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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


(Mark One)
☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
~~July~~January 31, ~~2023~~2024
Or
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number
1-4423

HP INC.

(Exact name of registrant as specified in its charter)


Delaware		94-1081436
(State or other jurisdiction of incorporation or organization)		(I.R.S. employer identification no.)
1501 Page Mill Road		94304
Palo Alto,	California	(Zip code)
(Address of principal executive offices)

(650) 857-1501

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.01 per share	HPQ	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ Accelerated filer ☐

Non-accelerated filer ☐ Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of HP Inc. common stock outstanding as of ~~July~~January 31, ~~2023~~2024 was ~~988,268,771~~980,731,959 shares.

HP INC. AND SUBSIDIARIES

Form 10-Q

For the Quarterly Period ended ~~July~~January 31, ~~2023~~2024

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In this report on Form 10-Q, for all periods presented, “we”, “us”, “our”, the “company”, the “Company”, “HP” and “HP Inc.” refer to HP Inc. (formerly Hewlett-Packard Company) and its consolidated subsidiaries. Certain financial statement numbers presented in this document may differ from those presented in our third quarter fiscal 2023 earnings release and Form 8-K filing (dated August 29, 2023) as a result of immaterial rounding adjustments.

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Forward-Looking Statements

This Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 2 of Part I, contains forward-looking statements based on current expectations and assumptions that involve risks and uncertainties. If the risks or uncertainties ever materialize or the assumptions prove incorrect, they could affect the business and results of operations of HP Inc. and its consolidated subsidiaries (“HP”) which may differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including, but not limited to, any statements regarding the impact of the COVID-19 pandemic; projections of net revenue, margins, expenses, effective tax rates, net earnings, net earnings per share, cash flows, benefit plan funding, deferred taxes, share repurchases, foreign currency exchange rates or other financial items; any projections of the amount, timing or impact of cost savings or restructuring and other charges, planned structural cost reductions and productivity initiatives; any statements of the plans, strategies and objectives of management for future operations, including, but not limited to, our business model and transformation, our sustainability goals, our go-to-market strategy, the execution of restructuring plans and any resulting cost savings (including the Fiscal 2023 Plan (as defined below)), net revenue or profitability improvements or other financial impacts; any statements concerning the expected development, demand, performance, market share or competitive performance relating to products or services; any statements concerning potential supply constraints, component shortages, manufacturing disruptions or logistics challenges; any statements regarding current or future macroeconomic trends or events and the impact of those trends and events on HP and its financial performance; any statements regarding pending investigations, claims, disputes or other litigation matters; any statements of expectation or belief as to the timing and expected benefits of acquisitions and other business combination and investment transactions (including the ~~recent~~ acquisition of Plantronics, Inc. (“Poly”)); and any statements of assumptions underlying any of the foregoing. Forward-looking statements can also generally be identified by words such as “future,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “will,” “would,” “could,” “can,” “may,” and similar terms. Risks, uncertainties and assumptions that could affect our business and results of operations include factors relating to the impact of macroeconomic and geopolitical trends, changes and events, including the Russian invasion of Ukraine, ~~and~~ tension across the Taiwan Strait, the Israel-Hamas conflict, other hostilities in the Middle East and the regional and global ramifications of these events; ~~recent~~ volatility in global capital markets and foreign currency, increases in benchmark interest rates, the effects of inflation and instability of financial institutions; risks associated with HP’s international operations; the effects of ~~the~~global pandemics, such as COVID-19, ~~pandemic;~~or other public health crises; the execution and performance of contracts by HP and its suppliers, customers, clients and partners, including logistical challenges with respect to such execution and performance; changes in estimates and assumptions HP makes in connection with the preparation of its financial statements; the need to manage (and reliance on) third-party suppliers, including with respect to supply constraints and component shortages, and the need to manage HP’s global, multi-tier distribution network ~~limit~~and potential misuse of pricing programs by HP’s channel partners, adapt to new or changing marketplaces and effectively deliver HP’s services; HP’s ability to execute on its strategic plans, including the previously announced initiatives, business model changes and transformation; execution of planned structural cost reductions and productivity initiatives; HP’s ability to complete any contemplated share repurchases, other capital return programs or other strategic transactions; the competitive pressures faced by HP’s businesses; ~~risks associated with executing HP’s strategy and business model changes and transformation;~~ successfully innovating, developing and executing HP’s go-to-market strategy, including online, omnichannel and contractual sales, in an evolving distribution, reseller and customer landscape; the development and transition of new products and services and the enhancement of existing products and services to meet evolving customer needs and respond to emerging technological ~~trends;~~trends, including artificial intelligence; successfully competing and maintaining the value proposition of HP’s products, including ~~supplies;~~supplies and services; challenges to HP’s ability to accurately forecast inventories, demand and pricing, which may be due to HP’s multi-tiered channel, sales of HP’s products to unauthorized resellers or unauthorized resale of HP’s products or our uneven sales cycle; integration and other risks associated with business combination and investment transactions; the results of our restructuring plans (including the Fiscal 2023 Plan), including estimates and assumptions related to the cost (including any possible disruption of HP’s business) and the anticipated benefits of our restructuring plans; the protection of HP’s intellectual property assets, including intellectual property licensed from third parties; the hiring and retention of key employees; disruptions in operations from system security risks, data protection breaches, cyberattacks, extreme weather conditions or other effects of climate change, ~~medical epidemics or pandemics such as the COVID-19 pandemic,~~ and other natural or manmade disasters or catastrophic events; the impact of changes to federal, state, local and foreign laws and regulations, including environmental regulations and tax laws; our aspirations related to environmental, social and governance matters; potential impacts, liabilities and costs from pending or potential investigations, claims and disputes; our use of artificial intelligence; the effectiveness of our internal control over financial reporting; and other risks that are described herein, ~~including but not limited to the items discussed in “Risk Factors” in Item 1A of Part II of this report~~ as well as the risks discussed in Item 1A “Risk Factors” of Part I in our Annual Report on Form 10-K for the fiscal year ended October 31, ~~2022~~2023 and that are otherwise described or updated from time to time in HP’s other filings with the Securities and Exchange Commission (the “SEC”). HP’s Fiscal 2023 Plan includes HP's efforts to take advantage of future growth opportunities, including but not limited to, investments to drive growth, investments in our people, improving product mix, driving structural cost savings and other productivity measures. Structural cost savings represent gross reductions in costs driven by operational efficiency, digital transformation, and portfolio optimization. These initiatives include but are not limited to workforce reductions, platform simplification, programs consolidation and productivity measures undertaken by HP, which HP expects to be sustainable in the

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longer-term. These structural cost savings are net of any new recurring costs resulting from these initiatives and exclude one-time investments to generate such savings. HP’s expectations on the longer-term sustainability of such structural cost savings are based on its current business operations and market dynamics and could be significantly impacted by various factors, including but not limited to HP’s evolving business models, future investment decisions, market environment and technology landscape. The forward-looking statements in this report are made as of the date of this filing and HP assumes no obligation and does not intend to update these forward-looking statements.

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Part I. Financial Information

ITEM 1. Financial Statements and Supplementary Data.

Index


			Page
Consolidated Condensed Statements of Earnings for the three ~~and~~ ~~nine~~months ended ~~July~~January 3 1 , ~~2023~~202 4 and ~~2022~~202 3 (Unaudited)			56
Consolidated Condensed Statements of Comprehensive Income for the three ~~and~~ ~~nine~~months ended ~~July~~January 3 1 , ~~2023~~202 4 and ~~2022~~202 3 (Unaudited)			67
Consolidated Condensed Balance Sheets as of ~~July~~January 3 1 , ~~2023~~202 4 and October 31, ~~2022~~202 3 (Unaudited)			78
Consolidated Condensed Statements of Cash Flows for the ni nethree months ended ~~July~~January 3 1 , ~~2023~~202 4 and ~~2022~~202 3 (Unaudited)			89
Consolidated Condensed Statements of Stockholders’ Deficit (Unaudited)			910
Notes to Consolidated Condensed Financial Statements (Unaudited)			1011
Note 1: Basis of Presentation			1011
Note 2: Segment Information			1112
Note 3: Restructuring and Other Charges			14
Note 4: Retirement and Post-Retirement Benefit Plans			15
Note 5: Taxes on Earnings			1716
Note 6: Supplementary Financial Information			1817
Note 7: Fair Value			2221
Note 8: Financial Instruments			2423
Note 9: Borrowings			2928
Note 10: Stockholders’ Deficit			30
Note 11: ~~Net~~ Earnings Per Share			3332
Note 12: Litigation and Contingencies			3332
Note 13: Guarantees, Indemnifications and Warranties			3837
~~Note 14: Revision of Prior Period Financial Statements~~			39

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~~HP INC. AND SUBSIDIARIES~~

~~Consolidated Condensed Statements of Earnings~~

~~(Unaudited)~~

Three months ended July 31 Nine months ended July 31
2023 2022 2023 2022
In millions, except per share amounts
Net revenue $ 13,196 $ 14,648 $ 39,901 $ 48,136
Costs and expenses:
Cost of revenue 10,374 11,764 31,378 38,564
Research and development 354 368 1,167 1,271
Selling, general and administrative 1,302 1,143 4,031 4,075
Restructuring and other charges 75 13 416 148
Acquisition and divestiture charges 48 31 205 83
Amortization of intangible assets 91 50 262 154
Russia exit charges — 23 — 23
Total costs and expenses 12,244 13,392 37,459 44,318
Earnings from operations 952 1,256 2,442 3,818
Interest and other, net (16) (70) (357) (141)
Earnings before taxes 936 1,186 2,085 3,677
(Provision for) benefit from taxes (170) (64) 204 (522)
Net earnings $ 766 $ 1,122 $ 2,289 $ 3,155
Net earnings per share:
Basic $ 0.77 $ 1.10 $ 2.31 $ 3.00
Diluted $ 0.76 $ 1.08 $ 2.29 $ 2.97
Weighted-average shares used to compute net earnings per share:
Basic 993 1,024 991 1,052
Diluted 1,002 1,035 999 1,064
~~The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.~~

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HP INC. AND SUBSIDIARIES

Consolidated Condensed Statements of ~~Comprehensive Income~~Earnings

(Unaudited)

Three months ended July 31 Nine months ended July 31
2023 2022 2023 2022
In millions
Net earnings $ 766 $ 1,122 $ 2,289 $ 3,155
Other comprehensive income (loss) before taxes:
Change in unrealized components of available-for-sale debt securities:
Unrealized gains (losses) arising during the period 1 (1) 5 (7)
Change in unrealized components of cash flow hedges:
Unrealized (losses) gains arising during the period (68) 280 (757) 1,182
Losses (gains) reclassified into earnings 68 (327) (104) (491)
— (47) (861) 691
Change in unrealized components of defined benefit plans:
Gains arising during the period — 10 5 12
Amortization of actuarial loss and prior service benefit — 5 — 16
Curtailments, settlements and other — (1) — (1)
— 14 5 27
Change in cumulative translation adjustment 10 (14) 48 (56)
Other comprehensive income (loss) before taxes 11 (48) (803) 655
Benefit from (provision for) taxes 3 (62) 164 (172)
Other comprehensive income (loss), net of taxes 14 (110) (639) 483
Comprehensive income $ 780 $ 1,012 $ 1,650 $ 3,638


	Three months ended January 31
		2024		2023
		In millions, except per share amounts
Net revenue:
Products		$	12,419	$	13,044
Services		766		754
Total net revenue		13,185		13,798
Cost of net revenue:
Products		9,871		10,589
Services		426		422
Total cost of net revenue		10,297		11,011
Gross margin		2,888		2,787
Research and development		399		403
Selling, general and administrative		1,383		1,331
Restructuring and other charges		63		141
Acquisition and divestiture charges		27		84
Amortization of intangible assets		81		85
Total operating expenses		1,953		2,044
Earnings from operations		935		743
Interest and other, net		(142)		(181)
Earnings before taxes		793		562
Provision for taxes		(171)		(93)
Net earnings		$	622	$	469

Net earnings per share:
Basic		$	0.63	$	0.47
Diluted		$	0.62	$	0.47

Weighted-average shares used to compute net earnings per share:
Basic		995		989
Diluted		1,002		996

The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.

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HP INC. AND SUBSIDIARIES

Consolidated Condensed ~~Balance Sheets~~Statements of Comprehensive Income

(Unaudited)

As of
July 31, 2023 October 31, 2022

In millions, except par value
ASSETS
Current assets:
Cash, cash equivalents and restricted cash $ 1,718 $ 3,145
Accounts receivable, net of allowance for credit losses of $91 and $107, respectively 4,367 4,546
Inventory 7,197 7,614
Other current assets 4,181 4,431
Total current assets 17,463 19,736
Property, plant and equipment, net 2,783 2,774
Goodwill 8,614 8,541
Other non-current assets 7,772 7,443
Total assets $ 36,632 $ 38,494
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Notes payable and short-term borrowings $ 443 $ 218
Accounts payable 14,123 15,303
Other current liabilities 10,624 10,668
Total current liabilities 25,190 26,189
Long-term debt 9,236 10,796
Other non-current liabilities 4,451 4,534
Stockholders’ deficit:
Preferred stock, $0.01 par value (300 shares authorized; none issued) — —
Common stock, $0.01 par value (9,600 shares authorized; 988 and 980 shares issued and outstanding at July 31, 2023 and October 31, 2022, respectively) 10 10
Additional paid-in capital 1,435 1,172
Accumulated deficit (3,336) (4,492)
Accumulated other comprehensive (loss) income (354) 285
Total stockholders’ deficit (2,245) (3,025)
Total liabilities and stockholders’ deficit $ 36,632 $ 38,494


	Three months ended January 31
		2024		2023
		In millions
Net earnings		$	622	$	469
Other comprehensive loss before taxes:
Change in unrealized components of available-for-sale debt securities:
Unrealized gains arising during the period		4		4



Change in unrealized components of cash flow hedges:
Unrealized losses arising during the period		(162)		(623)
Gains reclassified into earnings		(159)		(334)
		(321)		(957)
Change in unrealized components of defined benefit plans:
Losses arising during the period		(10)		(1)
Amortization of actuarial loss and prior service benefit		2		—
Curtailments, settlements and other		—		1
		(8)		—

Change in cumulative translation adjustment		20		29
Other comprehensive loss before taxes		(305)		(924)
Benefit from taxes		70		183
Other comprehensive loss, net of taxes		(235)		(741)
Comprehensive income (loss)		$	387	$	(272)

The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.

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HP INC. AND SUBSIDIARIES

Consolidated Condensed ~~Statements of Cash Flows~~Balance Sheets

(Unaudited)

Nine months ended July 31
2023 2022
In millions
Cash flows from operating activities:
Net earnings $ 2,289 $ 3,155
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization 638 571
Stock-based compensation expense 353 273
Restructuring and other charges 416 148
Deferred taxes on earnings (774) 51
Other, net (61) 361
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable 180 1,101
Inventory 364 (570)
Accounts payable (1,133) (491)
Net investment in leases (82) (94)
Taxes on earnings 354 (165)
Restructuring and other (244) (185)
Other assets and liabilities (704) (1,596)
Net cash provided by operating activities 1,596 2,559
Cash flows from investing activities:
Investment in property, plant and equipment (459) (647)
Proceeds from sale of property, plant and equipment — 26
Purchases of available-for-sale securities and other investments (6) (50)
Maturities and sales of available-for-sale securities and other investments 18 8
Collateral (posted) returned for derivative instruments (118) 14
Payment made in connection with business acquisitions, net of cash acquired (5) (24)
Net cash used in investing activities (570) (673)
Cash flows from financing activities:
Proceeds from (payment of) short-term borrowings with original maturities less than 90 days, net 190 (400)
Proceeds from debt, net of issuance costs 177 4,086
Payment of debt and associated costs (1,654) (141)
Stock-based award activities and others (86) (88)
Repurchase of common stock (100) (3,547)
Cash dividends paid (777) (788)
Collateral returned for derivative instruments (200) —
Settlement of cash flow hedges (3) 79
Net cash used in financing activities (2,453) (799)
(Decrease) increase in cash, cash equivalents and restricted cash (1,427) 1,087
Cash, cash equivalents and restricted cash at beginning of period 3,145 4,299
Cash, cash equivalents and restricted cash at end of period $ 1,718 $ 5,386


	As of
	January 31, 2024		October 31, 2023
	In millions, except par value
ASSETS
Current assets:
Cash, cash equivalents and restricted cash	$	2,417	$	3,232
Accounts receivable, net of allowance for credit losses of $84 and $93, respectively	3,804		4,237
Inventory	6,928		6,862
Other current assets	3,709		3,646
Total current assets	16,858		17,977
Property, plant and equipment, net	2,807		2,827
Goodwill	8,610		8,591
Other non-current assets	7,571		7,609
Total assets	$	35,846	$	37,004
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Notes payable and short-term borrowings	$	359	$	230
Accounts payable	13,255		14,046
Other current liabilities	10,243		10,212
Total current liabilities	23,857		24,488
Long-term debt	9,301		9,254
Other non-current liabilities	4,328		4,331
Stockholders’ deficit:
Preferred stock, $0.01 par value (300 shares authorized; none issued)	—		—
Common stock, $0.01 par value (9,600 shares authorized; 980 and 989 shares issued and outstanding at January 31, 2024 and October 31, 2023, respectively)	10		10
Additional paid-in capital	1,579		1,505
Accumulated deficit	(2,771)		(2,361)
Accumulated other comprehensive loss	(458)		(223)
Total stockholders’ deficit	(1,640)		(1,069)
Total liabilities and stockholders’ deficit	$	35,846	$	37,004

The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.

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HP INC. AND SUBSIDIARIES

Consolidated Condensed Statements of ~~Stockholders’ Deficit~~Cash Flows

(Unaudited)

Common Stock Additional
Paid-in Capital Accumulated
Other
Comprehensive Income (Loss) Total Stockholders’ Deficit
Number of Shares Par Value Accumulated Deficit
In millions, except number of shares in thousands
Balance at April 30, 2022 1,033,392 $ 10 $ 1,081 $ (3,399) $ 348 $ (1,960)
Net earnings 1,122 1,122
Other comprehensive loss, net of taxes (110) (110)
Comprehensive income 1,012
Issuance of common stock in connection with employee stock plans and other 1,068 9 9
Repurchases of common stock (Note 10) (28,522) (30) (971) (1,001)
Cash dividends ($0.50 per common share) (506) (506)
Stock-based compensation expense 70 70
Balance at July 31, 2022 1,005,938 $ 10 $ 1,130 $ (3,754) $ 238 $ (2,376)
Balance at April 30, 2023 985,876 $ 10 $ 1,344 $ (3,579) $ (368) $ (2,593)
Net earnings 766 766
Other comprehensive income, net of taxes 14 14
Comprehensive income 780
Issuance of common stock in connection with employee stock plans and other 2,344 — —
Cash dividends ($0.52 per common share) (523) (523)
Stock-based compensation expense 91 91
Balance at July 31, 2023 988,220 $ 10 $ 1,435 $ (3,336) $ (354) $ (2,245)
Common Stock Additional
Paid-in Capital Accumulated
Other
Comprehensive Income (Loss) Total Stockholders’ Deficit
Number of Shares Par Value Accumulated Deficit
In millions, except number of shares in thousands
Balance at October 31, 2021 1,092,205 $ 11 $ 1,060 $ (2,470) $ (245) $ (1,644)
Net earnings 3,155 3,155
Other comprehensive income, net of taxes 483 483
Comprehensive income 3,638
Issuance of common stock in connection with employee stock plans and other 11,452 (104) (104)
Repurchases of common stock (Note 10) (97,719) (1) (99) (3,399) (3,499)
Cash dividends ($1.00 per common share) (1,040) (1,040)
Stock-based compensation expense 273 273
Balance at July 31, 2022 1,005,938 $ 10 $ 1,130 $ (3,754) $ 238 $ (2,376)
Balance at October 31, 2022 979,869 $ 10 $ 1,172 $ (4,492) $ 285 $ (3,025)
Net earnings 2,289 2,289
Other comprehensive loss, net of taxes (639) (639)
Comprehensive income 1,650
Issuance of common stock in connection with employee stock plans and other 11,975 (86) (86)
Repurchases of common stock (Note 10) (3,624) (4) (96) (100)
Cash dividends ($1.05 per common share) (1,037) (1,037)
Stock-based compensation expense 353 353
Balance at July 31, 2023 988,220 $ 10 $ 1,435 $ (3,336) $ (354) $ (2,245)


	Three months ended January 31
	2024		2023
	In millions
Cash flows from operating activities:
Net earnings	$	622	$	469
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	205		209
Stock-based compensation expense	177		167
Restructuring and other charges	63		141
Deferred taxes on earnings	(5)		(140)

Other, net	(20)		4
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	446		244
Inventory	(47)		230
Accounts payable	(744)		(1,731)
Net investment in leases	(62)		(16)
Taxes on earnings	49		220
Restructuring and other	(87)		(92)
Other assets and liabilities	(476)		279
Net cash provided by (used in) operating activities	121		(16)
Cash flows from investing activities:
Investment in property, plant and equipment, net	(158)		(192)

Purchases of available-for-sale securities and other investments	—		(4)
Maturities and sales of available-for-sale securities and other investments	—		1
Collateral posted for derivative instruments	(70)		(240)


Net cash used in investing activities	(228)		(435)
Cash flows from financing activities:
Proceeds from short-term borrowings with original maturities less than 90 days, net	100		200

Proceeds from debt, net of issuance costs	92		52

Payment of debt and associated costs	(49)		(539)
Stock-based award activities and others	(76)		(79)
Repurchase of common stock	(500)		(100)
Cash dividends paid	(275)		(259)
Collateral returned for derivative instruments	—		(200)

Net cash used in financing activities	(708)		(925)
Decrease in cash, cash equivalents and restricted cash	(815)		(1,376)
Cash, cash equivalents and restricted cash at beginning of period	3,232		3,145
Cash, cash equivalents and restricted cash at end of period	$	2,417	$	1,769

The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.

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HP INC. AND SUBSIDIARIES

Consolidated Condensed Statements of Stockholders’ Deficit

(Unaudited)


	Common Stock			Additional Paid-in Capital				Accumulated Other Comprehensive Loss		Total Stockholders’ Deficit
	Number of Shares	Par Value				Accumulated Deficit
	In millions, except number of shares in thousands
Balance at October 31, 2023	988,782	$	10	$	1,505	$	(2,361)	$	(223)	$	(1,069)
Net earnings	—	—		—		622		—		622
Other comprehensive loss, net of taxes	—	—		—		—		(235)		(235)
Comprehensive income	—	—		—		—		—		387
Issuance of common stock in connection with employee stock plans and other	8,677	—		(76)		—		—		(76)
Repurchases of common stock (Note 10)	(17,062)	—		(27)		(487)		—		(514)
Cash dividends ($0.55 per common share)	—	—		—		(545)		—		(545)
Stock-based compensation expense	—	—		177		—		—		177

Balance at January 31, 2024	980,397	$	10	$	1,579	$	(2,771)	$	(458)	$	(1,640)


	Common Stock			Additional Paid-in Capital				Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Deficit
	Number of Shares	Par Value				Accumulated Deficit
	In millions, except number of shares in thousands
Balance at October 31, 2022	979,869	$	10	$	1,172	$	(4,492)	$	285	$	(3,025)
Net earnings	—	—		—		469		—		469
Other comprehensive loss, net of taxes	—	—		—		—		(741)		(741)
Comprehensive loss	—	—		—		—		—		(272)
Issuance of common stock in connection with employee stock plans and other	8,844	—		(79)		—		—		(79)
Repurchases of common stock (Note 10)	(3,624)	—		(4)		(96)		—		(100)
Cash dividends ($0.53 per common share)	—	—		—		(518)		—		(518)
Stock-based compensation expense	—	—		167		—		—		167

Balance at January 31, 2023	985,089	$	10	$	1,256	$	(4,637)	$	(456)	$	(3,827)

The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.

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Notes to Consolidated Condensed Financial Statements

(Unaudited)

Note 1: Basis of Presentation

Basis of Presentation

The accompanying Consolidated Condensed Financial Statements of HP and its wholly-owned subsidiaries are prepared in conformity with United States (“U.S.”) generally accepted accounting principles (“GAAP”). The interim financial information is unaudited but reflects all normal adjustments that are necessary to provide a fair statement of results for the interim periods presented. This interim information should be read in conjunction with the Consolidated Financial Statements for the fiscal year ended October 31, ~~2022~~2023 in HP’s Annual Report on Form 10-K, filed on December ~~6, 2022.~~18, 2023. The Consolidated Condensed Balance Sheet for October 31, ~~2022~~2023 was derived from audited financial statements.

Principles of Consolidation

The Consolidated Condensed Financial Statements include the accounts of HP and its subsidiaries and affiliates in which HP has a controlling financial interest or is the primary beneficiary. All intercompany balances and transactions have been eliminated.

~~Revision of Prior Period Financial Statements~~Reclassifications

In connection with the preparation of HP’s Consolidated Condensed Financial Statements for the three and nine months ended July 31, 2023, the Company identified an accounting error related to a revenue contract in the Personal Systems segment. HP has ~~revised its prior period financial statements~~reclassified certain prior-year amounts to correct this error, as well as other immaterial errors, which impacted the last quarter and annual period of fiscal year 2020 and all the subsequent periods through the second quarter of fiscal year 2023. The Company evaluated the error and determined that the related impacts were not material to its financial statements for the annual periods when they occurred, but that correcting the error would be materialconform to the Company’s results of operations for the three and nine months ended July 31, 2023. The Company has corrected these errors in the Consolidated Condensed Financial Statements for all prior periods presented herein. Revisions to the Company’s previously reported disclosures have been reflected in Note 2, “Segment Information”; Note 3, “Restructuring and Other Charges”; Note 5, “Taxes on Earnings”; Note 6, “Supplementary Financial Information”; Note 10, “Stockholders’ Deficit”; and Note 11, “Net Earnings Per Share”. A summary of the revisions to the Company’s previously reported financial statements is provided in Note 14, “Revision of Prior Period Financial Statements”.current-year presentation.

Use of Estimates

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in HP’s Consolidated Condensed Financial Statements and accompanying notes. Actual results may differ materially from those estimates. As of July 31, 2023, the extent to which the current macroeconomic factors will impact our business going forward depends on numerous dynamic factors which we cannot reliably predict. As a result, many of our estimates and assumptions required increased judgment and may carry a higher degree of variability and volatility. As the events continue to evolve with respect to the ongoing macroeconomic factors, our estimates may materially change in future periods.

Recently ~~Issued~~Adopted Accounting Pronouncements ~~Not Yet Adopted~~

In November 2021, the FASB issued guidance that enhances the transparency of government assistance by requiring annual disclosure of the types of assistance received, an entity’s accounting for the assistance, and the effect of the assistance on the entity’s financial statements. HP is required to adopt the guidance for its annual period ending on October 31, 2023. Early adoption is permitted. HP is currently evaluating the impact of this guidance on its disclosures.

In September 2022, the ~~FASB~~Financial Accounting Standards Board (“FASB”) issued guidance that enhances the transparency about the use of supplier finance programs.Under the new guidance, companies that use a supplier finance program in connection with the purchase of goods or services ~~will be~~are required to disclose information about ~~the program~~those programs to allow users of financial statements to understand the ~~program’s~~ nature, activity during the period, changes from period to period, and potential magnitude. HP ~~is required to adopt the~~adopted this guidance in the first quarter of fiscal year 2024, except for the ~~amendment~~disclosure on roll forward information which will be adopted in fiscal year 2025, in line with the effective adoption dates prescribed by the FASB. See Note 6, “Supplementary Financial Information,” for additional disclosure related to HP’s supplier finance programs.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued guidance that enhances the transparency of income tax disclosures by expanding annual disclosure requirements related to the rate reconciliation and income taxes paid. HP is ~~effective one year later.~~required to adopt this guidance for its annual period ending October 31, 2026. Early adoption is permitted. HP is currently evaluating the impact of this guidance on its disclosures.

In November 2023, the FASB issued guidance that updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance on an annual and interim basis. HP is required to adopt this guidance for its annual period ending October 31, 2025 and all interim periods thereafter. Early adoption is permitted. HP is currently evaluating the impact of this guidance on its disclosures.

