
—
|
|
|
274
|
|
|
—
|
|
|
496
|
|
|
—
|
|
|
496
|
|
||||||||
|
Other derivatives
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
|
Total assets
|
$
|
1,729
|
|
|
$
|
924
|
|
|
$
|
24
|
|
|
$
|
2,677
|
|
|
$
|
2,347
|
|
|
$
|
1,401
|
|
|
$
|
25
|
|
|
$
|
3,773
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Derivative Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Interest rate contracts
|
$
|
—
|
|
|
$
|
195
|
|
|
$
|
—
|
|
|
$
|
195
|
|
|
$
|
—
|
|
|
$
|
353
|
|
|
$
|
—
|
|
|
$
|
353
|
|
|
Foreign exchange contracts
|
—
|
|
|
206
|
|
|
—
|
|
|
206
|
|
|
—
|
|
|
117
|
|
|
—
|
|
|
117
|
|
||||||||
|
Other derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
||||||||
|
Total liabilities
|
$
|
—
|
|
|
$
|
401
|
|
|
$
|
—
|
|
|
$
|
401
|
|
|
$
|
—
|
|
|
$
|
476
|
|
|
$
|
—
|
|
|
$
|
476
|
|
|
|
As of January 31, 2019
|
|
As of October 31, 2018
|
||||||||||||||||||||||||||||
|
|
Cost
|
|
Gross
Unrealized
Gain
|
|
Gross
Unrealized
Loss
|
|
Fair
Value
|
|
Cost
|
|
Gross
Unrealized
Gain
|
|
Gross
Unrealized
Loss
|
|
Fair
Value
|
||||||||||||||||
|
|
In millions
|
||||||||||||||||||||||||||||||
|
Cash Equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Time deposits
|
$
|
521
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
521
|
|
|
$
|
781
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
781
|
|
|
Money market funds
|
1,722
|
|
|
—
|
|
|
—
|
|
|
1,722
|
|
|
2,340
|
|
|
—
|
|
|
—
|
|
|
2,340
|
|
||||||||
|
Total cash equivalents
|
2,243
|
|
|
—
|
|
|
—
|
|
|
2,243
|
|
|
3,121
|
|
|
—
|
|
|
—
|
|
|
3,121
|
|
||||||||
|
Available-for-Sale Investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Foreign bonds
|
114
|
|
|
17
|
|
|
—
|
|
|
131
|
|
|
113
|
|
|
18
|
|
|
—
|
|
|
131
|
|
||||||||
|
Other debt securities
|
25
|
|
|
—
|
|
|
(1
|
)
|
|
24
|
|
|
26
|
|
|
—
|
|
|
(1
|
)
|
|
25
|
|
||||||||
|
Total available-for-sale investments
|
139
|
|
|
17
|
|
|
(1
|
)
|
|
155
|
|
|
139
|
|
|
18
|
|
|
(1
|
)
|
|
156
|
|
||||||||
|
Total cash equivalents and available-for-sale debt investments
|
$
|
2,382
|
|
|
$
|
17
|
|
|
$
|
(1
|
)
|
|
$
|
2,398
|
|
|
$
|
3,260
|
|
|
$
|
18
|
|
|
$
|
(1
|
)
|
|
$
|
3,277
|
|
|
|
January 31, 2019
|
||||||
|
|
Amortized Cost
|
|
Fair Value
|
||||
|
|
In millions
|
||||||
|
Due in more than five years
|
$
|
139
|
|
|
$
|
155
|
|
|
|
As of January 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
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
195
|
|
|
$
|
6,850
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
353
|
|
|
Cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Foreign currency contracts
|
8,492
|
|
|
126
|
|
|
76
|
|
|
54
|
|
|
34
|
|
|
8,423
|
|
|
270
|
|
|
107
|
|
|
11
|
|
|
15
|
|
||||||||||
|
Net investment hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Foreign currency contracts
|
1,776
|
|
|
16
|
|
|
25
|
|
|
24
|
|
|
21
|
|
|
1,737
|
|
|
32
|
|
|
41
|
|
|
13
|
|
|
11
|
|
||||||||||
|
Total derivatives designated as hedging instruments
|
17,118
|
|
|
142
|
|
|
101
|
|
|
78
|
|
|
250
|
|
|
17,010
|
|
|
302
|
|
|
148
|
|
|
24
|
|
|
379
|
|
||||||||||
|
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Foreign currency contracts
|
7,107
|
|
|
30
|
|
|
1
|
|
|
65
|
|
|
8
|
|
|
6,780
|
|
|
41
|
|
|
5
|
|
|
55
|
|
|
12
|
|
||||||||||
|
Other derivatives
|
106
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
104
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
||||||||||
|
Total derivatives not designated as hedging instruments
|
7,213
|
|
|
35
|
|
|
1
|
|
|
65
|
|
|
8
|
|
|
6,884
|
|
|
41
|
|
|
5
|
|
|
61
|
|
|
12
|
|
||||||||||
|
Total derivatives
|
$
|
24,331
|
|
|
$
|
177
|
|
|
$
|
102
|
|
|
$
|
143
|
|
|
$
|
258
|
|
|
$
|
23,894
|
|
|
$
|
343
|
|
|
$
|
153
|
|
|
$
|
85
|
|
|
$
|
391
|
|
|
|
As of January 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
|
$
|
279
|
|
|
$
|
—
|
|
|
$
|
279
|
|
|
$
|
142
|
|
|
$
|
110
|
|
|
(1)
|
|
$
|
27
|
|
|
Derivative liabilities
|
$
|
401
|
|
|
$
|
—
|
|
|
$
|
401
|
|
|
$
|
142
|
|
|
$
|
171
|
|
|
(2)
|
|
$
|
88
|
|
|
|
As of October 31, 2018
|
||||||||||||||||||||||||
|
|
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
|
|
|
$
|
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 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, 2019, of the
$171 million
of collateral posted,
$162 million
was in cash and,
$9 million
was through re-use of counterparty collateral. As of October 31, 2018,
$302 million
of collateral posted was entirely cash.