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Notes to Consolidated Condensed Financial Statements (Continued)

(Unaudited)

Note 2: Segment Information

HP is a leading global provider of personal computing and other access devices, imaging and printing products, and related technologies, solutions and services. HP sells to individual consumers, small- and medium-sized businesses (“SMBs”) and large enterprises, including customers in the government, health and education sectors. HP goes to market through its extensive channel network and direct sales.

HP’s operations are organized into three reportable segments: Personal Systems, Printing, and Corporate Investments. HP’s organizational structure is based on many factors that the chief operating decision maker (“CODM”) uses to evaluate, view and run the business operations, which include, but are not limited to, customer base and homogeneity of products and technology. The segments are based on this organizational structure and information reviewed by HP’s CODM to evaluate segment results. The CODM uses several metrics to evaluate the performance of the overall business, including earnings from operations, and uses these results to allocate resources to each of the segments.

~~A summary description of each segment is as follows:~~

Personal Systems offers commercial and consumer ~~customers~~ desktops and notebooks, detachables and convertibles, workstations, thin clients, commercial mobility devices, retail point-of-sale (“POS”) systems, displays, hybrid systems, ~~(includes video conferencing~~software, solutions ~~cameras, headsets, voice, and related software capabilities including all products and solutions acquired from Poly), software, support~~ and services. HP groups commercial notebooks, commercial desktops, commercial services, commercial mobility devices, commercial detachables and convertibles, workstations, retail POS systems and thin clients into commercial (“Commercial PS”), and consumer notebooks, consumer desktops, consumer services and consumer detachables into consumer (“Consumer PS”) when describing performance in these markets. Commercial and Consumer services includePersonal Systems includes support and deployment, configurations and extended warranty ~~services.~~services and maintains multi-operating system and multi-architecture strategies using Microsoft Windows and Google Chrome operating systems, and predominantly use processors from Intel Corporation (“Intel”) and Advanced Micro Devices, Inc. (“AMD”).

Personal Systems groups its global business capabilities into the following business units when reporting business performance:

•Commercial PS ~~consist~~consists of ~~endpoint computing~~devices and accessories, including workstations, thin clients, mobility devices and hybrid systems, for use by enterprise, public sector (which includes education), and ~~SMB customers, with a focus on robust designs, security, serviceability, connectivity, reliability~~small- and ~~manageability in the customer’s environment. Additionally,~~medium-sized business (“SMB”) customers. HP offers a range of services and solutions to ~~enterprise, public sector (which includes education), and SMB~~commercial customers to help them manage the lifecycle of their personal computers (“PCs”) and mobility installed base.

•Consumer PS ~~consist~~consists of devices, accessories and services which are optimized for consumer usage, focusing on gaming, learning and working remotely, consuming multi-media for entertainment, managing personal life activities, ~~staying connected,~~ sharing information, ~~getting things done for work including creating content~~ and staying connected informed and secure.

Printing ~~provides~~offers consumer and commercial printer hardware, supplies, services and solutions. Printing is also focused on ~~imaging solutions~~Graphics and 3D Printing and Personalization in the commercial and industrial markets. ~~Described below are HP’s~~Our global business capabilities within ~~Printing.~~Printing are described below:

•Office Printing Solutions delivers HP’s office printers, supplies, services, and solutions to SMBs, public sector and large enterprises. It also includes ~~OEM~~Original Equipment Manufacturer (“OEM”) hardware and solutions.

•Home Printing Solutionsdelivers innovative printing products, supplies, services and solutions for the home and home ~~business and micro business customers utilizing both HP’s Ink and Laser technologies.~~business.

•Graphics Solutions delivers large-format, commercial and industrial solutions and supplies to print service providers and packaging converters through a wide portfolio of printers and presses (HP DesignJet, HP Latex, HP Indigo and HP PageWide Web Presses).

•3D Printing & ~~Digital Manufacturing~~Personalization offers a portfolio of additive manufacturing solutions and supplies to help customers succeed in their additive and digital manufacturing journey. HP offers complete solutions in collaboration with an ecosystem of partners.

~~Table of Contents~~Printing

~~HP INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Condensed Financial Statements (Continued)~~

~~(Unaudited)~~

~~Note 2: Segment Information (Continued)~~

~~Printing~~ groups its global business capabilities into the following business units when reporting business performance:

•Commercial Printingconsists of office printing solutions, graphics solutions and 3D printing and ~~digital manufacturing,~~personalization, excluding supplies;

•Consumer Printing consists of home printing solutions, excluding supplies; and

•Supplies comprises a set of highly innovative consumable products, ranging from ink and laser cartridges to media, graphics supplies and 3D printing and digital manufacturing supplies, for recurring use in consumer and commercial hardware.

Corporate Investments includes certain business incubation and investment projects.

The accounting policies HP uses to derive segment results are substantially the same as those used by HP in preparing these financial statements. HP derives the results of the business segments directly from its internal management reporting system.

HP does not allocate certain operating expenses, which it manages at the corporate level, to its segments. These unallocated amounts include expenses such as certain corporate governance costs and infrastructure investments, stock-based compensation expense, restructuring and other charges, acquisition and divestiture charges and amortization of intangible ~~assets and Russia exit charges.~~

~~Realignment~~

Effective the first quarter of fiscal 2023, HP realigned the Personal Systems business units reporting structure into Commercial PS and Consumer PS to align with its customer market segmentation. Additionally, in connection with certain other organizational realignments, some costs which were earlier reflected under “Corporate and unallocated cost and other” have now been reclassified to the Personal Systems and Printing segments.

HP has reflected these changes to its prior reporting periods on an as-if basis. The realignment change had no impact to previously reported segment net revenue, consolidated net revenue, net earnings or net earnings per share (“EPS”).assets.

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HP INC. AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements (Continued)

(Unaudited)

~~Note 2: Segment Information (Continued)~~

Segment Operating Results ~~from Operations~~ and the reconciliation to HP consolidated results were as follows:


		Three months ended July 31					Nine months ended July 31
		2023		2022			2023		2022
		In millions									Three months ended January 31
												2024	2023
						In millions								In millions
Net revenue:	Net revenue:
Commercial PS
Commercial PS
Commercial PS	Commercial PS	$	6,201	$	6,956		$	18,499	$	22,600
Consumer PS	Consumer PS	2,731		3,117			7,787		11,171
Personal Systems	Personal Systems	8,932		10,073			26,286		33,771
Supplies	Supplies	2,768		2,814			8,631		9,013
Commercial Printing	Commercial Printing	974		1,036			3,119		3,117
Consumer Printing	Consumer Printing	521		725			1,861		2,239
Printing	Printing	4,263		4,575			13,611		14,369
Corporate Investments	Corporate Investments	1		—			5		1
Total segment net revenue	Total segment net revenue	13,196		14,648			39,902		48,141
Other	Other	—		—			(1)		(5)
Total net revenue	Total net revenue	$	13,196	$	14,648		$	39,901	$	48,136

Earnings before taxes:	Earnings before taxes:
Earnings before taxes:
Earnings before taxes:
Personal Systems
Personal Systems
Personal Systems	Personal Systems	$	592	$	673		$	1,498	$	2,331
Printing	Printing	794		904			2,563		2,725
Corporate Investments	Corporate Investments	(32)		(58)			(103)		(184)
Total segment earnings from operations	Total segment earnings from operations	1,354		1,519			3,958		4,872
Corporate and unallocated costs and other	Corporate and unallocated costs and other	(97)		(76)			(279)		(373)
Stock-based compensation expense	Stock-based compensation expense	(91)		(70)			(353)		(273)
Restructuring and other charges	Restructuring and other charges	(75)		(13)			(416)		(148)
Acquisition and divestiture charges	Acquisition and divestiture charges	(48)		(31)			(206)		(83)
Amortization of intangible assets	Amortization of intangible assets	(91)		(50)			(262)		(154)

Russia exit charges		—		(23)			—		(23)
Interest and other, net
Interest and other, net
Interest and other, net	Interest and other, net	(16)		(70)			(357)		(141)
Total earnings before taxes	Total earnings before taxes	$	936	$	1,186		$	2,085	$	3,677

Realignment

Effective at the beginning of its first quarter of fiscal year 2024, HP realigned its business unit financial reporting more closely with its customer market segmentation. The realignment resulted in the transfer of LaserJet printers net revenues from Consumer Printing to Commercial Printing. HP reflected this change to its business unit information in prior reporting periods on an as-if basis which resulted in the reclassification of net revenues from Consumer Printing to Commercial Printing. The reporting change had no impact to previously reported segment net revenue, consolidated net revenue, earnings from operations, net earnings or net earnings per share (“EPS”).

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Notes to Consolidated Condensed Financial Statements

(Unaudited)

Note 3: Restructuring and Other Charges

Summary of Restructuring Plans

HP’s restructuring activities ~~for the nine months ended July 31, 2023 and 2022~~ summarized by plan were as follows:

Fiscal 2023 Plan
Severance and EER Non-labor
Other prior-year plans(1)
Total
In millions
Accrued balance as of October 31, 2022 $ — $ — $ 32 $ 32
Charges 318 38 3 359
Cash payments (135) (15) (37) (187)
Non-cash and other adjustments (141) (2) (5) 3 (143)
Accrued balance as of July 31, 2023 $ 42 $ 18 $ 1 $ 61
Total costs incurred to date as of July 31, 2023 $ 318 $ 38 $ 868 $ 1,224
Reflected in Consolidated Condensed Balance Sheets
Other current liabilities $ 42 $ 6 $ 1 $ 49
Other non-current liabilities $ — $ 12 $ — $ 12
Accrued balance as of October 31, 2021 $ — $ — $ 90 $ 90
Charges — — 136 136
Cash payments — — (170) (170)
Non-cash and other adjustments — — (36) (36)
Accrued balance as of July 31, 2022 $ — $ — $ 20 $ 20

~~HP’s restructuring charges for the three months ended July 31, 2023 summarized by the plans outlined below were as follows:~~

Fiscal 2023 Plan
Severance and EER Non-labor
Other prior-year plans(1)
Total
In millions
For the three months ended July 31, 2023 $ 24 $ 25 $ 1 $ 50


	Fiscal 2023 Plan
	Severance and EER		Non-labor		Other prior-year plans(1)		Total
	In millions
Accrued balance as of October 31, 2023	$	88	$	18	$	2	$	108
Charges	43		2		3		48
Cash payments	(63)		(6)		(3)		(72)
Non-cash and other adjustments	2		—		(2)		—
Accrued balance as of January 31, 2024	$	70	$	14	$	—	$	84
Total costs incurred to date as of January 31, 2024	$	445	$	43	$	869	$	1,357

Reflected in Consolidated Condensed Balance Sheets
Other current liabilities	$	70	$	3	$	—	$	73
Other non-current liabilities	$	—	$	11	$	—	$	11


Accrued balance as of October 31, 2022	$	—	$	—	$	32	$	32
Charges	122		9		—		131
Cash payments	(53)		(4)		(25)		(82)
Non-cash and other adjustments	(2)		(5)		1		(6)
Accrued balance as of January 31, 2023	$	67	$	—	$	8	$	75

(1) Primarily includes the fiscal 2020 plan along with other legacy plans, all of which are substantially complete. HP does not expect any further material activity associated with these plans.

~~(2)~~ Includes reclassification of liability related to the Enhanced Early Retirement (“EER”) program of $139 million for pension and post-retirement plan special termination benefits. See Note 4 “Retirement and Post-Retirement Benefit Plans” for further information.

Fiscal 2023 Plan

On November 18, 2022, HP’s Board of Directors approved the Future Ready Plan (the “Fiscal 2023 Plan”) intended to enable digital transformation, portfolio optimization and operational efficiency which HP expects will be implemented through fiscal year 2025. HP expects to reduce global headcount by approximately 4,000 to 6,000 employees. HP estimates that it will incur pre-tax charges of approximately $1.0 billion ~~relating to labor and non-labor actions. HP expects to incur~~of which approximately $0.7 billion primarily in labor costs related to workforce reductions and the remaining costs will relate to non-labor actions and other charges.

Other charges

Other charges include non-recurring costs, including those as a result of information technology rationalization efforts and transformation program management costs, and are distinct from ongoing operational costs. These costs primarily relate to third-party professional services and other non-recurring costs. For the three ~~and nine~~ months ended ~~July~~January 31, 2024, HP incurred $15 million of other charges. For the three months ended January 31, 2023, HP incurred ~~$25 million~~

~~and $57~~$10 million of other ~~charges, respectively. For the three and nine months ended July 31, 2022, HP incurred $7 million and $12 million of other charges, respectively.~~charges.

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Notes to Consolidated Condensed Financial Statements

(Unaudited)

Note 4: Retirement and Post-Retirement Benefit Plans

The components of HP’s pension and post-retirement benefit (credit) cost recognized in the Consolidated Condensed Statements of Earnings were as follows:


















	Three months ended January 31
	U.S. Defined Benefit Plans				Non-U.S. Defined Benefit Plans				Post- Retirement Benefit Plans
	2024		2023		2024		2023		2024		2023
	In millions
Service cost	$	—	$	—	$	9	$	9	$	—	$	—
Interest cost	57		54		12		10		4		4
Expected return on plan assets	(61)		(65)		(13)		(13)		(4)		(3)
Amortization and deferrals:
Actuarial loss (gain)	7		5		—		1		(4)		(4)
Prior service cost (credit)	—		—		2		1		(3)		(3)
Net periodic benefit (credit) cost	3		(6)		10		8		(7)		(6)

Settlement loss	—		—		—		1		—		—

Total periodic benefit (credit) cost	$	3	$	(6)	$	10	$	9	$	(7)	$	(6)

Three months ended July 31
U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans Post-Retirement Benefit Plans
2023 2022 2023 2022 2023 2022
In millions
Service cost $ — $ — $ 10 $ 14 $ 1 $ 1
Interest cost 54 41 10 5 4 2
Expected return on plan assets (65) (72) (13) (12) (4) (2)
Amortization and deferrals:
Actuarial loss (gain) 4 1 1 9 (4) (4)
Prior service cost (credit) — — 1 1 (2) (2)
Net periodic benefit (credit) cost (7) (30) 9 17 (5) (5)
Settlement gain — — — (1) — —
Total periodic benefit (credit) cost $ (7) $ (30) $ 9 $ 16 $ (5) $ (5)
Nine months ended July 31
U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans Post- Retirement Benefit Plans
2023 2022 2023 2022 2023 2022
In millions
Service cost $ — $ — $ 30 $ 42 $ 1 $ 1
Interest cost 163 121 30 16 11 6
Expected return on plan assets (194) (221) (39) (37) (10) (6)
Amortization and deferrals:
Actuarial loss (gain) 13 4 3 28 (12) (12)
Prior service cost (credit) — — 4 4 (8) (8)
Net periodic benefit (credit) cost (18) (96) 28 53 (18) (19)
Settlement gain — — — (1) — —
Special termination benefit cost 105 — — — 34 —
Total periodic benefit (credit) cost $ 87 $ (96) $ 28 $ 52 $ 16 $ (19)
Employer Contributions and Funding Policy

HP’s policy is to fund its pension plans so that it makes at least the minimum contribution required by local government, funding and taxing authorities.

During fiscal year ~~2023,~~2024, HP anticipates making contributions of approximately ~~$36~~$45 million to its non-U.S. pension plans, approximately ~~$32~~$31 million to its U.S. non-qualified plan participants and approximately $4$3 million to cover benefit claims under HP’s post-retirement benefit plans. During the ~~nine~~three months ended ~~July~~January 31, ~~2023,~~2024, HP contributed ~~$27~~$11 million to its non-U.S. pension plans, paid ~~$20~~$6 million to cover benefit payments to U.S. non-qualified plan participants and paid $4$2 million to cover benefit claims under HP’s post-retirement benefit plans.

HP’s pension and other post-retirement benefit costs and obligations depend on various assumptions. Differences between expected and actual returns on investments and changes in discount rates and other actuarial assumptions are reflected as unrecognized gains or losses, and such gains or losses are amortized to earnings in future periods. A deterioration in the funded

~~Table of Contents~~

~~HP INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Condensed Financial Statements (Continued)~~

~~(Unaudited)~~

~~Note 4: Retirement and Post-Retirement Benefit Plans (Continued)~~

status of a plan could result in a need for additional contributions or an increase in net pension and post-retirement benefit costs in future periods. Actuarial gains or losses are determined at the measurement date and amortized over the remaining service life for active plans or the life expectancy of plan participants for frozen plans.

Retirement Incentive Program

As part of the Fiscal 2023 Plan, HP announced a voluntary EER program for its U.S. employees in January 2023. Voluntary participation in the EER program was limited to employees at least 55 years old with 10 or more years of service at HP. Employees accepted into the EER program ~~are leaving~~left HP on dates ranging from March 15, 2023 to October 31, 2023. The U.S. defined benefit pension plan was amended to provide that the EER benefit ~~will~~was to be paid from the plan for eligible electing EER participants. The retirement incentive benefit iswas calculated as a lump sum based on years of service at HP at the time of retirement, ranging from 20 to 52 weeks of pay. As a result of this retirement incentive, HP recognized a special termination benefit (“STB”) expense of $105 million for the ~~nine months~~year ended ~~July~~October 31, 2023 as a restructuring charge. This expense is the present value of all additional benefits that HP will distribute from the pension plan assets.

All employees participating in the EER program were offered the opportunity to continue health care coverage at the active employee contribution rates for up to 36 months following retirement, but not beyond age 65 when Medicare is available. In addition, HP ~~is providing~~provided up to $12,000 in employer credits under the Retirement Medical Savings Account program. HP recognized an additional STB expense of $34 million as restructuring and other charges for the ~~nine months~~year ended ~~July~~October 31, 2023 for the health care incentives.

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Notes to Consolidated Condensed Financial Statements

(Unaudited)

Note 5: Taxes on Earnings

Provision for Taxes

HP’s effective tax rate was ~~18.2%~~21.6% and ~~5.4%~~16.6% for the three months ended ~~July~~January 31, ~~2023~~2024 and ~~2022, respectively, and (9.8)% and 14.2% for the nine months ended July 31,~~ 2023, ~~and 2022,~~ respectively. The difference between the U.S. federal statutory tax rate of 21% and HP’s effective tax rate for the three months ended ~~July~~January 31, 2023 was primarily due to tax effects of favorable tax rates associated with certain earnings from HP’s operations in lower-tax jurisdictions throughout the world. For the nine months ended July 31, 2023, the difference was primarily due to tax effects of internal reorganization. The difference between the U.S. federal statutory tax rate of 21% and HP’s effective tax rate for the three and nine months ended July 31, 2022 was primarily due to tax effects of internal reorganization and favorable tax rates associated with certain earnings from HP’sHP's operations in lower-tax jurisdictions throughout the world.

During the three ~~and nine~~ months ended ~~July~~January 31, 2023, HP recorded ~~$32~~$56 million ~~and $724 million, respectively,~~ of net income tax benefits related to discrete items in the provision for taxes. ~~The nine months ended July 31, 2023~~These amounts included ~~benefits~~$30 million of ~~$697 million related to~~income tax ~~effects of internal reorganization. The three and nine months ended July 31, 2023 also included~~ benefits ~~of $16 million and $82 million~~ related to restructuring charges, ~~$51 million and $15 million related to the filing of tax returns in various jurisdictions, and $10 million and $37~~$14 million related to acquisition charges and divestiture charges, respectively. These benefits were partially offset by income tax charges of $2 million and $60 million related to audit settlements in various jurisdictions, $17 million and $32$12 million of ~~uncertain~~other net tax ~~position charges, and $27 million and $25 million related to extinguishment of debt for the three and nine months ended July 31, 2023, respectively.~~benefits. During the three ~~and nine~~ months ended ~~July~~January 31, 2023, ~~discrete items in the provision for taxes and~~ excess tax benefits associated with stock options, restricted stock units and performance-adjusted restricted stock units were immaterial.

During the three and nine months ended July 31, 2022, HP recorded $150 million and $111 million, respectively, of net income tax benefits related to discrete items in the provision for taxes. These amounts included income tax benefits of $167 million and $150 million related to the filing of tax returns in various jurisdictions for the three and nine months ended July 31, 2022 and $3 million and $31 million related to restructuring charges for the three and nine months ended July 31, 2022, respectively. The three and nine months ended July 31, 2022 also included $87 million of tax benefits related to internal reorganization. These benefits were partially offset by income tax charges of $98 million and $93 million related to uncertain tax positions and $10 million and $19 million related to audit settlements in various jurisdictions for the three and nine months ended July 31, 2022, respectively. The nine months ended July 31, 2022 also included tax charges of $55 million related to withholding taxes on undistributed foreign earnings. In addition to the discrete items mentioned above, HP recorded excess tax benefits of $32 million associated with stock options, restricted stock units and performance-adjusted restricted stock units for the nine months ended July 31, 2022.

Uncertain Tax Positions

As of ~~July~~January 31, ~~2023,~~2024, the amount of gross unrecognized tax benefits was $1.2 billion, of which up to ~~$861~~$828 million would affect HP’s effective tax rate if realized. Total gross unrecognized tax benefits increased by ~~$106~~$20 million for the ~~nine~~three months ended ~~July~~January 31, ~~2023.~~2024. HP recognizes interest income from favorable settlements and interest expense and penalties accrued on unrecognized tax benefits in the provision for taxes in the Consolidated Condensed Statements of Earnings. As of ~~July~~January 31, ~~2023~~2024 and ~~2022,~~2023, HP had accrued ~~$98~~$105 million and ~~$76~~$73 million, respectively, for interest and penalties.

HP engages in continuous discussions and negotiations with taxing authorities regarding tax matters in various jurisdictions. HP expects complete resolution of certain tax years with various tax authorities within the next 12 months. HP believes it is reasonably possible that its existing gross unrecognized tax benefits may be reduced by ~~$44~~$39 million within the next 12 months, affecting HP’s effective tax rate if realized.

HP is subject to income tax in the United States and approximately 60 other countries and is subject to routine corporate income tax audits in many of these jurisdictions. In addition, HP is subject to numerous ongoing audits by federal, state and foreign tax authorities. The Internal Revenue Service (“IRS”) is conducting an audit of HP’s 2018 and 2019 income tax returns.

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Consolidated Condensed Statements of Earnings (Continued)

(Unaudited)

Note 6: Supplementary Financial Information

Cash, cash equivalents and restricted cash


		As of				As of
		July 31, 2023		October 31, 2022		January 31, 2024	October 31, 2023
		In millions				In millions
Cash and cash equivalents	Cash and cash equivalents	$	1,673	$	3,145
Restricted cash(1)	Restricted cash(1)	45		—
		$	1,718	$	3,145
	$

(1) Restricted ~~Cash~~cash is related to amounts collected and held on behalf of a third party for trade receivables previously sold.

Accounts Receivable

The allowance for credit losses related to accounts receivable and changes were as follows:


	~~Nine~~Three months ended ~~July~~January 31, ~~2023~~2024
	In millions
Balance at beginning of period	$	~~107~~93
Benefit of allowance for credit losses	~~(7)~~(6)
Deductions, net of recoveries	~~(9)~~(3)
Balance at end of period	$	9184

HP utilizes certain third-party arrangements in the normal course of business as part of HPs cash and liquidity management and also to provide liquidity to certain partners to facilitate their working capital requirements. These financing arrangements, which in certain circumstances may contain partial recourse, result in a transfer of HP’s receivables and risk to the third-party. As these transfers qualify as true sales under the applicable accounting guidance, the receivables are de-recognized from the Consolidated Condensed Balance Sheets upon transfer, and HP receives a payment for the receivables from the third-party within a mutually agreed upon time period. For arrangements involving an element of recourse, the recourse obligation is measured using market data from similar transactions and reported as a current liability in the Consolidated Condensed Balance Sheets. The recourse obligations as of ~~July~~January 31, ~~2023~~2024 and October 31, ~~2022~~2023 were not material.

The following is a summary of the activity under these arrangements:


		Three months ended July 31				Nine months ended July 31
				Three months ended January 31
				Three months ended January 31
				Three months ended January 31
		2023		2022		2023		2022		2024	2023
		In millions								In millions
Balance at beginning of period(1)	Balance at beginning of period(1)	$	174	$	173	$	185	$	131
Trade receivables sold	Trade receivables sold	3,383		2,918		10,241		8,887
Cash receipts	Cash receipts	(3,398)		(2,897)		(10,286)		(8,811)
Foreign currency and other	Foreign currency and other	—		(5)		19		(18)
Balance at end of period(1)	Balance at end of period(1)	$	159	$	189	$	159	$	189

(1) Amounts outstanding from third parties reported in Accounts receivable in the Consolidated Condensed Balance Sheets.

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HP INC. AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements (Continued)

(Unaudited)

Inventory


	As of
	January 31, 2024		October 31, 2023
	In millions
Finished goods	$	3,603	$	3,930
Purchased parts and fabricated assemblies	3,325		2,932
	$	6,928	$	6,862

Other Current Assets


	As of
	January 31, 2024		October 31, 2023
	In millions
Supplier and other receivables	$	1,419	$	1,349
Prepaid and other current assets	1,376		1,445
Value-added taxes receivable	914		852

	$	3,709	$	3,646

Property, Plant and Equipment, Net


	As of
	January 31, 2024		October 31, 2023
	In millions
Land, buildings and leasehold improvements	$	2,348	$	2,332
Machinery and equipment, including equipment held for lease	5,452		5,384
	7,800		7,716
Accumulated depreciation	(4,993)		(4,889)
	$	2,807	$	2,827

Other Non-Current Assets


	As of
	January 31, 2024		October 31, 2023
	In millions
Deferred tax assets	$	3,230	$	3,155
Intangible assets	1,519		1,593
Right-of-use assets	1,165		1,188
Deposits and prepaid	412		427
Prepaid pension and post-retirement benefit assets	395		393
Other	850		853
	$	7,571	$	7,609

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HP INC. AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements (Continued)

(Unaudited)

~~Note 6: Supplementary Financial Information (Continued)~~

~~Inventory~~
As of
July 31, 2023 October 31, 2022
In millions
Finished goods $ 4,171 $ 4,885
Purchased parts and fabricated assemblies 3,026 2,729
$ 7,197 $ 7,614

Other Current ~~Assets~~Liabilities

As of
July 31, 2023 October 31, 2022
In millions
Supplier and other receivables 1,868 1,377
Prepaid and other current assets 1,451 2,086
Value-added taxes receivable 862 968
$ 4,181 $ 4,431

~~Property, Plant and Equipment, net~~

As of
July 31, 2023 October 31, 2022
In millions
Land, buildings and leasehold improvements $ 2,305 $ 2,255
Machinery and equipment, including equipment held for lease 5,385 5,337
7,690 7,592
Accumulated depreciation (4,907) (4,818)
$ 2,783 $ 2,774


	As of
	January 31, 2024		October 31, 2023
	In millions
Sales and marketing programs	$	2,920	$	3,053
Deferred revenue	1,424		1,424
Other accrued taxes	1,071		994
Employee compensation and benefit	648		1,046
Warranty	572		569
Operating lease liabilities	459		430
Tax liability	282		217
Other	2,867		2,479
	$	10,243	$	10,212

Other Non-Current ~~Assets~~Liabilities

As of
July 31, 2023 October 31, 2022
In millions
Deferred tax assets $ 3,054 $ 2,167
Intangible assets 1,690 1,933
Right-of-use assets 1,171 1,236
Prepaid pension and post-retirement benefit assets 559 642
Deposits and prepaids 470 474
Other 828 991
$ 7,772 $ 7,443


	As of
	January 31, 2024		October 31, 2023
	In millions
Deferred revenue	$	1,373	$	1,324
Tax liability	926		904
Operating lease liabilities	815		825
Pension, post-retirement, and post-employment liabilities	546		546
Deferred tax liability	31		44
Other	637		688
	$	4,328	$	4,331

Interest and Other, Net


	Three months ended January 31
		2024		2023
		In millions
Interest expense on borrowings		$	(116)	$	(143)
Factoring costs		(40)		(32)
Loss on extinguishment of debt		—		(8)
Non-operating retirement-related credits		4		11
Other, net		10		(9)
		$	(142)	$	(181)

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HP INC. AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements (Continued)

(Unaudited)

~~Note 6: Supplementary Financial Information (Continued)~~

~~Other Current Liabilities~~

As of
July 31, 2023 October 31, 2022
In millions
Sales and marketing programs $ 3,031 $ 2,984
Deferred revenue 1,379 1,393
Other accrued taxes 1,014 1,064
Employee compensation and benefit 905 954
Warranty 584 619
Operating lease liabilities 439 405
Tax liability 366 286
Other 2,906 2,963
$ 10,624 $ 10,668

~~Other Non-Current Liabilities~~

As of
July 31, 2023 October 31, 2022
In millions
Deferred revenue $ 1,271 $ 1,171
Tax liability 957 911
Operating lease liability 829 875
Pension, post-retirement, and post-employment liabilities 595 600
Deferred tax liability 25 121
Other 774 856
$ 4,451 $ 4,534

~~Interest and other, net~~

Three months ended July 31 Nine months ended July 31
2023 2022 2023 2022
In millions
Interest expense on borrowings $ (134) $ (96) $ (429) $ (229)
Net gain on debt extinguishment 115 — 107 —
Non-operating retirement-related credits 14 38 40 110
Factoring costs(1)
(37) — (99) —
Other, net 26 (12) 24 (22)
$ (16) $ (70) $ (357) $ (141)

~~(1)For the three and nine months ended July 31, 2022, Factoring costs were included in Selling, general and administrative and were not material.~~

~~Table of Contents~~

~~HP INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Condensed Financial Statements (Continued)~~

~~(Unaudited)~~

~~Note 6: Supplementary Financial Information (Continued)~~

Net ~~revenue~~Revenue by ~~region~~Region

Three months ended July 31 Nine months ended July 31
2023 2022 2023 2022
In millions
Americas $ 5,880 $ 6,379 $ 17,052 $ 20,111
Europe, Middle East and Africa 4,285 4,712 13,330 16,670
Asia-Pacific and Japan 3,031 3,557 9,519 11,355
Total net revenue $ 13,196 $ 14,648 $ 39,901 $ 48,136


	Three months ended January 31
		2024		2023
		In millions
Americas		$	5,408	$	5,747
Europe, Middle East and Africa		4,668		4,636
Asia-Pacific and Japan		3,109		3,415
Total net revenue		$	13,185	$	13,798

Value of Remaining Performance Obligations

As of ~~July~~January 31, ~~2023,~~2024, the estimated value of transaction price allocated to remaining performance obligations was ~~$3.7~~$3.8 billion. HP expects to recognize approximately $1.7 billion of the unearned amount in next 12 months and ~~$2.0~~$2.1 billion thereafter.

HP has elected the practical expedients and accordingly does not disclose the aggregate amount of the transaction price allocated to remaining performance obligations if:

•the contract has an original expected duration of one year or less; or

•the revenue from the performance obligation is recognized over time on an as-invoiced basis when the amount corresponds directly with the value to the customer; or

•the portion of the transaction price that is variable in nature is allocated entirely to a wholly unsatisfied performance obligation.

The remaining performance obligations are subject to change and may be affected by various factors, such as termination of contracts, contract modifications and adjustment for currency.

Contract Liabilities

As of ~~July~~January 31, ~~2023~~2024 and October 31, ~~2022,~~2023, HP’s contract liabilities balances were ~~$2.6~~$2.8 billion and ~~$2.5~~$2.7 billion, respectively, included in Other current liabilities and Other non-current liabilities in the Consolidated Condensed Balance Sheets.

The increase in the contract liabilities balance for the ~~nine~~three months ended ~~July~~January 31, ~~2023,~~2024, was primarily driven by sales of fixed-price support and maintenance services, partially offset by ~~$1.0~~$0.5 billion of revenue recognized that was included in the contract liabilities balance as of October 31, ~~2022.~~2023.

Supplier Finance Programs

HP facilitates voluntary supplier finance programs to provide certain suppliers the opportunity to sell their right to HP’s payment obligations to participating financial institutions. Under this program, HP agrees to pay the participating financial institutions the stated amount of confirmed invoices from its designated suppliers on the original maturity dates of the invoices. Participation by suppliers in these programs have no impact on the payment terms and amounts due from HP. HP does not have an economic interest in a supplier's participation in the program and is not a party to the agreement between the supplier and the financial institutions. In connection with these programs, HP does not pledge assets or other forms of guarantees as security for the committed payment to the participating financial institutions. HP pays a monthly service fee to a third-party administrator that provides the supplier finance platform and related support. HP and the participating financial institutions may terminate the agreement upon at least 30 days notice. As of January 31, 2024 and October 31, 2023, HP had $5.3 billion and $6.6 billion respectively, in obligations outstanding (i.e., unpaid invoices) that were confirmed as valid under the supplier finance programs. Of the amounts confirmed as valid under the program and outstanding, the amounts owed to participating financial institutions were $0.7 billion and $0.9 billion as of January 31, 2024 and October 31, 2023, respectively. These obligations are included within the Accounts payable line item of HP’s Consolidated Condensed Balance Sheet.

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Notes to Consolidated Condensed Financial Statements (Continued)

(Unaudited)

Note 7: Fair Value

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date.

Fair Value Hierarchy

HP uses valuation techniques that are based upon observable and unobservable inputs. Observable inputs are developed using market data such as publicly available information and reflect the assumptions market participants would use, while unobservable inputs are developed using the best information available about the assumptions market participants would use. Assets and liabilities are classified in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement:

Level 1—Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2—Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and market-corroborated inputs.

Level 3—Unobservable inputs for the asset or liability.

The fair value hierarchy gives the highest priority to observable inputs and lowest priority to unobservable inputs.

The following table presents HP’s assets and liabilities that are measured at fair value on a recurring basis:

As of July 31, 2023 As of October 31, 2022
Fair Value Measured Using Fair Value Measured Using
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
In millions
Assets:
Cash Equivalents:
Corporate debt $ — $ 460 $ — $ 460 $ — $ 904 $ — $ 904
Government debt(1)
362 — — 362 1,289 — — 1,289
Available-for-Sale Investments:
Financial institution instruments — 3 — 3 — 5 — 5
Marketable securities and mutual funds 28 48 — 76 17 41 — 58
Derivative Instruments:
Foreign currency contracts — 248 — 248 — 1,088 — 1,088
Other derivatives — 6 — 6 — 2 — 2
Total assets $ 390 $ 765 $ — $ 1,155 $ 1,306 $ 2,040 $ — $ 3,346
Liabilities:
Derivative Instruments:
Interest rate contracts $ — $ 63 $ — $ 63 $ — $ 78 $ — $ 78
Foreign currency contracts — 341 — 341 — 295 — 295
Other derivatives — — — — — 1 — 1
Total liabilities $ — $ 404 $ — $ 404 $ — $ 374 $ — $ 374


	As of January 31, 2024								As of October 31, 2023
	Fair Value Measured Using								Fair Value Measured Using
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	In millions
Assets:
Cash Equivalents:
Corporate debt	$	—	$	502	$	—	$	502	$	—	$	589	$	—	$	589

Government debt(1)	1,029		—		—		1,029		1,900		—		—		1,900
Available-for-Sale Investments:

Financial institution instruments	—		3		—		3		—		3		—		3

Marketable securities and mutual funds	43		49		—		92		33		45		—		78
Derivative Instruments:

Foreign currency contracts	—		212		—		212		—		489		—		489
Other derivatives	—		2		—		2		—		—		—		—
Total assets	$	1,072	$	768	$	—	$	1,840	$	1,933	$	1,126	$	—	$	3,059
Liabilities:
Derivative Instruments:
Interest rate contracts	$	—	$	43	$	—	$	43	$	—	$	58	$	—	$	58
Foreign currency contracts	—		248		—		248		—		212		—		212
Other derivatives	—		—		—		—		—		2		—		2
Total liabilities	$	—	$	291	$	—	$	291	$	—	$	272	$	—	$	272

(1) Government debt includes instruments such as U.S. treasury notes, U.S. agency securities and non-U.S. government bonds. Money market funds invested in government debt and traded in active markets are included in Level 1.

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HP INC. AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements (Continued)

(Unaudited)

~~Note 7: Fair Value (Continued)~~

Valuation Techniques

Cash Equivalents and Investments: HP holds time deposits, money market funds, mutual funds, other debt securities primarily consisting of corporate and foreign government notes and bonds, and common stock and equivalents. HP values cash equivalents and equity investments using quoted market prices, alternative pricing sources, including net asset value, or models utilizing market observable inputs. The fair value of debt investments is based on quoted market prices or model-driven valuations using inputs primarily derived from or corroborated by observable market data and, in certain instances, valuation models that utilize assumptions which cannot be corroborated with observable market data.

Derivative Instruments: HP uses industry standard valuation models to measure fair value. Where applicable, these models project future cash flows and discount the future amounts to present value using market-based observable inputs, including interest rate curves, HP and counterparty credit risk, foreign exchange rates, and forward and spot prices for currencies and interest rates. See Note 8, “Financial Instruments” for a further discussion of HP’s use of derivative instruments.

Other Fair Value Disclosures

Short- and Long-Term Debt: HP estimates the fair value of its debt primarily using an expected present value technique, which is based on observable market inputs using interest rates currently available to companies of similar credit standing for similar terms and remaining maturities and considering its own credit risk. The portion of HP’s debt that is hedged is reflected in the Consolidated Condensed Balance Sheets as an amount equal to the debt’s carrying amount and a fair value adjustment representing changes in the fair value of the hedged debt obligations arising from movements in benchmark interest rates. The fair value of HP’s short- and long-term debt was ~~$9.1~~$9.3 billion as compared to its carrying amount of $9.7 billion at ~~July~~January 31, ~~2023.~~2024. The fair value of HP’s short- and long-term debt was ~~$9.6~~$8.5 billion as compared to its carrying value of ~~$11.0~~$9.5 billion at October 31, ~~2022.~~2023. If measured at fair value in the Consolidated Condensed Balance Sheets, short- and long-term debt would be classified in Level 2 of the fair value hierarchy.

Other Financial Instruments: For the balance of HP’s financial instruments, primarily accounts receivable, accounts payable and financial liabilities included in Other current liabilities on the Consolidated Condensed Balance Sheets, the carrying amounts approximate fair value due to their short maturities. If measured at fair value in the Consolidated Condensed Balance Sheets, these other financial instruments would be classified as Level 2 or Level 3 of the fair value hierarchy.

Non-Marketable Equity Investments and Non-Financial Assets: HP’s non-marketable equity investments are measured at cost less impairment, adjusted for observable price changes. HP’s non-financial assets, such as intangible assets, goodwill and property, plant and equipment, are recorded at fair value in the period an impairment charge is recognized. If measured at fair value in the Consolidated Condensed Balance Sheets these would generally be classified within Level 3 of the fair value hierarchy.

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Notes to Consolidated Condensed Financial Statements (Continued)

(Unaudited)

Note 8: Financial Instruments

Cash Equivalents and Available-for-Sale Investments


		As of July 31, 2023								As of October 31, 2022									As of January 31, 2024			As of October 31, 2023
		Cost		Gross Unrealized Gain		Gross Unrealized Loss		Fair Value		Cost		Gross Unrealized Gain		Gross Unrealized Loss		Fair Value			Cost	Gross Unrealized Gain	Gross Unrealized Loss	Fair Value	Cost	Gross Unrealized Gain	Gross Unrealized Loss	Fair Value
		In millions																	In millions
Cash Equivalents:	Cash Equivalents:																	Cash Equivalents:
Corporate debt	Corporate debt	$	460	$	—	$	—	$	460	$	904	$	—	$	—	$	904

Government debt	Government debt	362		—		—		362		1,289		—		—		1,289
Government debt
Government debt
Total cash equivalents	Total cash equivalents	822		—		—		822		2,193		—		—		2,193
Available-for-Sale Investments:	Available-for-Sale Investments:																	Available-for-Sale Investments:

Financial institution instruments	Financial institution instruments	3		—		—		3		5		—		—		5
Financial institution instruments
Financial institution instruments

Marketable securities and mutual funds
Marketable securities and mutual funds
Marketable securities and mutual funds	Marketable securities and mutual funds	41		35		—		76		50		8		—		58
Total available-for-sale investments	Total available-for-sale investments	44		35		—		79		55		8		—		63
Total cash equivalents and available-for-sale investments	Total cash equivalents and available-for-sale investments	$	866	$	35	$	—	$	901	$	2,248	$	8	$	—	$	2,256

All highly liquid investments with original maturities of three months or less at the date of acquisition are considered cash equivalents. As of ~~July~~January 31, ~~2023~~2024 and October 31, ~~2022,~~2023, the carrying amount of cash equivalents approximated fair value due to the short period of time to maturity. The estimated fair value of the available-for-sale investments may not be representative of values that will be realized in the future.

Contractual maturities of investments in available-for-sale debt securities were as follows:

As of July 31, 2023
Amortized Cost Fair Value
In millions
Due in one year $ 3 $ 3


	As of January 31, 2024
	Amortized Cost		Fair Value
	In millions
Due in one year	$	3	$	3

Non-marketable equity securities in privately held companies are included in Other non-current assets in the Consolidated Condensed Balance Sheets. These amounted to ~~$112~~$108 million and ~~$110~~$111 million as of ~~July~~January 31, ~~2023~~2024 and October 31, ~~2022,~~2023, respectively.

HP determines credit losses on cash equivalents and available-for-sale debt securities at the individual security level. All instruments are considered investment grade. No credit-related or noncredit-related impairment losses were recorded for the three ~~and nine~~ months ended ~~July~~January 31, ~~2023.~~2024.

Derivative Instruments

HP uses derivative instruments, primarily forward contracts, interest rate swaps, total return swaps, treasury rate locks, forward starting swaps and option contracts to offset business exposure to foreign currency and interest rate risk on expected future cash flows and on certain existing assets and liabilities. HP may designate its derivative contracts as fair value hedges or cash flow hedges and classifies the cash flows with the activities that correspond to the underlying hedged items. Additionally, for derivatives not designated as hedging instruments, HP categorizes those economic hedges as other derivatives. HP recognizes all derivative instruments at fair value in the Consolidated Condensed Balance Sheets.

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HP INC. AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements (Continued)

(Unaudited)

As a result of its use of derivative instruments, HP is exposed to the risk that its counterparties will fail to meet their contractual obligations. Master netting agreements mitigate credit exposure to counterparties by permitting HP to net amounts due from HP to counterparty against amounts due to HP from the same counterparty under certain conditions. To further limit credit risk, HP has collateral security agreements that allow HP’s custodian to hold collateral from, or require HP to post collateral to, counterparties when ~~aggregate derivative~~the net fair ~~values exceed~~value of financial instruments fluctuates from contractually established ~~thresholds which are~~

~~Table of Contents~~

~~HP INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Condensed Financial Statements (Continued)~~

~~(Unaudited)~~

~~Note 8: Financial Instruments (Continued)~~

generally based on the credit ratings of HP and its counterparties. If HP’s or the counterparty’s credit rating falls below a specified credit rating, either party has the right to request full collateralization of the derivatives’ net liability position.thresholds. The Company includes gross collateral posted and received in other current assets and other current liabilities in the Consolidated Condensed Balance Sheets, respectively. The fair value of derivatives with credit contingent features in a net liability position was ~~$174~~$119 million and ~~$82~~$91 million as of ~~July~~January 31, ~~2023~~2024 and as of October 31, ~~2022,~~2023, respectively, all of which were fully collateralized within two business days.

Under HP’s derivative contracts, the counterparty can terminate all outstanding trades following a covered change of control event affecting HP that results in the surviving entity being rated below a specified credit rating. This credit contingent provision did not affect HP’s financial position or cash flows as of ~~July~~January 31, ~~2023~~2024 and October 31, ~~2022.~~2023.

Fair Value Hedges

HP enters into fair value hedges, such as interest rate swaps, to reduce the exposure of its debt portfolio to changes in fair value resulting from changes in benchmark interest rates on HP’s future interest payments.

For derivative instruments that are designated and qualify as fair value hedges, HP recognizes the change in fair value of the derivative instrument, as well as the offsetting change in the fair value of the hedged item, in Interest and other, net in the Consolidated Condensed Statements of Earnings in the period of change.

Cash Flow Hedges

HP uses forward contracts, option contracts, treasury rate locks and forward starting swaps designated as cash flow hedges to protect against the foreign currency exchange and interest rate risks inherent in its forecasted net revenue, cost of revenue, operating expenses and debt issuance. HP’s foreign currency cash flow hedges mature predominantly within twelve months; however, hedges related to long-term procurement arrangements extend several years.

For derivative instruments that are designated and qualify as cash flow hedges, HP initially records changes in fair value of the derivative instrument in Accumulated other comprehensive loss as a separate component of Stockholders’ deficit in the Consolidated Condensed Balance Sheets and subsequently reclassifies these amounts into earnings in the period during which the hedged transaction is recognized in earnings. HP reports the changes in the fair value of the derivative instrument in the same financial statement line item as changes in the fair value of the hedged item.

Other Derivatives

Other derivatives not designated as hedging instruments consist primarily of forward contracts used to hedge foreign currency-denominated balance sheet exposures. HP also uses total return swaps to hedge its executive deferred compensation plan liability.

For derivative instruments not designated as hedging instruments, HP recognizes changes in fair value of the derivative instrument, as well as the offsetting change in the fair value of the hedged item, in Interest and other, net in the Consolidated Condensed Statements of Earnings in the period of change.

Hedge Effectiveness

For interest rate swaps designated as fair value hedges, HP measures hedge effectiveness by offsetting the change in fair value of the hedged item with the change in fair value of the derivative. For foreign currency options, forward contracts and forward starting swaps designated as cash flow hedges, HP measures hedge effectiveness by comparing the cumulative change in fair value of the hedge contract with the cumulative change in fair value of the hedged item, both of which are based on forward rates.

During the three ~~and nine~~ months ended ~~July~~January 31, ~~2023~~2024 and ~~2022,~~2023, no portion of the hedging instruments’ gain or loss was excluded from the assessment of effectiveness for fair value and cash flow hedges.

Fair Value of Derivative Instruments in the Consolidated Condensed Balance Sheets

The gross notional and fair value of derivative instruments in the Consolidated Condensed Balance Sheets were as follows:

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Notes to Consolidated Condensed Financial Statements (Continued)

(Unaudited)

~~Note 8: Financial Instruments (Continued)~~

As of July 31, 2023 As of October 31, 2022
Outstanding Gross Notional Other Current Assets Other Non-Current Assets Other Current Liabilities Other Non-Current Liabilities Outstanding Gross Notional Other Current Assets Other Non-Current Assets Other Current Liabilities Other Non-Current Liabilities
In millions
Derivatives designated as hedging instruments
Fair value hedges:
Interest rate contracts $ 750 $ — $ — $ — $ 63 $ 750 $ — $ — $ — $ 78
Cash flow hedges:
Foreign currency contracts 15,492 208 31 251 75 16,014 820 256 206 72
Total derivatives designated as hedging instruments 16,242 208 31 251 138 16,764 820 256 206 150
Derivatives not designated as hedging instruments
Foreign currency contracts 4,309 9 — 15 — 4,554 12 — 17 —
Other derivatives 137 6 — — — 122 2 — 1 —
Total derivatives not designated as hedging instruments 4,446 15 — 15 — 4,676 14 — 18 —
Total derivatives $ 20,688 $ 223 $ 31 $ 266 $ 138 $ 21,440 $ 834 $ 256 $ 224 $ 150


	As of January 31, 2024										As of October 31, 2023
	Outstanding Gross Notional		Other Current Assets		Other Non-Current Assets		Other Current Liabilities		Other Non-Current Liabilities		Outstanding Gross Notional		Other Current Assets		Other Non-Current Assets		Other Current Liabilities		Other Non-Current Liabilities
	In millions
Derivatives designated as hedging instruments
Fair value hedges:
Interest rate contracts	$	750	$	—	$	—	$	—	$	43	$	750	$	—	$	—	$	—	$	58
Cash flow hedges:
Foreign currency contracts	15,282		173		28		182		59		15,278		410		70		147		52

Total derivatives designated as hedging instruments	16,032		173		28		182		102		16,028		410		70		147		110
Derivatives not designated as hedging instruments
Foreign currency contracts	3,926		11		—		7		—		4,446		9		—		13		—
Other derivatives	130		2		—		—		—		125		—		—		2		—
Total derivatives not designated as hedging instruments	4,056		13		—		7		—		4,571		9		—		15		—
Total derivatives	$	20,088	$	186	$	28	$	189	$	102	$	20,599	$	419	$	70	$	162	$	110

Offsetting of Derivative Instruments

HP recognizes all derivative instruments on a gross basis in the Consolidated Condensed Balance Sheets. HP does not offset the fair value of its derivative instruments against the fair value of cash collateral posted under its collateral security agreements. As of ~~July~~January 31, ~~2023~~2024 and October 31, ~~2022,~~2023, information related to the potential effect of HP’s master netting agreements and collateral security agreements was as follows:


																			In the Consolidated Condensed Balance Sheets
																			(i)			(ii)		(iii) = (i)–(ii)		(iv)		(v)	(vi) = (iii)–(iv)–(v)
						Gross Amounts Not Offset

		In the Consolidated Condensed Balance Sheets
		(i)		(ii)			(iii) = (i)–(ii)			(iv)		(v)			(vi) = (iii)–(iv)–(v)			Gross Amount Recognized		Gross Amount Offset	Net Amount Presented		Derivatives		Financial Collateral		Net Amount
									Gross Amounts Not Offset								In millions
		Gross Amount Recognized		Gross Amount Offset			Net Amount Presented			Derivatives		Financial Collateral			Net Amount
		In millions
As of July 31, 2023
As of January 31, 2024																		As of January 31, 2024
Derivative assets	Derivative assets	$	254	$	—		$	254		$	222	$	31	(1)	$	1
Derivative liabilities	Derivative liabilities	$	404	$	—		$	404		$	222	$	149	(2)	$	33
As of October 31, 2022
As of October 31, 2023																		As of October 31, 2023
Derivative assets	Derivative assets	$	1,090	$	—		$	1,090		$	290	$	616	(1)	$	184
Derivative liabilities	Derivative liabilities	$	374	$	—		$	374		$	290	$	86	(2)	$	(2)

(1)Represents the cash collateral posted by counterparties as of the respective reporting date for HP’s asset position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date.

(2)Represents the collateral posted by HP including any re-use of counterparty cash collateral as of the respective reporting date for HP’s liability position, net of derivative amounts that could be offset as of, generally, two business days prior to the respective reporting date.

~~Table of Contents~~

~~HP INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Condensed Financial Statements (Continued)~~

~~(Unaudited)~~

~~Note 8: Financial Instruments (Continued)~~

Effect of Derivative Instruments in the Consolidated Condensed Statements of Earnings

The pre-tax effect of derivative instruments and related hedged items in a fair value hedging relationship were as follows:

Derivative Instrument Hedged Item Location Year Total amounts of income/(expense) line items in the statement of financial performance in which the effects of fair value hedges are recorded Gain/(loss) recognized in earnings on derivative instruments Gain/(loss) recognized in earnings on hedged item
In millions
Three months ended July 31
Interest rate contract Fixed-rate debt Interest and other, net 2023 $ (16) $ (6) $ 6
2022 $ (70) $ 8 $ (8)
Nine months ended July 31
Interest rate contract Fixed-rate debt Interest and other, net 2023 $ (357) $ 15 $ (15)
2022 $ (141) $ (34) $ 34

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HP INC. AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements (Continued)

(Unaudited)


Derivative Instrument	Hedged Item	Location	Year	Total amounts of income/(expense) line items in the statement of financial performance in which the effects of fair value hedges are recorded		Gain/(loss) recognized in earnings on derivative instruments		Gain/(loss) recognized in earnings on hedged item
				In millions



Three months ended January 31
Interest rate contract	Fixed-rate debt	Interest and other, net	2024	$	(142)	$	15	$	(15)
			2023	$	(181)	$	14	$	(14)

The pre-tax effect of derivative instruments in cash flow hedging relationships included in Accumulated other comprehensive (loss) income was as follows:

Three months ended July 31 Nine months ended July 31
2023 2022 2023 2022
In millions
(Loss)/gain recognized in Accumulated other comprehensive (loss) income on derivatives:
Foreign currency contracts $ (68) $ 264 $ (757) $ 1,097
Interest rate contracts $ — $ 16 $ — $ 85


	Three months ended January 31
			2024		2023
		In millions
Gain/(loss) recognized in Accumulated other comprehensive (loss) income on derivatives:
Foreign currency contracts			$	(162)	$	(623)

The pre-tax effect of derivative instruments in cash flow hedging relationships included in earnings were as follows:

Total amounts of income/(expense) line items in the statement of financial performance in which the effects of cash flow hedges are recorded Gain/(loss) reclassified from Accumulated
other comprehensive (loss) income into earnings
Three months ended July 31 Nine months ended July 31 Three months ended July 31 Nine months ended July 31
2023 2022 2023 2022 2023 2022 2023 2022
In millions
Net revenue $ 13,196 $ 14,648 $ 39,901 $ 48,136 $ (37) $ 349 $ 240 $ 548
Cost of revenue (10,374) (11,764) (31,378) (38,564) (33) (23) (142) (58)
Other operating expenses (1,870) (1,628) (6,081) (5,754) (1) (1) (3) —
Interest and other, net (16) (70) (357) (141) 3 2 9 1
Total $ (68) $ 327 $ 104 $ 491


		Total amounts of income/(expense) line items in the statement of financial performance in which the effects of cash flow hedges are recorded					Gain/(loss) reclassified from Accumulated other comprehensive (loss) income into earnings
	Three months ended January 31					Three months ended January 31
		2024		2023			2024		2023
		In millions
Net revenue		$	13,185	$	13,798		$	199	$	386
Cost of revenue		(10,297)		(11,011)			(40)		(54)
Operating expenses		(1,953)		(2,044)			(3)		(1)
Interest and other, net		(142)		(181)			3		3
Total							$	159	$	334

As of ~~July~~January 31, ~~2023,~~2024, HP expects to reclassify an estimated accumulated other comprehensive loss of ~~$49~~$33 million, net of taxes, to earnings within the next twelve months associated with cash flow hedges along with the earnings effects of the related forecasted transactions. The amounts ultimately reclassified into earnings could be different from the amounts previously included in Accumulated other comprehensive (loss) income based on the change of market rate, and therefore could have different impact on earnings.