|
|
|
|
Gains (Losses) Recognized in Earnings on Derivative and Related Hedged Item
|
||||||||||||
|
Derivative Instrument
|
|
Location
|
|
Three months ended January 31, 2019
|
|
Hedged Item
|
|
Location
|
|
Three months ended January 31, 2019
|
||||
|
|
|
|
|
In millions
|
|
|
|
|
|
In millions
|
||||
|
Interest rate contracts
|
|
Interest and other, net
|
|
$
|
158
|
|
|
Fixed-rate debt
|
|
Interest and other, net
|
|
$
|
(158
|
)
|
|
|
|
Gains (Losses) Recognized in Earnings on Derivative and Related Hedged Item
|
||||||||||||
|
Derivative Instrument
|
|
Location
|
|
Three months ended January 31, 2018
|
|
Hedged Item
|
|
Location
|
|
Three months ended January 31, 2018
|
||||
|
|
|
|
|
In millions
|
|
|
|
|
|
In millions
|
||||
|
Interest rate contracts
|
|
Interest and other, net
|
|
$
|
(138
|
)
|
|
Fixed-rate debt
|
|
Interest and other, net
|
|
$
|
138
|
|
|
|
Gains (Losses) Recognized in Other Comprehensive Income ("OCI") on Derivatives (Effective Portion)
|
|
Gains (Losses) Reclassified from Accumulated
OCI Into Earnings (Effective Portion)
|
||||||
|
|
Three months ended January 31, 2019
|
|
Location
|
|
Three months ended January 31, 2019
|
||||
|
|
In millions
|
|
|
|
In millions
|
||||
|
Cash flow hedges:
|
|
|
|
|
|
|
|
||
|
Foreign currency contracts
|
$
|
(37
|
)
|
|
Net revenue
|
|
$
|
80
|
|
|
Foreign currency contracts
|
71
|
|
|
Interest and other, net
|
|
53
|
|
||
|
Total cash flow hedges
|
$
|
34
|
|
|
Net earnings from continuing operations
|
|
$
|
133
|
|
|
Net investment hedges:
|
|
|
|
|
|
|
|
||
|
Foreign currency contracts
|
$
|
(43
|
)
|
|
Interest and other, net
|
|
$
|
—
|
|
|
|
Gains (Losses) Recognized in Other Comprehensive Income ("OCI") on Derivatives (Effective Portion)
|
|
Gains (Losses) Reclassified from Accumulated
OCI Into Earnings (Effective Portion)
|
||||||
|
|
Three months ended January 31, 2018
|
|
Location
|
|
Three months ended January 31, 2018
|
||||
|
|
In millions
|
|
|
|
In millions
|
||||
|
Cash flow hedges:
|
|
|
|
|
|
|
|
||
|
Foreign currency contracts
|
$
|
(179
|
)
|
|
Net revenue
|
|
$
|
(46
|
)
|
|
Foreign currency contracts
|
(2
|
)
|
|
Interest and other, net
|
|
16
|
|
||
|
Total cash flow hedges
|
$
|
(181
|
)
|
|
Net earnings from continuing operations
|
|
$
|
(30
|
)
|
|
Net investment hedges:
|
|
|
|
|
|
|
|
||
|
Foreign currency contracts
|
$
|
(82
|
)
|
|
Interest and other, net
|
|
$
|
—
|
|
|
|
|
|
Gains (Losses) Recognized in Earnings on Derivatives
|
||||||
|
|
Location
|
|
Three months ended January 31, 2019
|
|
Three months ended January 31, 2018
|
||||
|
|
|
|
In millions
|
||||||
|
Foreign currency contracts
|
Interest and other, net
|
|
$
|
(231
|
)
|
|
$
|
(390
|
)
|
|
Other derivatives
|
Interest and other, net
|
|
10
|
|
|
1
|
|
||
|
Total
|
|
|
$
|
(221
|
)
|
|
$
|
(389
|
)
|
|
|
Three months ended January 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
In millions
|
||||||
|
Taxes on change in net unrealized losses on cash flow hedges:
|
|
|
|
|
|
||
|
Tax (provision) benefit on net unrealized gains (losses) arising during the period
|
$
|
(1
|
)
|
|
$
|
25
|
|
|
Tax provision (benefit) on net (gains) losses reclassified into earnings
|
16
|
|
|
(4
|
)
|
||
|
|
15
|
|
|
21
|
|
||
|
Taxes on change in unrealized components of defined benefit plans:
|
|
|
|
|
|
||
|
Tax benefit (provision) on (losses) gains arising during the period
|
10
|
|
|
(1
|
)
|
||
|
Tax provision on amortization of actuarial loss and prior service benefit
|
(3
|
)
|
|
(3
|
)
|
||
|
Tax provision on curtailments, settlements and other
|
(9
|
)
|
|
(7
|
)
|
||
|
|
(2
|
)
|
|
(11
|
)
|
||
|
Tax provision on change in cumulative translation adjustment
|
(3
|
)
|
|
(3
|
)
|
||
|
Tax benefit on other comprehensive income
|
$
|
10
|
|
|
$
|
7
|
|
|
|
Three months ended January 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
In millions
|
||||||
|
Other comprehensive loss, net of taxes:
|
|
|
|
|
|
||
|
Change in net unrealized (losses) gains on available-for-sale securities:
|
|
|
|
|
|
||
|
Net unrealized gains arising during the period
|
$
|
2
|
|
|
$
|
1
|
|
|
(Gains) losses reclassified into earnings
|
(3
|
)
|
|
8
|
|
||
|
|
(1
|
)
|
|
9
|
|
||
|
Change in net unrealized losses on cash flow hedges:
|
|
|
|
|
|
||
|
Net unrealized gains (losses) arising during the period
|
33
|
|
|
(156
|
)
|
||
|
Net (gains) losses reclassified into earnings
(1)
|
(117
|
)
|
|
26
|
|
||
|
|
(84
|
)
|
|
(130
|
)
|
||
|
Change in unrealized components of defined benefit plans:
|
|
|
|
|
|
||
|
(Losses) gains arising during the period
|
(45
|
)
|
|
1
|
|
||
|
Amortization of actuarial loss and prior service benefit
(2)
|
49
|
|
|
44
|
|
||
|
Curtailments, settlements and other
|
(4
|
)
|
|
(7
|
)
|
||
|
|
—
|
|
|
38
|
|
||
|
Change in cumulative translation adjustment
|
9
|
|
|
23
|
|
||
|
Other comprehensive loss, net of taxes
|
$
|
(76
|
)
|
|
$
|
(60
|
)
|
|
|
|
(1)
|
For more details on the reclassification of pre-tax net (gains) losses on cash flow hedges into the Condensed Consolidated Statements of Earnings, see Note 11, "Financial Instruments".