2726

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HP INC. AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements (Continued)

(Unaudited)

~~Note 8: Financial Instruments (Continued)~~

The pre-tax effect of derivative instruments not designated as hedging instruments recognized in Interest and other, net in the Consolidated Condensed Statements of Earnings ~~for the three and nine months ended July 31, 2023 and 2022 was~~ as follows:

Gain/(loss) recognized in earnings on derivative instrument
Three months ended July 31 Nine months ended July 31
Location 2023 2022 2023 2022
In millions
Foreign currency contracts Interest and other, net $ (37) $ 8 $ (76) $ 3
Other derivatives Interest and other, net 5 14 5 2
Total $ (32) $ 22 $ (71) $ 5


	Gain/(loss) recognized in earnings on derivative instrument
		Three months ended January 31
	Location			2024		2023
			In millions
Foreign currency contracts	Interest and other, net			$	1	$	(44)
Other derivatives	Interest and other, net			4		6
Total				$	5	$	(38)

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HP INC. AND SUBSIDIARIES

Consolidated Condensed Statements of Earnings (Continued)

(Unaudited)

Note 9: Borrowings

Notes Payable and Short-Term Borrowings


		As of July 31, 2023				As of October 31, 2022					As of January 31, 2024							As of October 31, 2023
		Amount Outstanding		Weighted-Average Interest Rate		Amount Outstanding		Weighted-Average Interest Rate			Amount Outstanding				Weighted-Average Interest Rate				Amount Outstanding						Weighted-Average Interest Rate
		In millions									In millions
Commercial Paper	Commercial Paper	$	200	5.5	%	$	—	—	%	Commercial Paper	$	100		5.5		5.5	%			$	—			—		—	%
Current portion of long-term debt	Current portion of long-term debt	178		6.1	%	165		5.4	%	Current portion of long-term debt	193			5.9		5.9	%			179				6.0		6.0	%
Notes payable to banks, lines of credit and other	Notes payable to banks, lines of credit and other	65		1.4	%	53		0.6	%	Notes payable to banks, lines of credit and other	66			1.2		1.2	%			51				1.0		1.0	%
		$	443			$	218
	$												$	359								$	230

Long-Term Debt


		As of					As of
		July 31, 2023		October 31, 2022			January 31, 2024	October 31, 2023
		In millions					In millions
U.S. Dollar Global Notes(1)	U.S. Dollar Global Notes(1)					U.S. Dollar Global Notes(1)
$1,200 issued at discount to par at a price of 99.863% at 6.00%, due September 2041	$1,200 issued at discount to par at a price of 99.863% at 6.00%, due September 2041	$	1,199	$	1,199

$1,150 issued at discount to par at a price of 99.769% at 2.2%, due June 2025		1,149		1,149
$1,000 issued at discount to par at a price of 99.718% at 3.0%, due June 2027		998		997
$850 issued at discount to par at a price of 99.790% at 3.4%, due June 2030(4)		503		848
$1,000 issued at discount to par at a price of 99.808% at 1.45%, due June 2026(4)		521		999
$1,150 issued at discount to par at a price of 99.769% at 2.20%, due June 2025
$1,150 issued at discount to par at a price of 99.769% at 2.20%, due June 2025
$1,150 issued at discount to par at a price of 99.769% at 2.20%, due June 2025
$1,000 issued at discount to par at a price of 99.718% at 3.00%, due June 2027
$850 issued at discount to par at a price of 99.790% at 3.40%, due June 2030
$1,000 issued at discount to par at a price of 99.808% at 1.45%, due June 2026
$1,000 issued at discount to par at a price of 99.573% at 2.65%, due June 2031(2)	$1,000 issued at discount to par at a price of 99.573% at 2.65%, due June 2031(2)	997		996
$1,000 issued at discount to par at a price of 99.767% at 4.00%, due April 2029	$1,000 issued at discount to par at a price of 99.767% at 4.00%, due April 2029	999		999
$1,000 issued at discount to par at a price of 99.966% at 4.20%, due April 2032(4)		676		1,000
$1,000 issued at discount to par at a price of 99.966% at 4.20%, due April 2032
$900 issued at discount to par at a price of 99.841% at 4.75%, due January 2028	$900 issued at discount to par at a price of 99.841% at 4.75%, due January 2028	899		899
$1,100 issued at discount to par at a price of 99.725% at 5.50%, due January 2033	$1,100 issued at discount to par at a price of 99.725% at 5.50%, due January 2033	1,097		1,097
$500 issued at par at a price of 100% at 4.75%, due March 2029(3)		3		500
		9,041		10,683
Other borrowings at 1.58%-8.30%, due in calendar years 2023-2030		496		436
$500 issued at par at a price of 100% at 4.75%, due March 2029
	9,042
Other borrowings at 1.58%-8.30%, due in fiscal years 2024-2030
Fair value adjustment related to hedged debt	Fair value adjustment related to hedged debt	(63)		(78)
Unamortized debt issuance cost	Unamortized debt issuance cost	(60)		(80)
Current portion of long-term debt	Current portion of long-term debt	(178)		(165)
Total long-term debt	Total long-term debt	$	9,236	$	10,796

(1)HP may redeem some or all of the fixed-rate U.S. Dollar Global Notes at any time in accordance with the terms thereof. The U.S. Dollar Global Notes are senior unsecured debt.

(2)HP allocated an amount equal to the net proceeds to finance or refinance, in whole or in part, environmentally and socially responsible eligible projects in the following eight areas: renewable energy; green buildings; energy efficiency; clean transportation; pollution prevention and control; eco-efficient and/or circular economy products, production technologies and processes; environmentally sustainable management of living natural resources and land use; and socioeconomic advancement and empowerment.

~~(3)During the nine months ended July 31, 2023, HP repurchased or redeemed and settled $497 million of the March 2029 Notes related to the August 2022 Poly acquisition~~

~~(4)During the nine months ended July 31, 2023, HP repurchased and settled $1.15 billion in aggregate principal amount of various Global Notes.~~

As disclosed in Note 8, “Financial ~~Instruments”,~~Instruments,” HP uses interest rate swaps to mitigate some of the exposure of its debt portfolio to changes in fair value resulting from changes in benchmark interest rates. Interest rates shown in the table of long-term debt have not been adjusted to reflect the impact of any interest rate swaps.

~~Extinguishment of Debt~~

In July 2023, HP commenced and completed a tender offer to purchase approximately $1.15 billion in aggregate principal amount of its outstanding US Dollar 1.45% Global Notes due June 17, 2026, 3.40% Global Notes due June 17, 2030 and 4.20%

~~Table of Contents~~ 10

~~HP INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Condensed Financial Statements (Continued)~~

~~(Unaudited)~~

~~Note 9: Borrowings (Continued)~~

~~Global Notes due April 15, 2032~~. ~~This extinguishment of debt resulted in a net gain of $115 million, which was recorded within Interest and other, net on the Consolidated Condensed Statements of Earnings.~~

Commercial Paper

As of ~~July~~January 31, ~~2023,~~2024, HP maintained a U.S. commercial paper program for the issuance of U.S. dollar-denominated commercial paper up to a maximum aggregate principal amount of $6.0 billion. The principal amount outstanding under this program and certain short-term borrowings at any time cannot exceed a $6.0 billion authorization by HP’s Board of Directors.

Table of Contents 10

HP INC. AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements (Continued)

(Unaudited)

Credit Facilities

As of ~~July~~January 31, ~~2023,~~2024, HP maintained a $5.0 billion sustainability-linked senior unsecured committed revolving credit facility, which HP entered into in May 2021, and a $1.0 billion senior unsecured committed 364-day revolving credit facility, which HP entered into in March 2023. Commitments under the $5.0 billion revolving credit facility will be available until May 26, 2026 and commitments under the $1.0 billion 364-day revolving credit facility will be available until March 19, 2024. Commitment fees, interest rates and other terms of borrowing under the revolving credit facilities vary based on HP’s external credit ratings and, for the $5.0 billion facility, certain sustainability metrics. Funds borrowed under the revolving credit facilities may be used for general corporate purposes.

As of ~~July~~January 31, ~~2023,~~2024, HP was in compliance with the covenants in the credit agreements governing the revolving credit facilities.

Available Borrowing Resources

As of ~~July~~January 31, ~~2023,~~2024, HP had available borrowing resources of ~~$1.2~~$1.0 billion from uncommitted lines of credit in addition to the full capacity of the revolving credit facilities.

Table of Contents

HP INC. AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements (Continued)

(Unaudited)

Note 10: Stockholders’ Deficit

Share Repurchase Program

HP’s share repurchase program authorizes both open market and private repurchase transactions. ~~There were no~~During the three months ended January 31, 2024, HP executed share repurchases of 17.1 million shares and settled total shares for $0.5 billion. Share repurchases executed during the three months ended ~~July~~January 31, ~~2023.~~2024 included 0.3 million shares settled in February 2024. During the ~~nine~~three months ended ~~July~~January 31, 2023, HP executed share repurchases of 3.6 million shares and settled total shares for $0.1 billion. ~~During the three and nine months ended July 31, 2022, HP executed share repurchases of 29 million shares and 98 million shares and settled total shares for $1.0 billion and $3.5 billion respectively.~~

The shares repurchased during the ~~nine~~three months ended ~~July~~January 31, ~~2023~~2024 and ~~2022~~2023 were all open market repurchase transactions. As of ~~July~~January 31, ~~2023,~~2024, HP had approximately ~~$2.0~~$1.5 billion remaining under the share repurchase authorizations approved by HP’s Board of Directors.

Taxes related to Other Comprehensive Income (Loss)


	Three months ended January 31
			2024		2023
		In millions
Tax effect on change in unrealized components of available-for-sale debt securities:
Tax provision on unrealized gains arising during the period			$	—	$	(1)

Tax effect on change in unrealized components of cash flow hedges:
Tax benefit on unrealized losses arising during the period			36		106
Tax provision on gains reclassified into earnings			32		78
			68		184
Tax effect on change in unrealized components of defined benefit plans:
Tax benefit on losses arising during the period			2		—


			2		—


Tax benefit on other comprehensive loss			$	70	$	183

Table of Contents

HP INC. AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements (Continued)

(Unaudited)

~~Note 10: Stockholders' Deficit (Continued)~~

~~Tax effects related to Other Comprehensive Income (Loss)~~

Three months ended July 31 Nine months ended July 31
2023 2022 2023 2022
In millions
Tax effect on change in unrealized components of available-for-sale debt securities:
Tax benefit (provision) on unrealized (losses) gains arising during the period $ — $ 1 $ (1) $ 2
Tax effect on change in unrealized components of cash flow hedges:
Tax benefit (provision) on unrealized (losses) gains arising during the period 18 (159) 144 (305)
Tax (benefit) provision on losses (gains) reclassified into earnings (15) 99 22 135
3 (60) 166 (170)
Tax effect on change in unrealized components of defined benefit plans:
Tax benefit (provision) on gains (losses) arising during the period — — (1) —
Tax benefit on amortization of actuarial loss and prior service benefit — (3) — (5)
Tax provision on curtailments, settlements and other — — — (1)
— (3) (1) (6)
Tax effect on change in cumulative translation adjustment — — — 2
Tax benefit (provision) on other comprehensive income (loss) $ 3 $ (62) $ 164 $ (172)

~~Table of Contents~~

~~HP INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Condensed Financial Statements (Continued)~~

~~(Unaudited)~~

~~Note 10: Stockholders' Deficit (Continued)~~

Changes and reclassifications related to Other Comprehensive ~~Income (Loss),~~Loss, net of taxes

Three months ended July 31 Nine months ended July 31
2023 2022 2023 2022
In millions
Other comprehensive income (loss), net of taxes:
Change in unrealized components of available-for-sale debt securities:
Unrealized gains (losses) arising during the period $ 1 $ — $ 4 $ (5)
Change in unrealized components of cash flow hedges:
Unrealized (losses) gains arising during the period (50) 121 (613) 877
Losses (gains) reclassified into earnings 53 (228) (82) (356)
3 (107) (695) 521
Change in unrealized components of defined benefit plans:
Gains (losses) arising during the period — 10 4 12
Amortization of actuarial loss and prior service benefit(1)
— 2 — 11
Curtailments, settlements and other — (1) — (2)
— 11 4 21
Change in cumulative translation adjustment 10 (14) 48 (54)
Other comprehensive income (loss), net of taxes $ 14 $ (110) $ (639) $ 483


	Three months ended January 31
			2024		2023
		In millions
Other comprehensive loss, net of taxes:
Change in unrealized components of available-for-sale debt securities:
Unrealized gains arising during the period			$	4	$	3


Change in unrealized components of cash flow hedges:
Unrealized losses arising during the period			(126)		(517)
Gains reclassified into earnings			(127)		(256)
			(253)		(773)
Change in unrealized components of defined benefit plans:
Losses arising during the period			(8)		(1)
Amortization of actuarial loss and prior service benefit(1)			2		—
Curtailments, settlements and other			—		1
			(6)		—

Change in cumulative translation adjustment			20		29
Other comprehensive loss, net of taxes			$	(235)	$	(741)

(1)These components are included in the computation of net pension and post-retirement benefit (credit) charges in Note 4, “Retirement and Post-Retirement Benefit Plans”.

The components of Accumulated other comprehensive ~~income (loss),~~loss, net of taxes and changes were as follows:


		Nine months ended July 31, 2023										Three months ended January 31, 2024
		Net unrealized gains (losses) on available-for-sale debt securities		Net unrealized gains (losses) on cash flow hedges		Unrealized components of defined benefit plans		Change in cumulative translation adjustment		Accumulated other comprehensive income (loss)		Net unrealized gains (losses) on available-for-sale debt securities	Net unrealized gains (losses) on cash flow hedges	Unrealized components of defined benefit plans	Change in cumulative translation adjustment	Accumulated other comprehensive loss
		In millions										In millions
Balance at beginning of period	Balance at beginning of period	$	6	$	648	$	(323)	$	(46)	$	285
Other comprehensive gain (loss) before reclassifications		4		(613)		4		48		(557)
Other comprehensive gains (losses) before reclassifications
Reclassifications of gain into earnings	Reclassifications of gain into earnings	—		(82)		—		—		(82)

Balance at end of period	Balance at end of period	$	10	$	(47)	$	(319)	$	2	$	(354)
Balance at end of period
Balance at end of period

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Consolidated Condensed Statements of Earnings (Continued)

(Unaudited)

Note 11: ~~Net~~ Earnings Per Share

HP calculates basic net EPS using net earnings and the weighted-average number of shares outstanding during the reporting period. Diluted net EPS includes any dilutive effect of restricted stock units, stock options, performance-based awards and shares purchased under the 2021 employee stock purchase plan.

A reconciliation of the number of shares used for basic and diluted net EPS calculations is as follows:




		Three months ended July 31				Nine months ended July 31				Three months ended January 31
		2023		2022		2023		2022			2024	2023
		In millions, except per share amounts									In millions, except per share amounts
Numerator:	Numerator:
Net earnings	Net earnings	$	766	$	1,122	$	2,289	$	3,155
Net earnings
Net earnings
Denominator:	Denominator:
Weighted-average shares used to compute basic net EPS
Weighted-average shares used to compute basic net EPS
Weighted-average shares used to compute basic net EPS	Weighted-average shares used to compute basic net EPS	993		1,024		991		1,052
Dilutive effect of employee stock plans	Dilutive effect of employee stock plans	9		11		8		12
Weighted-average shares used to compute diluted net EPS	Weighted-average shares used to compute diluted net EPS	1,002		1,035		999		1,064
Net earnings per share:	Net earnings per share:
Basic	Basic	$	0.77	$	1.10	$	2.31	$	3.00
Basic
Basic
Diluted	Diluted	$	0.76	$	1.08	$	2.29	$	2.97
Anti-dilutive weighted-average stock-based compensation awards(1)	Anti-dilutive weighted-average stock-based compensation awards(1)	3		5		5		4

(1)HP excludes from the calculation of diluted net EPS stock options and restricted stock units where the assumed proceeds exceed the average market price, because their effect would be anti-dilutive. The assumed proceeds of a stock option include the sum of its exercise price, and average unrecognized compensation cost. The assumed proceeds of a restricted stock unit represent unrecognized compensation cost.

Note 12: Litigation and Contingencies

HP is involved in lawsuits, claims, investigations and proceedings, including those identified below, consisting of IP, commercial, securities, employment, employee benefits and environmental matters that arise in the ordinary course of business. HP accrues a liability when management believes that it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated. HP believes it has recorded adequate provisions for any such matters and, as of ~~July~~January 31, ~~2023,~~2024, it was not reasonably possible that a material loss had been incurred in excess of the amounts recognized in HP’s financial statements. HP reviews these matters at least quarterly and adjusts its accruals to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case. Pursuant to the separation and distribution agreement entered into with Hewlett Packard Enterprise Company (“Hewlett Packard Enterprise”), HP shares responsibility with Hewlett Packard Enterprise for certain matters, as indicated below, and Hewlett Packard Enterprise has agreed to indemnify HP in whole or in part with respect to certain matters. Based on its experience, HP believes that any damage amounts claimed in the specific matters discussed below are not a meaningful indicator of HP’s potential liability. Litigation is inherently unpredictable. However, HP believes it has valid defenses with respect to legal matters pending against it. Nevertheless, cash flows or results of operations could be materially affected in any particular period by the resolution of one or more of these contingencies.

Litigation, Proceedings and Investigations

Copyright Levies. Proceedings are ongoing or have been concluded involving HP in certain European countries, challenging the imposition or the modification of levies regimes upon IT equipment (such as PCs or printers) or the restrictions to exonerate the application of private copying levies on devices purchased by business users. The levies are generally based upon the number of products sold and the per-product amounts of the levies, which vary. Some European countries are expected to implement legislation to introduce or extend existing levy schemes to digital devices. HP, other companies and various industry associations have opposed the extension of levies to the digital product and certain requirements for business sales exemptions and have advocated alternative models of compensation to rights holders.

Table of Contents

HP INC. AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements (Continued)

(Unaudited)

Based on the exemption of levies on business sales and industry opposition to increasing levies to digital products, HP’s assessments of the merits of various proceedings and HP’s estimates of the number of units impacted and the amounts of the levies, HP has accrued amounts that it believes are adequate to address the ongoing disputes.

~~Table of Contents~~

~~HP INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Condensed Financial Statements (Continued)~~

~~(Unaudited)~~

~~Note 12: Litigation and Contingencies (Continued)~~

Forsyth, et al. v. HP Inc. and Hewlett Packard Enterprise. This is a purported class and collective action filed on August 18, 2016 in the United States District Court, Northern District of California, against HP and Hewlett Packard Enterprise (“HPE”) alleging the defendants violated federal and state law by terminating older workers and replacing them with younger workers. In their most recent complaint, plaintiffs seek to represent (1) a putative nationwide federal Age Discrimination in Employment Act (ADEA) collective comprised of all former HP Inc. employees 40 years of age and older who had their employment terminated under a WFR plan in or after 2014 or 2015, depending on state law; and (2) a putative Rule 23 class under California law comprised of all former HP Inc. employees 40 years of age and older who had their employment terminated in California under a WFR plan in or after 2012. Excluded from the putative collective and class are employees who (a) signed a Waiver and General Release Agreement at termination, or (b) signed an Agreement to Arbitrate Claims. Similar claims are pending against HPE. Because the court granted plaintiffs’ motion for preliminary certification of the putative nationwide ADEA collectives, a third-party administrator notified eligible former employees of their right to opt into the ADEA collective. This opt-in period closed on February 15, 2022. Plaintiffs seek monetary damages, punitive damages, and other relief. In June 2023, the parties reached an agreement in principle to resolve this matter. The parties ~~are negotiating~~have finalized a ~~formal~~ settlement agreement, ~~that, if finalized, would be submitted to~~and the ~~District Court for approval.The case is presently stayed until a hearing for preliminary approvalof the settlement set for~~court preliminarily approved it on October 26, 2023. The Court has set the Final Approval Hearing for March 28, 2024.

India Directorate of Revenue Intelligence Proceedings. On April 30 and May 10, 2010, the India Directorate of Revenue Intelligence (the “DRI”) issued show cause notices to Hewlett-Packard India Sales Private Limited (“HP India”), a subsidiary of HP, seven HP India employees and one former HP India employee alleging that HP India underpaid customs duties while importing products and spare parts into India and seeking to recover an aggregate of approximately $370 million, plus penalties and interest. Prior to the issuance of the notices, HP India deposited approximately $16 million with the DRI and agreed to post a provisional bond in exchange for the DRI’s agreement to not seize HP India products and spare parts or interrupt business by HP India.

On April 11, 2012, the Bangalore Commissioner of Customs issued an order on the products-related notice affirming certain duties and penalties against HP India and the named individuals of approximately $386 million, of which HP India had already deposited $9 million. On December 11, 2012, HP India voluntarily deposited an additional $10 million in connection with the products-related notice. The differential duty demand is subject to interest. On April 20, 2012, the Commissioner issued an order on the parts-related notice affirming certain duties and penalties against HP India and certain of the named individuals of approximately $17 million, of which HP India had already deposited $7 million. After the order, HP India deposited an additional $3 million in connection with the parts-related notice so as to avoid certain penalties.

HP India filed appeals of the Commissioner’s orders before the Customs, Excise and Service Tax Appellate Tribunal (the “Customs Tribunal”) along with applications for waiver of the pre-deposit of remaining demand amounts as a condition for hearing the appeals. The Customs Department has also filed cross-appeals before the Customs Tribunal. On January 24, 2013, the Customs Tribunal ordered HP India to deposit an additional $24 million against the products order, which HP India deposited in March 2013. On February 7, 2014, the Customs Tribunal granted HP India’s application for extension of the stay of deposit until disposal of the appeals. On October 27, 2014, the Customs Tribunal commenced hearings on the cross-appeals of the Commissioner’s orders and rejected HP India’s request to remand the matter to the Commissioner on procedural grounds. The Customs Tribunal cancelled hearings to reconvene in 2015, 2016 and January 2019. On January 20, 2021, the Customs Tribunal held a virtual hearing during which the judge allowed HP’s application for a physical hearing on the merits as soon as practicable, which will be scheduled when physical hearings resume at court. Pursuant to the separation and distribution agreement, Hewlett Packard Enterprise has agreed to indemnify HP in part, based on the extent to which any liability arises from the products and spare parts of Hewlett Packard Enterprise’s businesses.

Philips Patent Litigation. In September 2020, Koninklijke Philips N.V. and Philips North America LLC (collectively, “Philips”) filed a complaint against HP for patent infringement in federal court for the District of Delaware and filed a companion complaint with the U.S. International Trade Commission (“ITC”) pursuant to Section 337 of the Tariff Act against HP and 8 other sets of respondents. Both complaints allege that certain digital video-capable devices and components thereof infringe four of Philips’ patents. In October 2020, the ITC instituted an investigation, and Philips later withdrew two of the four patents. On March 23, 2022, the ITC rendered a final determination that no violation of Section 337 has occurred. Philips did not appeal and elected to resume litigation with its case in federal court. Philips seeks unspecified damages and an injunction against HP, and the prior stay has been lifted. On August 10, 2023, HP filed a motion for summary judgment of indefiniteness for all asserted claims.

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Caltech Patent Litigation. On November 11, 2020, the California Institute of Technology (“Caltech”) filed a complaint against HP for patent infringement in the federal court for the Western District of Texas. On March 19, 2021, Caltech filed an amendment to this same complaint. The complaint as amended alleges infringement of five of Caltech’s patents, U.S. Patent Nos. 7,116,710; 7,421,032; 7,716,552; 7,916,781; and 8,284,833. The accused products are HP commercial and consumer PCs

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~~(Unaudited)~~

~~Note 12: Litigation and Contingencies (Continued)~~

as well as wireless printers that comply with the IEEE 802.11n, 802.11ac, and/or 802.11ax standards. Caltech seeks unspecified damages and other relief. In August 2021, the court stayed the case pending the decision in related cases brought by ~~the U.S. Court of Appeals for the Federal Circuit in~~ ~~The California Inst. of Tech. v. Broadcom Ltd et al., Case No. 2020-2222, which was issued on February 4, 2022,~~Caltech against Apple and ~~a request for further review of that decision by the Supreme Court was denied.~~Broadcom. On ~~August 16, 2023, the parties informed the court that the stay should be lifted on September 5, 2023.~~

~~In re HP Inc. Securities Litigation (Electrical Workers Pension Fund, Local 103, I.B.E.W. v. HP Inc., et al.)~~. On February 19, 2020, Electrical Workers Pension Fund, Local 103, I.B.E.W. filed a putative class action complaint against HP, Dion Weisler, Catherine Lesjak, and Steven Fieler in U.S. District Court in the Northern District of California. The court appointed the State of Rhode Island, Office of the General Treasurer, on behalf of the Employees’ Retirement System of Rhode Island and Iron Workers Local 580 Joint Funds as Lead Plaintiffs. Lead Plaintiffs filed an amended complaint, which additionally named as defendants Enrique Lores and Christoph Schell. HP and the named officers filed a motion to dismiss the complaint for failure to state a claim upon which relief can be granted. The court granted HP’s motion to dismiss and granted plaintiffs leave to amend the complaint. Plaintiffs’ second amended complaint, which no longer names Christoph Schell as a defendant, alleges, among other things, that from February 23, 2017 to October 3, 2019, HP and the named officers violated Sections 10(b) and 20(a) of the Exchange Act by making false or misleading statements about HP’s printing supplies business. It further alleges that Dion Weisler and Enrique Lores violated Sections 10(b) and 20A of the Exchange Act by allegedly selling shares of HP common stock during this period while in possession of material, non-public adverse information about HP’s printing supplies business. Plaintiffs seek compensatory damages and other relief. HP and the named officers filed a motion to dismiss the second amended complaint for failure to state a claim upon which relief can be granted. On September 15, 2021, the court granted HP’s motion. Plaintiffs appealed the decision.~~The parties settled and the motion for preliminary approval of settlement was filed on March 3, 2023.Under the terms of the settlement, HP agreed to pay an amount that is immaterial to HP. The district court granted preliminary approval of the settlement on April 7, 2023. On September~~November 6, 2023, the court issued an order ~~approving~~maintaining the ~~settlement~~stay of all discovery and ~~directing entry~~deadlines pending discovery relating to whether Caltech has standing to bring suit with respect to the asserted patents and the court’s resolution of ~~final judgment.~~that issue. A hearing concerning Caltech’s standing is scheduled for May 2024.

York County on behalf of the County of York Retirement Fund v. HP Inc., et al., and related proceedings. On November 5, 2020, York County, on behalf of the County of York Retirement Fund, filed a putative class action complaint against HP, Dion Weisler, and Catherine Lesjak in federal court in the Northern District of California. The court appointed Maryland Electrical Industry Pension Fund as Lead Plaintiff. Lead Plaintiff filed a consolidated complaint, which additionally names as defendants Enrique Lores and Richard Bailey. The complaint alleges, among other things, that from November 5, 2015 to June 21, 2016, HP and the named current and former officers violated Sections 10(b) and 20(a) of the Exchange Act by concealing material information and making false statements about HP’s printing supplies business. Plaintiffs seek compensatory damages and other relief. HP and the named officers filed a motion to dismiss the complaint for failure to state a claim upon which relief can be granted. On March 3, 2022, the court granted the motion to dismiss with prejudice. Plaintiffs appealed the decision. On April 11, 2023, the appellate court reversed the district court’s decision and remanded the case to the district court for further proceedings consistent with the appellate opinion, including consideration of HP’s other arguments for dismissal. On June 27, 2023, the district court issued an order setting the briefing schedule for a renewed motion to dismiss. On May 17, 2021, stockholder Scott Franklin filed a derivative complaint against certain current and former officers and directors in federal court in the District of Delaware. Plaintiff purports to bring the action on behalf of HP, which he has named as a nominal defendant, and he makes substantially the same factual allegations as in the York County securities complaint, bringing claims for breach of fiduciary duty and violations of securities laws. The derivative plaintiff seeks compensatory damages, governance reforms, and other relief. By court order following stipulations by the parties, the case was transferred to the Northern District of California, and the case was stayed pending a ruling on the motion to dismiss in York County and exhaustion of all related appeals. On January 13, 2022, stockholder Gerald Lovoi filed a derivative complaint in federal court in the Northern District of California against the same current and former officers and directors named in the Franklin action. The complaint alleges the same basic claims based on the same alleged conduct as the Franklin action and seeks similar relief. By stipulation of the parties, the Lovoi action was stayed pending a ruling on the motion to dismiss in York County and exhaustion of all related appeals. Both derivative actions will remain stayed while the district court considers on remand HP’s other arguments for dismissal.

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~~Note 12: Litigation and Contingencies (Continued)~~

Legal Proceedings re Authentication of Supplies. Since 2016, HP has from time to time been named in civil litigation, or been the subject of government investigations, involving supplies authentication protocols used in certain HP printers in multiple geographies, including but not limited to the United States, Italy, Israel, the Netherlands, Australia and New Zealand. The supplies authentication protocols are often referred to as Dynamic Security. The core allegations in these proceedings claim misleading or inadequate consumer notifications and permissions pertaining to the use of Dynamic Security, the installation of firmware updates, or the potential inability of cartridges with clone chips or circuitry to work in HP printers with Dynamic Security. Plaintiffs base or have based their claims on various legal theories, including but not limited to unfair competition, computer trespass, and similar statutory claims. Among other relief, Plaintiffs have sought or seek money damages and in certain cases have or may seek injunctive relief against the use or operation of Dynamic Security or relief requiring interoperability. If HP is not successful in its defense of these cases or investigations, it could be subject to damages, penalties, significant settlement demands, or injunctive relief that may be costly or may disrupt operations.

Certain of these proceedings in Italy, the Netherlands, Israel, Australia and New Zealand have been resolved, have concluded, or have concluded subject only to HP’s pending appeal. Civil litigation filed by Digital Revolution B.V. (trading as 123Inkt) against HP Nederlands B.V., et al. (Netherlands) in March 2020, including its competition claim, remains pending. Both parties have appealed.

In addition, two putative class actions have been filed against HP in federal court in California, in December 2020, ~~and~~ April 2022, and one in federal court in Illinois, in January 2024, arising out of the use of Dynamic Security firmware updates in HP Laserjet printers, ~~and~~in HP Inkjet printers, and in both, respectively. Plaintiffs in ~~both~~these cases seek compensatory damages, restitution, injunctive relief against alleged unfair and anticompetitive business practices, and other relief. In the case directed to Laserjet printers, plaintiffs ~~have~~ filed a motion for class ~~certification.~~certification, and, on December 8, 2023, the court entered an order denying in full plaintiffs’ request to certify a damages class and granting certification of a narrowed injunctive relief class composed of those who did not see HP’s disclosures. In its order, the court declined at this juncture to resolve the merits of the sufficiency of HP’s disclosures. The ~~case involving Inkjet printers remains~~other cases are in ~~its~~their early stages.