|
|
(2)
|
These components are included in the computation of net pension and post-retirement benefit cost in Note 5, "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
|
2
|
|
|
33
|
|
|
(45
|
)
|
|
9
|
|
|
(1
|
)
|
|||||
|
Reclassifications of (gains) losses into earnings
|
(3
|
)
|
|
(117
|
)
|
|
45
|
|
|
—
|
|
|
(75
|
)
|
|||||
|
Balance at end of period
|
$
|
16
|
|
|
$
|
22
|
|
|
$
|
(2,922
|
)
|
|
$
|
(410
|
)
|
|
$
|
(3,294
|
)
|
|
|
Three months ended January 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
In millions, except per share amounts
|
||||||
|
Numerator:
|
|
|
|
|
|
||
|
Net earnings from continuing operations
|
$
|
177
|
|
|
$
|
1,482
|
|
|
Net loss from discontinued operations
|
—
|
|
|
(46
|
)
|
||
|
Net earnings
|
$
|
177
|
|
|
$
|
1,436
|
|
|
Denominator:
|
|
|
|
|
|
||
|
Weighted-average shares used to compute basic net EPS
|
1,401
|
|
|
1,591
|
|
||
|
Dilutive effect of employee stock plans
|
11
|
|
|
28
|
|
||
|
Weighted-average shares used to compute diluted net EPS
|
1,412
|
|
|
1,619
|
|
||
|
Basic net earnings (loss) per share:
|
|
|
|
|
|
||
|
Continuing operations
|
$
|
0.13
|
|
|
$
|
0.93
|
|
|
Discontinued operations
|
—
|
|
|
(0.03
|
)
|
||
|
Basic net earnings per share
|
$
|
0.13
|
|
|
$
|
0.90
|
|
|
Diluted net earnings (loss) per share:
|
|
|
|
||||
|
Continuing operations
|
$
|
0.13
|
|
|
$
|
0.92
|
|
|
Discontinued operations
(1)
|
—
|
|
|
(0.03
|
)
|
||
|
Diluted net earnings per share
|
$
|
0.13
|
|
|
$
|
0.89
|
|
|
Anti-dilutive weighted-average stock awards
(2)
|
7
|
|
|
7
|
|
||
|
|
|
(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
|
||||||
|
|
January 31, 2019
|
|
October 31, 2018
|
||||
|
|
In millions
|
||||||
|
Litigation matters and other contingencies
|
|
|
|
||||
|
Receivable
|
$
|
104
|
|
|
$
|
104
|
|
|
Payable
|
$
|
65
|
|
|
$
|
83
|
|
|
|
|
|
|
||||
|
Income tax related indemnification
(1)
|
|
|
|
||||
|
Net indemnification receivable
-
long-term
(2)
|
$
|
302
|
|
|
$
|
16
|
|
|
Net indemnification receivable
-
short-term
|
$
|
17
|
|
|
$
|
17
|
|
|
Net indemnification payable
-
long-term
|
$
|
9
|
|
|
$
|
9
|
|
|
Net indemnification payable
-
short-term
|
$
|
12
|
|
|
$
|
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)
|
For the three months ended January 31, 2019, the increase in Net indemnification receivable - long-term was due primarily to the effects of U.S. tax reform on tax attributes related to fiscal periods prior to the Separation.
|
|
•
|
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 the
three months ended January 31, 2019
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, 2019
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
|
|
Hybrid IT
|
|
Intelligent Edge
|
|
Financial Services
|
|
Corporate
Investments
|
||||||||||
|
|
Dollars in millions, except for per share amounts
|
||||||||||||||||||
|
Net revenue
(1)
|
$
|
7,553
|
|
|
$
|
5,970
|
|
|
$
|
686
|
|
|
$
|
919
|
|
|
$
|
118
|
|
|
Year-over-year change %
|
|
(1.6
|
)%
|
|
|
(3.1
|
)%
|
|
|
4.6
|
%
|
|
|
3.5
|
%
|
|
|
(13.2
|
)%
|
|
Earnings (loss) from continuing operations
(2)
|
$
|
456
|
|
|
$
|
675
|
|
|
$
|
9
|
|
|
$
|
77
|
|
|
$
|
(28
|
)
|
|
Earnings (loss) from continuing operations as a % of net revenue
|
|
6.0
|
%
|
|
|
11.3
|
%
|
|
|
1.3
|
%
|
|
|
8.4
|
%
|
|
|
(23.7
|
)%
|
|
Year-over-year change percentage points
|
|
3.0pts
|
|
|
|
2.0
|
pts
|
|
|
(3.9)pts
|
|
|
|
0.4pts
|
|
|
|
(4.6)pts
|
|
|
Net earnings from continuing operations
|
$
|
177
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net EPS from continuing operations
|
$
|
0.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net EPS from continuing operations
|
$
|
0.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
(1)
|
HPE consolidated net revenue excludes intersegment net revenue and other.
|
|
(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, disposition and other related charges, restructuring charges and separation costs.
|
|
|
Three Months Ended January 31,
|
||||||||||||
|
|
2019
|
|
2018
|
||||||||||
|
|
Dollars
|
|
% of
Revenue |
|
Dollars
|
|
% of
Revenue |
||||||
|
|
Dollars in millions
|
||||||||||||
|
Net revenue
|
$
|
7,553
|
|
|
100.0
|
%
|
|
$
|
7,674
|
|
|
100.0
|
%
|
|
Cost of sales
|
5,207
|
|
|
68.9
|
|
|
5,505
|
|
|
71.7
|
|
||
|
Gross profit
|
2,346
|
|
|
31.1
|
|
|
2,169
|
|
|
28.3
|
|
||
|
Research and development
|
466
|
|
|
6.2
|
|
|
389
|
|
|
5.1
|
|
||
|
Selling, general and administrative
|
1,211
|
|
|
16.0
|
|
|
1,218
|
|
|
15.9
|
|
||
|
Amortization of intangible assets
|
72
|
|
|
1.0
|
|
|
78
|
|
|
1.0
|
|
||
|
Restructuring charges
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
||
|
Transformation costs
|
78
|
|
|
1.1
|
|
|
245
|
|
|
3.2
|
|
||
|
Acquisition, disposition and other related charges
|
63
|
|
|
0.8
|
|
|
30
|
|
|
0.4
|
|
||
|
Separation costs
|
—
|
|
|
—
|
|
|
(24
|
)
|
|
(0.3
|
)
|
||
|
Earnings from continuing operations
|
456
|
|
|
6.0
|
|
|
228
|
|
|
3.0
|
|
||
|
Interest and other, net
|
(51
|
)
|
|
(0.7
|
)
|
|
(21
|
)
|
|
(0.3
|
)
|
||
|
Tax indemnification adjustments
|
219
|
|
|
3.0
|
|
|
(919
|
)
|
|
(12.0
|
)
|
||
|
Non-service net periodic benefit credit
|
16
|
|
|
0.2
|
|
|
33
|
|
|
0.4
|
|
||
|
Earnings from equity interests
|
15
|
|
|
0.2
|
|
|
22
|
|
|
0.3
|
|
||
|
Earnings (loss) from continuing operations before taxes
|
655
|
|
|
8.7
|
|
|
(657
|
)
|
|
(8.6
|
)
|
||
|
(Provision) benefit for taxes
|
(478
|
)
|
|
(6.4
|
)
|
|
2,139
|
|
|
27.9
|
|
||
|
Net earnings from continuing operations
|
177
|
|
|
2.3
|
|
|
1,482
|
|
|
19.3
|
|
||
|
Net loss from discontinued operations
|
—
|
|
|
—
|
|
|
(46
|
)
|
|
(0.6
|
)
|
||
|
Net earnings
|
$
|
177
|
|
|
2.3
|
%
|
|
$
|
1,436
|
|
|
18.7
|
%
|
|
|
Three months ended January 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
In millions
|
||||||
|
Cost of sales
|
$
|
12
|
|
|
$
|
15
|
|
|
Research and development
|
21
|
|
|
24
|
|
||
|
Selling, general and administrative
|
42
|
|
|
64
|
|
||
|
Transformation costs
|
2
|
|
|
3
|
|
||
|
Acquisition, disposition and other related charges
|
—
|
|
|
9
|
|
||
|
Separation costs
|
—
|
|
|
3
|
|
||
|
Stock-based compensation expense from continuing operations
|
$
|
77
|
|
|
$
|
118
|
|
|
|
Three months ended January 31, 2019
|
|
|
|
Percentage points
|
|
|
Hybrid IT
|
(2.4
|
)
|
|
Intelligent Edge
|
0.4
|
|
|
Financial Services
|
0.4
|
|
|
Corporate Investments/Other
(1)
|
—
|
|
|
Total HPE
|
(1.6
|
)
|
|
|
|
•
|
Hybrid IT net revenue decreased due primarily to a decline in Compute revenue within Hybrid IT Product as a result of lower Tier-1 server sales and a decline in HPE Pointnext revenue;
|
|
•
|
Intelligent Edge net revenue increased due primarily to revenue growth in HPE Aruba Product from WLAN and campus switching products and growth in HPE Aruba Services due to services attach on a growing product installed base; and
|
|
•
|
FS net revenue increased due primarily to higher asset management revenue.