Autonomy-Related Legal ~~Matters~~

~~Investigations~~Proceedings.

As athe result ~~of the findings~~ of an internal investigation, HP ~~provided~~obtained information ~~to government authorities, including the U.S. Department of Justice (“DOJ”) related to~~about certain accounting improprieties, disclosure failures and misrepresentations at Autonomy that occurred before and in connection with ~~HP’s~~its 2011 acquisition of Autonomy. In November 2016, a federal grand jury indicted Sushovan Hussain, former CFO of Autonomy on charges of conspiracy to commit wire fraud, securities fraud, and multiple counts of wire fraud. The indictment alleged that Mr. Hussain engaged in a scheme to defraud purchasers and sellers of securities of Autonomy and HP about Autonomy’s true financial performance and condition. On April 30, 2018, a jury found Mr. Hussain guilty of all charges against him, and that judgment was affirmed on appeal in August 2020. In November 2018, a federal grand jury indicted Michael Lynch, former CEO of Autonomy, and Stephen Chamberlain, former VP of Finance of Autonomy. The indictment charged Mr. Lynch and Mr. Chamberlain with conspiracy to commit wire fraud and multiple counts of wire fraud. On January 28, 2022, the U.K. Home Office approved U.S. demands to have Mr. Lynch extradited to face the charges. Mr. Lynch’s request for permission to appeal this decision was denied on April 21, 2023, and Mr. Lynch has been extradited to the United States. Trial on the charges against Mr. Lynch and Mr. Chamberlain is set to begin on March 18, 2024, in federal court in the Northern District of California. HP is continuing to cooperate with the ongoing enforcement actions.

~~Autonomy Corporation Limited v. Michael Lynch and Sushovan Hussain~~. On April 17, 2015, four former HP subsidiaries that became subsidiaries of Hewlett Packard Enterprise at the time of the Separation (Autonomy Corporation Limited, Hewlett Packard Vision BV, Autonomy Systems, Limited, and Autonomy, Inc.) initiated civil proceedings in the U.K. High Court of Justice against two members of Autonomy’s former management, Michael Lynch and Sushovan ~~Hussain. The Particulars of Claim seek damages in excess of $5 billion from Messrs. Lynch and~~ Hussain, for breach of their fiduciary duties byin causing Autonomy group companies to engage in improper transactions and accounting practices. ~~On October 1, 2015,~~The claims seek more than $5 billion in damages. Messrs. Lynch and Hussain filed ~~their defenses.~~defenses and Mr. Lynch ~~also~~ filed a counterclaim ~~against Autonomy Corporation Limited~~ seeking $160 million in damages ~~among other things,~~ for alleged misstatements regarding Lynch. Trial ~~was completed~~concluded in January 2020. On May 17, 2022, the court issued its final judgment, ~~memorializing its findings~~finding that HP succeeded inon substantially all ~~of its~~ claims and that Messrs. Lynch and Hussein engaged in fraud, and dismissing Mr. Lynch’s counterclaim. The court deferred its ~~assessment of~~ damages ruling to a later, separate judgment to be issued after further ~~submissions,~~proceedings, which began on February 12, 2024, but ~~it has~~ indicated that damages awarded may be substantially less than is claimed. Litigation is unpredictable, and there can be no assurance that HP will recover damages or as to how any award of damages will compare with the amount claimed. The amount ultimately awarded, if any, would be recorded in the period received. No adjustment has been recorded in the financial statements in relation to this potential award. Pursuant to the terms of the separation and distribution agreement, HP and Hewlett Packard Enterprise will share equally in any recovery. In addition, Messrs. Hussein and Lynch, and Stephen Chamberlain, former VP of Finance of Autonomy, were each indicted on federal criminal charges in the Northern District of California. On April 30, 2018, a jury found Mr. Hussein guilty of conspiracy to commit wire fraud, securities fraud, and multiple counts of wire fraud, and that judgment was affirmed on appeal in August 2020. Messrs. Lynch and Chamberlain are set to face trial on charges of conspiracy to commit wire fraud, and multiple counts of wire fraud on March 18, 2024. HP is continuing to cooperate with the ongoing enforcement actions.

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~~Note 12:~~

Nokia Patent Litigation. On October 31, 2023, Nokia filed a complaint for patent infringement against HP in federal court for the District of Delaware asserting ten patents and ~~Contingencies (Continued)~~filed two companion complaints with the U.S. International Trade Commission (“ITC”) pursuant to Section 337 of the Tariff Act against HP, asserting seven of the ten patents asserted in the federal court case. The complaints allege that HP products that are compliant with certain video coding technology standards, including Advanced Video Coding (H.264) or High Efficiency Video Coding (H.265) standards, infringe Nokia’s patents. In November 2023, the ITC instituted investigations on Nokia’s complaints. On December 11, 2023, HP filed counterclaims against Nokia in the Delaware action, including claims that Nokia violated its commitments to license standard-essential patents on fair, reasonable, and non-discriminatory (“FRAND”) terms, and seeking a court determination of the proper FRAND rate. Nokia’s patent litigation against HP also includes a lawsuit filed in November 2023 against HP and six of its subsidiaries in the European Unified Patent Court in Germany, 2 lawsuits filed in November 2023 but served in January 2024 against HP and its German subsidiary in state court in Munich, Germany, and a lawsuit filed on December 1, 2023, against a subsidiary, HP Brasil Indústria e Comércio de Equipamentos Eletrônicos Ltda. (“HP Brazil”), in the state court in Rio de Janeiro in Brazil. In Brazil, Nokia alleged that HP’s products contain “skip mode” technology compatible with H.264 video standards that infringes one of Nokia’s Brazilian patents. On December 4, 2023, before HP had received service of the lawsuit, the court granted Nokia an ex parte preliminary injunction against HP Brazil’s commercialization of such products in Brazil. HP has appealed the injunction and asked the appellate court to suspend its enforcement. If the court does not do so, the injunction in Brazil will take effect and remain in place unless overturned on appeal, until the state court revokes or modifies it, or the case is resolved. If HP is not successful in its defenses, it may be subject to injunctions, orders to recall products in Germany and other EU countries, or licensing demands to avoid potential disruptions to its business. On January 31, 2024, HP Brazil filed the non-infringement defense and a patent nullity action against Nokia. Given the procedural posture and nature of these cases, including proceedings that are in their early stages and have significant factual and legal issues to be resolved, HP is unable to make a reasonable estimate of the potential loss or range of losses that may arise from these matters.

R2 Semiconductor Litigation. In November 2022, R2 Semiconductor, Inc. (“R2”) filed a lawsuit in the Dusseldorf Regional Court in Germany against Intel Deutschland GmbH, HP Deutschland GmbH and certain other Intel customers. R2 asserts one European patent is infringed by HP’s products that contain certain Intel processors. R2 seeks an injunction prohibiting the sale of the alleged infringing products. Intel is indemnifying HP subject to certain limitations in the parties’ agreement. The Dusseldorf Regional Court conducted a trial on December 7, 2023 and issued an adverse judgment on February 7, 2024. The Court’s judgment imposes an injunction prohibiting sales of the accused products in Germany, an order to stop all other infringing actions, and an order to issue a communication to commercial customers recalling the relevant products sold since March 5, 2020, which could take effect upon notice of R2’s payment of the required sureties and remain in place unless stayed or overturned on appeal or the parties reach an agreement. On February 8, 2024, HP filed an appeal and request for a stay of the judgment pending appeal. Given the procedural posture, the nature of the case, and the relationship with Intel, HP is unable to make a reasonable estimate of the potential loss or range of losses that might arise from this lawsuit and that would not be indemnifiable by Intel.

Litigation with Access Advance Patent Pool regarding video codecs. Access Advance LLC (“Access Advance”) is an independent licensing administrator formed to license allegedly essential patents for standards-based video codecs, which it licenses through various licensing pools.In late 2023, members of Access Advance’s HEVC Advance patent pool launched a patent litigation campaign against HP in Germany and Europe. To date, three pool members, Dolby, Mitsubishi Electric (“Mitsubishi”) and Konikijke Philips N.V. (“Philips”) have each filed patent infringement lawsuits against HP and various affiliates. Specifically, Dolby filed a lawsuit against HP and 14 affiliates in the new Unified Patent Court (UPC) in Düsseldorf, and Mitsubishi and Philips each filed a lawsuit against HP and two affiliates in theState Court in Munich, Germany. The complaints allege that HP products that are compliant with the High Efficiency Video Coding (H.265) standard infringe the pool members' respective patents, seek an injunction, and allege that HP has failed to act as a willing licensee of HEVC essential patents based on HP's negotiations with Access Advance. If HP is not successful in its defenses in these suits, it may be subject to injunctions, recall orders, and claims for damages or face licensing demands to avoid potential disruptions to its business. Given the procedural posture and nature of these cases, which are in their early stages and have significant factual and legal issues to be resolved, HP is unable to make a reasonable estimate of the potential loss or range of losses that may arise from these matters.

Environmental

HP is, and may become a party to, proceedings brought by U.S., state, or other governmental entities or private third parties under federal, state, local, or foreign environmental laws, including the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), known as “Superfund,” or state laws similar to CERCLA. HP is also conducting environmental investigations or remediation at several current or former operating sites and former disposal sites pursuant to administrative orders or consent agreements with environmental agencies.

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Note 13: Guarantees, Indemnifications and Warranties

Guarantees

In the ordinary course of business, HP may issue performance guarantees to certain of its clients, customers and other parties pursuant to which HP has guaranteed the performance obligations of third parties. Some of those guarantees may be backed by standby letters of credit or surety bonds. In general, HP would be obligated to perform over the term of the guarantee in the event a specified triggering event occurs as defined by the guarantee. HP believes the likelihood of having to perform under a material guarantee is remote.

Cross-Indemnifications with Hewlett Packard Enterprise

On November 1, 2015, Hewlett-Packard Company completed the separation of Hewlett Packard Enterprise, Hewlett-Packard Company’s former enterprise technology infrastructure, software, services and financing businesses. The separation and distribution agreement provides for cross-indemnities between HP and Hewlett Packard Enterprise for liabilities allocated to the respective party pursuant to the terms of such agreement. For information on cross-indemnifications with Hewlett Packard Enterprise for litigation matters, see Note 12, “Litigation and Contingencies”.

Indemnifications

In the ordinary course of business, HP enters into contractual arrangements under which HP may agree to indemnify a third-party to such arrangement from any losses incurred relating to the services they perform on behalf of HP or for losses arising from certain events as defined within the particular contract, which may include, for example, litigation or claims relating to past performance. HP also provides indemnifications to certain vendors and customers against claims of intellectual property infringement made by third parties arising from the vendors’ and customers’ use of HP’s software products and services and certain other matters. Some indemnifications may not be subject to maximum loss clauses. Historically, payments made related to these indemnifications have been immaterial.

HP records tax indemnification receivables from various third parties for certain tax liabilities that HP is jointly and severally liable for, but for which it is indemnified by those same third parties under existing legal agreements. HP records a tax indemnification payable to various third parties under these agreements when management believes that it is both probable that a liability has been incurred and the amount can be reasonably estimated. The actual amount that the third parties pay or may be obligated to pay HP could vary depending on the outcome of certain unresolved tax matters, which may not be resolved for several years.

Warranties

HP accrues the estimated cost of product warranties at the time it recognizes revenue. HP engages in extensive product quality programs and processes, including actively monitoring and evaluating the quality of its component suppliers; however, contractual warranty terms, repair costs, product call rates, average cost per call, current period product shipments and ongoing product failure rates, as well as specific product class failures outside of HP’s baseline experience, affect the estimated warranty obligation.

HP’s aggregate product warranty liabilities and changes were as follows:


	~~Nine~~Three months ended ~~July~~January 31, ~~2023~~2024
	In millions
Balance at beginning of period	$	~~876~~706
Accruals for warranties issued	~~513~~183
Adjustments related to pre-existing warranties (including changes in estimates)	2419
Settlements made (in cash or in kind)	~~(660)~~(229)
Balance at end of period	$	~~753~~679

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~~Notes to Consolidated Condensed Financial Statements (Continued)~~

~~(Unaudited)~~

~~Note 14: Revision of Prior Period Financial Statements~~

The Company has revised certain prior period financial statements to correct for an accounting error related to a revenue contract as well as other immaterial errors. See Note 1, “Basis of Presentation” for further information. A summary of revisions to the Company’s previously reported financial statements is presented below.

~~Revised Consolidated Condensed Statements of Earnings~~

For the three months ended January 31, 2023 For the three months ended January 31, 2022
As reported Adjustment As revised As reported Adjustment As revised
In millions, except per share amounts
Net revenue $ 13,828 $ (30) $ 13,798 $ 17,028 $ (15) $ 17,013
Cost of revenue $ 11,019 $ (8) $ 11,011 $ 13,643 $ (21) $ 13,622
Research and development $ 403 $ — $ 403 $ 418 $ 60 $ 478
Total costs and expenses $ 13,063 $ (8) $ 13,055 $ 15,669 $ 39 $ 15,708
Earnings from operations $ 765 $ (22) $ 743 $ 1,359 $ (54) $ 1,305
Interest and other, net $ (181) $ — $ (181) $ (32) $ 2 $ (30)
Earnings before taxes $ 584 $ (22) $ 562 $ 1,327 $ (52) $ 1,275
Provision for taxes $ (97) $ 4 $ (93) $ (241) $ 18 $ (223)
Net earnings $ 487 $ (18) $ 469 $ 1,086 $ (34) $ 1,052
Basic earnings per share $ 0.49 $ (0.02) $ 0.47 $ 1.00 $ (0.03) $ 0.97
Diluted earnings per share $ 0.49 $ (0.02) $ 0.47 $ 0.99 $ (0.03) $ 0.96

For the three months ended April 30, 2023 For the six months ended April 30, 2023
As reported Adjustment As revised As reported Adjustment As revised
In millions, except per share amounts
Net revenue $ 12,913 $ (6) $ 12,907 $ 26,741 $ (36) $ 26,705
Cost of revenue $ 9,984 $ 9 $ 9,993 $ 21,003 $ 1 $ 21,004
Total costs and expenses $ 12,151 $ 9 $ 12,160 $ 25,214 $ 1 $ 25,215
Earnings from operations $ 762 $ (15) $ 747 $ 1,527 $ (37) $ 1,490
Earnings before taxes $ 602 $ (15) $ 587 $ 1,186 $ (37) $ 1,149
Benefit from taxes $ 464 $ 3 $ 467 $ 367 $ 7 $ 374
Net earnings $ 1,066 $ (12) $ 1,054 $ 1,553 $ (30) $ 1,523
Basic earnings per share $ 1.08 $ (0.02) $ 1.06 $ 1.57 $ (0.03) $ 1.54
Diluted earnings per share $ 1.07 $ (0.01) $ 1.06 $ 1.56 $ (0.03) $ 1.53

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~~Notes to Consolidated Condensed Financial Statements (Continued)~~

~~(Unaudited)~~

For the three months ended April 30, 2022 For the six months ended April 30, 2022
As reported Adjustment As revised As reported Adjustment As revised
In millions, except per share amounts
Net revenue $ 16,490 $ (15) $ 16,475 $ 33,518 $ (30) $ 33,488
Cost of revenue $ 13,157 $ 21 $ 13,178 $ 26,800 $ — $ 26,800
Research and development $ 425 $ — $ 425 $ 843 $ 60 $ 903
Restructuring and other charges $ 82 $ (15) $ 67 $ 150 $ (15) $ 135
Total costs and expenses $ 15,212 $ 6 $ 15,218 $ 30,881 $ 45 $ 30,926
Earnings from operations $ 1,278 $ (21) $ 1,257 $ 2,637 $ (75) $ 2,562
Interest and other, net $ (39) $ (2) $ (41) $ (71) $ — $ (71)
Earnings before taxes $ 1,239 $ (23) $ 1,216 $ 2,566 $ (75) $ 2,491
Provision for taxes $ (239) $ 4 $ (235) $ (480) $ 22 $ (458)
Net earnings $ 1,000 $ (19) $ 981 $ 2,086 $ (53) $ 2,033
Basic earnings per share $ 0.95 $ (0.02) $ 0.93 $ 1.96 $ (0.05) $ 1.91
Diluted earnings per share $ 0.94 $ (0.02) $ 0.92 $ 1.94 $ (0.05) $ 1.89

For the three months ended July 31, 2022 For the nine months ended July 31, 2022
As reported Adjustment As revised As reported Adjustment As revised
In millions, except per share amounts
Net revenue $ 14,664 $ (16) $ 14,648 $ 48,182 $ (46) $ 48,136
Research and development $ 368 $ — $ 368 $ 1,211 $ 60 $ 1,271
Restructuring and other charges $ 13 $ — $ 13 $ 163 $ (15) $ 148
Total costs and expenses $ 13,392 $ — $ 13,392 $ 44,273 $ 45 $ 44,318
Earnings from operations $ 1,272 $ (16) $ 1,256 $ 3,909 $ (91) $ 3,818
Earnings before taxes $ 1,202 $ (16) $ 1,186 $ 3,768 $ (91) $ 3,677
Provision for taxes $ (83) $ 19 $ (64) $ (563) $ 41 $ (522)
Net earnings $ 1,119 $ 3 $ 1,122 $ 3,205 $ (50) $ 3,155
Basic earnings per share $ 1.09 $ 0.01 $ 1.10 $ 3.05 $ (0.05) $ 3.00
Diluted earnings per share $ 1.08 $ — $ 1.08 $ 3.01 $ (0.04) $ 2.97

~~Revised~~ ~~Consolidated~~ ~~Condensed Statements of Comprehensive Income (Loss)~~

For the three months ended January 31, 2023 For the three months ended January 31, 2022
As reported Adjustment As revised As reported Adjustment As revised
In millions
Net earnings $ 487 $ (18) $ 469 $ 1,086 $ (34) $ 1,052
(Losses) gains on unrealized components of defined benefit plans $ (38) $ 37 $ (1) $ 21 $ (20) $ 1
Other comprehensive (loss) income before taxes $ (961) $ 37 $ (924) $ 270 $ (20) $ 250
Benefit from (provision for) taxes $ 192 $ (9) $ 183 $ (26) $ 6 $ (20)
Other comprehensive (loss) income, net of taxes $ (769) $ 28 $ (741) $ 244 $ (14) $ 230
Comprehensive (loss) income $ (282) $ 10 $ (272) $ 1,330 $ (48) $ 1,282

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~~Notes to Consolidated Condensed Financial Statements (Continued)~~

~~(Unaudited)~~

For the three months ended April 30, 2023 For the six months ended April 30, 2023
As reported Adjustment As revised As reported Adjustment As revised
In millions
Net earnings $ 1,066 $ (12) $ 1,054 $ 1,553 $ (30) $ 1,523
Gains (losses) on unrealized components of defined benefit plans $ 6 $ — $ 6 $ (32) $ 37 $ 5
Other comprehensive income (loss) before taxes $ 110 $ — $ 110 $ (851) $ 37 $ (814)
(Provision for) benefit from taxes $ (22) $ — $ (22) $ 170 $ (9) $ 161
Other comprehensive income (loss), net of taxes $ 88 $ — $ 88 $ (681) $ 28 $ (653)
Comprehensive income $ 1,154 $ (12) $ 1,142 $ 872 $ (2) $ 870

For the three months ended April 30, 2022 For the six months ended April 30, 2022
As reported Adjustment As revised As reported Adjustment As revised
In millions
Net earnings $ 1,000 $ (19) $ 981 $ 2,086 $ (53) $ 2,033
Gains on unrealized components of defined benefit plans $ 1 $ — $ 1 $ 22 $ (20) $ 2
Other comprehensive income before taxes $ 453 $ — $ 453 $ 723 $ (20) $ 703
Provision for taxes $ (90) $ — $ (90) $ (116) $ 6 $ (110)
Other comprehensive income, net of taxes $ 363 $ — $ 363 $ 607 $ (14) $ 593
Comprehensive income $ 1,363 $ (19) $ 1,344 $ 2,693 $ (67) $ 2,626

For the three months ended July 31, 2022 For the nine months ended July 31, 2022
As reported Adjustment As revised As reported Adjustment As revised
In millions
Net earnings $ 1,119 $ 3 $ 1,122 $ 3,205 $ (50) $ 3,155
Gains on unrealized components of defined benefit plans $ 10 $ — $ 10 $ 32 $ (20) $ 12
Other comprehensive (loss) income before taxes $ (48) $ — $ (48) $ 675 $ (20) $ 655
Provision for taxes $ (62) $ — $ (62) $ (178) $ 6 $ (172)
Other comprehensive (loss) income, net of taxes $ (110) $ — $ (110) $ 497 $ (14) $ 483
Comprehensive income $ 1,009 $ 3 $ 1,012 $ 3,702 $ (64) $ 3,638

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~~HP INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Condensed Financial Statements (Continued)~~

~~(Unaudited)~~

~~Revised Consolidated Condensed Balance Sheets~~

For the fiscal years ended October 31
2022
As reported Adjustment As revised
In millions
Inventory $ 7,595 $ 19 $ 7,614
Other current assets $ 4,515 $ (84) $ 4,431
Total current assets $ 19,801 $ (65) $ 19,736
Other non-current assets $ 7,471 $ (28) $ 7,443
Total assets $ 38,587 $ (93) $ 38,494
Accounts payable $ 15,284 $ 19 $ 15,303
Other current liabilities $ 10,651 $ 17 $ 10,668
Total current liabilities $ 26,153 $ 36 $ 26,189
Other non-current liabilities $ 4,556 $ (22) $ 4,534
Accumulated deficit $ (4,413) $ (79) $ (4,492)
Accumulated other comprehensive income $ 313 $ (28) $ 285
Total stockholders’ deficit $ (2,918) $ (107) $ (3,025)
Total liabilities and stockholders’ deficit $ 38,587 $ (93) $ 38,494

~~Revised Consolidated Condensed Statements of Cash Flows~~

For the three months ended January 31, 2023 For the three months ended January 31, 2022
As reported Adjustment As revised As reported Adjustment As revised
In millions
Cash flows from operating activities:
Net earnings $ 487 $ (18) $ 469 $ 1,086 $ (34) $ 1,052
Deferred taxes on earnings $ (136) $ (4) $ (140) $ 5 $ — $ 5
Accounts receivable $ 244 $ — $ 244 $ 337 $ 25 $ 362
Inventory $ 218 $ 12 $ 230 $ (1,277) $ — $ (1,277)
Accounts payable $ (1,712) $ (19) $ (1,731) $ 2,035 $ — $ 2,035
Taxes on earnings $ 220 $ — $ 220 $ (6) $ (17) $ (23)
Other assets and liabilities $ 250 $ 29 $ 279 $ (988) $ 26 $ (962)
Net cash (used in) provided by operating activities $ (16) $ — $ (16) $ 1,657 $ — $ 1,657

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~~HP INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Condensed Financial Statements (Continued)~~

~~(Unaudited)~~

For the six months ended April 30, 2023 For the six months ended April 30, 2022
As reported Adjustment As revised As reported Adjustment As revised
In millions
Cash flows from operating activities:
Net earnings $ 1,553 $ (30) $ 1,523 $ 2,086 $ (53) $ 2,033
Restructuring and other charges $ 341 $ — $ 341 $ 150 $ (15) $ 135
Deferred taxes on earnings $ (817) $ (8) $ (825) $ (5) $ 4 $ (1)
Accounts receivable $ 426 $ — $ 426 $ 91 $ 25 $ 116
Inventory $ 354 $ 20 $ 374 $ (1,270) $ — $ (1,270)
Accounts payable $ (1,914) $ (19) $ (1,933) $ 981 $ — $ 981
Taxes on earnings $ 329 $ 1 $ 330 $ (23) $ (25) $ (48)
Other assets and liabilities $ (153) $ 36 $ (117) $ (555) $ 64 $ (491)
Net cash provided by operating activities $ 620 $ — $ 620 $ 2,165 $ — $ 2,165

For the nine months ended July 31, 2022
As reported Adjustment As revised
In millions
Cash flows from operating activities:
Net earnings $ 3,205 $ (50) $ 3,155
Restructuring and other charges $ 163 $ (15) $ 148
Deferred taxes on earnings $ 47 $ 4 $ 51
Accounts receivable $ 1,076 $ 25 $ 1,101
Taxes on earnings $ (120) $ (45) $ (165)
Other assets and liabilities $ (1,677) $ 81 $ (1,596)
Net cash provided by operating activities $ 2,559 $ — $ 2,559

~~Revised Segment Information~~

The Personal Systems segment results were revised for these corrections within Note 2, “Segment Information”, which resulted in a decrease in segment net revenue and segment earnings from operations of $16 million for the three months ended July 31, 2022 and decrease in segment net revenue and segment earnings from operations of $46 million and $106 million, respectively, for the nine months ended July 31, 2022.

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~~Item~~ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

HP INC. AND SUBSIDIARIES

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

~~This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is organized as follows:~~

•~~Overview.~~ ~~A discussion of our business and other highlights affecting the Company to provide context for the remainder of this MD&A.~~

•~~Critical Accounting Policies and Estimates.~~ ~~A discussion of accounting policies and estimates that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results.~~

•~~Results of Operations.~~ An analysis of our financial results comparing the three and nine months ended July 31, 2023 to the prior-year period. A discussion of the results of operations is followed by a more detailed discussion of the results of operations by segment.

•~~Liquidity and Capital Resources.~~ ~~An analysis of changes in our cash flows and a discussion of our liquidity and financial condition.~~

•~~Contractual and Other Obligations.~~ ~~An overview of contractual obligations, retirement and post-retirement benefit plan contributions, cost-saving plans, uncertain tax positions and off-balance sheet arrangements of our operations.~~

The discussion of financial condition and results of our operations that follows provides information that will assist the reader in understanding our Consolidated Condensed Financial Statements, the changes in certain key items in those financial statements from year to year, and the primary factors that accounted for those changes, as well as how certain accounting principles, policies and estimates affect our Consolidated Condensed Financial Statements. This discussion should be read in conjunction with our Consolidated Condensed Financial Statements and the related notes that appear elsewhere in this document. Our prior period financial statements have been revised to reflect the correction of immaterial errors as described in Note 1, “Basis of Presentation” and Note 14, “Revision of Prior Period Financial Statements”, to the Consolidated Condensed Financial Statement in Item 1 of Part I of this report, which is incorporated herein by reference.

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~~HP INC. AND SUBSIDIARIES~~

~~Management’s Discussion and Analysis of~~

~~Financial Condition and Results of Operations (Continued)~~

OVERVIEW

We are a leading global provider of personal computing and other digital access devices, imaging and printing products, and related technologies, solutions, and services. We sell to individual consumers, SMBs and large enterprises, including customers in the government, health, and education sectors.

We have three reportable segments: Personal Systems, Printing, and Corporate Investments. The Personal Systems segment offers commercial and consumer desktops and notebooks, detachables and convertibles, workstations, thin clients, commercial mobility devices, retail POS systems, displays, hybrid systems, ~~(includes video conferencing~~software, solutions, ~~cameras, headsets, voice, and related software capabilities), software, support,~~ and services. The Printing segment provides consumer and commercial printer hardware, supplies, solutions and services. Corporate Investments include certain business incubation and investment projects.

•In Personal Systems, our long-term strategic focus is on:

◦profitable growth through innovation, market segmentation and simplification of our portfolio

◦enhanced innovation in multi-operating systems, multi-architecture, geography, customer segments and other key attributes;

◦investing in endpoint services and solutions. We are focused on services, including Device as a Service, as the market ~~begins to shift~~shifts to contractual solutions, and accelerating in attractive adjacencies such as hybrid systems; and

◦driving innovation to enable productivity and collaboration with ~~the~~ PCs becoming essential for hybrid work, ~~learn~~learning and play.

We believe that we are well positioned due to our competitive product lineup along with our recent acquisitions enhancing our portfolio of hybrid systems and remote-computing solutions.

•In Printing, our long-term strategic focus is on:

◦offering innovative printing solutions and contractual solutions to serve consumers, SMBs and large enterprises through our Instant Ink Services, HP+ and Managed Print Services solutions;

◦providing digital printing solutions for industrial graphics segments and applications including commercial publishing, labels, packaging, and textiles; and

◦expanding our footprint in 3D printing across digital manufacturing and strategic applications.