|
|
•
|
Hybrid IT gross margin increased for the
three months ended January 31, 2019
, as compared to the prior-year period, due primarily to a lower mix of revenue from Tier-1 server sales, a higher mix of revenue from higher-margin products, decrease in costs of services and products due to cost management activities and the year-over-year decrease in commodity costs, and favorable foreign currency fluctuations;
|
|
•
|
Intelligent Edge gross margin increased for the
three months ended January 31, 2019
, as compared to the prior-year period, due primarily to favorable foreign currency fluctuations, cost management activities and a higher mix of higher-margin WLAN products and HPE Aruba Services; and
|
|
•
|
FS gross margin increased for the
three months ended January 31, 2019
, as compared to the prior-year period due primarily to higher revenue associated with higher asset management activity.
|
|
|
Three months ended January 31,
|
|||||||||
|
|
2019
|
|
2018
|
|
% Change
|
|||||
|
|
Dollars in millions
|
|
|
|||||||
|
Net revenue
|
$
|
5,970
|
|
|
$
|
6,158
|
|
|
(3.1
|
)%
|
|
Earnings from operations
|
$
|
675
|
|
|
$
|
572
|
|
|
18.0
|
%
|
|
Earnings from operations as a % of net revenue
|
11.3
|
%
|
|
9.3
|
%
|
|
|
|
||
|
|
Three months ended January 31,
|
|||||||||
|
|
Net Revenue
|
|
Weighted
Net Revenue Change Percentage Points |
|||||||
|
|
2019
|
|
2018
|
|
2019
|
|||||
|
|
Dollars in millions
|
|
|
|||||||
|
Compute
|
$
|
3,402
|
|
|
$
|
3,518
|
|
|
(1.9
|
)
|
|
Storage
|
975
|
|
|
948
|
|
|
0.4
|
|
||
|
Hybrid IT Product
|
4,377
|
|
|
4,466
|
|
|
(1.5
|
)
|
||
|
HPE Pointnext
|
1,593
|
|
|
1,692
|
|
|
(1.6
|
)
|
||
|
Total Hybrid IT
|
$
|
5,970
|
|
|
$
|
6,158
|
|
|
(3.1
|
)
|
|
•
|
The net revenue decrease in Compute was due primarily to a decline in Tier-1 server sales as we continue to exit less profitable product categories and focus on more profitable standard offerings. The decrease in Compute net revenue was partially offset by growth in core ISS products, which was driven by Average Unit Prices ("AUPs") growth across core products. The increase in AUPs was partially offset by a decline in unit shipments, primarily in the rack, tower, and blade categories. Mission-critical servers ("MCS") experienced a net revenue increase for the period led by higher revenue from NonStop products.
|
|
•
|
The net revenue increase in Storage was due primarily to revenue growth in converged storage led by HPE Nimble Storage, which contributed to the revenue increase in All Flash Arrays, and growth in big data products. This revenue increase was partially offset by a decline in revenue from 3PAR products and traditional storage products.
|
|
|
Three months ended January 31,
|
|||||||||
|
|
2019
|
|
2018
|
|
% Change
|
|||||
|
|
Dollars in millions
|
|
|
|||||||
|
Net revenue
|
$
|
686
|
|
|
$
|
656
|
|
|
4.6
|
%
|
|
Earnings from operations
|
$
|
9
|
|
|
$
|
34
|
|
|
(73.5
|
)%
|
|
Earnings from operations as a % of net revenue
|
1.3
|
%
|
|
5.2
|
%
|
|
|
|
||
|
|
|
|
|
|
|
|
|
Three months ended January 31,
|
|||||||||
|
|
Net Revenue
|
|
Weighted
Net Revenue Change Percentage Points |
|||||||
|
|
2019
|
|
2018
|
|
2019
|
|||||
|
|
Dollars in millions
|
|
|
|||||||
|
HPE Aruba Product
|
$
|
597
|
|
|
$
|
582
|
|
|
2.3
|
|
|
HPE Aruba Services
|
89
|
|
|
74
|
|
|
2.3
|
|
||
|
Total Intelligent Edge
|
$
|
686
|
|
|
$
|
656
|
|
|
4.6
|
|
|
|
|
|
|
|
|
|
|
Three months ended January 31,
|
|||||||||
|
|
2019
|
|
2018
|
|
% Change
|
|||||
|
|
Dollars in millions
|
|
|
|||||||
|
Net revenue
|
$
|
919
|
|
|
$
|
888
|
|
|
3.5
|
%
|
|
Earnings from operations
|
$
|
77
|
|
|
$
|
71
|
|
|
8.5
|
%
|
|
Earnings from operations as a % of net revenue
|
8.4
|
%
|
|
8.0
|
%
|
|
|
|
||
|
|
|
|
|
|
|
|
|
Three months ended January 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