~~In addition to growing~~Certain aspects of our ~~subscription~~ business we are ~~also focused on rebalancing system profitability through our product offerings including HP+~~identified as key growth areas, and ~~profit upfront Big Tank.~~

Wewe are committed to growing ~~our hybrid systems, gaming, workforce services and solutions, consumer subscriptions, 3D and industrial graphics businesses~~these at a rate faster than our core business with accretive margins in the longer term. The key growth areas are comprised of;

•Hybrid Systems: Video conferencing solutions, cameras, headsets, voice, and related software capabilities

•Gaming: Gaming PCs, HyperX and gaming accessories

•Workforce Solutions: Managed services (Managed Print Service and Device-as-a-Service), digital services and lifecycle services

•Consumer Subscriptions: Instant Ink, other consumer subscriptions and consumer digital services

•Industrial Graphics: Large Format Industrial, Page Wide Press (PWP), Indigo and Page Wide Industrial packaging solutions and supplies

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•3D & Personalization: Portfolio of additive manufacturing solutions and supplies including end-to-end solutions such as molded fiber, footwear and orthotics

We believe our ability to innovate will help us gain momentum in growth areas like hybrid systems and gaming, and we see significant opportunities to drive greater recurring revenues across Personal Systems and Printing. Our ~~acquisition of Poly adds to our growth portfolio by bringing industry-leading video conferencing solutions, cameras, headsets, voice and software capabilities. To drive more~~Workforce Solutions organization drives integration across our commercial services, software and security ~~portfolio, we have created a new Workforce Services and Solutions organization.~~portfolio. We continue to build on strong portfolios like Instant Ink to grow our Consumer Subscription business. In Industrial Graphics, we are driving the shift from analog to digital in segments like labels and packaging. In 3D and Personalization, we are creating end-to-end solutions that we believe can capture more value with our differentiated technology.

We continue to experience challenges that are representative of the trends and uncertainties that may affect our industry, generally, and our business and financial results, specifically, and we expect these challenges to continue in the short-term. One set of challenges relates to the current macroeconomic environment and the adverse impact on demand for certain of our products. A second set of challenges relates to changes in the competitive landscape. Our primary competitors are exerting competitive pressure in targeted areas and are entering new markets, our emerging competitors are introducing new technologies and business models, and our alliance partners in some businesses are increasingly becoming our competitors in others. A third set of challenges relates to business model changes and our go-to-market execution in an evolving distribution and reseller landscape, with increasing online and omnichannel presence. Additional challenges we face at the segment level ~~and that we expect to continue facing in the short-term,~~ are set forth below.

•In Personal Systems, we face challenges with ~~decline in Personal Systems market due to the~~a competitive pricing environment and demand softness.

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~~HP INC. AND SUBSIDIARIES~~

~~Management’s Discussion and Analysis of~~

~~Financial Condition and Results of Operations (Continued)~~

•In Printing, we face challenges from our competitors with a favorable foreign currency environment and non-original supplies (which includes imitation, refill, or remanufactured alternatives) ~~and competitors with a favorable foreign currency environment.~~. We also obtain many Printing components from single source suppliers due to technology, availability, price, quality, or other considerations. For instance, we source the majority of our A4 and a portion of our A3 portfolio of laser printer engines and laser toner cartridges from Canon. Any decision by either party to not renew our agreement with Canon or to limit or reduce the scope of the agreement could adversely affect our net revenue from LaserJet products; however, we have a long-standing business relationship with Canon and anticipate renewal of this agreement.

To address these challenges, we continue to pursue innovation with a view towards developing new products and services aligned with generating market demand and meeting the needs of our customers and partners. In addition, we continue to work on improving our operations and adapting our business models, with a particular focus on enhancing our end-to-end processes, analytics, efficiencies and simplification of our product portfolio. We also continue to work on optimizing our sales coverage models, aligning our sales incentives with our strategic goals, improving channel execution and inventory, production and backlog management, strengthening our capabilities in our areas of strategic focus, effective cost management, strengthening our pricing strategy, and developing and capitalizing on market opportunities.

Macroeconomic Environment

Our business and financial performance ~~also~~ depend significantly on worldwide economic conditions. We face global macroeconomic challenges ~~particularly in light of the effects of the~~such as ongoing geopolitical conflicts in(including the Russian invasion of Ukraine, tensions across the Taiwan Strait, ~~tariff-driven headwinds,~~the Israel-Hamas conflict and other hostilities in the Middle East), uncertainty in the markets, volatility in exchange rates, inflationary trends and evolving dynamics in the global trade environment. We also experience seasonality in the sale of our products and services which may be affected by general economic conditions.

During the ~~nine~~three months ended ~~July~~January 31, ~~2023,~~2024, we ~~observed~~experienced continued market uncertainty, overall demand weakness due to cautious commercial spending ~~by large enterprise~~ on information technology hardware, ~~lower~~reduced discretionary consumer spending ~~inflationary pressures,~~ and ~~foreign currency fluctuations.~~a competitive pricing environment across both Personal Systems and Printing, and we anticipate these trends to persist in the short-term. These market pressures ~~which we expect to continue in the short-term, have~~ created new and different demand dynamics ~~and have had significant impacts on our financial results. Geographically, we observed these~~which adversely impacted certain regional markets, specifically China.Despite the overall macroeconomic ~~dynamics negatively impacting certain markets, particularly China. However, in the third quarter of fiscal 2023 we also observed uneven recovery in other markets.~~

~~During the nine months ended July 31, 2023, we continued to experience overall demand weakness and elevated industry wide reseller inventory due to a challenging macroeconomic environment. The decline~~challenges, in Personal Systems ~~revenue is~~we outperformed the market in ~~line with market trends~~units while maintaining profitability and ~~we expect this to continue~~ in ~~the short-term. In~~ Printing we continue to execute on our strategy of optimizing the geographic and product mix. Our revenue declines continued to ~~see gradual and uneven recovery in Commercial Printing, driven by~~slow sequentially, consistent with the ~~slow return of workers to~~stabilizing trends we expected heading into the office. In the short term, we continued to experience a competitive pricing environment across Personal Systems and Printing. These markets declined in the first nine months of fiscal 2023 compared to the corresponding fiscal 2022 period, and we expect this to be the case for the full fiscal year 2023 compared to fiscal 2022.year.

We are exposed to fluctuations in foreign currency exchange rates. We have a large global presence, with ~~approximately~~more than 65% of our net revenue coming from outside the United States. As a result, our financial results can be, and particularly in recent periods have been, impacted by fluctuations in foreign currency exchange rates. ~~We expect~~While the foreign currency fluctuations were favorable to ~~continue~~our financial results in Q1’24, we expect these fluctuations to ~~negatively~~have a minimal impact to our financial results in fiscal ~~2023.~~

On May 31, 2022, we announced our decision to wind down business operations in Russia having already suspended all new shipments and paused our marketing and advertising activities in February 2022. In the third quarter of fiscal 2022, we recognized a charge of $23 million towards severance, cancellation of contracts, inventory write-downs and other one-time exit charges related to our decision.

We typically experience higher net revenues in our fourth fiscal quarter compared to other quarters in our fiscal year due, in part, to seasonal holiday demand. Historical seasonal patterns may not continue in the future and have been impacted by supply constraints, shifts in customer behavior, continuing impacts of the macroeconomic challenges and different demand dynamics.2024.

For a further discussion of trends, uncertainties and other factors that could impact our operating results, see the section entitled “Risk Factors” in Item 1A of Part ~~II of this report as well as in Item 1A of Part~~ I in our Annual Report on Form 10-K for the fiscal year ended October 31, ~~2022.~~2023.

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Transformation Update

In November 2022, we announced our Future Ready Plan (the “Fiscal 2023 Plan”) to become a more digitally enabled company, focus investments on key growth opportunities and simplify our operating model. The ~~new~~ Fiscal 2023 ~~plan~~Plan is expected to run ~~for three years~~ through end of fiscal year 2025. The three key elements of our Fiscal 2023 ~~plan~~Plan are digital transformation, portfolio optimization, and operational efficiency. We ~~expect to invest some of the savings from these efforts across our businesses to be more efficient and advance our positions in Personal Systems and Printing, while also disrupting~~

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~~HP INC. AND SUBSIDIARIES~~

~~Management’s Discussion and Analysis of~~

~~Financial Condition and Results of Operations (Continued)~~

new industries where we see attractive growth opportunities. We also plan to use some of these savings to partially offset headwinds we expect to continue to see across our businesses in fiscal 2023 as a result of macroeconomic factors.

We are ~~on-track~~on track to achieve our ~~targeted~~ gross annual run-rate structural cost savings bytarget for fiscal year 2024 as well as the ~~end of~~overall goal exiting fiscal ~~2023.~~ year 2025.

We ~~continue~~enhanced our digital capabilities in Workforce Solutions and continued to leverage ~~artificial intelligence (“AI”)~~AI to positively impact both our products and solutions. ~~During the nine months ended July 31, 2023, we enhanced our digital capabilities in Workforce Services and Solutions.~~ Additionally, we are reducing portfolio complexity, improving continuity of supply, and increasing our forecast accuracy across ~~Personal Systems and Printing~~our business to drive reduction in our cost of sales and operating expenses. We also continued to reduce our structural cost through headcount reductions and ~~executed a significant portion of the early retirement program in second quarter of fiscal 2023 and~~ are on track to achieve our overall headcount reduction goal. We expect to continue to invest some of the savings into our growth areas and our people.

See “Risk Factors—We may not achieve some or all of the expected benefits of our restructuring plans and our restructuring may adversely affect our business” in Item 1A of Part I in our Annual Report on Form 10-K for the fiscal year ended October 31, 2023. For more information on our Fiscal 2023 Plan, see Note 3, “Restructuring and Other Charges,~~” and Note 4, “Retirement and Post-Retirement Benefit Plans,~~” to the Consolidated Condensed Financial Statements in Item 1 of Part I of this report, which is incorporated herein by reference.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

MD&A is based on our Consolidated Condensed Financial Statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, net revenue and expenses, and the disclosure of contingent liabilities. As of July 31, 2023, the impact of current macroeconomic factors on our business continued to unfold. As a result, many of our estimates and assumptions required increased judgment and may carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, our estimates may change in future periods. Management believes that there have been no significant changes during the ~~nine~~three months ended ~~July~~January 31, ~~2023~~2024 to the items that we disclosed as our critical accounting policies and estimates in MD&A in our Annual Report on Form 10-K for the fiscal year ended October 31, ~~2022, except as mentioned in Note 1, “Basis of Presentation”.~~2023.

ACCOUNTING PRONOUNCEMENTS

For a summary of recent accounting pronouncements applicable to our Consolidated Condensed Financial Statements see Note 1, “Basis of Presentation”, to the Consolidated Condensed Financial Statements in Item 1 of Part I of this report, which is incorporated herein by reference.

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~~HP INC. AND SUBSIDIARIES~~

~~Management’s Discussion and Analysis of~~

~~Financial Condition and Results of Operations (Continued)~~

RESULTS OF OPERATIONS

Revenue from our international operations has historically represented, and we expect will continue to represent, a majority of our overall net revenue. As a result, our net revenue growth has been impacted, and we expect it will continue to be impacted, by fluctuations in foreign currency exchange rates. In order to provide a framework for assessing performance excluding the impact of foreign currency fluctuations, we supplement the year-over-year percentage change in net revenue with the year-over-year percentage change in net revenue on a constant currency basis, which excludes the effect of foreign currency exchange fluctuations calculated by translating current period revenues using monthly exchange rates from the comparative period and excluding any hedging impact recognized in the current period, and without adjusting for any repricing or demand impacts from changes in foreign currency exchange rates. This information is provided so that net revenue can be viewed with and without the effect of fluctuations in foreign currency exchange rates, which is consistent with how management evaluates our net revenue results and trends, as management does not believe that the excluded items are reflective of ongoing operating results. The constant currency measures are provided in addition to, and not as a substitute for, the year-over-year percentage change in net revenue on a GAAP basis. Other companies may calculate and define similarly labeled items differently, which may limit the usefulness of this measure for comparative purposes.

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Results of operations in dollars and as a percentage of net revenue were as follows:


		Three months ended July 31								Nine months ended July 31
		2023				2022				2023				2022
		Dollars		% of Net Revenue		Dollars		% of Net Revenue		Dollars		% of Net Revenue		Dollars		% of Net Revenue			Three months ended January 31
		Dollars in millions																		2024	2023
Net revenue		$	13,196	100.0	%	$	14,648	100.0	%	$	39,901	100.0	%	$	48,136	100.0	%
Cost of revenue		10,374		78.6	%	11,764		80.3	%	31,378		78.6	%	38,564		80.1	%
Gross profit		2,822		21.4	%	2,884		19.7	%	8,523		21.4	%	9,572		19.9	%
																						Dollars			% of Net Revenue				Dollars				% of Net Revenue
																						Dollars in millions
Net revenue:
Products
Products
Products																						$	12,419		94.2		%		$	13,044			94.5	%
Services																		Services				766			5.8		%		754				5.5	%
Total net revenue																		Total net revenue				13,185			100.0		%		13,798				100.0	%
Cost of net revenue:
Products(1)
Products(1)
Products(1)																						9,871			79.5		%		10,589				81.2	%
Services(2)																		Services(2)				426			55.6		%		422				56.0	%
Total cost of net revenue																		Total cost of net revenue				10,297			78.1		%		11,011				79.8	%
Gross Margin																		Gross Margin				2,888			21.9		%		2,787				20.2	%
Research and development	Research and development	354		2.7	%	368		2.5	%	1,167		2.9	%	1,271		2.6	%	Research and development				399		3.0		3.0		%		403		2.9		2.9	%
Selling, general and administrative	Selling, general and administrative	1,302		9.9	%	1,143		7.8	%	4,031		10.2	%	4,075		8.5	%	Selling, general and administrative				1,383		10.5		10.5		%		1,331		9.7		9.7	%
Restructuring and other charges	Restructuring and other charges	75		0.5	%	13		0.1	%	416		1.0	%	148		0.4	%	Restructuring and other charges				63		0.5		0.5		%		141		1.0		1.0	%
Acquisition and divestiture charges	Acquisition and divestiture charges	48		0.4	%	31		0.2	%	205		0.5	%	83		0.2	%	Acquisition and divestiture charges				27		0.2		0.2		%		84		0.6		0.6	%
Amortization of intangible assets	Amortization of intangible assets	91		0.7	%	50		0.3	%	262		0.7	%	154		0.3	%	Amortization of intangible assets				81		0.6		0.6		%		85		0.6		0.6	%
Russia exit charges		—		—	%	23		0.2	%	—		—	%	23		—	%
Total operating expenses																		Total operating expenses				1,953			14.8		%		2,044				14.8	%
Earnings from operations	Earnings from operations	952		7.2	%	1,256		8.6	%	2,442		6.1	%	3,818		7.9	%	Earnings from operations				935		7.1		7.1		%		743		5.4		5.4	%
Interest and other, net	Interest and other, net	(16)		(0.1)	%	(70)		(0.5)	%	(357)		(0.9)	%	(141)		(0.3)	%	Interest and other, net				(142)		(1.1)		(1.1)		%		(181)		(1.3)		(1.3)	%
Earnings before taxes	Earnings before taxes	936		7.1	%	1,186		8.1	%	2,085		5.2	%	3,677		7.6	%	Earnings before taxes				793		6.0		6.0		%		562		4.1		4.1	%
(Provision for) benefit from taxes		(170)		(1.3)	%	(64)		(0.4)	%	204		0.5	%	(522)		(1.0)	%
Provision for taxes																		Provision for taxes				(171)			(1.3)		%		(93)				(0.7)	%
Net earnings	Net earnings	$	766	5.8	%	$	1,122	7.7	%	$	2,289	5.7	%	$	3,155	6.6	%	Net earnings				$	622	4.7		4.7		%		$	469	3.4		3.4	%

(1)Products cost of net revenue as a percentage of net revenue is calculated as a percentage of product net revenue.

(2)Services cost of net revenue as a percentage of net revenue is calculated as a percentage of services net revenue.

Net Revenue

Products net revenue includes revenue from the sale of hardware, supplies, subscriptions and software licenses. Services net revenue includes revenue from our service offerings and support on hardware devices. For the three months ended ~~July~~January 31, ~~2023,~~2024, net revenue decreased ~~9.9%~~4.4% (decreased ~~7.4%~~4.9% on a constant currency basis) as compared to the prior-year period. U.S. net revenue decreased ~~6.7%~~7.0% to ~~$4.8~~$4.4 billion, and net revenue from international operations decreased ~~11.7%~~3.1% to ~~$8.4 billion. The decrease in net revenue was primarily driven by lower average selling prices (“ASPs”) in Personal Systems and Printing as well as foreign currency impacts.~~

For the nine months ended July 31, 2023, total net revenue decreased 17.1% (decreased 13.6% on a constant currency basis) as compared to the prior-year period. U.S. net revenue decreased 15.0% to $13.9 billion, and net revenue from international operations decreased 18.2% to $26.0$8.8 billion. The decrease in net revenue was primarily driven by demand softness and ~~lower ASPs~~competitive pricing in ~~both Personal Systems and Printing as well as~~products, partially offset by favorable foreign currency ~~impacts.~~impacts while services increased nominally.

A detailed discussion of the factors contributing to the changes in segment net revenue is included in “Segment Information” below.

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~~HP INC. AND SUBSIDIARIES~~

~~Management’s Discussion and Analysis of~~

~~Financial Condition and Results of Operations (Continued)~~

Gross Margin

For the three months ended ~~July~~January 31, ~~2023,~~2024, gross margin increased by 1.7 percentage points primarily driven by products gross margin due to lower commodity and logistics costs, favorable foreign currency impacts and cost ~~in Personal Systems and mix shift towards Printing,~~savings, partially offset by competitive pricing ~~and foreign currency impacts.~~

~~For the nine months ended July 31, 2023,~~while services gross margin increased by 1.5 percentage points, primarily driven by mix shift towards Printing, and lower commodity and logistics cost in Personal Systems, partially offset by foreign currency impacts and competitive pricing in Personal Systems.nominally.

A detailed discussion of the factors contributing to the changes in segment gross margins is included under “Segment Information” below.

Operating Expenses

Research and Development (“R&D”)

R&D expense decreased ~~3.8%~~1.0% for the three months ended ~~July~~January 31, ~~2023,~~2024, primarily due to lower variable compensation and disciplined cost management, partially offset by ~~the Poly acquisition.~~

higher R&D ~~expense decreased 8.2% for~~partner funding received in the ~~nine months ended July 31, 2023, primarily due to disciplined cost management, and lower variable compensation, partially offset by the Poly acquisition.~~prior period.

Selling, General and Administrative (“SG&A”)

SG&A expense increased ~~13.9%~~3.9% for the three months ended ~~July~~January 31, ~~2023,~~2024 primarily due to ~~the Poly acquisition.~~

~~SG&A expense decreased 1.1% for the nine months ended July 31, 2023, primarily due to~~higher go-to market initiatives, partially offset by lower variable compensation and disciplined cost management including Future Ready transformation ~~savings, and variable compensation, partially offset by the Poly acquisition.~~savings.

Restructuring and Other Charges

Restructuring and other charges for the three ~~and nine~~ months ended ~~July~~January 31, ~~2023~~2024 primarily relate ~~primarily~~ to the Fiscal 2023 Plan. For more information, see Note 3, “Restructuring and other charges”, to the Consolidated Condensed Financial Statements in Item 1 of Part I of this report, which is incorporated herein by reference.

Acquisition and Divestiture Charges

Acquisition and divestiture charges primarily include direct third-party professional and legal fees, integration and divestiture-related costs, non-cash adjustments to the fair value of certain acquired assets, such as inventory, and certain compensation charges related to cash settlement of restricted stock units and performance-based restricted stock units from acquisitions. Acquisition and divestiture charges for the three ~~and nine~~ months ended ~~July~~January 31, ~~2023 increased~~2024 decreased by ~~$17~~$57 million ~~and $122 million, respectively,~~ primarily due to the fiscal year 2022 Poly ~~acquisition.~~acquisition and continuing integration progress.

Amortization of Intangible Assets

Amortization of intangible assets for the three ~~and nine~~ months ended ~~July~~January 31, ~~2023 relates~~2024 primarily relate to intangible assets resulting from prior ~~acquisitions. Amortization of intangible assets increased by $41 million~~acquisitions and ~~$108 million for the three and nine months ended July 31, 2023, respectively, primarily due to the Poly acquisition.~~remained flat.

Interest and Other, Net

Interest and other, net expense decreased ~~$54~~$39 million for the three months ended ~~July~~January 31, ~~2023,~~2024 primarily due to ~~the net gain on extinguishment of debt, partially offset by higher~~lower interest expense on ~~debt and factoring costs.~~

Interest and other, net expense increased $216 million for the nine months ended July 31, 2023, primarily due to higher interest expense on debt and factoring costs, partially offset by the net gain on extinguishment of debt.

Provision for ~~taxes~~Taxes

~~Our~~HP’s effective tax rate was ~~18.2%~~21.6% for the three months ended ~~July~~January 31, ~~2023 and (9.8)% for the nine months ended July 31, 2023. The difference between~~2024, which did not materially differ from the U.S. federal statutory tax rate of 21%.

In December 2021, the Organization for Economic Cooperation and ~~our effective~~Development (“OECD”) enacted model rules for a new global minimum tax ~~rate for~~framework (“BEPS Pillar Two”), and various governments around the ~~three months ended July 31, 2023 was primarily due to favorable tax rates associated with certain earnings from our operations~~world have enacted, or are in ~~lower-tax jurisdictions throughout~~ the ~~world. For~~process of enacting, legislation on this. We are in the ~~nine months ended July 31, 2023,~~process of assessing the ~~difference was primarily due to~~ tax effects of ~~internal reorganization.~~

~~During~~Pillar Two legislation for when it comes into effect, and we plan to treat the ~~three and nine months ended July 31, 2023, we recorded $32 million and $724 million, respectively, of net income~~ tax benefits related to discrete items in the provision for taxes. The nine months ended July 31, 2023 included benefits of $697 million related to tax effects of internal reorganization, The three and nine months ended July 31, 2023 also included benefits of $16 million and $82 million related to restructuring charges, $51 million and $15 million relatedas a period cost. Due to the ~~filing~~complexities in applying the legislation, the quantitative impact of tax returns in various jurisdictions, and $10 million and $37 million related to acquisition and divestiture charges, respectively. These benefits were partially offset by income tax charges of $2 million and $60 million related to audit settlements in variousthe enacted or substantively enacted legislation is not yet reasonably estimable.

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~~HP INC. AND SUBSIDIARIES~~

~~Management’s Discussion and Analysis of~~

~~Financial Condition and Results of Operations (Continued)~~

jurisdictions, $17 million and $32 million of uncertain tax position charges, and $27 million and $25 million related to extinguishment of debt for the three and nine months ended July 31, 2023, respectively. During the three and nine months ended July 31, 2023, discrete items in the provision for taxes and excess tax benefits associated with stock options, restricted stock units and performance-adjusted restricted stock units were immaterial.

Segment Information

During the first quarter of fiscal year 2024, HP realigned its business unit financial reporting more closely with its customer market segmentation. A description of the products and services for each segment and the business unit realignment can be found in Note 2, “Segment Information” to the Consolidated Condensed Financial Statements in Item 1 of Part I of this report, which is incorporated herein by reference. Future changes to this organizational structure may result in changes to the segments disclosed.

~~Table of Contents~~

~~HP INC. AND SUBSIDIARIES~~

~~Management’s Discussion and Analysis of~~

~~Financial Condition and Results of Operations (Continued)~~

Personal Systems




		Three months ended July 31								Nine months ended July 31									Three months ended January 31
		2023			2022			% Change		2023			2022			% Change				2024			2023			% Change
		Dollars in millions																		Dollars in millions
Net revenue	Net revenue	$	8,932		$	10,073		(11.3)	%	$	26,286		$	33,771		(22.2)	%	Net revenue		$	8,809		$	9,185		(4.1)	%
Earnings from operations	Earnings from operations	$	592		$	673		(12.0)	%	$	1,498		$	2,331		(35.7)	%	Earnings from operations		$	537		$	475		13.1	%
Earnings from operations as a % of net revenue	Earnings from operations as a % of net revenue	6.6		%	6.7		%			5.7		%	6.9		%			Earnings from operations as a % of net revenue		6.1		%	5.2		%

The components of net revenue and the weighted net revenue change by business unit were as follows:




															Three months ended January 31
																Net Revenue		Weighted Net Revenue Change(1)
		Three months ended July 31						Nine months ended July 31
		Net Revenue				Weighted Net Revenue Change(1)		Net Revenue					Weighted Net Revenue Change(1)
		2023		2022			2023			2022
		Dollars in millions					Percentage Points			Dollars in millions				Percentage Points			Dollars in millions		Percentage Points
Commercial PS	Commercial PS	$	6,201	$	6,956	(7.5)		$	18,499		$	22,600	(12.2)
Consumer PS	Consumer PS	2,731		3,117		(3.8)		7,787			11,171		(10.0)
Total Personal Systems	Total Personal Systems	$	8,932	$	10,073	(11.3)		$	26,286		$	33,771	(22.2)

(1)Weighted Net Revenue Change Percentage Points measures contribution of each business unit towards overall segment revenue growth. It is calculated by dividing the change in revenue of each business unit from the prior-year period by total segment revenue for the prior-year period.

Three months ended ~~July~~January 31, ~~2023~~2024 compared with three months ended ~~July~~January 31, ~~2022~~2023

Personal Systems net revenue decreased ~~11.3%~~4.1% (decreased ~~8.3%~~4.9% on a constant currency basis) for the three months ended ~~July~~January 31, ~~2023.~~2024. The net revenue decrease was primarily due to a decline in average selling ~~prices~~price (“ASPs”) by ~~16.8%~~7.5%, ~~partially~~ offset by ana 5.1% increase in ~~revenue driven by the Poly acquisition~~commercial and ~~3.0% increase in~~consumer client PCs unit volume ~~primarily driven by higher consumer notebooks.~~as we outperformed the market in units while maintaining profitability. The decline in ASPs ~~was~~is primarily due to competitive pricing and unfavorable mix ~~shift and foreign~~shifts, partially offset by favorable currency impacts.

Consequently, Commercial PS net revenue decreased ~~10.9%~~5.3% primarily ~~driven by lower~~due to a 5.1% decline in ASPs, partially offset by ana 1.9% increase in ~~hybrid systems revenue driven by the Poly acquisition. The lower ASPs were driven by unfavorable mix shift~~units and ~~foreign currency impacts.~~

Consumer PS net revenue decreased ~~12.4% driven by lower~~1.4% primarily due to a 10.4% decline in ASPs, partially offset by ~~unit~~a 9.8% increase in ~~notebooks. The lower ASPs were driven by competitive pricing and foreign currency impacts.~~units.

Personal Systems earnings from operations as a percentage of net revenue ~~decreased~~increased by ~~0.1~~0.9 percentage points. The ~~decrease~~increase was primarily driven by an increase in gross margin, partially offset by an increase in operating expenses as a percentage of ~~revenue, partially offset by an increase in gross margin.~~revenue. Gross margin increased primarily due to lower commodity and logistics ~~cost, partially offset by~~costs, favorable foreign currency impacts and cost savings, partially offset by competitive pricing. Operating expenses as a percentage of revenue increased ~~primarily driven by~~due to higher go-to market initiatives and higher R&D partner funding received in the ~~acquisition of Poly,~~prior year, partially offset by lower variable compensation and disciplined cost management including Future Ready transformation savings.

~~Nine months ended July 31, 2023 compared with nine months ended July 31, 2022~~

Personal Systems net revenue decreased 22.2% (decreased 18.1% on a constant currency basis) for the nine months ended July 31, 2023. The net revenue decrease was primarily due to a 18.9% decrease in commercial and consumer client PCs unit volume and a decline in ASPs by 7.8%, partially offset by an increase in revenue driven by the Poly acquisition. The decline in unit volume was due to demand softness and elevated industry-wide reseller inventory. The decline in ASPs was primarily due to foreign currency impacts, unfavorable mix shift and competitive pricing.

Commercial PS net revenue decreased 18.1% primarily driven by unit decline due to demand softness and lower ASPs, partially offset by an increase in hybrid systems revenue driven by the Poly acquisition. The lower ASPs were driven by unfavorable mix shift and foreign currency impacts.