In millions
|
||||||
|
Total financing volume
|
$
|
1,389
|
|
|
$
|
1,436
|
|
|
|
As of
|
||||||
|
|
January 31, 2019
|
|
October 31, 2018
|
||||
|
|
Dollars in millions
|
||||||
|
Financing receivables, gross
|
$
|
8,411
|
|
|
$
|
8,256
|
|
|
Net equipment under operating leases
|
4,167
|
|
|
4,212
|
|
||
|
Capitalized profit on intercompany equipment transactions
(1)
|
456
|
|
|
502
|
|
||
|
Intercompany leases
(1)
|
120
|
|
|
125
|
|
||
|
Gross portfolio assets
|
13,154
|
|
|
13,095
|
|
||
|
Allowance for doubtful accounts
(2)
|
127
|
|
|
120
|
|
||
|
Operating lease equipment reserve
|
64
|
|
|
63
|
|
||
|
Total reserves
|
191
|
|
|
183
|
|
||
|
Net portfolio assets
|
$
|
12,963
|
|
|
$
|
12,912
|
|
|
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 $11.4 billion at both
January 31, 2019
and
October 31, 2018
, 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
January 31, 2019
and
October 31, 2018
was $1.6 billion
|
|
|
Three months ended January 31,
|
|||||||||
|
|
2019
|
|
2018
|
|
% Change
|
|||||
|
|
Dollars in millions
|
|
|
|||||||
|
Net revenue
|
$
|
118
|
|
|
$
|
136
|
|
|
(13.2
|
)%
|
|
Loss from operations
|
$
|
(28
|
)
|
|
$
|
(26
|
)
|
|
(7.7
|
)%
|
|
Loss from operations as a % of net revenue
|
(23.7
|
)%
|
|
(19.1
|
)%
|
|
|
|||
|
|
|
|
|
|
|
|
|
Three Months Ended January 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
In millions
|
||||||
|
Net cash provided by operating activities
|
$
|
382
|
|
|
$
|
142
|
|
|
Net cash used in investing activities
|
(616
|
)
|
|
(1,131
|
)
|
||
|
Net cash used in financing activities
|
(945
|
)
|
|
(929
|
)
|
||
|
Net decrease in cash, cash equivalents and restricted cash
|
$
|
(1,179
|
)
|
|
$
|
(1,918
|
)
|
|
|
Three months ended January 31,
|
|||||||
|
|
2019
|
|
2018
|
|
Change
|
|||
|
Days of sales outstanding in accounts receivable ("DSO")
|
38
|
|
|
36
|
|
|
2
|
|
|
Days of supply in inventory ("DOS")
|
40
|
|
|
40
|
|
|
—
|
|
|
Days of purchases outstanding in accounts payable ("DPO")
|
(100
|
)
|
|
(97
|
)
|
|
(3
|
)
|
|
Cash conversion cycle
|
(22
|
)
|
|
(21
|
)
|
|
(1
|
)
|
|
|
As of
January 31, 2019 |
||
|
|
In millions
|
||
|
Commercial paper programs
|
$
|
4,041
|
|
|
Uncommitted lines of credit
|
$
|
1,583
|
|
|
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 2018)
|
25,330
|
|
|
$
|
15.32
|
|
|
25,330
|
|
|
$
|
4,325,438
|
|
|
Month 2 (December 2018)
|
16,406
|
|
|
$
|
14.38
|
|
|
16,406
|
|
|
$
|
4,089,471
|
|
|
Month 3 (January 2019)
|
13,365
|
|
|
$
|
14.19
|
|
|
13,365
|
|
|
$
|
3,899,756
|
|
|
Total
|
55,101
|
|
|
$
|
14.77
|
|
|
55,101
|
|
|
|
|
|
|
|
|
|
|
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
|
|
2.3
|
|
November 5, 2015
|
|
|
2.4
|
|
|
8-K
|
|
001-37483
|
|
2.4
|
|
November 5, 2015
|
|
|
2.5
|
|
|
8-K
|
|
001-37483
|
|
2.5
|
|
November 5, 2015
|
|
|
2.6
|
|
|
8-K
|
|
001-37483
|
|
2.6
|
|
November 5, 2015
|
|
|
2.7
|
|
|
8-K
|
|
001-37483
|
|
2.7
|
|
November 5, 2015
|
|
|
2.8
|
|
|
8-K
|
|
001-37483
|
|
2.1
|
|
May 26, 2016
|
|
|
2.9
|
|
|
8-K
|
|
001-37483
|
|
2.2
|
|
May 26, 2016
|
|
|
2.10
|
|
|
8-K
|
|
001-37483
|
|
2.1
|
|
September 7, 2016
|
|
|
2.11
|
|
|
8-K
|
|
001-37483
|
|
2.2
|
|
September 7, 2016
|
|
|
2.12
|
|
|
8-K
|
|
001-37483
|
|
2.3
|
|
September 7, 2016
|
|
|
2.13
|
|
|
8-K
|
|
001-37483
|
|
2.1
|
|
November 2, 2016
|
|
|
2.14
|
|
|
8-K
|
|
001-37483
|
|
2.2
|
|
November 2, 2016
|
|
|
2.15
|
|
|
8-K
|
|
001-37483
|
|
99.1
|
|
March 7, 2017
|
|
|
2.16
|
|
|
8-K
|
|
001-37483
|
|
99.2
|
|
March 7, 2017
|
|
|
2.17
|
|
|
8-K
|
|
001-38033
|
|
2.1
|
|
April 6, 2017
|
|
|
2.18
|
|
|
8-K
|
|
001-38033
|
|
2.2
|
|
April 6, 2017
|
|
|
2.19
|
|
|
8-K
|
|
001-38033
|
|
2.3
|
|
April 6, 2017
|
|
|
2.20
|
|
|
8-K
|
|
001-38033
|
|
2.4
|
|
April 6, 2017
|
|
|
2.21
|
|
|
8-K
|
|
001-38033
|
|
2.5
|
|
April 6, 2017
|
|
|
2.22
|
|
|
8-K
|
|
001-38033