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~~HP INC. AND SUBSIDIARIES~~

~~Management’s Discussion and Analysis of~~

~~Financial Condition and Results of Operations (Continued)~~

Consumer PS net revenue decreased 30.3% driven by unit decline due to demand softness and lower ASPs. The lower ASPs were driven by competitive pricing and foreign currency impacts, partially offset by favorable mix shifts.

Personal Systems earnings from operations as a percentage of net revenue decreased by 1.2 percentage points. The decrease was driven by an increase in operating expenses as a percentage of revenue, partially offset by an increase in gross margin. Gross margin increased primarily due to lower commodity and logistics cost and favorable mix shift, partially offset by foreign currency impacts and competitive pricing. Operating expenses as a percentage of revenue increased primarily driven by the acquisition of Poly, partially offset by disciplined cost management including Future Ready transformation savings and lower variable compensation.

Printing




		Three months ended July 31								Nine months ended July 31									Three months ended January 31
		2023			2022			% Change		2023			2022			% Change					2024			2023			% Change
		Dollars in millions																		Dollars in millions
Net revenue	Net revenue	$	4,263		$	4,575		(6.8)	%	$	13,611		$	14,369		(5.3)	%	Net revenue			$	4,375		$	4,612		(5.1)	%
Earnings from operations	Earnings from operations	$	794		$	904		(12.2)	%	$	2,563		$	2,725		(5.9)	%	Earnings from operations			$	872		$	870		0.2	%
Earnings from operations as a % of net revenue	Earnings from operations as a % of net revenue	18.6		%	19.8		%			18.8		%	19.0		%			Earnings from operations as a % of net revenue			19.9		%	18.9		%

The components of net revenue and the weighted net revenue change by business unit were as follows:




															Three months ended January 31
																Net Revenue		Weighted Net Revenue Change(1)
		Three Months Ended July 31						Nine months ended July 31
		Net Revenue				Weighted Net Revenue Change(1)		Net Revenue					Weighted Net Revenue Change(1)
		2023		2022			2023			2022
		Dollars in millions					Percentage Points			Dollars in millions				Percentage Points			Dollars in millions		Percentage Points
Supplies	Supplies	$	2,768	$	2,814	(1.0)		$	8,631		$	9,013	(2.7)
Commercial	Commercial	974		1,036		(1.3)		3,119			3,117		—
Consumer	Consumer	521		725		(4.5)		1,861			2,239		(2.6)

Total Printing	Total Printing	$	4,263	$	4,575	(6.8)		$	13,611		$	14,369	(5.3)
Total Printing
Total Printing

Three months ended ~~July~~January 31, ~~2023~~2024 compared with three months ended ~~July~~January 31, ~~2022~~2023

Printing net revenue decreased ~~6.8%~~5.1% (decreased ~~5.4%~~4.8% on a constant currency basis) for the three months ended ~~July~~January 31, ~~2023~~2024. The decrease in net revenue was driven by ~~Consumer Printing,~~ Commercial Printing and Consumer Printing, whileSupplies ~~as well as~~ net reve~~foreign currency impacts~~nue increased nominally. Printer unit volume decreased 16.5% primarily due to demand softness and Print hardware ASPs decreased 2.8% primarily due to competitive pricing and unfavorable mix shifts.

. Net revenue for Commercial Printing decreased by 11.6% primarily due to a 18.3% decrease in printer unit volume due to demand softness, partially offset by a 1.0% increase in ASPs. The increase in ASPs was primarily driven by mix shifts, partially offset by competitive pricing.

Net revenue for ~~Supplies~~Consumer Printing decreased ~~1.6%~~22.3%, primarily due to ~~decline~~a 9.0% decrease in ~~the installed base~~ASPs and ~~usage. Printer~~15.4% decrease in printer unit ~~volume decreased 18.7% and hardware ASPs decreased 2.4%.~~volume. The decrease in printer unit volume was primarily ~~driven by overall demand weakness. Print hardware ASPs decreased primarily~~ due to ~~competitive pricing~~demand softness and ~~foreign currency impacts, partially offset by mix shift.~~

~~Net revenue for Commercial Printing decreased 6.0%, primarily due to 8.0% decrease in printer unit volume and 4.4% decrease in ASPs. The~~the decrease in ASPs was primarily driven by competitive pricing, ~~and foreign currency impacts,~~ partially offset by favorable mix ~~shift.~~shifts.

~~Net revenue for Consumer~~ ~~Printing decreased 28.1~~%, primarily due to 20.3% decrease in printer unit volume and 10.3% decrease in ASPs. The decrease in ASPs was primarily driven by competitive pricing and foreign currency impacts, partially offset by mix shift.

Printing earnings from operations as a percentage of net revenue ~~decreased~~increased by ~~1.2~~1.0 percentage ~~points,~~point, primarily due to a ~~decline~~increase in gross margin, ~~and~~partially offset by higher operating expenses as a percentage of revenue. The ~~decrease~~increase in gross margin ~~was~~is primarily due to ~~pricing pressure~~lower printer unit volume, lower commodity and ~~foreign currency impacts, partially offset by favorable mix shift.~~logistics costs, as well as cost savings. Operating expenses as a percentage of revenue increased primarily due to ~~lower net revenue.~~

~~Table of Contents~~

~~HP INC. AND SUBSIDIARIES~~

~~Management’s Discussion and Analysis of~~

~~Financial Condition and Results of Operations (Continued)~~

~~Nine months ended July 31, 2023 compared with nine months ended July 31, 2022~~

~~Printing net revenue decreased 5.3% (decreased 3.3% on a constant currency basis) for the nine months ended~~ ~~July 31, 2023. The decrease in net revenue was driven by Consumer Printing, Supplies as well as~~ ~~foreign currency impacts,~~go-to market initiatives, partially offset by ~~Commercial Printing. Net revenue f~~or Supplies decreased 4.2%, primarily due to decline in the installed base and usage. Printer unit volume decreased 7.2% and hardware ASPs decreased 1.5%. The decrease in printer unit volume was primarily driven by overall demand weakness. Print hardware ASPs decreased primarily due to foreign currency impacts, partially offset by pricing optimization in Commercial Printing and mix shifts.

Net revenue for Commercial Printing increased by 0.1%, primarily due to 6.4% increase in ASPs, partially offset by 5.3% decrease in printer unit volume. The increase in ASPs was primarily driven by mix shift and pricing optimization, partially offset by foreign currency impacts.

~~Net revenue for Consumer~~ ~~Printing decreased 16.9~~%, primarily due to 7.6% decrease in printer unit volume and 10.2% decrease in ASPs. The decrease in ASPs was primarily driven by competitive pricing and foreign currency impacts, partially offset by mix shift.

Printing earnings from operations as a percentage of net revenue decreased by 0.2 percentage points. The decrease was driven by decline in gross margin, partially offset by lower operating expenses as a percentage of revenue. The decline in gross margin was primarily driven by pricing pressure, and foreign currency impacts, partially offset by favorable mix shift. Operating expenses as a percentage of revenue decreased primarily due to lower variable compensation and disciplined cost management including Future Ready transformation savings.

Corporate Investments

The loss from operations in Corporate Investments for the three ~~and nine~~ months ended ~~July~~January 31, ~~2023~~2024 was primarily due to expenses associated with our incubation projects and investments in digital enablement.

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LIQUIDITY AND CAPITAL RESOURCES

We use cash generated by operations as our primary source of liquidity. We believe that current cash, cash flow from operating activities, new borrowings, available commercial paper authorization and the credit facilities will be sufficient to meet HP’s operating cash requirements, planned capital expenditures, interest and principal payments on all borrowings, pension and post-retirement funding requirements, authorized share repurchases and annual dividend payments for the foreseeable future. Additionally, if suitable acquisition opportunities arise, the Company may obtain all or a portion of the required financing through additional borrowings. While our access to capital markets may be constrained and our cost of borrowing may increase under certain business, market and economic conditions, our access to a variety of funding sources to meet our liquidity needs is designed to facilitate continued access to capital resources under all such conditions. Our liquidity is subject to various risks including the risks identified in the section entitled “Risk Factors” in Item 1A of Part ~~II of this report as well as Item 1A of Part~~ I in our Annual Report on Form 10-K for the fiscal year ended October 31, ~~2022~~2023 and the market risks identified in the section entitled “Quantitative and Qualitative Disclosures about Market Risk” in Item 3 of Part I of this report.

Amounts held outside of the U.S. are generally utilized to support non-U.S. liquidity needs and may from time to time be distributed to the U.S. Repatriations of amounts held outside the U.S. generally will not be taxable from a U.S. federal tax perspective but may be subject to state income or foreign withholding tax upon repatriation. As we evaluate the future cash needs of our operations, we may revise the amount of foreign earnings considered to be permanently reinvested in our foreign subsidiaries and how to utilize such funds, including reducing our gross debt level, or other uses.

Liquidity

Our cash, cash equivalents and restricted cash and total debt were as follows:
As of
July 31, 2023 October 31, 2022
In millions
Cash and cash equivalents $ 1,673 $ 3,145
Restricted cash $ 45 $ —
Total debt $ 9,679 $ 11,014


	As of
	January 31, 2024		October 31, 2023
	In millions
Cash and cash equivalents	$	2,263	$	3,107
Restricted cash	$	154	$	125
Total debt	$	9,660	$	9,484

~~Table of Contents~~

~~HP INC. AND SUBSIDIARIES~~

~~Management’s Discussion and Analysis of~~

~~Financial Condition and Results of Operations (Continued)~~

Our key cash flow metrics were as follows:


		Nine months ended July 31				Three months ended January 31
		2023		2022		2024	2023
		In millions				In millions
Net cash provided by operating activities		$	1,596	$	2,559
Net cash provided by (used in) operating activities
Net cash used in investing activities	Net cash used in investing activities	(570)		(673)
Net cash used in financing activities	Net cash used in financing activities	(2,453)		(799)
Net (decrease) increase in cash, cash equivalents and restricted cash		$	(1,427)	$	1,087
Net decrease in cash, cash equivalents and restricted cash

Operating Activities

Compared to the corresponding period in fiscal year ~~2022,~~2023, net cash provided by operating activities ~~decreased~~increased by ~~$1.0~~$0.1 billion for the ~~nine~~three months ended ~~July~~January 31, ~~2023,~~2024, primarily due to ~~lower~~higher net earnings and favorable working capital ~~movements including changes in receivables from contract manufacturers,~~impacts, partially offset by ~~lower~~amounts collected and held on behalf of a third party for trade receivables previously sold and higher variable compensation ~~and changes~~payout in ~~sales and marketing program liabilities.~~the current period for fiscal year 2023.

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Key Working Capital Metrics

Management utilizes current cash conversion cycle information to manage our working capital level. Our working capital metrics and cash conversion cycle impacts were as follows:




		As of			As of
		July 31, 2023	October 31, 2022	Change	July 31, 2022	October 31, 2021	Change	Y/Y Change	January 31, 2024	October 31, 2023	Change	January 31, 2023	October 31, 2022	Change	Y/Y Change
Days of sales outstanding in accounts receivable (“DSO”)	Days of sales outstanding in accounts receivable (“DSO”)	30	28	2	27	30	(3)	3
Days of supply in inventory (“DOS”)	Days of supply in inventory (“DOS”)	62	57	5	63	53	10	(1)
Days of purchases outstanding in accounts payable (“DPO”)	Days of purchases outstanding in accounts payable (“DPO”)	(123)	(114)	(9)	(119)	(108)	(11)	(4)
Cash conversion cycle	Cash conversion cycle	(31)	(29)	(2)	(29)	(25)	(4)	(2)

~~July~~January 31, ~~2023~~2024 as compared to ~~July~~January 31, ~~2022~~2023

The cash conversion cycle is the sum of days of DSO and DOS less DPO. Items which may cause the cash conversion cycle in a particular period to differ from historical trends include, but are not limited to, changes in business mix, changes in payment terms and timing, timing and extent of receivables factoring, seasonal trends and the timing of revenue recognition and inventory purchases within the period.

DSO measures the average number of days our receivables are outstanding. DSO is calculated by dividing ending accounts receivable, net of allowance for credit losses, by a 90-day average net revenue. The ~~increase~~decrease in DSO was primarily ~~due to unfavorable~~driven by favorable revenue linearity and ~~a marginal increase in extended payment terms.~~improved collections.

DOS measures the average number of days from procurement to sale of our product. DOS is calculated by dividing ending inventory by a 90-day average cost of goods sold. The ~~decrease~~increase in DOS ~~was~~is primarily due to ~~supply chain improvements~~strategic buys in ~~Printing.~~Personal Systems and higher in-transit sea shipments, offset by inventory reduction in Print.

DPO measures the average number of days our accounts payable balances are outstanding. DPO is calculated by dividing ending accounts payable by a 90-day average cost of goods sold. The increase in DPO was primarily driven by ~~sequentially higher manufacturing volumes in Personal Systems in the current period as compared to a decline in the prior year period.~~favorable payment terms with vendors.

Investing Activities

Compared to the corresponding period in fiscal year ~~2022,~~2023, net cash used in investing ~~activities~~ decreased by ~~$0.1~~$0.2 billion for the ~~nine~~three months ended ~~July~~January 31, ~~2023,~~2024, primarily due to ~~a decrease in net investment in property, plant and equipment of $0.2 billion, partially offset by higher~~lower collateral posted for derivative ~~instruments of $0.1 billion.~~instruments.

Financing Activities

Compared to the corresponding period in fiscal year ~~2022,~~2023, net cash used in financing activities ~~increased~~decreased by ~~$1.7~~$0.2 billion for the ~~nine~~three months ended ~~July~~January 31, ~~2023,~~2024, primarily due tothe lower net payment of debt ~~repayment~~ of ~~$0.9~~$0.4 billion and ~~$0.2 billion of~~ collateral

~~Table of Contents~~

~~HP INC. AND SUBSIDIARIES~~

~~Management’s Discussion and Analysis of~~

~~Financial Condition and Results of Operations (Continued)~~

~~posted~~ returned for derivative instruments ~~in the current year period, compared to issuance~~ of ~~senior unsecured notes of $3.9 billion and share repurchases of $3.4~~$0.2 billion in the prior ~~year period.~~period, partially offset by a $0.4 billion increase in share repurchases.

Share Repurchases and Dividends

During the ~~nine~~three months ended ~~July~~January 31, ~~2023,~~2024, HP returned ~~$0.9~~$0.8 billion to the shareholders in the form of cash dividends of ~~$0.8~~$0.3 billion and share repurchases of ~~$0.1~~$0.5 billion. As of ~~July~~January 31, ~~2023,~~2024, HP had approximately ~~$2.0~~$1.5 billion remaining under the share repurchase authorizations approved by HP’s Board of Directors.

For more information on our share repurchases, see Note 10, “Stockholders’ Deficit”, to the Consolidated Condensed Financial Statements in Item 1 of Part I of this report, which is incorporated herein by reference.

Capital Resources

Debt Levels

We maintain debt levels that we establish through consideration of a number of factors, including cash flow expectations, cash requirements for operations, investment plans (including acquisitions), share repurchase activities, our cost of capital and targeted capital structure as well as credit rating considerations. Depending on these factors, we may, from time to time, incur additional indebtedness or repay or refinance existing indebtedness. Outstanding borrowings ~~decreased~~increased to $9.7 billion as of ~~July~~January 31, ~~2023~~2024 as compared to ~~$11.0~~$9.5 billion as of October 31, ~~2022,~~2023, bearing weighted-average interest rates of 4.2% ~~and 3.7%~~ for ~~July~~both January 31, ~~2023~~2024 and October 31, ~~2022, respectively.~~2023.

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Our weighted-average interest rate reflects the effective rate on our borrowings prevailing during the period and reflects the effect of interest rate swaps. For more information on our interest rate swaps, see Note 8, “Financial Instruments”, to the Consolidated Condensed Financial Statements in Item 1 of Part I of this report, which is incorporated herein by reference.

As of ~~July~~January 31, ~~2023,~~2024, we maintained a 5-year sustainability-linked senior unsecured committed revolving credit facility with aggregate lending commitments of $5.0 billion which will be available until May 26, 2026. In March 2023, we also entered into a $1.0 billion senior unsecured committed revolving credit facility with a 364-day maturity. Funds borrowed under the revolving credit facilities may be used for general corporate purposes.

Available Borrowing Resources

As of ~~July~~January 31, ~~2023,~~2024, we had available borrowing resources of ~~$1.2~~$1.0 billion from uncommitted lines of credit in addition to the full capacity of the revolving credit facilities.

In December 2022, we filed a non-automatic shelf registration statement (the “2022 Shelf Registration Statement”) with the SEC. The 2022 Shelf Registration Statement was declared effective by the SEC on March 1, 2023 and enables us to offer for sale, from time to time, in one or more offerings, up to $3.0 billion, in the aggregate, of debt securities, common stock, preferred stock, depository shares and warrants.

For more information on our borrowings, see Note 9, “Borrowings”, to the Consolidated Condensed Financial Statements in Item 1 of Part I of this report, which is incorporated herein by reference.

Credit Ratings

Our credit risk is evaluated by major independent rating agencies based upon publicly available information as well as information they obtain during our ongoing discussions. While we currently do not have any rating downgrade triggers that would accelerate the maturity of a material amount of our debt, a downgrade from our current credit rating may increase the cost of borrowing under our credit facility, reduce market capacity for our commercial paper, require the posting of additional collateral under some of our derivative contracts and may have a negative impact on our liquidity and capital position and our contractual business going forward, depending on the extent of such downgrade. We can access alternative sources of funding, including drawdowns under our credit facilities, if necessary, to offset potential reductions in the market capacity for our commercial paper.

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CONTRACTUAL AND OTHER OBLIGATIONS

Retirement and Post-Retirement Benefit Plan Contributions

As of ~~July~~January 31, ~~2023,~~2024, we anticipate making contributions for the remainder of fiscal year ~~2023~~2024 of approximately $9$34 million to our non-U.S. pension plans, ~~and $12~~$25 million to cover benefit payments to U.S. non-qualified pension plan ~~participants.~~participants and $1 million to cover benefit claims for our post-retirement benefit plans. Our policy is to fund our pension plans so that we meet the minimum contribution required by local government, funding and taxing authorities. For more information on our retirement and post-retirement benefit plans, see Note 4, “Retirement and ~~Post-~~

~~Table of Contents~~

~~HP INC. AND SUBSIDIARIES~~

~~Management’s Discussion and Analysis of~~

~~Financial Condition and Results of Operations (Continued)~~

~~Retirement~~Post-Retirement Benefit Plans”, to the Consolidated Condensed Financial Statements in Item 1 of Part I of this report, which is incorporated herein by reference.

Cost Savings Plan

As a result of our approved restructuring plans, we expect to make future cash payments of approximately ~~$0.6~~$0.4 billion. We expect to make future cash payments of ~~$0.1~~$0.2 billion in fiscal year ~~2023~~2024 with remaining cash payments through fiscal year 2025. For more information on our restructuring activities that are part of our cost improvements, see Note 3, “Restructuring and Other Charges”, to the Consolidated Condensed Financial Statements in Item 1 of Part I of this report, which is incorporated herein by reference.

Uncertain Tax Positions

As of ~~July~~January 31, ~~2023,~~2024, we had approximately ~~$938~~$943 million of recorded liabilities and related interest and penalties pertaining to uncertain tax positions. We are unable to make a reasonable estimate as to when cash settlement with the tax authorities might occur due to the uncertainties related to these tax matters. Payments of these obligations would result from settlements with taxing authorities. For more information on our uncertain tax positions, see Note 5, “Taxes on Earnings”, to the Consolidated Condensed Financial Statements in Item 1 of Part I of this report, which is incorporated herein by reference.

Off-balance sheet arrangements

As part of our ongoing business, we have not participated in transactions that generate material relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

HP utilizes certain third-party arrangements in the normal course of business as part of HPs cash and liquidity management and also to provide liquidity to certain partners to facilitate their working capital requirements. For more information on our third-party short-term financing arrangements, see Note 6, “Supplementary Financial Information”, to the Consolidated Condensed Financial Statements in Item 1 of Part I of this report, which is incorporated herein by reference.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

For quantitative and qualitative disclosures about market risk affecting HP, see “Quantitative and Qualitative Disclosures About Market Risk” in Item 7A of Part II of our Annual Report on Form 10-K for the fiscal year ended October 31, ~~2022.~~2023. Our exposure to market risk has not changed materially since October 31, ~~2022.~~2023.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of ~~any changes in~~the effectiveness of the design and operation of our ~~internal control over financial reporting (as such term is~~disclosure controls and procedures, as defined in Rules ~~13a-15(f)~~13a-15(e) and ~~15d-15(f)~~15d-15(e) under the Exchange ~~Act) that occurred during our most recently completed fiscal quarter.~~Act as of the end of the period covered by this report (the “Evaluation Date”). Based on ~~that~~this evaluation, our principal executive officer and principal financial officer concluded that, as of ~~such date,~~the Evaluation Date, our disclosure controls and procedures were not effective due to the material ~~weaknesses~~weakness in our internal control over financial reporting described below.

Material ~~Weaknesses~~Weakness

As previously reported in ~~Internal Control Over Financial Reporting~~

Athe Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2023, we previously identified a material weakness ~~is a deficiency, or a combination of deficiencies,~~ in internal control over financial ~~reporting, such that there is a reasonable possibility that a~~reporting. The material ~~misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.~~

~~The~~This material weakness described in clause (i) resulted in an error related to a revenue contract in our Personal Systems segment that comprises less than 1% of total consolidated revenues for the impacted periods. As a result, we revised our prior period financial statements for this error and other previously identified errors, the impact of which was not material to our previously filed financial statements. The error was identified by management as part of the financial statement close process for the period ended July 31, 2023. The material weakness described in clause (ii) above did not result in any errors. While ~~these~~this material ~~weaknesses~~weakness did not result in a material misstatement of our ~~previously filed~~ financial statements, there is a reasonable possibility that ~~these control deficiencies~~it could have resulted in a material misstatement in the Company's annual or interim consolidated financial statements that would not be detected. Accordingly, we ~~have~~ determined that ~~these control deficiencies constitute~~it constituted a material ~~weaknesses.~~weakness.

~~Remediation Plan for~~With respect to the ~~Material Weaknesses~~

~~The Company’s~~material weakness above, management, under the oversight of the Audit Committee, is in the process of designing ~~prevent and detect controls~~appropriate ITGCs specific to the impacted ~~business activity.~~

The Company’s management is also enhancing its processes and controls to help ensure the timely review of the SOC-1 report in conjunction with designing and implementing related, effective complementary user entity controls associated with the sales incentive payment processing application.

software solutions. While we have taken steps to implement our remediation plan, the material ~~weaknesses~~weakness will not be considered remediated until the enhanced controls operate for a sufficient period of time and management has concluded, through testing, that the related controls are effective. The Company will monitor the effectiveness of its remediation plan and refine its remediation plan as appropriate.

Changes in Internal Control over Financial Reporting

As described above, we are taking steps to remediate the material ~~weaknesses~~weakness in our internal control over financial reporting. Other than in connection with the remediation process described above, no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the quarter ended ~~July~~January 31, ~~2023~~2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

Information with respect to this item may be found in Note 12, “Litigation and Contingencies” to the Consolidated Condensed Financial Statements in Item 1 of Part I of this report, which is incorporated herein by reference.

Item 1A. Risk Factors.

Our operations and financial results are subject to various risks and uncertainties, including those described in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended October 31, ~~2022,~~2023, which could adversely affect our business, financial condition, results of operations, cash flows, and the trading price of our common and capital stock. ~~Other than the risk factors set forth below, there~~There have been no material changes in our risk factors since our Annual Report on Form 10-K for the fiscal year ended October 31, ~~2022.~~2023.

We have identified material weaknesses in our internal control over financial reporting that could, if not remediated, result in material misstatements in our financial statements and cause us to fail to meet our reporting and financial obligations.

As more fully disclosed in Item 4, “Controls and Procedures,” under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures and internal control over financial reporting. Based on that evaluation, we have concluded that our disclosure controls and procedures were not effective as of July 31, 2023 and October 31, 2022 due to material weaknesses in internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in our internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

We identified material weaknesses in internal control over financial reporting due to design deficiencies involving (i) recognition of revenue for a Personal Systems customer’s transactions involving third-party financing and (ii) undue reliance on a payment application for certain sales incentive programs in EMEA, associated with variable consideration of approximately 4% of total consolidated revenues, for which management did not receive the System and Organization Controls Type 1 (SOC-1) Report timely and did not have effective complementary user entity controls. The material weakness described in clause (i) resulted in an error related to a revenue contract in our Personal Systems segment that comprises less than 1% of total consolidated revenues for the impacted periods. As a result, we revised our prior period financial statements for this error and other previously identified errors, the impact of which was not material to our previously filed financial statements. The error was identified by management as part of the financial statement close process for the period ended July 31, 2023. The material weakness described in clause (ii) above did not result in any errors. While these material weaknesses did not result in a material misstatement of our previously filed financial statements, there is a reasonable possibility that these control deficiencies could have resulted in a material misstatement in the Company's annual or interim consolidated financial statements that would not be detected. Accordingly, we have determined that these control deficiencies constitute material weaknesses.

The Company’s management, under the oversight of the Audit Committee, is in the process of designing prevent and detect controls specific to the impacted business activity. The Company’s management is also enhancing its processes and controls to help ensure the timely review of the SOC-1 report in conjunction with designing and implementing related, effective complementary user entity controls associated with the sales incentive payment processing application.However, we can give no assurance that the measures we take will remediate the material weaknesses or that additional material weaknesses will not arise in the future. Any failure to remediate the material weaknesses, or the development of new material weaknesses in our internal control over financial reporting, could result in material misstatements in our financial statements and cause us to fail to meet our reporting and financial obligations, which in turn could have a negative impact on our financial condition, results of operations or cash flows, restrict our ability to access the capital markets, require significant resources to correct the material weaknesses or deficiencies, subject us to fines, penalties or judgments, harm our reputation or otherwise cause a decline in investor confidence and cause a decline in the market price of our stock.

~~Ineffective internal controls could impact our business and operating results.~~

Our internal control over financial reporting may not prevent or detect misstatements because of its inherent limitations, including the possibility of human error, failure or interruption of information technology systems, the circumvention or overriding of controls, or fraud. Even effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements. If we fail to maintain the adequacy of our internal controls, including any failure to implement required new or improved controls, or if we experience difficulties in their implementation, our business and operating results could be harmed and the company could fail to meet its financial reporting obligations.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Recent Sales of Unregistered Securities

There were no unregistered sales of equity securities during the period covered by this report.

Issuer Purchases of Equity Securities

The table below provides information regarding the Company’s share repurchases during the three months ended ~~July~~January 31, ~~2023.~~2024.

~~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~~

~~May 2023~~

—

~~2,034,564~~

~~June 2023~~

—

~~2,034,564~~

~~July 2023~~

—

~~2,034,564~~

~~Total~~

—


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
November 2023	—	$	—	—	$	2,034,564
December 2023	3,667	$	30.30	3,667	$	1,923,463
January 2024	13,082	$	29.73	13,082	$	1,534,564
Total	16,749			16,749

The Company’s share repurchase program, which does not have a specific expiration date, authorizes repurchases in the open market or in private transactions. On February 22, 2020, HP’s Board of Directors increased HP’s remaining share repurchase authorization to $15.0 billion in total. All share repurchases settled in the first quarter of fiscal year 2024 were open market transactions. As of ~~July~~January 31, ~~2023,~~2024, HP had approximately ~~$2.0~~$1.5 billion remaining under the share repurchase authorizations. From time-to-time HP may repurchase shares opportunistically and to offset the dilution created by shares issued under employee stock plans.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

Our directors and officers (as defined in Exchange Act Rule 16a-1(f)) may from time to time enter into plans or other arrangements for the purchase or sale of our shares that are intended to satisfy the affirmative defense conditions of Rule 10b5–1(c) or may represent a non-Rule 10b5-1 trading arrangement under the Exchange Act. During the ~~quarter~~three months ended ~~July~~January 31, ~~2023,~~2024, no such plans or other arrangements were adopted or terminated.

Item 6. Exhibits.

The Exhibit Index beginning on page 65 12 of this report sets forth a list of exhibits.

Table of Contents

HP INC. AND SUBSIDIARIES

EXHIBIT INDEX

Exhibit
Number

Incorporated by Reference

Exhibit Description

Form

File No.

Exhibit(s)

Filing Date

2(a)

Separation and Distribution Agreement, dated as of October 31, 2015, by and among Hewlett-Packard Company, Hewlett Packard Enterprise Company and the Other Parties Thereto.**

8-K

001-04423

2.1

November 5, 2015

2(b)

Transition Services Agreement, dated as of November 1, 2015, by and between Hewlett-Packard Company and Hewlett Packard Enterprise Company.**

8-K

001-04423

2.2

November 5, 2015

2(c)

Employee Matters Agreement, dated as of October 31, 2015, by and between Hewlett-Packard Company and Hewlett Packard Enterprise Company.**

8-K

001-04423

2.4

November 5, 2015

3(a)

Registrant’s Certificate of Incorporation.

10-Q

001-04423

3(a)

June 12, 1998

3(b)

Registrant’s Amendment to the Certificate of Incorporation.

10-Q

001-04423

3(b)

March 16, 2001

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Exhibit
Number

Incorporated by Reference

Exhibit Description

Form

File No.

Exhibit(s)

Filing Date

3(c)

Registrant’s Certificate of Amendment to the Certificate of Incorporation.

8-K

001-04423

3.2

October 22, 2015

3(d)

Registrant’s Certificate of Amendment to the Certificate of Incorporation.

8-K

001-04423

3.1

April 7, 2016

3(e)

Registrant’s Amended and Restated Bylaws.

~~8-K~~10-K

001-04423

~~3.1~~3(e)

~~June 23,~~December 18, 2023

3(f)

Certificate of Designations of Series A Junior Participating Preferred Stock of HP Inc.

8-K

001-04423

3.1

February 20, 2020

4(a)

Form of Senior Indenture

S-3

333-215116

4.1

December 15, 2016

4(b)

Form of Subordinated Indenture.

S-3

333-215116

4.2

December 15, 2016

4(c)

Form of Registrant’s 4.375% Global Note due September 15, 2021 and 6.000% Global Note due September 15, 2041 and form of related Officers’ Certificate.

8-K

001-04423

4.4, 4.5 and 4.6

September 19, 2011

4(d)

Form of Registrant’s 4.650% Global Note due December 9, 2021 and related Officers’ Certificate.

8-K

001-04423

4.3 and 4.4

December 12, 2011

4(e)

Form of Registrant’s 4.050% Global Note due September 15, 2022 and related Officers’ Certificate.

8-K

001-04423

4.2 and 4.3

March 12, 2012

4(f)

Specimen certificate for the Registrant’s common stock.

8-A/A

001-04423

4.1

June 23, 2006

4(g)

First Supplemental Indenture, dated as of March 26, 2018, to the Indenture, dated as of June 1, 2000, by and between the Registrant and The Bank of New York Mellon Trust Company, N.A.

10-Q

001-04423

4(j)

June 5, 2018

4(h)

Description of HP Inc.’s securities.

10-K

001-04423

~~4(j)~~4(h)

December ~~12, 2019~~18, 2023

4(i)

Indenture, dated as of June 17, 2020, between HP Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee.

8-K

001-04423

4.1

June 17, 2020

4(j)

Form of 2.200% notes due 2025 and related Officers’ Certificate.

8-K

001-04423

4.2 and 4.5

June 17, 2020

4(k)

Form of 3.000% notes due 2027 and related Officers’ Certificate.

8-K

001-04423

4.3 and 4.5

June 17, 2020

4(l)

Form of 3.400% notes due 2030 and related Officers’ Certificate.

8-K

001-04423

4.4 and 4.5

June 17, 2020

4(m)

First Supplemental Indenture, dated as of June 16, 2021, between the Registrant and The Bank of New York Mellon Trust Company, N.A., as Trustee.

8-K

001-04423

4.2

June 21, 2021

4(n)

Registration Rights Agreement, dated as of June 16, 2021, by and among the Registrant and Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC and Wells Fargo Securities, LLC, as representatives of the Initial Purchasers of the Notes.

8-K

001-04423

4.3

June 21, 2021

4(o)

Form of 4.000% notes due 2029 and related Officers’ Certificate.

8-K

001-04423

4.2 and 4.4

March 31, 2022

4(p)

Form of 4.200% notes due 2032 and related Officers’ Certificate.

8-K

001-04423

4.3 and 4.4

March 31, 2022

4(q)

Form of 4.750% notes due 2028 and related Officers’ Certificate.

8-K

001-04423

4.2 and 4.4

June 21, 2022

4(r)

Form of 5.500% notes due 2033 and related Officers’ Certificate.

8-K

001-04423

4.3 and 4.4

June 21, 2022

4(s)

Second Supplemental Indenture, dated as of September 1, 2022, between HP Inc. and The Bank of New York Mellon Trust Company, N.A., as Trustee.

8-K

001-04423

4.2

September 7, 2022

6153

Table of Contents

Exhibit
Number

Incorporated by Reference

Exhibit Description

Form

File No.

Exhibit(s)

Filing Date

10(a)

Registrant’s 2004 Stock Incentive Plan.*

S-8

333-114253

4.1

April 7, 2004

10(b)

Registrant’s Excess Benefit Retirement Plan, amended and restated as of January 1, 2006.*

8-K

001-04423

10.2

September 21, 2006

10(c)

Hewlett-Packard Company Cash Account Restoration Plan, amended and restated as of January 1, 2005.*

8-K

001-04423

99.3

November 23, 2005

10(d)

Form of Agreement Regarding Confidential Information and Proprietary Developments (California).*

8-K

001-04423

10.2

January 24, 2008

10(e)

Form of Agreement Regarding Confidential Information and Proprietary Developments (Texas).*

10-Q

001-04423

10(o)(o)

March 10, 2008

10(f)

Form of Stock Option Agreement for Registrant’s 2004 Stock Incentive Plan.*

10-Q

001-04423

10(p)(p)

March 10, 2008

10(g)

Form of Common Stock Payment Agreement for Registrant’s 2000 Stock Plan.*

10-Q

001-04423

10(u)(u)

June 6, 2008

10(h)

First Amendment to the Hewlett-Packard Company Excess Benefit Retirement Plan.*

10-Q

001-04423

10(b)(b)(b)

March 10, 2009

10(i)

Form of Stock Notification and Award Agreement for awards of non-qualified stock options.*

10-K

001-04423

10(i)(i)(i)

December 15, 2010

10(j)

Form of Agreement Regarding Confidential Information and Proprietary Developments (California—new hires).*

10-K

001-04423

10(j)(j)(j)

December 15, 2010

10(k)

Form of Agreement Regarding Confidential Information and Proprietary Developments (California—current employees).*

10-K

001-04423

10(k)(k)(k)

December 15, 2010

10(1)

Second Amended and Restated Hewlett-Packard Company 2004 Stock Incentive Plan, as amended effective February 28, 2013.*

8-K

001-04423

10.2

March 21, 2013

10(m)

Form of Stock Notification and Award Agreement for awards of foreign stock appreciation rights.*

10-Q

001-04423

10(v)(v)

March 11, 2014

10(n)

Form of Stock Notification and Award Agreement for long-term cash awards.*

10-Q

001-04423

10(w)(w)

March 11, 2014

10(o)

Form of Stock Notification and Award Agreement for awards of non-qualified stock options.*

10-Q

001-04423

10(x)(x)

March 11, 2014

10(p)

Form of Stock Notification and Award Agreement for awards of performance-contingent non-qualified stock options.*

10-Q

001-04423

10(a)(a)(a)

March 11, 2014

10(q)

Form of Grant Agreement for grants of performance-contingent non-qualified stock options.*

10-Q

001-04423

10(b)(b)(b)

March 11, 2014

10(r)

Form of Grant Agreement for grants of long-term cash awards.*

10-Q

001-04423

10(e)(e)(e)

March 11, 2015

10(s)

Form of Grant Agreement for grants of non-qualified stock options.*

10-Q

001-04423

10(f)(f)(f)

March 11, 2015

10(t)

Form of Grant Agreement for grants of performance-contingent non-qualified stock options.*

10-Q

001-04423

10(i)(i)(i)

March 11, 2015

10(u)

Form of Grant Agreement for grants of foreign stock appreciation rights.*

10-K

001-04423

10(e)(e)(e)

December 16, 2015

10(v)

Form of Grant Agreement for grants of performance-contingent non-qualified stock options.*

10-K

001-04423

10(f)(f)(f)

December 16, 2015

10(w)

Form of Grant Agreement for grants of non-qualified stock options.*

10-K

001-04423

10(g)(g)(g)

December 16, 2015

Table of Contents

Exhibit
Number

Incorporated by Reference

Exhibit Description

Form

File No.

Exhibit(s)

Filing Date

10(x)

Registrant’s 2005 Executive Deferred Compensation Plan, amended and restated effective November 1, 2017.*

10-K/A

001-04423

10(n)(n)

December 15, 2017

10(y)

Registrant’s Severance and Long-Term Incentive Change in Control Plan for Executive Officers, amended and restated effective February 28, 2020.*

10-Q

001-04423

10(p)(p)

March 5, 2020

10(z)

Form of Stock Notification and Award Agreement for awards of performance-contingent non-qualified stock options (launch grant).*

10-Q

001-04423

10(p)(p)

March 3, 2016

10(a)(a)

2017 Amendment to the Hewlett-Packard Company Cash Account Restoration Plan.*

10-Q

001-04423

10(w)(w)

March 2, 2017

10(b)(b)

Second Amendment to the Hewlett-Packard Company Excess Benefit Retirement Plan.*

10-Q

001-04423

10(x)(x)

March 2, 2017

10(c)(c)

Second Amended and Restated HP Inc. 2004 Stock Incentive Plan, as amended and restated effective January 23, 2017.*

10-Q

001-04423

10(y)(y)

March 2, 2017

10(d)(d)

Second Amended and Restated HP Inc. 2004 Stock Incentive Plan (as amended effective January 29, 2018).*

10-Q

001-04423

10(b)(b)(b)

March 1, 2018

10(e)(e)

Form of Grant Agreement for grants of restricted stock units (for use from November 1, 2017).*

10-Q

001-04423

10(c)(c)(c)

March 1, 2018

10(f)(f)

Form of Grant Agreement for grants of restricted stock units for directors (for use from November 1, 2017).*

10-Q

001-04423

10(e)(e)(e)

March 1, 2018

10(g)(g)

Form of Grant Agreement for grants of stock options for directors (for use from November 1, 2017).*

10-Q

001-04423

10(f)(f)(f)

March 1, 2018

10(h)(h)

Form of Grant Agreement for grants of restricted stock units (for use from November 1, 2018).*

10-K

001-04423

10(g)(g)(g)

December 13, 2018

10(i)(i)

Form of Grant Agreement for grants of performance-adjusted restricted stock units (for use from November 1, 2018).*

10-K

001-04423

10(h)(h)(h)

December 13, 2018

10(j)(j)

Form of Grant Agreement for grants of stock options for directors (for use from November 1, 2018).*

10-Q

001-04423

10(j)(j)(j)

March 5, 2019

10(k)(k)

Form of Grant Agreement for grants of restricted stock units for directors (for use from November 1, 2018).*

10-Q

001-04423

10(k)(k)(k)

March 5, 2019

10(l)(l)

Form of Grant Agreement for grants of restricted stock units (for use from July 1, 2019).*

10-Q

001-04423

10(l)(l)(l)

August 29, 2019

10(m)(m)

Form of Grant Agreement for grants of non-qualified stock options.*

10-K

001-04423

10(m)(m)(m)

December 12, 2019

10(n)(n)

Form of Retention Grant Agreement for grants of non-qualified stock options.*

10-K

001-04423

10(n)(n)(n)

December 12, 2019

6355

Table of Contents

Exhibit
Number

Incorporated by Reference

Exhibit Description

Form

File No.

Exhibit(s)

Filing Date

10(o)(o)

Form of Grant Agreement for grants of stock options for directors (for use from January 15, 2020).*

10-Q

001-04423

10(m)(m)(m)

March 5, 2020

10(p)(p)

Form of Grant Agreement for grants of restricted stock units for directors (for use from January 15, 2020).*

10-Q

001-04423

10(n)(n)(n)

March 5, 2020

10(q)(q)

Form of Retention Grant Agreement for grants of restricted stock units (for use from November 1, 2019).*

10-Q

001-04423

10(o)(o)(o)

March 5, 2020

10(r)(r)

Form of Grant Agreement for grants of restricted stock units (for use from November 1, 2019).*

10-Q

001-04423

10(p)(p)(p)

March 5, 2020

10(s)(s)

Form of Grant Agreement for grants of performance-adjusted restricted stock units (for use from November 1, 2019).*

10-Q

001-04423

10(q)(q)(q)

March 5, 2020

10(t)(t)

Amendment Number One to Second Amended and Restated HP Inc. 2004 Stock Incentive Plan (as amended effective February 28, 2020).*

10-Q

001-04423

10(r)(r)(r)

June 5, 2020

10(u)(u)

Amendment Number One to Registrant’s 2005 Executive Deferred Compensation Plan (as amended effective February 28, 2020).*

10-Q

001-04423

10(s)(s)(s)

June 5, 2020

10(v)(v)

HP Inc. 2021 Employee Stock Purchase Plan.*

10-Q

001-04423

10(t)(t)(t)

June 5, 2020

10(w)(w)

Amendment Number Two to Second Amended and Restated HP Inc. 2004 Stock Incentive Plan (as amended effective September 21, 2020.*

10-K

001-04423

10(x)(x)(x)

December 10, 2020

10(x)(x)

Amendment Number Two to Registrant's 2005 Executive Deferred Compensation Plan (as amended effective September 21, 2020).*

10-K

001-04423

10(y)(y)(y)

December 10, 2020

10(y)(y)

Form of Grant Agreement for grants of restricted stock units (for use from November 17, 2020).*

10-Q

001-04423

10(x)(x)(x)

March 5, 2021

10(z)(z)

Form of Retention Grant Agreement for grants of restricted stock units (for use from November 17, 2020).*

10-Q

001-04423

10(y)(y)(y)

March 5, 2021

10(a)(a)(a)

Form of Grant Agreement for grants of non-qualified stock options.*

10-Q

001-04423

10(z)(z)(z)

March 5, 2021

10(b)(b)(b)

Form of Retention Grant Agreement for grants of non-qualified stock options.*

10-Q

001-04423

10(a)(a)(a)(a)

March 5, 2021

10(c)(c)(c)

Form of Grant Agreement for grants of performance-adjusted restricted stock units (for use from November 17, 2020).*

10-Q

001-04423

10(b)(b)(b)(b)

March 5, 2021

10(d)(d)(d)

Form of Grant Agreement for grants of performance-contingent non-qualified stock options.*

10-Q

001-04423

10(c)(c)(c)(c)

March 5, 2021

10(e)(e)(e)

Form of Grant Agreement for grants of restricted stock units for directors.*

10-Q

001-04423

10(d)(d)(d)(d)

March 5, 2021

10(f)(f)(f)

First Amendment to the Registrant’s Severance and Long-Term Incentive Change in Control Plan for Executive Officers, as amended and restated effective February 28, 2020 (as amended effective December 7, 2020)*

10-Q

001-04423

10(e)(e)(e)(e)

March 5, 2021

6456

Table of Contents

Exhibit
Number

Incorporated by Reference

Exhibit Description

Form

File No.

Exhibit(s)

Filing Date

10(g)(g)(g)

Amendment Number Three to Registrant’s 2005 Executive Deferred Compensation Plan (as amended effective November 17, 2020).*

10-Q

001-04423

10(f)(f)(f)(f)

March 5, 2021

10(h)(h)(h)

Five-Year Credit Agreement, dated as of May 26, 2021, among the Registrant, the lenders named therein and JPMorgan Chase Bank, N.A., as administrative agent.

8-K

001-04423

10.1

June 1, 2021

10(i)(i)(i)

Amendment Number Four to Registrant’s 2005 Executive Deferred Compensation Plan (as amended effective as of April 1, 2021 and December 31, 2021).*

10-Q

001-04423

10(j)(j)(j)

September 3, 2021

10(j)(j)(j)

Form of Grant Agreement for grants of restricted stock units (for use from November 16, 2021).*

10-Q

001-04423

10(j)(j)(j)

March 7, 2022

10(k)(k)(k)

Form of Retention Grant Agreement for grants of restricted stock units (for use from November 16, 2021).*

10-Q

001-04423

10(k)(k)(k)

March 7, 2022

10(l)(l)(l)

Form of Grant Agreement for grants of non-qualified stock options.*

10-Q

001-04423

10(l)(l)(l)

March 7, 2022

10(m)(m)(m)

Form of Retention Grant Agreement for grants of non-qualified stock options.*

10-Q

001-04423

10(m)(m)(m)

March 7, 2022

10(n)(n)(n)

Form of Grant Agreement for grants of performance-adjusted restricted stock units (for use from November 16, 2021).*

10-Q

001-04423

10(n)(n)(n)

March 7, 2022

10(o)(o)(o)

Form of Grant Agreement for grants of performance-contingent non-qualified stock options.*

10-Q

001-04423

10(o)(o)(o)

March 7, 2022

10(p)(p)(p)

Third Amended and Restated HP Inc. 2004 Stock Incentive Plan.*

8-K

001-04423

10.1

April 22, 2022

10(q)(q)(q)

Amendment Agreement, dated August 23, 2022 to the Five-Year Credit Agreement dated May 26, 2021, by and among HP Inc., the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent.

8-K

001-04423

10.1

August 26, 2022

10(r)(r)(r)

Plantronics, Inc. 2003 Stock Plan, as amended and restated.*

S-8

333-267151

4.4

August 29, 2022

10(s)(s)(s)

Amendment Number One to the Plantronics, Inc. 2003 Stock Plan, as amended and restated.*

S-8

333-267151

4.5

August 29, 2022

10(t)(t)(t)

Amendment Number Five to Registrant’s 2005 Executive Deferred Compensation Plan.*

10-K

001-04423

10(t)(t)(t)

December 6, 2022

10(u)(u)(u)

Form of Grant Agreement for grants of restricted stock units (for use from November 1, 2022).*

10-Q

001-04423

10(u)(u)(u)

March 1, 2023

10(v)(v)(v)

Form of Retention Grant Agreement for grants of restricted stock units (for use from November 1, 2022).*

10-Q

001-04423

10(v)(v)(v)

March 1, 2023

10(w)(w)(w)

Form of Grant Agreement for grants of non-qualified stock options (for use from November 1, 2022).*

10-Q

001-04423

10(w)(w)(w)

March 1, 2023

10(x)(x)(x)

Form of Retention Grant Agreement for grants of non-qualified stock options (for use from November 1, 2022).*

10-Q

001-04423

10(x)(x)(x)

March 1, 2023

10(y)(y)(y)

Form of Grant Agreement for grants of performance-adjusted restricted stock units (for use from November 1, 2022).*

10-Q

001-04423

10(y)(y)(y)

March 1, 2023

10(z)(z)(z)

Form of Grant Agreement for grants of performance-contingent non-qualified stock options (for use from November 1, 2022).*

10-Q

001-04423

10(z)(z)(z)

March 1, 2023

6557

Table of Contents

10(a)(a)(a)(a)

Second Amendment to Registrant’s Severance and Long-Term Incentive Change in Control Plan for Executive Officers, as amended and restated effective February 28, 2020, for Performance-Contingent Stock Options generally granted on or after December 7, 2022.*

10-Q

001-04423

10(a)(a)(a)(a)

March 1, 2023

10(b)(b)(b)(b)

Form of Grant Agreement for grants of restricted stock units (for Plantronics, Inc. plan).*

10-Q

001-04423

10(b)(b)(b)(b)

March 1, 2023

10(c)(c)(c)(c)

Form of Retention Grant Agreement for grants of restricted stock units (for Plantronics, Inc. plan).*

10-Q

001-04423

10(c)(c)(c)(c)

March 1, 2023

10(d)(d)(d)(d)

2023 Amendment to the HP Inc. Cash Account Restoration Plan.*

10-Q

001-04423

10(d)(d)(d)(d)

May 31, 2023

10(e)(e)(e)(e)

Third Amendment to the HP Inc. Excess Benefit Plan.*

10-Q

001-04423

10(e)(e)(e)(e)

May 31, 2023

10(f)(f)(f)(f)

Form of Grant Agreement for grants of restricted stock units (for use from November 1, 2023).*†

10(g)(g)(g)(g)

Form of Retention Grant Agreement for grants of restricted stock units (for use from November 1, 2023).*†

10(h)(h)(h)(h)

Form of Grant Agreement for grants of non-qualified stock options (for use from November 1, 2023).*†

10(i)(i)(i)(i)

Form of Retention Grant Agreement for grants of non-qualified stock options (for use from November 1, 202 3 ).*†

10(j)(j)(j)(j)

Form of Grant Agreement for grants of performance-adjusted restricted stock units (for use from November 1, 2023).*†

10(k)(k)(k)(k)

Form of Grant Agreement for grants of restricted stock units (for Plantronics, Inc. plan for use from December 1, 2023).*†

10(l)(l)(l)(l)

Form of Retention Grant Agreement for grants of restricted stock units (for Plantronics, Inc. plan for use from December 1, 2023).*†

31.1

Certification of Chief Executive Offic er pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.†

31.2

Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.†

Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.††

101.INS

XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.†

101.SCH

Inline XBRL Taxonomy Extension Schema Document.†

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document.†

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document.†

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document.†

Table of Contents

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document.†

104

The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended ~~July~~January 31, ~~2023,~~2024, formatted in Inline XBRL (included within the Exhibit 101 attachments).†

* Indicates management contract or compensatory plan, contract or arrangement.

** Certain schedules and exhibits to this agreement have been omitted pursuant to Item 601(a)(5) of Registration S-K. A copy of any omitted schedule and/or exhibit will be furnished supplementally to the SEC upon request.

† Filed herewith.

†† Furnished herewith.

The registrant agrees to furnish to the Commission supplementally upon request a copy of (1) any instrument with respect to long-term debt not filed herewith as to which the total amount of securities authorized thereunder does not exceed 10% of the

~~Table of Contents~~

total assets of the registrant and its subsidiaries on a consolidated basis and (2) any omitted schedules to any material agreements set forth above.

6759

Table of Contents

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			HP INC.
			/s/ ~~MARIE MYERS~~TIMOTHY BROWN
			~~Marie Myers~~Timothy Brown Interim Chief Financial Officer (Principal Financial Officer and Authorized Signatory)

Date: ~~September 11, 2023~~February 28, 2024

6860


	For the three months ended January 31, 2023						For the three months ended January 31, 2022
	As reported		Adjustment		As revised		As reported		Adjustment		As revised
	In millions, except per share amounts
Net revenue	$	13,828	$	(30)	$	13,798	$	17,028	$	(15)	$	17,013

Cost of revenue	$	11,019	$	(8)	$	11,011	$	13,643	$	(21)	$	13,622
Research and development	$	403	$	—	$	403	$	418	$	60	$	478





Total costs and expenses	$	13,063	$	(8)	$	13,055	$	15,669	$	39	$	15,708
Earnings from operations	$	765	$	(22)	$	743	$	1,359	$	(54)	$	1,305
Interest and other, net	$	(181)	$	—	$	(181)	$	(32)	$	2	$	(30)
Earnings before taxes	$	584	$	(22)	$	562	$	1,327	$	(52)	$	1,275
Provision for taxes	$	(97)	$	4	$	(93)	$	(241)	$	18	$	(223)
Net earnings	$	487	$	(18)	$	469	$	1,086	$	(34)	$	1,052

Basic earnings per share	$	0.49	$	(0.02)	$	0.47	$	1.00	$	(0.03)	$	0.97
Diluted earnings per share	$	0.49	$	(0.02)	$	0.47	$	0.99	$	(0.03)	$	0.96


	For the three months ended April 30, 2023						For the six months ended April 30, 2023
	As reported		Adjustment		As revised		As reported		Adjustment		As revised
	In millions, except per share amounts
Net revenue	$	12,913	$	(6)	$	12,907	$	26,741	$	(36)	$	26,705

Cost of revenue	$	9,984	$	9	$	9,993	$	21,003	$	1	$	21,004






Total costs and expenses	$	12,151	$	9	$	12,160	$	25,214	$	1	$	25,215
Earnings from operations	$	762	$	(15)	$	747	$	1,527	$	(37)	$	1,490

Earnings before taxes	$	602	$	(15)	$	587	$	1,186	$	(37)	$	1,149
Benefit from taxes	$	464	$	3	$	467	$	367	$	7	$	374
Net earnings	$	1,066	$	(12)	$	1,054	$	1,553	$	(30)	$	1,523

Basic earnings per share	$	1.08	$	(0.02)	$	1.06	$	1.57	$	(0.03)	$	1.54
Diluted earnings per share	$	1.07	$	(0.01)	$	1.06	$	1.56	$	(0.03)	$	1.53


	For the three months ended April 30, 2022						For the six months ended April 30, 2022
	As reported		Adjustment		As revised		As reported		Adjustment		As revised
	In millions, except per share amounts
Net revenue	$	16,490	$	(15)	$	16,475	$	33,518	$	(30)	$	33,488

Cost of revenue	$	13,157	$	21	$	13,178	$	26,800	$	—	$	26,800
Research and development	$	425	$	—	$	425	$	843	$	60	$	903

Restructuring and other charges	$	82	$	(15)	$	67	$	150	$	(15)	$	135



Total costs and expenses	$	15,212	$	6	$	15,218	$	30,881	$	45	$	30,926
Earnings from operations	$	1,278	$	(21)	$	1,257	$	2,637	$	(75)	$	2,562
Interest and other, net	$	(39)	$	(2)	$	(41)	$	(71)	$	—	$	(71)
Earnings before taxes	$	1,239	$	(23)	$	1,216	$	2,566	$	(75)	$	2,491
Provision for taxes	$	(239)	$	4	$	(235)	$	(480)	$	22	$	(458)
Net earnings	$	1,000	$	(19)	$	981	$	2,086	$	(53)	$	2,033

Basic earnings per share	$	0.95	$	(0.02)	$	0.93	$	1.96	$	(0.05)	$	1.91
Diluted earnings per share	$	0.94	$	(0.02)	$	0.92	$	1.94	$	(0.05)	$	1.89


	For the three months ended July 31, 2022						For the nine months ended July 31, 2022
	As reported		Adjustment		As revised		As reported		Adjustment		As revised
	In millions, except per share amounts
Net revenue	$	14,664	$	(16)	$	14,648	$	48,182	$	(46)	$	48,136

Research and development	$	368	$	—	$	368	$	1,211	$	60	$	1,271

Restructuring and other charges	$	13	$	—	$	13	$	163	$	(15)	$	148



Total costs and expenses	$	13,392	$	—	$	13,392	$	44,273	$	45	$	44,318
Earnings from operations	$	1,272	$	(16)	$	1,256	$	3,909	$	(91)	$	3,818

Earnings before taxes	$	1,202	$	(16)	$	1,186	$	3,768	$	(91)	$	3,677
Provision for taxes	$	(83)	$	19	$	(64)	$	(563)	$	41	$	(522)
Net earnings	$	1,119	$	3	$	1,122	$	3,205	$	(50)	$	3,155

Basic earnings per share	$	1.09	$	0.01	$	1.10	$	3.05	$	(0.05)	$	3.00
Diluted earnings per share	$	1.08	$	—	$	1.08	$	3.01	$	(0.04)	$	2.97


	For the fiscal years ended October 31
	2022
	As reported		Adjustment		As revised
	In millions

Inventory	$	7,595	$	19	$	7,614
Other current assets	$	4,515	$	(84)	$	4,431
Total current assets	$	19,801	$	(65)	$	19,736
Other non-current assets	$	7,471	$	(28)	$	7,443
Total assets	$	38,587	$	(93)	$	38,494
Accounts payable	$	15,284	$	19	$	15,303
Other current liabilities	$	10,651	$	17	$	10,668
Total current liabilities	$	26,153	$	36	$	26,189
Other non-current liabilities	$	4,556	$	(22)	$	4,534
Accumulated deficit	$	(4,413)	$	(79)	$	(4,492)
Accumulated other comprehensive income	$	313	$	(28)	$	285
Total stockholders’ deficit	$	(2,918)	$	(107)	$	(3,025)
Total liabilities and stockholders’ deficit	$	38,587	$	(93)	$	38,494