|
|
2.6
|
|
April 6, 2017
|
|
|
2.23
|
|
|
8-K
|
|
001-37483
|
|
2.1
|
|
September 1, 2017
|
|
|
2.24
|
|
|
8-K
|
|
001-37483
|
|
2.2
|
|
September 1, 2017
|
|
|
2.25
|
|
|
8-K
|
|
001-37483
|
|
2.3
|
|
September 1, 2017
|
|
|
2.26
|
|
|
8-K
|
|
001-37483
|
|
2.4
|
|
September 1, 2017
|
|
|
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
|
|
4.2
|
|
October 13, 2015
|
|
|
4.3
|
|
|
8-K
|
|
001-37483
|
|
4.3
|
|
October 13, 2015
|
|
|
4.4
|
|
|
8-K
|
|
001-37483
|
|
4.4
|
|
October 13, 2015
|
|
|
4.5
|
|
|
8-K
|
|
001-37483
|
|
4.5
|
|
October 13, 2015
|
|
|
4.6
|
|
|
8-K
|
|
001-37483
|
|
4.6
|
|
October 13, 2015
|
|
|
4.7
|
|
|
8-K
|
|
001-37483
|
|
4.7
|
|
October 13, 2015
|
|
|
4.8
|
|
|
8-K
|
|
001-37483
|
|
4.8
|
|
October 13, 2015
|
|
|
4.9
|
|
|
8-K
|
|
001-37483
|
|
4.9
|
|
October 13, 2015
|
|
|
4.10
|
|
|
8-K
|
|
001-37483
|
|
4.10
|
|
October 13, 2015
|
|
|
4.11
|
|
|
8-K
|
|
001-37483
|
|
4.11
|
|
October 13, 2015
|
|
|
4.12
|
|
|
8-K
|
|
001-37483
|
|
4.12
|
|
October 13, 2015
|
|
|
4.13
|
|
|
10-K
|
|
001-04423
|
|
4.13
|
|
December 17, 2015
|
|
|
4.14
|
|
|
8-K
|
|
001-37483
|
|
10.1
|
|
December 22, 2016
|
|
|
4.15
|
|
|
8-K
|
|
001-37483
|
|
4.1
|
|
September 20, 2017
|
|
|
4.16
|
|
|
S-3ASR
|
|
333-222102
|
|
4.5
|
|
December 15, 2017
|
|
|
4.17
|
|
|
8-K
|
|
001-37483
|
|
4.2
|
|
September 19, 2018
|
|
|
4.18
|
|
|
8-K
|
|
001-37483
|
|
4.3
|
|
September 19, 2018
|
|
|
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
|
|
|
8-K
|
|
001-37483
|
|
10.1
|
|
November 5, 2015
|
|
|
10.11
|
|
|
10-Q
|
|
001-37483
|
|
10.14
|
|
March 10, 2016
|
|
|
10.12
|
|
|
10-Q
|
|
001-37483
|
|
10.15
|
|
March 10, 2016
|
|
|
10.13
|
|
|
8-K
|
|
001-37483
|
|
10.1
|
|
May 26, 2016
|
|
|
10.14
|
|
|
S-8
|
|
333-207679
|
|
4.3
|
|
March 6, 2017
|
|
|
10.15
|
|
|
S-8
|
|
001-37483
|
|
4.3
|
|
April 18, 2017
|
|
|
10.16
|
|
|
S-8
|
|
001-37483
|
|
4.4
|
|
April 18, 2017
|
|
|
10.17
|
|
|
S-8
|
|
001-37483
|
|
4.3
|
|
April 24, 2017
|
|
|
10.18
|
|
|
10-Q
|
|
000-51333
|
|
10.1
|
|
January 29, 2016
|
|
|
10.19
|
|
|
10-K
|
|
000-51333
|
|
10.48
|
|
February 28, 2007
|
|
|
10.20
|
|
|
10-K
|
|
000-51333
|
|
10.3
|
|
September 10, 2012
|
|
|
10.21
|
|
|
S-1
|
|
000-51333
|
|
10.10
|
|
February 4, 2005
|
|
|
10.22
|
|
|
S-8
|
|
333-221254
|
|
4.3
|
|
October 31, 2017
|
|
|
10.23
|
|
|
S-8
|
|
333-221254
|
|
4.4
|
|
October 31, 2017
|
|
|
10.24
|
|
|
S-8
|
|
333-226181
|
|
4.3
|
|
July 16, 2018
|
|
|
10.25
|
|
|
10-Q
|
|
001-37483
|
|
10.29
|
|
September, 4, 2018
|
|
|
10.26
|
|
|
10-Q
|
|
001-37483
|
|
10.30
|
|
September, 4, 2018
|
|
|
10.27
|
|
|
10-Q
|
|
001-37483
|
|
10.27
|
|
December 12, 2018
|
|
|
10.28
|
|
|
10-Q
|
|
001-37483
|
|
10.28
|
|
December 12, 2018
|
|
|
10.29
|
|
|
10-Q
|
|
001-37483
|
|
10.29
|
|
December 12, 2018
|
|
|
10.30
|
|
|
S-8
|
|
333-229449
|
|
4.3
|
|
January 31, 2019
|
|
|
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‡
|
|
|
|
|
|
|
|
|
|
*
|
Indicates management contract or compensation plan, contract or arrangement
|
|
‡
|
Filed herewith
|
|
†
|
Furnished herewith
|
|
|
|
HEWLETT PACKARD ENTERPRISE COMPANY
|
|
|
|
/s/ TAREK A. ROBBIATI
|
|
|
|
Tarek A. Robbiati
Executive Vice President and Chief Financial Officer
(Principal Financial Officer and Authorized
Signatory)
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
| FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
|---|
| DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
|---|---|---|---|
WILLIAM R. KLESSE Former Chief Executive Officer and Chairman of the Board, Valero Energy Director Since: 2013 Committee Membership: | |||
VICKY A. BAILEY Former Assistant Secretary, Domestic Policy and International Affairs, U.S. Department of Energy President, Anderson Stratton International, LLC Director Since: 2022 Committee Membership: | |||
ROBERT M. SHEARER Former Managing Director, BlackRock Advisors, LLC Director Since: 2019 Committee Membership: | |||
KENNETH B. ROBINSON Former Senior Vice President of Audit and Controls, Exelon Corporation Director Since: 2023 Committee Membership: | |||
JACK B. MOORE Former President and Chief Executive Officer, Cameron International Chairman Since: 2022 Director Since: 2016 Committee Membership: | |||
CLAIRE O’NEILL Former Member of Parliament and Minister for Energy and Clean Growth (UK Govt) Director Since: 2023 Committee Membership: | |||
CARLOS M. GUTIERREZ Former U.S. Secretary of Commerce Co-Founder, Former Executive Chairman and CEO, EmPath, Inc. Director Since: 2009 Committee Membership: | |||
AVEDICK B. POLADIAN Former Executive Vice President and Chief Operating Officer, Lowe Enterprises Director Since: 2008 Committee Membership: | |||
ANDREW GOULD Former Chairman and Chief Executive Officer, Schlumberger Director Since: 2020 Committee Membership: |
|
Name and Principal
Position
|
Year
|
Salary
|
Bonus
|
Stock
Awards
|
Option
Awards
|
Non-Equity
Incentive Plan
Compensation
|
Nonqualified
Deferred
Compensation
Earnings
|
All Other
Compensation
|
Total
|
||||||||
|
Vicki Hollub
President and Chief
Executive Officer
|
2024
|
$
1,564,959
|
$
—
|
$
12,640,152
|
$
—
|
$
3,402,000
|
$
214,438
|
$
713,512
|
$
18,535,061
|
||||||||
|
2023
|
$
1,472,603
|
$
—
|
$
12,028,476
|
$
—
|
$
3,375,000
|
$
174,726
|
$
684,214
|
$
17,735,019
|
|||||||||
|
2022
|
$
1,258,082
|
$
312,000
|
$
7,312,830
|
$
2,437,542
|
$
3,003,000
|
$
96,545
|
$
549,511
|
$
14,969,510
|
|||||||||
|
Sunil Mathew
Senior Vice President and
Chief Financial Officer
|
2024
|
$
743,306
|
$
—
|
$
3,427,914
|
$
—
|
$
945,000
|
$
57,543
|
$
259,999
|
$
5,433,762
|
||||||||
|
2023
|
$
670,411
|
$
—
|
$
3,457,479
|
$
—
|
$
1,050,000
|
$
44,919
|
$
264,122
|
$
5,486,931
|
|||||||||
|
Kenneth Dillon
Senior Vice President and
President, International Oil
and Gas Operations
|
2024
|
$
790,314
|
$
—
|
$
3,856,461
|
$
—
|
$
1,113,800
|
$
120,068
|
$
305,123
|
$
6,185,766
|
||||||||
|
2023
|
$
753,151
|
$
—
|
$
3,742,166
|
$
—
|
$
1,237,500
|
$
101,562
|
$
315,989
|
$
6,150,368
|
|||||||||
|
2022
|
$
705,110
|
$
99,000
|
$
2,625,184
|
$
875,020
|
$
1,303,500
|
$
59,048
|
$
295,601
|
$
5,962,463
|
|||||||||
|
Richard A. Jackson
Senior Vice President and
President, ORCM, Operations
|
2024
|
$
790,314
|
$
—
|
$
3,856,461
|
$
—
|
$
1,113,800
|
$
86,950
|
$
287,153
|
$
6,134,678
|
||||||||
|
2023
|
$
753,151
|
$
—
|
$
3,742,166
|
$
—
|
$
1,200,000
|
$
71,228
|
$
279,206
|
$
6,045,751
|
|||||||||
|
2022
|
$
701,616
|
$
84,000
|
$
2,400,147
|
$
800,032
|
$
1,106,000
|
$
40,166
|
$
251,981
|
$
5,383,942
|
|||||||||
|
Robert L. Peterson
Senior Vice President and
Executive Vice President,
Essential Chemistry, OCC
|
2024
|
$
770,314
|
$
—
|
$
3,427,914
|
$
—
|
$
945,000
|
$
96,256
|
$
278,753
|
$
5,518,237
|
||||||||
|
2023
|
$
735,890
|
$
—
|
$
3,421,431
|
$
—
|
$
1,050,000
|
$
80,483
|
$
288,215
|
$
5,576,019
|
|||||||||
|
2022
|
$
701,616
|
$
84,000
|
$
2,400,147
|
$
800,032
|
$
1,106,000
|
$
46,113
|
$
271,909
|
$
5,409,817
|
|||||||||
Customers
| Customer name | Ticker |
|---|---|
| Insight Enterprises, Inc. | NSIT |
Suppliers
Price
Yield
| Owner | Position | Direct Shares | Indirect Shares |
|---|---|---|---|
| Mathew Sunil | - | 212,095 | 4,440 |
| KLESSE WILLIAM R | - | 182,989 | 0 |
| Bennett Peter J. | - | 134,301 | 6,023 |
| Champion Christopher O | - | 129,924 | 2,988 |
| Kerrigan Sylvia J | - | 111,829 | 901 |
| Bennett Peter J. | - | 100,179 | 5,610 |
| Kerrigan Sylvia J | - | 80,536 | 499 |
| GUTIERREZ CARLOS M | - | 75,261 | 0 |
| Shearer Bob | - | 53,048 | 0 |
| ONeill Claire | - | 12,473 | 0 |
| Robinson Kenneth B. | - | 549 | 0 |
| BERKSHIRE HATHAWAY INC | - | 0 | 84,897 |
| OCCIDENTAL PETROLEUM CORP /DE/ | - | 0 | 165,682,000 |